[G.R. No. 101279. August 6, 1992.

in the DOLE, through the facilities of the POEA, the task of

processing and deploying such workers.

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS,

INC. petitioner, vs. HON. RUBEN D. TORRES, as Secretary
of the Department of Labor & Employment, and JOSE N.
SARMIENTO, as Administrator of the PHILIPPINE
OVERSEAS
EMPLOYMENT
ADMINISTRATION, respondents.

PASEI is the largest national organization of private employment

and recruitment agencies duly licensed and authorized by the
POEA, to engage in the business of obtaining overseas
employment for Filipino landbased workers, including domestic
helpers. l

SYLLABUS
1. ADMINISTRATIVE LAW; ADMINISTRATIVE BODIES;
VESTURE OF QUASI LEGISLATIVE AND QUASI JUDICIAL
POWERS. The vesture of quasi-legislative and quasi-judicial
powers in administrative bodies is not unconstitutional,
unreasonable and oppressive. It has been necessitated by "the
growing complexity of the modern society" (Solid Homes,
Inc. vs. Payawal, 177 SCRA 72, 79). More and more
administrative bodies are necessary to help in the regulation of
society's ramified activities. "Specialized in the particular field
assigned to them, they can deal with the problems thereof with
more expertise and dispatch than can be expected from the
legislature or the courts of justice."
2. LABOR LAW; OVERSEAS EMPLOYMENT; DOLE AND
POEA CIRCULARS; POWER TO RESTRICT AND
REGULATE INVOLVES A GRANT OF POLICE POWER. It
is noteworthy that the assailed circulars do not prohibit the
petitioner from engaging in the recruitment and deployment of
Filipino landbased workers for overseas employment. A careful
reading of the challenged administrative issuances discloses that
the same fall within the "administrative and policing powers
expressly or by necessary implication conferred" upon the
respondents (People vs. Maceren, 79 SCRA 450). The power to
"restrict and regulate conferred by Article 36 of the Labor Code
involves a grant of police power (City of Naga vs. Court of
Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or
stop" and whereas the power to "regulate" means "the power to
protect, foster, promote, preserve, and control with due regard for
the interests, first and foremost, of the public, then of the utility
and of its patrons" (Philippine Communications Satellite
Corporationvs. Alcuaz, 180 SCRA 218).
3. ID.; ID.; ID.; INVALID FOR LACK OF PROPER
PUBLICATION AND FILING IN THE OFFICE OF NATIONAL
ADMINISTRATIVE REGISTER. Nevertheless, the DOLE
and POEA circulars are legally invalid, defective and
unenforceable for lack of proper publication and filing in the
Office of the National Administrative Register as required in
Article 2 of the Civil Code, Article 5 of the Labor Code and
Sections 3(1) and 4, Chapter 2, Book VII of the Administrative
Code of 1987.

This petition for prohibition with TRO was filed by the Philippine
Association of Service Exporters (PASEI) to prohibit and enjoin
the Secretary of the Department of Labor and Employment
(DOLE) and the Administrator of the Philippine Overseas
Employment Administration (or POEA) from enforcing and
implementing DOLE Department Order No. 16, Series of 1991
and POEA Memorandum Circular Nos. 30 and 37, Series of 1991,
temporarily suspending the recruitment by private employment
agencies of Filipino domestic helpers for Hong Kong and vesting

On June 1, 1991, as a result of published stories regarding the

abuses suffered by Filipino housemaids employed in Hong Kong,
DOLE Secretary Ruben D. Torres issuedDepartment Order No.
16, Series of 1991, temporarily suspending the recruitment by
private employment agencies of "Filipino domestic helpers going
to Hong Kong" (p. 30, Rollo). The DOLE itself, through the
POEA took over the business of deploying such Hong Kongbound workers.
"In view of the need to establish
mechanisms that will enhance the protection
for Filipino domestic helpers going to Hong
Kong, the recruitment of the same by private
employment agencies is hereby temporarily
suspended effective 1 July 1991. As such,
the DOLE through the facilities of the
Philippine
Overseas
Employment
Administration shall take over the
processing and deployment of household
workers bound for Hong Kong, subject to
guidelines to be issued for said purpose.
"In support of this policy, all DOLE
Regional Directors and the Bureau of Local
Employment's regional offices are likewise
directed to coordinate with the POEA in
maintaining a manpower pool of prospective
domestic helpers to Hong Kong on a
regional basis.
"For compliance." (Emphasis ours; p. 30,
Rollo.)
Pursuant to the above DOLE circular, the POEA
issued Memorandum Circular No. 30, Series of 1991, dated July
10, 1991, providing GUIDELINES on the Government
processing and deployment of Filipino domestic helpers to Hong
Kong and the accreditation of Hong Kong recruitment agencies
intending to hire Filipino domestic helpers.
"Subject: Guidelines on the Temporary
Government Processing and Deployment of
Domestic Helpers to Hong Kong.
"Pursuant to Department Order No. 16,
series of 1991 and in order to operationalize
the temporary government processing and
deployment of domestic helpers (DHs) to
Hong Kong resulting from the temporary
suspension of recruitment by private
employment agencies for said skill and host
market, the following guidelines and
mechanisms
shall
govern
the
implementation of said policy:
"I. Creation of a Joint POEA-OWWA
Household Workers Placement Unit
(HWPU).

"An ad hoc, one stop Household Workers

Placement Unit [or HWPU] under the
supervision of the POEA shall take charge
of the various operations involved in the
Hong Kong-DH industry segment:

attested by the Hong Kong Commissioner of

Labor up to 30 June 1991 shall be processed
by the POEA Employment Contracts
Processing Branch up to 15 August 1991
only.

"The HWPU shall have the following

functions in coordination with appropriate
units and other entities concerned:

"Effective 16 August 1991, all Hong Kong

recruitment agent/s hiring DHs from the
Philippines shall recruit under the new
scheme which requires prior accreditation
with the POEA.

"1. Negotiations with and Accreditation of

Hong Kong Recruitment Agencies
"2. Manpower Pooling
"3. Worker Training and Briefing
"4. Processing and Deployment
"5. Welfare Programs.
"II. Documentary Requirements and Other
Conditions for Accreditation of Hong Kong
Recruitment Agencies or Principals. LexLib
"Recruitment agencies in Hong Kong
intending to hire Filipino DHs for their
employers may negotiate with the HWPU in
Manila directly or through the Philippine
Labor Attache's Office in Hong Kong.
"xxx xxx xxx
"X. Interim Arrangement
"All contracts stamped in Hong Kong as of
June 30 shall continue to be processed by
POEA until 31 July 1991 under the name of
the
Philippine
agencies
concerned.
Thereafter, all contracts shall be processed
with the HWPU.
"Recruitment agencies in Hong Kong shall
submit to the Philippine Consulate General
in Hong Kong a list of their accepted
applicants in their pool within the last week
of July. The last day of acceptance shall be
July 31 which shall then be the basis of
HWPU in accepting contracts for
processing. After the exhaustion of their
respective pools the only source of
applicants will be the POEA manpower
pool.
"For strict compliance of all concerned."
(pp. 31-35, Rollo.)
On August 1, 1991, the POEA Administrator also
issued Memorandum Circular No. 37, Series of 1991, on the
processing of employment contracts of domestic workers for
Hong Kong.
"TO: All Philippine and Hong Kong
Agencies engaged in the recruitment of
Domestic helpers for Hong Kong.
"Further to Memorandum Circular No. 30,
series of 1991 pertaining to the government
processing and deployment of domestic
helpers (DHs) to Hong Kong,processing of
employment contracts which have been

"Recruitment agencies in Hong Kong may

apply for accreditation at the Office of the
Labor Attache, Philippine Consulate General
where a POEA team is posted until 31
August 1991. Thereafter, those who failed to
have themselves accredited in Hong Kong
may proceed to the POEA-OWWA
Household Workers Placement Unit in
Manila for accreditation before their
recruitment and processing of DHs shall be
allowed.
"Recruitment agencies in Hong Kong who
have some accepted applicants in their pool
after the cut-off period shall submit this list
of workers upon accreditation. Only those
DHs in said list will be allowed processing
outside of the HWPU manpower pool.
"For strict compliance of all concerned."
(Emphasis supplied, p. 36, Rollo.)
On September 2, 1991, the petitioner, PASEI, filed this petition
for prohibition to annul the aforementioned DOLE and POEA
circulars and to prohibit their implementation for the following
reasons:
1. that the respondents acted with grave
abuse of discretion and/or in excess of their
rule-making authority in issuing said
circulars;
2. that the assailed DOLE and POEA
circulars are contrary to the Constitution, are
unreasonable, unfair and oppressive; and
3. that the requirements of publication and
filing with the Office of the National
Administrative Register were not complied
with.
There is no merit in the first and second grounds of the petition.
Article 36 of the Labor Code grants the Labor Secretary the
power to restrict and regulate recruitment and placement
activities. LLpr
"Art. 36. Regulatory Power. The Secretary of Labor
shall have the power to restrict and regulate the
recruitment and placement activities of all agencies
within the coverage of this title [Regulation of
Recruitment and Placement Activities] and is hereby
authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement
the provisions of this title." (Italics ours.)

On the other hand, the scope of the regulatory authority of the

POEA, which was created by EXECUTIVE ORDER NO. 797 on
May 1, 1982 to take over the functions of the Overseas
Employment Development Board, the National Seamen Board,
and the overseas employment functions of the Bureau of
Employment Services, is broad and far-ranging for:

1. Among the functions inherited by the POEA from the defunct

Bureau of Employment Services was the power and duty:
"'2. To establish and maintain a registration and/or licensing
system to private sector participation in the recruitment and
placement of workers, locally and overseas, . . . .' (Art. 15, Labor
Code, italics supplied)." (p. 13, Rollo.)
It assumed from the defunct Overseas Employment Development
Board the power and duty:
"'3. To recruit and place workers for overseas employment of
Filipino contract workers, on a government to government
arrangement and in such other sectors as policy may dictate . . . .'
(Art. 17, Labor Code.)" (p. 13, Rollo.)
From the National Seamen Board, the POEA took over:
"2. To regulate and supervise the activities of agents or
representatives of shipping companies in the hiring of seamen for
overseas employment; and secure the best possible terms of
employment for contract seamen workers and secure compliance
therewith." (Art. 20, Labor Code.)
The vesture of quasi-legislative and quasi-judicial powers in
administrative bodies is not unconstitutional, unreasonable and
oppressive. It has been necessitated by "the growing complexity
of the modern society" (Solid Homes, Inc. vs. Payawal, 177
SCRA 72, 79). More and more administrative bodies are
necessary to help in the regulation of society's ramified activities.
"Specialized in the particular field assigned to them, they can deal
with the problems thereof with more expertise and dispatch than
can be expected from the legislature or the courts of justice"
(Ibid.).
It is noteworthy that the assailed circulars do not prohibit the
petitioner from engaging in the recruitment and deployment of
Filipino landbased workers for overseas employment. A careful
reading of the challenged administrative issuances discloses that
the same fall within the "administrative and policing powers
expressly or by necessary implication conferred" upon the
respondents (People vs. Maceren, 79 SCRA 450). The power to
"restrict and regulate conferred by Article 36 of the Labor Code
involves a grant of police power (City of Naga vs. Court of
Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or
stop" (p. 62, Rollo) and whereas the power to "regulate" means
"the power to protect, foster, promote, preserve, and control with
due regard for the interests, first and foremost, of the public, then
of the utility and of its patrons" (Philippine Communications
Satellite Corporation vs. Alcuaz, 180 SCRA 218).
The Solicitor General, in his Comment, aptly observed:
" . . . Said Administrative Order [i.e.,
DOLE ADMINISTRATIVE ORDER NO.
16] merely restricted the scope or area of
petitioner's business operations by excluding
therefrom recruitment and deployment of
domestic helpers for Hong Kong till after
the establishment of the `mechanisms' that

will enhance the protection of Filipino

domestic helpers going to Hong Kong. In
fine, other than the recruitment and
deployment of Filipino domestic helpers for
Hongkong, petitioner may still deploy other
class of Filipino workers either for
Hongkong and other countries and all other
classes of Filipino workers for other
countries. Cdpr
"Said administrative issuances, intended to
curtail, if not to end, rampant violations of
the rule against excessive collections of
placement and documentation fees, travel
fees and other charges committed by private
employment agencies recruiting and
deploying domestic helpers to Hongkong.
[They are] reasonable, valid and justified
under the general welfare clause of the
Constitution, since the recruitment and
deployment business, as it is conducted
today, is affected with public interest.
"xxx xxx xxx
"The alleged takeover [of the business of
recruiting and placing Filipino domestic
helpers in Hongkong] is merely a remedial
measure, and expires after its purpose shall
have been attained. This is evident from the
tenor of ADMINISTRATIVE ORDER NO.
16 that recruitment of Filipino domestic
helpers going to Hongkong by private
employment
agencies
are
hereby
'temporarily suspended effective July 1.
1991.'
"The alleged takeover is limited in scope,
being confined to recruitment of domestic
helpers going to Hongkong only.
"xxx xxx xxx
" . . . the justification for the takeover of the
processing and deploying of domestic
helpers for Hongkong resulting from the
restriction of the scope of petitioner's
business is confined solely to the
unscrupulous
practice
of
private
employment agencies victimizing applicants
for employment as domestic helpers for
Hongkong and not the whole recruitment
business in the Philippines." (pp. 62-65.
Rollo.)
The questioned circulars are therefore a valid exercise of the
police power as delegated to the executive branch of Government.
Nevertheless, they are legally invalid, defective and
unenforceable for lack of proper publication and filing in the
Office of the National Administrative Register as required
inArticle 2 of the Civil Code, Article 5 of the Labor Code
and Sections 3(1) and 4, Chapter 2, Book VII of the
Administrative Code of 1987 which provide:

"Art. 2. Laws shall take effect after fifteen

(15) days following the completion of their
publication in the Official Gazette, unless it
is otherwise provided. . . . ." (Civil Code.)
"Art. 5. Rules and Regulations. The Department of
Labor and other government agencies charged with the
administration and enforcement of this Code or any of
its parts shall promulgate the necessary implementing
rules and regulations. Such rules and regulations shall
become effective fifteen (15) days after announcement
of their adoption in newspapers of general circulation."
(Emphasis supplied, Labor Code, as amended.)
Section 3. Filing. (1) Every agency shall file with the
University of the Philippines Law Center, three (3)
certified copies of every rule adopted by it. Rules in
force on the date of effectivity of this Code which are
not filed within three (3) months shall not thereafter be
the basis of any sanction against any party or persons."
(Underscoring supplied, Chapter 2, Book VII of the
Administrative Code of 1987.)
"Section 4. Effectivity. In addition to other rulemaking requirements provided by law not inconsistent
with this Book, each rule shall become effective fifteen
(15) days from the date of filing as above provided
unless a different date is fixed by law, or specified in the
rule in cases of imminent danger to public health, safety
and welfare, the existence of which must be expressed
in a statement accompanying the rule. The agency shall
take appropriate measures to make emergency rules
known to persons who may be affected by them."
(Emphasis supplied, Chapter 2, Book VII of the
Administrative Code of 1987.)
Once more, we advert to our ruling in Taada vs. Tuvera, 146
SCRA 446 that:
" . . . Administrative rules and regulations must also be
published if their purpose is to enforce or implement
existing law pursuant also to a valid delegation," (p.
447.).LLjur
"Interpretative regulations and those merely internal in
nature, that is, regulating only the personnel of the
administrative agency and not the public, need not be
published. Neither is publication required of the socalled letters of instructions issued by administrative
superiors concerning the rules or guidelines to be
followed by their subordinates in the performance of
their duties." (p. 448.)
"We agree that publication must be in full or it is no
publication at all since its purpose is to inform the
public of the content of the laws." (p. 448.)
For lack of proper publication, the administrative circulars in
question may not be enforced and implemented.
WHEREFORE, the writ of prohibition is GRANTED. The
implementation of DOLE Department Order No. 16, Series of
1991, and POEA Memorandum Circular Nos. 30 and 37, Series of
1991, by the public respondents is hereby SUSPENDED pending
compliance with the statutory requirements of publication and
filing under the aforementioned laws of the land. cdll
SO ORDERED.

||| (Philippine Ass'n. of Service Exporters, Inc. v. Torres, G.R. No.

101279, August 06, 1992)

[G.R. No. 115381. December 23, 1994.]

KILUSANG MAYO UNO LABOR CENTER, petitioner, vs.
HON.
JESUS
B.
GARCIA,
JR.,
the
LAND
TRANSPORTATION FRANCHISING AND REGULATORY
BOARD, and the PROVINCIAL BUSES OPERATORS
ASSOCIATION OF THE PHILIPPINES, respondents.
Public utilities are privately owned and operated businesses
whose service are essential to the general public. They are
enterprises which specially cater to the needs of the public and
conduce to their comfort and convenience. As such, public utility
services are impressed with public interest and concern. The same
is true with respect to the business of common carrier which holds
such a peculiar relation to the public interest that there is
superinduced upon it the right of public regulation when private
properties are affected with public interest, hence, they cease to
be juris privati only. When, therefore, one devotes his property to
a use in which the public has an interest, he, in effect grants to the
public an interest in that use, and must submit to the control by
the public for the common good, to the extent of the interest he
has thus created. 1
An abdication of the licensing and regulatory government
agencies of their functions as the instant petition seeks to show, is
indeed lamentable. Not only is it an unsound administrative
policy but it is inimical to public trust and public interest as well.
The instant petition for certiorari assails the constitutionality and
validity of certain memoranda, circulars and/or orders of the
Department of Transportation and Communications (DOTC) and
the Land Transportation Franchising and Regulatory Board
LTFRB) 2 which, among others, (a) authorize provincial bus and
jeepney operators to increase or decrease the prescribed
transportation fares without application therefor with the LTFRB
and without hearing and approval thereof by said agency in
violation of Sec. 16(c) of Commonwealth Act No. 146, as
amended, otherwise known as the Public Service Act, and in
derogation of LTFRB's duty to fix and determine just and
reasonable fares by delegating that function to bus operators, and
(b) establish a presumption of public need in favor of applicants
for certificates of public convenience (CPC) and place on the
oppositor the burden of proving that there is no need for the
proposed service, in patent violation not only of Sec. 16(c) of CA
146, as amended, but also of Sec. 20(a) of the same Act
mandating that fares should be "just and reasonable." It is,
likewise, violative of the Rules of Court which places upon each
party the burden to prove his own affirmative allegations. 3 The
offending provisions contained in the questioned issuances
pointed out by petitioner, have resulted in the introduction into
our highways and thoroughfares thousands of old and smokebelching buses, many of which are right-hand driven, and have
exposed our consumers to the burden of spiraling costs of public
transportation without hearing and due process. cdrep
The following memoranda, circulars and/or orders are sought to
be nullified by the instant petition, viz: (a) DOTC Memorandum
Order 90-395, dated June 26, 1990 relative to the implementation
of a fare range scheme for provincial bus services in the country;
(b) DOTC Department Order No. 92-587, dated March 30, 1992,
defining the policy framework on the regulation of transport
services; (c) DOTC Memorandum dated October 8, 1992, laying
down rules and procedures to implement Department Order No.
92-587; (d) LTFRB Memorandum Circular No. 92-009, providing
implementing guidelines on the DOTC Department Order No. 92-

587; and (e) LTFRB Order dated March 24, 1994 in Case No. 943112.
The relevant antecedents are as follows:
On June 26, 1990, then Secretary of DOTC, Oscar M. Orbos,
issued Memorandum Circular No. 90-395 to then LTFRB
Chairman, Remedios A.S. Fernando allowing provincial bus
operators to charge passengers rates within a range of 15% above
and 15% below the LTFRB official rate for a period of one (1)
year. The text of the memorandum order reads in full:
One of the policy reforms and measures that is in line with the
thrusts and the priorities set out in the Medium-Term Philippine
Development Plan (MTPDP) 1987 1992) is the liberalization
of regulations in the transport sector. Along this line, the
Government intends to move away gradually from regulatory
policies and make progress towards greater reliance on free
market forces.
Based on several surveys and observations, bus companies are
already charging passenger rates above and below the official fare
declared by LTFRB on many provincial routes. It is in this
context that some form of liberalization on public transport fares
is to be tested on a pilot basis.
In view thereof, the LTFRB is hereby directed to immediately
publicize a fare range scheme for all provincial bus routes in
country (except those operating within Metro Manila). Transport
operators shall be allowed to charge passengers within a range of
fifteen percent (15%) above and fifteen percent (15%) below the
LTFRB official rate for a period of one year.
Guidelines and procedures for the said scheme shall be prepared
by LTFRB in coordination with the DOTC Planning Service.
The implementation of the said fare range scheme shall start on 6
August 1990.
For compliance. (Emphasis ours.)
Finding the implementation of the fare range scheme "not legally
feasible," Remedios A.S. Fernando submitted the following
memorandum to Oscar M. Orbos on July 24, 1990, to wit:
With reference to DOTC Memorandum Order No. 90-395 dated
26 June 1990 which the LTFRB received on 19 July 1990,
directing the Board "to immediately publicize a fare range
scheme for all provincial bus routes in the country (except those
operating within Metro Manila)" that will allow operators "to
charge passengers within a range of fifteen percent (15%) above
and fifteen percent (15%) below the LTFRB official rate for a
period of one year" the undersigned is respectfully adverting the
Secretary's attention to the following for his consideration:
1. Section 16 (c) of the Public Service Act prescribes the
following for the fixing and determination of rates -- (a) the rates
to be approved should be proposed by public service operators;
(b) there should be a publication and notice to concerned or
affected parties in the territory affected; (c) a public hearing
should be held for the fixing of the rates; hence, implementation
of the proposed fare range scheme on August 6 without
complying with the requirements of the Public Service Act may
not be legally feasible.

2. To allow bus operators in the country to charge fares fifteen

(15%) above the present LTFRB fares in the wake of the
devastation, death and suffering caused by the July 16 earthquake
will not be socially warranted and will be politically unsound;
most likely public criticism against the DOTC and the LTFRB
will be triggered by the untimely motu propio implementation of
the proposal by the mere expedient of publicizing the fare range
scheme without calling a public hearing, which scheme many as
early as during the Secretary's predecessor know through
newspaper reports and columnists' comments to be Asian
Development Bank and World Bank inspired.
3. More than inducing a reduction in bus fares by fifteen percent
(15%) the implementation of the proposal will instead trigger an
upward adjustment in bus fares by fifteen percent (15%) at a time
when hundreds of thousands of people in Central and Northern
Luzon, particularly in Central Pangasinan, La Union, Baguio
City, Nueva Ecija, and the Cagayan Valley are suffering from the
devastation and havoc caused by the recent earthquake.
4. In lieu of the said proposal, the DOTC with its agencies
involved in public transportation can consider measures and
reforms in the industry that will be socially uplifting, especially
for the people in the areas devastated by the recent earthquake.
In view of the foregoing considerations, the undersigned
respectfully suggests that the implementation of the proposed fare
range scheme this year be further studied and evaluated.
On December 5, 1990, private respondent Provincial Bus
Operators Association of the Philippines, Inc. (PBOAP) filed an
application for fare rate increase. An across-the-board increase of
eight and a half centavos (P0.085) per kilometer for all types of
provincial buses with a minimum-maximum fare range of fifteen
(15%) percent over and below the proposed basic per kilometer
fare rate, with the said minimum-maximum fare range applying
only to ordinary, first class and premium class buses and a fiftycentavo (P0.50) minimum per kilometer fare for aircon buses,
was sought.
On December 6, 1990, private respondent PBOAP reduced its
applied proposed fare to an across-the-board increase of six and a
half (P0.065) centavos per kilometer for ordinary buses. The
decrease was due to the drop in the expected price of diesel. llcd
The application was opposed by the Philippine Consumers
Foundation, Inc. and Perla C. Bautista alleging that the proposed
rates were exorbitant and unreasonable and that the application
contained no allegation on the rate of return of the proposed
increase in rates.
On December 14, 1990, public respondent LTFRB rendered a
decision granting the fare rate increase in accordance with the
following schedule of fares on a straight computation method,
viz:
AUTHORIZED FARES
LUZON
MIN. OF 5 KMS. SUCCEEDING KM.
REGULAR P1.50 P0.37
STUDENT P1.15 P0.28

VISAYAS/MINDANAO
REGULAR P1.60 P0.375
STUDENT P1.20 P0.285
FIRST CLASS (PER KM.)
LUZON P0.385
VISAYAS/MINDANAO P0.395
PREMIERE CLASS (PER KM.)
LUZON P0.395
VISAYAS/ MINDANAO P0.405
AIRCON (PER KM.) P0.415.4
On March 30, 1992, then Secretary of the Department of
Transportation and Communications Pete Nicomedes Prado
issued Department Order No. 92-587 defining the policy
framework on the regulation of transport services. The full text of
the said order is reproduced below in view of the importance of
the provisions contained therein:

WHEREAS, Executive Order No. 125 as amended, designates the

Department of Transportation and Communications (DOTC) as
the primary policy, planning, regulating and implementing agency
on transportation;
WHEREAS, to achieve the objective of a viable, efficient, and
dependable transportation system, the transportation regulatory
agencies under or attached to the DOTC have to harmonize their
decisions and adopt a common philosophy and direction;
WHEREAS, the government proposes to build on the successful
liberalization measures pursued over the last five years and bring
the transport sector nearer to a balanced longer term regulatory
framework;
NOW, THEREFORE, pursuant to the powers granted by laws to
the DOTC, the following policies and principles in the economic
regulation of land, air, and water transportation services are
hereby adopted:
1. Entry into and exit out of the industry. Following the
Constitutional dictum against monopoly, no franchise holder shall
be permitted to maintain a monopoly on any route. A minimum of
two franchise holders shall be permitted to operate on any route.
The requirements to grant a certificate to operate, or certificate of
public convenience, shall be: proof of Filipino citizenship,
financial capability, public need, and sufficient insurance cover to
protect the riding public.
In determining public need, the presumption of need for a service
shall be deemed in favor of the applicant. The burden of proving
that there is no need for a proposed service shall be with the
oppositor(s).

In the interest of providing efficient public transport services, the

use of the 'prior operator' and the 'priority of filing' rules shall be
discontinued. The route measured capacity test or other similar
tests of demand for vehicle/vessel fleet on any route shall be used
only as a guide in weighing the merits of each franchise
application and not as a limit to the services offered.
Where there are limitations in facilities, such as congested road
space in urban areas, or at airports and ports, the use of demand
management measures in conformity with market principles may
be considered.
The right of an operator to leave the industry is recognized as a
business decision, subject only to the filing of appropriate notice
and following a phase-out period, to inform the public and to
minimize disruption of services.
2. Rate and Fare Setting. Freight rates shall be freed gradually
from government controls. Passenger fares shall also be
deregulated, except for the lowest class of passenger service
(normally third class passenger transport) for which the
government will fix indicative or reference fares. Operators of
particular services may fix their own fares within a range 15%
above and below the indicative or reference rate.
Where there is lack of effective competition for services, or on
specific routes, or for the transport of particular commodities,
maximum mandatory freight rates or passenger fares shall be set
temporarily by the government pending actions to increase the
level of competition.
For unserved or single operator routes, the government shall
contract such services in the most advantageous terms to the
public and the government, following public bids for the services.
The advisability of bidding out the services or using other kinds
of incentives on such routes shall be studied by the government.
3. Special Incentives and Financing for Fleet Acquisition. As a
matter of policy, the government shall not engage in special
financing and incentive programs, including direct subsidies for
fleet acquisition and expansion. Only when the market situation
warrants government intervention shall programs of this type be
considered. Existing programs shall be phased out gradually.
The Land Transportation Franchising and Regulatory Board, the
Civil Aeronautics Board, the Maritime Industry Authority are
hereby directed to submit to the office of the Secretary, within
forty-five (45) days of this Order, the detailed rules and
procedures for the Implementation of the policies herein set forth.
In the formulation of such rules, the concerned agencies shall be
guided by the most recent studies on the subjects, such as the
Provincial Road Passenger Transport Study, the Civil Aviation
Master Plan, the Presidential Task Force on the Inter-island
Shipping Industry, and the Inter-island Liner Shipping Rate
Rationalization Study.
For the compliance of all concerned. (Emphasis ours)
On October 8, 1992, public respondent Secretary of the
Department of Transportation and Communications Jesus B.
Garcia, Jr. issued a memorandum to the Acting Chairman of the
LTFRB suggesting swift action on the adoption of rules and
procedures to implement above-quoted Department Order No. 92587 that laid down deregulation and other liberalization policies
for the transport sector. Attached to the said memorandum was a
revised draft of the required rules and procedures covering (i)

Entry Into and Exit Out of the Industry and (ii) Rate and Fare
Setting, with comments and suggestions from the World Bank
incorporated therein. Likewise, resplendant from the said
memorandum is the statement of the DOTC Secretary that the
adoption of the rules and procedures is a pre-requisite to the
approval of the Economic Integration Loan from the World Bank.
5
On February 17, 1993, the LTFRB issued Memorandum Circular
No. 92-009 promulgating the guidelines for the implementation of
DOTC Department Order No. 92-587. The Circular provides,
among others, the following challenged portions:
xxx xxx xxx
IV. Policy Guidelines on the Issuance of Certificate of Public
Convenience:
The issuance of a Certificate of Public Convenience is determined
by public need. The presumption of public need for a service shall
be deemed in favor of the applicant, while burden of proving that
there is no need for the proposed service shall be the oppositor's.
xxx xxx xxx
V. Rate and Fare Setting
The control in pricing shall be liberalized to introduce price
competition complementary with the quality of service, subject to
prior notice and public hearing. Fares shall not be provisionally
authorized without public hearing.
A. On the General Structure of Rates
1. The existing authorized fare range system of plus or minus 15
per cent for provincial buses and jeepneys shall be widened to
20% and -25% limit in 1994 with the authorized fare to be
replaced by an indicative or reference rate as the basis for the
expanded fare range.
2. Fare systems for aircon buses are liberalized to cover first class
and premier services.
xxx xxx xxx
(Emphasis ours).
Sometime in March, 1994, private respondent PBOAP, availing
itself of the deregulation policy of the DOTC allowing provincial
bus operators to collect plus 20% and minus 25% of the
prescribed fare without first having filed a petition for the purpose
and without the benefit of a public hearing, announced a fare
increase of twenty (20%) percent of the existing fares. Said
increased fares were to be made effective on March 16, 1994.
On March 16, 1994, petitioner KMU filed a petition before the
LTFRB opposing the upward adjustment of bus fares.
On March 24, 1994, the LTFRB issued one of the assailed orders
dismissing the petition for lack of merit. The dispositive portion
reads:

PREMISES CONSIDERED, this Board after considering the

arguments of the parties, hereby DISMISSES FOR LACK OF
MERIT the petition filed in the above-entitled case. This petition
in this case was resolved with dispatch at the request of petitioner
to enable it to immediately avail of the legal remedies or options
it is entitled under existing laws.
SO ORDERED.6
Hence, the instant petition for certiorari with an urgent prayer for
issuance of a temporary restraining order.
The Court, on June 20, 1994, issued a temporary restraining order
enjoining, prohibiting and preventing respondents from
implementing the bus fare rate increase as well as the questioned
orders and memorandum circulars. This meant that provincial bus
fares were rolled back to the levels duly authorized by the LTFRB
prior to March 16, 1994. A moratorium was likewise enforced on
the issuance of franchises for the operation of buses, jeepneys,
and taxicabs.
Petitioner KMU anchors its claim on two (2) grounds. First, the
authority given by respondent LTFRB to provincial bus operators
to set a fare range of plus or minus fifteen (15) percent, later
increased to plus twenty (20%) and minus twenty-five (-25%)
percent, over and above the existing authorized fare without
having to file a petition for the purpose, is unconstitutional,
invalid and illegal. Second, the establishment of a presumption of
public need in favor of an applicant for a proposed transport
service without having to prove public necessity, is illegal for
being violative of the Public Service Act and the Rules of Court.
In its Comment, private respondent PBOAP, while not actually
touching upon the issues raised by the petitioner, questions the
wisdom and the manner by which the instant petition was filed. It
asserts that the petitioner has no legal standing to sue or has no
real interest in the case at bench and in obtaining the reliefs
prayed for.
In their Comment filed by the Office of the Solicitor General,
public respondents DOTC Secretary Jesus B. Garcia, Jr. and the
LTFRB asseverate that the petitioner does not have the standing
to maintain the instant suit. They further claim that it is within
DOTC and LTFRB's authority to set a fare range scheme and
establish a presumption of public need in applications for
certificates of public convenience.
We find the instant petition impressed with merit.
At the outset, the threshold issue of locus standi must be struck.
Petitioner KMU has the standing to sue.
The requirement of locus standi inheres from the definition of
judicial power. Section 1 of Article VIII of the Constitution
provides:

xxx xxx xxx

Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality
of the Government.

In Lamb v. Phipps,7 we ruled that judicial power is the power to

hear and decide causes pending between parties who have the
right to sue in the courts of law and equity. Corollary to this
provision is the principle of locus standi of a party litigant. One
who is directly affected by and whose interest is immediate and
substantial in the controversy has the standing to sue. The rule
therefore requires that a party must show a personal stake in the
outcome of the case or an injury to himself that can be redressed
by a favorable decision so as to warrant an invocation of the
court's jurisdiction and to justify the exercise of the court's
remedial powers in his behalf. 8
In the case at bench, petitioner, whose members had suffered and
continue to suffer grave and irreparable injury and damage from
the implementation of the questioned memoranda, circulars
and/or orders, has shown that it has a clear legal right that was
violated and continues to be violated with the enforcement of the
challenged memoranda, circulars and/or orders. KMU members,
who avail of the use of buses, trains and jeepneys everyday, are
directly affected by the burdensome cost of arbitrary increase in
passenger fares. They are part of the millions of commuters who
comprise the riding public. Certainly, their rights must be
protected, not neglected nor ignored. cdll
Assuming arguendo that petitioner is not possessed of the
standing to sue, this court is ready to brush aside this barren
procedural infirmity and recognize the legal standing of the
petitioner in view of the transcendental importance of the issues
raised. And this act of liberality is not without judicial precedent.
As early as the Emergency Powers Cases, this Court had
exercised its discretion and waived the requirement of proper
party. In the recent case of Kilosbayan, Inc., et al. v. Teofisto
Guingona, Jr., et al., 9 we ruled in the same lines and enumerated
some of the cases where the same policy was adopted, viz:
. . . A party's standing before this Court is a procedural
technicality which it may, in the exercise of its discretion, set
aside in view of the importance of the issues raised. In the
landmark Emergency Powers Cases, [G.R. No. L-2044 (Araneta
v. Dinglasan); G.R. No. L-2756 (Araneta v. Angeles); G.R. No. L3054 (Rodriguez v. Tesorero de Filipinas); G.R. No. L-3055
(Guerrero v. Commissioner of Customs); and G.R. No. L-3056
(Barredo v. Commission on Elections), 84 Phil. 368 (1949)], this
Court brushed aside this technicality because 'the transcendental
importance to the public of these cases demands that they be
settled promptly and definitely, brushing aside, if we must,
technicalities of procedure. (Avelino vs. Cuenco, G.R. No. L2621).' Insofar as taxpayers' suits are concerned, this Court had
declared that it 'is not devoid of discretion as to whether or not it
should be entertained,' (Tan v. Macapagal, 43 SCRA 677, 680
[1972]) or that it 'enjoys an open discretion to entertain the same
or not.' [Sanidad v. COMELEC, 73 SCRA 333 (1976)].
xxx xxx xxx
In line with the liberal policy of this Court on locus standi,
ordinary taxpayers, members of Congress, and even association
of planters, and non-profit civic organizations were allowed to
initiate and prosecute actions before this court to question the
constitutionality or validity of laws, acts, decisions, rulings, or
orders of various government agencies or instrumentalities.
Among such cases were those assailing the constitutionality of (a)
R.A. No. 3836 insofar as it allows retirement gratuity and
commutation of vacation and sick leave to Senators and
Representatives and to elective officials of both Houses of
Congress (Philippine Constitution Association, Inc. v. Gimenez,

15 SCRA 479 [1965]); (b) Executive Order No. 284, issued by

President Corazon C. Aquino on 25 July 1987, which allowed
members of the cabinet, their undersecretaries, and assistant
secretaries to hold other government offices or positions (Civil
Liberties Union v. Executive Secretary, 194 SCRA 317 [1991]);
(c) the automatic appropriation for debt service in the General
Appropriations Act (Guingona v. Carague, 196 SCRA 221 [1991];
(d) R.A. No. 7056 on the holding of desynchronized elections
(Osmea v. Commission on Elections, 199 SCRA 750 [1991]; (e)
P.D. No. 1869 (the charter of the Philippine Amusement and
Gaming Corporation) on the ground that it is contrary to morals,
public policy, and order (Basco v. Philippine Gaming and
Amusement Corp., 197 SCRA 52 [1991]); and (f) R.A. No. 6975,
establishing the Philippine National Police. (Carpio v. Executive
Secretary, 206 SCRA 290 [1992]).
Other cases where we have followed a liberal policy regarding
locus standi include those attacking the validity or legality of (a)
an order allowing the importation of rice in the light of the
prohibition imposed by R.A. No. 3452 (Iloilo Palay and Corn
Planters Association, Inc. v. Feliciano, 13 SCRA 377 [1965]; (b)
P.D. Nos. 991 and 1033 insofar as they proposed amendments to
the Constitution and P.D. No. 1031 insofar as it directed the
COMELEC to supervise, control, hold, and conduct the
referendum-plebiscite on 16 October 1976 (Sanidad v.
Commission on Elections, supra); (c) the bidding for the sale of
the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo,
Japan (Laurel v. Garcia, 187 SCRA 797 [1990]); (d) the approval
without hearing by the Board of Investments of the amended
application of the Bataan Petrochemical Corporation to transfer
the site of its plant from Bataan to Batangas and the validity of
such transfer and the shift of feedstock from naphtha only to
naphtha and/or liquefied petroleum gas (Garcia v. Board of
Investments, 177 SCRA 374 [1989]; Garcia v. Board of
Investments, 191 SCRA 288 [1990]); (e) the decisions, orders,
rulings, and resolutions of the Executive Secretary, Secretary of
Finance, Commissioner of Internal Revenue, Commissioner of
Customs, and the Fiscal Incentives Review Board exempting the
National Power Corporation from indirect tax and duties (Maceda
v. Macaraig, 197 SCRA 771 [1991]); (f) the orders of the Energy
Regulatory Board of 5 and 6 December 1990 on the ground that
the hearings conducted on the second provisional increase in oil
prices did not allow the petitioner substantial cross-examination;
(Maceda v. Energy Regulatory Board, 199 SCRA 454 [1991]); (g)
Executive Order No. 478 which levied a special duty of P0.95 per
liter of imported oil products (Garcia v. Executive Secretary, 211
SCRA 219 [1992]); (h) resolutions of the Commission on
Elections concerning the apportionment, by district, of the
number of elective members of Sanggunians (De Guia vs.
Commission on Elections, 208 SCRA 420 [1992]); and (i)
memorandum orders issued by a Mayor affecting the Chief of
Police of Pasay City (Pasay Law and Conscience Union, Inc. v.
Cuneta, 101 SCRA 662 [1980]).
In the 1975 case of Aquino v. Commission on Elections (62
SCRA 275 [1975]), this Court, despite its unequivocal ruling that
the petitioners therein had no personality to file the petition,
resolved nevertheless to pass upon the issues raised because of
the far-reaching implications of the petition. We did no less in De
Guia v. COMELEC (Supra) where, although we declared that De
Guia 'does not appear to have locus standi, a standing in law, a
personal or substantial interest,' we brushed aside the procedural
infirmity 'considering the importance of the issue involved,
concerning as it does the political exercise of qualified voters

affected by the apportionment, and petitioner alleging abuse of

discretion and violation of the Constitution by respondent.'
Now on the merits of the case.
On the fare range scheme.
Section 16 (c) of the Public Service Act, as amended, reads:
Sec. 16. Proceedings of the Commission, upon notice and
hearing. The Commission shall have power, upon proper
notice and hearing in accordance with the rules and provisions of
this Act, subject to the limitations and exceptions mentioned and
saving provisions to the contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, tolls, charges,
classifications, or schedules thereof, as well as commutation,
mileage kilometrage, and other special rates which shall be
imposed, observed, and followed thereafter by any public service:
Provided, That the Commission may, in its discretion, approve
rates proposed by public services provisionally and without
necessity of any hearing; but it shall call a hearing thereon within
thirty days thereafter, upon publication and notice to the concerns
operating in the territory affected: Provided, further, That in case
the public service equipment of an operator is used principally or
secondarily for the promotion of a private business, the net profits
of said private business shall be considered in relation with the
public service of such operator for the purpose of fixing the rates.
(Emphasis ours).
xxx xxx xxx
Under the foregoing provision, the Legislature delegated to the
defunct Public Service Commission the power of fixing the rates
of public services. Respondent LTFRB, the existing regulatory
body today, is likewise vested with the same under Executive
Order No. 202 dated June 19, 1987. Section 5 (c) of the said
executive order authorizes LTFRB "to determine, prescribe,
approve and periodically review and adjust, reasonable fares,
rates and other related charges, relative to the operation of public
land transportation services provided by motorized vehicles."

Such delegation of legislative power to an administrative agency

is permitted in order to adapt to the increasing complexity of
modern life. As subjects for governmental regulation multiply, so
does the difficulty of administering the laws. Hence,
specialization even in legislation has become necessary. Given the
task of determining sensitive and delicate matters as route-fixing
and rate-making for the transport sector, the responsible
regulatory body is entrusted with the power of subordinate
legislation. With this authority, an administrative body and in this
case, the LTFRB, may implement broad policies laid down in a
statute by "filling in" the details which the Legislature may
neither have time or competence to provide. However, nowhere
under the aforesaid provisions of law are the regulatory bodies,
the PSC and LTFRB alike, authorized to delegate that power to a
common carrier, a transport operator, or other public service.
In the case at bench, the authority given by the LTFRB to the
provincial bus operators to set a fare range over and above the
authorized existing fare, is illegal and invalid as it is tantamount
to an undue delegation of legislative authority. Potestas delegata

non delegari potest. What has been delegated cannot be delegated.

This doctrine is based on the ethical principle that such as
delegated power constitutes not only a right but a duty to be
performed by the delegate through the instrumentality of his own
judgment and not through the intervening mind of another. 11 The
policy of allowing the provincial bus operators to change and
increase their fares at will would result not only to a chaotic
situation but to an anarchic state of affairs. This would leave the
riding public at the mercy of transport operators who may
increase fares every hour, every day, every month or every year,
whenever it pleases them or whenever they deem it "necessary" to
do so. In Panay Autobus Co. v. Philippine Railway Co., 12 where
respondent Philippine Railway Co. was granted by the Public
Service Commission the authority to change its freight rates at
will, this Court categorically declared that:
In our opinion, the Public Service Commission was not
authorized by law to delegate to the Philippine Railway Co. the
power of altering its freight rates whenever it should find it
necessary to do so in order to meet the competition of road trucks
and autobuses, or to change its freight rates at will, or to regard its
present rates as maximum rates, and to fix lower rates whenever
in the opinion of the Philippine Railway Co. it would be to its
advantage to do so.
The mere recital of the language of the application of the
Philippine Railway Co. is enough to show that it is untenable. The
Legislature has delegated to the Public Service Commission the
power of fixing the rates of public services, but it has not
authorized the Public Service Commission to delegate that power
to a common carrier or other public service. The rates of public
services like the Philippine Railway Co. have been approved or
fixed by the Public Service Commission, and any change in such
rates must be authorized or approved by the Public Service
Commission after they have been shown to be just and
reasonable. The public service may, of course, propose new rates,
as the Philippine Railway Co. did in case No. 31827, but it cannot
lawfully make said new rates effective without the approval of the
Public Service Commission, and the Public Service Commission
itself cannot authorize a public service to enforce new rates
without the prior approval of said rates by the commission. The
commission must approve new rates when they are submitted to
it, if the evidence shows them to be just and reasonable, otherwise
it must disapprove them. Clearly, the commission cannot
determine in advance whether or not the new rates of the
Philippine Railway Co. will be just and reasonable, because it
does not know what those rates will be.
In the present case the Philippine Railway Co. in effect asked for
permission to change its freight rates at will. It may change them
every day or every hour, whenever it deems it necessary to do so
in order to meet competition or whenever in its opinion it would
be to its advantage. Such a procedure would create a most
unsatisfactory state of affairs and largely defeat the purposes of
the public service law. 13 (Emphasis ours).
One veritable consequence of the deregulation of transport fares
is a compounded fare. If transport operators will be authorized to
impose and collect an additional amount equivalent to 20% over
and above the authorized fare over a period of time, this will
unduly prejudice a commuter who will be made to pay a fare that
has been computed in a manner similar to those of compounded
bank interest rates.
Picture this situation. On December 14, 1990, the LTFRB
authorized provincial bus operators to collect a thirty-seven

(P0.37) centavo per kilometer fare for ordinary buses. At the same
time, they were allowed to impose and collect a fare range of plus
or minus 15% over the authorized rate. Thus P0.37 centavo per
kilometer authorized fare plus P0.05 centavos (which is 15% of
P0.37 centavo) is equivalent to P0.42 centavos, the allowed rate
in 1990. Supposing the LTFRB grants another five (P0.05)
centavo increase per kilometer in 1994, then, the base or
reference for computation would have to be P0.47 centavos
(which is P0.42 + P0.05 centavos). If bus operators will exercise
their authority to impose an additional 20% over and above the
authorized fare, then the fare to be collected shall amount to
P0.56 (that is, P0.47 authorized LTFRB rate plus 20% of P0.47
which is P0.29). In effect, commuters will be continuously
subject, not only to a double fare adjustment but to a
compounding fare as well. On their part, transport operators shall
enjoy a bigger chunk of the pie. Aside from fare increase applied
for, they can still collect an additional amount by virtue of the
authorized fare range. Mathematically, the situation translates into
the following:
Year * LTFRB Fare Range Fare to be
authorized collected
rate ** per kilometer
1990 P0.37 15% (P0.05) P0.42
1994 P0.42 + 0.05 = 0.47 20% (P0.09) P0.56
1998 P0.56 + 0.05 = 0.61 20% (P0.12) P0.73
2002 P0.73 + 0.05 = 0.78 20% (P0.16) P0.94
Moreover, rate making or rate fixing is not an easy task. It is a
delicate and sensitive government function that requires dexterity
of judgment and sound discretion with the settled goal of arriving
at a just and reasonable rate acceptable to both the public utility
and the public. Several factors, in fact, have to be taken into
consideration before a balance could be achieved. A rate should
not be confiscatory as would place an operator in a situation
where he will continue to operate at a loss. Hence, the rate should
enable public utilities to generate revenues sufficient to cover
operational costs and provide reasonable return on the
investments. On the other hand, a rate which is too high becomes
discriminatory. It is contrary to public interest. A rate, therefore,
must be reasonable and fair and must be affordable to the end
user who will utilize the services.
Given the complexity of the nature of the function of rate-fixing
and its far-reaching effects on millions of commuters, government
must not relinquish this important function in favor of those who
would benefit and profit from the industry. Neither should the
requisite notice and hearing be done away with. The people,
represented by reputable oppositors, deserve to be given full
opportunity to be heard in their opposition to any fare increase.
The present administrative procedure, 14 to our mind, already
mirrors an orderly and satisfactory arrangement for all parties
involved. To do away with such a procedure and allow just one
party, an interested party at that, to determine what the rate should
be will undermine the right of the other parties to due process.
The purpose of a hearing is precisely to determine what a just and
reasonable rate is. 15 Discarding such procedural and
constitutional right is certainly inimical to our fundamental law
and to public interest.

On the presumption of public need.

A certificate of public convenience (CPC) is an authorization
granted by the LTFRB for the operation of land transportation
services for public use as required by law. Pursuant to Section
16(a) of the Public Service Act, as amended, the following
requirements must be met before a CPC may be granted, to wit:
(i) the applicant must be a citizen of the Philippines, or a
corporation or co-partnership, association or joint-stock company
constituted and organized under the laws of the Philippines, at
least 60 per centum of its stock or paid-up capital must belong
entirely to citizens of the Philippines; (ii) the applicant must be
financially capable of undertaking the proposed service and
meeting the responsibilities incident to its operation; and (iii) the
applicant must prove that the operation of the public service
proposed and the authorization to do business will promote the
public interest in a proper and suitable manner. It is understood
that there must be proper notice and hearing before the PSC can
exercise its power to issue a CPC.
While adopting in toto the foregoing requisites for the issuance of
a CPC, LTFRB Memorandum Circular No. 92-009, Part IV,
provides for yet incongruous and contradictory policy guideline
on the issuance of a CPC. The guidelines states:
The issuance of a Certificate of Public Convenience is determined
by public need. The presumption of public need for a service shall
be deemed in favor of the applicant, while the burden of proving
that there is no need for the proposed service shall be the
oppositor's. (Emphasis ours).
The above-quoted provision is entirely incompatible and
inconsistent with Section 16(c)(iii) of the Public Service Act
which requires that before a CPC will be issued, the applicant
must prove by proper notice and hearing that the operation of the
public service proposed will promote public interest in a proper
and suitable manner. On the contrary, the policy guideline states
that the presumption of public need for a public service shall be
deemed in favor of the applicant. In case of conflict between a
statute and an administrative order, the former must prevail.

By its terms, public convenience or necessity generally means

something fitting or suited to the public need. 16 As one of the
basic requirements for the grant of a CPC, public convenience
and necessity exists when the proposed facility or service meets a
reasonable want of the public and supply a need which the
existing facilities do not adequately supply. The existence or nonexistence of public convenience and necessity is therefore a
question of fact that must be established by evidence, real and/or
testimonial; empirical data; statistics and such other means
necessary, in a public hearing conducted for that purpose. The
object and purpose of such procedure, among other things, is to
look out for, and protect, the interests of both the public and the
existing transport operators.
Verily, the power of a regulatory body to issue a CPC is founded
on the condition that after full-dress hearing and investigation, it
shall find, as a fact, that the proposed operation is for the
convenience of the public. 17 Basic convenience is the primary
consideration for which a CPC is issued, and that fact alone must
be consistently borne in mind. Also, existing operators is subject
routes must be given an opportunity to offer proof and oppose the
application. Therefore, an applicant must, at all times, be required
to prove his capacity and capability to furnish the service which

he has undertaken to render. 18 And all this will be possible only

if a public hearing were conducted for that purpose. LLjur
Otherwise stated, the establishment of public need in favor of an
applicant reverses well-settled and institutionalized judicial,
quasi-judicial and administrative procedures. It allows the party
who initiates the proceedings to prove, by mere application, his
affirmative allegations. Moreover, the offending provisions of the
LTFRB memorandum circular in question would in effect amend
the Rules of Court by adding another disputable presumption in
the enumeration of 37 presumptions under Rule 131, Section 5 of
the Rules of Court. Such usurpation of this Court's authority
cannot be countenanced as only this Court is mandated by law to
promulgate rules concerning pleading, practice and procedure. 19
Deregulation, while it may be ideal in certain situations, may not
be ideal at all in our country given the present circumstances.
Advocacy of liberalized franchising and regulatory process is
tantamount to an abdication by the government of its inherent
right to exercise police power, that is, the right of government to
regulate public utilities for protection of the public and the
utilities themselves.
While we recognize the authority of the DOTC and the LTFRB to
issue administrative orders to regulate the transport sector, we
find that they committed grave abuse of discretion in issuing
DOTC Department Order No. 92-587 defining the policy
framework on the regulation of transport services and LTFRB
Memorandum Circular No. 92-009 promulgating the
implementing guidelines on DOTC Department Order No. 92587, the said administrative issuances being amendatory and
violative of the Public Service Act and the Rules of Court.
Consequently, we rule that the twenty (20%) per centum fare
increase imposed by respondent PBOAP on March 16, 1994
without the benefit of a petition and a public hearing is null and
void and of no force and effect. No grave abuse of discretion
however was committed in the issuance of DOTC Memorandum
Order No. 90-395 and DOTC Memorandum dated October 8,
1992, the same being merely internal communications between
administrative officers.
WHEREFORE, in view of the foregoing, the instant petition is
hereby GRANTED and the challenged administrative issuances
and orders, namely: DOTC Department Order No. 92-587,
LTFRB Memorandum Circular No. 92-009, and the order dated
March 24, 1994 issued by respondent LTFRB are hereby
DECLARED contrary to law and invalid insofar as they affect
provisions therein (a) delegating to provincial bus and jeepney
operators the authority to increase or decrease the duly prescribed
transportation fares; and (b) creating a presumption of public need
for a service in favor of the applicant for a certificate of public
convenience and placing the burden of proving that there is no
need for the proposed service to the oppositor. LexLib
The Temporary Restraining Order issued on June 20, 1994 is
hereby MADE PERMANENT insofar as it enjoined the bus fare
rate increase granted under the provisions of the aforementioned
administrative circulars, memoranda and/or orders declared
invalid.
No pronouncement as to costs.
SO ORDERED.
Padilla, Davide, Jr., Bellosillo and Quiason, JJ., concur.

Footnotes
||| (Kilusang Mayo Uno Labor Center v. Garcia, Jr., G.R. No.
115381, December 23, 1994)

[G.R. No. L-17122. February 27, 1922.]

THE UNITED STATES, plaintiff-appellee, vs. NAG TANG
Ho, defendant-appellant.
SYLLABUS
1. ORGANIC LAW. By the organic law of the Philippine
Islands and the Constitution of the United States, all powers are
vested in the Legislature, Executive, and Judiciary. It is the duty
of the Legislature to make the law; of the Executive; and of the
Judiciary to construe the law. The Legislature has no authority to
execute or construe the law; the Executive has no authority to
make or construe the law; and the Judiciary has no power to make
or execute the law.
2. POWER. Subject to the Constitution only, the power of
each branch is supreme within its own jurisdiction, and it is for
the judiciary only to say when any Act of the Legislature is or is
not constitutional.
3. THE POWER TO DELEGATE. The Legislature cannot
delegate legislative power to enact any law. If Act No. 2868 is a
law unto itself and within itself, and it does nothing more than to
authorize the Governor-General to make rules and regulations to
carry it into effect, then the Legislature created the law. There is
no delegation of power and it is valid. One the other hand, if the
act within itself does not define a crime and is not complete, and
some legislative act remains to be done to make it law or a crime,
the doing of which is vested in the Governor-General, the is a
delegation of legislative power, is unconstitutional and avoid.
4. No CRIME TO SELL. After the passage of Act No. 2868,
and without any rules and regulations of the Governor-General, a
dealer in rice could sell it at any price and he would not commit a
crime. There was no legislative act which made it a crime to sell
rice at any price.
5. CRIME BY PROCLAMATION. When Act No. 2868 is
analyzed, it is the violation of the Proclamation of the GovernorGeneral which constitutes the crime. The alleged sale was made a
crime, if at all, because of the Proclamation by the GovernorGeneral.
6. UNCONSTITUTIONAL. In so far as Act No. 2868
undertakes to authorize the Governor-General, in his discretion,
to issue a proclamation fixing the price and to make the sale of it
in violation of the proclamation a crime, it is unconstitutional and
void.
7. CONSTITUTION. The Constitution is something solid,
permanent and substantial. It stability protects the rights, liberty,
and property rights of the rich and the poor alike, and its
construction ought not to change with emergencies or conditions.
8. PRIVATE RIGHTS. In the instant case, the law was not
dealing with Government property. It was dealing with private
property and private rights which are sacred under the
Constitution.
9. PRIVATE PROPERTY. In the instant case, the rice was the
personal, private property of the defendant. The Government had
not bought it, did not claim to own it, or have any interest in it at
the time the defendant sold it to one of his customers.

10. POWER VESTED IN THE LEGISLATURE. By the

organic act and subject only to constitutional limitations, the
power to legislate and enact laws is vested exclusively in the
Legislature, which is elected by a direct vote of the people of the
Philippine Islands.
11. OPINION LIMITED. This opinion is confined to the right
of the Governor-General to issue a proclamation fixing the
maximum price at which rice should be sold, and to make it a
crime to sell it at a higher price, and to that extent holds that it is
an unconstitutional delegation of legislative power. It does not
decide or undertake to construe the constitutionality of any of the
remaining portions of Act No. 2868.
DECISION
At its special session of 1919, the Philippine Legislature passed
Act No. 2868, entitled "An Act penalizing the monopoly and
hoarding of, and speculation in palay, rice, and corn under
extraordinary circumstances, regulating the distribution and sale
thereof, and authorizing the Governor-General, with the consent
of the Council of States. to issue the necessary rules and
regulations therefor, and making an appropriation for this
purpose," the material provisions of which are as follows:
"Section 1. The Governor-General is hereby authorized,
whenever, for any cause, conditions arise resulting in an
extraordinary rise in the price of palay, rice or corn, to issue and
promulgate, with the consent of the Council of States, temporary
rules and emergency measures for carrying out the purpose of this
Act. to wit:
"(a) To prevent the monopoly and hoarding of, and speculation in,
palay rice or corn.
"(b) To establish and maintain a government control of the
distribution or sale of the commodities referred to or have such
distribution or sale made by the Government itself.
"(c) To fix, from time to time, the quantities of palay, rice, or corn
that a company or individual may acquire, and the maximum sale
price that the industrial or merchant may demand.
"(d) . . .
"SEC. 2. It shall be unlawful to destroy, limit, prevent or in the
other manner obstruct the production or milling of palay, rice or
corn for the purpose of raising the prices thereof; to corner or
hoard said products as defined in section three of this Act; . . ."
Section 3 defines what shall constitute a monopoly or hoarding of
palay, rice or corn within the meaning of this Act, but does not
specify the price of rice of define any basis for fixing the price.
"SEC. 4. The violations of any of the provisions of this Act or of
the regulations, orders and decrees promulgated in accordance
therewith shall be punished by a fine of not more than five
thousand pesos, or by imprisonment for not more than two years,
or both, in the discretion of the court: Provided, That in the case
of companies or corporations, the manager or administrator shall
be criminally liable.
"SEC. 7. At any time that the Governor-General, with the consent
of the Council of State, shall consider that the public interest
requires the application of the provisions of this Act, he shall so
declare by proclamation, and any provisions of other laws

inconsistent herewith shall from then on be temporarily

suspended.
"Upon the cessation of the reasons foe which such proclamation
was issued, the Governor-General, with the consent of the
Council of States, shall declare the application of this Act to have
likewise terminated, and all laws temporarily suspended by virtue
of the same shall again take effect, but such termination shall not
prevent the prosecution of any proceedings or cause begun prior
to such termination, nor the filing of any proceedings for an
offense committed during the period covered by the GovernorGeneral's proclamation."
August 1, 1919, the Governor-General issued a proclamation
fixing the price at which rice should be sold.
August 8, 1919, a complaint was filed against the defendant,
NAG Tang Ho, charging him with the sale of rice at an excessive
price as follows:
"The undersigned accuses NAG Tang Ho of a violation of
Executive Order No. 53 of the Governor-General of the
Philippines, dated the 1st of August, 1919, in relation with the
provisions of sections 1, 2 and 4 Act No. 2868, committed as
follows:
"That on or about the 6th day of August, 1919, in the city of
Manila, Philippine Islands, the said NAG Tang Ho. voluntarily,
illegally and criminally sold to Pedro Trinidad, one Janet of rice
at the price of eighty centavos (P.80). which is a price greater than
that fixed by Executive Order No. 53 of the Governor-General of
the Philippines, dated the 1st of August, 1919, under the authority
of section 1 of Act No. 2868. Contrary to law."
Upon this charge, he was tried, found guilty and sentenced to five
months' imprisonment and to pay a fine of P500, from which he
appealed to this court, claiming that the lower court erred in
finding Executive Order No. 53 of 1919, to be of any force and
effect, in finding the accused guilty of the offense charged, and in
imposing the sentence.
The official records show that Act was to take effect on its
approval; that it was approved July 30,1919; that the GovernorGeneral issued his proclamation on the 1st of August, 1919; and
that the law was first published on the 13th of August, 1919; and
that the proclamation itself was first published on the 20th of
August, 1919.
The question here involves an analysis and construction of Act
No. 2868, in so far as it authorizes the Governor-General to fix
the price at which rice should be sold. It will be noted that section
1 authorizes the Governor-General, with the consent of the
Council of State, for any cause resulting in an extraordinary rise
in the price of palay, rice or corn, to issue and promulgated
temporary rules and emergency measures for carrying out the
purposes of the Act. By its very terms, the promulgation of
temporary rules and emergency measures is left to the discretion
of the Governor-General. The Legislature does not undertake
reasons the Governor-General shall issue the proclamation, but
says that it may be issued " for any cause," and leaves the
question as to what is "any cause" to the discretion of the
Governor-General. The Act also says: "For any cause, conditions
arise resulting in an extraordinary rise in the price of palay, rice or
corn." The Legislature does not specify or define what is "an
extraordinary rise." That is also left to the discretion of the
Governor-General. The Act also says that the Governor-General,

"with the consent of the Council of State," is authorized to issue

and promulgate "temporary rules and emergency measures for
carrying out the purposes of this Act." It does not specify or
define what is a temporary rule or an emergency measure, or how
long such temporary rules or emergency measures shall remain in
force and effect, or when they shall take effect. That is to say the
Legislature itself has no in any manner specified or defined any
basis for the order, but has left it to the sole judgment and
discretion of the Governor-General to say what is or what is not
"a cause," and what is or what is not "an extraordinary rise in the
price of rice," and as to what a temporary rule or an emergency
measure for the carrying out the purpose of the Act Under this
state of facts, if the law is valid and the Governor-General issues
a proclamation fixing the minimum price at which rice should be
sold, any dealer who, with or without notice, sells rice at a higher
price, is a criminal. There may not have been any cause, and the
price may not have been extraordinary, and there may not have
been an emergency, but, if the Governor-General found the
existence of such facts and issued a proclamation, and rice is sold
at any higher price, the seller commits a crime.
By the organic law of the Philippine Islands and the Constitution
of the United States all power are vested in the Legislative,
Executive and Judiciary. It is the duty of the Legislature to make
the law; of the Executive to execute the law; and of the Judiciary
to construe the law. The Legislature has no authority to executive
or construe the law, the Executive has no authority to make or
construe the law, and the Judiciary has no power to make or
executive the law. Subject to the Constitution only, the power of
each branch is supreme within its own jurisdiction, and it is for
the Judiciary only to say when any Act of the Legislature is or is
not constitutional. Assuming, without deciding, that the
Legislature itself has the power to fix the price at which rice is to
be sold, can it delegate that power to another, and, if so, was that
power legally delegated by Act. No. 2868? In other words, does
the Act delegate legislative power to the Governor-General? By
the Organic Law, all legislative power is vested in the Legislature,
and the power conferred upon the Legislature to make laws
cannot be delegated to the Governor-General, or any one else.
The Legislative cannot delegate the Legislative power to enact
any law. If Act No. 2868 is a law unto itself and within itself, and
it does nothing more than to authorize the Governor-General to
make rules and regulations to carry the law into effect, then the
Legislature itself created the law. There is no delegation of power
and it is valid. On the other hand, if the Act within itself does not
define a crime, and is not a law, and some legislative act remains
to be done to make it a law or a crime, the doing of which is
vested in the Governor-General, then the Act is a delegation of
legislative power, is unconstitutional and avoid.
The Supreme Court of the United States in what is known as the
Grainer Cases (94 U. S.. 183-187; 24 L, ed., 94), first laid down
the rule:
"Railroad companies are engaged in public employment affecting
the public interest and, under the decision in Mun vs. Ill., ante
subject to Legislative control as to their rates of fare and freight
unless protect by their charters.
"The Illinois statute of Mar. 23, 1874, to established reasonable
maximum rates of charges for the transportation of freights and
passengers on the different railroads of the State is not void as
being repugnant to the Constitution of the United States or to that
of the State."

It was there for the first time held in substance that a railroad was
a public utility, and that, being a public utility, the State had
power to establish reasonable maximum freight and passenger
rates. This was followed by the State of Minnesota in enacting a
similar law, providing for and empowering, a railroad
commission to hear and determine what was a just and reasonable
rate. The constitutionality of this law was attacked and upheld by
the Supreme Court of Minnesota in a learned and exhaustive
opinion by Justice Mitchell, in the case of State vs. Chicago,
Milwaukee & St. Paul Ribs. Co. (38 Minn., 281), in which the
court held:
"Regulations of railway tariffs Conclusiveness of
commission's tariffs. Under Laws 1887, c. 10, sec. 8, the
determination of the railroad and warehouse commission as to
what are equal and reasonable fares rates for the transportation of
persons and property by a railway company is conclusive, and, in
proceedings by mandamus to compel compliance with the tariff
of rates recommended and published by them, no issue can be
raise or inquiry had on that question.
"Same Constitution Delegation of power to commission.
The authority thus given to the commission to determine, in the
exercise of their discretion and judgment, what are equal and
reasonable rates, is not a delegation of legislative power."
It will be noted that the law creating the railroad commission
expressly provides
"That all charges by any common carrier for the transportation of
passengers and property shall be equal and reasonable."
With that as a basis for the law, power is then given to the railroad
commission to investigate all the facts, to hear and determine
what is a just and reasonable rate. Even then that law does not
make the violation of the order of the commission a crime. The
only remedy is a civil proceeding. It was there held
"That the legislature itself has the power to regulate railroad
charges is now too well settled to require either argument or
citation of authority.
"The difference between the power to say what the law shall be,
and the power to adopt rules and regulations, or to investigate and
determine the facts, in order to carry into effect a law already
passed, is apparent. The true distinction is between the delegation
of power to make the law, which necessarily involves a discretion
as to what it shall be, and the conferring an authority or discretion
to be exercised under and in pursuance of the law.
"The legislature enacts that all freight rates and passenger fares
should be just and reasonable. It had the undoubted power to fix
these rates at whatever it deemed equal and reasonable.
"They have not delegated to the commission any authority or
discretion as to what the law shall be, which would not be
allowable, but have merely conferred upon it an authority and
discretion, to be exercised in the execution of the law, and under
and in pursuance of it, which is entirely permissible. The
legislature itself has passed upon the expediency of the law, and
what it shall be. The commission is intrusted with no authority or
discretion upon these questions. It can neither make nor unmade a
single provision of law. It is merely charged with the
administration of the law, and with no other power."

The delegation of legislative power was before the Supreme

Court of Wisconsin in Doling vs Lancaster Ins. Co. (92 Wis., 63).
The opinion says:
"The true distinction is between the delegation of power to make
the law, which necessarily involves a discretion as to what it shall
be and conferring 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.'
"The act, in our judgment, wholly fails to provide definitely and
clearly what the standard policy should contain so that it could be
put in use as a uniform policy required to take the place of all
others, without the determination of the insurance commissioner
in respect to matters involving the exercise of a legislative
discretion that could not be delegated, and without which the act
could not possibly be put in use as an act in conformity to which
all fire insurance policies were required to be issued.
"The result of all the cases on this subject is that a law must be
complete, in all its terms and provisions, when it leaves the
legislative branch of the government, and nothing must be left to
the judgment of the electors or other appointee or delegate of the
legislature, so that, in form and substances, it is a law in all its
details in presenting, but which may be left to take effect in
future, if necessary, upon the ascertainment of any prescribed fact
or event."
The delegation of legislative power was before the Supreme
Court in United States vs. Grimed (220 U. S., 506; 55 L. ed.,
563), where it was held that the rules and regulations of the
Secretary of Agriculture as to a trespass on government land in a
forest reserve were valid constitutional. The Act there provided
that the Secretary of Agriculture " . . . may make such rules and
regulations and establish such service as will insure the objects of
such reservation; namely, to regulate their occupancy and use, and
to preserve the forests thereon from destruction; and any violation
of the provisions of this act or such rules and regulations shall be
punished, . . ."
The brief of the United States Solicitor-General says:
"In refusing permits to use s forest reservation for stock grazing,
except upon stated terms or in stated ways, the Secretary of
Agriculture merely asserts and enforces the proprietary right of
the United States over land which it owns. The regulations of the
Secretary, therefore, is not an exercise of legislative, or even of
administrative, power; but is an ordinary and legitimate refusal of
the landowner's authorized agent to allow persons having no right
in the land to use it as they will. The right of proprietary control is
altogether different from governmental authority."
The opinion says:
"From the beginning of the government, various acts have been
passed conferring upon executive officers power to make rules
and regulations, not for the government of their departments,
but for administering the laws which did govern. None of these
statutes could confer legislative power. But when Congress had
legislated and indicated its will, it could give to those who were
to act under such general provisions power to fill up the details'
by the establishment of administrative rules and regulations, the
violation of which be punished by fine imprisonment fixed by
Congress, or by penalties fixed by Congress, or measured by the
injury done.

"That 'Congress cannot delegate legislative power is a principle

universally recognized as vital to the integrity and maintenance of
the system of government ordained by the Constitution.'

"All saloons in said village shall be closed at 11 o'clock P. M.

each day and remain closed until 5 o'clock on the following
morning, unless by special permission of the president."

"If, after the passage of the act and the promulgation the rule, the
defendants drove and grazed their sheep upon the reserve, in
violation of the regulations, they were making an unlawful use of
the government's property. In doing so they thereby made
themselves liable to the penalty imposed by Congress."

Construing it in 136 Wis., 526 128 A. S. R., 1100, 1 the Supreme

Court of that State says:

"The subject as to which the Secretary can regulate are defined.

The lands are set apart as a forest reserve. He is required to make
provision to protect them from depredations and from harmful
uses. He is authorized 'to regulate the occupancy and use and to
use to preserve the forests from destruction.' A violation of
reasonable rules regulating the use and occupancy of the property
is made a crime, not by the Secretary, but by Congress."
The above are leading cases in the United States on the question
of delegating legislative power. It will be noted that in the
"Grainer Cases," it was held that a railroad company was a public
corporation, and that a railroad was a public utility, and that, for
such reasons the Legislature had the power to fix and determine
just and reasonable rates for freight and passengers.
The Minnesota case held that, so long as the rates were just and
reasonable, the legislature could delegate the power to ascertain
the facts and determine from the facts what were just and
reasonable rates, and that in vesting the commission with such
power was not a delegation of legislative power.
The Wisconsin case was a civil action founded upon a "Wisconsin
standard policy of fire insurance," and the court held that "the act,
. . . wholly fails to provide definitely and clearly what the
standard policy should contain, so that it could be put in use as a
uniform policy required to take the place of all others, without the
determination of the insurance commissioner in respect to matters
involving the exercise of a legislative discretion that could not be
delegated.''
The case of the United States Supreme Court, supra, dealt with
rules and regulations which were promulgated by the Secretary of
Agriculture for Government land in the forest reserve. These hold
that the legislature only can enact a law, and that it cannot
delegate its legislative authority.

"We regard the ordinance as void for two reasons: First, because
it attempts to confer arbitrary power upon an executive officer,
and allows him, in executing the ordinance, to make unjust and
groundless discriminations among persons similarly situated;
second, because the power to regulate saloons is a law-making
power vested in the village board, which cannot be delegated. A
legislative body cannot delegate to a mere administrative officer
power to make a law, but it can make a law with provisions that it
shall go into effect or be suspended in its operation upon the
ascertainment of a fact or state of facts by an administrative of
board. In the present case the ordinance by its terms gives power
to the president to decide arbitrarily, and in the exercise of his
own discretion, when a saloon shall close. This is an attempt to
vest legislative discretion in him, and cannot be sustained."
The legal principle involved there is squarely in point here.
It must conceded that, after the passage of Act No. 2868, and
before any rules and regulations were promulgated by the
Governor-General, a dealer in rice could sell it at any price, even
at a peso per "Janet," and that he would not commit a crime,
because there would be no law fixing the price of rice, and the
sale of it at any price would not be a crime. That is to say, in the
absence of a proclamation, it was not a crime to sell rice at any
price. Hence, it must follow that, if the defendant committed a
crime, it was because the Governor-General issued the
proclamation. There was no act of the Legislature making it a
crime to sell rice at any price, and without the proclamation, the
sale of it at any price was not crime.
The Executive Order 1 provides"
(5) The maximum selling price of palay, rice or corn is hereby
fixed, for the time being as follows:
"In Manila
"Palay at P6.75 per sack of 1/2 kilos, or 29 centavos per Janet.

The line of cleavage between what is and what is not a delegation

of legislative power is pointed out and clearly defined. As the
Supreme Court of Wisconsin says:

"Rice at P15 per sack of 57 1/2 kilos, or 63 centavos per Janet.

"That no part of the legislative power can be delegated by the

legislature to any other department of the government, executive
or judicial, is a fundamental principle in constitutional law,
essential to the integrity and maintenance of the system of
government established by the constitution.

"In the provinces producing palay, rice and corn, the maximum
price shall be the Manila price less the cost of transportation from
the source of supply and necessary handling expenses to the place
of sale, to be determined by the provincial treasures or their
deputies.

"Where an act is clothed with all the forms of law, and is

complete in and of itself, it may be provided that it shall become
operative only upon some certain act or event, or, in like manner,
that its operation shall be suspended.

"In provinces, obtaining their supplies from Manila or other

producing provinces, the maximum price shall be the authorized
price at the place of supply or the Manila price as the case may
be, plus the transportation cost, from the place of supply and the
necessary handling expenses, to the place of sale, to be
determined by the provincial treasurers or their deputies.

The legislature cannot delegate its power to make a law, but it can
make a law to delegate a power to determine some fact or state of
things upon which the law makes, or intends to make, its own
action to depend."

"Corn at P8 per sack of 57 1/2 kilos, or 34 centavos per Janet.

"(6) Provincial treasurers and their deputies are hereby directed to

communicate with, and execute all instructions emanating from
the Director of Commerce and Industry, for the most effective and

proper enforcement of the above regulations in their respective

localities,"
The law says that the Governor-General may fix "the maximum
sale price that industrial or merchant may demand." The law is a
general law and not a local or special law.
The proclamation undertakes to fix one price for rice in Manila
and other and different prices in other and different provinces in
the Philippines Islands, and delegates the power to determine the
other and different prices to provincial treasurers and their
deputies. Here, then, you would have a delegation of legislative
power to the Governor-General, and a delegation by him of that
power to provincial treasurers and their deputies, who "are hereby
directed to communicate with, and executive all instructions
emanating from the Director of Commerce and Industry, for the
most effective and proper enforcement of the above regulations in
their respective localities." The issuance of the proclamation by
the Governor-General was the exercise of the power delegation of
a power, and was even a subdelegation of that power.
Assuming that it is valid, Act No. 2868 is a general law and does
not authorize the Governor-General to fix one price of rice in
Manila and another price in Iloilo. It only purports to authorize
him fix the price of rice in the Philippine Islands under a law,
which is general and uniform, and not local or special. Under the
terms of the law, the price of rice fixed in the proclamation must
be the same all over the Islands. There cannot be one price at
Manila and another at Iloilo. Again, it is a matter of common
knowledge, and of which this court will take judicial notice, that
there are many kinds of rice with different and corresponding
market values, and that there is a wide range in the price, which
varies with grade and quality. Act No. 2868 makes no distinction
in price for the grade quality of the rice, and the proclamation,
upon which the defendant was tried and convicted, fixes the
selling price of rice in Manila "at P15 per sack of 57 1/2 kilos, or
63 centavo per Janet," and is uniform as to all grades of rice, and
says nothing about grade or quality. Again, it will be noted that
the law is confined to palay, rice and corn. They are products of
the Philippine Islands. Hemp, tobacco, coconut, chickens, eggs,
and many other things are also products. Any law which singles
out palay, rice or corn from the numerous, but is a local or special
law. If such a law is valid, then by the same principle, the
Governor-General could be authorized by proclamation to fix the
price of meat, eggs chickens, coconut, hemp, and tobacco, or any
other of the Islands. In the very nature of things, all of that class
of laws should be general and uniform. Otherwise, there would be
an unjust discrimination of property rights, which, under the law,
must be equal and uniform. Act No. 2868 is nothing more than a
floating law, which, in the discretion and by a proclamation of the
Governor-General, makes it a floating crime to sell rice at a price
in excess of the proclamation, without regard to grade or quality.
When Act No. 2868 is analyzed, it is the violation of the
proclamation of the Governor-General which constitutes the
crime. Without that proclamation, it was no crime to sell rice at
any price. In other words, the Legislature left it to the sole
discretion of the Governor-General to say what was and what was
not "any cause" for enforcing the act, and what was and what was
not "an extraordinary rise in the price of palay, rice or corn," and
under certain undefined conditions to fix the price at which rice
should be sold, without regard to grade or quality, also to say
whether a proclamation should be issued, if so, when, and
whether or not the law should be enforced, how long it should be
enforced, and when the law should be suspended. The Legislature
did not specify or define what was "any cause," or what was "an

extraordinary rise in the price of rice, palay or corn." Neither did

it specify or define the conditions upon which the proclamation
should be issued. In the absence of the proclamation no crime was
committed. The alleged sale was made a crime, if at all, because
the Governor-General issued the proclamation. The act or
proclamation does not say anything about the different grades or
qualities of rice, and the defendant is charged with the sale" of
one Janet of rice at the price of eighty centavos (P0.80) which is a
price greater than fixed by Executive Order No. 53."
We are clearly of the opinion and hold that Act No. 2868 in so far
as it undertakes to authorize the Governor-General in his
discretion to issue a proclamation, fixing the price of rice, and to
make the sale of rice in violation of the proclamation a crime, is
unconstitutional and void.
It may be urged that there was an extraordinary rise in the price of
rice and profiteering, which worked a severe hardship, on the
poorer classes, and that an emergency existed, but the question
here presented is the constitutionality of a particular portion of a
statute, and none of such matters is an argument for, or against, its
constitutionality.
The Constitution is something solid, permanent and substantial.
Its stability protects the life, liberty and property rights of the rich
and the poor alike, and that protection ought not to change with
the wind or any emergency condition. The fundamental question
involved in this case is the right of the people of the Philippine
Islands to be and live under a republican form of government. We
make the board statement that no state or nation, living under a
republican form of government, under the terms and conditions
specified in Act No. 2868, has ever enacted a law delegating the
power to any one, to fix the price at which rice should be sold.
That power can never be delegated under a republican form of
government.
In the fixing of the price at which the defendant should sell his
rice, the law was not dealing with government property. It was
dealing with private property and private rights, which are sacred
under the Constitution. If this law should be sustained, upon the
same principle and for the same reason, the Legislature could
authorize the Governor-General to fix the price of every product
or commodity in the Philippine Islands, and empower him to
make it a crime to sell any product at any other or different price.
It may be said that this was a war measure, and that for such
reason the provision of the Constitution should be suspended. But
the stubborn fact remains that at all times the judicial power was
in full force and effect, and that while that power was in force and
effect, such a provision of the Constitution could not be, and was
not, suspended even in times of war. It may be claimed that
during the war, the United States Government undertook to, and
did, fix the price at which wheat and flour should be bought and
sold, and that is true. There, the United States had declared war,
and at the time was at war with other nations, and it was a war
measure, but it is also true that in doing so, and as a part of the
same act, the United States commandeered all the wheat and
flour, and took possession of it, either or constructive, and the
government itself became the owner of the wheat and flour, and
fixed the price to be paid for it. That is not case. Here, the rice
sold was the personal and private property of the defendant, who
sold it to one of his customers. The government had not bought
and did not claim to own the rice, or have any interest in it. and at
the time of the alleged sale, it was the personal, private property
of the defendant. It may be that the law was passed in the interest
of the public, but the members of this court have taken a solemn

oath to uphold and defend the Constitution, and it ought not to be

construed to meet the changing winds or emergency conditions.
Again we say that no state or nation under a republican form of
government ever enacted a law authorizing any executive, under
the conditions stated, to fix the price at which a private person
would sell his own rice, and make the broad statement that no
decision of any court, on principle or by analogy. will ever be
found which sustains the constitutionality of that particular
portion of Act No. 2868 here in question. By the terms of the
Organic Act, subject only to constitutional limitations, the power
Legislature, which is elated by a direct vote of the people of the
Philippine Island. As to the question here involved, the authority
of the Governor-General to fix the maximum price at which
palay, rice and corn may be sold in the manner and under the
conditions stated is a delegation of legislative power in violation
of the organic law.
This opinion is confined to the particular question here involved,
which is the right of the Governor-General, upon the terms and
conditions stated in the Act, to fix the price of rice and make it a
crime to sell it at a higher price, and which holds that portion of
the Act unconstitutional. It does not decide or undertake to
construe the constitutionality of any of the remaining of the Act.
The judgment of the lower court is reversed, and the defendant
discharged. So ordered.
Araullo, C. J., Johnson, Street, and Ostrand, JJ., concur.
Romualdez, J., concurs in the result.
||| (United States v. Ang Tang Ho, G.R. No. L-17122, February 27,
1922)
[G.R. No. 74457. March 20, 1987.]

RESTITUTO YNOT, petitioner, vs. INTERMEDIATE

APPELLATE COURT, THE STATION COMMANDER,
INTEGRATED NATIONAL POLICE, BAROTAC NUEVO,
ILOILO and THE REGIONAL DIRECTOR, BUREAU OF
ANIMAL INDUSTRY, REGION IV, ILOILO CITY,
respondents.
DECISION
The essence of due process is distilled in the immortal cry of
Themistocles to Alcibiades: "Strike but hear me first!'" It is
this cry that the petitioner in effect repeats here as he challenges
the constitutionality of EXECUTIVE ORDER NO. 626-A. Cdpr
The said executive order reads in full as follows:
"WHEREAS, the President has given orders prohibiting the
interprovincial movement of carabaos and the slaughtering of
carabaos not complying with the requirements of EXECUTIVE
ORDER NO. 626 particularly with respect to age;
"WHEREAS, it has been observed that despite such orders the
violators still manage to circumvent the prohibition against
interprovincial movement of carabaos by transporting carabeef
instead; and.
"WHEREAS, in order to achieve the purposes and objectives of
EXECUTIVE ORDER NO. 626 and the prohibition against
interprovincial movement of carabaos, it is necessary to
strengthen the said Executive Order and provide for the
disposition of the carabaos and carabeef subject of the violation;.
"NOW, THEREFORE, I, FERDINAND E. MARCOS, President
of the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby promulgate the following:
"SECTION 1. EXECUTIVE ORDER NO. 626 is hereby
amended such that henceforth, no carabao regardless of age, sex,
physical condition or purpose and no carabeef shall be transported
from one province to another. The carabao or carabeef transported
in violation of this Executive Order as amended shall be subject
to confiscation and forfeiture by the government, to be distributed
to charitable institutions and other similar institutions as the
Chairman of the National Meat Inspection Commission may see
fit, in the case of carabeef, and to deserving farmers through
dispersal as the Director of Animal Industry may see fit, in the
case of carabaos.
"SECTION 2. This Executive Order shall take effect immediately.
"Done in the City of Manila, this 25th day of October, in the year
of Our Lord, nineteen hundred and eighty.
(SGD.) FERDINAND E. MARCOS
President
Republic of the Philippines"
The petitioner had transported six carabaos in a pump boat from
Masbate to Iloilo on January 13, 1984, when they were
confiscated by the police station commander of Barotac Nuevo,
Iloilo, for violation of the above measure. 1 The petitioner sued
for recovery, and the Regional Trial Court of Iloilo City issued a
writ of replevin upon his filing of a supersedeas bond of
P12,000.00. After considering the merits of the case, the court

sustained the confiscation of the carabaos and, since they could

no longer be produced, ordered the confiscation of the bond. The
court also declined to rule on the constitutionality of the executive
order, as raised by the petitioner, for lack of authority and also for
its presumed validity. 2
The petitioner appealed the decision to the Intermediate Appellate
Court, * 3 which upheld the trial court, ** and he has now come
before us in this petition for review on certiorari. prcd
The thrust of his petition is that the executive order is
unconstitutional insofar as it authorizes outright confiscation of
the carabao or carabeef being transported across provincial
boundaries. His claim is that the penalty is invalid because it is
imposed without according the owner a right to be heard before a
competent and impartial court as guaranteed by due process. He
complains that the measure should not have been presumed, and
so sustained, as constitutional. There is also a challenge to the
improper exercise of the legislative power by the former President
under Amendment No. 6 of the 1973 Constitution. 4
While also involving the same executive order, the case of
Pesigan v. Angeles 5 is not applicable here. The question raised
there was the necessity of the previous publication of the measure
in the Official Gazette before it could be considered enforceable.
We imposed the requirement then on the basis of due process of
law. In doing so, however, this Court did not, as contended by the
Solicitor General, impliedly affirm the constitutionality of
EXECUTIVE ORDER NO. 626-A. That is an entirely different
matter.
This Court has declared that while lower courts should observe a
becoming modesty in examining constitutional questions, they are
nonetheless not prevented from resolving the same whenever
warranted, subject only to review by the highest tribunal. 6 We
have jurisdiction under the Constitution to "review, revise,
reverse, modify or affirm on appeal or certiorari, as the law or
rules of court may provide," final judgments and orders of lower
courts in, among others, all cases involving the constitutionality
of certain measures. 7 This simply means that the resolution of
such cases may be made in the first instance by these lower
courts.
And while it is true that laws are presumed to be constitutional,
that presumption is not by any means conclusive and in fact may
be rebutted. Indeed, if there be a clear showing of their invalidity,
and of the need to declare them so, then "will be the time to make
the hammer fall, and heavily," 8 to recall Justice Laurel's
trenchant warning. Stated otherwise, courts should not follow the
path of least resistance by simply presuming the constitutionality
of a law when it is questioned. On the contrary, they should probe
the issue more deeply, to relieve the abscess, paraphrasing another
distinguished jurist, 9 and so heal the wound or excise the
affliction.
Judicial power authorizes this; and when the exercise is
demanded, there should be no shirking of the task for fear of
retaliation, or loss of favor, or popular censure, or any other
similar inhibition unworthy of the bench, especially this Court.
LLjur
The challenged measure is denominated an executive order but it
is really presidential decree, promulgating a new rule instead of
merely implementing an existing law. It was issued by President
Marcos not for the purpose of taking care that the laws were
faithfully executed but in the exercise of his legislative authority

under Amendment No. 6. It was provided thereunder that

whenever in his judgment there existed a grave emergency or a
threat or imminence thereof or whenever the legislature failed or
was unable to act adequately on any matter that in his judgment
required immediate action, he could, in order to meet the
exigency, issue decrees, orders or letters of instruction that were
to have the force and effect of law. As there is no showing of any
exigency to justify the exercise of that extraordinary power then,
the petitioner has reason, indeed, to question the validity of the
executive order. Nevertheless, since the determination of the
grounds was supposed to have been made by the President "in his
judgment," a phrase that will lead to protracted discussion not
really necessary at this time, we reserve resolution of this matter
until a more appropriate occasion. For the nonce, we confine
ourselves to the more fundamental question of due process.
It is part of the art of constitution-making that the provisions of
the charter be cast in precise and unmistakable language to avoid
controversies that might arise on their correct interpretation. That
is the ideal. In the case of the due process clause, however, this
rule was deliberately not followed and the wording was purposely
kept ambiguous. In fact, a proposal to delineate it more clearly
was submitted in the Constitutional Convention of 1934, but it
was rejected by Delegate Jose P. Laurel, Chairman of the
Committee on the Pill of Rights, who forcefully argued against it.
He was sustained by the body. 10
The due process clause was kept intentionally vague so it would
remain also conveniently resilient. This was felt necessary
because due process is not, like some provisions of the
fundamental law, an "iron rule" laying down an implacable and
immutable command for all seasons and all persons. Flexibility
must be the best virtue of the guaranty. The very elasticity of the
due process clause was meant to make it adapt easily to every
situation, enlarging or constricting its protection as the changing
times and circumstances may require.
Aware of this, the courts have also hesitated to adopt their own
specific description of due process lest they confine themselves in
a legal straitjacket that will deprive them of the elbow room they
may need to vary the meaning of the clause whenever indicated.
Instead, they have preferred to leave the import of the protection
open-ended, as it were, to be "gradually ascertained by the
process of inclusion and exclusion in the course of the decision of
cases as they arise." 11 Thus, Justice Felix Frankfurter of the U.S.
Supreme Court, for example, would go no farther than to define
due process - and in so doing sums it all up as nothing more
and nothing less than "the embodiment of the sporting idea of fair
play." 12
When the barons of England extracted from their sovereign liege
the reluctant promise that that Crown would thenceforth not
proceed against the life, liberty or property of any of its subjects
except by the lawful judgment of his peers or the law of the land,
they thereby won for themselves and their progeny that splendid
guaranty of fairness that is now the hallmark of the free society.
The solemn vow that King John made at Runnymede in 1215 has
since then resounded through the ages, as a ringing reminder to
all rulers, benevolent or base, that every person, when confronted
by the stern visage of the law, is entitled to have his say in a fair
and open hearing of his cause. prLL
The closed mind has no place in the open society. It is part of the
sporting idea of fair play to hear "the other side" before an
opinion is formed or a decision is made by those who sit in
judgment. Obviously, one side is only one-half of the question;

the other half must also be considered if an impartial verdict is to

be reached based on an informed appreciation of the issues in
contention. It is indispensable that the two sides complement each
other, as unto the bow the arrow, in leading to the correct ruling
after examination of the problem not from one or the other
perspective only but in its totality. A judgment based on less that
this full appraisal, on the pretext that a hearing is unnecessary or
useless, is tainted with the vice of bias or intolerance or
ignorance, or worst of all, in repressive regimes, the insolence of
power.
The minimum requirements of due process are notice and hearing
13 which, generally speaking, may not be dispensed with because
they are intended as a safeguard against official arbitrariness. It is
a gratifying commentary on our judicial system that the
jurisprudence of this country is rich with applications of this
guaranty as proof of our fealty to the rule of law and the ancient
rudiments of fair play. We have consistently declared that every
person, faced by the awesome power of the State, is entitled to
"the law of the land," which Daniel Webster described almost two
hundred years ago in the famous Dartmouth College Case, 14 as
"the law which hears before it condemns, which proceeds upon
inquiry and renders judgment only after trial." It has to be so if
the rights of every person are to be secured beyond the reach of
officials who, out of mistaken zeal or plain arrogance, would
degrade the due process clause into a worn and empty catchword.
This is not to say that notice and hearing are imperative in every
case for, to be sure, there are a number of admitted exceptions.
The conclusive presumption, for example, bars the admission of
contrary evidence as long as such presumption is based on human
experience or there is a rational connection between the fact
proved and the fact ultimately presumed therefrom. 15 There are
instances when the need for expeditious action will justify
omission of these requisites, as in the summary abatement of a
nuisance per se, like a mad dog on the loose, which may be killed
on sight because of the immediate danger it poses to the safety
and lives of the people. Pornographic materials, contaminated
meat and narcotic drugs are inherently pernicious and may be
summarily destroyed. The passport of a person sought for a
criminal offense may be cancelled without hearing, to compel his
return to the country he has fled. 16 Filthy restaurants may be
summarily padlocked in the interest of the public health and
bawdy houses to protect the public morals. 17 In such instances,
previous judicial hearing may be omitted without violation of due
process in view of the nature of the property involved or the
urgency of the need to protect the general welfare from a clear
and present danger. cdll
The protection of the general welfare is the particular function of
the police power which both restraints and is restrained by due
process. The police power is simply defined as the power inherent
in the State to regulate liberty and property for the promotion of
the general welfare. 18 By reason of its function, it extends to all
the great public needs and is described as the most pervasive, the
least limitable and the most demanding of the three inherent
powers of the State, far outpacing taxation and eminent domain.
The individual, as a member of society, is hemmed in by the
police power, which affects him even before he is born and
follows him still after he is dead from the womb to beyond the
tomb in practically everything he does or owns. Its reach is
virtually limitless. It is a ubiquitous and often unwelcome
intrusion. Even so, as long as the activity or the property has
some relevance to the public welfare, its regulation under the
police power is not only proper but necessary. And the
justification is found in the venerable Latin maxims, Salus populi

est suprema lex and Sic utere tuo ut alienum non laedas, which
call for the subordination of individual interests to the benefit of
the greater number.
It is this power that is now invoked by the government to justify
EXECUTIVE ORDER NO. 626-A, amending the basic rule in
EXECUTIVE ORDER NO. 626, prohibiting the slaughter of
carabaos except under certain conditions. The original measure
was issued for the reason, as expressed in one of its Whereases,
that "present conditions demand that the carabaos and the
buffaloes be conserved for the benefit of the small farmers who
rely on them for energy needs." We affirm at the outset the need
for such a measure. In the face of the worsening energy crisis and
the increased dependence of our farms on these traditional beasts
of burden, the government would have been remiss, indeed, if it
had not taken steps to protect and preserve them.
A similar prohibition was challenged in United States v. Toribio,
19 where a law regulating the registration, branding and slaughter
of large cattle was claimed to be a deprivation of property without
due process of law. The defendant had been convicted thereunder
for having slaughtered his own carabao without the required
permit, and he appealed to the Supreme Court. The conviction
was affirmed. The law was sustained as a valid police measure to
prevent the indiscriminate killing of carabaos, which were then
badly needed by farmers. An epidemic had stricken many of these
animals and the reduction of their number had resulted in an acute
decline in agricultural output, which in turn had caused an
incipient famine. Furthermore, because of the scarcity of the
animals and the consequent increase in their price, cattle-rustling
had spread alarmingly, necessitating more effective measures for
the registration and branding of these animals. The Court held
that the questioned statute was a valid exercise of the police
power and declared in part as follows:
"To justify the State in thus interposing its authority in behalf of
the public, it must appear, first, that the interests of the public
generally, as distinguished from those of a particular class, require
such interference; and second, that the means are reasonably
necessary for the accomplishment of the purpose, and not unduly
oppressive upon individuals. . . .
"From what has been said, we think it is clear that the enactment
of the provisions of the statute under consideration was required
by `the interests of the public generally, as distinguished from
those of a particular class' and that the prohibition of the slaughter
of carabaos for human consumption, so long as these animals are
fit for agricultural work or draft purposes was a `reasonably
necessary' limitation on private ownership, to protect the
community from the loss of the services of such animals by their
slaughter by improvident owners, tempted either by greed of
momentary gain, or by a desire to enjoy the luxury of animal
food, even when by so doing the productive power of the
community may be measurably and dangerously affected."

In the light of the tests mentioned above, we hold with the Toribio
Case that the carabao, as the poor man's tractor, so to speak, has a
direct relevance to the public welfare and so is a lawful subject of
EXECUTIVE ORDER NO. 626. The method chosen in the basic
measure is also reasonably necessary for the purpose sought to be
achieved and not unduly oppressive upon individuals, again
following the above-cited doctrine. There is no doubt that by
banning the slaughter of these animals except where they are at
least seven years old if male and eleven years old if female upon
issuance of the necessary permit, the executive order will be
conserving those still fit for farm work or breeding and
preventing their improvident depletion. llcd
But while conceding that the amendatory measure has the same
lawful subject as the original executive order, we cannot say with
equal certainty that it complies with the second requirement, viz.,
that there be a lawful method. We note that to strengthen the
original measure, EXECUTIVE ORDER NO. 626-A imposes an
absolute ban not on the slaughter of the carabaos but on their
movement, providing that "no carabao regardless of age, sex,
physical condition or purpose (sic) and no carabeef shall be
transported from one province to another." The object of the
prohibition escapes us. The reasonable connection between the
means employed and the purpose sought to be achieved by the
questioned measure is missing.
We do not see how the prohibition of the interprovincial transport
of carabaos can prevent their indiscriminate slaughter,
considering that they can be killed anywhere, with no less
difficulty in one province than in another. Obviously, retaining the
carabaos in one province will not prevent their slaughter there,
any more than moving them to another province will make it
easier to kill them there. As for the carabeef, the prohibition is
made to apply to it as otherwise, so says executive order, it could
be easily circumvented by simply killing the animal. Perhaps so.
However, if the movement of the live animals for the purpose of
preventing their slaughter cannot be prohibited, it should follow
that there is no reason either to prohibit their transfer as, not to be
flippant, dead meat.
Even if a reasonable relation between the means and the end were
to be assumed, we would still have to reckon with the sanction
that the measure applies for violation of the prohibition. The
penalty is outright confiscation of the carabao or carabeef being
transported, to be meted out by the executive authorities, usually
the police only. In the Toribio Case, the statute was sustained
because the penalty prescribed was fine and imprisonment, to be
imposed by the court after trial and conviction of the accused.
Under the challenged measure, significantly, no such trial is
prescribed, and the property being transported is immediately
impounded by the police and declared, by the measure itself, as
forfeited to the government.
In the instant case, the carabaos were arbitrarily confiscated by
the police station commander, were returned to the petitioner only
after he had filed a complaint for recovery and given a
supersedeas bond of P12,000.00, which was ordered confiscated
upon his failure to produce the carabaos when ordered by the trial
court. The executive order defined the prohibition, convicted the
petitioner and immediately imposed punishment, which was
carried out forthright. The measure struck at once and pounced
upon the petitioner without giving him a chance to be heard, thus
denying him the centuries-old guaranty of elementary fair play.
It has already been remarked that there are occasions when notice
and hearing may be validly dispensed with notwithstanding the

usual requirement for these minimum guarantees of due process.

It is also conceded that summary action may be validly taken in
administrative proceedings as procedural due process is not
necessarily judicial only. 20 In the exceptional cases accepted,
however, there is a justification for the omission of the right to a
previous hearing, to wit, the immediacy of the problem sought to
be corrected and the urgency of the need to correct it. cdphil

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. For these reasons, we hereby declare
EXECUTIVE ORDER NO. 626-A unconstitutional.

In the case before us, there was no such pressure of time or action
calling for the petitioner's peremptory treatment. The properties
involved were not even inimical per se as to require their instant
destruction. There certainly was no reason why the offense
prohibited by the executive order should not have been proved
first in a court of justice, with the accused being accorded all the
rights safeguarded to him under the Constitution. Considering
that, as we held in Pesigan v. Angeles, 21 EXECUTIVE ORDER
NO. 626-A is penal in nature, the violation thereof should have
been pronounced not by the police only but by a court of justice,
which alone would have had the authority to impose the
prescribed penalty, and only after trial and conviction of the
accused.

We agree with the respondent court, however, that the police

station commander who confiscated the petitioner's carabaos is
not liable in damages for enforcing the executive order in
accordance with its mandate. The law was at that time
presumptively valid, and it was his obligation, as a member of the
police, to enforce it. It would have been impertinent of him, being
a mere subordinate of the President, to declare the executive order
unconstitutional and, on his own responsibility alone, refuse to
execute it. Even the trial court, in fact, and the Court of Appeals
itself did not feel they had the competence, for all their superior
authority, to question the order we now annul.

We also mark, on top of all this, the questionable manner of the

disposition of the confiscated property as prescribed in the
questioned executive order. It is there authorized that the seized
property shall "be distributed to charitable institutions and other
similar institutions as the Chairman of the National Meat
Inspection Commission may see fit, in the case of carabeef, and to
deserving farmers through dispersal as the Director of Animal
Industry may see fit, in the case of carabaos." (Emphasis
supplied.) The phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with perilous
opportunities for partiality and abuse, and even corruption. One
searches in vain for the usual standard and the reasonable
guidelines, or better still, the limitations that the said officers
must observe when they make their distribution. There is none.
Their options are apparently boundless. Who shall be the
fortunate beneficiaries of their generosity and by what criteria
shall they be chosen? Only the officers named can supply the
answer, they and they alone may choose the grantee as they see
fit, and in their own exclusive discretion. Definitely, there is here
a "roving commission," a wide and sweeping authority that is not
"canalized within banks that keep it from overflowing," in short, a
clearly profligate and therefore invalid delegation of legislative
powers.

The Court notes that if the petitioner had not seen fit to assert and
protect his rights as he saw them, this case would never have
reached us and the taking of his property under the challenged
measure would have become a fait accompli despite its invalidity.
We commend him for his spirit. Without the present challenge,
the matter would have ended in that pump boat in Masbate and
another violation of the Constitution, for all its obviousness,
would have been perpetrated, allowed without protest, and soon
forgotten in the limbo of relinquished rights. LLpr

To sum up then, we find 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 strength of democracy lies not in the rights it guarantees but

in the courage of the people to invoke them whenever they are
ignored or violated. Rights are but weapons on the wall if, like
expensive tapestry, all they do is embellish and impress. Rights,
as weapons, must be a promise of protection. They become truly
meaningful, and fulfill the role assigned to them in the free
society, if they are kept bright and sharp with use by those who
are not afraid to assert them.
WHEREFORE, EXECUTIVE ORDER NO. 626-A is hereby
declared unconstitutional. Except as affirmed above, the decision
of the Court of Appeals is reversed. The supersedeas bond is
cancelled and the amount thereof is ordered restored to the
petitioner. No costs.

SO ORDERED.
||| (Ynot v. Intermediate Appellate Court, G.R. No. 74457, March
20, 1987)