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QUASI-LEGISLATIVE

A. In General
People vs. Maceran, October 18, 1977
Aquino J.

Administrative regulations adopted under legislative authority by a particular department must be in harmony with the
provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By such
regulations, the law itself cannot be extended. An administrative agency cannot amend an act of Congress.

FACTS: The respondents were charged with violating Fisheries Administrative Order No. 84-1 which penalizes electro fishing in fresh
water fisheries. This was promulgated by the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries under
the old Fisheries Law and the law creating the Fisheries Commission. The municipal court quashed the complaint and held that the law
does not clearly prohibit electro fishing, hence the executive and judicial departments cannot consider the same. On appeal, the CFI
affirmed the dismissal. Hence, this appeal to the SC.

ISSUE: Whether the administrative order penalizing electro fishing is valid?

HELD: NO. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded their authority in issuing
the administrative order. The old Fisheries Law does not expressly prohibit electro fishing. As electro fishing is not banned under that
law, the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. Had the
lawmaking body intended to punish electro fishing, a penal provision to that effect could have been easily embodied in the old Fisheries
Law. The lawmaking body cannot delegate to an executive official the power to declare what acts should constitute an offense. It can
authorize the issuance of regulations and the imposition of the penalty provided for in the law itself. Where the legislature has
delegated to executive or administrative officers and boards authority to promulgate rules to carry out an express legislative purpose,
the rules of administrative officers and boards, which have the effect of extending, or which conflict with the authority granting statute,
do not represent a valid precise of the rule-making power

Smart Communications, Inc. vs. NTC, August 12, 2003
YNARES-SANTIAGO, J.:
Facts: On June 00, pursuant to its, rule-making and regulatory powers, NTC issued Memorandum Circular 13-6-2000, promulgating
rules on the billing of telecommunications services. Pertinent parts:
omplied





On Aug 00, NTC issued a Memorandum, containing measures to minimize theft of cell phones like compliance with the preceding
Memo. On Oct 00, another Memo was issued for compliance with the preceding Memos. Petitioners thereafter filed to declare
nullification of NTC Memo Circulars. They contend that NTC has no jurisdiction, jurisdiction belongs to DTI where there has been a
violation of Constitution, deprivation of property w/o due process and impairment of prepaid service. TRO was issued. Subsequently,
the NTC motion to dismiss: failure to exhaust administrative remedies. RTC: injunction granted pending resolution of case. CA:
Reversed, exhaust administrative remedies.

Issue: Whether or not the Courts have jurisdiction? YES.

Held:
In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need not exhaust
administrative remedies before going to court. Exhaustion applies only where the act of the administrative agency concerned was
performed pursuant to its quasi-judicial function, and not when the assailed act pertained to its rule-making or quasi-legislative power.

Even assuming that the principle of exhaustion of administrative remedies apply in this case, the records reveal that petitioners
sufficiently complied with this requirement. In like manner, the doctrine of primary jurisdiction applies only where the administrative
agency exercises its quasi-judicial or adjudicatory function.

However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the administrative agency in the
performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same. The determination of whether
a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the
regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or
executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts.

In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and its Memorandum dated October 6, 2000 was
pursuant to its quasi-legislative or rule-making power. As such, petitioners were justified in invoking the judicial power of the Regional
Trial Court to assail the constitutionality and validity of the said issuances.



Page 2 of 16

B. Delegation of Legislative Power

Compania General de Tabacos de Filipinas vs. Board of Public Utility, March 06,1916-
Moreland, J.

Facts:COMPANIA GENERAL DE TABACOS DEFILIPINAS is a foreign corporation organized under the laws of Spain and engaged in
business in the Philippine Islands as a common carrier of passengers and merchandise by water:

On June 7, 1915, the Board of PublicUtility Commissioners issued and causedto be served an order to show cause whythey should not
be required to presentdetailed annual reports respecting itsfinances and operations respecting thevessels owned and operated by it, in
theform and containing the mattersindicated by the model attached to thepetition. They are ordered to present annually onor before
March first of each year adetailed report of finances andoperations of such vessels as areoperated by it as a common carrierwithin the
Philippine Islands, in the formand containing the matters indicated inthe model of annual report whichaccompanied the order to show
causeherein.

COMPANIA GENERAL DE TABACOS DE FILIPINAS denied the authority of theboard to require the report asked for onthe ground that
the provision of Act No.2307 relied on by said board as authorityfor such requirement was, if construed asconferring such power,
invalid asconstituting an unlawful attempt on thepart of the Legislature to delegatelegislative power to the board. It iscumbersome and
unnecessarily prolixand that the preparation of the samewould entail an immense amount of clerical work."

ISSUE: Whether or not it is constitutional torequire COMPANIA GENERAL DETABACOS DE FILIPINAS to pass a detailed report to the
Board of PublicUtility Commissioners of the PhilippineIslands?
Whether the power to require thedetailed report is strictly legislative, or administrative, or merely relates to the execution of the law?

HELD: The order appealed from is set aside andthe cause is returned to the Board of Public Utility Commissioners with instructions to
dismiss the proceeding.

RULING:
The section of Act No. 2307 under whichthe Board of Public Utility Commissionersrelies for its authority, so far as pertinent to the case
at hand, reads as follows:Sec. 16. The Board shall havepower, after hearing, upon notice,by order in writing, to require every public
utility as herein defined: (e) To furnish annually a detailedreport of finances and operations,in such form and containing suchmatters as
the Board may fromtime to time by order prescribe. The statute which authorizes a Board of Public Utility Commissioners to
requiredetailed reports from public utilities,leaving the nature of the report, thecontents thereof, the general lines whichit shall follow,
the principle upon which itshall proceed, indeed, all other matters whatsoever, to the exclusive discretion of the board, is not
expressing its own will or the will of the State with respect to thepublic utilities to which it refers.

Such a provision does not declare, or setout, or indicate what information theState requires, what is valuable to it,what it needs in
order to impose correctand just taxation, supervision or control,or the facts which the State must have inorder to deal justly and
equitably withsuch public utilities and to require themto deal justly and equitably with theState. The Legislature seems simply tohave
authorized the Board of PublicUtility Commissioners to require whatinformation the board wants. It wouldseem that the Legislature, by
theprovision in question, delegated to theBoard of Public Utility Commissioners allof its powers over a given subject-matterin a manner
almost absolute, and withoutlaying down a rule or even making asuggestion by which that power is to bedirected, guided or applied.

The true distinction is between the delegation of power to make the law,which necessarily involves a discretion asto what shall be, and
conferring authority or discretion as to its execution, to beexercised under and in pursuance of thelaw. The first cannot be done; to
thelatter no valid objection can be made. The Supreme Court held that there wasno delegation of legislative power, it said: The
Congress may not delegate itspurely legislative powers to acommission, but, having laid downthe general rules of action underwhich a
commission shall proceed,it may require of that commissionthe application of such rules toparticular situations and theinvestigation of
facts, with a viewto making orders in a particularmatter within the rules laid downby the Congress.In section 20 (of the Commerce
Act),Congress has authorized the commissionto require annual reports.
The act itself prescribes in detail what those reportsshall contain.

In other words, Congress has laid down general rules for theguidance of the Commission, leaving to itmerely the carrying out of details
in theexercise of the power so conferred. This,we think, is not a delegation of legislativeauthority.In the case at bar the
provisioncomplained of does not law "down thegeneral rules of action under which thecommission shall proceed." nor does ititself
prescribe in detail what thosereports shall contain. Practicallyeverything is left to the judgment anddiscretion of the Board of Public
UtilityCommissioners, which is unrestrained asto when it shall act, why it shall act, howit shall act, to what extent it shall act, orwhat it
shall act upon.

The Legislature, by the provision inquestion, has abdicated its powers andfunctions in favor of the Board of PublicUtility Commissioners
with respect to thematters therein referred to, and thatsuch Act is in violation of the Act of Congress of July 1, 1902. The Legislature,by
the provision referred to, has no tasked for the information which the State wants but has authorized and board toobtain the
information which the board wants.

Page 3 of 16


People vs. Vera, November 16, 1937
LAUREL, J.
People v. Vera, 65 Phil. 56 (1937)

Lesson: Old Probation Law violated the doctrine of non-delegation when it placed the discretion to the local
governments the decision to allocate for the salary of the probation officer.

FACTS:
Petitioners, People of the Philippines and Hongkong and Shanghai Banking Corporation (HSBC) are respectively the plaintiff and the
offended party, and Mariano Cu Unjieng is one of the defendants, in the criminal case. Hon. Jose O. Vera, is the Judge ad interim of
the seventh branch of the Court of First Instance of Manila, who heard the application of Cu Unjieng for probation. HSBC intervened in
the case as private prosecutor. After a protracted trial, the Court of First Instance rendered a judgment of conviction sentencing Cu
Unjieng to indeterminate penalty ranging from 4 years and 2 months of prision correccional to 8 years of prision mayor, to pay the
costs and with reservation of civil action to the offended party, HSBC.

Upon appeal, the court, on 26 March 1935, modified the sentence to an indeterminate penalty of from 5 years and 6 months of prision
correccional to 7 years, 6 months and 27 days of prision mayor, but affirmed the judgment in all other respects. Cu Unjieng filed a
motion for reconsideration and four successive motions for new trial which were denied on 17 December 1935, and final judgment was
accordingly entered on 18 December 1935. Cu Unjieng thereupon sought to have the case elevated on certiorari to the Supreme Court
of the United States but the latter denied the petition for certiorari in November, 1936. The Supreme Court, on 24 November 1936,
denied the petition subsequently filed by Cu Unjieng for leave to file a second alternative motion for reconsideration or new trial and
thereafter remanded the case to the court of origin for execution of the judgment.

ISSUE:
Whether or not the People of the Philippines is a proper party in this case.

HELD:
YES. The People of the Philippines, represented by the Solicitor General and the Fiscal of the City of Manila, is a proper party in the
present proceedings. The unchallenged rule is that the person who impugns the validity of a statute must have a personal and
substantial interest in the case such that he has sustained, or will sustained, direct injury as a result of its enforcement. It goes without
saying that if Act No. 4221 really violates the constitution, the People of the Philippines, in whose name the present action is brought,
has a substantial interest in having it set aside. Of greater import than the damage caused by the illegal expenditure of public funds is
the mortal wound inflicted upon the fundamental law by the enforcement of an invalid statute. Hence, the well-settled rule that the
state can challenge the validity of its own laws.

Ynot vs. IAC, March 20, 1987- Cruz, J.

Police Power Not Validly Exercised

There had been an existing law which prohibited the slaughtering of carabaos (EO 626). To strengthen the law, Marcos issued EO 626-
A which not only banned the movement of carabaos from interprovinces but as well as the movement of carabeef. On 13 Jan 1984,
Ynot was caught transporting 6 carabaos from Masbate to Iloilo. He was then charged in violation of EO 626-A. Ynot averred EO 626-A
as unconstitutional for it violated his right to be heard or his right to due process. He said that the authority provided by EO 626-A to
outrightly confiscate carabaos even without being heard is unconstitutional. The lower court ruled against Ynot ruling that the EO is a
valid exercise of police power in order to promote general welfare so as to curb down the indiscriminate slaughter of carabaos.

ISSUE: Whether or not the law is valid.

HELD: The SC ruled that the EO is not valid as it indeed violates due process. EO 626-A ctreated a presumption based on the
judgment of the executive. The movement of carabaos from one area to the other does not mean a subsequent slaughter of the same
would ensue. Ynot should be given to defend himself and explain why the carabaos are being transferred before they can be
confiscated. The SC found that the challenged measure is an invalid exercise of the police power because the method employed to
conserve the carabaos is not reasonably necessary to the purpose of the law and, worse, is unduly oppressive. Due process is violated
because the owner of the property confiscated is denied the right to be heard in his defense and is immediately condemned and
punished. The conferment on the administrative authorities of the power to adjudge the guilt of the supposed offender is a clear
encroachment on judicial functions and militates against the doctrine of separation of powers. There is, finally, also an invalid
delegation of legislative powers to the officers mentioned therein who are granted unlimited discretion in the distribution of the
properties arbitrarily taken.

Pelaez vs. Auditor General, December 24, 1965
CONCEPCION, J.:
Political Law Sufficient Standard Test and Completeness Test

From Sept 04 to Oct 29, 1964, the President (Marcos) issued executive orders creating 33 municipalities this is purportedly in
pursuant to Sec 68 of the Revised Administrative Code which provides that the President of the Philippines may by executive order
define the boundary, or boundaries, of any province, sub-province, municipality, [township] municipal district or other political
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subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovincesThe VP
Emmanuel Pelaez and a taxpayer filed a special civil action to prohibit the auditor general from disbursing funds to be appropriated for
the said municipalities. Pelaez claims that the EOs are unconstitutional. He said that Sec 68 of the RAC has been impliedly repealed by
Sec 3 of RA 2370 which provides that barrios may not be created or their boundaries altered nor their names changed except by Act
of Congress or of the corresponding provincial board upon petition of a majority of the voters in the areas affected and the
recommendation of the council of the municipality or municipalities in which the proposed barrio is situated. Pelaez argues,
accordingly: If the President, under this new law, cannot even create a barrio, can he create a municipality which is composed of
several barrios, since barrios are units of municipalities? The Auditor General countered that only barrios are barred from being
created by the President. Municipalities are exempt from the bar and that t a municipality can be created without creating barrios.
Existing barrios can just be placed into the new municipality. This theory overlooks, however, the main import of Pelaez argument,
which is that the statutory denial of the presidential authority to create a new barrio implies a negation of the bigger power to create
municipalities, each of which consists of several barrios.

ISSUE: Whether or not Congress has delegated the power to create barrios to the President by virtue of Sec 68 of the RAC.

HELD: Although Congress may delegate to another branch of the government the power to fill in the details in the execution,
enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a)
be complete in itself it must set forth therein the policy to be executed, carried out or implemented by the delegate and (b) fix a
standard the limits of which are sufficiently determinate or determinable to which the delegate must conform in the performance
of his functions. Indeed, without a statutory declaration of policy, the delegate would, in effect, make or formulate such policy, which
is the essence of every law; and, without the aforementioned standard, there would be no means to determine, with reasonable
certainty, whether the delegate has acted within or beyond the scope of his authority.
In the case at bar, the power to create municipalities is eminently legislative in character not administrative.

Eastern Shipping Lines vs. POEA, October 18, 1988
Cruz, J.
Facts:Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accidentin Tokyo, Japan on March 15,
1985.His widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2of the POEA.The petitioner, as
owner of the vessel, argued that the complaint was cognizable not by thePOEA but by the Social Security System and should have
been filed against the State FundInsurance.The POEA nevertheless assumed jurisdiction and after considering the position papers of
theparties ruled in favour of the complainant.The petition is DISMISSED, with costs against the petitioner. The temporary restraining
orderdated December 10, 1986 is hereby LIFTED. It is so ordered

Issue: Whether or not the validity of Memorandum Circular No. 2 itself as violative of the principleof non-delegation of legislative
power.

Held: No. Memorandum Circular No. 2 is an administrative regulation. The model contractprescribed thereby has been applied in a
significant number of the cases without challenge by theemployer. The power of the POEA (and before it the National Seamen Board)
in requiring themodel contract is not unlimited as there is a sufficient standard guiding the delegate in theexercise of the said authority.
That standard is discoverable in the executive order itself which, increating the Philippine Overseas Employment Administration,
mandated it to protect the rightsof overseas Filipino workers to "fair and equitable employment practices."

GENERAL RULE: Non-delegation of powers; exceptionIt is true that legislative discretion as to the substantive contents of the law
cannot be delegated.What can be delegated is the discretion to determine how the law may be enforced, not what thelaw shall be. The
ascertainment of the latter subject is a prerogative of the legislature. Thisprerogative cannot be abdicated or surrendered by the
legislature to the delegate.

Two Tests of Valid Delegation of Legislative Power
There are two accepted tests to determine whether or not there is a valid delegation of legislativepower, viz, the completeness test and
the sufficient standard test. Under the first test, the lawmust be complete in all its terms and conditions when it leaves the legislature
such that when itreaches the delegate the only thing he will have to do is to enforce it. Under the sufficientstandard test, there must
be adequate guidelines or stations in the law to map out the boundaries of the delegates authority and prevent the delegation from
running riot.

Both tests are intended to prevent a total transference of legislative authority to the delegate, whois not allowed to step into the shoes
of the legislature and exercise a power essentially legislative.The delegation of legislative power has become the rule and its non-
delegation the exception.

Edu vs. Ericta, October 24, 1970
Fernando, J.
Facts:

1. Assailed is the validity of the Reflector Law and Admin Order No. 2 which implements it. Under the law, a vehicle has to comply with
the requirements of having reflective device prior to being registered at the LTO.

2. The respondent Galo on his behalf and that of other motorists, filed a suit for certiorari and prohibition with preliminary injunction
assailing the validity of the challenged Act as an invalid exercise of the police power for being violative of the due process clause. This
he followed on May 28, 1970 with a manifestation wherein he sought as an alternative remedy that, in the event that respondent
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Judge would hold said statute constitutional, Administrative Order No. 2 of the Land Transportation Commissioner, now petitioner,
implementing such legislation be nullified as an undue exercise of legislative power.


Issue: W/N Reflector Law is unconstitutional, and w/n AO2 is valid


YES, both the law and AO 2 are valid.

It is thus obvious that the challenged statute is a legislation enacted under the police power to promote public safety. What is
delegated is authority which is non-legislative in character, the completeness of the statute when it leaves the hands of Congress being
assumed.

1. Police Power
It is in the above sense the greatest and most powerful attribute of government. "the most essential, insistent, and at least il limitable
of powers," (Justice Holmes) aptly pointed out "to all the great public needs."
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides enough
room for an efficient and flexible response to conditions and circumstances thus assuring the greatest benefits. In the language of
Justice Cardozo: "Needs that were narrow or parochial in the past may be interwoven in the present with the well-being of the nation.


2. Delegation of Legislative Power
It is a fundamental principle flowing from the doctrine of separation of powers that Congress may not delegate its legislative power to
the two other branches of the government, subject to the exception that local governments may over local affairs participate in its
exercise. What cannot be delegated is the authority under the Constitution to make laws and to alter and repeal them; the test is the
completeness of the statute in all its term and provisions when it leaves the hands of the legislature. To determine whether or not
there is an undue delegation of legislative power the inquiry must be directed to the scope and definiteness of the measure enacted.
The legislature does not abdicate its functions when it describes what job must be done, who is to do it, and what is the scope of his
authority. For a complex economy, that may indeed be the only way in which the legislative process can go forward. A distinction has
rightfully been made between delegation of power to make the laws which necessarily involves a discretion as to what it shall be,
which constitutionally may not be done, and delegation of authority or discretion as to its execution to exercised under and in
pursuance of the law, to which no valid objection call be made. The Constitution is thus not to be regarded as denying the legislature
the necessary resources of flexibility and practicability.


To avoid the taint of unlawful delegation, there must be a standard, which implies at the very least that the legislature itself determines
matters of principle and lay down fundamental policy. Otherwise, the charge of complete abdication may be hard to repel. A standard
thus defines legislative policy, marks its limits, its maps out its boundaries and specifies the public agency to apply it. It indicates the
circumstances under which the legislative command is to be effected. It is the criterion by which legislative purpose may be carried out.
Thereafter, the executive or administrative office designated may in pursuance of the above guidelines promulgate supplemental rules
and regulations.


The standard may be either express or implied. If the former, the non-delegation objection is easily met. The standard though does not
have to be spelled out specifically. It could be implied from the policy and purpose of the act considered as a whole. In the Reflector
Law, clearly the legislative objective is public safety.

Beltran vs. Secretary of Health, November 25, 2005
Azcuna, J.

Facts: In January of 1994, the New Tropical Medicine Foundation, with the assistance of the U.S. Agency for International
Development (USAID) released its final report of a study on the Philippine blood banking system entitled Project to
Evaluate the Safety of the Philippine Blood Banking System. It was revealed that of the blood units collected in 1992, 64.4 % were
supplied by commercial blood banks, 14.5% by the PNRC, 13.7% by government hospital-based blood banks, and 7.4% by private
hospital-based blood banks ; showing that the Philippines heavily relied on commercial sources of blood. It was further
found, among other things, that blood sold by persons to blood commercial banks are three times more likely to have any of the four
(4) tested infections or blood transfusion transmissible diseases, namely, malaria, syphilis, Hepatitis B and Acquired
Immune Deficiency Syndrome (AIDS) than those donated to PNRC.
Republic Act No. 7719 or the National Blood Services Act of 1994 was then enacted into law on April 2, 1994. The Act seeks to
provide an adequate supply of safe blood by promoting voluntary blood donation and by regulating blood banks in the
country. One of the provisions of the said act was the phasing out of commercial blood banks within 2 years from its effectivity.
Petitioners, comprising the majority of the Board of Directors of the Philippine Association of Blood Banks assail the
constitutionality of RA 7719 on the ground among others that it is an improper and unwarranted delegation of legislative power.
According to petitioners, the Act was incomplete when it was passed by the Legislature, and the latter failed to fix a
standard to which the Secretary of Health must conform in the performance of his functions. Petitioners also contend
that the two-year extension period that may be granted by the Secretary of Health for the phasing out of commercial
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blood banks pursuant to Section 7 of the Act constrained the Secretary to legislate, thus constituting undue delegation
of legislative power.
Issue: WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES UNDUE DELEGATION OF LEGISLATIVE POWER
Held: In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to inquire whether the statute
was complete in all its terms and provisions when it left the hands of the Legislature so that nothing was left to the judgment of the
administrative body or any other appointee or delegate of the Legislature. Except as to matters of detail that may be left to be filled in
by rules and regulations to be adopted or promulgated by executive officers and administrative boards, an act of the Legislature, as a
general rule, is incomplete and hence invalid if it does not lay down any rule or definite standard by which the administrative board
may be guided in the exercise of the discretionary powers delegated to it.
Republic Act No. 7719 or the National Blood Services Act of 1994 is complete in itself. It is clear from the provisions of the Act that the
Legislature intended primarily to safeguard the health of the people and has mandated several measures to attain this objective. One
of these is the phase out of commercial blood banks in the country. The law has sufficiently provided a definite standard for the
guidance of the Secretary of Health in carrying out its provisions, that is, the promotion of public health by providing a safe and
adequate supply of blood through voluntary blood donation. By its provisions, it has conferred the power and authority to the Secretary
of Health as to its execution, to be exercised under and in pursuance of the law.
The Secretary of Health has been given, under Republic Act No. 7719, broad powers to execute the provisions of said Act. Specifically,
Section 23 of Administrative Order No. 9 provides that the phase-out period for commercial blood banks shall be extended for another
two years until May 28, 1998 based on the result of a careful study and review of the blood supply and demand and public safety.
This power to ascertain the existence of facts and conditions upon which the Secretary may effect a period of extension for said phase-
out can be delegated by Congress. The true distinction between the power to make laws and discretion as to its execution is illustrated
by the fact that the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring
an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter
no valid objection can be made.

Carbonilla vs. BAR, September 14, 2011

C. Kinds of Administrative Rules and Regulations

BPI Leasing Corporation vs. CA, November 18, 2003
Azuna, J.

FACTS:
For the calendar year 1986, BLC paid the CIR a totalof P1,139,041.49 representing 4% "contractors percentage tax " imposed by
Section 205 of the NIRC based on its grossrentals from equipment leasing for said year.On November 10, 1986, CIR issued
Revenue Regulation 19-86.Section 6.2 thereof provided that finance and leasingcompanies registered under RA 5980 shall be subject
to gross receipt tax of 5%-3%-1% on actual income earned.

This means that companies registered under Republic Act 5980, such as BLC, are not liable for "contractors percentage tax" under
Section 205 but are, instead, subject to "gross receipts tax" under Section 260 (now Section 122)of the NIRC. Since BLC had earlier
paid the "contractors percentage tax for its 1986 lease rentals. BLC filed a claim for a refund with theCIR on April 1988 for the amount
representing the differencebetween what it had paid as "contractors percentage tax" andwhat it should have paid for "gross receipts
tax."

ISSUES:1. WON Revenue Regulation 19-86 is legislative rather than interpretative in character.
2.WON it should retroact to the date of effectivity of the law itseeks to interpret.

RATIO:1. NO. Section 1 of Revenue Regulation 19-86 plainly states that it was promulgated pursuant to Section 277 of the
NIRC.Section 277 (now Section 244) is an express grant of authority to the Secretary of Finance to promulgate all needful rules and
regulations for the effective enforcement of the provisions of the NIRC.

2.NO.
The principle is well entrenched that statutes, including administrative rules and regulations, operate prospectivelyonly, unless the
legislative intent to the contrary is manifest byexpress terms or by necessary implication. In the presentcase, there is no indication that
the revenue regulation mayoperate retroactively.Furthermore, there is an express provision stating that it "shall take effect on January
1, 1987," and that it "shall be applicable to all leases written ON OR AFTER the said date." Being clear on its prospective application, it
Page 7 of 16

must begiven its literal meaning and applied without further interpretation. Thus, BLC is not in a position to invoke the provisions of
Revenue Regulation 19-86 for lease rentals it received prior to January 1, 1987.

Commissioner of Internal Revenue vs. CA (Bellosillos Separate Opinion),
August 29, 1996
A brief discourse on the powers and functions of administrative bodies may be instructive.
Administrative agencies possess quasi-legislative or rule making powers and quasi-judicial or administrative adjudicatory
powers. Quasi-legislative or rule making power is the power to make rules and regulations which results in delegated
legislation that is within the confines of the granting statute and the doctrine of nondelegability and separability of
powers.
Interpretative rule, one of the three (3) types of quasi-legislative or rule making powers of an administrative agency (the other
two being supplementary or detailed legislation, and contingent legislation), is promulgated by the administrative agency to
interpret, clarify or explain statutory regulations under which the administrative body operates. The purpose or
objective of an interpretative rule is merely to construe the statute being administered. It purports to do no more than
interpret the statute. Simply, the rule tries to say what the statute means. Generally, it refers to no single person or party in
particular but concerns all those belonging to the same class which may be covered by the said interpretative rule. It need not be
published and neither is a hearing required since it is issued by the administrative body as an incident of its power to enforce the law
and is intended merely to clarify statutory provisions for proper observance by the people. In Taada v. Tuvera,
[6]
this Court expressly
said that "[i]nterpretative regulations x x x need not be published."
Quasi-judicial or administrative adjudicatory power on the other hand is the power of the administrative agency
to adjudicate the rights of persons before it. It is the power to hear and determine questions of fact to which the
legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and
administering the same law.
[7]
The administrative body exercises its quasi-judicial power when it performs in a judicial manner an
act which is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably
necessary for the performance of the executive or administrative duty entrusted to it.
[8]
In carrying out their quasi-judicial functions the
administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and
draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature. Since rights of specific
persons are affected it is elementary that in the proper exercise of quasi-judicial power due process must be observed in the conduct of
the proceedings.
The importance of due process cannot be underestimated. Too basic is the rule that no person shall be deprived of life, liberty or
property without due process of law. Thus when an administrative proceeding is quasi-judicial in character, notice and fair
open hearing are essential to the validity of the proceeding. The right to reasonable prior notice and hearing embraces
not only the right to present evidence but also the opportunity to know the claims of the opposing party and to meet
them. The right to submit arguments implies that opportunity otherwise the right may as well be considered
impotent. And those who are brought into contest with gover nment in a quasi-judicial proceeding aimed at the
control of their activities are entitled to be fairly advised of what the government proposes and to be heard upon its
proposal before it issues its final command.
There are cardinal primary rights which must be respected in administrative proceedings. The landmark case of Ang Tibay v. The
Court of Industrial Relations
[9]
enumerated these rights (1) the right to a hearing, which includes the right to the party
interested or affected to present his own case and submit evidence in support thereof; (2) the tribunal must consider
the evidence presented; (3) the decision must have something to support itself; (4) the evidence must be substantial;
(5) the decision must be rendered on the evidence presented at the hearing, or at least contained in the record and
disclosed to the parties affected; (6) the tribunal or any of its judges must act on its or his own independent
consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a
decision; and, (7) the tribunal should in all controversial questions render its decision in such manner that the parties
to the proceeding may know the various issues involved and the reasons for the decision rendered.

D. Requisites for Validity

Executive Secretary vs. Southwing Heavy Industries, February 20, 2006












Page 8 of 16

Dagan vs. Philippine Racing Commission, February 12, 2009

Lesson: Requisites, explained.

SCs words: The validity of an administrative issuance, such as the assailed guidelines, hinges on compliance with the
following requisites:
1. Its promulgation must be authorized by the legislature;
2. It must be promulgated in accordance with the prescribed procedure;
3. It must be within the scope of the authority given by the legislature;
4. It must be reasonable.
All the prescribed requisites are met as regards the questioned issuances. Philracoms authority is drawn from P.D.
No. 420. The delegation made in the presidential decree is valid. Philracom did not exceed its authority. And the
issuances are fair and reasonable. Xxx

P.D. No. 420 hurdles the tests of completeness and standards sufficiency.

Philracom was created for the purpose of carrying out the declared policy in Section 1 which is to promote and direct
the accelerated development and continued growth of horse racing not only in pursuance of the sports development
program but also in order to insure the full exploitation of the sport as a source of revenue and employment.
Furthermore, Philracom was granted exclusive jurisdiction and control over every aspect of the conduct of horse
racing, including the framing and scheduling of races, the construction and safety of race tracks, and the security of
racing. P.D. No. 420 is already complete in itself.
Clearly, there is a proper legislative delegation of rule-making power to Philracom. Clearly too, for its part Philracom
has exercised its rule-making power in a proper and reasonable manner. More specifically, its discretion to rid the
facilities of MJCI and PRCI of horses afflicted with EIA is aimed at preserving the security and integrity of horse races.

Petitioners also question the supposed delegation by Philracom of its rule-making powers to MJCI and PRCI.

There is no delegation of power to speak of between Philracom, as the delegator and MJCI and PRCI as
delegates. The Philracom directive is merely instructive in character. Philracom had instructed PRCI and MJCI to
immediately come up with Clubs House Rule to address the problem and rid their facilities of horses infected with
EIA. PRCI and MJCI followed-up when they ordered the racehorse owners to submit blood samples and subject their
race horses to blood testing. Compliance with the Philracoms directive is part of the mandate of PRCI and MJCI under
Sections 11 of R.A. No. 7953 and Sections 1 and 2 of 8407.
As correctly proferred by MJCI, its duty is not derived from the delegated authority of Philracom but arises from the
franchise granted to them by Congress allowing MJCI to do and carry out all such acts, deeds and things as may be
necessary to give effect to the foregoing. As justified by PRCI, obeying the terms of the franchise and abiding by
whatever rules enacted by Philracom is its duty.

As to the second requisite, petitioners raise some infirmities relating to Philracoms guidelines. They question the
supposed belated issuance of the guidelines, that is, only after the collection of blood samples for the Coggins
Test was ordered. While it is conceded that the guidelines were issued a month after Philracoms directive, this
circumstance does not render the directive nor the guidelines void. The directives validity and effectivity are not
dependent on any supplemental guidelines. Philracom has every right to issue directives to MJCI and PRCI with
respect to the conduct of horse racing, with or without implementing guidelines.


On publication: Petitioners also argue that Philracoms guidelines have no force and effect for lack of publication and
failure to file copies with the University of the Philippines (UP) Law Center as required by law.

As a rule, the issuance of rules and regulations in the exercise of an administrative agency of its quasi-legislative
power does not require notice and hearing, In Abella, Jr. v. Civil Service Commission, this Court had the occasion to
rule that prior notice and hearing are not essential to the validity of rules or regulations issued in the exercise of
quasi-legislative powers since there is no determination of past events or facts that have to be established or
ascertained.

The third requisite for the validity of an administrative issuance is that it must be within the limits of the powers
granted to it. The administrative body may not make rules and regulations which are inconsistent with the provisions
of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in
derogation of, or defeat, the purpose of a statute.

The assailed guidelines prescribe the procedure for monitoring and eradicating EIA. These guidelines are in accord
with Philracoms mandate under the law to regulate the conduct of horse racing in the country.

Anent the fourth requisite, the assailed guidelines do not appear to be unreasonable or discriminatory. In fact, all
horses stabled at the MJCI and PRCIs premises underwent the same procedure. The guidelines implemented were
undoubtedly reasonable as they bear a reasonable relation to the purpose sought to be accomplished, i.e., the
complete riddance of horses infected with EIA.

Page 9 of 16

It also appears from the records that MJCI properly notified the racehorse owners before the test was conducted.
Those who failed to comply were repeatedly warned of certain consequences and sanctions.

Furthermore, extant from the records are circumstances which allow respondents to determine from time to time the
eligibility of horses as race entries. The lease contract executed between petitioner and MJC contains a proviso
reserving the right of the lessor, MJCI in this case, the right to determine whether a particular horse is a qualified
horse. In addition, Philracoms rules and regulations on horse racing provide that horses must be free from any
contagious disease or illness in order to be eligible as race entries.

All told, we find no grave abuse of discretion on the part of Philracom in issuing the contested guidelines and on the
part MJCI and PRCI in complying with Philracoms directive.



















































Page 10 of 16




E. Fact-finding and Rate-Fixing
F.
Lovina vs. Moreno, November 29, 1963

Facts: Numerous residents of Macabebe, Pampanga complained that appellees had blocked the "Sapang Bulati", a
navigable river in the same municipality and asked that the obstructions be ordered removed, under the provisions of
Republic Act No. 2056. After notice and hearing to the parties, the said Secretary of Public Works and
Communications found the constructions to be a public nuisance in navigable waters, and ordered the land owners,
spouses Lovina, to remove five (5) closures of Sapang Bulati. After receipt of the decision, the appellees filed a petition
in CFI of Manila to restrain the Secretary from enforcing his decision. The trial court, after due hearing, granted a
permanent injunction. It held that Republic Act No. 2056 is unconstitutional and that Sapang Bulati is not a navigable
river but a private stream. The appellees contention is that Republic Act No. 2056 is unconstitutional because it
invests the Secretary of Public Works and Communications with sweeping, unrestrained, final and unappealable
authority to pass upon the issues of whether a river or stream is public and navigable, whether a dam encroaches
upon such waters and is constitutive as a public nuisance, and whether the law applies to the state of facts, thereby
Constituting an alleged unlawful delegation of judicial power to the Secretary of Public Works and Communications.
Issue: Whether or not there is an unlawful delegation of judicial power.
Held: The contentions of the appellees are not tenable. R.A. 2056 merely empowers the Secretary to remove
unauthorized obstructions or encroachments upon public streams, constructions that no private person was anyway
entitled to make, because the bed of navigable streams is public property, and ownership thereof is not acquirable by
adverse possession. It is true that the exercise of the Secretary's power under the Act necessarily involves the
determination of some questions of fact, such as the existence of the stream and its previous navigable character; but
these functions, whether judicial or quasi-judicial, are merely incidental to the exercise of the power granted by law
to clear navigable streams of unauthorized obstructions or encroachments, and authorities are clear that they are,
validly conferable upon executive officials provided the party affected is given opportunity to be heard, as is expressly
required by Republic Act No. 2056, section 2. The mere fact that an officer is required by law to inquire the existence of
certain facts and to apply the law thereto in order to determine what his official conduct shall be and the fact that these
acts may affect private, rights do not constitute an exercise of judicial powers. Accordingly, a statute may give to non-
judicial officers the power to declare the existence of facts which call into operation its provisions, and similarly may
grant to commissioners and other subordinate officer, power to ascertain and determine appropriate facts as a basis for
procedure in the enforcement of particular laws. It is noteworthy that Republic Act 2605 authorizes removal of the
unauthorized dikes either as "public nuisances or as prohibited constructions" on public navigable streams, and those of
appellees clearly are in the latter class. In fine, it is held that Republic Act No. 2056 does not constitute an unlawful
delegation of judicial power to the Secretary of Public Works; that the findings of fact of the Secretary of Public Works
under Republic Act No. 2056 should be respected in the absence of illegality, error of law, fraud, or imposition, so long
as the said, findings are supported by substantial evidence submitted to him. The decision appealed from is reversed,
and the writs of injunction issued therein are annulled and set aside.

Philippine Interisland Shipping Association vs. CA, January 22, 1997

FACTS
On February 3, 1986, shortly before the presidential elections, President Ferdinand E. Marcos, responding to the clamor
of harbor pilots for an increase in pilotage rates, issued Executive Order No. 1088, PROVIDING FOR UNIFORM AND MODIFIED
RATES FOR PILOTAGE SERVICES RENDERED TO FOREIGN AND COASTWISE VESSELS IN ALL PRIVATE AND PUBLIC
PORTS. The executive order increased substantially the rates of the existing pilotage fees previously fixed by the PPA.
However, the PPA refused to enforce the executive order on the ground that it had been drawn hastily and without prior
consultation; that its enforcement would create disorder in the ports as the operators and owners of the maritime vessels had
expressed opposition to its implementation; and that the increase in pilotage, as mandated by it, was exorbitant and detrimental to
port operations.
The United Harbor Pilots' Association of the Philippines, Inc. (UHPAP) then announced its intention to implement E.O. No.
1088 effective November 16, 1986. UHPAP is the umbrella organization of various groups rendering pilotage service in different ports
of the Philippines. The service consists of navigating a vessel from a specific point, usually about two (2) miles off shore, to an
assigned area at the pier and vice versa. When a vessel arrives, a harbor pilot takes over the ship from its captain to maneuver it to a
berth in the port, and when it departs, the harbor pilot also maneuvers it up to a specific point off shore. The setup is required by the
fact that each port has peculiar topography with which a harbor pilot is presumed to be more familiar than a ship captain. This in turn
Page 11 of 16

drew a warning from the PPA that disciplinary sanctions would be applied to those who would charge rates under E.O. No. 1088. The
PPA instead issued Memorandum Circular No. 43-86, fixing pilotage fees at rates lower than those provided in E.O. No. 1088.
Consequently, the UHPAP filed on January 7, 1987 a complaint for injunction with the Regional Trial Court of Manila, against
the then Minister of Transportation and Communications, Hernando Perez, and PPA General Manager, Primitivo S. Solis, Jr. It sought a
writ of preliminary mandatory injunction for the immediate implementation of E.O. No. 1088, as well as a temporary restraining order
to stop PPA officials from imposing disciplinary sanctions against UHPAP members charging rates in accordance with E.O. No. 1088.
The RTC of Manila issued a temporary restraining order, enjoining the PPA from threatening the UHPAP, its officers and its members
with suspension and other disciplinary action for collecting pilotage fees pursuant to E.O. No. 1088.
On February 26, 1988, while the case was pending, the PPA issued Administrative Order No. 02-88, entitled IMPLEMENTING
GUIDELINES ON OPEN PILOTAGE SERVICE. The PPA announced in its order that it was leaving to the contracting parties, i.e., the
shipping lines and the pilots, the fixing of mutually acceptable rates for pilotage services, thus abandoning the rates fixed by it (PPA)
under Memorandum Circular No. 43-86, as well as those provided in E.O. No. 1088.
The UHPAP and Manila Pilots Association filed a petition for certiorari filed before RTC-Manila, Branch 2 seeking for the
annulment of A.O. No. 02-88.
The UHPAP and MPA, as petitioners below, contended (1) that A.O. No. 02-88 was issued without the benefit of a public
hearing; (2) that E.O. No. 1088 had not been repealed by any other Executive Order or Presidential Decree and, therefore, should be
given effect; and (3) that A.O. No. 02-88 contravened P.D. No. 857.
On September 8, 1989, a writ of preliminary injunction was issued by the court, enjoining the PPA from implementing A.O.
No. 02-88 and, on October 26, 1989, judgment was rendered in favor of the petitioners therein.
Respondents and the intervenors below filed a joint petition for certiorari in the Court of Appeals (CA G.R. SP No. 19570),
assailing the decision of the trial court. But their petition was dismissed for lack of jurisdiction on the ground that the issue raised was
purely legal.
The parties separately filed petitions for review before this Court. The first one, by the PPA and its officers, was docketed as
G.R. No. 100109, while the second one, by the intervenors, was docketed as G.R. No. 100481.
The petition filed by the government in G.R. No. 100109 was dismissed for failure of petitioners to show that the Court of
Appeals committed a reversible error. On the other hand, the petition of the intervenors in G.R. No. 100481 was given due course.
Following the denial of its petition in G.R. No. 100109, the PPA issued on July 31, 1992, Administrative Order No. 05-92,
placing harbor pilots under the control of the PPA with respect to the scheduling and assignment of service of vessels. The PPA cited as
justification "pilotage delays . . . under the set-up where private respondents (UHPAP & MPA) assign the pilots. Intentionally or
otherwise, several vessels do not receive the pilotage service promptly, causing them operational disruptions and additional
expenses/costs."

Petitioners contend that E.O. No. 1088 was merely an administrative issuance of then President Ferdinand E. Marcos and, as
such, it could be superseded by an order of the PPA. They argue that to consider E.O. No. 1088 a statute would be to deprive the PPA
of its power under its charter to fix pilotage rates.

ISSUE
Whether or not the President Ferdinand Marcos, in the exercise of his legislative power, is authorized to fix pilotage rates

RULING
Yes. President Marcos is authorized to fix pilotage rates
The contention of the petitioners has no merit. The fixing of rates is essentially a legislative power. Indeed, the great battle
over the validity of the exercise of this power by administrative agencies was fought in the 1920s on the issue of undue delegation
precisely because the power delegated was legislative. The growing complexity of modern society, the multiplication of the subjects of
governmental regulations and the increased difficulty of administering the laws made the creation of administrative agencies and the
delegation to them of legislative power necessary.
There is no basis for petitioners' argument that rate fixing is merely an exercise of administrative power; that
if President Marcos had power to revise the rates previously fixed by the PPA through the issuance of E.O. No. 1088,
the PPA could in turn revise those fixed by the President, as the PPA actually did in A.O. No. 43-86, which fixed lower
rates of pilotage fees, and even entirely left the fees to be paid for pilotage to the agreement of the parties to a
contract. The orders previously issued by the PPA were in the nature of subordinate legislation, promulgated by it in
the exercise of delegated power. As such these could only be amended or revised by law, as the President did by E.O.
No. 1088.
It is not an answer to say that E.O. No. 1088 should not be considered a statute because that would imply the withdrawal of
power from the PPA. What determines whether an act is a law or an administrative issuance is not its form but its nature. Here, as we
have already said, the power to fix the rates of charges for services, including pilotage service, has always been
regarded as legislative in character.
Nor is there any doubt of the power of the then President to fix rates. On February 3, 1986, when he issued E.O. No.
1088, President Marcos was authorized under Amendment No. 6 of the 1973 Constitution to exercise legislative power,
just as he was under the original 1973 Constitution, when he issued P.D. NO. 857 which created the PPA, endowing it
with the power to regulate pilotage service in Philippine ports. Although the power to fix rates for pilotage had been
delegated to the PPA, it became necessary to rationalize the rates of charges fixed by it through the imposition of
uniform rates. That is what the President did in promulgating E.O. No. 1088. As the President could delegate the ratemaking power
to the PPA, so could he exercise it in specific instances without thereby withdrawing the power vested by P.D. No. 857, Section 20(a) in
the PPA "to impose, fix, prescribe, increase or decrease such rates, charges or fees... for the services rendered by the Authority or by
any private organization within a Port District."
It is worthy to note that E.O. No. 1088 provides for adjusted pilotage service rates without withdrawing the power of the PPA
to impose, prescribe, increase or decrease rates, charges or fees. The reason is because E.O. NO. 1088 is not meant simply to fix new
pilotage rates. Its legislative purpose is the "rationalization of pilotage service charges, through the imposition of uniform and adjusted
rates for foreign and coastwise vessels in all Philippine ports."
We conclude that E.O. No. 1088 is a valid statute and that the PPA is duty bound to comply with its provisions. The PPA may
increase the rates but it may not decrease them below those mandated by E.O. No. 1088. Finally, the PPA cannot refuse to implement
E.O. No. 1088 or alter it as it did in promulgating Memorandum Circular No. 43-86. Much less could the PPA abrogate the rates fixed
and leave the fixing of rates for pilotage service to the contracting parties as it did through A. O. No. 02-88, Section 3. Theretofore the
policy was one of governmental regulation of the pilotage business. By leaving the matter to the determination of the parties, the PPA
jettisoned this policy and changed it to laissez-faire, something which only the legislature, or whoever is vested with lawmaking
authority, could do.
Page 12 of 16



Philippine Consumers Foundation, Inc. vs. Secretary of DECS, August 31, 1987

Facts: The Task Force on Private Higher Education created by the Department of Education, Culture and Sports (hereinafter referred to
as the DECS) submitted a report which favorably recommended to the DECS the increase of school fees by private schools. Pursuant
thereto, the DECS through respondent Secretary issued an Order authorizing the 15% to 20% increase in school fees, to which the
petitioner sought a reconsideration on the ground that the increases were too high. Thereafter, DECS issued Dep Order No. 37,
modifying the previous Order and reducing the increases to a lower ceiling of 10% to 15%. Petitioner opposed and and alleged in a
petition that said order was issued without any legal basis arguing that authority of DECS to regulate school fees does not always
include the power to increase the same.

Issue: WON the fixing of school fees through department order by DECS is a valid delegation of legislative power.

Held: Yes. Sec. 57 (3) of BP Blg. 232 (The Education Act of 1982), vests the DECS with the power to regulate the educational system;
and Sec. 70 of the same act grants the DECS the power to issue rules which are likewise necessary to discharge its functions and
duties under the law.

Power granted to the educational department to regulate the educational system includes the power to prescribe school fees. In the
absence of a statue stating otherwise, this power include the power to prescribe school fees. No other government agency has been
vested with the authority to fix school fees and as such, the power should be considered lodged with the DECS.

The function of prescribing rates by an administrative agency may be either a legislative or an adjudicative function. If it were a
legislative function, the grant of prior notice and hearing to the affected parties is not a requirement of due process. As regards rates
prescribed by an administrative agency in the exercise of its quasi-judicial function, prior notice and hearing are essential to the validity
of such rates. When the rules and/or rates laid down by an administrative agency are meant to apply to all enterprises of a given kind
throughout the country, they may partake of a legislative character. Where the rules and the rates imposed apply exclusively to a
particular party, based upon a finding of fact, then its function is quasi-judicial in character.

G. Construction and Administrative Interpretation
Victorias Milling Company, Inc. vs. Social Security Commission, March 07,
1962

Facts:
On October 15, 1958, the Social Security Commission issued its Circular No. 22 of the following tenor: "Effective November 1, 1958, all
Employers in computing the premiums due the System, will take in...to consideration and include in the Employee's remuneration all
bonuses and overtime pay, as well as the cash value of other media of remuneration. All these will comprise the Employee's
remuneration or earnings, upon which the 3-1/2% and 2-1/2% contributions will be based, up to a maximum of P500 for any one
month."

Petitioner Victorias Milling Company, Inc. wrote the Social Security Commission in effect protesting against the circular as contradictory
to a previous Circular No. 7, dated October 7, 1957 expressly excluding overtime pay and bonus in the computation of the employers'
and employees' respective monthly premium contributions. Moreover, it contended that due notice via publication was not complied
with.

Issue: Whether or not Circular No. 22 is a rule or regulation, as contemplated in Section 4(a) of Republic Act 1161 empowering the
Social Security Commission "to adopt, amend and repeal subject to the approval of the President such rules and regulations as may be
necessary to carry out the provisions and purposes of this Act."

Held:
It will thus be seen that whereas prior to the amendment, bonuses, allowances, and overtime pay given in addition to the regular or
base pay were expressly excluded, or exempted from the definition of the term "compensation", such exemption or exclusion was
deleted by the amendatory law. It thus became necessary for the Social Security Commission to interpret the effect of such deletion or
elimination. Circular No. 22 was, therefore, issued to apprise those concerned of the interpretation or understanding of the
Commission, of the law as amended, which it was its duty to enforce. It did not add any duty or detail that was not already in the law
as amended. It merely stated and circularized the opinion of the Commission as to how the law should be.

Tayug Rural Bank vs. Central Bank, November 28, 1986

FACTS: Plaintiff-appellee is a banking corporation in Tayug, Pangasinan. During the period from December 28, 1962 to July 30, 1963,
it obtained thirteen (13) loans from defendant-appellant Central Bank totaling P813,000. On December 23, 1964, Central Bank
issued Memorandum Circular No. DLC-8, imposing an additional penalty interest rate of ten percent (10%) p.a. on all past due loans
of rural banks, beginning January 4, 1965. Said Circular was enforced on all rural banks effective July 4, 1965.

On June 27, 1969, Tayug sued Central Bank in CFI-Manila to recover the 10% imposed penalty amounting to P16,874.07, and to
restrain the same from further imposing the penalty. Central Bank filed a counterclaim for the outstanding balance and overdue
accounts of the plaintiff-appellee, including accrued interest and the 10% penalty. Defendant-appellant justified that the penalty
Page 13 of 16

was legally imposed under the Rules and Regulations Governing Rural Banks promulgated by the Monetary Board on September 5,
1958, under Republic Act No. 720. Tayug prayed for the dismissal of the counterclaim, saying that their unpaid obligation was due to
Central Banks flexible and double standard policy of its rediscounting privileges, and its subsequent arbitrary and illegal imposition
of the 10% penalty. The lower court ruled that only a legal question has been raised in the pleadings, and decided the case in favor
of Tayug Rural Bank.

Central Bank appealed the decision of the trial court to the Court of Appeals, for determination of questions of fact and of law. The
Court of Appeals ruled that the resolution of the appeal will solely depend on the legal issue of whether or not the Monetary Board
had authority to authorize Defendant-appellant-appellant Central Bank to impose a penalty rate of 10% per annum on past due
loans of rural banks, and ordered the certification of the case to the Supreme Court for proper determination.

ISSUE: Whether or not the Central Bank can validly impose the 10% penalty on Tayugs past overdue loans beginning July 4, 1965, by
virtue of Memorandum Circular No. DLC-8 dated December 23, 1964.

RULING: The answer is in the negative.
Nowhere in any of the above-quoted pertinent provisions of R.A. 720 nor in any other provision of R.A. 720 for that matter, is the
monetary Board authorized to mete out on rural banks an additional penalty rate on their past due accounts with Appellant. As
correctly stated by the trial court, while the Monetary Board possesses broad supervisory powers, nonetheless, the retroactive
imposition of administrative penalties cannot be taken as a measure supervisory in character.
Administrative rules and regulations have the force and effect of law. There are, however, limitations to the rule-making power of
administrative agencies. A rule shaped out by jurisprudence is that when Congress authorizes promulgation of administrative rules
and regulations to implement given legislation, all that is required is that the regulation be not in contradiction with it, but conform
to the standards that the law prescribes. The rule delineating the extent of the binding force to be given to administrative rul es and
regulations was explained by the Court in Teoxon v. Member of the Board of Administrators (33 SCRA 588), thus: "The recognition of
the power of administrative officials to promulgate rules in the implementation of the statute is necessarily limited to what is
provided for in the legislative enactment. The Court held in the same case that "A rule is binding on the courts so long as the
procedure fixed for its promulgation is followed and its scope is within the statute granted by the legislature, even if the courts are
not in agreement with the policy stated therein or its innate wisdom ...." On the other hand, "administrative i nterpretation of the
law is at best merely advisory, for it is the courts that finally determine what the law means." Indeed, it cannot be otherwi se as the
Constitution limits the authority of the President, in whom all executive power resides, to take care that the laws be faithfully
executed. No lesser administrative, executive office, or agency then can, contrary to the express language of the Constitution, assert
for itself a more extensive prerogative. Necessarily, it is bound to observe the constitutional mandate. There must be strict
compliance with the legislative enactment.
Pharmaceutical and Health Care Association of the Philippines vs. Duque, October 09,
2007

Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of the Department of Health (DOH). For
purposes of herein petition, the DOH is deemed impleaded as a co-respondent since respondents issued the questioned RIRR in their
capacity as officials of said executive agency.1Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October
28, 1986 by virtue of the legislative powers granted to the president under the Freedom Constitution. One of the preambular clauses of
the Milk Code states that the law seeks to give effect to Article 112 of the International Code of Marketing of Breastmilk Substitutes
(ICMBS), a code adopted by the World Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted several Resolutions to
the effect that breastfeeding should be supported, promoted and protected, hence, it should be ensured that nutrition and health
claims are not permitted for breastmilk substitutes.In 1990, the Philippines ratified the International Convention on the Rights of the
Child. Article 24 of said instrument provides that State Parties should take appropriate measures to diminish infant and child mortality,
and ensure that all segments of society, specially parents and children, are informed of the advantages of breastfeeding. On May 15,
2006, the DOH issued herein assailed RIRR which was to take effect on July 7, 2006.

Issue: . Whether Administrative Order or the Revised Implementing Rules and Regulations (RIRR) issued by the Department of Health
(DOH) is not constitutional;

Held: YES, under Article 23, recommendations of the WHA do not come into force for members,in the same way that conventions or
agreements under Article 19 and regulations under Article 21 come into force. Article 23 of the WHO Constitution reads:
Article 23. The Health Assembly shall have authority to make recommendations to Members with respect to any matter within the
competence of the Organization for an international rule to be considered as customary law, it must be established that such rule is
being followed by states because they consider it obligatory to comply with such rules

Under the 1987 Constitution, international law can become part of the sphere of domestic law either
By transformation or incorporation. The transformation method requires that an international law be transformed into a domestic law
through a constitutional mechanism such as local legislation. The incorporation method applies when, by mere constitutional
declaration, international law is deemed to have the force of domestic law.

Page 14 of 16

Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into domestic law. The provisions of the
WHA Resolutions cannot be considered as part of the law of the land that can be implemented by executive agencies without the need
of a law enacted by the legislature.

Hilado vs. Collector of Customs, August 31, 1956
ABS-CBN Broadcasting Corporation vs. CTA, October 12, 1981

Facts: During the period pertinent to this case, petitioner corporation was engaged in the business of telecasting local as well as
foreign films acquired from foreign corporations not engaged in trade or business within the Philippines. for which petitioner paid
rentals after withholding income tax of 30%of one-half of the film rentals. In implementing Section 4(b) of the Tax Code, the
Commissioner issued General Circular V-334. Pursuant thereto, ABS-CBN Broadcasting Corp. dutifully withheld and turned over to the
BIR 30% of of the film rentals paid by it to foreign corporations not engaged in trade or business in the Philippines. The last year
that the company withheld taxes pursuant to the Circular was in 1968. On 27 June 1908, RA 5431 amended Section 24 (b) of the Tax
Code increasing the tax rate from 30% to 35% and revising the tax basis from such amount referring to rents, etc. to gross
income. In 1971, the Commissioner issued a letter of assessment and demand for deficiency withholding income tax for years 1965 to
1968. The company requested for reconsideration; where the Commissioner did not act upon.

Issue: Whether Revenue Memorandum Circular 4-71, revoking General Circular V-334, may be retroactively applied.

Held: Rulings or circulars promulgated by the Commissioner have no retroactive application where to so apply them would be
prejudicial to taxpayers. Herein ,the prejudice the company of the retroactive application of Memorandum Circular 4-71 is beyond
question. It was issued only in 1971, or three years after 1968, the last year that petitioner had withheld taxes under General Circular
No. V-334. The assessment and demand on petitioner to pay deficiency withholding income tax was also made three years after 1968
for a period of time commencing in 1965. The company was no longer in a position to withhold taxes due from foreign corporations
because it had already remitted all film rentals and had no longer control over them when the new circular was issued. Insofar as the
enumerated exceptions are concerned, the company does not fall under any of them.

H. Penal Regulations
US vs. Panlilio, December 08, 1914- MORELAND, J .:
FACTS: On or about the 22nd day of February, 1913, all of the carabaos belonging to the above-named accused having been exposed
to the dangerous and contagious disease known as rinderpest, were, in accordance with an order of duly-authorized agent of the
Director of Agriculture, quarantined in a corral in the barrio of Masamat, municipality of Mexico, Province of Pampanga. That, on said
place, Adriano Panlilio illegally and voluntarily and in violation of Act No. 1760, and while the quarantine against said carabaos was still
in force, permitted and ordered said carabaos to be taken from the corral in which they were then quarantined and his servants and
agents took the said carabaos from the said corral and drove them from place to place within his hacienda to use them the said
caracaos as work animals.
The contention of the accused is that the facts alleged in the information and proved on the trial do not constitute a violation of Act No.
1760 or any portion thereof.
Furthermore, the government contended that if the offense stated in the information and proved upon the trial does not constitute a
violation of any of the provisions of Act No. 1760, it does constitute a violation of article 581, paragraph 2, of the Penal Code. It
provides:A fine of not less than fifteen and not more than seventy pesetas and censure shall be imposed upon: . . .2. Any person who
shall violate the regulations, ordinances, or proclamations issued with reference to any epedemic disease among animals, the
extermination of locusts, or any other similar plague.1awphil.net
ISSUE: WON act of defendant is in violation of said act.
HELD:The only sections of Act No. 1760, which prohibit acts and pronounce them unlawful are 3, 4 and 5. This case does not fall
within any of them.
Section 3 provides, in effect, that it shall be unlawful for any person, firm, or corporation knowingly to ship or
otherwise bring into the Philippine Islands any animal suffering from, infected with, or dead of any dangerous communicable
disease, or any of the effects pertaining to such animal which are liable to introduce such disease into the Philippine Islands.
Section 4 declares, substantially, that it shall be unlawful for any reason, firm, or corporation knowingly to ship, drive
or otherwise take or transport from one island, province, municipality, township, or settlement to another any domestic animal
suffering from any dangerous communicable diseases or to expose such animal either alive or dead on any public road or
highway where it may come in contact with other domestic animals.
Section 5 provides that whenever the Secretary of the Interior shall declare that a dangerous communicable animal
disease prevails in any island, province, municipality, township, or settlement and that there is danger of spreading such
disease by shipping, driving or otherwise transporting or taking out of such island, province, municipality, township, or
settlement any class of domestic animal, it shall be unlawful for any person, firm or corporation to ship, drive or otherwise
remove the kind of animals so specified from such locality except when accompanied by a certificate issued by authority of the
Director of Agriculture stating the number and the kind of animals to be shipped, driven, taken or transported, their
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destination, manner in which they are authorized to be shipped, driven, taken, or transported, and their brands and
distinguishing marks.
The Solicitor-General suggests, but does not argue, that section 6 is applicable to the case at bar. Section 6 simply authorizes the
Director of Agriculture to do certain things, among them, paragraph (c) "to require that animals which are suffering from dangerous
communicable diseases or have been exposed thereto be placed in quarantine at such place and for such time as may be deemed by
him necessary to prevent the spread of the disease."
Nowhere in the law, however, is the violation of the orders of the Bureau of Agriculture neither prohibited or made unlawful, nor is
there provided any punishment for a violation of such orders.
Section 8 provides that "any person violating any of the provisions of this Act shall, upon conviction, be punished by a fine of not more
than one thousand pesos, or by imprisonment for not more than six months, or by both such fine and imprisonment, in the discretion
of the court, for each offense."
A violation of the orders of the Bureau of Agriculture, as authorized by Section 6 paragraph (c), is not a violation of the provision of the
Act.
The orders of the Bureau of Agriculture, while they may possibly be said to have the force of law, are statutes and
particularly not penal statutes, and a violation of such orders is not a penal offense unless the statute itself somewhere
makes a violation thereof unlawful and penalizes it. Nowhere in Act No. 1760 is a violation of the orders of the Bureau
of Agriculture made a penal offense, nor is such violation punished in any way therein.
However, we consider these acts as plain violation of the article of the Penal Code as above quoted. The fact that the information in its
preamble charged a violation of act No. 1760 does not prevent us from finding the accused guilty of a violation of an article of the
Penal Code.
The accused is accordingly convicted of a violation of article 581, paragraph 2, of the Penal Code, and is sentenced to pay a fine of
seventy pesetas (P14) and censure, with subsidiary imprisonment in case of insolvency, and the costs of this appeal. So ordered

People vs. Santos, August 15, 1936- VILLA-REAL, J.:
On June 18, 1930, the provincial fiscal of Cavite filed an information against the accused -appellee Augusta A. Santos for violation of
section 28 of Fish and Game Administrative Order No. 2 and penalized by section 29 thereof. That on or about April 29, 1935,
within 1,500 yards north of Cavalry Point, Corregidor Island, Province of Cavite, P.I., the said accused Augusta A. Santos, the
registered owner of two fishing motor boats Malabon II and Malabon III, manned and operated by his fishermen, fish, loiter and
anchor without permission from the Secretary of Agriculture and Commerce within three (3) kilometers from the shore line of the
Island of Corregidor over which the naval and military authorities of the United States exercise jurisdiction.
Section 28 of Administrative Order No. 2 relative to fish and game, issued by the Secretary of Agriculture and Commerce, provides as
follows: 28. Prohibited fishing areas. No boats licensed in accordance with the provisions of Act No. 4003 and this order to catch,
collect, gather, take, or remove fish and other sea products from Philippine waters shall be allowed to fish, loiter, or anchor within 3
kilometers of the shore line of islands and reservations over which jurisdiction is exercised by naval or military authorities of the United
States, particularly Corregidor, Pulo Caballo, La Monja, El Fraile, and Carabao, and all other islands and detached rocks lying between
Mariveles Reservation on the north side of the entrance to Manila Bay and Calumpan Point Reservation on the south side of said
entrance: Provided, That boats not subject to license under Act No. 4003 and this order may fish within the areas mentioned above
only upon receiving written permission therefor, which permission may be granted by the Secretary of Agriculture and Commerce upon
recommendation of the military or naval authorities concerned.
The above quoted provisions of Administrative, Order No. 2 were issued by the then Secretary of Agriculture and Natural Resources,
now Secretary of Agriculture and Commerce, by virtue of the authority vested in him by section 4 of Act No. 4003 which reads as
follows: SEC. 4. Instructions, orders, rules and regulations. The Secretary of Agriculture and Natural Resources shall from time to
time issue such instructions, orders, rules and regulations consistent with this Act, as may be necessary and proper to carry into effect
the provisions thereof and for the conduct of proceedings arising under such provisions.
The CFI (now RTC) of Cavite dismissed the case on the ground that it does not fall within its jurisdiction. The prosecuting attorney
appealed and requested that the case be remanded to the CFI contending that because the applicable penalty is under section 83 of
Act No. 4003, it falls within the original jurisdiction of the court.
ISSUE:Whether or not accused Santos be criminally liable under Section 28 of AO No. 2 issued by the Secretary of Agriculture and
Commerce by virtue of the authority given by Act No. 4003.
RULING:
Act No. 4003 contains no similar provision prohibiting boats not subject to license from fishing within three kilometers of the shore line
of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States, without permission
from the Secretary of Agriculture and Commerce upon recommendation of the military and naval authorities concerned. Inasmuch as
the only authority granted to the Secretary of Agriculture and Commerce, by section 4 of Act No. 4003, is to issue from time to time
such instructions, orders, rules, and regulations consistent with said Act, as may be necessary and proper to carry into effect the
provisions thereof and for the conduct of proceedings arising under such provisions; and inasmuch as said Act No. 4003, as stated,
contains no provisions similar to those contained in the above quoted conditional clause of section 28 of AO No. 2, the conditional
clause in question supplies a defect of the law, extending it. This is equivalent to legislating on the matter, a power which has not been
Page 16 of 16

and cannot be delegated to him, it being exclusively reserved to the then Philippine Legislature by the Jones Law, and now to the
National Assembly by the Constitution of the Philippines. Such act constitutes not only an excess of the regulatory power conferred
upon the Secretary of Agriculture and Commerce, but also an exercise of a legislative power which he does not have, and therefore
said conditional clause is null and void and without effect (12 Corpus Juris, 845; Rubi vs. Provincial Board of Mindoro, 39 Phil., 660;
U.S. vs. Ang Tang Ho, 43 Phil., 1; U.S. vs. Barrias, 11 Phil., 327).
For the foregoing considerations, we are of the opinion and so hold that the conditional clause of section 28 of AO No. 2. issued by the
Secretary of Agriculture and Commerce, is null and void and without effect, as constituting an excess of the regulatory power conferred
upon him by section 4 of Act No. 4003 and an exercise of a legislative power which has not been and cannot be delegated to him.
Wherefore, inasmuch as the facts with the commission of which Augusto A. Santos is charged do not constitute a crime or a violation
of some criminal law within the jurisdiction of the civil courts, the information filed against him is dismissed, with the costs de oficio. So
ordered.
Pesigan vs. Angeles, April 30, 1984

Anselmo and Marcelo Pesigan transported in the evening of April 2, 1982 twenty-six carabaos and a calf from Camarines Sur with
Batangas as their destination. They were provided with three certificates: 1) a health certificate from the provincial veterinarian, 2)
permit to transfer/transport from the provincial commander; and 3) three certificates of inspections. In spite of the papers, the
carabaos were confiscated by the provincial veterinarian and the towns police station commander while passing through Camarines
Norte. Confiscation was based on EO No. 626-A which prohibits transportation of carabaos & carabeef from one province to another.

Issue: WON EO No. 626-A, providing for the confiscation and forfeiture by the government of carabaos transported from one province
to another, dated October 25, 1980 is enforceable before publication in the Official Gazette on June 14, 1982

Held: No. The said order isnt enforceable against the Pesigans on April 2, 1982 because its a penal regulation published more than 2
mos. later in the OG. It became effective only fifteen days thereafter as provided in A2 of the CC & 11 of the Revised Administrative
Code. The word laws in article 2 includes circulars & regulations which prescribe penalties. Publication is necessary to apprise the
public of the contents of the regulations & make the said penalties binding on the persons affected thereby. Commonwealth Act No.
638 requires that all Presidential EOs having general applicability should be published in the OG. It provides that every order or
document which shall prescribe a penalty shall be deemed to have general applicability and legal effect. This applies to a violation of
EO No. 626-A because its confiscation & forfeiture provision or sanction makes it a penal statute. It results that they have cause of
action for the recovery of the carabaos. The summary confiscation wasnt in order. The recipients of the carabaos should return them
to the Pesigans. However, they cannot transport the carabaos to Batangas because they are now bound by the said executive order.
Neither can they recover damages. Doctor Miranda & Zenerosa acted in good faith in ordering the forfeiture and dispersal of the
carabaos. Judgment: Order of dismissal and confiscation and dispersal of the carabaos, reversed and set aside. Respondents to restore
carabaos, with the requisite documents, to petitioners for their own disposal in Basud or Sipocot, Camarines Sur. No costs. Important
point: Publication is necessary to apprise the public of the contents of the regulations & make the said penalties binding on the persons
affected hereby. Justice & fairness dictate that the public must be informed of that provision by means of the publication on the
Gazette.

I. Effectivity of Rules
Taada vs. Tuvera, December 29, 1986 -Cruz
Facts: On 24 April 1985, the Court affirmed the necessity for the publication to the OfficialGazette all unpublished presidential issuances
which are of general application, and unless so published, they shall have no binding force and effect. Decision was concurred only by
3 judges.Petitioners move for reconsideration / clarification of the decision on various questions. Solicitor General avers that the motion
is a request for advisory opinion. February Revolution took place,which subsequently required the new Solicitor General to file a
rejoinder on the issue (under Rule 3, Section 18 of the Rules of Court).
Issue:Whether publication is still required in light of the clause unless otherwise provided.
Held:The clause unless it is otherwise provided, in Article 2 of the Civil Code, refers to thedate of effectivity and not to the
requirement of publication itself, which cannot in any event be omitted. This clause does not mean that the legislature may make the
law effective immediatelyupon approval, or on any other date, without its previous publication. The legislature may in itsdiscretion
provide that the usual fifteen-day period shall be shortened or extended. Publicationrequirements applies to (1) all statutes, including
those of local application and private laws; (2) presidential decrees and executive orders promulgated by the President in the exercise
of legislative powers whenever the same are validly delegated by the legislature or directlyconferred by the Constitution; (3)
Administrative rules and regulations for the purpose of enforcing or implementing existing law pursuant also to a valid delegation; (4)
Charter of a citynotwithstanding that it applies to only a portion of the national territory and directly affects onlythe inhabitants of that
place; (5) Monetary Board circulars to fill in the details of the CentralBank Act which that body is supposed to enforce. Further,
publication must be in full or it is no publication at all since its purpose is to inform the public of the contents of the laws.
Reasoning:The Supreme Court declared that all laws as above defined shall immediately upontheir approval, or as soon thereafter as
possible, be published in full in the Official Gazette, to become effective only after 15 days from their publication, or on another date
specified by thelegislature, in accordance with Article 2 of the Civil Code.