US vs.

ANG TANG HO (February 17, 1922) • The power conferred upon the Legislature to make laws cannot be delegated to
Ponente: Johns, J. the Gov-Gen or anyone else. The Legislature cannot delegate the legislative
power to enact any law; it can only pass a law that does nothing more than to
Facts: authorize the Gov-Gen to make rules and regulations to carry the law into
• 1919: Philippine Legislature passed Act No. 2686 effect.
o penalized the monopoly and hoarding of, as well as speculation in, palay, • Ponente states several US cases… ie. State v. Chicago, Milwaukee and St.
rice and corn under extraordinary circumstances Paul Ry. Co: “The true distinction is between the delegation of power to make
o regulated the distribution and sale thereof the law, which necessarily involves discretion as to what it shall be, and the
o authorized the Governor-General to issue necessary rules and regulations conferring an authority or discretion to be exercised under and in pursuance of
pursuant therefor the law.”
• see p. 3-4 with regard to pertinent sections being assailed
Held: Act No. 2868, insofar as it undertakes to authorize the Gov-Gen in his
• August 1, 1919: Gov-Gen issued proclamation fixing price at which rice should discretion to issue a proclamation, fixing the price of rice, and to make the sale of
be sold (EO #53) rice in violation of the proclamation a crime, is unconstitutional and void
• August 8: complaint was filed against defendant Ang Tang Ho, charging him
with the sale of rice at an excessive price – he was subsequently tried, found
guilty, and sentenced to 5 months’ imprisonment and to pay a fine of P500
• Present case is an appeal, with petitioner alleging that the lower court erred in:
o Finding EO #53 to of any force and effect
o Finding him guilty of the offense charged
o Imposing the sentence

Issue: WON Act No. 2868 delegates legislative power to the Governor-General
(such delegation being violative of the Constitution)  YES, therefore, it is
unconstitutional and void; lower court’s decision was reversed and petitioner was
discharged

Ratio:
• In the analysis and construction of Act No. 2868, insofar as it authorizes the
Gov-Gen to fix the price at which rice should be sold, it can be gathered that
legislative power to enact law, which is constitutionally granted to the
Legislature, is lodged in the Executive.
o The promulgation of temporary rules and emergency measures was left to
the discretion of the Gov-Gen
o The Legislature did not specify or define what conditions or for what
reasons the Gov-Gen shall issue the proclamation – the Act states that it
can be issued “for any cause”
o The Legislature did not specify or define what is an “extraordinary rise” in
the price of rice (wow, nag-rhyme), the causes of which shall supposedly
be prevented by such proclamation
o The Act did not specify or define what is a temporary rule or an emergency
measure, or how long such temporary rules or measures shall remain in
force and effect, or when they shall take effect
o In the absence of the proclamation, it was not a crime to sell rice at any
price. It follows that if the defendant committed a crime, it was because
the Gov-Gen issued the proclamation. No act of the Legislature made it
a crime to sell rice at any price, and without the proclamation, the
sale of it at any price was not a crime. It is the violation of the
proclamation, not of Act 2868, which constitutes the crime.
 SOLICITOR GENERAL v. MMA (1991)
Petition to review the resolution of the Metropolitan Manila Authority.
FACTS:
The ff cases were consolidated inasmuch as all of them present the same
fundamental question w/c can be disposed of jointly:
1. Oct 1990: Rodolfo Malapira’s complaint when he was stopped for an alleged
traffic violation and his driver’s license was confiscated by a traffic enforcer in
QC
2. Dec 1990: the Caloocan-Mla Drivers & Operators Assoc sent a letter to the
Court asking whether they could seek damages for confiscation of their driver’s
licenses
3. Feb 1991: Stephen Monsanto complained against the confiscation of his driver’s
license also for a traffic violation in Mandaluyong
4. March 1991: Atty Calderon, also for the confiscation of his driver’s license in
Makati
5. April 1991: Atty Trieste protested the removal of his front license plate by E.
Ramos of MMA-Traffic Operations Ctr & subsequent confiscation of his driver’s
license by one Emmanuel of the Metropolitan Police Command1.
This consolidated case revolves around a discrepancy between two opposing
sanctions between PD 1605, the principal law, and Ordinance No. 11, Series of
1991, issued by the MMA, a local govt agency.
Under PD 1605, the confiscation of driver’s licenses for traffic violations is not
directly prescribed nor allowed. It does not allow either the removal of license
plates in Metropolitan Manila. It transfers only the powers of the Land
Transportation Commission and the Bd of Transportation to the Metropolitan Mla
Commission inasmuch as the latter is allowed to impose fines and discipline traffic
violators in amounts and penalties prescribed.
Under Ordinance No. 7 and 11, specifically Sec 2 of the latter, MMA is authorized to
detach the license plate/tow and impound attended/unattended/abandoned motor
vehicles illegally parked or obstructing the flow of traffic in MMla. The MMA, in its
defense, alleges that its powers were conferred upon it by virtue of EO 392.
ISSUE: WON Ord No 7 and 11 are legal and valid
HELD: The present issue of the validity of Ordinance No 7 and 11 can, in principle,
be challenged only in a direct action and not collaterally as in this case. However,
that rule is not inflexible and may be relaxed by the Court under exceptional
circumstances such as in the present controversy. It has created a great deal of
confusion among motorists about the state of the law on the questioned sanctions.
Even though the complainants, especially the lawyers Monsanto and Trieste, failed
to formally challenge its validity, the Court will suspend the procedural rules in the
interest of substantial justice.
1
Emmanuel averred that he confiscated Atty Trieste’s license pursuant to a memorandum authorizing
such sanction. However, Dir Gen Cesar Nazareno of the PNP in his Comment assured the Court that his
Office has never authorized the removal of the license plates of illegally parked vehicles and he ordered
full compliance of the memorandum.
Ordinance No 11 was enacted to promote the comfort and convenience of the public
and to alleviate the worsening traffic problems in Metropolitan Mla due in large part
to violation of traffic rules. The Court holds that indeed there is a valid delegation
of legislative power to promulgate such measures, it satisfying the requisites of
delegation: (1) completeness of the statute making the delegation; and (2) the
presence of a sufficient standard (i.e. the convenience and welfare of the public esp
motorists and passengers).
However, what is questioned is the validity of the exercise of such delegated power.
Ordinance No 11 is merely an enactment of local govt acting only as agents of the
national legislature. Necessarily, its acts must reflect and conform to the will of the
principal. Therefore, a municipal ordinance to be valid: 1) must not contravene
the Consti or any statute; 2) must not be unfair or oppressive; 3) must not be
partial or discriminatory; 4) must not prohibit but may regulate trade; 5) must not
be unreasonable; and 6) must be general and consistent w/ public policy.
It is clear that Ordinance No 7 and 11 do not pass the first criterion because they do
not conform to the existing law, PD 1605, and in effect partially repeals the law.
The latter prohibits and does not allow either the removal of license plates or the
confiscation of driver'’ licenses for traffic violations committed in Metropolitan Mla.
Local political subdivisions are able to legislate only by virtue of a valid delegation of
legislative power from the national legislature. They are mere agents vested w/
what is called the power of subordinate legislation. As delegates of the Congress,
the LGU cannot contravene but must obey at all times the will of their principal. To
sustain the local ordinances would open the floodgates to other ordinances
amending and so violating national laws in the guise of implementing them.
The enactment in question, therefore, being merely local in origin, cannot prevail
against the decree, w/c has the force and effect of a statute. They are declared
NULL and VOID. All law enforcement authorities in Metropolitan Mla are enjoined
from removing license plates of motor vehicles2 and confiscating driver’s licenses for
traffic violation w/in the area.
EMMANUEL PELAEZ, petitioner vs. THE AUDITOR GENERAL, respondent
Original Action in the SC. Prohibition w/Preliminary Injunction [Dec. 24, 1965]
Facts:
• Sept. 4 – Oct. 29, 1964: Phil Pres purporting to act pursuant to Sec. 68 of
Revised Administrative Code (RAC), issued Exec Orders (EO) Nos. 93-121, 124,
126-129, creating 33 municipalities (see footnote #1 in p.573 for complete
list).
• Sec. 68 of RAC:
1. Gov Gen/Pres of Phil may by EO define boundary or boundaries of prov,
subprov, municipality, municipal district or other pol subd & increase,
divide, separate & merge territories, name new subd created & change
seat of gov’t w/in subd as pub welfare may require.
2. Provided that Phil Legislature/Congress of RP’s authorization shall first be
obtained when boundary of prov/subprov is to be defined or prov is to be
divided into 1/more subprov.
2
Except when authorized under LOI 43, in cases when stalled vehicles obstruct public streets.
 3. Change of territory under jurisdiction of an administrative/judicial officer,
recommendation & advice of head of dept having exec control over such
officer shall be obtained.
4. Equitable distribution of funds & oblig of divisions affected shall be made as
recommended by Auditor Gen & approved by Gov Gen/Pres.
• Nov. 10, 1964: Emmanuel Pelaez, as VP of the Phil & a taxpayer, instituted
action to restrain Auditor Gen & his reps & agents from passing in audit any
expenditure of public funds in implementation of EOs and/or any disbursement
by said municipalities. He claims that law invoked by Pres has been impliedly
repealed by RA No. 2370 & constitutes undue delegation of legislative pow.
• Pertinent provisions of RA No. 2370
1. Sec. 3, Par. 1: All barrios at time of passage of this Act shall come under
provisions hereof.
2. Sec. 3, Par. 2: New barrio may be created or name of existing one may be
changed by prov’l board of province upon petition of maj of voters in those
areas & upon recommendation of council of municipality/municipalities in
w/c proposed barrio is stipulated. Recommendation must be in a form of
resolution approved by at least 2/3 of council’s mems. To create a new
barrio, pop must be at least 500 persons.
3. Sec. 3, Par. 3: Barrios shall not be created/their boundaries altered nor
their names changed except under provisions of this Act/by Act of
Congress.
• Respondent: action is premature & not all proper parties (officials of newly-
created pol subd) have been impleaded.
• Mayors of municipalities from which the barrios w/c formed the new
municipalities were taken intervened.
• Attys. Enrique Fernando & Emma Quisumbing-Fernando appeared as amici
curiae.
Issues & Ratio:
1. WON the President’s act constituted an undue delegation of legislative
pow. – YES.
• Since Jan. 1, 1960, when RA 2370 took effect, barrios can only be created or
their boundaries be altered or their names changed by Act of Congress or of
provincial board (Par. 2 & 3 respectively).
a. Petitioner claims if Pres is enjoined fr creating a barrio, all the more that he
should be prohibited fr creating a municipality w/c is composed of several
barrios.
b. Respondent: New municipality can be created w/o creating new barrios.
You simply place old barrios under new municipality. (Tsktsk, logical!)
But using logic & experience, we can deduce that the statutory denial of pres’l
authority to create a new barrio implies a negation of the bigger power to
create new municipalities.
• Respondent cites Municipality of Cardona vs. Municipality of Binangonan in
claiming that Pres’ act is not an undue delegation of pow. But this is not
applicable because it did not involve the creation of a new municipality but a
mere transfer of territory (fr Cardona to Binangona). Both territories already
existed prior to & during time of transfer.
• Remember that power to fix common boundaries as in the cited case are
administrative in nature whereas authority to create municipal corp. is
legislative in nature. Strictly a legislative function (State ex rel. Higgins vs.
Aicklen), solely & exclusively the exercise of legislative power (Udall vs.
Severn). It has been held that municipal corp are purely the creatures of
statutes (Territory ex rel. Kelly vs. Stewart).
• Congress can delegate such pow but it should provide the policy to be
executed, carried out or implemented & fix the standard, w/ sufficiently
determinate or determinable standards. Leaving the delegate (to whom pow is
delegated) only to fill in details in execution, enforcement or admin of law.
Without the policy, delegate would be left to make/formulate the policy w/c is
the essence of every law & w/o the standard, we cannot determine
w/reasonable certainty whether delegate acted w/in or beyond scope of his
authority. Delegate might make or even unmake the law by adopting measures
inconsistent w/end sought to be attained by Act of Congress. This would nullify
principle of sep of pow & sys of checks & balances, & undermine foundation of
our Republican sys. Sec. 68 of RAC doesn’t meet aforementioned standards in
delegating pow since it does not provide w/ a policy & standard.
• Last clause of #1 Sec. 68, RAC using the term “public welfare” pertains only to
changing the seat of gov’t & not to all items in that sentence. This is in
accordance w/ orig provision, Sec. 1, Act No. 1748. Although SC ruled in
Calalang vs. Wiliams and People vs. Rosenthal that pub welfare & pub interest
are valid standards for valid delegation of authority to execute the law, these
doctrines are only applicable to specific facts & issues involved in said cases.
They don’t constitute precedents & are not binding. Besides, both cases
involved grants to administrative officers of pows related to exercise of
administrative functions, calling for determination of ques of fact whereas Sec.
68 deals w/legislative functions. Ques of WON pub interest demands ex of such
pow is not one of fact, it’s purely a legislative ques (Carolina-Virginia Coastal
Highway vs. Coastal Turnpike Authority), political ques (Udall vs. Severn) or
ques of public policy & statecraft (In Re Village of North Milwaukee).
• Examples of laws annulled by judiciary due to undue delegation of legislative
pow:
1. law granting judicial dept pow to determine annexing of territories (Udall
vs. Severn)
2. law vesting in a Commission rt to determine plan & frame of gov’t of
proposed villages & functions to be exercised (In re Municipal Charters)
3. law allowing courts to incorporate towns/villages & determine metes &
bounds upon petition of maj of taxable inhabitants setting forth area
desired to be included in the village (Territory ex rel Kelly vs. Stewart)
4. law w/c allowed courts & inhabitants of a town to incorporate a town (In re
Villages of North Milwaukee)
5. creating Municipal Board of Control w/c determines if it’s w/in pub interest
to construct/operate a toll road & allowing such board to create & name
municipal corporations (Carolina-Virginia Coastal Hwy vs. Coastal Turnpike
Authority)
• Schechter Poultry Corp vs US: involved constitutionality of a law w/c authorized
US Pres to approve codes of fair competition submitted by trade/industrial
copr/assoc w/co inequitable restrictions on admission to membership as long as
codes are not designed to promote monopolies or eliminate/oppress small
enterprises & will not operate to discriminate against them. Court ruled that
aside from providing w/gen aims of rehab, correction & expansion, the law does
not provide any standards. Instead of prescribing rules of conduct, law
authorizes making of codes to prescribe the rules. Pres’ discretion in approving
codes is unregulated/unfettered. Thus, it is an unconstitutional delegation of
legislative pow. If Schechter case found term “unfair competition” broad &
 vesting pow on Pres would be a virtually unfettered discretion leading to undue
delegation of legislative pow, same should be applied to the term pub welfare
w/c has a broader connotation. If we uphold validity of Sec. 68, then that would
be tantamount to allowing Pres to do anything w/c in his opinion may be for
pub interest/welfare. It would be a virtual abdication of pows of Congress in
favor of Exec & would bring about total collapse of democratic sys.
• Note that EOs were issued after legislative bills creating involved municipalities
had failed to pass Congress.
• Sec. 10 (1), Art. VII of Consti only allows Pres to have gen supervision over loc
gov’ts. He can only check whether these governments & their officials are
performing duties as provided by law & he can’t interfere as long as they’re
acting w/in scope of their authority. He can’t enact an ordinance w/ council
failed/refused to pass even if such violated an imposed duty for it’s the role of
provincial officials to do so. He can’t vote, set aside or annul an ordinance
passed w/in council’s jurisdiction even if such is unwise. He can’t suspend an
elective official or take disciplinary action except on appeal fr provincial board’s
decision. If Pres is allowed to create municipalities, then, he could compel loc
officials to submit to his dictation, defying the consti’l provision w/c only grants
him gen supervision over loc officials. Also, Pres can’t abolish or create a new
exec dept or bureau. Allowing him to create a municipal corp would give him
greater control over on loc gov’ts than on exec depts., bureaus, or offices, when
he should only exercise gen supervision over former. Thus, we can conclude
that the 1935 Consti also repealed Sec. 68 of RAC since it is incompatible &
inconsistent w/ the fundamental law.
2. Whether there are other proper parties to be impleaded. - NONE
Records don’t show & parties don’t claim that officers of new municipalities have
been appointed/elected & assumed office. Sol Gen is the officer authorized by law to
represent Phil Gov’t, its offices & agents in any proceeding requiring a lawyer
(Sec.1661, RAC). Loc officials are mere agents or reps of nat’l gov’t. Presence of Sol
Gen is sufficient.
3. WON present petition is premature. - NO
Even if EOs in dispute have not yet been acted upon, Pres has previously issued
similar EOs which actually organized & operated new municipal corp & thus,
expenditures incidental to such have been sanctioned, approved or passed by Gen
Auditing Officials. No reason that Auditor Gen won’t be acting in the same manner
on new EOs.
Held: EOs are null & void ab initio. Respondent restraint from implementing
such.
GARCIA v. EXECUTIVE SECRETARY (July 3, 1992)
Ponente: Feliciano, J.
Facts:
• Nov. 27, 1990: EO #438 was issued, imposing, in addition to other duties,
taxes and charges on all articles imported into the Phils. (across the board,
including crude oil and other oil products) an additional duty of 5% ad valorem
– subsequently increased to 9% ad valorem by the promulgation of EO #443 on
Jan. 3, 1991
• July 24, 1991: DOF requested the Tariff Commission to initiate the process
required by the Tariff and Customs Code for the imposition of a specific levy on
crude oil and other petroleum products (HS Heading Nos. 27.09, 27.10 and
27.11 of Sec. 104 of said Code, as amended). A public hearing was scheduled
to give interested parties an opportunity to be heard…
• Aug. 15: EO #475 was issued, reducing the rate of additional duty back to 5%
ad valorem, except in the cases of crude oil and other oil products
• Aug. 23: EO #478 was issued, levying a special duty of P0.95 per liter or
P151.05 per barrel of imported crude oil and P1.00 per liter of imported oil
products (in addition to the 9% ad valorem and all other existing ad valorem
duties)
• Petitioner assails the validity of EO #s 475 & 478, arguing that it is violative of
Sec 24, Art VI of the Consti – since the Consti vests the authority to enact
revenue bills to the Congress, the President may not assume such powers by
issuing EO #s 475 & 478, which are in the nature of revenue-generating
measures.
• Petitioner also argues that assailed EO’s contravene Sec 401 of the Tariff and
Customs Code – said section authorizes the President to increase, reduce or
remove tariff duties, or to impose additional duties only when necessary to
protect local industries or products but not for the purpose of raising additional
revenue for the government.
Issue: WON EO #s 475 & 478 are unconstitutional  NO
Ratio:
• Even if the power to enact appropriation, revenue and tariff bills are lodged
with the Legislature, it does not follow that EO #s 475 & 478, assuming they
may be characterized as revenue measures, are prohibited to the President,
that they must instead be enacted by Congress.
• Sec 28(2), Art VI of the Consti: “The Congress may, by law, authorize the
President to fix within specified limits, and subject to such limitations and
restrictions as it may impose, tariff rates, import and export quotas, tonnage
and wharfage dues, and other duties or imposts within the framework of the
national development program of the Government.”  there is explicit
constitutional permission to Congress to authorize the President to fix
within specified limits tariff rates and other duties
• Tariff and Customs Code (TCC) – Sec. 104: “… The rates of duty herein
provided or subsequently fixed pursuant to Sec. 401 of this Code shall be
subject to periodic investigation by the Tariff Commission and may be revised
by the President upon recommendation by the NEDA…”
o Nothing in the language of either Sec. 104 or 401 of the TCC suggests
sharp and absolute limitation of authority
o The Bureau of Customs, which administers the TCC, is one of the 2
principal generators of governmental revenue, the other being the BIR; it
is, therefore, inevitable that revenue will be collected in the process of
imposing such customs duties
o Customs duties, which are assessed at the prescribed tariff rates, are very
much like taxes, which are frequently imposed for both revenue-raising
and regulatory purposes. The levying of customs duties on imported goods
may have in some measure the effect of protecting local industries;
 simultaneously, such customs duties inevitably have the effect of producing
government revenues.
o The contention of petitioner that “protection of local industries” should be
the only permissible objective that can be secured by the exercise of that
delegated authority is a stiflingly narrow one as to render the assailed EO’s
unconstitutional.
Held: Petition dismissed for lack of merit. Constitutionality of EO #s 474 &
478 are upheld.
Osmena vs. Orbos {March 31, 1993}
Original Petition for certiorari and prohibition in the Supreme Court
Facts:
 October 10, 1984 – Marcos issued PD 1956 creating a Special Account in the
General Fund, designated as the Oil Price Stabilization Fund.
 OPSF was designed to reimburse oil companies for cost increases in crude oil
and imported petroleum products resulting from exchange rate adjustments
and from increases in the world market prices of crude oil.
 OPSF was reclassified as a trust liability and ordered released from the National
Treasury to the Ministry of Energy.
 February 27, 1987 – Aquino amended PD 1956 when she promulgated EO No.
137. This EO expanded the grounds for reimbursement to oil companies, for
possible cost underrecovery incurred as a result of the reduction of domestic
prices of petroleum products.
 March 31, 1991 – OPSF showed a Terminal Fund Balance Deficit amounting to
P12.877 billion. To abate the worsening deficit the ERB issued an order on
December 10, 1990 approving the increase in pump prices of petroleum
products.
 The petition contends that the creation of the trust fund violates section 29(3),
article VI of the Constitution which provides that:
o All money collected on any tax levied for a special purpose shall be treated
as a special fund and paid out for such purpose only. If the purpose for
which a special fund was created has been fulfilled or abandoned, the
balance, if any, shall be transferred to the general funds of the
Government.
 Petitioner argues that the monies collected pursuant to PD 1956 as amended
must be treated as a Special Fund not as a trust account or a trust fund and
that if a special tax is collected for a specific purpose, the revenue generated
therefrom shall be treated as a special fund to be used only for the purpose
indicated, and not channelled to another government objective.
 Petitioner also argues that the delegation of legislative authority to the ERB
violated Article VI section 28(2)
o The Congress may, by law, authorize the President to fix within specified
limits, and subject to such limitations and restrictions as it may impose,
tariff rates, import and export quotas, tonnage and wharfage dues, and
other duties or imposts within the framework of the national development
program of the Government.
Issues:
1. WON the powers granted to the ERB under PD 1956 partake the nature of the
taxation power of the State. NO
2. WON the monies collected should be maintained in a special account of the
general fund. NO
3. WON the reimbursement made to the oil companies is illegal. YES
Ratio
1.
 OPSF was established precisely to protect local consumers from the adverse
consequences that such frequent oil price adjustments may have upon the
economy. OPSF serves as a pocket into which a portion of the purchase price of
oil and petroleum products paid by consumers as well as some tax revenues
are inputted and from which amounts are drawn from time to time to reimburse
oil companies, when appropriate situations arise, for increases in, as well as
underrecovery of, costs of crude importation.
 OPSF is a buffer mechanism through which the domestic consumer prices of oil
and petroleum products are stabilized, instead of fluctuating every so often,
and oil companies are allowed to recover given the level of domestic prices
existing at any given time.
 Establishment and maintenance of the OPSF is well within that pervasive and
non-waivable power and responsibility of the government to secure the physical
and economic survival and well being of the community, POLICE POWER of the
State.
 Gaston v. Republic Planters Bank – Court upheld the legality of the sugar
stabilization fee. Stabilization fees collected are in the nature of a tax which is
within the power of the State to impose for the promotion of the sugar industry.
 Funds collected may be referred to as taxes, they are exacted in the exercise of
the police power of the State.
2.
 The provision authorizing the ERB to impose additional amounts could be
construed to refer to the power of taxation, it cannot be overlooked that the
overriding consideration is to enable the delegate to act with expediency in
carrying out the objectives of the law which are embraced by the Police Power
of the State.
 For a valid delegation of power it is essential that the law delegating the power
must be:
o Complete in itself (must set forth the policy to be executed by the
delegate)
o Must fix a standard limit (limits are sufficiently determinate or
determinable)
 Challenged law sets forth a determinable standard which guides the exercise
the power granted to the ERB. What the law intended was to permit the
additional imposts for as long as there exists a need to protect the general
public and the petroleum industry from the adverse consequences of pump rate
fluctuations.
3.
 None of them was incurred as a result of the reduction of domestic prices of
petroleum products
 Petitioner contends that the term ‘other factors’ can only include such other
factors which necessarily result in the reduction of domestic prices of petroleum
products.
 Solicitor General contends that to place the term within the restrictive confines
of the rule of ejusdem generis would reduce EO 137 to a meaningless provision
 Caltex Philippines v. Honorable Commisioner of Audit – ejusdem generis states
that where words follow an enumeration of persons or things , by words of a
particular and specific meaning, such general words are not to be construed in
their widest extent, but are held to be as applying only to persons or things of
the same kind or class as those specifically mentioned.
 Reimbursement of financing charges is not authorized paragraph 2 section 8 of
PD 1956 for the reason that they were not incurred as a result of the reduction
of domestic prices of petroleum products.
RAFAEL v. EMBROIDERY & APPAREL CONTROL & INSPECTION BOARD
(Sept 29, 1967) Appeal from a decision of CFI of Manila
FACTS:
• In a letter dated Jan 9, 1961, petitioner (who was engaged in the
manufacture of embroidery & apparel products for the purpose of
exportation, using imported raw materials) was authorized by the Collector
of Customs, pursuant to Tariff & Customs Code (RA 1937) to operate
Manufacturing Bonded Warehouse no. 88 at Rizal.
• By virtue of such authority, petitioner imported raw materials exempt from
duty & manufactured them into finished products for export under the
ISSUES:
terms & conditions required & specified in the letter-authority.
• June 17, 1961: RA 3137 was enacted creating “an embroidery & apparel
control & inspection board (BOARD) covering control, issuance of entry
permits, & inspection of conditionally tax-free raw material importations by
local embroidery apparel manufacturers & the corresponding liquidation of
re-exportations thereof as RP-made embroideries & apparels.”
• RA 3137 (Sec.1 – p. 338, not so relevant)
• RA 3137, Sec. 2: ”This license required hereof under Sec. 1 of this Act shall
be duly issued by an Embroidery and Apparel Control and Inspection Board
w/c is hereby created & hereinafter referred to as the Board, composed of
(1) A representative from BOC to act as Chairman, to be designated by the
Sec. Of Finance; (2) A rep from Central Bank to be designated by its
Governor; (3) A rep from Dept of Commerce & Industry; (4) A
representative from the Nat’l Economic Council to be designated by its
Chairman; (5) A representative from the private sector coming from
the Association of Embroidery & Apparel Exporters of the Phil. The
Board shall have the over-all control & shall administer the checks &
counter-checks of consigned textile, leather gloves, raw materials &/or
supplies to embroidery & apparel manufacturers & corresponding counter-
checks for liquidations of said goods prior to re-exportations… (p.339)
• In compliance w/ these provisions, the Board was constituted, each of the
members having been previously designated by their respective
department heads.
• Upon recommendation of the Phil Association of Embroidery & Apparel
Exporters, Inc. (PAEAE), the DOF named Quintin Santiago, association
president, as the representative from private sector (See RA3137, Sec.2,
no. 5)
• However, another organization, the Phil Chamber of Embroidery & Apparel
Producers, Inc., to which petitioner was affiliated, questioned the choice of
Santiago, because its own nominee was rejected.
• In upholding its original choice, the Board referred to a letter of Sen.
Alejandro Almendras, principal author of RA 3137, stating that the
association referred to in Sec. 2 was none other than the PAEAE. On the
basis of this letter, the Board adopted on Sept 15, 1961, Resolution 2:
stating that PAEAE is the association referred to in Sec. 2 & that it is the
only association entitled to representation in the Board from the private
sector.
• In the exercise of its powers, the Board on Aug 31, 1961 requested
petitioner to submit pertinent data called for in the attached form of
application for license & requested to remit w/ the application P200 in cash
or check drawn in favor of the Board. This amount will be charged against
petitioner’s future assessments as per Sec. 4, par. XVI of RA 3137.
• Unwilling to comply w/ Board’s request, petitioner filed an action for
prohibition w/ preliminary injunction in the court a quo for the purpose of
enjoining/restraining respondents from enforcing RA 3137.
• Petitioner contends that RA 3137 is UNCONSTITUTIONAL & VOID ab initio
• CFI DECISION: a) Sec. 2 is unconstitutional; b) Board is illegally
constituted, thus its acts & orders are null & void; c) permanently enjoining
respondets from enforcing Sec. 2
1. WON the Act’s prescription that the chairman & members of the Board
should come from specified offices is equivalent to a declaration by
Congress as to who should be appointed thereby infringing the const’l
power of the President to make appointments.
(Petitioner claims that while Congress may create an office, it cannot
specify who shall be appointed therein; that the members of the Board can
only be appointed by the Pres in accordance w/ Art VII, Sec 10(3),
CONSTI)
• NO. RA 3137 not unconstitutional on this point
• Sec. 2 reveals that for the chairman & members of the Board to qualify,
they need only be designated by the respective dept heads. W/ the
exception of the rep from private sector, they sit ex-officio.
• In order to be designated, they must already be holding positions in the
offices mentioned in the law. No need for new appointments because the
reps so designated merely perform duties in the Board in addition to those
they already perform under their original appointments.
• Nothing in the Act suggest that the designated reps will lose or forfeit their
orig appointments in their “parent offices”
• Sec. 2 is not incompatible w/ or violative of the doctrine that “the
appointing power is the exclusive prerogative of the President, upon w/c,
no limitations maybe imposed by Congress, except those resulting from the
need of securing the concurrence of COA & from the exercise of the limited
power to prescribe the qualifications to a given appointive office.”
• CONG took care to specify that the reps should come from BOC, CB, Dept
of Commerce & Industry & NEC BECAUSE these departments &/or bureaus
 perform functions w/c have a direct relation to the importation of raw
materials, the manufacture thereof into embroidery & apparel products &
their subsequent exportation abroad. There is no attempt in RA 3137 to
deprive the President of his power to make appointments
2. WON Act constitutes class legislation & WON it has deprived petitioner of
equal protection of laws (because Congress has vested the appointment of
the representative of the private sector in respondent Board, a private non-
govtl entity)
• NO.
• PAEAE was not singled out by the law in order to favor it over & above
others but rather because it is the dominant organization in the field.
• General rule: legislation w/c affects alike all persons pursuing the same
business under the same conditions is not such class legislation as is
prohibited by const’l provisions. The discrimination w/c are open to
objection are those in w/c persons engaged in the same business are
subjected to different restrictions or are held entitled to different privileges
under the same conditions
3. WON Sec. 4, XVI, par.2 of the Act constitutes an undue delegation of
legislative power because the Act does not provide sufficient standards
under w/c the Board may base its assessment.
• NO.
• Sec.4, XVI, par.2: “A special assessment shall be levied upon all persons,
corporations, or firms engaged in the embroidery & apparel manufacturing
industry in an amount to be fixed by the Board not exceeding 1% of the
value of the labor, processing or finishing costs realized from the processed
or finished goods exported. The funds collected hereunder shall accrue to
the Board & shall be used exclusively for carrying out its functions & duties.
• This paragraph has a direct relation to the immediately preceding
paragraph:
• “XVI: Every manufacturer who intends to remove manufactured products
for export shall make a written request to the Board for exportation of the
articles intended for removal, giving the kinds, quantity of yardage, used
gross & net weights, & the value of the articles to be exported & the
number or numbers of Import entry or entries involved…” (p. 344)
• Evidently, the special assessment referred to in the 2nd paragraph applies to
manufactured products w/c a manufacturer intends to remove from the
bonded warehouse for exportation.
• Far from empowering the Board to levy w/o sufficient standard, the law
sets a reasonable basis under w/c the special assessment may be imposed:
(1) that such special assessment be levied on manufactured goods
intended to be removed for exportation (2) that such special assessment
should not exceed 1% of the value of labor, processing or finishing costs
realized from the processed or finished goods exported.
• TRUE DISTINCTION: DELEGATION OF POWER TO LEGISLATE: involves a
discretion as to what the law shall be; CONFERRING OF AUTHORITY OR
DISCRETION AS TO THE EXECUTION OF THE LAW: authority or discretion
as to its execution has to be exercised under & in pursuance of the law.
THE FORMER CANNOT BE DONE.
HELD: CFI decision REVERSED. RA 3137, particularly Sec. 2 is CONSTITUTIONAL;
permanent injunction SET ASIDE
Arnault v. Nazareno
Facts:
This case is a petition for habeas corpus to relieve petitioner Jean Arnault from
confinement in the New Bilibid prison. Arnault was confined to the institution after
he refused to reveal the name of a person during a senate hearing. The facts
preceding this case are as follows:
In the latter part of October, 1949, the Philippine Government, through the Rural
Progress Administration, bought two estates known as Buenavista and Tambobong
for the sums of P4,500,000 and P500,000, respectively. P1,000,000 was paid for
the first sum and P 500,000 to the second sum both to Ernest H. Burt, a
nonresident American, thru his two attorney-in-fact in the Philippines, as
represented by Jean L. Arnault, for both estates respectively.
However, Ernest H. Burt was not the original owner of the estate. He bought the
first from San Juan de Dios hospital and the second from the Philippine trust
company. In both instances, Burt was not able to pay the necessary amount of
money to complete his payments. As such, his contract with said owners were
cancelled.
On September 4, 1947, the Philippine Trust Company sold, conveyed, and delivered
the Tambobong Estate to the Rural Progress Administration by an abolute deed of
sale in consideration of the sum of P750,000. The Philippine Government then,
through the Secretary of Justice as Chairman of the Board of Directors of the Rural
Progress Administration and as Chairman of the Board of Directors of the Philippine
National Bank, from which the money was borrowed, accomplished the purchase of
the two estates in the latter part of October, 1949, as stated at the outset.
On February 27, 1950, the Senate adopted its Resolution No. 8, which created a
special committee to investigate the transactions surrounding the estates. The
special committee created by the resolution called and examined various witnesses,
among the most important of whom was Jean L. Arnault. An intriguing question
which the committee sought to resolve was the apparent unnecessariness and
irregularity of the Government's paying to Burt the total sum of P1,500,000 for his
alleged interest of only P20,000 in the two estates, which he seemed to have
forfeited anyway long before October, 1949. The committee sought to determine
who were responsible for and who benefited from the transaction at the expense of
the Government.
Arnault testified that two checks payable to Burt aggregating P1,500,000 were
delivered to him on the afternoon of October 29, 1949; that on the same date he
opened a new account in the name of Ernest H. Burt with the Philippine National
Bank in which he deposited the two checks aggregating P1,500,000; and that on
the same occasion he drew on said account two checks; one for P500,000, which he
transferred to the account of the Associated Agencies, Inc., with the Philippine
National Bank, and another for P440,000 payable to cash, which he himself cashed.
It was the desire of the committee to determine the ultimate recipient of this sum of
P440,000 that gave rise to the present case.

As Arnault resisted to name the recipient of the money, the senate then approved a
resolution that cited him for contempt. It is this resolution which brought him to jail
and is being contested in this petition.
Issue:
1. WON the Senate has the power to punish Arnault for contempt for refusing to
reveal the name of the person to whom he gave the P440,000.
2. WON the Senate lacks authority to commit him for contempt for a term beyond
its period of legislative session, which ended on May 18, 1950.
3. WON the privilege against self incrimination protects the petitioner from being
questioned.
Holding/ Ratio: Petition Denied.
1. Yes.
“Once an inquiry is admitted or established to be within the jurisdiction of a
legislative body to make, we think the investigating committee has the power
to require a witness to answer any question pertinent to that inquiry,
subject of course to his constitutional right against self-incrimination. The inquiry, to
be within the jurisdiction of the legislative body to make, must be material or
necessary to the exercise of a power in it vested by the Constitution, such as to
legislate, or to expel a Member; and every question which the investigator is
empowered to coerce a witness to answer must be material or pertinent to the
subject of the inquiry or investigation. So a witness may not be coerced to
answer a question that obviously has no relation to the subject of the
inquiry. But from this it does not follow that every question that may be
propounded to a witness must be material to any proposed or possible
legislation.”
“In other words, the materiality of the question must be determined by its direct
relation to the subject of the inquiry and not by its indirect relation to any proposed
or possible legislation. The reason is, that the necessity or lack of necessity for
legislative action and the form and character of the action itself are determined by
the sum total of the information to be gathered as a result of the investigation, and
not by a fraction of such information elicited from a single question.”
“The contention is not that the question is impertinent to the subject of the inquiry
but that it has no relation or materiality to any proposed legislation. We have
already indicated that it is not necessary for the legislative body to show
that every question propounded to a witness is material to any proposed or
possible legislation; what is required is that it be pertinent to the matter
under inquiry.
The Court cannot determine, any more than it can direct Congress, what legislation
to approve or not to approve; that would be an invasion of the legislative
prerogative. The Court, therefore, may not say that the information sought from the
witness which is material to the subject of the legislative inquiry is immaterial to
any proposed or possible legislation.”
2. No.
“The resolution of commitment here in question was adopted by the Senate, which
is a continuing body and which does not cease to exist upon the periodical
dissolution of the Congress or of the House of Representatives. There is no
limit as to time to the Senate's power to punish for contempt in cases where that
power may constitutionally be exerted as in the present case.”
“As against the foregoing conclusion it is argued for the petitioner that the power
may be abusively and oppressively exerted by the Senate which might keep the
witness in prison for life. But we must assume that the Senate will not be disposed
to exert the power beyond its proper bounds. And if, contrary to this assumption,
proper limitations are disregarded, the portals of this Court are always open to
those whose rights might thus be transgressed.”
3. No.
We are satisfied that those answers of the witness to the important question,
What is the name of that person to whom you gave the P440,000? were obviously
false. His insistent claim before the bar of the Senate that if he should reveal the
name he would incriminate himself, necessarily implied that he knew the name.
Moreover, it is unbelievable that he gave P440,000 to a person to him unknown.
"Testimony which is obviously false or evasive is equivalent to a refusal to
testify and is punishable as contempt, assuming that a refusal to testify
would be so punishable." (12 Am. Jur., sec. 15, Contempt, pp. 399-400.)
Since according to the witness himself the transaction was legal, and that he gave
the P440,000 to a representative of Burt in compliance with the latter's verbal
instruction, we find no basis upon which to sustain his claim that to reveal
the name of that person might incriminate him.
Note:
The court also refuted cases cited by petitioner on p. 52, last paragraph
and p. 55, last paragraph.
There is a discussion of the general principles of the law including
separation of powers in p. 44-46
“Our form of government being patterned after the American system-the
framers of our Constitution having drawn largely from American institutions and
practices-we can, in this case, properly draw also from American precedents in
interpreting analogous provisions of our Constitution, as we have done in other
cases in the past.”
“Although there is no provision in the Constitution expressly investing either House
of Congress with power to make investigations and exact testimony to the end that
it may exercise its legislative functions advisedly and effectively, such power is so
far incidental to the legislative function as to be implied. In other words, the power
of inquiry with process to enforce it-is an essential and appropriate auxiliary to the
legislative function. A legislative body cannot legislate wisely or effectively in the
absence of information respecting the conditions which the legislation is intended to
affect or change; and where the legislative body does not itself possess the requisite
information which is not infrequently true-recourse must be had to others who do
possess it. … The fact that the Constitution expressly gives to Congress the power
to punish its Members for disorderly behaviour, does not by necessary implication
exclude the power to punish for contempt any other person. (Anderson vs. Dunn, 6
Wheaton, 204; 5 L. ed., 242.)
But no person can be punished for contumacy as a witness before either House,
unless his testimony is required in a matter into which that House has jurisdiction to
inquire. (Kilbourn vs. Thompson, 26 L. ed., 377.)
“Since, as we have noted, the Congress of the Philippines has a wider range of
legislative field than either the Congress of the United States or a State Legislature,
we think it is correct to say that the field of inquiry into which (ooppss..putol…I
wasn’t able to copy everything)
Bengson, Jr. vs. Senate Blue Ribbon Committee
20 November 1991. En Banc. Padilla, J.
Petition for prohibition to review the decision of the Senate Blue Ribbon Committee.
PETITIONERS: Jose F.S. Bengzon, Jr, et. al.
RESPONDENTS: Senate Blue Ribbon Committee, Hon. Wigberto Tañada (Chairman)
INTERVENOR: Jose S. Sandejas
FACTS:
On 30 July 1987, the Republic of the Philippines, represented by the
Presidential Commission on Good Governance (PCGG), filed a complaint with
Sandiganbayan against the petitioners of this case. PCGG allege, among others,
that: defendants (petitioners therein) Benjamin “Kokoy” Romualdez and Juliette
Gomez Romualdez, alleged “cronies” of former President Marcos and First Lady
Imelda Romualdez Marcos, engaged in schemes and stratagems to unjustly enrich
themselves at the expense of the Filipino people. Among these stratagems are (1)
obtained control of some big business enterprises such as MERALCO, Pilipinas Shell,
and PCI Bank, (2) manipulated the formation of Erectors Holding Inc, to appear
viable and borrow more capital, reaching a total of more that P2 billion, (3)
collaborated with lawyers (petitioners therein) of the Bengzon Law Offices in
concealing funds and properties, in maneuvering the purported sale of interests in
certain corporations, in misusing the Meralco Pension Fund worth P25 million, and in
cleverly hiding behind the veil of corporate entity.
On 13 September 1988, Sen. Juan Ponce Enrile delivered a speech before
the Senate on the alleged take-over of SolOil Incorporated by Ricardo Lopa (who
died during the pendency of this case) and called upon the senate to look into
possible violation of the Anti Graft and Corrupt Practices Act or RA 3019. The Senate
Committee on Accountability of Public Officers or Blue Ribbon Committee (SBRC)
started its investigation through a hearing on 23 May 1989, but Lopa and Bengzon
declined to testify. The SBRC rejected petitioner Bengzon’s plea and voted to pursue
its investigation. Petitioner claims that the SBRC, in requiring their attendance and
testimony, acted in excess of its jurisdiction and legislative purpose. Hence this
petition.
ISSUES:
1. WON the court has jurisdiction over this case. YES.
2. WON the SBRC’s inquiry has a valid legislative purpose. NO.
3. WON the sale or disposition of the Romualdez corporations is a purely
private transaction which is beyond the power of the SBRC to inquire into.
YES.
4. WON the inquiry violates the petitioners’ right to due process. NO.
RATIO:
1. As the court held in Angara vs. Electoral Commission, the Constitution
provided for an elaborate system of checks and balances to secure coordination in
the workings of the departments of the government, and it is the judiciary that was
vested of the powers to determine the scope, nature and extent of such powers.
2 and 3. The speech of Sen. Enrile contained no suggestion on contemplated
legislation; he merely called upon the Senate to look into a possible violation of Sec.
5 of RA 3019. The purpose of the inquiry to be conducted by respondent SBRC was
to find out WON the relatives of President Aquino, particularly Ricardo Lopa, had
violated the law in connection with the alleged sale of the 36/39 corporations of
Kokoy Romualdez to the Lopa Group. There appears, therefore, no intended
legislation involved.
The inquiry also is not conducted pursuant to Senate Resolution No. 212 3
(SR 212), as the committee alleges. The inquiry under SR 212 is to look into the
charges against PCGG filed by stockholders of Oriental Petroleum in connection with
the implementation of Section 26 Article XVIII of the Constitution. Mr. Lopa and the
petitioners are not connected with the government and did their acts as private
citizens, hence such a case of alleged graft and corruption is within the jurisdiction,
not of the SBRC, but of the courts. In fact, the Sandiganbayan already took
jurisdiction of this issue before the SBRC did. The inquiry of the respondent
committee into the same justiciable controversy already before the Sandiganbayan
would be an encroachment of into the exclusive domain of judicial jurisdiction.
4. The Constitution provides the right of an accused of a crime to remain
silent; this extends also to respondents in administrative investigation but only if
they partake of the nature of a criminal proceeding. This is not so in this case. BUT
since the court already held that the inquiry is not in aid of legislation, the
petitioners therein cannot be compelled to testify.
RULING: Petition is GRANTED. The Senate Blue Ribbon Committee is hereby
enjoined from compelling the petitioners and intervenor to testify before it and
produce evidence at the said inquiry.
3
Senate Resolution wherein the activities of PCGG be investigated on the ground, among
others, that the Sandiganbayan has ordered the PCGG to answered charges filed by three
stockholders of Oriental Petroleum that it has adopted a “get-rich quick” scheme.