EN BANC

[G.R. No. L-7995. May 31, 1957.]

LAO H. ICHONG, in his own behalf and in behalf of other
alien residents, corporations and partnerships adversely
affected by Republic Act No. 1180, petitioner, vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO
SARMIENTO, City Treasuer of Manila, respondent.

Ozaeta, Lichauco & Picazo and Sycip, Quisumbing, Salazar &

Associates for petitioner.
Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for

respondent Secretary of Finance.

City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S.

Serrano for respondent City Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.
SYLLABUS
1.CONSTITUTIONAL LAW; POLICE POWER; NATURE AND SCOPE.
Police power is far-reaching in scope, and it is almost impossible to limit its
sweep. It derives its existence from the very existence of the State itself, and
does not need to be expressed or defined in its scope. It is said to be coextensive with self - protection and survival, and as such it is the most
positive and active of all governmental processes, the most essential, insistent
and illimitable. Especially is it so under a modern democratic framework
where the demands of society and of nations have multiplied to almost
unimaginable proportions; the field and scope of police power has become
almost boundless, just as the fields of public interest and public welfare have
become almost all-embracing and have transcended human foresight.

2.ID.; GUARANTEES IN SECTION I, ARTICLE III OF THE

CONSTITUTION; UNIVERSALITY OF APPLICATION. The constitutional
guarantees in Section I, Article III, of the Constitution, which embody the
essence of individual liberty and freedom in democracies, are not limited to
citizens alone but are admittedly universal in their application, without regard
to any differences of race, of color, or of nationality (Yiek Wo vs. Hopkins, 30
L. ed., 220, 226).
3.ID.; LAW DEPRIVATION OF LIFE, LIBERTY OR PROPERTY; TEST OR
STANDARD. The conflict between police power and the guarantees of due
process and equal protection of the laws is more apparent than real. Properly
related, the power and the guarantees are supposed to coexist. The balancing
is the essence, or the indispensable means for the attainment of legitimate
aspirations of any democratic society. There can be no absolute power,
whoever exercises it, for that would be tyranny. Yet there can neither be
absolute liberty, for that would mean license and anarchy. So the State can
deprive persons of life, liberty or property, provided there is due process of
law; and persons may be classified into classes and groups, provided
everyone is given the equal protection of the law. The test or standard, as
always, is reason. The police power legislation must be firmly grounded on
public interest and welfare, and a reasonable relation must exist between
purposes and means. And if distinction or classification has been made, there
must be a reasonable basis for said distinction.
4.ID.; EQUAL PROTECTION OF THE LAW CLAUSE; WHEN NOT DEEMED
INFRINGED BY LEGISLATION. The equal protection of the law clause is
against undue favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality. It is not intended to prohibit
legislation, which is limited either in the object to which it is directed or by
territory within which it is to operate. It does not demand absolute equality
among residents; it merely requires that all persons shall be treated alike,
under like circumstances and conditions both as to privileges conferred and
liabilities enforced. The equal protection clause is not infringed by legislation
which applies only to those persons falling within a specified class, if it applies
alike to all persons within such class, and reasonable grounds exist for making
a distinction between those who fall within such class and those who do not
(2 Cooley, Constitutional Limitations, 824-825).
5.ID.; ID.; LEGISLATIVE POWER TO MAKE DISTINCTION AND
CLASSIFICATION AMONG PERSONS; CITIZENSHIP AS GROUND FOR
CLASSIFICATION. The Power of the legislature to make distinctions and
classifications among persons is not curtailed or denied by the equal
protection of the laws clause. The legislative power admits of a wide scope of

discretion, and a law can be violative of the constitutional limitation only when
the classification is without reasonable basis. Citizenship is a legal and valid
ground for classification.
6.ID.; ID.; NATIONALIZATION OF RETAIL TRADE; CLASSIFICATION IN
REPUBLIC ACT NO. 1180 ACTUAL, REAL AND REASONABLE. The
classification in the law of retail traders into nationals and aliens is actual, real
and reasonable. All persons of one class are treated alike, and it cannot be
said that the classification is patently unreasonable and unfounded. Hence, it
is the duty of this Court to declare that the legislature acted within its
legitimate prerogative and it cannot declare that the act transcends the limits
of equal protection established by the Constitution.
7.ID.; ID.; ID.; ID.; TEST OF REASONABLENESS. The law in question
is deemed absolutely necessary to bring about the desired legislative
objective, i.e., to free the national economy from alien control and
dominance. It is not necessarily unreasonable because it affects private rights
and privileges (II Am. Jur., pp. 1080-1081). The test of reasonableness of a
law is the appropriateness or adequacy under all circumstances of the means
adopted to carry out its purpose into effect. Judged by this test, the disputed
legislation, which is not merely reasonable but actually necessary, must be
considered not to have infringed the constitutional limitation of
reasonableness.
8.ID.; ID.; ID.; ID.; ID.; REPUBLIC ACT NO. 1180 TOLERANT AND
REASONABLE. A cursory study of the provisions of the law immediately
reveals how tolerant and reasonable the Legislature has been. The law is
made prospective and recognizes the right and privilege of those already
engaged in the occupation to continue therein during the rest of their lives;
and similar recognition of the right to continue is accorded associations of
aliens. The right or privilege is denied only to persons upon conviction of
certain offenses.
9.ID.; ID.; ID.; ATTAINMENT OF LEGISLATIVE ASPIRATIONS OF A
PEOPLE NOT BEYOND THE LIMITS OF LEGISLATIVE AUTHORITY. If
political independence is a legitimate aspiration of a people, then economic
independence is none of less legitimate. Freedom and liberty are not real and
positive if the people are subject to the economic control and domination of
others, especially if not of their own race or country. The removal and
eradication of the shackles of foreign economic control and domination is one
of the noblest motives that a national legislature may pursue. It is impossible
to conceive that legislation that seeks to bring it about can infringe the
constitutional limitation of due process. The attainment of a legitimate
aspiration of a people can never be beyond the limits of legislative authority.

10.ID.; ID.; ID.; NATIONALISTIC TENDENCY MANIFESTED IN THE

CONSTITUTION. Nationalistic tendency is manifested in various provisions
of the Constitution. The nationalization of the retail trade is only a
continuance of the nationalistic protective policy laid down as a primary
objective of the Constitution. It cannot therefore be said that a law imbued
with the same purpose and spirit underlying many of the provisions of the
Constitution is unreasonable, invalid or unconstitutional.
11.ID.; LEGISLATIVE DEPARTMENT; EXERCISE OF LEGISLATIVE
DISCRETION NOT SUBJECT TO JUDICIAL REVIEW. The exercise of
legislative discretion is not subject to judicial review. The Court will not
inquire into the motives of the Legislature, nor pass upon general matters of
legislative judgment. The Legislature is primarily the judge of the necessity of
an enactment or of any of its provisions, and every presumption is in favor of
its validity, and though the Court may hold views inconsistent with the
wisdom of the law, it may not annul the legislation if not palpably in excess of
the legislative power.
12.ID.; TITLES OF BILLS; PROHIBITION AGAINST DUPLICITY;
PRESENCE OF DUPLICITY NOT SHOWN IN TITLE OR PROVISIONS OF
REPUBLIC ACT NO. 1180. What Section 21(1) of Article VI of the
Constitution prohibits is duplicity, that is, if its title completely fails to apprise
the legislators or the public of the nature, scope and consequences of the law
or its operation (I Sutherland, Statutory Construction, Sec. 1707, p. 297). A
cursory consideration of the title and the provisions of the bill fails to show
the presence of duplicity. It is true that the term "regulate" does not and may
not readily and at first glance convey the idea of "nationalization" and
"prohibition", which terms express the two main purposes and objectives of
the law. But "regulate" is a broader term than either prohibition or
nationalization. Both of these have always been included within the term
"regulation".
13.ID.; ID.; ID.; ID.; USE OF GENERAL TERMS IN TITLE OF BILL.
The general rule is for the use of general terms in the title of a bill; the title
need not be an index to the entire contents of the law (I Sutherland,
Statutory Construction, Sec. 4803, p. 345). The above rule was followed when
the title of the Act in question adopted the more general term "regulate"
instead of "nationalize" or "prohibit".
14.ID.; ID.; ID.; ID.; PURPOSE OF CONSTITUTIONAL DIRECTIVE
REGARDING SUBJECT OF A BILL. One purpose of the constitutional
directive that the subject of a bill should be embraced in its title is to apprise
the legislators of the purposes, the nature and scope of its provisions, and
prevent the enactment into law of matters which have not received the

notice, action and study of the legislators or of the public. In case at bar it
cannot be claimed that the legislators have not been apprised of the nature of
the law, especially the nationalization and prohibition provisions. The
legislators took active interest in the discussion of the law, and a great many
of the persons affected by the prohibition in the law conducted a campaign
against its approval. It cannot be claimed, therefore, that the reasons for
declaring the law invalid ever existed.
15.ID.; INTERNATIONAL TREATIES AND OBLIGATIONS NOT VIOLATED
BY REPUBLIC ACT No. 1180; TREATIES SUBJECT TO QUALIFICATION OR
AMENDMENT BY SUBSEQUENT LAW. The law does not violate international
treaties and obligations. The United Nations Charter imposes no strict or legal
obligations regarding the rights and freedom of their subjects (Jans Kelsen,
The Law of the United Nations, 1951 ed., pp. 29-32), and the Declaration of
Human Rights contains nothing more than a mere recommendation, or a
common standard of achievement for all peoples and all nations. The Treaty
of Amity between the Republic of the Philippines and the Republic of China of
April 18, 1947 guarantees equality of treatment to the Chinese nationals
"upon the same terms as the nationals of any other country". But the
nationals of China are not discriminated against because nationals of all other
countries, except those of the United States, who are granted special rights
by the Constitution, are all Prohibited from engaging in the retail trade. But
even supposing that the law infringes upon the said treaty, the treaty is
always subject to qualification or amendment by a subsequent law (U.S. vs.
Thompson, 258, Fed. 257, 260), and the same may never curtail or restrict
the scope of the police power of the State (Palston vs. Pennsylvania 58 L. ed.,
539).
DECISION
LABRADOR, J :
p

I. The case and the issue, in general

This Court has before it the delicate task of passing upon the validity
and constitutionality of a legislative enactment, fundamental and far-reaching
in significance The enactment poses questions of due process, police power
and equal protection of the laws. It also poses an important issue of fact, that
is whether the conditions which the disputed law purports to remedy really or

actually exist. Admittedly springing from a deep, militant, and positive

nationalistic impulse, the law purports to protect citizen and country from the
alien retailer. Through it, and within the field of economy it regulates,
Congress attempts to translate national aspirations for economic
independence and national security, rooted in the drive and urge for national
survival and welfare, into a concrete and tangible measures designed to free
the national retailer from the competing dominance of the alien, so that the
country and the nation may be free from a supposed economic dependence
and bondage. Do the facts and circumstances justify the enactment?
II. Pertinent provisions of Republic Act No. 1180
Republic Act No. 1180 is entitled "An Act to Regulate the Retail
Business." In effect it nationalizes the retail trade business. The main
provisions of the Act are: (1) a prohibition against persons, not citizens of the
Philippines, and against associations, partnerships, or corporations the capital
of which are not wholly owned by citizens of the Philippines, from engaging
directly or indirectly in the retail trade; (2) an exception from the above
prohibition in favor of aliens actually engaged in said business on May 15,
1954, who are allowed to continue to engage therein, unless their licenses are
forfeited in accordance with the law, until their death or voluntary retirement
in case of natural persons, and for ten years after the approval of the Act or
until the expiration of term in case of juridical persons; (3) an exception
therefrom in favor of citizens and juridical entities of the United States; (4) a
provision for the forfeiture of licenses (to engage in the retail business) for
violation of the laws on nationalization, economic control weights and
measures and labor and other laws relating to trade, commerce and industry;
(5) a prohibition against the establishment or opening by aliens actually
engaged in the retail business of additional stores or branches of retail
business, (6) a provision requiring aliens actually engaged in the retail
business to present for registration with the proper authorities a verified
statement concerning their businesses, giving, among other matters, the
nature of the business, their assets and liabilities and their offices and
principal offices of juridical entities; and (7) a provision allowing the heirs of
aliens now engaged in the retail business who die, to continue such business
for a period of six months for purposes of liquidation.
III. Grounds upon which petition is based Answer thereto
Petitioner, for and in his own behalf and on behalf of other alien
residents, corporations and partnerships adversely affected by the provisions
of Republic Act No. 1180, brought this action to obtain a judicial declaration
that said Act is unconstitutional, and to enjoin the Secretary of Finance and all
other persons acting under him, particularly city and municipal treasurers,

from enforcing its provisions. Petitioner attacks the constitutionality of the

Act, contending that: (1) it denies to alien residents the equal protection of
the laws and deprives them of their liberty and property without due process
of law; (2) the subject of the Act is not expressed or comprehended in the
title thereof; (3) the Act violates international and treaty obligations of the
Republic of the Philippines; (4) the provisions of the Act against the
transmission by aliens of their retail business thru hereditary succession, and
those requiring 100% Filipino capitalization for a corporation or entity to
entitle it to engage in the retail business, violate the spirit of Sections 1 and 5,
Article XIII and Section 8 of Article XIV of the Constitution.
In answer, the Solicitor-General and the Fiscal of the City of Manila
contend that: (1) the Act was passed in the valid exercise of the police power
of the State, which exercise is authorized in the Constitution in the interest of
national economic survival; (2) the Act has only one subject embraced in the
title; (3) no treaty or international obligations are infringed; (4) as regards
hereditary succession, only the form is affected but the value of the property
is not impaired, and the institution of inheritance is only of statutory origin.
IV. Preliminary consideration of legal principles involved

a.The police power.

There is no question that the Act was approved in the exercise of the
police power, but petitioner claims that its exercise in this instance is attended
by a violation of the constitutional requirements of due process and equal
protection of the laws. But before proceeding to the consideration and
resolution of the ultimate issue involved, it would be well to bear in mind
certain basic and fundamental, albeit preliminary, considerations in the
determination of the ever recurrent conflict between police power and the
guarantees of due process and equal protection of the laws. What is the
scope of police power and how are the due process and equal protection
clauses related to it? What is the province and power of the legislature, and
what is the function and duty of the courts? These consideration must be
clearly and correctly understood that their application to the facts of the case
may be brought forth with clarity and the issue accordingly resolved.
It has been said that police power is so far-reaching in scope, that it
has become almost impossible to limit its sweep. As it derives its existence
from the very existence of the State itself, it does not need to be expressed
or defined in its scope; it is said to be co- extensive with self-protection and
survival, and as such it is the most positive and active of all governmental
processes, the most essential, insistent and illimitable. Especially is it so under
a modern democratic framework where the demands of society and of nations

have multiplied to almost unimaginable proportions; the field and scope of

police power has become almost boundless, just as the fields of public
interest and public welfare have become almost all- embracing and have
transcended human foresight. Otherwise stated, as we cannot foresee the
needs and demands of public interest and welfare in this constantly changing
and progressive world, so we cannot delimit beforehand the extent or scope
of police power by which and through which the State seeks to attain or
achieve public interest or welfare. So it is that Constitutions do not define the
scope or extent of the police power of the State; what they do is to set forth
the limitations thereof. The most important of these are the due process
clause and the equal protection clause.

b.Limitations on police power.

The basic limitations of due process and equal protection are found in
the following provisions of our Constitution:
"SECTION 1.(1)No person shall be deprived of life, liberty or
property without due process of law, nor shall any person be denied the
equal protection of the laws." (Article III, Phil. Constitution)

These constitutional guarantees which embody the essence of individual

liberty and freedom in democracies, are not limited to citizens alone but are
admittedly universal in their application, without regard to any differences of
race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)

c.The equal protection clause.

The equal protection of the law clause is against undue favor and
individual or class privilege, as well as hostile discrimination or the oppression
of inequality. It is not intended to prohibit legislation, which is limited either in
the object to which it is directed or by territory within which it is to operate. It
does not demand absolute equality among residents; it merely requires that
all persons shall be treated alike, under like circumstances and conditionsboth
as to privileges conferred and liabilities enforced. The equal protection clause
is not infringed by legislation which applies only to those persons falling
within a specified class, if it applies alike to all persons within such class, and
reasonable grounds exists for making a distinction between those who fall
within such class and those who do not. (2 Cooley, Constitutional Limitations,
824-825.)

d.The due process clause.

The due process clause has to do with the reasonableness of legislation
enacted in pursuance of the police power, Is there public interest, a public

purpose; is public welfare involved? Is the Act reasonably necessary for the
accomplishment of the legislature's purpose; is it not unreasonable, arbitrary
or oppressive? Is there sufficient foundation or reason in connection with the
matter involved; or has there not been a capricious use of the legislative
power? Can the aims conceived be achieved by the means used, or is it not
merely an unjustified interference with private interest? These are the
questions that we ask when the due process test is applied.
The conflict, therefore, between police power and the guarantees of
due process and equal protection of the laws is more apparent than real.
Properly related, the power and the guarantees are supposed to coexist. The
balancing is the essence or, shall it be said, the indispensable means for the
attainment of legitimate aspirations of any democratic society. There can be
no absolute power, whoever exercise it, for that would be tyranny. Yet there
can neither be absolute liberty, for that would mean license and anarchy. So
the State can deprive persons of life, liberty and property, provided there is
due process of law; and persons may be classified into classes and groups,
provided everyone is given the equal protection of the law. The test or
standard, as always, is reason. The police power legislation must be firmly
grounded on public interest and welfare, and a reasonable relation must exist
between purposes and means. And if distinction and classification has been
made, there must be a reasonable basis for said distinction.

e.Legislative discretion not subject to judicial review.

Now, in this matter of equitable balancing, what is the proper place and
role of the courts? It must not be overlooked, in the first place, that the
legislature, which is the constitutional repository of police power and
exercises the prerogative of determining the policy of the State, is by force of
circumstances primarily the judge of necessity, adequacy or reasonableness
and wisdom, of any law promulgated in the exercise of the police power, or of
the measures adopted to implement the public policy or to achieve public
interest. On the other hand, courts, although zealous guardians of individual
liberty and right, have nevertheless evinced a reluctance to interfere with the
exercise of the legislative prerogative. They have done so early where there
has been a clear, patent or palpable arbitrary and unreasonable abuse of the
legislative prerogative. Moreover, courts are not supposed to override
legitimate policy, and courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve
directly into the issue involved. If the disputed legislation were merely a
regulation, as its title indicates, there would be no question that it falls within

the legitimate scope of legislative power. But it goes further and prohibits a
group of residents, the aliens, from engaging therein. The problem becomes
more complex because its subject is a common, trade or occupation, as old as
society itself, which from time immemorial has always been open to residents,
irrespective of race, color or citizenship.

a.Importance of retail trade in the economy of the nation.

In a primitive economy where families produce all that they consume
and consume all that they produce, the dealer, of course, is unknown. But as
group life develops and families begin to live in communities producing more
than what they consume and needing an infinite number of things they do
not produce, the dealer comes into existence. As villages develop into big
communities and specialization in production begins, the dealer's importance
is enhanced. Under modern conditions and standards of living, in which man's
needs have multiplied and diversified to unlimited extents and proportions,
the retailer comes as essential as the producer, because thru him the infinite
variety of articles, goods and commodities needed for daily life are placed
within the easy reach of consumers. Retail dealers perform the functions of
capillaries in the human body, thru which all the needed food and supplies are
ministered to members of the communities comprising the nation.
There cannot be any question about the importance of the retailer in
the life of the community. He ministers to the resident's daily needs, food in
all its increasing forms, and the various little gadgets and things needed for
home and daily life. He provides his customers around his store with the rice
or corn, the fish, the salt, the vinegar, the spices needed for the daily
cooking. He has cloths to sell, even the needle and the thread to sew them or
darn the clothes that wear out. The retailer, therefore, from the lowly
peddler, the owner of a small sari-sari store, to the operator of a department
store or a supermarket is so much a part of day-to-day existence.

b.The alien retailer's traits.

The alien retailer must have started plying his trade in this country in
the bigger centers of population (Time there was when he was unknown in
provincial towns and villages). Slowly but gradually he invaded towns and
villages; now he predominates in the cities and big centers of population. He
even pioneers in far away nooks where the beginnings of community life
appear, ministering to the daily needs of the residents and purchasing their
agricultural produce for sale in the towns. It is an undeniable fact that in
many communities the alien has replaced the native retailer. He has shown in
this trade, industry without limit, and the patience and forbearance of a slave.
Derogatory epithets are hurled at him, but he laughs these off without

murmur; insults of ill-bred and insolent neighbors and customers are made in
his face, but he heeds them not, and he forgets and forgives. The community
takes no note of him, as he appears to be harmless and extremely useful.

c.Alleged alien control and dominance.

There is a general feeling on the part of the public, which appears to be
true to fact, about the controlling and dominant position that the alien retailer
holds in the nation's economy. Food and other essentials, clothing, almost all
articles of daily life reach the residents mostly through him. In big cities and
centers of population he has acquired not only predominance, but apparent
control over distribution of almost all kinds of goods, such as lumber,
hardware, textiles, groceries, drugs, sugar, flour, garlic, and scores of other
goods and articles. And were it not for some national corporations like the
Naric, the Namarco, the Facomas and the Accfa, his control over principal
foods and products would easily become full and complete.
Petitioner denies that there is alien predominance and control in the
retail trade. In one breath it is said that the fear is unfounded and the threat
is imagined; in another, it is charged that the law is merely the result of
racialism and pure and unabashed nationalism. Alienage, it is said, is not an
element of control; also so many unmanageable factors in the retail business
make control virtually impossible. The first argument which brings up an issue
of fact merits serious consideration. The others are matters of opinion within
the exclusive competence of the legislature and beyond our prerogative to
pass upon and decide.
The best evidence are the statistics on the retail trade, which put down
the figures in black and white. Between the constitutional convention year
(1935), when the fear of alien domination and control of the retail trade
already filled the minds of our leaders with fears and misgivings, and the year
of the enactment of the nationalization of the retail trade act (1954), official
statistics unmistakably point out to the ever-increasing dominance and control
by the alien of the retail trade, as witness the following tables:
AssetsGross Sales
Year and Retailer'sNo.-Estab-Per centPer cent
NationalityishmentsPesosDistri-PesosDistributionbution
1941:
Filipino106,671200,323,13855.82174,181,9245174
Chinese15,356118,348,69232.98148,813,23944.21
Others1,64640,187,09011.2013,630,2394.05
1947:

Filipino111,107208,658,94665.05279,583,33357.03
Chinese13,774106,156,21833.56205,701,13441.96
Others3548,761,260.494,927,1681.01
1948:
Filipino113,631213,342,26467.30467,161,66760.51
Chinese12,08793,155,45929.38294,894,22738.20
Others42210,514,6753.329,995,4021.29
1949:
Filipino113,659213,451,60260.89462,532,90153.47
Chinese16,248125,223,33635.72392,414,87545.36
Others48612,056,3653.3910,078,3641.17
1951:
Filipino119,352224,053,62061.09466,058,05253.07
Chinese17,429134,325,30336.60404,481,38446.06
Others3478,614,0252.317,645,327.87
AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Item Gross Sales
Year and Retailer'sAssets(Pesos)
Nationality(Pesos)
1941:
Filipino1,8781,633
Chinese7,7079,691
Others24,4158,281
1947:
Filipino1,8782,516
Chinese7,70714,934
Others24,74913,919
1948: (Census)
Filipino1,8784,111
Chinese7,70724,398
Others24,91623,686
1949:
Filipino1,8784,069
Chinese7,70724,152
Others24,80720,737
1951:
Filipino1,8773,905
Chinese7,70733,207
Others24,82422,033

(Estimates Assets and Gross Sales of Retail Establishments, By

year and Nationality of Owners, Benchmark: 1948 Census, issued by the
Bureau of Census and Statistics, Department of Commerce and Industry;
pp. 18-19 of Answer.)

The above statistics do not include corporations and partnerships, while the
figures on Filipino establishments already include mere market vendors,
whose capital is necessarily small.
The above figures reveal that in percentage distribution of assets and
of gross sales, alien participation has steadily increased during the years. It is
true, of course, that Filipinos have the edge in the number of retailers, but
aliens more than make up for the numerical gap through their assets and
gross sales which average between six and seven times those of the very
many Filipino retailers Numbers in retailers, here, do not imply superiority;
the alien invests more capital, buys and sells six to seven times more, and
gains much more. The same of official report, pointing out to the known
predominance of foreign elements in the retail trade, remarks that the Filipino
retailers were largely engaged in minor retailer enterprises. As observed by
respondents, the native investment is thinly spread, and the Filipino retailer is
practically helpless in matters of capital, credit, price and supply.

d.Alien control and threat, subject of apprehension in Constitutional

Convention.
It is this domination and control, which we believe has been sufficiently
shown to exist, that is the legislature's target in the enactment of the
disputed nationalization law. If they did not exist as a fact the sweeping
remedy of nationalization would never have been adopted. The framers of our
Constitution also believed in the existence of this alien dominance and control
when they approved a resolution categorically declaring among other things,
that "it is the sense of the Convention that the public interest requires the
nationalization of the retail trade; . . ." (II Aruego, The Framing of the
Philippine Constitution, 662-663, quoted on page 67 of Petitioner.) That was
twenty-two years ago; and the events since then have not been either
pleasant or comforting. Dean Since of the University of the Philippines College
of Law, commenting on the patrimony clause of the Preamble opines that the
fathers of our Constitution were merely translating the general preoccupation
of Filipinos "of the dangers from alien interests that had already brought
under their control the commercial and other economic activities of the
country" (Sinco, Phil. Political Law, 10th ed., p. 114); and analyzing the
concern of the members of the constitutional convention for the economic life

of the citizens, in connection with the nationalistic provisions of the

Constitution, he says:
"But there has been a general feeling that alien dominance over
the economic life of the country is not desirable and that if such a
situation should remain, political independence alone is no guarantee to
national stability and strength. Filipino private capital is not big enough
to wrest from alien hands the control of the national economy.
Moreover, it is but of recent formation and hence, largely inexperienced,
timid and hesitant. Under such conditions, the government as the
instrumentality of the national will, has to step in and assume the
initiative, if not the leadership, in the struggle for the economic freedom
of the nation in somewhat the same way that it did in the crusade for
political freedom. Thus . . . It (the Constitution) envisages an organized
movement for the protection of the nation not only against the
possibilities of armed invasion but also against its economic subjugation
by alien interests in the economic field." (Phil. Political Law by Sinco,
10th ed., p. 476.)

Belief in the existence of alien control and predominance is felt in other

quarters. Filipino business men, manufacturers and producers believe so; they
fear the business coming from alien control, and they express sentiments of
economic independence. Witness thereto is Resolution No. 1, approved on
July 18, 1953, of the Fifth National Convention of Filipino Businessmen, and a
similar resolution, approved on March 20, 1954, of the Second National
Convention of Manufacturers and Producers. The man in the street also
believes, and fears, alien predominance and control; so our newspapers,
which have editorially pointed out not only to control but to alien
stranglehold. We, therefore, find alien domination and control to be a fact, a
reality proved by official statistics, and felt by all the sections and groups that
compose the Filipino community.

e.Dangers of alien control and dominance in retail.

But the dangers arising from alien participation in the retail trade does
not seem to lie in the predominance alone; there is a prevailing feeling that
such predominance may truly endanger the national interest. With ample
capital, unity of purpose and action and thorough organization, alien retailers
and merchants can act in such complete unison and concert on such vital
matters as the fixing of prices, the determination of the amount of goods or
articles to be made available in the market, and even the choice of the goods
or articles they would or would not patronize or distribute, that fears of
dislocation of the national economy and of the complete subservience of
national retailers and of the consuming public are not entirely unfounded.
Nationals, producers and consumers alike, can be placed completely at their

mercy. This is easily illustrated. Suppose an article of daily use is desired to

be prescribed by the aliens, because the producer or importer does not offer
them sufficient profits, or because a new competing article offers bigger
profits for its introduction. All that aliens would do is to agree to refuse to sell
the first article, eliminating it from their stocks, offering the new one as a
substitute. Hence, the producers or importers of the prescribed article, or its
consumers, find the article suddenly out of circulation. Freedom of trade is
thus curtailed and free enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the
pernicious influences of alien domination. Grave abuses have characterized
the exercise of the retail trade by aliens. It is a fact within judicial notice,
which courts of justice may not properly overlook or ignore in the interests of
truth and justice, that there exists a general feeling on the part of the public
that alien participation in the retail trade has been attended by a pernicious
and intolerable practices, the mention of a few of which would suffice for our
purposes; that at some time or other they have cornered the market of
essential commodities, like corn and rice, creating artificial scarcities to justify
and enhance profits to unreasonable proportions; that they have hoarded
essential foods to the inconvenience and prejudice of the consuming public,
so much so that the Government has had to establish the National Rice and
Corn Corporation to save the public from their continuous hoarding practices
and tendencies; that they have violated price control laws, especially on foods
and essential commodities, such that the legislature had to enact a law (Sec.
9, Republic Act No. 1168), authorizing their immediate and automatic
deportation for price control convictions; that they have secret combinations
among themselves to control prices, cheating the operation of the law of
supply and demand; that they have connived to boycott honest merchants
and traders who would not cater or yield to their demands, in unlawful
restraint of freedom of trade and enterprise. They are believed by the public
to have evaded tax laws, smuggled goods and money into and out of the
land, violated import and export prohibitions, control laws and the like, in
derision and contempt of lawful authority. It is also believed that they have
engaged in corrupting public officials with fabulous bribes, indirectly causing
the prevalence of graft and corruption in the Government. As a matter of fact
appeals to unscrupulous aliens have been made both by the Government and
by their own lawful diplomatic representatives, action which impliedly admits
a prevailing feeling about the existence of many of the above practices.
The circumstances above set forth create well founded fears that worse
things may come in the future. The present dominance of the alien retailer,
especially in the big centers of population, therefore, becomes a potential

source of danger on occasions of war or other calamity. We do not have here

in this country isolated groups of harmless aliens retailing goods among
nationals; what we have are well organized and powerful groups that
dominate the distribution of goods and commodities in the communities and
big centers of population. They owe no allegiance or loyalty to the State, and
the State cannot rely upon them in times of crisis or emergency. While the
national holds his life, his person and his property subject to the needs of his
country, the alien may even become the potential enemy of the State.

f.Law enacted in interest of national economic survival and security.

We are fully satisfied upon a consideration of all the facts and
circumstances that the disputed law is not the product of racial hostility,
prejudice or discrimination, but the expression of the legitimate desire and
determination of the people, thru their authorized representatives, to free the
nation from the economic situation that has unfortunately been saddled upon
it rightly or wrongly, to its disadvantage. The law is clearly in the interest of
the public, any of the national security itself, and indisputably falls within the
scope of police power, thru which and by which the State insures its existence
and security and the supreme welfare of its citizens.
VI. The Equal Protection Limitation

a.Objections to alien participation in retail trade.

The next question that now poses solution is, Does the law deny the
equal protection of the laws? As pointed out above, the mere fact of alienage
is the root and cause of the distinction between the alien and the national as
a trader. The alien resident owes allegiance to the country of his birth or his
adopted country; his stay here is for personal convenience; he is attracted by
the lure of gain and profit. His aim or purpose of stay, we admit, is neither
illegitimate nor immoral, but he is naturally lacking in that spirit of loyalty and
enthusiasm for this country where he temporarily stays and makes his living,
or of that spirit of regard, sympathy and consideration for his Filipino
customers as would prevent him from taking advantage of their weakness
and exploiting them. The faster he makes his pile, the earlier can the alien go
back to his beloved country and his beloved kin and country men. The
experience of the country is that the alien retailer has shown such utter
disregard for his customers and the people on whom he makes his profit, that
it has been found necessary to adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never
really makes a genuine contribution to national income and wealth. He
undoubtedly contributes to general distribution, but the gains and profits he
makes are not invested in industries that would help the country's economy

and increase national wealth. The alien's interest in this country being merely
transient and temporary, it would indeed be ill-advised to continue entrusting
the very important function of retail distribution to his hands.
The practices resorted to by aliens in the control of distribution, as
already pointed out above, their secret manipulations of stocks of
commodities and prices, their utter disregard of the welfare of their customers
and of the ultimate happiness of the people of the nation of which they are
mere guests, which practices, manipulations and disregard do not attend the
exercise of the trade by the nationals, show the existence of real and actual,
positive and fundamental differences between an alien and a national which
fully justify the legislative classification adopted in the retail trade measure.
These differences are certainly a valid reason for the State to prefer the
national over the alien in the retail trade. We would be doing violence to fact
and reality were we to hold that no reason or ground for a legitimate
distinction can be found between one and the other.

b.Difference in alien aims and purposes sufficient basis for distinction.

The above objectionable characteristics of the exercise of the retail

trade by the aliens, which are actual and real, furnish sufficient grounds for
legislative classification of retail traders into nationals and aliens. Some may
disagree with the wisdom of the legislature's classification. To this we answer,
that this is the prerogative of the law-making power. Since the Court finds
that the classification is actual, real and reasonable, and all persons of one
class are treated alike, and as it cannot be said that the classification is
patently unreasonable and unfounded, it is in duty bound to declare that the
legislature acted within its legitimate prerogative and it cannot declare that
the act transcends the limit of equal protection established by the
Constitution.
Broadly speaking, the power of the legislature to make distinctions and
classifications among persons is not curtailed or denied by the equal
protection of the laws clause. The legislative power admits of a wide scope of
discretion, and a law can be violative of the constitutional limitation only when
the classification is without reasonable basis. In addition to the authorities we
have earlier cited, we can also refer to the case of Lindsley vs. Natural
Carbonic Gas Co. (1911), 55 L. ed., 369, which clearly and succinctly defined
the application of equal protection clause to a law sought to be voided as
contrary thereto:

". . . '1. The equal protection clause of the Fourteenth

Amendment does not take from the state the power to classify in the
adoption of police laws, but admits of the exercise of the wide scope of
discretion in that regard, and avoids what is done only when it is without
any reasonable basis, and therefore is purely arbitrary. 2. A classification
having some reasonable basis does not offend against that clause
merely because it is not made with mathematical nicety, or because in
practice it results in some inequality. 3. When the classification in such a
law is called in question, if any state of facts reasonably can be
conceived that would sustain it, the existence of that state of facts at
the time the law was enacted must be assumed. 4. One who assails the
classification in such a law must carry the burden of showing that it does
not rest upon any reasonable basis, but is essentially arbitrary.'"

c.Authorities recognizing citizenship as basis for classification.

The question as to whether or not citizenship is a legal and valid
ground for classification has already been affirmatively decided in this
jurisdiction as well as in various courts in the United States. In the case of
Smith Bell & Co. vs. Natividad, 40 Phil. 136, where the validity of Act No.
2761 of the Philippine Legislature was in issue, because of a condition therein
limiting the ownership of vessels engaged in coastwise trade to corporations
formed by citizens of the Philippine Islands or the United States, thus denying
the right to aliens, it was held that the Philippine Legislature did not violate
the equal protection clause of the Philippine Bill of Rights. The Legislature in
enacting the law had as ultimate purpose the encouragement of Philippine
shipbuilding and the safety for these Islands from foreign interlopers. We held
that this was a valid exercise of the police power, and all presumptions are in
favor of its constitutionality. In substance, we held that the limitation of
domestic ownership of vessels engaged in coastwise trade to citizens of the
Philippines does not violate the equal protection of the law and due process of
law clauses of the Philippine Bill of Rights. In rendering said decision we
quoted with approval the concurring opinion of Justice Johnson in the case of
Gibbons vs. Ogden, 9 Wheat., I, as follows:
"'Licensing acts, in fact, in legislation, are universally restraining
acts; as, for example, acts licensing gaming houses, retailers of
spirituous liquors, etc. The act, in this instance, is distinctly of that
character, and forms part of an extensive system, the object of which is
to encourage American shipping, and place them on an equal footing
with the shipping of other nations. Almost every commercial nation
reserves to its own subjects a monopoly of its coasting trade; and a
countervailing privilege in favor of American shipping is contemplated, in
the whole legislation of the United States on this subject. It is not to
give the vessel an American character, that the license is granted; that

effect has been correctly attributed to the act of her enrollment. But it is
to confer on her American privileges, as contra distinguished from
foreign; and to preserve the Government from fraud by foreigners; in
surreptitiously intruding themselves into the American commercial
marine, as well as frauds upon the revenue in the trade coastwise, that
this whole system is projected.'"

The rule in general is as follows:

"Aliens are under no special constitutional protection which
forbids a classification otherwise justified simply because the limitation
of the class falls along the lines of nationality. That would be requiring a
higher degree of protection for aliens as a class than for similar classes
of American citizens. Broadly speaking, the difference in status between
citizens and aliens constitutes a basis for reasonable classification in the
exercise of police power." (2 Am. Jur. 468-469.)

In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a

statute on the licensing of hawkers and peddlers, which provided that no one
can obtain a license unless he is, or has declared his intention, to become a
citizen of the United States, was held valid, for the following reason: It may
seem wise to the legislature to limit the business of those who are supposed
to have regard for the welfare, good order and happiness of the community,
and the court cannot question this judgment and conclusion. In Bloomfield vs.
State, 99 N.E. 309 (Ohio, 1912), a statute which prevented certain persons,
among them aliens, from engaging in the traffic of liquors, was found not to
be the result of race hatred, or in hospitality, or a deliberate purpose to
discriminate, but was based on the belief that an alien cannot be sufficiently
acquainted with 'our institutions and our life as to enable him to appreciate
the relation of this particular business to our entire social fabric", and was
not, therefore, invalid. In Ohio ex rel. Clarke vs. Deckebach, 274 U.S. 392, 71
L. ed. 1115 (1926), the U. S. Supreme Court had under consideration an
ordinance of the city of Cincinnati prohibiting the issuance of licenses (pools
and billiard rooms) to aliens. It held that plainly irrational discrimination
against aliens is prohibited, but it does not follow that alien race and
allegiance may not bear in some instances such a relation to a legitimate
object of legislation as to be made the basis of permitted classification, and
that it could not state that the legislation is clearly wrong; and that latitude
must be allowed for the legislative appraisement of local conditions and for
the legislative choice of methods for controlling an apprehended evil. The
case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the
one at bar. In Asakura vs. City of Seattle, 210 P. 30 (Washington, 1922), the
business of pawnbroking was considered as having tendencies injuring public
interest, and limiting it to citizens is within the scope of police power. A

similar statute denying aliens the right to engage in auctioneering was also
sustained in Wright vs. May, L. R. A., 1915 P. 151 (Minnesota, 1914). So also
in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court said that aliens
are judicially known to have different interests, knowledge, attitude,
psychology and loyalty, hence the prohibition of issuance of licenses to them
for the business of pawnbroker, pool, billiard, card room, dance hall, is not an
infringement of constitutional rights. In Templar vs. Michigan State Board of
Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting the licensing of
aliens as barbers was held void, but the reason for the decision was the
court's finding that the exercise of the business by the aliens does not in any
way affect the morals, the health, or even the convenience of the community.
In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a
California statute banning the issuance of commercial fishing licenses to
persons ineligible to citizenship was held void, because the law conflicts with
Federal power over immigration, and because there is no public interest in the
mere claim of ownership of the waters and the fish in them, so there was no
adequate justification for the discrimination. It further added that the law was
the outgrowth of antagonism toward persons of Japanese ancestry. However,
two Justices dissented on the theory that fishing rights have been treated
traditionally as natural resources. In Fraser vs. McConway & Tarley Co., 82
Fed. 257 (Pennsylvania, 1897), a state law which imposed a tax on every
employer of foreign-born unnaturalized male persons over 21 years of age,
was declared void because the court found that there was no reason for the
classification and the tax was an arbitrary deduction from the daily wage of
an employee.

d.Authorities contra explained.

It is true that some decisions of the Federal court and of the State
courts in the United States hold that the distinction between aliens and
citizens is not a valid ground for classification. But in these decisions the laws
declared invalid were found to be either arbitrary, unreasonable or capricious,
or were the result or product of racial antagonism and hostility, and there was
no question of public interest involved or pursued. In Yu Cong Eng vs.
Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared
invalid a Philippine law making unlawful the keeping of books of account in
any language other than English, Spanish or any other local dialect, but the
main reasons for the decisions are: (1) that if Chinese were driven out of
business there would be no other system of distribution, and (2) that the
Chinese would fall prey to all kinds of fraud, because they would be deprived
of their right to be advised of their business and to direct its conduct. The real

reason for the decision, therefore, is the court's belief that no public benefit
would be derived from the operation of the law and on the other hand it
would deprive Chinese of something indispensable for carrying on their
business. In Yick Wo vs. Hopkins, 30 L. ed. 220 (1885) an ordinance
conferring power on officials to withhold consent in the operation of laundries
both as to persons and place, was declared invalid, but the court said that the
power granted was arbitrary, that there was no reason for the discrimination
which attended the administration and implementation of the law, and that
the motive thereof was mere racial hostility. In State vs. Montgomery, 47 A.
165 (Maine, 1900), a law prohibiting aliens to engage as hawkers and
peddlers was declared void, because the discrimination bore no reasonable
and just relation to the act in respect to which the classification was
proposed.
The case at bar is radically different, and the facts make them so. As
we already have said, aliens do not naturally possess the sympathetic
consideration and regard for customers with whom they come in daily
contact, nor the patriotic desire to help bolster the nation's economy, except
in so far as it enhances their profit, nor the loyalty and allegiance which the
national owes to the land. These limitations on the qualifications of aliens
have been shown on many occasions and instances, especially in times of
crisis and emergency. We can do no better than borrow the language of
Anton vs. Van Winkle, 297 F. 340, 342, to drive home the reality and
significance of the distinction between the alien and the national, thus:
". . . It may be judicially known, however, that aliens coming into
this country are without the intimate knowledge of our laws, customs,
and usages that our own people have. So it is likewise known that
certain classes of aliens are of different psychology from our fellow
countrymen. Furthermore, it is natural and reasonable to suppose that
the foreign born, whose allegiance is first to their own country, and
whose ideals of governmental environment and control have been
engendered and formed under entirely different regimes and political
systems, have not the same inspiration for the public weal, nor are they
as well disposed toward the United States, as those who by citizenship,
are a part of the government itself. Further enlargement, is
unnecessary. I have said enough so that obviously it cannot be affirmed
with absolute confidence that the Legislature was without plausible
reason for making the classification, and therefore appropriate
discrimination against aliens as it relates to the subject of legislation. . .
."

VII. The Due Process of Law Limitation

a.Reasonability, the test of the limitation; determination by legislature

decisive.
We now come to due process as a limitation on the exercise of the
police power. It has been stated by the highest authority in the United States
that:
". . . And the guaranty of due process, as has often been held,
demands only that the law shall not be unreasonable, arbitrary or
capricious, and that the means selected shall have a real and substantial
relation to the subject sought to be attained. . . ."
xxx xxx xxx
"So far as the requirement of due process is concerned and in the
absence of other constitutional restriction a state is free to adopt
whatever economic policy may reasonably be deemed to promote public
welfare, and to enforce that policy by legislation adapted to its purpose.
The courts are without authority either to declare such policy, or, when
it is declared by the legislature, to override it. If the laws passed are
seen to have a reasonable relation to a proper legislative purpose, and
are neither arbitrary nor discriminatory, the requirements of due process
are satisfied, and judicial determination to that effect renders a
court functus officio. . . ." (Nebbia vs. New York, 78 L. ed. 940, 950,
957.)

Another authority states the principle thus:

". . . Too much significance cannot be given to the word
'reasonable' in considering the scope of the police power in a
constitutional sense, for the test used to determine the constitutionality
of the means employed by the legislature is to inquire whether the
restrictions it imposes on rights secured to individuals by the Bill of
Rights are unreasonable, and not whether it imposes any restrictions on
such rights. . . ."
xxx xxx xxx
". . . A statute to be within this power must also be reasonable in
its operation upon the persons whom it affects, must not be for the
annoyance of a particular class, and must not be unduly oppressive."
(11 Am. Jur. Sec. 302, pp. 1074-1075.)

In the case of Lawton vs. Steele, 38 L. ed. 385, 388, it was also held:
". . . 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. . . ."

Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes
this test of constitutionality:
"In determining whether a given act of the Legislature, passed in
the exercise of the police power to regulate the operation of a business,
is or is not constitutional, one of the first questions to be considered by
the court is whether the power as exercised has a sufficient foundation
in reason in connection with the matter involved, or is an arbitrary,
oppressive, and capricious use of that power, without substantial
relation to the health, safety, morals, comfort, and general welfare of
the public."

b.Petitioner's argument considered.

Petitioner's main argument is that retail is a common, ordinary
occupation, one of those privileges long ago recognized as essential to the
orderly pursuit of happiness by free men; that it is a gainful and honest
occupation and therefore beyond the power of the legislature to prohibit and
penalize. This argument overlooks fact and reality and rests on an incorrect
assumption and premise, i.e., that in this country where the occupation is
engaged in by petitioner, it has been so engaged by him, by the alien, in an
honest creditable and unimpeachable manner, without harm or injury to the
citizens and without ultimate danger to their economic peace, tranquility and
welfare. But the Legislature has found, as we have also found and indicated,
that the privilege has been so grossly abused by the alien, thru the
illegitimate use of pernicious designs and practices, that he now enjoys a
monopolistic control of the occupation and threatens a deadly stranglehold on
the nation's economy endangering the national security in times of crisis and
emergency.
The real question at issue, therefore, is not that posed by petitioner,
which overlooks and ignores the facts and circumstances, but this, Is the
exclusion in the future of aliens from the retail trade unreasonable, arbitrary
and capricious, taking into account the illegitimate and pernicious form and
manner in which the aliens have heretofore engaged therein? As thus
correctly stated the answer is clear. The law in question is deemed absolutely
necessary to bring about the desired legislative objective, i.e., to free national
economy from alien control and dominance. It is not necessarily unreasonable
because it affects private rights and privileges (11 Am. Jur. pp. 1080-1081.)
The test of reasonableness of a law is the appropriateness or adequacy under
all circumstances of the means adopted to carry out its purpose into effect
(Id.) Judged by this test, disputed legislation, which is not merely reasonable

but actually necessary, must be considered not to have infringed the

constitutional limitation of reasonableness.
The necessity of the law in question is explained in the explanatory
note that accompanied the bill, which later was enacted into law:
"This bill proposes to regulate the retail business. Its purpose is
to prevent persons who are not citizens of the Philippines from having a
strangle hold upon our economic life. If the persons who control this
vital artery of our economic life are the ones who owe no allegiance to
this Republic, who have no profound devotion to our free institutions,
and who have no permanent stake in our people's welfare, we are not
really the masters of our own destiny. All aspects of our life, even our
national security, will be at the mercy of other people.
"In seeking to accomplish the foregoing purpose, we do not
propose to deprive persons who are not citizens of the Philippines of
their means of livelihood. While this bill seeks to take away from the
hands of persons who are not citizens of the Philippines a power that
can be wielded to paralyze all aspects of our national life and endanger
our national security it respects existing rights.
"The approval of this bill is necessary for our national survival."

If political independence is a legitimate aspiration of a people, then

economic independence is none the less legitimate. Freedom and liberty are
not real and positive if the people are subject to the economic control and
domination of others, especially if not of their own race or country. The
removal and eradication of the shackles of foreign economic control and
domination, is one of the noblest motives that a national legislature may
pursue. It is impossible to conceive that legislation that seeks to bring it about
can infringe the constitutional limitation of due process. The attainment of a
legitimate aspiration of a people can never be beyond the limits of legislative
authority.

c.Law expressly held by Constitutional Convention to be within the

sphere of legislative action.
The framers of the Constitution could not have intended to impose the
constitutional restrictions of due process on the attainment of such a noble
motive as freedom from economic control and domination, thru the exercise
of the police power. The fathers of the Constitution must have given to the
legislature full authority and power to enact legislation that would promote
the supreme happiness of the people, their freedom and liberty. On the
precise issue now before us, they expressly made their voice clear; they

adopted a resolution expressing their belief that the legislation in question is

within the scope of the legislative power. Thus they declared in their
Resolution:
"'That it is the sense of the Convention that the public interest
requires the nationalization of retail trade; but it abstains from approving
the amendment introduced by the Delegate for Manila, Mr. Araneta, and
others on this matter because it is convinced that the National Assembly
is authorized to promulgate a law which limits to Filipino and American
citizens the privilege to engage in the retail trade.'" (II Aruego, The
Framing of the Philippine Constitution, 662- 663, quoted on pages 66
and 67 of the Memorandum for the Petitioner.)

It would do well to refer to the nationalistic tendency manifested in

various provisions of the Constitution. Thus in the preamble, a principal
objective is the conservation of the patrimony of the nation and as corollary
thereto the provision limiting to citizens of the Philippines the exploitation,
development and utilization of its natural resources. And in Section 8 of
Article XIV, it is provided that "no franchise, certificate, or any other form of
authorization for the operation of a public utility shall be granted except to
citizens of the Philippines." The nationalization of the retail trade is only a
continuance of the nationalistic protective policy laid down as a primary
objective of the Constitution. Can it be said that a law imbued with the same
purpose and spirit underlying many of the provisions of the Constitution is
unreasonable, invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the
nationals as manifested in the approval of the radical measure is, therefore,
fully justified. It would have been recreant to its duties towards the country
and its people would it view the sorry plight of the nationals with
complacency and refuse or neglect to adopt a remedy commensurate with the
demands of public interest and national survival. As the repository of the
sovereign power of legislation, the Legislature was in duty bound to face the
problem and meet, through adequate measures, the danger and threat that
alien domination of retail trade poses to national economy.

d.Provisions of law not unreasonable.

A cursory study of the provisions of the law immediately reveals how
tolerant, how reasonable the Legislature has been. The law is made
prospective and recognizes the right and privilege of those already engaged in
the occupation to continue therein during the rest of their lives; and similar
recognition of the right to continue is accorded associations of aliens. The
right or privilege is denied to those only upon conviction of certain offenses.
In the deliberations of the Court on this case, attention was called to the fact

that the privilege should not have been denied to children and heirs of aliens
now engaged in the retail trade. Such provision would defeat the law itself, its
aims and purposes. Besides, the exercise of legislative discretion is not
subject to judicial review It is well settled that the Court will not inquire into
the motives of the Legislature, nor pass upon general matters of legislative
judgment. The Legislature is primarily the judge of the necessity of an
enactment or of any of its provisions, and every presumption is in favor of its
validity, and though the Court may hold views inconsistent with the wisdom of
the law, it may not annul the legislation if not palpably in excess of the
legislative power. Furthermore, the test of the validity of a law attacked as a
violation of due process, is not its reasonableness, but its unreasonableness,
and we find the provisions are not unreasonable. These principles also answer
various other arguments raised against the law, some of which are: that the
law does not promote general welfare; that thousands of aliens would be
thrown out of employment; that prices will increase because of the
elimination of competition; that there is no need for the legislation; that
adequate replacement is problematical; that there may be general
breakdown; that there would be repercussions from foreigners; etc. Many of
these arguments are directed against the supposed wisdom of the law which
lies solely within the legislative prerogative; they do not import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is
the claim that the title thereof is misleading or deceptive, as it conceals the
real purpose of the bill, which is to nationalize the retail business and prohibit
aliens from engaging therein. The constitutional provision which is claimed to
be violated in Section 21 (1) of Article VI, which reads:
"No bill which may be enacted into law shall embrace more then
one subject which shall be expressed in the title of the bill".

What the above provision prohibits is duplicity, that is, if its title
completely fails to apprise the legislators or the public of the nature, scope
and consequences of the law or its operation (I Sutherland, Statutory
Construction, Sec. 1707, p. 297.) A cursory consideration of the title and the
provisions of the bill fails to show the presence of duplicity. It is true that the
term "regulate" does not and may not readily and at first glance convey the
idea of "nationalization" and "prohibition", which terms express the two main
purposes and objectives of the law. But "regulate" is a broader term than
either prohibition or nationalization. Both of these have always been included
within the term regulation.

"Under the title of an act to 'regulate', the sale of intoxicating

liquors, the Legislature may prohibit the sale of intoxicating liquors."
(Sweet vs. City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.)
"Within the meaning of the Constitution requiring that the subject
of every act of the Legislature shall be stated in the title, the title 'To
regulate the sale of intoxicating liquors, etc." sufficiently expresses the
subject of an act prohibiting the sale of such liquors to minors and to
persons in the habit of getting intoxicated; such matters being properly
included within the subject of regulating the sale." (Williams vs. State,
48 Ind. 306, 308, quoted in p. 42 of Answer.)
"The word 'regulate' is of broad import, and necessarily implies
some degree of restraint and prohibition of acts usually done in
connection with the thing to be regulated. While word regulate' does not
ordinarily convey meaning of prohibit, there is no absolute reason why it
should not have such meaning when used in delegating police power in
connection with a thing the best or only efficacious regulation of which
involves suppression." (State vs. Morton, 162 So. 718, 182 La. 887,
quoted in p. 42 of Answer.)

The general rule is for the use of general terms in the title of a bill; it
has also been said that the title need not be an index to the entire contents of
the law (I Sutherland, Statutory Construction, Sec. 4803, p. 345.) The above
rule was followed when the title of the Act in question adopted the more
general term "regulate" instead of "nationalize" or "prohibit". Furthermore,
the law also contains other rules for the regulation of the retail trade, which
may not be included in the terms "nationalization" or "prohibition"; so were
the title changed from "regulate" to "nationalize" or "prohibit", there would
have been many provisions not falling within the scope of the title which
would have made the Act invalid. The use of the term "regulate", therefore, is
in accord with the principle governing the drafting of statutes, under which a
simple or general term should be adopted in the title, which would include all
other provisions found in the body of the Act.
One purpose of the constitutional directive that the subject of a bill
should be embraced in its title is to apprise the legislators of the purposes,
the nature and scope of its provisions, and prevent the enactment into law of
matters which have not received the notice, action and study of the
legislators or of the public. In the case at bar it cannot be claimed that the
legislators have not been apprised of the nature of the law, especially the
nationalization and prohibition provisions. The legislators took active interest
in the discussion of the law, and a great many of the persons affected by the
prohibition in the law conducted a campaign against its approval. It cannot be

claimed, therefore, that the reasons for declaring the law invalid ever existed.
The objection must therefore, be overruled.
IX. Alleged violation of international treaties and obligations
Another subordinate argument against the validity of the law is the
supposed violation thereby of the Charter of the United Nations and of the
Declaration of Human Rights adopted by the United Nations General
Assembly. We find no merit in the above contention. The United Nations
Charter imposes no strict or legal obligations regarding the rights and
freedom of their subjects (Hans Kelsen, The Law of the United Nations, 1951
ed. pp. 29-32), and the Declaration of Human Rights contains nothing more
than a mere recommendation, or a common standard of achievement for all
peoples and all nations (Id. p. 39.) That such is the import of the United
Nations Charter aid of the Declaration of Human Rights can be inferred from
the fact that members of the United Nations Organization, such as Norway
and Denmark, prohibit foreigners from engaging in retail trade, and in most
nations of the world laws against foreigners engaged in domestic trade are
adopted.
The Treaty of Amity between the Republic of the Philippines and the
Republic of China of April 18, 1947 is also claimed to be violated by the law in
question. All that the treaty guarantees is equality of treatment to the Chinese
nationals "upon the same terms as the nationals of any other country." But
the nationals of China are not discriminated against because nationals of all
other countries, except those of the United States, who are granted special
rights by the Constitution, are all prohibited from engaging in the retail trade.
But even supposing that the law infringes upon the said treaty, the treaty is
always subject to qualification or amendment by a subsequent law (U.
S.vs. Thompson, 258, Fed. 257, 260), and the same may never curtail or
restrict the scope of the police power of the State (Palston vs. Pennsylvania,
58 L. ed. 539.).
X. Conclusion
Resuming what we have set forth above we hold that the disputed law
was enacted to remedy a real actual threat and danger to national economy
posed by alien dominance and control of the retail business and free citizens
and country from such dominance and control; that the enactment clearly
falls within the scope of the police power of the State, thru which and by
which it protects its own personality and insures its security and future; that
the law does not violate the equal protection clause of the Constitution
because sufficient grounds exist for the distinction between alien and citizen

in the exercise of the occupation regulated, nor the due process of law clause,
because the law is prospective in operation and recognizes the privilege of
aliens already engaged in the occupation and reasonably protects their
privilege; that the wisdom and efficacy of the law to carry out its objectives
appear to us to be plainly evident as a matter of fact it seems not only
appropriate but actually necessary and that in any case such matter falls
within the prerogative of the Legislature, with whose power and discretion the
Judicial department of the Government may not interfere; that the provisions
of the law are clearly embraced in the title, and this suffers from no duplicity
and has not misled the legislators or the segment of the population affected;
and that it cannot be said to be void for supposed conflict with treaty
obligations because no treaty has actually been entered into on the subject
and the police power may not be curtailed or surrendered by any treaty or
any other conventional agreement.
Some members of the Court are of the opinion that the radical effects
of the law could have been made less harsh in its impact on the aliens. Thus
it is stated that more time should have been given in the law for the
liquidation of existing businesses when the time comes for them to close. Our
legal duty, however, is merely to determine if the law falls within the scope of
legislative authority and does not transcend the limitations of due process and
equal protection guaranteed in the Constitution. Remedies against the
harshness of the law should be addressed to the Legislature; they are beyond
our power and jurisdiction.
The petition is hereby denied, with costs against petitioner.

Paras, C.J., Bengzon, Reyes A., Bautista Angelo, Concepcion, Reyes,

J.B.L., Endencia and Felix, JJ., concur.

Separate Opinions
PADILLA, J., concurring and dissenting:
I agree to the proposition, principle or rule that courts may not inquire
into the wisdom of an Act passed by the Congress and duly approved by the
President of the Republic. But the rule does not preclude courts from inquiring
and deter mining whether the Act offends against a provision or provisions of
the Constitution. I am satisfied that the Act assailed as violative of the due
process of law and the equal protection of the laws clauses of the Constitution
does not infringe upon them, insofar as it affects associations, partnerships or
corporations, the capital of which is not wholly owned by citizens of the

Philippines, and aliens, who are not and have not been engaged in the retail
business. I am, however, unable to persuade myself that it does not violate
said clauses insofar as the Act applies to associations and partnerships
referred to in the Act and to aliens, who are and have heretofore been
engaged in said business. When they did engage in the retail business there
was no prohibition on or against them to engage in it. They assumed and
believed in good faith they were entitled to engage in the business. The Act
allows aliens to continue in business until their death or voluntary retirement
from the business or forfeiture of their license; and corporations, associations
or partnerships, the capital of which is not wholly owned by citizens of the
Philippines to continue in the business for a period of ten years from the date
of the approval of the Act (19 June 1954) or until the expiry of the term of
the existence of the association or partnership or corporation, whichever
event comes first. The prohibition on corporations, the capital of which is not
wholly owned by citizens of the Philippines, to engage in the retail business
for a period of more than ten years from the date of the approval of the Act
or beyond the term of their corporate existence, whichever event comes first,
is valid and lawful, because the continuance of the existence of such
corporations is subject to whatever the Congress may impose reasonably
upon them by subsequent legislation. 1 But the prohibition to engage in the
retail business by associations and partnerships, the capital of which is not
wholly owned by citizens of the Philippines, after ten years from the date of
the approval of the Act, even before the end of the term of their existence as
agreed upon by the associates and partners, and by alien heirs to whom the
retail business is transmitted by the death of an alien engaged in the
business, or by his executor or administrator, amounts to a deprivation of
their property without due process of law. To my mind, the ten-year period
from the date of the approval of the Act or until the expiration of the term of
the existence of the association and partnership, whichever event comes first,
and the six- month period granted to alien heirs of a deceased alien, his
executor or administrator, to liquidate the business, do not cure the defect of
the law, because the effect of the prohibition is to compel them to sell or
dispose of their business. The price obtainable at such forced sale of the
business would be inadequate to reimburse and compensate the associates or
partners of the association or partnership, and the alien heirs of a deceased
alien, engaged in the retail business for the capital invested in it. The stock of
merchandise bought and sold at retail does not alone constitute the business.
The goodwill that the association, partnership and the alien had built up
during a long period of effort, patience and perseverance forms part of such
business. The constitutional provisions that no person shall be deprived of his
property without due process of law 1 and that no person shall be denied the

equal protection of the laws 2 would have no meaning as applied to

associations or partnerships and alien heirs of an alien engaged in the retail
business if they were to be compelled to sell or dispose of their business
within ten years from the date of the approval of the Act and before the end
of the term of the existence of the associations and partnerships as agreed
upon by the associates and partners and within six months after the death of
their predecessor-in-interest.
The authors of the Constitution were vigilant, careful and zealous in the
safeguard of the ownership of private agricultural lands which together with
the lands of the public domain constitute the priceless patrimony and
mainstay of the nation; yet, they did not deem it wise and prudent to deprive
aliens and their heirs of such lands. 3
For these reasons, I am of the opinion that section 1 of the Act, insofar
as it compels associations and partnerships referred to therein to wind up
their retail business within ten years from the date of the approval of the Act
even before the expiry of the term of their existence as agreed upon by the
associates and partners and section 3 of the Act, insofar as it compels the
alien heirs of a deceased alien engaged in the retail business in his lifetime,
his executor or administrator, to liquidate the business, are invalid, for they
violate the due process of law and the equal protection of the laws clauses of
the Constitution.

EN BANC
[G.R. No. L-29646. November 10, 1978.]
MAYOR ANTONIO J. VILLEGAS, petitioner, vs. HIU CHIONG
TSAI PAO HO and JUDGE FRANCISCO ARCA, respondents.

Angel C . Cruz, Gregorio A. Ejercito, Felix C . Chaves & Jose Laureta for
petitioner.

Sotero H . Laurel for respondents.

DECISION

FERNANDEZ, J :
p

This is a petition for certiorari to review the decision dated September 17, 1968
of respondent Judge Francisco Arca of the Court of First Instance of Manila,
Branch I, in Civil Case No. 72797, the dispositive portion of which reads:
"Wherefore, judgment is hereby rendered in favor of the petitioner and
against the respondents, declaring Ordinance No. 6537 of the City of
Manila null and void. The preliminary injunction is hereby made
permanent. No pronouncement as to cost.
SO ORDERED.
Manila, Philippines, September 17, 1968.
(SGD.) FRANCISCO ARCA
Judge"

The controverted Ordinance No. 6537 was passed by the Municipal Board of
Manila on February 22, 1968 and signed by the herein petitioner Mayor Antonio
J. Villegas of Manila on March 27, 1968. 2
City Ordinance No. 6537 is entitled:
"AN ORDINANCE MAKING IT UNLAWFUL FOR ANY PERSON NOT A
CITIZEN OF THE PHILIPPINES TO BE EMPLOYED IN ANY PLACE OF
EMPLOYMENT OR TO BE ENGAGED IN ANY KIND OF TRADE, BUSINESS
OR OCCUPATION WITHIN THE CITY OF MANILA WITHOUT FIRST
SECURING AN EMPLOYMENT PERMIT FROM THE MAYOR OF MANILA;
AND FOR OTHER PURPOSES." 3

Section 1 of said Ordinance No. 6537 4 prohibits aliens from being employed or
to engage or participate in any position or occupation or business enumerated
therein, whether permanent, temporary or casual, without first securing an
employment permit from the Mayor of Manila and paying the permit fee of
P50.00 except persons employed in the diplomatic or consular missions of
foreign countries, or in the technical assistance programs of both the Philippine
Government and any foreign government, and those working in their respective
households, and members of religious orders or congregations, sect or
denomination, who are not paid monetarily or in kind.
cdrep

Violations of this ordinance is punishable by an imprisonment of not less than

three (3) months to six (6) months or fine of not less than P100.00 but not more
than P200.00 or both such fine and imprisonment, upon conviction. 5
On May 4, 1968, private respondent Hiu Chiong Tsai Pao Ho, who was employed
in Manila, filed a petition with the Court of First Instance of Manila, Branch I,
denominated as Civil Case No. 72797, praying for the issuance of the writ of
preliminary injunction and restraining order to stop the enforcement of
Ordinance No. 6637 as well as for a judgment declaring said Ordinance No. 6537
null and void. 6
In this petition, Hiu Chiong Tsai Pao Ho assigned the following as his grounds for
wanting the ordinance declared null and void:
1)As a revenue measure imposed on aliens employed in the City of
Manila, Ordinance No. 6537 is discriminatory and violative of the rule of
the uniformity in taxation;
2)As a police power measure, it makes no distinction between useful
and non-useful occupations, imposing a fixed P50.00 employment
permit, which is out of proportion to the cost of registration and that it
fails to prescribe' any standard to guide and/or limit the action of the
Mayor, thus, violating the fundamental principle on illegal delegation of
legislative powers:
3)It is arbitrary, oppressive and unreasonable, being applied only to
aliens who are thus, deprived of their rights to life, liberty and property
and therefore, violates the due process and equal protection clauses of
the Constitution. 7

On May 24, 1968, respondent Judge issued the writ of preliminary injunction and
on September 17, 1968 rendered judgment declaring Ordinance No. 6537 null
and void and making permanent the writ of preliminary injunction.8
Contesting the aforecited decision of respondent Judge, then Mayor Antonio
J. Villegas filed the present petition on March 27, 1969. Petitioner assigned the
following as errors allegedly committed by respondent Judge in the latter's
decision of September 17, 1968: 9
"I.

THE RESPONDENT JUDGE COMMITTED A SERIOUS AND PATENT

ERROR OF LAW IN RULING THAT ORDINANCE NO. 6537 VIOLATED THE
CARDINAL RULE OF UNIFORMITY OF TAXATION.
II.
RESPONDENT JUDGE LIKEWISE COMMITTED A GRAVE AND PATENT
ERROR OF LAW IN RULING THAT ORDINANCE NO. 6537 VIOLATED THE
PRINCIPLE AGAINST UNDUE DESIGNATION OF LEGISLATIVE POWER.
III.
RESPONDENT JUDGE FURTHER COMMITTED A SERIOUS AND PATENT
ERROR OF LAW IN RULING THAT ORDINANCE NO. 6537 VIOLATED THE
DUE PROCESS AND EQUAL PROTECTION CLAUSES OF THE
CONSTITUTION."

Petitioner Mayor Villegas argues that Ordinance No. 6537 cannot be declared null
and void on the ground that it violated the rule on uniformity of taxation because
the rule on uniformity of taxation applies only to purely tax or revenue measures
and that Ordinance No. 6537 is not a tax or revenue measure but is an exercise
of the police power of the state, it being principally a regulatory measure in
nature.
cdll

The contention that Ordinance No. 6537 is not a purely tax or revenue measure
because its principal purpose is regulatory in nature has no merit. While it is true
that the first part which requires that the alien shall secure an employment
permit from the Mayor involves the exercise of discretion and judgment in the
processing and approval or disapproval of applications for employment permits
and therefore is regulatory in character the second part which requires the
payment of P50.00 as employee's fee is not regulatory but a revenue measure.
There is no logic or justification in exacting P50.00 from aliens who have been
cleared for employment. It is obvious that the purpose of the ordinance is to
raise money under the guise of regulation.
The P50.00 fee is unreasonable not only because it is excessive but because it
fails to consider valid substantial differences in situation among individual aliens
who are required to pay it. Although the equal protection clause of the
Constitution does not forbid classification, it is imperative that the classification,
should be based on real and substantial differences having a reasonable relation
to the subject of the particular legislation. The same amount of P50.00 is being

collected from every employed alien, whether he is casual or permanent, part

time or full time or whether he is a lowly employee or a highly paid executive.
Ordinance No. 6537 does not lay down any criterion or standard to guide the
Mayor in the exercise of his discretion. It has been held that where an ordinance
of a municipality fails to state any policy or to set up any standard to guide or
limit the mayor's action, expresses no purpose to be attained by requiring a
permit, enumerates no conditions for its grant or refusal, and entirely lacks
standard, thus conferring upon the Mayor arbitrary and unrestricted power to
grant or deny the issuance of building permits, such ordinance is invalid, being
an undefined and unlimited delegation of power to allow or prevent an
activity per se lawful. 10
In Chinese Flour Importers Association vs. Price Stabilization Board, 11 where a
law granted a government agency power to determine the allocation of wheat
flour among importers, the Supreme Court ruled against the interpretation of
uncontrolled power as it vested in the administrative officer an arbitrary
discretion to be exercised without a policy, rule, or standard from which it can be
measured or controlled.
It was also held in Primicias vs. Fugoso 12 that the authority and discretion to
grant and refuse permits of all classes conferred upon the Mayor of Manila by the
Revised Charter of Manila is not uncontrolled discretion but legal discretion to be
exercised within the limits of the law.
Ordinance No. 6537 is void because it does not contain or suggest any standard
or criterion to guide the mayor in the exercise of the power which has been
granted to him by the ordinance.
The ordinance in question violates the due process of law and equal protection
rule of the Constitution.
Requiring a person before he can be employed to get a permit from the City
Mayor of Manila who may withhold or refuse it at will is tantamount to denying
him the basic right of the people in the Philippines to engage in a means of
livelihood. While it is true that the Philippines as a State is not obliged to admit
aliens within its territory, once an alien is admitted, he cannot be deprived of life
without due process of law. This guarantee includes the means of livelihood. The
shelter of protection under the due process and equal protection clause is given
to all persons, both aliens and citizens. 13
The trial court did not commit the errors assigned.

LLpr

WHEREFORE, the decision appealed from is hereby affirmed, without

pronouncement as to costs.
SO ORDERED.

Barredo, Makasiar, Muoz Palma, Santos, and Guerrero, JJ ., concur.

Castro, C . J ., Antonio and Aquino, JJ ., concur in the result.
Concepcion Jr., J ., took no part.

FIRST DIVISION
[G.R. No. 45685. November 16, 1937.]
THE PEOPLE OF THE PHILIPPINE ISLANDS and THE
HONGKONG & SHANGHAI BANKING
CORPORATION, petitioners, vs. JOSE O. VERA, Judge ad
interim of the Court of First Instance of Manila, and
MARIANO CU UNJIENG, respondents.

Solicitor-General Tuason and City Fiscal Diaz for the Government.

DeWitt, Perkins & Ponce Enrile for the Hongkong & Shanghai Banking

Corporation.

Vicente J. Francisco, Feria & La O, Orense & Belmonte and Gibbs &
McDough for respondent Cu Unjieng.
No appearance for respondent Judge.
SYLLABUS
1.PROBATION; AUTHORITY OF PROBATION COURT TO LOOK INTO
CIRCUMSTANCES OF OFFENSE; SUPERIOR AND INFERIOR COURTS; LEGAL
RELATION AND ETHICAL STANDARD. Probation implies guilt by final
judgment. While a probation court hearing a probation case may look into the
circumstances attending the commission of the offense, this does not
authorize it to reverse the findings and conclusions of the Supreme Court,
either directly or indirectly, especially where from its own admission reliance

was merely had on the printed briefs, averments, and pleadings of the par
ties. As observed in Shioji vs. Harvey ( [1922], 43 Phil., 333, 337), and
reiterated in subsequent cases," if each and every Court of First Instance
could enjoy the privilege of overruling decisions of the Supreme Court, there
would be no end to litigation, and judicial chaos would result." A becoming
modesty of inferior courts demands conscious realization of the position that
they occupy in the interrelation and operation of the integrated judicial
system of the nation.
2.CONSTITUTIONAL LAW; THE PRESIDENT AND HIS VETO POWER;
PRESIDENT'S VETO NOT BINDING ON THE SUPREME COURT. In vetoing a
bill, the President may express the reasons which he may deem proper, but
his reasons are not binding upon the Supreme Court in the determination of
actual controversies submitted to it for determination. Whether or not the
Executive should express or in any manner insinuate his opinion on a matter
encompassed within his broad constitutional power of veto but which happens
to be at the same time pending determination before the Supreme Court is a
question of propriety for him exclusively to decide or determine. Whatever
opinion is expressed by him under these circumstances, however, cannot
sway the judgment of the court one way or another and prevent it from
taking what in its opinion is the proper course of action to take in a given
case.
3.ID.; INDEPENDENCE OF THE JUDICIARY. If it is ever necessary to
make any vehement affirmance during this formative period of our political
history, it is that the judiciary is independent of the Executive no less than of
the Legislative department of our government independent in the
performance of its functions, undeterred by any consideration, free from
politics, indifferent to popularity, and unafraid of criticism in the
accomplishment of its sworn duty as it sees it and understands it.
4.ID.; WHEN CONSTITUTIONALITY MAY BE RAISED. The
constitutionality of an act of the legislature will not be determined by the
courts unless that question is properly raised and presented in appropriate
cases and is necessary to a determination of the case; i. e., the issue of
constitutionality must be the very lis mota presented.
5.ID.; ID.; RESORT TD EXTRAORDINARY LEGAL REMEDIES;
ADJUDICATED CASES. The question of the constitutionality of an Act of the
legislature is frequently raised in ordinary actions. Nevertheless, resort may
be made to extraordinary legal remedies, particularly where the remedies in
the ordinary course of law, even if avail able, are not plain, speedy and
adequate. Thus, in Cu Unjieng vs. Patstone ([1922], 42 Phil., 818), the
Supreme Court held that the question of the constitutionality of a statute may

be raised by the petitioner in mandamus proceedings (see also 12 C. J., p.

783); and in Government of the Philippine Islands vs. Springer ([1927], 50
Phil., 259, affirmed in Springer vs. Government of the Philippine Islands
[1928], 277 U. S., 189; 72 Law. ed., 845), this court declared an act of the
legislature unconstitutional in an action of quo warranto brought in the name
of the Government of the Philippines. It has also been held that the
constitutionality of a statute may be questioned in habeas corpus proceedings
(12 C. J., p. 783; Bailey on Habeas Corpus, Vol. I, pp. 97, 117), although
there are authorities to the contrary; on an application for injunction to
restrain action under the challenged statute (mandatory, see
Cruz vs.Youngberg [1931] 56 Phil., 234); and even on an application for
preliminary in junction where the determination of the constitutional question
is necessary to a decision of the case. (12 C. J., p. 783.) The same may be
said as regards prohibition and certiorari. (Yu Cong Eng vs. Trinidad [1925],
47 Phil., 385; [1926], 271 U. S., 500; 70 Law. ed., 1059; Bell vs. First Judicial
District Court [1905], 28 Nev., 280; 81 Pac., 875; 113 A. S. R., 854; 6 Ann.
Cas., 982; 1 L. R. A. [N. S.], 843, and cases cited.)
6.ID. ; ID.; ID.; ID.; PROHIBITION; RULE WHERE JURISDICTION IS
EXCLUSIVELY DERIVED FROM UNCONSTITUTIONAL STATUTE. The writ of
prohibition is an extraordinary judicial writ issuing out of a court of superior
jurisdiction and directed to an inferior court, for the purpose of preventing the
inferior tribunal from usurping a jurisdiction with which it is not legally vested.
The general rule, although there is a conflict in the cases, is that the writ of
prohibition will notice where the inferior court has jurisdiction independent of
the statute the constitutionality of which is questioned, because in such cases
the inferior court having jurisdiction may itself determine the constitutionality
of the statute, and its decision may be subject to review, and consequently
the complainant in such cases ordinarily has adequate remedy by appeal
without resort to the writ of prohibition. But where the inferior court or
tribunal derives its jurisdiction exclusively from an unconstitutional statute, it
may be prevented by the writ of prohibition from en forcing that statute.
7.ID.; ID.; ID.; ID.; ID.; COURTS OF FIRST INSTANCE; LIMITED
JURISDICTION IN PROBATION CASES. A Court of First Instance sitting in
probation proceedings is a court of limited jurisdiction. Its jurisdiction in such
proceeding is conferred exclusively by Act No. 4221 of the Philippine
Legislature.
8.ID.; ID. CONSTITUTIONALITY MUST BE RAISED AT THE EARLIEST
OPPORTUNITY; EXCEPTIONS. As a general rule, the question
constitutionality must be raised at the earliest opportunity, so that if not
raised by the pleadings, ordinarily it may be raised at the trial, and if not

raised in the trial court, it will not be considered on appeal. But the general
rule admits of exceptions. Courts, in the exercise of sound discretion, may
determine the time when a question affecting the constitutionality of a statute
should be presented. Thus, in criminal cases, although there is a very sharp
conflict of authorities, it is said that the question may be raised for the first
time at any stage of the proceedings, either in the trial court or on appeal.
Even in civil cases, it has been held that it is the duty of a court to pass on
the constitutional question, though raised for the first time on appeal, if it
appears that a determination of the question is .necessary to a decision of the
case. And it has been held that a constitutional question will be considered by
an appellate court at any time, where it involves the jurisdiction of the court
below.
9.ID.; ID.; PERSONAL AND SUBSTANTIAL INTEREST OF PARTY RIGHT
AND INTEREST OF THE PEOPLEOF THE PHILIPPINES TO CHALLENGE
CONSTITUTIONALITY. The person who impugns the validity of a statute
must have a personal and substantial interest in the case such that he has
sustained, or will sustain, direct injury as a result of its enforcement. It goes
without saying that if Act No. 4221 really violates the Constitution,
the People of the Philippines, in whose name the present action is brought,
has a substantial interest in having it set aside. Of greater import than the
damage caused by the illegal expenditure of public funds is the mortal wound
inflicted upon the fundamental law by the enforcement of an invalid statute.
Hence, the well-settled rule that the state can challenge the validity of its own
laws.
10.ID.; ID.; RELIANCE ON PROBATION ACT, BY FISCAL DOES NOT
CONSTITUTE ESTOPPEL AGAINST THE PEOPLE. The mere fact that the
Probation Act has been repeatedly relied upon in the past and all that time
has not been attacked as unconstitutional by the Fiscal of Manila but, on the
contrary, has been impliedly regarded by him as constitutional, is no reason
for considering the People of the Philippines estopped from now as sailing its
validity. For courts will pass upon a constitutional question only when
presented before it in bona fide cases for determination, and the fact that the
question has not been raised before is not a valid reason for refusing to allow
it to be raised later. The fiscal and all others are justified in relying upon the
statute and treating it as valid until it is held void by the courts in proper
cases.
11.ID.; ID.; WHEN DETERMINATION OF CONSTITUTIONALITY
NECESSARY; WAIVER IF CASE CAN BE DECIDED ON OTHER POINTS.
While the court will meet the question with firmness, where its decision is
indispensable, it is the part of wisdom, and a just respect for the legislature,

renders it proper, to waive it, if the case in which it arises, can be decided on
other points. (Ex parte Randolph [1833], 20 F. Cas. No 11,558; 2 Brock.,
447.Vide, also Hoover vs. Wood [1857], 9 Ind., 286, 287.) It has been held
that the determination of a constitutional question is, necessary whenever it is
essential to the decision of the case, as where the right of a party is founded
solely on a statute the validity of which is attacked. (12 C. J., p. 782.)
12.ID.; ID.; ID.; REASONS OF PUBLIC POLICY JUSTIFYING
CONSTITUTIONAL INQUIRY. The Supreme Court will take cognizance of
the fact that the Probation Act is a new addition to our statute books and its
validity has never before been passed upon by the courts; that many persons
accused and convicted of crime in the City of Manila have applied for
probation; that some of them are already on probation; that more people will
likely take advantage of the Probation Act in the future; and that the re
respondent M. C. U. has been at large for a period of about four years since
his first conviction. All await the decision of this court on the constitutional
question. Considering, therefore, the importance which the instant case has
assumed and to prevent multiplicity of suits, strong reasons of public policy
demand that the constitutionality of Act No. 4221 be now resolved.
13.ID.; THE JUDICIARY; ITS DUTY TO ENFORCE THE CONSTITUTION.
Under a doctrine peculiarly American, it is the office and duty of the
judiciary to enforce the Constitution. The Supreme Court, by clear implication
from the provisions of section 2, subsection 1, and section 10, of Article VIII
of the Constitution, may declare an act of the National Legislature invalid
because in conflict with the fundamental law. It will not shirk from its sworn
duty to enforce the Constitution. And, in clear cases, it will not hesitate to
Five effect to the supreme law by setting aside a statute in conflict therewith.
This is of the essence of judicial duty.
14.ID.; ID.; STATUTORY CONSTRUCTION; PRESUMPTION IN FAVOR
OF CONSTITUTIONALITY; RATIONALE OF PRESUMPTION. All reason able
doubts should be resolved in favor of the constitutionality of a statute. An act
of the legislature approved by the executive, is presumed to be within
constitutional limitations. The responsibility of upholding the Constitution rests
not on the courts alone but on the legislature as well. "The question of the
validity of every statute is first determined by the legislative department of
the government itself." ( U. S. vs.Ten Yu [1912], 24 Phil., 1, 10; Case is.
Board of Health and Heiser [1913], 24 Phil., 250, 276; U. S. vs. Joson t1913],
26 Phil., 1.) And a statute finally comes before the courts sustained by the
sanction of the executive. The members of the Legislature and the Chief
Executive have taken an oath to support the Constitution and it must be

presumed that they have been true to this oath and that in enacting and
sanctioning a particular law they did not intend to violate the Constitution.
Then, there is that peculiar political philosophy which bids the judiciary to
reflect the wisdom of thepeople as expressed through an elective Legislature
and an elective Chief Executive. It follows that the courts will not set aside a
law as violative of the Constitution except in clear cases.
15.ID.; THE PARDONING POWER UNDER THE JONES LAW AT THE
CONSTITUTION OF THE PHILIPPINES. Section 21 of the Jones Law, in e at
the time of the approval of Act No. 4221, vests in the Governor-General of the
Philippines "the exclusive power to grant pardons and reprieves and remit
fines and forfeitures." This power is now vested in the President of the
Philippines. The provisions of the Jones Law and the Constitution of the
Philippines differ in some respects. The adjective "exclusive" found in the
Jones Law has been omitted from the Constitution. Under the Jones Law, as
at common law, pardon could be granted any time after the commission of
the offense, either before or after conviction. The Governor-General of the
Philippines was thus empowered, like the President of the United States, to
pardon a person before the facts of his case were fully brought to light. The
framers of our Constitution thought this undesirable and, following most of
the state constitutions, provided that the pardoning power can only be
exercised "after conviction". So too, under the new Constitution, the
pardoning power does not extend to "cases of impeachment". This is also the
rule generally followed in the United States.
16.ID.; ID.; ROYAL PARDON UNDER ENGLISH LAW; POWER OF THE
HOUSE OF LORDS. The rule in England is different. There, a royal pardon
can not be pleaded in bar of an impeachment; "but," says Blackstone, "after
the impeachment has been solemnly heard and determined, it is not
understood that the king's royal grace is further restrained or abridged." The
reason for the distinction is obvious. In England, judgment on impeachment is
not confined to mere "removal from office and disqualification to hold and
enjoy any office of honor, trust, or profit under the Government" but extends
to the whole punishment attached by law to the offense committed. The
House of Lords, on a conviction may, by its sentence, inflict capital
punishment, perpetual banishment, fine or imprisonment, depending upon
the gravity of the offense committed, together with removal from office and
incapacity to hold office.
17.ID.; ID.; COMMUTATION AND AMNESTY UNDER THE PHILIPPINE
CONSTITUTION. Our Constitution makes specific mention of
"commutation" and of the power of the executive to impose, in the par dons
he may grant, such conditions, restrictions and limitations as he may deem

proper. Amnesty may be granted by the President under the Constitution but
only with the concurrence of the National Assembly.
18.ID.; ID.; EXCLUSIVE CHARACTER OF THE PARDONING POWER.
The benign prerogative of mercy reposed in the Executive cannot be taken
away nor fettered by any legislative restrictions, nor can like power be given
by the legislature to any other officer or authority. The coordinate
departments of government have nothing to do with the pardoning power,
since no person properly belonging to one of the departments can exercise
any powers appertaining to either of the others except in cases expressly
provided for by the constitution. (20 R. C. L., pp. 540, 541.) Where the
pardoning power is conferred on the executive without express or implied
limitations, the grant is exclusive, and the legislature can neither exercise
such power itself nor delegate it elsewhere, nor interfere with or control the
proper exercise thereof (12 C. J., pp. 838, 839).
19.ID.; PROBATION, POWER OF THE PHILIPPINE LEGISLATURE TO
ENACT A PROBATION LAW. The Philippine Legislature, like the Congress of
the United States, may legally enact a probation law under its broad power to
fix the punishment of any and all penal offenses. The legislative power to set
punishment for crime is very broad, and in the exercise of this power the
legislature may confer on trial judges, if it sees fit, the largest discretion as to
the sentence to be imposed, as to the beginning and end of the punishment,
and whether it should be certain, or indeterminate, or conditional. Indeed, the
Philippine Legislature has defined all crimes and fixed the penalties for their
violation. Invariably, the legislature has demonstrated the desire to vest in the
courts particularly the trial courts large discretion in imposing the
penalties which the law prescribes in particular cases. It is believed that
justice can best be served by vesting this power in the courts, they being in a
position to best determine the penalties which an individual convict, peculiarly
circumstance, should suffer.
20.ID.; ID.; PROBATION AND PARDON NOT COTERMINOUS;
PROBATION DISTINGUISHED FROM REPRIEVE AND COMMISSION.
Probation and pardon are not coterminous; nor are they the same. They are
actually distinct and different from each other, both in origin and in nature. In
probation, the probationer is in no true sense, as in pardon, a freeman He is
not finally and completely exonerated. He is not exempt from the entire
punishment which the law inflicts. Under the Probation Act, the probationer's
case is not terminated by the mere fact that he is placed on probation. The
probationer, during the period of probation, remains in legal custody
subject to the control of the probation officer and of the court, he may be
rearrested upon the non-fulfillment of the conditions of probation and, when

rearrested, may be committed to prison to serve the sentence originally

imposed upon him. Probation should also be distinguished from reprieve and
from commutation of the sentence.
21.ID.; ID.; ID.; PROBATION NOT IN CONFLICT WITH PARDONING
POWER. The Probation Act does not conflict with the pardoning power of
the Executive. The pardoning power, in respect to those serving their
probationary sentences, remains as full and complete as if the Probation Law
had never been enacted. The President may yet pardon the probationer and
thus place it beyond the power of the court to order his rearrest and
imprisonment.
22.ID.; DIVISION OF POWERS. Under our constitutional system
powers of government are distributed among three coordinate and
substantially independent organs: the legislative, the executive and the
judicial. Each of these departments of the government derives its authority
from the Constitution which, in turn, is the highest expression of the popular
will. Each has exclusive cognizance of the matters within its jurisdiction, and
is supreme with in its own sphere.
23.ID.; ID.; DELEGATION OF LEGISLATIVE AUTHORITY HISTORICAL
DEVELOPMENT. The power to make laws the legislative power is
vested in a bicameral Legislature by the Jones Law and in a unicameral
National Assembly by the Constitution. The Philippine Legislature or the
National Assembly may not escape its duties and responsibilities by delegating
that power to any other body or authority. Any attempt to abdicate the power
is unconstitutional and void. on the principle that potestas de legata non
delegare potest. This principle is said to have originated with the glossators,
was introduced into English law through a misreading of Bracton, there
developed as a principle of agency, was established by Lord Coke in the
English public law in decisions forbidding the delegation of judicial power, and
found its way into America as an enlightened principle of free government. It
has since become an accepted corollary of the principle of separation of
powers.
24.ID.; ID.; ID.; RULE FORBIDDING DELEGATION OF LEGISLATIVE
AUTHORITY NOT INFLEXIBLE; EXCEPTIONS. The rule, however which
forbids the delegation of legislative power is not absolute and inflexible. It
admits of exceptions. An exception sanctioned by immemorial practice
permits the central legislative body to delegate legislative powers to local
authorities. On quite the same principle, Congress is empowered to delegate
legislative power to such agencies in the territories of the United States as it

may select. Courts have also sustained the delegation of legislative power to
the people at large, though some authorities maintain that this may not be
done. Doubt less, also, legislative power may be delegated by the
Constitution itself. Section 14, paragraph 2, of Article VI of the Constitution of
the Philippines provides that "The National Assembly may by law authorize
the President, subject to such limitations and restrictions as it may impose,
to fix within specified limits, tariff rates, import or export quotas, and tonnage
and wharfage dues." And section 16 of the same article of the Constitution
provides that "In times of war or other national emergency, the National
Assembly may by law authorize the President, for a limited period and subject
to such restrictions as it may prescribe, to promulgate rules and regulations to
carry out a declared national policy."
25.ID.; ID.; ID.; TEST OF UNDUE DELEGATION; DETAILS OF
EXECUTION. In testing whether a statute constitutes an undue delegation
of legislative power or not, it is usual to inquire whether the statute was
complete in all its terms and provisions when it left the hands of the
legislature so that nothing was left to the judgment of any other appointee or
delegate of the legislature. In United States vs. Ang Tang Ho ( [1922], 43
Phil., 1), the Supreme Court adhered to the foregoing rule. The general rule,
however, is limited by another rule that to a certain extent matters of detail
may be left to be filled in by rules and regulations to be adopted or
promulgated by executive officers and administrative boards. As a rule, an act
of the legislature is incomplete and hence invalid if it does not lay down any
rule or definite standard by which the administrative board may be guided in
the exercise of the discretionary powers delegated to it.
26.ID.; ID.; ID.; PROBATION ACT MAKES VIRTUAL SURRENDER OF
LEGISLATIVE POWER TO PROVINCIAL BOARDS. The Probation Act does
not, by the force of any of its provisions, fix and impose upon the provincial
boards any standard or guide in the exercise of their discretionary power.
What is granted is a "roving commission" which enables the provincial boards
to exercise arbitrary discretion. By section 11 of the Act, the legislature does
seemingly on its own authority extend the benefits of the Probation Act to the
provinces but in reality leaves the entire matter for the various provincial
boards to determine. If a provincial board does not wish to have the Act
applied in its province, all that it has to do is to decline to appropriate the
needed amount for the salary of a probation officer. This is a virtual surrender
of legislative power to the provincial boards.
27.ID.; ID.; ID.; TRUE DISTINCTION BETWEEN POWER TO MAKE LAW
AND DISCRETION AS TO ITS EXECUTION; ADJUDICATED CASES. 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 an

authority or discretion as to its execution, to be exercised under and in
pursuance of the law. The first cannot be done; to the latter no valid
objection can be made. ( Cincinnati, W. & Z. R. Co. vs. Clinton County Comrs.
[1852], 1 Ohio St., 77, 88. See also,Sutherland on Statutory Construction,
sec. 68.) To the same effect are decisions of the Supreme Court in the
Municipality of Cardona vs. Municipality of Binagonan ([1917], 36 Phil., 547);
Rubi vs. Provincial Board of Mindoro ([1919], 39. Phil., 660); and
Cruz vs. Youngberg ([1931], 56 Phil., 234).
28.ID.; ID.; ID.; CONDITIONAL ENFORCEMENT OF A LAW;
RELAXATION OF THE DOCTRINE. Laws may be made effective on certain
contingencies, as by proclamation of the executive or the adoption by
the people of a particular community (6 R. C. L., 116, 170- 172; Cooley,
Constitutional Limitations, 8th ed., vol. I, p. 227). In Wayman vs. Southard
([1825], 10 Wheat., 1; 6 Law. ed., 253), the Supreme Court of the United
States ruled that the legislature may delegate a power not legislative which it
may itself rightfully exercise. The power to ascertain facts is such a power
which may be delegated. There is nothing essentially legislative in
ascertaining the existence of facts or conditions as the basis of the taking into
effect of a law. That is a mental process common to all branches of the
government. Notwithstanding the apparent tendency to relax the rule pro hi
biting delegation of legislative authority on account of the complexity arising
from social and economic forces at work in this modern industrial age, the
orthodox pronouncement of .Judge Cooley in his work on Constitutional
Limitations finds restatement in Professor Willoughby's treatise on the
Constitution of the United States and is accepted.
29.ID.; ID.; ID.; OPERATION OF PROBATION ACT NOT CONTINGENT
ON SPECIFIED FACTS OR CONDITIONS; DISCRETION VESTED IN
PROVINCIAL BOARDS ARBITRARY. The legislature has not made the
operation of the Probation Act contingent upon specified facts or conditions to
be ascertained by the provincial board. It leaves the entire operation or nonoperation of the law upon the provincial boards. The discretion vested is
arbitrary be cause it is absolute and unlimited. A provincial board need not
investigate conditions or find any fact, or await the happening of any specified
contingency. It is bound by no rule limited by no principle of expediency
announced by the legislature. It may take into consideration certain facts or
conditions; and, again, it may not. It may have any purpose or no purpose at
all. It need not give any reason or have any reason whatsoever for refusing or
failing to appropriate any funds for the salary of a probation officer. This is a
matter which rests entirely at its pleasure.

30.ID.; ID.; ID.; LOCAL OPTION LAWS RIGHT OF LOCAL SELFGOVERNMENT; SUSPENSION OF OPERATION OF A GENERAL LAW
COUNTENANCED. The legislature may enact laws for a particular locality
different from those applicable to other localities and, while recognizing the
force of the principle hereinabove expressed, courts in many jurisdictions
have sustained the constitutionality of the submission of option laws to the
vote of the people. (6 R. C. L., p. 171.) But option laws thus sustained treat
of subjects purely local in character which should receive different treatment
in different localities placed under different circumstances. Without denying
the right of local self-government and the propriety of leaving matters of
purely local concern in the hands of local authorities or for the people of small
communities to pass upon in matters of general legislation like that which
treats of criminals in general, and as regards the general subject of probation,
discretion may not be vested in a manner so unqualified and absolute as
provided in Act No. 4221.
31.ID.; ID.; ID.; PROVINCIAL BOARDS EMPOWERED TO SUSPEND
OPERATION OF PROBATION ACT. The statute does not expressly state
that the provincial boards may suspend the operation of the Probation Act in
particular provinces but, considering that, in being vested with the authority
to appropriate or not the necessary funds for the salaries of probation officers
they thereby are given absolute discretion to determine whether or not the
law should take effect or operate in their respective provinces, the provincial
boards are in reality empowered by the legislature to suspend the operation
of the Probation Act in particular provinces, the Act to be held in abeyance
until the provincial boards should decide otherwise by appropriating the
necessary funds. The validity of a law is not tested by what has been done,
but by what may be done under its provisions. (Walter E. Olsen &
Co. vs. Aldanese and Trinidad [1922], 43 Phil., 259; 12 C. ,T., p. 786.)
32.ID.; ID.; ID.; LEGISLATIVE POLICY; EXECUTION THEREOF
CONSTITUTION BOTH A GRANT AND LIMITATION OF POWER. A great
deal of latitude should be granted to the legislature not only in the expression
of what may be termed legislative policy but in the elaboration and execution
thereof. "Without this power, legislation would become oppressive and yet
imbecile." (People vs. Reynolds, 5 Gilman, 1.) It has been said that popular
government lives because of the inexhaustible reservoir of power behind it. It
is unquestionable that the mass of powers of government is vested in the
representatives of the people and that these representatives are no further
restrained under our system than by the express language of the instrument
imposing the restraint, or by particular provisions which by clear intendment,
have that effect. But it should be borne in mind that a constitution is both a

grant and a limitation of power and one of these time-honored limitations is

that, subject to certain exceptions, legislative power shall not be delegated.
33.ID.; EQUAL PROTECTION OF THE LAWS; CLASS LEGISLATION;
CLASSIFICATION ON REASONABLE BASIS. " . . . nor shall any person be
denied the equal protection of the laws." This basic individual right sheltered
by the Constitution is a restraint on all the three grand departments of our
government and on the subordinate instrumentalities and subdivisions
thereof, and on many constitutional powers, like the police power, taxation
and eminent domain. What may be regarded as a denial of the equal
protection of the laws is a question not always easily determined. No rule that
will cover every case can be formulated. Class legislation discriminating
against some and favoring others is prohibited. But classification on a
reasonable basis, and not made arbitrarily or capriciously, is permitted. The
classification, however, to be reasonable must be based on substantial
distinctions which make real differences; it must be germane to the purposes
of the law; it must not be limited to existing conditions only, and must apply
equally to each member of the class.
34.ID.; ID.; ID.; RESULTANT INEQUALITY FROM UNWANTED
DELEGATION; PROBATION ACT PERMITS DENIAL OF EQUAL PROTECTION.
In the case of Act No. 4221, the resultant inequality may be said to flow
from the unwarranted delegation of legislative power to the provincial boards.
While inequality may result in the application of the law and in the
conferment of the benefits therein provided, inequality is not in all cases the
necessary result. But whatever may be the case, it is clear that section 11 of
the Probation Act creates a situation in which discrimination and inequality
are permitted or allowed. There are, to be sure, abundant authorities
requiring actual denial of the equal protection of the law before courts should
assume the task of setting aside a law vulnerable on that score, but premises
and circumstances considered, we are of the opinion that section 11 of Act
No. 4221 permits of the denial of the equal protection of the law and is on
that account bad. We see no difference between a law which denies equal
protection and a law which permits of such denial. A law may appear to be
fair on its face and impartial in appearance, yet, if it permits of unjust and
illegal discrimination. it is within the constitutional prohibition. In other words,
statutes may be adjudged unconstitutional because of their effect in
operation. If a law has the effect of denying the equal protection of the law it
is unconstitutional.
35.ID.; ID.; ID.; SECTION 11 OF PROBATION ACT; GOVERNMENT OF
LAWS; EQUALITY CLAUSE NOT "A ROPE OF SAND". Under section 11 of

the Probation Act, not only may said Act be in force in one or several
provinces and not be in force in the other provinces, but one province may
appropriate for the salary of a probation officer of a given year and have
probation during that year and thereafter decline to make further
appropriation, and have no probation in subsequent years. While this
situation, goes rather to the abuse of discretion which delegation implies, it is
here indicated to show that the Probation Act sanctions a situation which is
intolerable in a government of laws, and to prove how easy it is, under the
Act, to make the guaranty of the equality clause but "a rope of sand."
36.ID.; PARTIAL UNCONSTITUTIONALITY; PRESUMPTION AGAINST
MUTILATION OF STATUTE. In seeking the legislative intent, the
presumption is against any mutilation of a statute, and the courts will resort
to elimination only where an unconstitutional pro vision is interjected into a
statute otherwise valid, and is so independent and separable that its removal
will leave the constitutional features and purposes of the act substantially
unaffected by the process.
37.ID.; SECTION 11 OF PROBATION ACT INSEPARABLE FROM REST OF
ACT; PROBATION AND PROBATION OFFICERS. Section 11 of the Probation
Act (No. 4221) is inseparably linked with the other portions of the Act that
with the elimination of the section what would be left is the bare idealism of
the system, devoid of any practical benefit to a large number of people who
may be deserving of the intended beneficial results of that system. The clear
policy of the law, as may be gleaned from a careful examination of the whole
context, is to make the application of the system dependent entirely upon the
affirmative action of the different provincial boards. If not one of the
provinces and this is the actual situation now appropriates the necessary
fund for the salary of a probation officer, probation under Act No. 4221 would
be illusory. There can be no probation without a probation officer. Neither can
there be a probation officer with out a probation system.
38.ID.; ID.; PROBATION ACT ANALYZED; SECTIONS 10 AND 11 ACT;
RULE OF STATUTORY CONSTRUCTION. The probation officer the
administrative personnel referred to in section 10 are clearly not those
probation officers required to be appointed for the provinces under section
11. It may be said, reddendo singula singulis, that the probation officers
referred to in section 10 are to act as such, not in the various provinces, but
in the central office known as the Probation Office established in the
Department of Justice, under the supervision of a Chief Probation Officer.
When the law provides that "the probation officer" shall investigate and make
reports to the court; that "the probation officer" shall supervise and visit the
probationer; that the probationer shall report to the "probation officer", shall

al low "the probation officer" to visit him, shall truthfully answer any
reasonable inquiries on the part of "the probation officer" concerning his
conduct or condition; that the court shall notify "the probation officer" in
writing of the period and terms of probation, it means the probation officer
who is in charge of a particular probationer in a particular province. It never
could have been the intention of the legislature, for instance, to re quire a
probationer in Batanes, to report to a probation officer in the City of Manila,
or to require a probation officer in Manila to visit the probationer in the said
province of Batanes, to place him under his care, to supervise his conduct, to
instruct him concerning the conditions of his probation or to perform such
other functions as are assigned to him by law.
39.ID.; ID.; ID.; ID.; WISDOM AND PROPRIETY OF LEGISLATION;
PROGRESSIVE INTERPRETATION AND JUDICIAL LEGISLATION. That under
section 10 the Secretary of Justice may appoint as many probation officers as
there are provinces or groups of provinces is, of course, possible. But this
would be arguing on what the law may beor should beand not on what the
law is. Between is and ought there is a far cry. The wisdom and propriety of
legislation is not for us to pass upon. We may think a law better otherwise
than it is. But much as has been said regarding progressive interpretation and
judicial legislation we decline to amend the law. We are not permitted to read
into the law matters and provisions which are not there. Not for any purpose
not even to save a statute from the doom of invalidity.
40.ID.; ID.; ID.; ID.; APPROPRIATION OF FUNDS; APPOINTMENT OF
PROBATION OFFICERS BY SECRETARY OF JUSTICE; JUDICIAL NOTICE.
The clear intention and policy of the law is not to make the Insular
Government defray the salaries of probation officers in the provinces but to
make the provinces defray them should they desire to have the Probation Act
apply thereto. The sum of P50,000, appropriated "to carry out the purposes
of this Act", is to be applied, among other things, for the salaries of probation
officers in the central office at Manila. These probation officers are to receive
such compensation as the Secretary of Justice may fix "until such positions
shall have been included in the Appropriation Act". It was not the intention of
the legislature to empower the Secretary of Justice to fix the salaries of
probation officers in the provinces or later on to include said salaries in an
appropriation act. Considering, further, that the sum of P50,000, appropriated
in section 10 is to cover, among other things, the salaries of the
administrative personnel of the Probation Office, what would be left of the
amount can hardly be said to be sufficient to pay even nominal salaries to
probation officers in the provinces. We take judicial notice of the fact that
there are 48 provinces in the Philippines, and we do not think it is seriously

contended that, with the fifty thousand pesos appropriated for the central
office, there can be in each province, as intended, a probation officer with a
salary not lower than that of a provincial fiscal. If this is correct, the
contention that without section 11 of Act No. 4221 said act is complete is an
impracticable thing under the remainder of the Act, unless it is conceded that
there can be a system of probation in the provinces without probation
officers.
41.ID.; PROBATION AS DEVELOPMENT OF MODERN PENOLOGY;
PROBATION ACT AS REPUGNANT TO FUNDAMENTAL LAW. Probation as a
development of modern penology is a commendable system. Probation laws
have been enacted, here and in other countries, to permit what modern
criminologists call the "individualization of punishment", the adjustment of the
penalty to the character of the criminal and the circumstances of his particular
case. It provides a period of grace in order to aid in the rehabilitation of a
penitent offender. It is believed that, in many cases, convicts may be
reformed and their development into hardened criminals aborted. It,
therefore, takes advantage of an opportunity for reformation and avoids
imprisonment so long as the convict gives promise of reform. The welfare of
society is its chief end and aim. The benefit to the individual convict is merely
incidental. But while probation is commendable as a system and its
implantation into the Philippines should be welcomed, the law is set aside
because of repugnancy to the fundamental law.
42.ID.; CONSTITUTIONAL RELATIONS; RULES OF STATUTORY
CONSTRUCTION; DECISIONS OF UNITED STATES COURTS; LOCAL
CONDITIONS AND ENVIRONMENT. The constitutional relations between
the Federal and the State governments of the United States and the dual
character of the American Government is a situation which does not obtain in
the Philippines. The situation of a state of the American Union or of the
District of Columbia with reference to the Federal Government of the United
States is not the situation of a province with respect to the Insular
Government; the distinct federal and state judicial organizations of the United
States do not embrace the integrated judicial system of the Philippines;
"General propositions do not decide concrete cases" and "to keep pace with .
. . new developments of times and circumstances", fundamental principles
should be interpreted having in view existing local conditions and
environments.
DECISION

LAUREL, J :
p

This is an original action instituted in this court on August 19, 1937, for
the issuance of the writs of certiorari and of prohibition to the Court of First
Instance of Manila so that this court may review the actuations of the
aforesaid Court of First Instance in criminal case No. 42649 entitled
"The People of the Philippine Islands vs. Mariano Cu Unjieng, et al.", more
particularly the application of the defendant Mariano Cu Unjieng therein for
probation under the provisions of Act No. 4221, and thereafter prohibit the
said Court of First Instance from taking any further action or entertaining
further the aforementioned application for probation, to the end that the
defendant Mariano Cu Unjieng may be forthwith committed to prison in
accordance with the final judgment of conviction rendered by this court in
said case (G. R. No. 41200). 1
Petitioners herein, the People of the Philippine Islands and the
Hongkong and Shanghai Banking Corporation, are respectively the plaintiff
and the offended party, and the respondent herein Mariano Cu Unjieng is one
of the defendants, in the criminal case entitled "The People of the Philippine
Islands vs. Mariano Cu Unjieng, et al.", criminal case No. 42649 of the Court
of First Instance of Manila and G. R. No. 41200 of this court. Respondent
herein, Hon. Jose O. Vera, is the Judge ad interim of the seventh branch of
the Court of First Instance of Manila, who heard the application of the
defendant Mariano Cu Unjieng for probation in the aforesaid criminal case.
The information in the aforesaid criminal case was filed with the Court
of First Instance of Manila on October 15, 1931, petitioner herein Hongkong
and Shanghai Banking Corporation intervening in the case as private
prosecutor. After a protracted trial unparalleled in the annals of Philippine
jurisprudence both in the length of time spent by the court as well as in the
volume of the testimony and the bulk of exhibits presented, the Court of First
Instance of Manila, on January 8, 1934, rendered a judgment of conviction
sentencing the defendant Mariano Cu Unjieng to an indeterminate penalty
ranging from four years and two months of prision correccional to eight years
of prison mayor, to pay the costs and with reservation of civil action to the
offended party, the Hongkong and Shanghai Banking Corporation. Upon
appeal, the court, on March 26, 1935, modified the sentence to an
indeterminate penalty of from five years and six months of prision
correccional to seven years, six months and twenty-seven days of prison
mayor, but affirmed the judgment in all other respects. Mariano Cu Unjieng
filed a motion for reconsideration and four successive motions for new trial

which were denied on December 17, 1935, and final judgment was
accordingly entered on December 18, 1935. The defendant thereupon sought
to have the case elevated on certiorari to the Supreme Court of the United
States but the latter denied the petition for certiorari in November, 1936. This
court, on November 24, 1936, denied the petition subsequently filed by the
defendant for leave to file a second alternative motion for reconsideration or
new trial and thereafter remanded the case to the court of origin for
execution of the judgment.
The instant proceedings have to do with the application for probation
filed by the herein respondent Mariano Cu Unjieng on November 27, 1936,
before the trial court, under the provisions of Act No. 4221 of the defunct
Philippine Legislature. Herein respondent Mariano Cu Unjieng states in his
petition, inter alia, that he is innocent of the crime of which he was convicted,
that he has no criminal record and that he would observe good conduct in the
future. The Court of First Instance of Manila, Judge Pedro Tuason presiding,
referred the application for probation to the Insular Probation Office which
recommended denial of the same on June 18, 1937. Thereafter, the Court of
First Instance of Manila, seventh branch, Judge Jose O. Vera presiding, set
the petition for hearing on April 5, 1937.
On April 2, 1937, the Fiscal of the City of Manila filed an opposition to
the granting of probation to the herein respondent Mariano Cu Unjieng. The
private prosecution also filed an opposition on April 5, 1937, alleging, among
other things, that Act No. 4221, assuming that it has not been repealed by
section 2 of Article XV of the Constitution, is nevertheless violative of section
1, subsection (1), Article III of the Constitution guaranteeing equal protection
of the laws for the reason that its applicability is not uniform throughout the
Islands and because section 11 of said Act No. 4221 endows the provincial
boards with the power to make said law effective or otherwise in their
respective provinces. The private prosecution also filed a supplementary
opposition on April 19, 1937, elaborating on the alleged unconstitutionality of
Act No. 4221, as an undue delegation of legislative power to the provincial
boards of several provinces (sec. 1, Art. VI, Constitution). The City Fiscal
concurred in the opposition of the private prosecution except with respect to
the questions raised concerning the constitutionality of Act No. 4221.
On June 28, 1937, herein respondent Judge Jose O. Vera promulgated
a resolution with a finding that "las pruebas no han establecido de una
manera concluyente la culpabilidad del peticionario y que todos los hechos
probados no son inconsistentes o incongruentes con su inocencia" and
concludes that the herein respondent Mariano Cu Unjieng "es inocente por
duda racional" of the crime for which he stands convicted by this court in G.

R. No. 41200, but denying the latter's petition for probation for the reason
that:
". . . Si este Juzgado concediera la probacion solicitada por las
circunstancias y la historia social que se han expuesto en el cuerpo de
esta resolucion, que hacen al peticionario acreedor de la misma, una
parte de la opinion publica, atizada por los recelos y las suspicacias,
podria levantarse indignada contra un sistema de probacion que permite
atisbar en los procedimientos ordinarios de una causa criminal
perturbando la quietud y la eficacia de las decisiones ya recaidas al traer
a la superficie conclusiones enteramente diferentes, en menoscabo del
interes publico que demanda el respeto de las leyes y del veredicto
judicial."

On July 3, 1937, counsel for the herein respondent Mariano Cu Unjieng

filed an exception to the resolution denying probation and a notice of
intention to file a motion for reconsideration. An alternative motion for
reconsideration or new trial was filed by counsel on July 13, 1937. This was
supplemented by an additional motion for reconsideration submitted on July
14, 1937. The aforesaid motions were set for hearing on July 31, 1937, but
said hearing was postponed at the petition of counsel for the respondent
Mariano Cu Unjieng because a motion for leave to intervene in the case
as amici curiae signed by thirty-three (thirty-four) attorneys had just been
filed with the trial court. Attorney Eulalio Chaves whose signature appears in
the aforesaid motion subsequently filed a petition for leave to withdraw his
appearance as amicus curiae on the ground that the motion for leave to
intervene as amici curiae was circulated at a banquet given by counsel for
Mariano Cu Unjieng on the evening of July 30, 1937, and that he signed the
same "without mature deliberation and purely as a matter of courtesy to the
person who invited me (him)."
On August 6, 1937, the Fiscal of the City of Manila filed a motion with
the trial court for the issuance of an order of execution of the judgment of
this court in said case and forthwith to commit the herein respondent Mariano
Cu Unjieng to jail in obedience to said judgment.
On August 7, 1937, the private prosecution filed its opposition to the
motion for leave to intervene as amici curiae aforementioned, asking that a
date be set for the hearing of the same and that, at all events, said motion
should be denied with respect to certain attorneys signing the same who were
members of the legal staff of the several counsel for Mariano Cu Unjieng. On
August 10, 1937, herein respondent Judge Jose O. Vera issued an order
requiring all parties including the movants for intervention as amici curiae to
appear before the court on August 14, 1937. On the last mentioned date, the

Fiscal of the City of Manila moved for the hearing of his motion for execution
of judgment in preference to the motion for leave to intervene as amici
curiae but, upon objection of counsel for Mariano Cu Unjieng, he moved for
the postponement of the hearing of both motions. The respondent judge
thereupon set the hearing of the motion for execution on August 21, 1937,
but proceeded to consider the motion for leave to intervene as amici curiae as
in order. Evidence as to the circumstances under which said motion for leave
to intervene as amici curiae was signed and submitted to court was to have
been heard on August 19, 1937. But at this juncture, herein petitioners came
to this court on extraordinary legal process to put an end to what they alleged
was an interminable proceeding in the Court of First Instance of Manila which
fostered "the campaign of the defendant Mariano Cu Unjieng for delay in the
execution of the sentence imposed by this Honorable Court on him, exposing
the courts to criticism and ridicule because of the apparent inability of the
judicial machinery to make effective a final judgment of this court imposed on
the defendant Mariano Cu Unjieng."
The scheduled hearing before the trial court was accordingly suspended
upon the issuance of a temporary restraining order by this court on August
21, 1937.
To support their petition for the issuance of the extraordinary writs of
certiorari and prohibition, herein petitioners allege that the respondent judge
has acted without jurisdiction or in excess of his jurisdiction:
I.Because said respondent judge lacks the power to place respondent
Mariano Cu Unjieng under probation for the following reasons:
(1)Under section 11 of Act No. 4221, the said Act of the Philippine
Legislature is made to apply only to the provinces of the Philippines; it
nowhere states that it is to be made applicable to chartered cities like the City
of Manila.
(2)While section 37 of the Administrative Code contains a proviso to the
effect that in the absence of a special provision, the term "province" may be
construed to include the City of Manila for the purpose of giving effect to laws
of general application, it is also true that Act No. 4221 is not a law of general
application because it is made to apply only to those provinces in which the
respective provincial boards shall have provided for the salary of a probation
officer.
(3)Even if the City of Manila were considered to be a province, still, Act
No. 4221 would not be applicable to it because it has not provided for the
salary of a probation officer as required by section 11 thereof; it being
immaterial that there is an Insular Probation Office willing to act for the City

of Manila, said Probation Office provided for in section 10 of Act No. 4221
being different and distinct from the Probation Officer provided for in section
11 of the same Act.
II.Because even if the respondent judge originally had jurisdiction to
entertain the application for probation of the respondent Mariano Cu Unjieng,
he nevertheless acted without jurisdiction or in excess thereof in continuing to
entertain the motion for reconsideration and by failing to commit Mariano Cu
Unjieng to prison after he had promulgated his resolution of June 28, 1937,
denying Mariano Cu Unjieng's application for probation, for the reason that:
(1)His jurisdiction and power in probation proceedings is limited by Act
No. 4221 to the granting or denying of applications for probation.
(2)After he had issued the order denying Mariano Cu Unjieng's petition
for probation on June 28, 1937, it became final and executory at the moment
of its rendition.
(3)No right of appeal exists in such cases.
(4)The respondent judge lacks the power to grant a rehearing of said
order or to modify or change the same.
III.Because the respondent judge made a finding that Mariano Cu
Unjieng is innocent of the crime for which he was convicted by final judgment
of this court, which finding is not only presumptuous but without foundation
in fact and in law, and is furthermore in contempt of this court and a violation
of the respondent's oath of office as ad interim judge of first instance.
IV.Because the respondent judge has violated and continues to violate
his duty, which became imperative when he issued his order of June 28,
1937, denying the application for probation, to commit his co-respondent to
jail.
Petitioners also aver that they have no other plain, speedy and
adequate remedy in the ordinary course of law.
In a supplementary petition filed on September 9, 1937, the petitioner
Hongkong and Shanghai Banking Corporation further contends that Act No.
4221 of the Philippine Legislature providing for a system of probation for
persons eighteen years of age or over who are convicted of crime, is
unconstitutional because it is violative of section 1, subsection (1), Article III,
of the Constitution of the Philippines guaranteeing equal protection of the
laws because it confers upon the provincial board of each province the
absolute discretion to make said law operative or other wise in their
respective provinces, because it constitutes an unlawful and improper

delegation to the provincial boards of the several provinces of the legislative

power lodged by the Jones Law (section 8), in the Philippine Legislature and
by the Constitution (section 1, Art. VI) in the National Assembly; and for the
further reason that it gives the provincial boards, in contravention of the
Constitution (section 2, Art. VIII) and the Jones Law (section 28), the
authority to enlarge the powers of the Courts of First Instance of the different
provinces without uniformity. In another supplementary petition dated
September 14, 1937, the Fiscal of the City of Manila, in behalf of one of the
petitioners, the People of the Philippine Islands, concurs for the first time with
the issues raised by the other petitioner regarding the constitutionality of Act
No. 4221, and in the oral argument held on October 6, 1937, further
elaborated on the theory that probation is a form of reprieve and therefore
Act No. 4221 is an encroachment on the exclusive power of the Chief
Executive to grant pardons and reprieves. On October 7, 1937, the City Fiscal
filed two memorandums in which he contended that Act No. 4221 not only
encroaches upon the pardoning power of the executive, but also constitutes
an unwarranted delegation of legislative power and a denial of the equal
protection of the laws. On October 9, 1937, two memorandums, signed jointly
by the City Fiscal and the Solicitor-General, acting in behalf of the People, of
the Philippine Islands, and by counsel for the other petitioner, the Hongkong
and Shanghai Banking Corporation, one sustaining the power of the state to
impugn the validity of its own laws and the other contending that Act No.
4221 constitutes an unwarranted delegation of legislative power, were
presented. Another joint memorandum was filed by the same persons on the
same day, October 9, 1937, alleging that Act No. 4221 is unconstitutional
because it denies the equal protection of the laws and constitutes an unlawful
delegation of legislative power and, further, that the whole Act is void; that
the Commonwealth is not estopped from questioning the validity of its laws;
that the private prosecution may intervene in probation proceedings and may
attack the probation law as unconstitutional; and that this court may pass
upon the constitutional question in prohibition proceedings.
Respondents in their answer dated August 31, 1937, as well as in their
oral argument and memorandums, challenge each and every one of the
foregoing proposition raised by the petitioners.
As special defenses, respondents allege:
(1)That the present petition does not state facts sufficient in law to
warrant the issuance of the writ of certiorari or of prohibition.
(2)That the aforesaid petition is premature because the remedy sought
by the petitioners is the very same remedy prayed for by them before the trial

court and was still pending resolution before the trial court when the present
petition was filed with this court.
(3)That the petitioners having themselves raised the question as to the
execution of judgment before the trial court, said trial court has acquired
exclusive jurisdiction to resolve the same under the theory that its resolution
denying probation is unappealable.
(4)That upon the hypothesis that this court has concurrent jurisdiction
with the Court of First Instance to decide the question as to whether or not
execution will lie, this court nevertheless cannot exercise said jurisdiction
while the Court of First Instance has assumed jurisdiction over the same upon
motion of herein petitioners themselves.
(5)That the procedure followed by the herein petitioners in seeking to
deprive the trial court of its jurisdiction over the case and elevate the
proceedings to this court, should not be tolerated because it impairs the
authority and dignity of the trial court which court while sitting in probation
cases is "a court of limited jurisdiction but of great dignity."
(6)That, under the supposition that this court has jurisdiction to resolve
the question submitted to and pending resolution by the trial court, the
present action would not lie because the resolution of the trial court denying
probation is appealable; for although the Probation Law does not specifically
provide that an applicant for probation may appeal from a resolution of the
Court of First Instance denying probation, still it is a general rule in this
jurisdiction that a final order, resolution or decision of an inferior court is
appealable to the superior court.
(7)That the resolution of the trial court denying probation of herein
respondent Mariano Cu Unjieng being appealable, the same had not yet
become final and executory for the reason that the said respondent had filed
an alternative motion for reconsideration and new trial within the requisite
period of fifteen days, which motion the trial court was not able to resolve in
view of the restraining order improvidently and erroneously issued by this
court.
(8)That the Fiscal of the City of Manila had by implication admitted that
the resolution of the trial court denying probation is not final and
unappealable when he presented his answer to the motion for reconsideration
and agreed to the postponement of the hearing of the said motion.
(9)That under the supposition that the order of the trial court denying
probation is not appealable, it is incumbent upon the accused to file an action
for the issuance of the writ of certiorari with mandamus, it appearing that the
trial court, although it believed that the accused was entitled to probation,

nevertheless denied probation for fear of criticism because the accused is a

rich man; and that, before a petition for certiorari grounded on an irregular
exercise of jurisdiction by the trial court could lie, it is incumbent upon the
petitioner to file a motion for reconsideration specifying the error committed
so that the trial court could have. an opportunity to correct or cure the same.
(10)That on the hypothesis that the resolution of the trial court is not
appealable, the trial court retains its jurisdiction within a reasonable time to
correct or modify it in accordance with law and justice; that this power to
alter or modify an order or resolution is inherent in the courts and may be
exercised either motu proprio or upon petition of the proper party, the
petition in the latter case taking the form of a motion for reconsideration.
(11)That on the hypothesis that the resolution of the trial court is
appealable as respondents allege, said court cannot order execution of the
same while it is on appeal, for then the appeal would not be availing because
the doors of probation would be closed from the moment the accused
commences to serve his sentence (Act No. 4221, sec. 1; U. S. vs. Cook, 19
Fed. [2d], 827).
In their memorandums filed on October 23, 1937, counsel for the
respondents maintain that Act No. 4221 is constitutional because, contrary to
the allegations of the petitioners, it does not constitute an undue delegation
of legislative power, does not infringe the equal protection clause of the
Constitution, and does not encroach upon the pardoning power of the
Executive. In an additional memorandum filed on the same date, counsel for
the respondents reiterate the view that section 11 of Act No. 4221 is free
from constitutional objections and contend, in addition, that the private
prosecution may not intervene in probation proceedings, much less question
the validity of Act No. 4221; that both the City Fiscal and the Solicitor-General
are estopped from questioning the validity of the Act; that the validity of the
Act cannot be attacked for the first time before this court; that prohibition is
unavailable; and that, in any event, section 11 of Act No. 4221 is separable
from the rest of the Act. The last memorandum for the respondent Mariano
Cu Unjieng was denied for having been filed out of time but was admitted by
resolution of this court and filed anew on November 5, 1937. This
memorandum elaborates on some of the points raised by the respondents
and refutes those brought up by the petitioners.
In the scrutiny of the pleadings and examination of the various aspect
of the present case, we noted that the court below, in passing upon the
merits of the application of the respondent Mariano Cu Unjieng and in

denying the said application assumed the task not only of considering the
merits of the application, but of passing upon the culpability of the applicant,
notwithstanding the final pronouncement of guilt by this court. (G. R. No.
41200.) Probation implies guilt by final judgment. While a probation court
hearing a probation case may look into the circumstances attending the
commission of the offense, this does not authorize it to reverse the findings
and conclusions of this court, either directly or indirectly, especially where
from its own admission reliance was merely had on the printed briefs,
averments, and pleadings of the parties. As already observed by this court in
Shioji vs.Harvey ([1922], 43 Phil., 333, 337), and reiterated in subsequent
cases, "if each and every Court of First Instance could enjoy the privilege of
overruling decisions of the Supreme Court, there would be no end to
litigation, and judicial chaos would result." A becoming modesty of inferior
courts demands conscious realization of the position that they occupy in the
interrelation and operation of the integrated judicial system of the nation.
After threshing carefully the multifarious issues raised by both counsel
for the petitioners and the respondents, this court prefers to cut the Gordian
knot and take up at once the two fundamental questions presented, namely,
(1) whether or not the constitutionality of Act No. 4221 has been properly
raised in these proceedings; and (2) in the affirmative, whether or not said
Act is constitutional. Consideration of these issues will involve a discussion of
certain incidental questions raised by the parties.
To arrive at a correct conclusion on the first question, resort to certain
guiding principles is necessary. It is a well-settled rule that the
constitutionality of an act of the legislature will not be determined by the
courts unless that question its properly raised and presented in appropriate
cases and is necessary to a determination of the case; i. e., the issue of
constitutionality must be the very lis mota presented. (McGirr vs. Hamilton
and Abreu [1915], 30 Phil., 563, 568; 6 R. C. L., pp. 76, 77; 12 C. J., pp. 780782, 783.)
The question of the constitutionality of an act of the legislature is
frequently raised in ordinary actions. Nevertheless, resort may be made to
extraordinary legal remedies, particularly where the remedies in the ordinary
course of law even if available, are not plain, speedy and adequate. Thus, in
Cu Unjieng vs. Patstone ([1922], 42 Phil., 818), this court held that the
question of the constitutionality of a statute may be raised by the petitioner in
-mandamus proceedings (see, also, 12 C. J., p. 783); and in Government of
the Philippine Islands vs. Springer ([1927], 50 Phil., 259 [affirmed in
Springer vs. Government of the Philippine Islands (1928), 277 U. S., 189; 72
Law. ed., 845]), this court declared an act of the legislature unconstitutional

in an action of quo warranto brought in the name of the Government of the

Philippines. It has also been held that the constitutionality of a statute may be
questioned inhabeas corpus proceedings (12 C. J., p. 783; Bailey on Habeas
Corpus, Vol. I, pp. 97, 117), although there are authorities to the contrary; on
an application for injunction to restrain action under the challenged statute
(mandatory, see Cruz vs. Youngberg [1931], 56 Phil., 234); and even on an
application for preliminary injunction where the determination of the
constitutional question is necessary to a decision of the case. (12 C. J., p.
783.) The same may be said as regards prohibition and certiorari. (Yu Cong
Eng vs. Trinidad [1925], 47 Phil., 385; [1926], 271 U. S., 500: 70 Law. ed.,
1059; Bell vs. First Judicial District Court [1905], 28 Nev., 280; 81 Pac., 875;
113 A. S. R., 854; 6 Ann. Cas., 982; 1 L. R. A. [N. S], 843, and cases cited).
The case of Yu Cong Eng vs. Trinidad, supra, decided by this court twelve
years ago was, like the present one, an original action for certiorari and
prohibition. The constitutionality of Act No. 2972, popularly known as the
Chinese Bookkeeping Law, was there challenged by the petitioners, and the
constitutional issue was met squarely by the respondents in a demurrer. A
point was raised "relating to the propriety of the constitutional question being
decided in original proceedings in prohibition." This court decided to take up
the constitutional question and, with two justices dissenting, held that Act No.
2972 was constitutional. The case was elevated on writ of certiorari to the
Supreme Court of the United States which reversed the judgment of this court
and held that the Act was invalid. (271 U. S., 500; 70 Law. ed., 1059.) On the
question of jurisdiction, however, the Federal Supreme Court, though its Chief
Justice, said:
"By the Code of Civil Procedure of the Philippine Islands, section
516, the Philippine supreme court is granted concurrent jurisdiction in
prohibition with courts of first instance over inferior tribunals or persons,
and original jurisdiction over courts of first instance, when such courts
are exercising functions without or in excess of their jurisdiction. It has
been held by that Court that the question of the validity of a criminal
statute must usually be raised by a defendant in the trial court and be
carried regularly in review to the Supreme Court. (Cadwallader-Gibson
Lumber Co. vs. Del Rosario, 26 Phil., 192.) But in this case where a new
act seriously affected numerous persons and extensive property rights,
and was likely to cause a multiplicity of actions, the Supreme Court
exercised its discretion to bring the issue of the act's validity promptly
before it and decide it in the interest of the orderly administration of
justice. The court relied by analogy upon the cases of Ex parteYoung
(209 U. S., 123; 52 Law. ed., 714; 13 L. R. A. [N. S.], 932; 28 Sup. Ct.
Rep., 441; 14 Ann. Cas., 764; Traux vs. Raich, 239 U. S., 33, 60 Law.
ed., 131; L. R. A. 1916D, 545; 36 Sup. Ct. Rep., 7; Ann. Cas., 1917B,

283; and Wilson vs. New, 243 U. S., 332; 61 Law. ed., 755; L. R. A.
1917E, 938; 37 Sup. Ct. Rep., 298; Ann. Cas., 1918A, 1024). Although
objection to the jurisdiction was raised by demurrer to the petition, this
is now disclaimed on behalf of the respondents, and both parties ask a
decision on the merits. In view of broad powers in prohibition granted to
that court under the Island Code, we acquiesce in the desire of the
parties."

The writ of prohibition is an extraordinary judicial writ issuing out of a

court of superior jurisdiction and directed to an inferior court, for the purpose
of preventing the inferior tribunal from usurping a jurisdiction with which it is
not legally vested.) (High, Extraordinary Legal Remedies, p. 705.) The general
rule, although there is a conflict in the cases, is that the writ of prohibition will
not lie where the inferior court has jurisdiction independent of the statute the
constitutionality of which is questioned, because in such cases the inferior
court having jurisdiction may itself determine the constitutionality of the
statute, and its decision may be subject to review, and consequently the
complainant in such cases ordinarily has adequate remedy by appeal without
resort to the writ of prohibition. But where the inferior court or tribunal

derives its jurisdiction exclusively from an unconstitutional statute, it may be

prevented by the writ of prohibition from enforcing that statute. (50 C. J.,
670; Ex parte Roundtree [1874], 51 Ala., 42; In re Macfarland. 30 App. [D.
C.], 365; Curtis vs. Cornish [1912], 109 Me., 384; 84 A., 799;
Pennington vs.Woolfolk [1880], 79 Ky., 13; State vs. Godfrey [1903], 54 W.
Va., 54; 46 S. E., 185; Arnold vs. Shields [1837], 5 Dana, 19; 30 Am. Dec.,
669.)

Courts of First Instance sitting in probation proceedings derive their

jurisdiction solely from Act No. 4221 which prescribes in detailed manner the
procedure for granting probation to accused persons after their conviction has
become final and before they have served their sentence. It is true that at
common law the authority of the courts to suspend temporarily the execution
of a sentence is recognized and, according to a number of state courts,
including those of Massachusetts, Michigan, New York, and Ohio, the power is
inherent in the courts (Commonwealth vs.Dowdican's Bail [1874], 115 Mass.,
133; People vs. Stickel [1909], 156 Mich., 557; 121 N. W., 497; People ex
rel.Forsyth vs. Court of Sessions [1894], 141 N. Y., 288; Weber vs. State
[1898], 58 Ohio St., 616). But, in the leading case of Ex parte United States
([1916], 242 U. S., 27; 61 Law. ed., 129; L. R. A., 1917E, 1178; 37 Sup. Ct.
Rep., 72; Ann. Cas. 1917B, 355), the Supreme Court of the United States
expressed the opinion that under the common law the power of the court was
limited to temporary suspension, and brushed aside the contention as to
inherent judicial power saying, through Chief Justice White:

"Indisputably under our constitutional system the right to try

offenses against the criminal laws and upon conviction to impose the
punishment provided by law is judicial, and it is equally to be conceded
that, in exerting the powers vested in them on such subject, courts
inherently possess ample right to exercise reasonable, that is, judicial,
discretion to enable them to wisely exert their authority. But these
concessions afford no ground for the contention as to power here made,
since it must rest upon the proposition that the power to enforce begets
inherently a discretion to permanently refuse to do so. And the effect of
the proposition urged upon the distribution of powers made by the
Constitution will become apparent when it is observed that indisputable
also is it that the authority to define and fix the punishment for crime is
legislative and includes the right in advance to bring within judicial
discretion, for the purpose of executing the statute, elements of
consideration which would be otherwise beyond the scope of judicial
authority, and that the right to relieve from the punishment, fixed by law
and ascertained according to the methods by it provided belongs to the
executive department."

Justice Carson, in his illuminating concurring opinion in the case of

Director of Prisons vs. Judge of First Instance of Cavite (29 Phil., 265),
decided by this court in 1915, also reached the conclusion that the power to
suspend the execution of sentences pronounced in criminal cases is not
inherent in the judicial function. "All are agreed", he said, "that in the absence
of statutory authority, it does not lie within the power of the courts to grant
such suspensions." (at p. 278.) Both petitioners and respondents are correct,
therefore, when they argue that a Court of First Instance sitting in probation
proceedings is a court of limited jurisdiction. Its jurisdiction in such
proceedings is conferred exclusively by Act No. 4221 of the Philippine
Legislature.
It is, of course, true that the constitutionality of a statute will not be
considered on application for prohibition where the question has not been
properly brought to the attention of the court by objection of some kind
(Hill vs.Tarver [1901], 130 Ala., 592; 30 S., 499; State ex rel. Kelly vs. Kirby
[1914], 260 Mo., 120; 168 S. W., 746). In the case at bar, it is
unquestionable that the constitutional issue has been squarely presented not
only before this court by the petitioners but also before the trial court by the
private prosecution. The respondent, Hon. Jose O. Vera, however, acting as
judge of the court below, declined to pass upon the question on the ground
that the private prosecutor, not being a party whose rights are affected by
the statute, may not raise said question. The respondent judge cited Cooley

on Constitutional Limitations (Vol. I, p. 339; 12 C. J., sec. 177, pp. 760 and
762), and McGlue vs.Essex County ([1916], 225 Mass., 59; 113 N. E., 742,
743), as authority for the proposition that a court will not consider any attack
made on the constitutionality of a statute by one who has no interest in
defeating it because his rights are not affected by its operation. The
respondent judge further stated that it may not motu proprio take up the
constitutional question and, agreeing with Cooley that "the power to declare a
legislative enactment void is one which the judge, conscious of the fallibility of
the human judgment, will shrink from exercising in any case where he can
conscientiously and with due regard to duty and official oath decline the
responsibility" (Constitutional Limitations, 8th ed., Vol. I, p. 332), proceeded
on the assumption that Act No. 4221 is constitutional. While, therefore, the
court a quoadmits that the constitutional question was raised before it, it
refused to consider the question solely because it was not raised by a proper
party. Respondents herein reiterate this view. The argument is advanced that
the private prosecution has no personality to appear in the hearing of the
application for probation of defendant Mariano Cu Unjieng in criminal case
No. 42648 of the Court of First Instance of Manila, and hence the issue of
constitutionality was not properly raised in the lower court. Although, as a
general rule, only those who are parties to a suit may question the
constitutionality of a statute involved in a judicial decision, it has been held
that since the decree pronounced by a court without jurisdiction is void,
where the jurisdiction of the court depends on the validity of the statute in
question, the issue of constitutionality will be considered on its being brought
to the attention of the court by persons interested in the effect to be given
the statute. (12 C. J., sec. 184, p. 766.) And, even if we were to concede that
the issue was not properly raised in the court below by the proper party, it
does not follow that the issue may not be here raised in an original action of
certiorari and prohibition. It is true that, as a general rule, the question of
constitutionality must be raised at the earliest opportunity, so that if not
raised by the pleadings, ordinarily it may not be raised at the trial, and if not
raised in the trial court, it will not be considered on appeal. (12 C. J., p.
786. See, also, Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192,
193-195.) But we must state that the general rule admits of exceptions.
Courts, in the exercise of sound discretion, may determine the time when a
question affecting the constitutionality of a statute should be presented. ( In
re Woolsey [1884], 95 N. Y., 135, 144.) Thus, in criminal cases, although
there is a very sharp conflict of authorities, it is said that the question may be
raised for the first time at any stage of the proceedings, either in the trial
court or on appeal. (12 C. J., p. 786.) Even in civil cases, it has been held that
it is the duty of a court to pass on the constitutional question, though raised

for the first time on appeal, if it appears that a determination of the question
is necessary to a decision of the case. (McCabe's Adm'x. vs. Maysville & B. S.
R. Co. [1910], 136 Ky., 674; 124 S. W., 892; Lohmeyer vs. St. Louis Cordage
Co. [1908], 214 Mo., 685; 113 S. W., 1108; Carmody vs. St. Louis Transit Co.
[1905], 188 Mo., 572; 87 S. W., 913.) And it has been held that a
constitutional question will be considered by an appellate court at any time,
where it involves the jurisdiction of the court below (State vs. Burke [1911],
175 Ala., 561; 57 S., 870.) As to the power of this court to consider the
constitutional question raised for the first time before this court in these
proceedings, we turn again and point with emphasis to the case of Yu Cong
Eng vs. Trinidad, supra. And on the hypothesis that the Hongkong & Shanghai
Banking Corporation, represented by the private prosecution, is not the
proper party to raise the constitutional question here a point we do not
now have to decide we are of the opinion that the People of the
Philippines, represented by the Solicitor-General and the Fiscal of the City of
Manila, is such a proper party in the present proceedings. The unchallenged
rule is that the person who impugns the validity of a statute must have a
personal and substantial interest in the case such that he has sustained, or
will sustain, direct injury as a result of its enforcement. It goes without saying
that if Act No. 4221 really violates the Constitution, the People of the
Philippines, in whose name the present action is brought, has a substantial
interest in having it set aside. Of greater import than the damage caused by
the illegal expenditure of public funds is the mortal wound inflicted upon the
fundamental law by the enforcement of an invalid statute. Hence, the wellsettled rule that the state can challenge the validity of its own laws. In
Government of the Philippine Islands vs. Springer ([1927], 50 Phil., 259
(affirmed in Springer vs.Government of the Philippine Islands [1928], 277 U.
S., 189; 72 Law. ed., 845), this court declared an act of the legislature
unconstitutional in an action instituted in behalf of the Government of the
Philippines. In Attorney Generalvs. Perkins ([1889], 73 Mich., 303, 311, 312;
41 N. W. 426, 428, 429), the State of Michigan, through its Attorney General,
instituted quo warranto proceedings to test the right of the respondents to
renew a mining corporation, alleging that the statute under which the
respondents base their right was unconstitutional because it impaired the
obligation of contracts. The capacity of the chief law officer of the state to
question the constitutionality of the statute was itself questioned. Said the
Supreme Court of Michigan, through Champlin, J.:
". . . The idea seems to be that the people are estopped from
questioning the validity of a law enacted by their representatives; that to
an accusation by the people of Michigan of usurpation upon their
government, a statute enacted by the people of Michigan is an adequate

answer. The last proposition is true, but, if the statute relied on in

justification is unconstitutional, it is a statute only in form, and lacks the
force of law, and is of no more saving effect to justify action under it
than if it had never been enacted. The constitution is the supreme law,
and to its behests the courts, the legislature, and the people must bow. .
. . The legislature and the respondents are not the only parties in
interest upon such constitutional questions. As was remarked by Mr.
Justice Story, in speaking of an acquiescence by a party affected by an
unconstitutional act of the legislature: 'The people have a deep and
vested interest in maintaining all the constitutional limitations upon the
exercise of legislative powers.' (Allen vs. Mckeen, 1 Sum., 314.)"

In State vs. Doane ([1916], 98 Kan., 435; 158 Pac., 38, 40), an original
action (mandamus) was brought by the Attorney-General of Kansas to test
the constitutionality of a statute of the state. In disposing of the question
whether or not the state may bring the action, the Supreme Court of Kansas
said:
". . . The state is a proper party indeed, the proper party to
bring this action. The state is always interested where the integrity of its
Constitution or statutes is involved.
"'It has an interest in seeing that the will of the Legislature is not
disregarded, and need not, as an individual plaintiff must, show grounds
of fearing more specific injury. (State vs. Kansas City, 60 Kan., 518 [57
Pac., 118]'). (State vs. Lawrence, 80 Kan., 707; 103 Pac., 839.)
"Where the constitutionality of a statute is in doubt the state's
law officer, its Attorney-General, or county attorney, may exercise his
best judgment as to what sort of action he will bring to have the matter
determined, either by quo warranto to challenge its validity
(State vs. Johnson, 61 Kan., 803; 60 Pac., 1068; 49 L. R. A., 662), by
mandamus to compel obedience to its terms (State vs. Dolley, 82 Kan.,
533; 108 Pac., 846), or by injunction to restrain proceedings under its
questionable provisions (State ex rel. vs. City of Neodesha, 3 Kan. App.,
319; 45 Pac., 122)."

Other courts have reached the same conclusion (See State vs. St. Louis
S. W. Ry. Co. [1917], 197 S. W., 1006; State vs. S. H. Kress & Co. [1934],
155 S., 823; State vs. Walmsley [1935], 181 La., 597; 160 S., 91;
State vs. Board of County Comr's [1934], 39 Pac. [2d], 286; First Const. Co.
of Brooklyn vs. State [1917], 221 N. Y., 295; 116 N. E., 1020; Bush vs. State
[1918], 187 Ind., 339; 119 N. E., 417; State vs. Watkins [1933], 176 La.,
837; 147 S., 8, 10, 11). In the case last cited, the Supreme Court of Louisiana
said:

"It is contended by counsel for Herbert Watkins that a district

attorney, being charged with the duty of enforcing the laws, has no right
to plead that a law is unconstitutional. In support of the argument, three
decisions are cited, viz.: State ex rel. Hall, District Attorney, vs. Judge of
Tenth Judicial District (33 La. Ann., 1222); State ex rel. Nicholls,
Governor vs. Shakespeare, Mayor of New Orleans (41 La. Ann., 156; 6
So., 592); and State ex rel. Banking Co., etc. vs. Heard, Auditor (47 La.
Ann., 1679; 18 So., 746; 47 L. R. A., 512). These decisions do not forbid
a district attorney to plead that a statute is unconstitutional if he finds it
in conflict with one which it is his duty to enforce. In State ex rel. Hall,
District Attorney, vs. Judge, etc., the ruling was that the judge should
not, merely because he believed a certain statute to be unconstitutional,
forbid the district attorney to file a bill of information charging a person
with a violation of the statute. In other words, a judge should not
judicially declare a statute unconstitutional until the question of
constitutionality is tendered for decision, and unless it must be decided
in order to determine the right of a party litigant. State ex rel. Nicholls,
Governor, etc., is authority for the proposition merely that an officer on
whom a statute imposes the duty of enforcing its provisions cannot
avoid the duty upon the ground that he considers the statute
unconstitutional, and hence in enforcing the statute he is immune from
responsibility if the statute be unconstitutional. State ex rel. Banking Co.,
etc., is authority for the proposition merely that executive officers, e. g.,
the state auditor and state treasurer, should not decline to perform
ministerial duties imposed upon them by a statute, on the ground that
they believe the statute is unconstitutional.
"It is the duty of a district attorney to enforce the criminal laws of
the state, and, above all, to support the Constitution of the state. If, in
the performance of his duty he finds two statutes in conflict with each
other, or one which repeals another, and if, in his judgment, one of the
two statutes is unconstitutional, it is his duty to enforce the other; and,
in order to do so, he is compelled to submit to the court, by way of a
plea, that one of the statutes is unconstitutional. If it were not so, the
power of the Legislature would be free from constitutional limitations in
the enactment of criminal laws."

The respondents do not seem to doubt seriously the correctness of the

general proposition that the state may impugn the validity of its laws. They
have not cited any authority running clearly in the opposite direction. In fact,
they appear to have proceeded on the assumption that the rule as stated is
sound but that it has no application in the present case, nor may it be invoked
by the City Fiscal in behalf of the People of the Philippines, one of the
petitioners herein, the principal reasons being that the validity of the
Probation Act cannot be attacked for the first time before this court, that the

City Fiscal is estopped from attacking the validity of the Act and, not being
authorized to enforce laws outside of the City of Manila, cannot challenge the
validity of the Act in its application outside said city. (Additional memorandum
of respondents, October 23, 1937, pp. 8, 10, 17 and 23.)
The mere fact that the Probation Act has been repeatedly relied upon in
the past and all that time has not been attacked as unconstitutional by the
Fiscal of Manila but, on the contrary, has been impliedly regarded by him as
constitutional, is no reason for considering the People of the Philippines
estopped from now assailing its validity. For courts will pass upon a
constitutional question only when presented before it in bona fide cases for
determination, and the fact that the question has not been raised before is
not a valid reason for refusing to allow it to be raised later. The fiscal and all
others are justified in relying upon the statute and treating it as valid until it is
held void by the courts in proper cases.
It remains to consider whether the determination of the
constitutionality of Act No. 4221 is necessary to the resolution of the instant
case. For, ". . . while the court will meet the question with firmness, where its
decision is indispensable, it is the part of wisdom, and a just respect for the
legislature, renders it proper, to waive it, if the case in which it arises, can be
decided on other points." (Ex parte Randolph [1833], 20 F. Cas. No. 11,558; 2
Brock., 447.Vide, also, Hoover vs. Wood [1857], 9 Ind., 286, 287.) It has
been held that the determination of a constitutional question is necessary
whenever it is essential to the decision of the case (12 C. J., p. 782, citing
Long Sault Dev. Co.vs. Kennedy [1913], 158 App. Div., 398; 143 N. Y. Supp.,
454 [aff. 212 N. Y., 1; 105 N. E., 849; Ann. Cas. 1915D, 56; and app dism
242 U. S., 272]; Hesse vs. Ledesma, 7 Porto Rico Fed., 520;
Cowan vs. Doddridge, 22 Gratt [63 Va.], 458; Union Line Co .vs. Wisconsin R.
Comm., 146 Wis., 523; 129 N. W., 605), as where the right of a party is
founded solely on a statute, the validity of which is attacked. (12 C. J., p. 782,
citing Central Glass Co. vs. Niagara F. Ins. Co., 131 La., 513; 59 S., 972;
Cheney vs. Beverly, 188 Mass., 81; 74 N. E., 306). There is no doubt that the
respondent Cu Unjieng draws his privilege to probation solely from Act No.
4221 now being assailed.
Apart from the foregoing considerations, this court will also take
cognizance of the fact that the Probation Act is a new addition to our statute
books and its validity has never before been passed upon by the courts; that
many persons accused and convicted of crime in the City of Manila have
applied for probation; that some of them are already on probation; that
more people will likely take advantage of the Probation Act in the future; and
that the respondent Mariano Cu Unjieng has been at large for a period of

about four years since his first conviction. All await the decision of this court
on the constitutional question. Considering, therefore, the importance which
the instant case has assumed and to prevent multiplicity of suits, strong
reasons of public policy demand that the constitutionality of Act No. 4221 be
now resolved. (Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385; [1926], 271 U.
S., 500; 70 Law. ed., 1059. See 6 R. C. L., pp. 77, 78; People vs. Kennedy
[1913], 207 N. Y., 533; 101 N. E., 442, 444; Ann. Cas. 1914C, 616;
Borginis vs. Falk Co. [1911], 147 Wis., 327; 133 N. W., 209, 211; 37 L. R. A.
[N. S.], 489; Dimayuga and Fajardo vs. Fernandez [1922], 43 Phil., 304.) In
Yu Cong Eng vs. Trinidad, supra, an analogous situation confronted us. We
said: "Inasmuch as the property and personal rights of nearly twelve
thousand merchants are affected by these proceedings, and inasmuch as Act
No. 2972 is a new law not yet interpreted by the courts, in the interest of the
public welfare and for the advancement of public policy, we have determined
to overrule the defense of want of jurisdiction in order that we may decide
the main issue. We have here an extraordinary situation which calls for a
relaxation of the general rule." Our ruling on this point was sustained by the
Supreme Court of the United States. A more binding authority in support of
the view we have taken can not be found.
We have reached the conclusion that the question of the
constitutionality of Act No. 4221 has been properly raised. Now for the main
inquiry: Is the Act unconstitutional?
Under a doctrine peculiarly American, it is the office and duty of the
judiciary to enforce the Constitution. This court, by clear implication from the
provisions of section 2, subsection 1, and section 10, of Article VIII of the
Constitution, may declare an act of the national legislature invalid because in
conflict with the fundamental law. It will not shirk from its sworn duty to
enforce the Constitution. And, in clear cases, it will not hesitate to give effect
to the supreme law by setting aside a statute in conflict therewith. This is of
the essence of judicial duty.
This court is not unmindful of the fundamental criteria in cases of this
nature that all reasonable doubts should be resolved in favor of the
constitutionality of a statute. An act of the legislature approved by the
executive, is presumed to be within constitutional limitations. The
responsibility of upholding the Constitution rests not on the courts alone but
on the legislature as well. "The question of the validity of every statute is first
determined by the legislative department of the government itself." (U.
S. vs. Ten Yu [1912], 24 Phil., 1, 10; Case vs. Board of Health and Heiser
[1913], 24 Phil., 250, 276; U. S. vs. Joson [1913], 26 Phil., 1.) And a statute
finally comes before the courts sustained by the sanction of the executive.

The members of the Legislature and the Chief Executive have taken an oath
to support the Constitution and it must be presumed that they have been true
to this oath and that in enacting and sanctioning a particular law they did not
intend to violate the Constitution. The courts cannot but cautiously exercise
its power to overturn the solemn declarations of two of the three grand
departments of the government. (6 R. C. L., p. 101.) Then, there is that
peculiar political philosophy which bids the judiciary to reflect the wisdom of
the people as expressed through an elective Legislature and an elective Chief
Executive. It follows, therefore, that the courts will not set aside a law as
violative of the Constitution except in a clear case. This is a proposition too
plain to require a citation of authorities.
One of the counsel for respondents, in the course of his impassioned
argument, called attention to the fact that the President of the Philippines had
already expressed his opinion against the constitutionality of the Probation
Act, adverting that as to the Executive the resolution of this question was a
foregone conclusion. Counsel, however, reiterated his confidence in the
integrity and independence of this court. We take notice of the fact that the
President in his message dated September 1, 1937, recommended to the
National Assembly the immediate repeal of the Probation Act (No. 4221); that
this message resulted in the approval of Bill No. 2417 of the National
Assembly repealing the Probation Act, subject to certain conditions therein
mentioned; but that said bill was vetoed by the President on September 13,
1937, much against his wish, "to have stricken out from the statute books of
the Commonwealth a law . . . unfair and very likely unconstitutional." It is
sufficient to observe in this connection that, in vetoing the bill referred to, the
President exercised his constitutional prerogative. He may express the
reasons which he may deem proper for taking such a step, but his reasons
are not binding upon us in the determination of actual controversies
submitted for our determination. Whether or not the Executive should express
or in any manner insinuate his opinion on a matter encompassed within his
broad constitutional power of veto but which happens to be at the same time
pending determination in this court is a question of propriety for him
exclusively to decide or determine. Whatever opinion is expressed by him
under these circumstances, however, cannot sway our judgment one way or
another and prevent us from taking what in our opinion is the proper course
of action to take in a given case. If it is ever necessary for us to make any
vehement affirmance during this formative period of our political history, it is
that we are independent of the Executive no less than of the Legislative
department of our government independent in the performance of our
functions, undeterred by any consideration, free from politics, indifferent to

popularity, and unafraid of criticism in the accomplishment of our sworn duty

as we see it and as we understand it.
The constitutionality of Act No. 4221 is challenged on three principal
grounds: (1) That said Act encroaches upon the pardoning power of the
Executive; (2) that it constitutes an undue delegation of legislative power;
and (3) that it denies the equal protection of the laws.
1.Section 21 of the Act of Congress of August 29, 1916, commonly
known as the Jones Law, in force at the time of the approval of Act No. 4221,
otherwise known as the Probation Act, vests in the Governor- General of the
Philippines "the exclusive power to grant pardons and reprieves and remit
fines and forfeitures". This power is now vested in the President of the
Philippines. (Art. VII, sec. 11, subsec. 6.) The provisions of the Jones Law and
the Constitution differ in some respects. The adjective "exclusive" found in
the Jones Law has been omitted from the Constitution. Under the Jones Law,
as at common law, pardon could be granted any time after the commission of
the offense, either before or after conviction (Vide Constitution of the United
States, Art. II, sec. 2; In re Lontok [1922], 43 Phil., 293). The GovernorGeneral of the Philippines was thus empowered, like the President of the
United States, to pardon a person before the facts of the case were fully
brought to light. The framers of our Constitution thought this undesirable and,
following most of the state constitutions, provided that the pardoning power
can only be exercised "after conviction". So, too, under the new Constitution,
the pardoning power does not extend to "cases of impeachment". This is also
the rule generally followed in the United States (Vide Constitution of the
United States, Art. II, sec. 2). The rule in England is different. There, a royal
pardon can not be pleaded in bar of an impeachment; "but," says Blackstone,
"after the impeachment has been solemnly heard and determined, it is not
understood that the king's royal grace is further restrained or abridged."
(Vide, Ex parte Wells [1856], 18 How., 307; 15 Law. ed., 421;
Com. vs. Lockwood [1872], 109 Mass., 323; 12 Am. Rep., 699;
Sterling vs. Drake [1876], 29 Ohio St., 457; 23 Am. Rep., 762.) The reason
for the distinction is obvious. In England, judgment on impeachment is not
confined to mere "removal from office and disqualification to hold and enjoy
any office of honor, trust, or profit under the Government" (Art. IX, sec. 4,
Constitution of the Philippines) but extends to the whole punishment attached
by law to the offense committed. The House of Lords, on a conviction may,
by its sentence, inflict capital punishment, perpetual banishment, fine or
imprisonment, depending upon the gravity of the offense committed, together
with removal from office and incapacity to hold office.

(Com. vs. Lockwood, supra.) Our Constitution also makes specific mention of
"commutation" and of the power of the executive to impose, in the pardons
he may grant, such conditions, restrictions and limitations as he may deem
proper. Amnesty may be granted by the President under the Constitution but
only with the concurrence of the National Assembly. We need not dwell at
length on the significance of these fundamental changes. It is sufficient for
our purposes to state that the pardoning power has remained essentially the
same. The question is: Has the pardoning power of the Chief Executive under
the Jones Law been impaired by the Probation Act?
As already stated, the Jones Law vests the pardoning power exclusively
in the Chief Executive. The exercise of the power may not, therefore, be
vested in anyone else. ". . . The benign prerogative of mercy reposed in the
executive cannot be taken away nor fettered by any legislative restrictions,
nor can like power be given by the legislature to any other officer or
authority. The coordinate departments of government have nothing to do
with the pardoning power, since no person properly belonging to one of the
departments can exercise any powers appertaining to either of the others
except in cases expressly provided for by the constitution." (20 R. C. L., pp.
540, 541, and cases cited.) ". . . where the pardoning power is conferred on
the executive without express or implied limitations, the grant is exclusive,
and the legislature can neither exercise such power itself nor delegate it
elsewhere, nor interfere with or control the proper exercise thereof, . . .." (12
C. J., pp. 838, 839, and cases cited.) If Act No. 4221, then, confers any
pardoning power upon the courts it is for that reason unconstitutional and
void. But does it?
In the famous Killitts decision involving an embezzlement case, the
Supreme Court of the United States ruled in 1916 that an order indefinitely
suspending sentence was void. (Ex parte United States [1916], 242 U. S., 27;
61 Law. ed., 129; L. R. A. 1917E, 1178; 37 Sup. Ct. Rep., 72; Ann. Cas.
1917B, 355.) Chief Justice White, after an exhaustive review of the
authorities, expressed the opinion of the court that under the common law
the power of the court was limited to temporary suspension and that the right
to suspend sentence absolutely and permanently was vested in the executive
branch of the government and not in the judiciary. But, the right of Congress
to establish probation by statute was conceded. Said the court through its
Chief Justice: ". . . and so far as the future is concerned, that is, the causing
of the imposition of penalties as fixed to be subject, by probation legislation
or such other means as the legislative mind may devise, to such judicial
discretion as may be adequate to enable courts to meet by the exercise of an
enlarged but wise discretion the infinite variations which may be presented to

them for judgment, recourse must be had to Congress whose legislative

power on the subject is in the very nature of things adequately complete."
(Quoted in Riggs vs. United States [1926], 14 F. [2d], 5, 6.) This decision led
the National Probation Association and others to agitate for the enactment by
Congress of a federal probation law. Such action was finally taken on March
4, 1925 (chap. 521, 43 Stat. at L. 1259, U. S. C. title 18, sec. 724). This was
followed by an appropriation to defray the salaries and expenses of a certain
number of probation officers chosen by civil service. (Johnson, Probation for
Juveniles and Adults, p. 14.)
In United States vs. Murray ([1925], 275 U. S., 347; 48 Sup. Ct. Rep.,
146; 72 Law. ed., 309), the Supreme Court of the United States, through
Chief Justice Taft, held that when a person sentenced to imprisonment by a
district court has begun to serve his sentence, that court has no power under
the Probation Act of March 4, 1925 to grant him probation even though the
term at which sentence was imposed had not yet expired. In this case of
Murray, the constitutionality of the Probation Act was not considered but was
assumed. The court traced the history of the Act and quoted from the report
of the Committee on the Judiciary of the United States House of
Representatives (Report No. 1377, 68th Congress, 2d Session) the following
statement:
"Prior to the so-called Killitts case, rendered in December, 1916,
the district courts exercised a form of probation either by suspending
sentence or by placing the defendants under state probation officers or
volunteers. In this case, however (Ex parte United States, 242 U. S., 27;
61 L. ed., 129; L. R. A., 1917E, 1178; 37 Sup. Ct. Rep., 72; Ann. Cas.
1917B, 355), the Supreme Court denied the right of the district courts to
suspend sentence. In the same opinion the court pointed out the
necessity for action by Congress if the courts were to exercise probation
powers in the future. . . .
"Since this decision was rendered, two attempts have been made
to enact probation legislation. In 1917, a bill was favorably reported by
the Judiciary Committee and passed the House. In 1920, the Judiciary
Committee again favorably reported a probation bill to the House, but it
was never reached for definite action.
"If this bill is enacted into law, it will bring the policy of the
Federal government with reference to its treatment of those convicted of
violations of its criminal laws in harmony with that of the states of the
Union. At the present time every state has a probation law, and in all
but twelve states the law applies both to adult and juvenile offenders."
(See, also, Johnson, Probation for Juveniles and Adults [1928], Chap. I.)

The constitutionality of the federal probation law has been sustained by

inferior federal courts. In Riggs vs.United States supra, the Circuit Court of
Appeals of the Fourth Circuit said:
"Since the passage of the Probation Act of March 4, 1925, the
questions under consideration have been reviewed by the Circuit Court
of Appeals of the Ninth Circuit (7 F. [2d], 590), and the constitutionality
of the act fully sustained, and the same held in no manner to encroach
upon the pardoning power of the President. This case will be found to
contain an able and comprehensive review of the law applicable here. It
arose under the act we have to consider, and to it and the authorities
cited therein special reference is made (Nix vs. James, 7 F. [2d], 590,
594), as is also to a decision of the Circuit Court of Appeals of the
Seventh Circuit (Kriebel vs.U. S., 10 F. [2d], 762), likewise construing
the Probation Act."

We have seen that in 1916 the Supreme Court of the United States; in
plain and unequivocal language, pointed to Congress as possessing the
requisite power to enact probation laws, that a federal probation law was
actually enacted in 1925, and that the constitutionality of the Act has been
assumed by the Supreme Court of the United States in 1928 and consistently
sustained by the inferior federal courts in a number of earlier cases.
We are fully convinced that the Philippine Legislature, like the Congress
of the United States, may legally enact a probation law under its broad power
to fix the punishment of any and all penal offenses. This conclusion is
supported by other authorities. In Ex parte Bates ([1915], 20 N. M., 542; L. R.
A. 1916A, 1285; 151 Pac., 698, the court said: "It is clearly within the
province of the Legislature to denominate and define all classes of crime, and
to prescribe for each a minimum and maximum punishment." And in
State vs. Abbott ([1910], 87 S. C., 466; 33 L. R. A. [N. S.], 112; 70 S. E., 6;
Ann. Cas. 1912B, 1189), the court said: "The legislative power to set
punishment for crime is very broad, and in the exercise of this power the
general assembly may confer on trial judges, if it sees fit, the largest
discretion as to the sentence to be imposed, as to the beginning and end of
the punishment and whether it should be certain or indeterminate or
conditional." (Quoted in State vs. Teal [1918], 108 S. C., 455; 95 S. E., 69.)
Indeed, the Philippine Legislature has defined all crimes and fixed the
penalties for their violation. Invariably, the legislature has demonstrated the
desire to vest in the courts particularly the trial courts large discretion in
imposing the penalties which the law prescribes in particular cases. It is
believed that justice can best be served by vesting this power in the courts,
they being in a position to best determine the penalties which an individual
convict, peculiarly circumstanced, should suffer. Thus, while courts are not

allowed to refrain from imposing a sentence merely because, taking into

consideration the degree of malice and the injury caused by the offense, the
penalty provided by law is clearly excessive, the courts being allowed in such
cases to submit to the Chief Executive, through the Department of Justice,
such statement as it may deem proper (see art. 5, Revised Penal Code), in
cases where both mitigating and aggravating circumstances are attendant in
the commission of a crime and the law provides for a penalty composed of
two indivisible penalties, the courts may allow such circumstances to offset
one another in consideration of their number and importance, and to apply
the penalty according to the result of such compensation. (Art. 63, rule 4,
Revised Penal Code; U. S. vs. Reguera and Asuategui [1921], 41 Phil., 506.)
Again, Article 64, paragraph 7, of the Revised Penal Code empowers the
courts to determine, within the limits of each period, in case the penalty
prescribed by law contains three periods, the extent of the penalty according
to the number and nature of the aggravating and mitigating circumstances
and the extent of the evil produced by the crime. In the imposition of fines,
the courts are allowed to fix any amount within the limits established by law,
considering not only the mitigating and aggravating circumstances, but more
particularly the wealth or means of the culprit. (Art. 66, Revised Penal Code.)
Article 68, paragraph 1, of the same Code provides that "a discretionary
penalty shall be imposed" upon a person under fifteen but over nine years of
age, who has not acted without discernment, but always lower by two
degrees at least than that prescribed by law for the crime which he has
committed. Article 69 of the same Code provides that in case of "incomplete
self-defense", i. e., when the crime committed is not wholly excusable by
reason of the lack of some of the conditions required to justify the same or to
exempt from criminal liability in the several cases mentioned in articles 11 and
12 of the Code, "the courts shall impose the penalty in the period which may
be deemed proper, in view of the number and nature of the conditions of
exemption present or lacking." And, in case the commission of what are
known as "impossible" crimes, "the court, having in mind the social danger
and the degree of criminality shown by the offender," shall impose upon him
either arresto mayor or a fine ranging from 200 to 500 pesos. (Art. 59,
Revised Penal Code.)
Under our Revised Penal Code, also, one-half of the period of
preventive imprisonment is deducted from the entire term of imprisonment,
except in certain cases expressly mentioned (art. 29); the death penalty is not
imposed when the guilty person is more than seventy years of age, or where
upon appeal or revision of the case by the Supreme Court, all the members

thereof are not unanimous in their voting as to the propriety of the imposition
of the death penalty (art. 47, see also, sec. 133, Revised Administrative Code,
as amended by Commonwealth Act No. 3); the death sentence is not to be
inflicted upon a woman within the three years next following the date of the
sentence or while she is pregnant, or upon any person over seventy years of
age (art. 83); and when a convict shall become insane or an imbecile after
final sentence has been pronounced, or while he is serving his sentence, the
execution of said sentence shall be suspended with regard to the personal
penalty during the period of such insanity or imbecility (art. 79).
But the desire of the legislature to relax what might result in the undue
harshness of the penal laws is more clearly demonstrated in various other
enactments, including the probation Act. There is the Indeterminate Sentence
Law enacted in 1933 as Act No. 4103 and subsequently amended by Act No.
4225, establishing a system of parole (secs. 5 to 10) and granting the courts
large discretion in imposing the penalties of the law. Section 1 of the law as
amended provides: "Hereafter, in imposing a prison sentence for an offense
punished by the Revised Penal Code, or its amendments, the court shall
sentence the accused to an indeterminate sentence the maximum term of
which shall be that which, in view of the attending circumstances, could be
properly imposed under the rules of the said Code, and to a minimum which
shall be within the range of the penalty next lower to that prescribed by the
Code for the offense; and if the offense is punished by any other law, the
court shall sentence the accused to an indeterminate sentence, the maximum
term of which shall not exceed the maximum fixed by said law and the
minimum shall not be less than the minimum term prescribed by the same."
Certain classes of convicts are, by section 2 of the law, excluded from the
operation thereof. The Legislature has also enacted the Juvenile Delinquency
Law (Act No. 3203) which was subsequently amended by Act No. 3559.
Section 7 of the original Act and section 1 of the amendatory Act have
become article 80 of the Revised Penal Code, amended by Act No. 4117 of
the Philippine Legislature and recently reamended by Commonwealth Act No.
99 of the National Assembly. Finally came the (Adult) Probation Act now in
question. In this Act is again manifested the intention of the legislature to
"humanize" the penal laws. It allows, in effect, the modification in particular
cases of the penalties prescribed by law by permitting the suspension of the
execution of the judgment in the discretion of the trial court, after due
hearing and after Investigation of the particular circumstances of the offense,
the criminal record, if any, of the convict, and his social history. The
Legislature has in reality decreed that in certain cases no punishment at all
shall be suffered by the convict as long as the conditions of probation are

faithfully observed. If this be so, then, it cannot be said that the Probation Act
comes in conflict with the power of the Chief Executive to grant pardons and
reprieves, because, to use the language of the Supreme Court of New Mexico,
"the element of punishment or the penalty for the commission of a wrong,
while to be declared by the courts as a judicial function under and within the
limits of law as announced by legislative acts, concerns solely the procedure
and conduct of criminal causes, with which the executive can have nothing to
do." (Ex parte Bates, supra.) In Williams vs. State ([1926], 162 Ga., 327; 133
S. E., 843), the court upheld the constitutionality of the Georgia probation
statute against the contention that it attempted to delegate to the courts the
pardoning power lodged by the constitution in the governor of the state and
observed that "while the governor alone is vested with the power to pardon
after final sentence has been imposed by the courts, the power of the courts
to impose any penalty which may be from time to time prescribed by law and
in such manner as may be defined cannot be questioned."
We realize, of course, the conflict which the American cases disclose.
Some cases hold it unlawful for the legislature to vest in the courts the power
to suspend the operation of a sentence, by probation or otherwise, as to do
so would encroach upon the pardoning power of the executive. (In re Webb
[1895], 89 Wis., 354; 27 L. R. A., 356; 46 Am. St. Rep., 846; 62 N. W., 177; 9
Am. Crim. Rep., 702; State ex rel. Summer field vs. Moran [1919], 43 Nev.,
150; 182 Pac., 927; Ex parte Clendenning [1908], 22 Okla., 108; 1 Okla.
Crim. Rep., 227; 19 L. R. A. [N. S.], 1041; 132 Am. St. Rep., 628; 97 Pac.,
650; People vs. Barrett [1903], 202 Ill., 287; 67 N. E., 23; 63 L. R. A., 82; 95
Am. St. Rep., 230; Snodgrass vs. State [1912], 67 Tex. Crim. Rep., 615; 41 L.
R. A. [N. S.], 1144; 150 S. W., 162; Ex parteShelor [1910], 33 Nev., 361; 111
Pac., 291; Neal vs. State [1898], 104 Ga., 509; 42 L. R. A., 190; 69 Am. St.
Rep., 175; 30 S. E., 858; State ex rel. Payne vs. Anderson [1921], 43 S. D.,
630; 181 N. W., 839; People vs. Brown, 54 Mich., 15; 19 N. W., 571;
State vs. Dalton [1903], 109 Tenn., 544; 72 S. W., 456.)
Other cases, however, hold contra. (Nix vs. James 1925; C. C. A., 9th],
7 F. [2d], 590; Archer vs. Snook [1926; D. C.], 10 F. [2d], 567;
Riggs. vs. United States [1926; C. C. A. 4th], 14]) [2d], 5; Murphy vs. State
[1926], 171 Ark., 620; 286 S. W., 871; 48 A. L. R., 1189; Re Giannini [1912],
18 Cal. App., 166; 122 Pac., 831; Re Nachnaber [1928], 89 Cal. App., 530;
265 Pac., 392; Ex parte De Voe [1931], 114 Cal. App., 730; 300 Pac.,
874; People vs. Patrick [1897], 118 Cal., 332; 50 Pac., 425;
Martin vs. People [1917], 69 Colo., 60; 168 Pac., 1171; Belden vs. Hugo
[1914], 88 Conn., 50; 91 A., 369, 370, 371; Williams vs. State [1926], 162
Ga., 327; 133 S. E., 843; People vs. Heise [1913], 257 Ill., 443; 100 N. E.,

1000; Parker vs. State [1893], 135 Ind., 534; 35 N. E., 179; 23 L. R. A., 859;
St. Hilarie, Petitioner [1906], 101 Me., 522; 64 Atl., 882; People vs. Stickle
[1909], 156 Mich., 557; 121 N. W., 497; State vs.Fjolander [1914], 125 Minn.,
529; State ex rel. Bottomnly vs. District Court [1925], 73 Mont., 541; 237
Pac., 525; State vs. Everitt [1913], 164 N. C., 399; 79 S. E., 274; 47 L. R. A.
[N. S.], 848; State ex rel. Buckley vs. Drew [1909], 75 N. H., 402; 74 Atl.,
875; State vs. Osborne [1911], 79 N. J. Eq., 430; 82 Atl. 424; Ex parte Bates
[1915], 20 N. M., 542; L. R. A., 1916 A, 1285; 151 Pac., 698; People ex
rel. Forsyth vs. Court of Sessions [1894], 141 N. Y., 288; 23 L. R. A., 856; 36
N. E., 386; 15 Am. Crim. Rep., 675; People ex rel. Sullivan vs. Flynn [1907],
55 Misc., 639; 106 N. Y. Supp., 928; People vs. Goodrich [1914], 149 N. Y.
Supp., 406; Moore vs. Thorn [1935], 245 App. Div., 180; 281 N. Y. Supp., 49;
Re Hart [1914], 29 N. D., 38; L. R. A., 1915C, 1169; 149 N. W., 568; Ex
parte Eaton [1925], 29 Okla., Crim. Rep., 275; 233 P., 781; State vs. Teal
[1918], 108 S. C., 455; 95 S. E., 69; State vs. Abbot [1910], 87 S. C., 466; 33
L. R. A. [N. S.], 112; 70 S. E., 6; Ann. Cas., 1912B, 1189; Fults vs. State
[1854], 34 Tenn., 232; Woods vs.State [1814], 130 Tenn., 100; 169 S. W.,
558; Baker vs. State [1913], 70 Tex., Crim. Rep., 618; 158 S. W., 998;
Cookvs. State [1914], 73 Tex. Crim. Rep., 548; 165 S. W., 573; King vs. State
[1914], 72 Tex. Crim. Rep., 394; 162 S. W., 890; Clare vs. State [1932], 122
Tex. Crim. Rep., 211; 54 S. W. [2d], 127; Re Hall [1927], 100 Vt., 197; 136
A., 24; Richardson vs. Com. [1921], 131 Va., 802; 109 S. E., 460;
State vs. Mallahan [1911], 65 Wash., 287; 118 Pac., 42; State ex
rel. Tingstad vs. Starwich [1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R.,
393; 396.) We elect to follow this long catena of authorities holding that the
courts may be legally authorized by the legislature to suspend sentence by
the establishment of a system of probation however characterized. State ex
rel. Tingstad vs. Starwich ([1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R.,
393), deserved particular mention. In that case, a statute enacted in 1921
which provided for the suspension of the execution of a sentence until
otherwise ordered by the court, and required that the convicted person be
placed under the charge of a parole or peace officer during the term of such
suspension, on such terms as the court may determine, was held
constitutional and as not giving the court a power in violation of the
constitutional provision vesting the pardoning power in the chief executive of
the state. (Vide, also, Re Giannini [1912], 18 Cal. App., 166; 122 Pac., 831.)
Probation and pardon are not coterminous; nor are they the same.
They are actually distinct and different from each other, both in origin and in
nature. In People ex rel. Forsyth vs. Court of Sessions ([1894], 141 N. Y.,

288, 294; 36 N. E., 386, 388; 23 L. R. A., 856; 15 Am. Crim. Rep., 675), the
Court of Appeals of New York said:
". . . The power to suspend sentence and the power to grant
reprieves and pardons, as understood when the constitution was
adopted, are totally distinct and different in their origin and nature. The
former was always a part of the judicial power; the latter was always a
part of the executive power. The suspension of the sentence simply
postpones the judgment of the court temporarily or indefinitely, but the
conviction and liability following it, and all civil disabilities, remain and
become operative when judgment is rendered. A pardon reaches both
the punishment prescribed for the offense and the guilt of the offender.
It releases the punishment, and blots out of existence the guilt, so that
in the eye of the law, the offender is as innocent as if he had never
committed the offense. It removes the penalties and disabilities, and
restores him to all his civil rights. It makes him, as it were, a new man,
and gives him a new credit and capacity. (Ex parte Garland, 71 U. S., 4
Wall., 333; 18 Law. ed., 366; U. S. vs. Klein, 80 U. S., 13 Wall., 128; 20
Law. ed., 519; Knote vs. U. S. 95 U. S., 149; 24 Law. ed., 442.)
"The framers of the federal and state constitutions were perfectly
familiar with the principles governing the power to grant pardons, and it
was conferred by these instruments upon the executive with full
knowledge of the law upon the subject, and the words of the
constitution were used to express the authority formerly exercised by
the English crown, or by its representatives in the colonies. (Ex
parte Wells, 59 U. S., 18 How., 307; 15 Law. ed., 421.) As this power
was understood, it did not comprehend any part of the judicial functions
to suspend sentence, and it was never intended that the authority to
grant reprieves and pardons should abrogate, or in any degree restrict,
the exercise of that power in regard to its own judgments, that criminal
courts had so long maintained. The two powers, so distinct and different
in their nature and character, were still left separate and distinct, the
one to be exercised by the executive, and the other by the judicial
department. We therefore conclude that a statute which, in terms,
authorizes courts of criminal jurisdiction to suspend sentence in certain
cases after conviction, a power inherent in such courts at common
law, which was understood when the constitution was adopted to be an
ordinary judicial function, and which, ever since its adoption, has been
exercised by the courts, is a valid exercise of legislative power under the
constitution. It does not encroach, in any just sense, upon the powers of
the executive, as they have been understood and practiced from the
earliest times." (Quoted with approval in Director of Prisons vs. Judge of

First Instance of Cavite [1915], 29 Phil., 265, Carson, J., concurring, at

pp. 294, 295.)

In probation, the probationer is in no true sense, as in pardon, a free

man. He is not finally and completely exonerated. He is not exempt from the
entire punishment which the law inflicts. Under the Probation Act, the
probationer's case is not terminated by the mere fact that he is placed on
probation. Section 4 of the Act provides that the probation may be definitely
terminated and the probationer finally discharged from supervision only after
the period of probation shall have been terminated and the probation officer
shall have submitted a report, and the court shall have found that the
probationer has complied with the conditions of probation. The probationer,
then, during the period of probation, remains in legal custody subject to
the control of the probation officer and of the court; and, he may be
rearrested upon the non-fulfillment of the conditions of probation and, when
rearrested, may be committed to prison to serve the sentence originally
imposed upon him. (Secs. 2, 3, 5 and 6, Act No. 4221.)
"The probation described in the act is not pardon. It is not
complete liberty, and may be far from it. It is really a new mode of
punishment, to be applied by the judge in a proper case, in substitution
of the imprisonment and fine prescribed by the criminal laws. For this
reason its application is as purely a judicial act as any other sentence
carrying out the law deemed applicable to the offense. The executive act
of pardon, on the contrary, is against the criminal law, which binds and
directs the judges, or rather is outside of and above it. There is thus no
conflict with the pardoning power, and no possible unconstitutionality of
the Probation Act for this cause." (Archer vs. Snook [1926], 10 F. [2d],
567, 569.)

Probation should also be distinguished from reprieve and from

commutation of the sentence. Snodgrass vs.State ([1912], 67 Tex. Crim.
Rep., 615; 41 L. R. A. [N. S.], 1144; 150 S. W., 162), is relied upon most
strongly by the petitioners as authority in support of their contention that the
power to grant pardons and reprieves, having been vested exclusively upon
the Chief Executive by the Jones Law, may not be conferred by the legislature
upon the courts by means of a probation law authorizing the indefinite judicial
suspension of sentence. We have examined that case and found that
although the Court of Criminal Appeals of Texas held that the probation
statute of the state in terms conferred on the district courts the power to
grant pardons to persons convicted of crime, it also distinguished between
suspension of sentence on the one hand, and reprieve and commutation of
sentence on the other. Said the court, through Harper, J.:

"That the power to suspend the sentence does not conflict with
the power of the Governor to grant reprieves is settled by the decisions
of the various courts; it being held that the distinction between a
'reprieve' and a suspension of sentence is that a reprieve postpones the
execution of the sentence to a day certain, whereas a suspension is for
an indefinite time. (Carnal vs. People, 1 Parker, Cr. R., 262; In
re Buchanan, 146 N. Y., 264; 40 N. E., 883), and cases cited in 7 Words
& Phrases, pp. 6115, 6116. This law cannot be held in conflict with the
power confiding in the Governor to grant commutations of punishment,
for commutation is but to change the punishment assessed to a less
punishment."

In State ex rel. Bottomly vs. District Court ([1925], 73 Mont., 541; 237
Pac., 525), the Supreme Court of Montana had under consideration the
validity of the adult probation law of the state enacted in 1913, now found in
sections 1207812086, Revised Codes of 1921. The court held the law valid
as not impinging upon the pardoning power of the executive. In a unanimous
decision penned by justice Holloway, the court said:
". . . the terms 'pardon,' 'commutation,' and 'respite' each had a
well understood meaning at the time our Constitution was adopted, and
no one of them was intended to comprehend the suspension of the
execution of a judgment as that phrase is employed in sections 1207812086. A 'pardon' is an act of grace, proceeding from the power
intrusted with the execution of the laws which exempts the individual on
whom it is bestowed from the punishment the law inflicts for a crime he
has committed (United States vs. Wilson, 7 Pet., 150; 8 Law. ed., 640);
It is a remission of guilt (State vs. Lewis, 111 La., 693; 35 So., 816), a
forgiveness of the offense (Cook vs. Middlesex County, 26 N. J. Law,
326; Ex parte Powell, 73 Ala., 517; 49 Am. Rep., 71). 'Commutation' is a
remission of a part of the punishment; a substitution of a less penalty
for the one originally imposed (Lee vs. Murphy, 22 Grat. [Va.], 789; 12
Am. Rep., 563; Rich vs. Chamberlain, 107 Mich., 381; 65 N. W., 235). A
'reprieve' or 'respite' is the withholding of a sentence for an interval of
time (4 Blackstone's Commentaries, 394), a postponement of execution
(Carnal vs. People, 1 Parker, Cr. R. [N. Y.], 272), a temporary
suspension of execution (Butler vs. State, 97 Ind., 373).
"Few adjudicated cases are to be found in which the validity of a
statute similar to our section 12078 has been determined; but the same
objections have been urged against parole statutes which vest the
power to parole in persons other than those to whom the power of
pardon is granted, and these statutes have been upheld quite uniformly,
as a reference to the numerous cases cited in the notes to
Woods vs. State (130 Tenn., 100; 169 S. W., 558, reported in L. R. A.,
1915F, 531), will disclose. (See, also, 20 R. C. L., 524.)"

We conclude that the Probation Act does not conflict with the
pardoning power of the Executive. The pardoning power, in respect to those
serving their probationary sentences, remains as full and complete as if the
Probation Law had never been enacted. The President may yet pardon the
probationer and thus place it beyond the power of the court to order his
rearrest and imprisonment. (Riggs vs. United States [1926], 14 F. [2d], 5, 7.)
2.But while the Probation Law does not encroach upon the pardoning
power of the executive and is not for that reason void, does section 11
thereof constitute, as contended, an undue delegation of legislature power?
Under our constitutional system, the powers of government are
distributed among three coordinate and substantially independent organs: the
legislative, the executive and the judicial. Each of these departments of the
government derives its authority from the Constitution which, in turn, is the
highest expression of popular will. Each has exclusive cognizance of the
matters within its jurisdiction, and is supreme within its own sphere.
The power to make laws the legislative power is vested in a
bicameral Legislature by the Jones Law (sec. 12) and in a unicameral National
Assembly by the Constitution (Art. VI, sec. 1, Constitution of the Philippines).
The Philippine Legislature or the National Assembly may not escape its duties
and responsibilities by delegating that power to any other body or authority.
Any attempt to abdicate the power is unconstitutional and void, on the
principle that potestas delegata non delegare potest. This principle is said to
have originated with the glossators, was introduced into English law through
a misreading of Bracton, there developed as a principle of agency, was
established by Lord Coke in the English public law in decisions forbidding the
delegation of judicial power, and found its way into America as an
enlightened principle of free government. It has since become an accepted
corollary of the principle of separation of powers. (5 Encyc. of the Social
Sciences, p. 66.) The classic statement of the rule is that of Locke, namely:
"The legislative neither must nor can transfer the power of making laws to
anybody else, or place it anywhere but where the people have." (Locke on
Civil Government, sec 142.) Judge Cooley enunciates the doctrine in the
following oft-quoted language: "One of the settled maxims in constitutional
law is, that the power conferred upon the legislature to make laws cannot be
delegated by that department to any other body or authority. Where the
sovereign power of the state has located the authority, there it must remain;
and by the constitutional agency alone the laws must be made until the
Constitution itself is changed. The power to whose judgment, wisdom, and
patriotism this high prerogative has been intrusted cannot relieve itself of the
responsibility by choosing other agencies upon which the power shall be

devolved, nor can it substitute the judgment, wisdom, and patriotism of any
other body for those to which alone the people have seen fit to confide this
sovereign trust." (Cooley on Constitutional Limitations, 8th ed., Vol. I, p. 224.
Quoted with approval in U. S. vs. Barrias [1908], 11 Phil., 327.) This court
posits the doctrine "on the ethical principle that such a delegated power
constitutes not only a right but a duty to be performed by the delegate by the
instrumentality of his own judgment acting immediately upon the matter of
legislation and not through the intervening mind of another. (U.
S. vs. Barrias, supra, at p. 330.)
The rule, however, which forbids the delegation of legislative power is
not absolute and inflexible. It admits of exceptions. An exception sanctioned
by immemorial practice permits the central legislative body to delegate
legislative powers to local authorities. (Rubi vs. Provincial Board of Mindoro
[1919], 39 Phil., 660; U. S. vs.Salaveria [1918], 39 Phil., 102;
Stoutenburgh vs. Hennick [1889], 129 U. S., 141; 32 Law. ed., 637; 9 Sup.
Ct. Rep., 256; Statevs. Noyes [1855], 30 N. H., 279.) "It is a cardinal principle
of our system of government, that local affairs shall be managed by local
authorities, and general affairs by the central authority; and hence while the
rule is also fundamental that the power to make laws cannot be delegated,
the creation of municipalities exercising local self government has never been
held to trench upon that rule. Such legislation is not regarded as a transfer of
general legislative power, but rather as the grant of the authority to prescribe
local regulations, according to immemorial practice, subject of course to the
interposition of the superior in cases of necessity."
(Stoutenburgh vs. Hennick, supra.) On quite the same principle, Congress is
empowered to delegate legislative power to such agencies in the territories of
the United States as it may select. A territory stands in the same relation to
Congress as a municipality or city to the state government. (United
States vs. Heinszen [1907], 206 U. S., 370; 27 Sup. Ct. Rep., 742.; 51 L. ed.,
1098; 11 Ann. Cas., 688; Dorr vs. United States [1904], 195 U. S., 138; 24
Sup. Ct. Rep., 808; 49 Law. ed., 128; 1 Ann. Cas., 697.) Courts have also
sustained the delegation of legislative power to the people at large. Some
authorities maintain that this may not be done (12 C. J., pp. 841, 842; 6 R. C.
L., p. 164, citing People vs. Kennedy [1913], 207 N. Y., 533; 101 N. E., 442;
Ann. Cas., 1914C, 616). However, the question of whether or not a state has
ceased to be republican in form because of its adoption of the initiative and
referendum has been held not to be a judicial but a political question (Pacific
States Tel. & Tel. Co. vs. Oregon [1912], 223 U. S., 118; 56 Law. ed., 377; 32
Sup. Ct. Rep., 224), and as the constitutionality of such laws has been looked

upon with favor by certain progressive courts, the sting of the decisions of the
more conservative courts has been pretty well drawn. (Opinions of the
Justices [1894], 160 Mass., 586; 36 N. E., 488; 23 L. R. A., 113;
Kiernan vs. Portland [1910], 57 Ore., 454; 111 Pac., 379; 112 Pac., 602; 37 L.
R. A. [N. S.], 332; Pacific States Tel. & Tel. Co. vs. Oregon, supra.) Doubtless,
also, legislative power may be delegated by the Constitution itself. Section 14,
paragraph 2, of article VI of the Constitution of the Philippines provides that
"The National Assembly may by law authorize the President, subject to such
limitations and restrictions as it may impose, to fix within specified limits,
tariff rates, import or export quotas, and tonnage and wharfage dues." And
section 16 of the same article of the Constitution provides that "In times of
war or other national emergency, the National Assembly may by law authorize
the President, for a limited period and subject to such restrictions as it may
prescribe, to promulgate rules and regulations to carry out a declared national
policy." It is beyond the scope of this decision to determine whether or not, in
the absence of the foregoing constitutional provisions, the President could be
authorized to exercise the powers thereby vested in him. Upon the other
hand, whatever doubt may have existed has been removed by the
Constitution itself.
The case before us does not fall under any of the exceptions
hereinabove mentioned.
The challenged section of Act No. 4221 is section 11 which reads as
follows:
"This Act shall apply only in those provinces in which the

respective provincial boards have provided for the sale of a probation

officer at rates not lower than those now provided for provincial fiscals.

Said probation officers shall be appointed by the Secretary of Justice and

shall be subject to the direction of the Probation Office." (Italics ours.)

In testing whether a statute constitutes an undue delegation of

legislative power or not, it is usual to inquire whether the statute was
complete in all its terms and provisions when it left the hands of the
legislature so that nothing was left to the judgment of any other appointee or
delegate of the legislature. (6 R. C. L., p. 165.) In United States vs. Ang Tang
Ho ([1922], 43 Phil., 1), this court adhered to the foregoing rule when it held
an act of the legislature void in so far as it undertook to authorize the
Governor-General, in his discretion, to issue a proclamation fixing the price of
rice and to make the sale of it in violation of the proclamation a crime. (See
and cf. Compaia General de Tabacos vs. Board of Public Utility
Commissioners [1916], 34 Phil., 136.) The general rule, however, is limited by
another rule that to a certain extent matters of detail may be left to be filled

in by rules and regulations to be adopted or promulgated by executive

officers and administrative boards. (6 R. C. L., pp. 177-179.)
For the purposes of the Probation Act, the provincial boards may be
regarded as administrative bodies endowed with power to determine when
the Act should take effect in their respective provinces. They are the agents
or delegates of the legislature in this respect. The rules governing delegation
of legislative power to administrative and executive officers are applicable or
are at least indicative of the rule which should be here adopted. An
examination of a variety of cases on delegation of power to administrative
bodies will show that the ratio decidendi is at variance but, it can be broadly
asserted that the rationale revolves around the presence or absence of a
standard or rule of action or the sufficiency thereof in the statute, to aid
the delegate in exercising the granted discretion. In some cases, it is held
that the standard is sufficient; in others that it is insufficient; and in still
others that it is entirely lacking. As a rule, an act of the legislature is
incomplete and hence invalid if it does not lay down any rule or definite
standard by which the administrative officer or board may be guided in the
exercise of the discretionary powers delegated to it. (See Schecter vs. United
States [1925], 295 U. S., 495; 79 L. ed., 1570; 55 Sup. Ct. Rep., 837; 97 A. L.
R., 947; People ex rel. Rice vs. Wilson Oil Co. [1936], 364 Ill., 406; 4 N. E.
[2d], 847; 107 A. L. R., 1500 and cases cited. See also R. C. L., title
"Constitutional Law", sec. 174.) In the case at bar, what rules are to guide
the provincial boards in the exercise of their discretionary power to determine
whether or not the Probation Act shall apply in their respective provinces?
What standards are fixed by the Act? We do not find any and none has been
pointed to us by the respondents. The probation Act does not, by the force of
any of its provisions, fix and impose upon the provincial boards any standard
or guide in the exercise of their discretionary power. What is granted, if we
may use the language of Justice Cardozo in the recent case of
Schecter, supra, is a "roving commission" which enables the provincial boards
to exercise arbitrary discretion. By section 11 of the Act, the legislature does
seemingly on its own authority extend the benefits of the Probation Act to the
provinces but in reality leaves the entire matter for the various provincial
boards to determine. In other words, the provincial boards of the various
provinces are to determine for themselves, whether the Probation Law shall
apply to their provinces or not at all. The applicability and application of the
Probation Act are entirely placed in the hands of the provincial boards. If a
provincial board does not wish to have the Act applied in its province, all that
it has to do is to decline to appropriate the needed amount for the salary of a
probation officer. The plain language of the Act is not susceptible of any other

interpretation. This, to our minds, is a virtual surrender of legislative power to

the provincial boards.
"The true distinction", says Judge Ranney, "is between the
delegation of power to make the law, which necessarily involves a
discretion as to what it shall be, and conferring an authority or discretion
as to its execution, to be exercised under and in pursuance of the law.
The first cannot be done; to the latter no valid objection can be made."
(Cincinnati, W. & Z. R. Co. vs. Clinton County Comrs. [1852]; 1 Ohio St.,
77, 88. See also, Sutherland on Statutory Construction, sec. 68.) To the
same effect are decisions of this court in Municipality of
Cardona vs. Municipality of Binangonan ([1917], 36 Phil., 547);
Rubi vs. Provincial Board of Mindoro ([1919], 39 Phil., 660), and
Cruz vs. Youngberg ([1931], 56 Phil., 234). In the first of these cases,
this court sustained the validity of a law conferring upon the GovernorGeneral authority to adjust provincial and municipal boundaries. In the
second case, this court held it lawful for the legislature to direct nonChristian inhabitants to take up their habitation on unoccupied lands to
be selected by the provincial governor and approved by the provincial
board. In the third case, it was held proper for the legislature to vest in
the Governor-General authority to suspend or not, at his discretion, the
prohibition of the importation of foreign cattle, such prohibition to be
raised "if the conditions of the country make this advisable or if disease
among foreign cattle has ceased to be a menace to the agriculture and
livestock of the lands."

It should be observed that in the case at bar we are not concerned with
the simple transference of details of execution or the promulgation by
executive or administrative officials of rules and regulations to carry into
effect the provisions of a law. If we were, recurrence to our own decisions
would be sufficient. (U. S. vs. Barrias [1908], 11 Phil., 327; U. S. vs. Molina
[1914], 29 Phil., 119; Alegre vs. Collector of Customs [1929], 53 Phil., 394;
Cebu Autobus Co. vs. De Jesus [1931], 56 Phil., 446; U. S. vs. Gomez [1915],
31 Phil., 218; Rubi vs. Provincial Board of Mindoro [1919], 39 Phil., 660.)
It is contended, however, that a legislative act may be made to the
effect as law after it leaves the hands of the legislature. It is true that laws
may be made effective on certain contingencies, as by proclamation of the
executive or the adoption by the people of a particular community (6 R. C. L.,
116. 170-172; Cooley, Constitutional Limitations, 8th ed., Vol. I, p. 227). In
Wayman vs. Southard ([1825], 10 Wheat. 1; 6 Law. ed., 253), the Supreme
Court of the United States ruled that the legislature may delegate a power not
legislative which it may itself rightfully exercise. (Vide,

also, Dowling vs. Lancashire Ins. Co. [1896], 92 Wis., 63; 65 N. W., 738; 31

L. R. A., 112.) The power to ascertain facts is such a power which may be
delegated. There is nothing essentially legislative in ascertaining the existence
of facts or conditions as the basis of the taking into effect of a law. That is a
mental process common to all branches of the government.
(Dowling vs. Lancashire Ins. Co., supra; In re Village of North Milwaukee
[1896], 93 Wis., 616; 97 N. W., 1033; 33 L. R. A., 938; Nash vs. Fries [1906],
129 Wis., 120; 108 N. W., 210; Field vs. Clark [1892], 143 U. S., 649; 12 Sup.
Ct., 495; 36 Law. ed., 294.) Notwithstanding the apparent tendency,
however, to relax the rule prohibiting delegation of legislative authority on
account of the complexity arising from social and economic forces at work in
this modern industrial age (Pfiffner, Public Administration [1936] ch. XX;
Laski, "The Mother of Parliaments", Foreign Affairs, July, 1931, Vol. IX, No. 4,
pp. 569-579; Beard, "Squirt-Gun Politics", in Harper's Monthly Magazine, July,
1930, Vol. CLXI, pp. 147, 152), the orthodox pronouncement of Judge Cooley
in his work on Constitutional Limitations finds restatement in Prof.
Willoughby's treatise on the Constitution of the United States in the following
language speaking of declaration of legislative power to administrative
agencies: "The principle which permits the legislature to provide that the
administrative agent may determine when the circumstances are such as
require the application of a law is defended upon the ground that at the time
this authority is granted, the rule of public policy, which is the essence of the
legislative act, is determined by the legislature. In other words, the
legislature, as it is its duty to do, determines that, under given circumstances,
certain executive or administrative action is to be taken, and that, under other
circumstances, different or no action at all is to be taken. What is thus left to
the administrative official is not the legislative determination of what public
policy demands, but simply the ascertainment of what the facts of the case
require to be done according to the terms of the law by which he is
governed." (Willoughby on the Constitution of the United States, 2nd ed., Vol.
III, p. 1637.) In Miller vs. Mayer, etc., of New York ([1883], 109 U. S., 385; 3
Sup. Ct. Rep., 228; 27 Law. ed., 971, 974), it was said: "The efficiency of an
Act as a declaration of legislative will must, of course, come from Congress,
but the ascertainment of the contingency upon which the Act shall take effect
may be left to such agencies as it may designate." (See, also, 12 C. J., p.
864; State vs. Parker [1854], 26 Vt., 357; Blanding vs. Burr [1859], 13 Cal.,
343, 358.) The legislature, then, may provide that a law shall take effect upon
the happening of future specified contingencies leaving to some other person
or body the power to determine when the specified contingency has arisen.
But, in the case at bar, the legislature has not made the operation of the
Probation Act contingent upon specified facts or conditions to be ascertained

by the provincial board. It leaves, as we have already said, the entire

operation or non-operation of the law upon the provincial boards. The
discretion vested is arbitrary because it is absolute and unlimited. A provincial
board need not investigate conditions or find any fact, or await the happening
of any specified contingency. It is bound by no rule, limited by no principle
of expediency announced by the legislature. It may take into consideration
certain facts or conditions; and, again, it may not. It may have any purpose
or no purpose at all. It need not give any reason or have any reason
whatsoever for refusing or failing to appropriate any funds for the salary of a
probation officer. This is a matter which rests entirely at its pleasure. The fact
that at some future time we cannot say when the provincial boards may
appropriate funds for the salaries of probation officers and thus put the law
into operation in the various provinces will not save the statute. The time of
its taking into effect, we reiterate, would yet be based solely upon the will of
the provincial boards and not upon the happening of a certain specified
contingency, or upon the ascertainment of certain facts or conditions by a
person or body other than the legislature itself.
The various provincial boards are, in practical effect, endowed with the
power of suspending the operation of the Probation Law in their respective
provinces. In some jurisdictions, constitutions provide that laws may be
suspended only by the legislature or by its authority. Thus, section 28, article
I of the Constitution of Texas provides that "No power of suspending laws in
this state shall be exercised except by the legislature"; and section 26, article
I of the Constitution of Indiana provides "That the operation of the laws shall
never be suspended, except by authority of the General Assembly." Yet, even
provisions of this sort do not confer absolute power of suspension upon the
legislature. While it may be undoubted that the legislature may suspend a
law, or the execution or operation of a law, a law may not be suspended as to
certain individuals only, leaving the law to be enjoyed by others. The
suspension must be general, and cannot be made for individual cases or for
particular localities. In Holden vs. James ([1814], 11 Mass., 396; 6 Am. Dec.,
174, 177, 178), it was said:
"By the twentieth article of the declaration of rights in the
constitution of this commonwealth, it is declared that the power of
suspending the laws, or the execution of the laws, ought never to be
exercised but by the legislature, or by authority derived from it, to be
exercised in such particular cases only as the legislature shall expressly
provide for. Many of the articles in that declaration of rights were
adopted from the Magna Charta of England, and from the bill of rights
passed in the reign of William and Mary. The bill of rights contains an
enumeration of the oppressive acts of James II, tending to subvert and

extirpate the protestant religion, and the laws and liberties of the
kingdom; and the first of them is the assuming and exercising a power
of dispensing with and suspending the laws, and the execution of the
laws without consent of parliament. The first article in the claim or
declaration of rights contained in the statute is, that the exercise of such
power, by regal authority without consent of parliament, is illegal. In the
tenth section of the same statute it is further declared and enacted, that
'No dispensation by non obstante of or to any statute, or any part
thereof, should be allowed; but the same should be held void and of no
effect, except a dispensation be allowed of in such statute.' There is an
implied reservation of authority in the parliament to exercise the power
here mentioned; because, according to the theory of the English
Constitution, 'that absolute despotic power, which must in all
governments reside somewhere,' is intrusted to the parliament: 1 Bl.
Com., 160.
"The principles of our government are widely different in this
particular. Here the sovereign and absolute power resides in the people;
and the legislature can only exercise what is delegated to them
according to the constitution. It is obvious that the exercise of the power
in question would be equally oppressive to the subject, and subversive
of his right to protection, 'according to standing laws,' whether exercised
by one man or by a number of men. It cannot be supposed that
the people when adopting this general principle from the English bill of
rights and inserting it in our constitution, intended to bestow by
implication on the general court one of the most odious and oppressive
prerogatives of the ancient kings of England. it is manifestly contrary to
the first principles of civil liberty and natural justice, and to the spirit of
our constitution and laws, that any one citizen should enjoy privileges
and advantages which are denied to all others under like circumstances;
or that any one should be subject to losses, damages, suits, or actions
from which all others under like circumstances are exempted."

To illustrate the principle: A section of a statute relative to dogs made

the owner of any dog liable to the owner of domestic animals wounded by it
for the damages without proving a knowledge of its vicious disposition. By a
provision of the act, power was given to the board of supervisors to
determine whether or not during the current year their county should be
governed by the provisions of the act of which that section constituted a part.
It was held that the legislature could not confer that power. The court
observed that it could no more confer such a power than to authorize the
board of supervisors of a county to abolish in such county the days of grace
on commercial paper, or to suspend the statute of limitations.
(Slinger vs. Henneman [1875], 38 Wis., 504.) A similar statute in Missouri was
held void for the same reason in State vs. Field ([1853], 17 Mo., 529; 59 Am.

Dec., 275.) In that case a general statute formulating a road system

contained a provision that "if the county court of any county should be of
opinion that the provisions of the act should not be enforced, they might, in
their discretion, suspend the operation of the same for any specified length of
time, and thereupon the act should become inoperative in such county for the
period specified in such order; and thereupon order the roads to be opened
and kept in good repair, under the laws theretofore in force." Said the court:
". . . this act, by its own provisions, repeals the inconsistent provisions of a
former act, and yet it is left to the county court to say which act shall be in
force in their county. The act does not submit the question to the county
court as an original question, to be decided by that tribunal, whether the act
shall commence its operation within the county; but it became by its own
terms a law in every county not excepted by name in the act. It did not, then,
require the county court to do any act in order to give it effect. But being the
law in the county, and having by its provisions superseded and abrogated the
inconsistent provisions of previous laws, the county court is . . . empowered,
to suspend this act and revive the repealed provisions of the former act.'
When the question is before the county court for that tribunal to determine
which law shall be in force, it is urged before us that the power then to be
exercised by the court is strictly legislative power, which under our
constitution, cannot be delegated to that tribunal or to any other body of men
in the state. In the present case, the question is not presented in the
abstract; for the county court of Saline county, after the act had been for
several months in force in that county, did by order suspend its operation;
and during that suspension the offense was committed which is the subject of
the present indictment . . .." (See Mitchell vs. State [1901], 134 Ala., 392; 32
S., 687.)
True, the legislature may enact laws for a particular locality different
from those applicable to other localities and, while recognizing the force of
the principle hereinabove expressed, courts in many jurisdictions have
sustained the constitutionality of the submission of option laws to the vote of
the people. (6 R. C. L., p. 171.) But option laws thus sustained treat of
subjects purely local in character which should receive different treatment in
different localities placed under different circumstances. "They relate to
subjects which, like the retailing of intoxicating drinks, or the running at large
of cattle in the highways, may be differently regarded in different localities,
and they are sustained on what seems to us the impregnable ground, that the
subject, though not embraced within the ordinary powers of municipalities to
make by-laws and ordinances, is nevertheless within the class of public

regulations, in respect to which it is proper that the local judgment should

control." (Cooley on Constitutional Limitations, 5th ed., p. 148.) So that, while
we do not deny the right of local self-government and the propriety of leaving
matters of purely local concern in the hands of local authorities or for
the people of small communities to pass upon, we believe that in matters of
general legislation like that which treats of criminals in general, and as
regards the general subject of probation, discretion may not be vested in a
manner so unqualified and absolute as provided in Act No. 4221. True, the
statute does not expressly state that the provincial boards may suspend the
operation of the Probation Act in particular provinces but, considering that, in
being vested with the authority to appropriate or not the necessary funds for
the salaries of probation officers, they thereby are given absolute discretion to
determine whether or not the law should take effect or operate in their
respective provinces, the provincial boards are in reality empowered by the
legislature to suspend the operation of the Probation Act in particular
provinces, the Act to be held in abeyance until the provincial boards should
decide otherwise by appropriating the necessary funds. The validity of a law is
not tested by what has been done but by what may be done under its
provisions. (Walter E. Olsen & Co. vs. Aldanese and Trinidad [1922], 43 Phil.,
259; 12 C. J., p. 786.)
It is conceded that a great deal of latitude should be granted to the
legislature not only in the expression of what may be termed legislative policy
but in the elaboration and execution thereof. "Without this power, legislation
would become oppressive and yet imbecile." (People vs. Reynolds, 5 Gilman,
1.) It has been said that popular government lives because of the
inexhaustible reservoir of power behind it. It is unquestionable that the mass
of powers of government is vested in the representatives of the people and
that these representatives are no further restrained under our system than by
the express language of the instrument imposing the restraint, or by
particular provisions which by clear intendment, have that effect.
(Angara vs. Electoral Commission [1936], 35 Off. Gaz., 23;
Schneckenburger vs. Moran [1936], 35 Off. Gaz., 1317.) But, it should be
borne in mind that a constitution is both a grant and a limitation of power and
one of these time-honored limitations is that, subject to certain exceptions,
legislative power shall not be delegated.
We conclude that section 11 of Act No. 4221 constitutes an improper
and unlawful delegation of legislative authority to the provincial boards and is,
for this reason, unconstitutional and void.
3.It is also contended that the Probation Act violates the provision of

our Bill of Rights which prohibits the denial to any person of the equal

protection of the laws (Art. III, sec. 1, subsec. 1, Constitution of the

Philippines.)

This basic individual right sheltered by the Constitution is a restraint on

all the three grand departments of our government and on the subordinate
instrumentalities and subdivisions thereof, and on many constitutional
powers, like the police power, taxation and eminent domain. The equal
protection of the laws, sententiously observes the Supreme Court of the
United States, "is a pledge of the protection of equal laws." (Yick
Wo vs. Hopkins [1886], 118 U. S., 356; 30 Law. ed., 220; 6 Sup. Ct. Rep.,
10464; Perley vs. North Carolina, 249 U. S., 510; 39 Sup. Ct. Rep., 357; 63
Law. ed., 735.) Of course, what may be regarded as a denial of the equal
protection of the laws is a question not always easily determined. No rule that
will cover every case can be formulated. (Connolly vs. Union Sewer Pipe Co.
[1902], 184 U. S., 540; 22 Sup. Ct. Rep., 431; 46 Law. ed., 679.) Class
legislation discriminating against some and favoring others is prohibited. But
classification on a reasonable basis, and not made arbitrarily or capriciously, is
permitted. (Finely vs. California [1911], 222 U. S., 28; 56 Law. ed., 75; 32
Sup. Ct. Rep., 13; Gulf. C. & S. F. Ry Co.vs. Ellis [1897], 165 U. S., 150; 41
Law. ed., 666; 17 Sup. Ct. Rep., 255; Smith, Bell & Co. vs. Natividad [1919],
40 Phil., 136.) The classification, however, to be reasonable must be based on
substantial distinctions which make real differences; it must be germane to
the purposes of the law; it must not be limited to existing conditions only, and
must apply equally to each member of the class. (Borgnis vs. Falk. Co.
[1911], 147 Wis., 327, 353; 133 N. W., 209; 3 N. C. C. A., 649; 37 L. R. A.
[N. S.], 489; State vs. Cooley, 56 Minn., 540; 530-552; 58 N. W., 150;
Lindsley vs. Natural Carbonic Gas Co. [1911], 220 U. S., 61, 79, 55 Law. ed.,
369, 377; 31 Sup. Ct. Rep., 337; Ann. Cas., 1912C, 160; Lake Shore & M. S.
R. Co. vs. Clough [1917], 242 U. S., 375; 37 Sup. Ct. Rep., 144; 61 Law. ed.,
374; Southern Ry. Co. vs.Greene [1910], 216 U. S., 400; 30 Sup. Ct. Rep.,
287; 54 Law. ed., 536; 17 Ann. Cas., 1247; Truax vs. Corrigan [1921], 257 U.
S., 312; 12 C. J., pp. 1148, 1149.)
In the case at bar, however, the resultant inequality may be said to
flow from the unwarranted delegation of legislative power, although perhaps
this is not necessarily the result in every case. Adopting the example given by
one of the counsel for the petitioners in the course of his oral argument, one
province may appropriate the necessary fund to defray the salary of a
probation officer, while another province may refuse or fail to do so. In such a
case, the Probation Act would be in operation in the former province but not
in the latter. This means that a person otherwise coming within the purview
of the law would be liable to enjoy the benefits of probation in one province

while another person similarly situated in another province would be denied

those same benefits. This is obnoxious discrimination. Contrariwise, it is also
possible for all the provincial boards to appropriate the necessary funds for
the salaries of the probation officers in their respective provinces, in which
case no inequality would result for the obvious reason that probation would
be in operation in each and every province by the affirmative action of
appropriation by all the provincial boards. On that hypothesis, every person
coming within the purview of the Probation Act would be entitled to avail of
the benefits of the Act. Neither will there be any resulting inequality if no
province, through its provincial board, should appropriate any amount for the
salary of the probation officer which is the situation now and, also, if we
accept the contention that, for the purposes of the Probation Act, the City of
Manila should be considered as a province and that the municipal board of
said city has not made any appropriation for the salary of a probation officer.
These different situations suggested show, indeed, that while inequality may
result in the application of the law and in the conferment of the benefits
therein provided, inequality is not in all cases the necessary result. But
whatever may be the case, it is clear that section 11 of the Probation Act
creates a situation in which discrimination and inequality are permitted or
allowed. There are, to be sure, abundant authorities requiring actual denial of
the equal protection of the law before courts should assume the task of
setting aside a law vulnerable on that score, but premises and circumstances
considered, we are of the opinion that section 11 of Act No. 4221 permits of
the denial of the equal protection of the law and is on that account bad. We
see no difference between a law which denies equal protection and a law
which permits of such denial. A law may appear to be fair on its face and
impartial in appearance, yet, if it permits of unjust and illegal discrimination, it
is within the constitutional prohibition. (By analogy, Chy Lung vs. Freeman
[1876], 292 U. S., 275; 23 Law. ed., 550; Henderson vs. Mayor [1876], 92 U.
S., 259; 23 Law. ed., 543; Ex parte Virginia [1880], 100 U. S., 339; 25 Law
ed., 676; Neal vs. Delaware [1881], 103 U. S., 370; 26 Law. ed., 567; Soon
Hing vs. Crowley [1885], 113 U. S., 703; 28 Law. ed., 1145; Yick
Wo vs. Hopkins [1886], 118 U. S., 356; 30 Law. ed., 220;
Williams vs. Mississippi [1897], 170 U. S., 218; 18 Sup. Ct. Rep., 583; 42 Law.
ed., 1012; Bailey vs. Alabama [1911], 219 U. S., 219; 31 Sup. Ct. Rep. 145;
55 Law. ed., 191; Sunday Lake Iron Co. vs.Wakefield [1918], 247 U. S., 450;
38 Sup. Ct. Rep., 495; 62 Law. ed., 1154.) In other words, statutes may be
adjudged unconstitutional because of their effect in operation (General Oil
Co. vs. Clain [1907], 209 U. S., 211; 28 Sup. Ct. Rep., 475; 52 Law. ed., 754;
State vs. Clement Nat. Bank [1911], 84 Vt., 167; 78 Atl., 944; Ann. Cas.,
1912D, 22). If a law has the effect of denying the equal protection of the law

it is unconstitutional. (6 R. C. L. p. 372; Civil Rights Cases, 109 U. S., 3; 3

Sup. Ct. Rep., 18; 27 Law. ed., 835; Yick Wo vs. Hopkins, supra;
State vs.Montgomery, 94 Me., 192; 47 Atl., 165; 80 A. S. R., 386;
State vs. Dering, 84 Wis., 585; 54 N. W., 1104; 36 A. S. R., 948; 19 L. R. A.,
858.) Under section 11 of the Probation Act, not only may said Act be in force
in one or several provinces and not be in force in the other provinces, but one
province may appropriate for the salary of a probation officer of a given year
and have probation during that year and thereafter decline to make
further appropriation, and have no probation in subsequent years. While this
situation goes rather to the abuse of discretion which delegation implies, it is
here indicated to show that the Probation Act sanctions a situation which is
intolerable in a government of laws, and to prove how easy it is, under the
Act, to make the guaranty of the equality clause but "a rope of sand".
(Brewer, J. Gulf C. & S. F. Ry. Co. vs. Ellis [1897], 165 U. S., 150, 154; 41
Law. ed., 666; 17 Sup. Ct. Rep., 255.)
Great reliance is placed by counsel for the respondents on the case of
Ocampo vs. United States ( [1914], 234 U. S., 91; 58 Law. ed., 1231). In that
case, the Supreme Court of the United States affirmed the decision of this
court (18 Phil., 1) by declining to uphold the contention that there was a
denial of the equal protection of the laws because, as held in
Missouri vs. Lewis (Bowman vs. Lewis) decided in 1880 (101 U. S., 220; 25
Law. ed., 991), the guaranty of the equality clause does not require territorial
uniformity. It should be observed, however, that this case concerns the right
to preliminary investigations in criminal cases originally granted by General
Orders No. 58. No question of legislative authority was involved and the
alleged denial of the equal protection of the laws was the result of the
subsequent enactment of Act No. 612, amending the charter of the City of
Manila (Act No. 813) and providing in section 2 thereof that "in cases triable
only in the court of first instance of the City of Manila, the defendant . . . shall
not be entitled as of right to a preliminary examination in any case where the
prosecuting attorney, after a due investigation of the facts . . . shall have
presented an information against him in proper form . . .." Upon the other
hand, an analysis of the arguments and the decision indicates that the
investigation by the prosecuting attorney although not in the form had in
the provinces was considered a reasonable substitute for the City of
Manila, considering the peculiar conditions of the city as found and taken into
account by the legislature itself.
Reliance is also placed in the case of Missouri vs. Lewis, supra. That
case has reference to a situation where the constitution of Missouri permits

appeals to the Supreme Court of the state from final judgments of any circuit
court, except those in certain counties for which counties the constitution
establishes a separate court of appeals called the St. Louis Court of Appeals.
The provision complained of, then, is found in the constitution itself and it is
the constitution that makes the apportionment of territorial jurisdiction.
We are of the opinion that section 11 of the Probation Act is
unconstitutional and void because it is also repugnant to the equal- protection
clause of our Constitution.
Section 11 of the Probation Act being unconstitutional and void for the
reasons already stated, the next inquiry is whether or not the entire Act
should be avoided.
"In seeking the legislative intent, the presumption is against any
mutilation of a statute, and the courts will resort to elimination only
where an unconstitutional provision is interjected into a statute
otherwise valid, and is so independent and separable that its removal
will leave the constitutional features and purposes of the act
substantially unaffected by the process." (Riccio vs. Hoboken, 69 N. J.
Law., 649, 662; 63 L.. R. A., 485; 55 Atl., 1109, quoted in
Williams vs. Standard Oil Co. [1929], 278 U. S., 235, 240; 73 Law. ed.,
287, 309; 49 Sup. Ct. Rep., 115; 60 A. L. R., 596.) In
Barrameda vs. Moir ([1913], 25 Phil., 44, 47), this court stated the wellestablished rule concerning partial invalidity of statutes in the following
language:
". . . where part of a statute is void, as repugnant to the Organic
Law, while another part is valid, the valid portion, if separable from the
invalid, may stand and be enforced. But in order to do this, the valid
portion must be so far independent of the invalid portion that it is fair to
presume that the Legislature would have enacted it by itself if they had
supposed that they could not constitutionally enact the other. (Mutual
Loan Co. vs. Martell, 200 Mass., 482; 86 N. E., 916; 128 A. S. R., 446;
Supervisors of Holmes Co. vs. Black Creek Drainage District, 99 Miss.,
739; 55 Sou., 963.) Enough must remain to make a complete,
intelligible, and valid statute, which carries out the legislative intent.
(Pearson vs. Bass, 132 Ga., 117; 63 S. E., 798.) The void provisions
must be eliminated without causing results affecting the main purpose of
the Act, in a manner contrary to the intention of the Legislature.
(State vs. A. C. L. R., Co., 56 Fla., 617, 642; 47 Sou., 969;
Harpervs. Galloway, 58 Fla., 255; 51 Sou., 226; 26 L. R. A., N. S., 794;
Connolly vs. Union Sewer Pipe Co., 184 U. S., 540,
565; People vs. Strassheim, 240 Ill., 279, 300; 88 N. E., 821; 22 L. R. A.,
N. S., 1135; State vs.Cognevich, 124 La., 414; 50 Sou., 439.) The
language used in the invalid part of a statute can have no legal force or

efficacy for any purpose whatever, and what remains must express the
legislative will, independently of the void part, since the court has no
power to legislate. (State vs. Junkin, 85 Neb., 1; 122 N. W., 473; 23 L.
R. A., N. S., 839; Vide, also, U. S. vs. Rodriguez [1918], 38 Phil., 759;
Pollock vs. Farmers' Loan and Trust Co. [1895], 158 U. S., 601, 635; 39
Law. ed., 1108, 1125; 15 Sup. Ct. Rep., 912; 6 R. C. L., 121.)"

It is contended that even if section 11, which makes the Probation Act
applicable only in those provinces in which the respective provincial boards
have provided for the salaries of probation officers were inoperative on
constitutional grounds, the remainder of the Act would still be valid and may
be enforced. We should be inclined to accept the suggestion but for the fact
that said section is, in our opinion, so inseparably linked with the other
portions of the Act that with the elimination of the section what would be left
is the bare idealism of the system, devoid of any practical benefit to a large
number of people who may be deserving of the intended beneficial results of
that system. The clear policy of the law, as may be gleaned from a careful
examination of the whole context, is to make the application of the system
dependent entirely upon the affirmative action of the different provincial
boards through appropriation of the salaries for probation officers at rates not
lower than those provided for provincial fiscals. Without such action on the
part of the various boards, no probation officers would be appointed by the
Secretary of Justice to act in the provinces. The Philippines is divided or
subdivided into provinces and it needs no argument to show that if not one of
the provinces and this is the actual situation how appropriates the
necessary fund for the salary of a probation officer, probation under Act No.
4221 would be illusory. There can be no probation without a probation officer.
Neither can there be a probation officer without a probation system.
Section 2 of the Act provides that the probation officer shall supervise
and visit the probationer. Every probation officer is given, as to the persons
placed in probation under his care, the powers of a police officer. It is the
duty of probation officers to see that the conditions which are imposed by the
court upon the probationer under his care are complied with. Among those
conditions, the following are enumerated in section 3 of the Act:
habits;

"That the probationer (a) shall indulge in no injurious or vicious

"(b)Shall avoid places or persons of disreputable or harmful

character;
"(c)Shall report to the probation officer as directed by the court or
probation officers;

"(d)Shall permit the probation officer to visit him at reasonable

times at his place of abode or elsewhere;
"(e)Shall truthfully answer any reasonable inquiries on the part of
the probation officer concerning his conduct or condition;
"(f)Shall endeavor to be employed regularly;
"(g)Shall remain or reside within a specified place or locality;
"(h)Shall make reparation or restitution to the aggrieved parties
for actual damages or losses caused by his offense;
"(i)Shall support his wife and children;
"(j)Shall comply with such orders as the court may from time to
time make; and
"(k)Shall refrain from violating any law, statute, ordinance, or any
by-law or regulation, promulgated in accordance with law."

The court is required to notify the probation officer in writing of the

period and terms of probation. Under section 4, it is only after the period of
probation, the submission of a report of the probation officer and appropriate
finding of the court that the probationer has complied with the conditions of
probation that probation may be definitely terminated and the probationer
finally discharged from supervision. Under section 5, if the court finds that
there is non-compliance with said conditions, as reported by the probation
officer, it may issue a warrant for the arrest of the probationer and said
probationer may be committed with or without bail. Upon arraignment and
after an opportunity to be heard, the court may revoke, continue or modify
the probation, and if revoked, the court shall order the execution of the
sentence originally imposed. Section 6 prescribes the duties of probation
officers: "It shall be the duty of every probation officer to furnish to all
persons placed on probation under his supervision a statement of the period
and conditions of their probation, and to instruct them concerning the same;
to keep informed concerning their conduct and condition; to aid and
encourage them by friendly advice and admonition, and by such other
measures, not inconsistent with the conditions imposed by the court as may
seem most suitable, to bring about improvement in their conduct and
condition; to report in writing to the court having jurisdiction over said
probationers at least once every two months concerning their conduct and
condition; to keep records of their work; to make such reports as are
necessary for the information of the Secretary of Justice and as the latter may
require; and to perform such other duties as are consistent with the functions
of the probation officer and as the court or judge may direct. The probation
officers provided for in this Act may act as parole officers for any penal or

reformatory institution for adults when so requested by the authorities

thereof, and, when designated by the Secretary of Justice, shall act as parole
officer of persons released on parole under Act Numbered Forty-one Hundred
and Three, without any additional compensation."
It is argued, however, that even without section 11 probation officers
may be appointed in the provinces under section 10 of the Act which provides
as follows:
"There is hereby created in the Department of Justice and subject
to its supervision and control, a Probation Office under the direction of a
Chief Probation Officer to be appointed by the Governor-General with
the advise and consent of the Senate who shall receive a salary of four
thousand eight hundred pesos per annum. To carry out the purposes of
this Act, there is hereby appropriated out of any funds in the Insular
Treasury not otherwise appropriated, the sum of fifty thousand pesos to
be disbursed by the Secretary of Justice, who is hereby authorized to
appoint probation officers and the administrative personnel of the
probation office under civil service regulations from among those who
possess the qualifications, training and experience prescribed by the
Bureau of Civil Service, and shall fix the compensation of such probation
officers and administrative personnel until such positions shall have been
included in the Appropriation Act."

But the probation officers and the administrative personnel referred to

in the foregoing section are clearly not those probation officers required to be
appointed for the provinces under section 11. It may be said, reddendo
singula singulis, that the probation officers referred to in section 10 abovequoted are to act as such, not in the various provinces, but in the central
office known as the Probation Office established in the Department of Justice,
under the supervision of a Chief Probation Officer. When the law provides
that "the probation officer" shall investigated and make reports to the court
(secs. 1 and 4); that "the probation officer" shall supervise and visit the
probationer (sec. 2; sec. 6, par. d); that the probationer shall report to the
"probation officer" (sec. 3, par. c.), shall allow "the probation officer" to visit
him (sec. 3, par. d), shall truthfully answer any reasonable inquiries on the
part of "the probation officer" concerning his conduct or condition (sec. 3,
par. 4); that the court shall notify "the probation officer" in writing of the
period and terms of probation (sec. 3, last par.), it means the probation
officer who is in charge of a particular probationer in a particular province. It
never could have been the intention of the legislature, for instance, to require
a probationer in Batanes, to report to a probation officer in the City of Manila,
or to require a probation officer in Manila to visit the probationer in the said

province of Batanes, to place him under his care, to supervise his conduct, to
instruct him concerning the conditions of his probation or to perform such
other functions as are assigned to him by law.
That under section 10 the Secretary of Justice may appoint as many
probation officers as there are provinces or groups of provinces is, of course,
possible. But this would be arguing on what the law may be or should be and
not on what the law is. Between is and ought there is a far cry. The wisdom
and propriety of legislation is not for us to pass upon. We may think a law
better otherwise than it is. But much as has been said regarding progressive
interpretation and judicial legislation we decline to amend the law. We are not
permitted to read into the law matters and provisions which are not there.
Not for any purpose not even to save a statute from the doom of invalidity.
Upon the other hand, the clear intention and policy of the law is not to
make the Insular Government defray the salaries of probation officers in the
provinces but to make the provinces defray them should they desire to have
the Probation Act apply thereto. The sum of P50,000, appropriated "to carry
out the purposes of this Act", is to be applied, among other things, for the
salaries of probation officers in the central office at Manila. These probation
officers are to receive such compensations as the Secretary of Justice may fix
"until such positions shall have been included in the Appropriation Act". It was
not the intention of the legislature to empower the Secretary of Justice to fix
the salaries of probation officers in the provinces or later on to include said
salaries in an appropriation act. Considering, further, that the sum of P50,000
appropriated in section 10 is to cover, among other things, the salaries of the
administrative personnel of the Probation Office, what would be left of the
amount can hardly be said to be sufficient to pay even nominal salaries to
probation officers in the provinces. We take judicial notice of the fact that
there are 48 provinces in the Philippines and we do not think it is seriously
contended that, with the fifty thousand pesos appropriated for the central
office, there can be in each province, as intended, a probation officer with a
salary not lower than that of a provincial fiscal. If this is correct, the
contention that without section 11 of Act No. 4221 said act is complete is an
impracticable thing under the remainder of the Act, unless it is conceded that
in our case there can be a system of probation in the provinces without
probation officers.
Probation as a development of modern penology is a commendable
system. Probation laws have been enacted, here and in other countries, to
permit what modern criminologists call the "individualization of punishment",
the adjustment of the penalty to the character of the criminal and the
circumstances of his particular case. It provides a period of grace in order to

aid in the rehabilitation of a penitent offender. It is believed that, in any

cases, convicts may be reformed and their development into hardened
criminals aborted. It, therefore, takes advantage of an opportunity for
reformation and avoids imprisonment so long as the convict gives promise of
reform. (United Statesvs. Murray [1925], 275 U. S., 347, 357, 358; 72 Law.
ed., 309; 312, 313; 48 Sup. Ct. Rep., 146; Kaplan vs. Hecht, 24 F. [2d], 664,
665.) The welfare of society is its chief end and aim. The benefit to the
individual convict is merely incidental. But while we believe that probation is
commendable as a system and its implantation into the Philippines should be
welcomed, we are forced by our inescapable duty to set the law aside
because of repugnancy to our fundamental law.
In arriving at this conclusion, we have endeavored to consider the
different aspects presented by able counsel for both parties, as well in their
memorandums as in their oral argument. We have examined the cases
brought to our attention, and others we have been able to reach in the short
time at our command for the study and deliberation of this case. In the
examination of the cases and in the analysis of the legal principles involved
we have inclined to adopt the line of action which in our opinion, is supported
by better reasoned authorities and is more conducive to the general welfare.
(Smith, Bell & Co. vs. Natividad [1919], 40 Phil., 136.) Realizing the conflict of
authorities, we have declined to be bound by certain adjudicated cases
brought to our attention, except where the point or the principle is settled
directly or by clear implication by the more authoritative pronouncements of
the Supreme Court of the United States. This line of approach is justified
because:
(a)The constitutional relations between the Federal and the State
governments of the United States and the dual character of the American
Government is a situation which does not obtain in the Philippines;
(b)The situation of a state of the American Union or of the District of
Columbia with reference to the Federal Government of the. United States is
not the situation of a province with respect to the Insular Government (Art. I,
sec. 8, cl. 17, and 10th Amendment, Constitution of the United States;
Sims vs. Rives, 84 Fed. [2d], 871);
(c)The distinct federal and state judicial organizations of the United
States do not embrace the integrated judicial system of the Philippines
(Schneckenburger vs. Moran [1936], 35 Off. Gaz., p. 1317);
(d)"General propositions do not decide concrete cases" (Justice Holmes
in Lochner vs. New York [1904], 198 U. S., 45, 76; 49 Law. ed., 937, 949)
and, "to keep pace with . . . new developments of times and circumstances"

(Chief Justice Waite in Pensacola Tel. Co. vs. Western Union Tel. Co. [1899],
96 U. S., 1, 9; 24 Law. ed., 708; Yale Law Journal, Vol. XXIX, No. 2, Dec.
1919, 141, 142), fundamental principles should be interpreted having in view
existing local conditions and environments.
Act No. 4221 is hereby declared unconstitutional and void and the writ
of prohibition is, accordingly, granted. Without any pronouncement regarding
costs. So ordered.

Avancea, C. J., Imperial, Diaz and Concepcion, JJ., concur.

EN BANC
[G.R. No. L-52304. January 28, 1980.]
RAMON B. CENIZA, FEDERICO C. CABILAO, JR., NELSON J.
ROSAL and ALEJANDRO R.
ALINSUG,petitioners, vs. COMMISSION ON ELECTIONS,
COMMISSION ON AUDIT, and NATIONAL
TREASURER, respondents.
DECISION
CONCEPCION, JR., J :
p

Petition for prohibition and mandamus with a prayer for a writ of preliminary
injunction.
cdasia

On December 22, 1979, the Interim Batasang Pambansa enacted Batas Blg 51
providing for local elections on January 30,1980. Section 3 of the statute
provides:
"SEC. 3.Cities. There shall be in each city such elective local officials
as provided in their respective charters, including the city mayor, the city
vice-mayor, and the elective members of the sangguniang panglungsod,
all of whom shall be elected by the qualified voters in the city. In
addition thereto, there shall be appointive sangguniang panglungsod
members consisting of the president of the city association of barangay
councils, the president of the city federation of the kabataang barangay,
and one representative each from the agricultural and industrial labor

sectors who shall be appointed by the President (Prime Minister)

whenever, as determined by the sangguniang panglungsod, said sectors
are of sufficient number in the city to warrant representation.
Until cities are reclassified into highly urbanized and component cities in
accordance with the standards established in the Local Government
Code as provided for in Article XI, Section 4(1) of the Constitution, any
city now existing with an annual regular income derived from
infrastructure and general funds of not less than forty million pesos
(P40,000,000.00) at the time of the approval of this Act shall be
classified as a highly urbanized city. All other cities shall be considered
components of the provinces where they are geographically located.
The City of Baguio, because of its special functions as the summer
capital of the Philippines, shall be classified as a highly urbanized city
irrespective of its income.
The registered voters of a component city may be entitled to vote in the
election of the officials of the province of which that city is a component,
if its charter so provides. However, voters registered in a highly
urbanized city, as hereinabove defined, shall not participate nor vote in
the election of the officials of the province in which the highly urbanized
city is geographically located."

To implement this Act, the Commission on Elections (COMELEC, for short)

adopted Resolution No. 1421, which reads as follows:
"WHEREAS, Batas Pambansa Blg. 51 in calling for the election of the
provincial governor, provincial vice-governor and members of the
Sangguniang Panlalawigan in each province classified the chartered
cities of the Philippines into "highly urbanized and "component" cities
based on the annual regular income of each city, and provided that "the
registered voter of a component city may be entitled to vote in the
election of the officials of the province of which that city is a component,
if its charter provides", but that "voters registered in a highly urbanized
city, shall not participate nor vote in the election of the officials of the
province in which the highly urbanized city is geographically located";
llcd

"WHEREAS, inasmuch as the charters of the different cities vary with

respect to the right of their registered voters to vote for the provincial
officials of the provinces where they are located, there is need to study
the various charters of the cities and determine what cities shall and
shall not vote for provincial officials pursuant to Batas Pambansa Blg.
51;

"WHEREAS, the voters in the cities should be accordingly informed if

they are going to vote for provincial officials or not, for their proper
guidance;
"NOW, THEREFORE, the Commission on Elections, by virtue of the
powers conferred upon it by the Constitution, the 1978 Election Code
and Batas Pambansa Blg 52 (51) RESOLVED, as it hereby RESOLVES,
that the qualified voters in each city shall or shall not be entitled to vote
for the provincial officials of the province where they are geographically
located, to wit:
A.Cities not entitled to participate in the election of provincial
officials.
1.Baguio11.Mandaue
2.Bais12.Manila
3.Canlaon13.Naga
4.Caloocan14.Ormoc
5.Cebu15.Oroquieta
6.Cotabato16.Ozamis
7.Dagupan17.Pasay
8.Davao18.Quezon
9.General Santos19.San Carlos (Pangasinan)
10.Iloilo20.Zamboanga"

Because the City of Cebu has an income of P51,603,147,64, it is classified as a

highly urbanized city and the voters thereof cannot take part in the election of
the elective provincial officials of the province of Cebu, although the Charter of
Cebu City 1 allows the qualified voters of the city to vote in the election of the
provincial officials of the Province of Cebu.
prcd

The City of Mandaue, not having an annual regular income of not less than P40
million, is classified as a component city. But the registered voters of the city
cannot vote for the provincial elective officials because its Charter 2 expressly

provides that the registered voters of the city cannot participate in the election of
the provincial officials of the Province of Cebu, except to be a candidate therefor.
The petitioners filed the instant suit as taxpayers and registered voters in the
Cities of Cebu and Mandaue. They are members of a civic and non-partisan
group known as D-O-E-R-S (an acronym for "DEMOCRACY OR EXTINCTION:
RESOLVED TO SUCCEED), which counts lawyers among its members, and
extends free legal assistance to citizens regardless of economic and social status
in meritorious cases involving violation of civil liberties and basic human rights.
They vigorously assail Section 3 of Batas Pambansa Blg. 51, which uses the
annual income of a given city as the basis for classification of whether or not a
particular city is a highly urbanized city whose voters may not participate in the
election of provincial officials of the province where the city is geographically
located; and Republic Act No. 5519, otherwise known as the Charter of Mandaue
City, which went into effect without the benefit of ratification by the residents of
Mandaue in a plebiscite or referendum. They pray that upon filing of the instant
petition, a restraining order be issued "temporarily prohibiting the holding of
election for Provincial Governor and other elective provincial officials in the
province where the 18 cities listed by the respondent COMELEC are located,
particularly Cebu City and Mandaue City, and temporarily prohibiting the National
Treasurer to release public funds and the COA to pass in audit said funds in
connection with and for the purpose of holding local elections in said provinces;
and after hearing, to make the injunction permanent declaring unconstitutional
and therefore void Section 3 of Batas Blg. 885 as well as Section 96, Art. XVIII of
the Charter of Mandaue, otherwise known as RA 5519," and should the stopping
of the provincial elections in the provinces concerned be not possible, the
respondent COMELEC be directed "to allow the qualified registered voters in the
cities listed by said respondent, particularly Cebu City and Mandaue City, to
participate in the election of, and vote for, the Provincial Governor and other
elective provincial officials and preparing the corresponding official ballots for this
purpose which shall provide spaces therein for Provincial Governor and other
elective provincial officials of the provinces concerned, particularly the Province
of Cebu."
The petitioners contend that "Section 3 of Batas Blg. 885 3 insofar as it classifies
cities including Cebu City as highly urbanized as the only basis for not allowing
its electorate to vote for the provincial officials is inherently and palpably
unconstitutional in that such classification is not based on substantial distinctions
germane to the purpose of the law which in effect provides for and regulates the
exercise of the right of suffrage, and therefore such unreasonable classification
amounts to a denial of equal protection."
cda

We find no merit in the petition. The thrust of the 1973 Constitution is towards
the fullest autonomy of local government units. In the Declaration of Principles
and State Policies, it is stated that "The State shall guarantee and promote the
autonomy of local government units, especially the barrio, to ensure their fullest
development as self-reliant communities." 4 To this end, the Constitution directs
the National Assembly to "enact a local government code which may not
thereafter be amended except by a majority vote of all its members, defining a
more responsive and accountable local government structure with an effective
system of recall, allocating among the different local governments their powers,
responsibilities, and resources, and providing for the qualifications, election and
removal, term, salaries, powers, functions, and duties of local officials, and all
other matters relating to the organization and operation of the local units," 5 and
empowered local government units "to create its own sources of revenue and to
levy taxes, subject to limitations as may be provided by law." 6 Art. XI, Section
4(1) of the said Constitution places highly urbanized cities outside the
supervisory power of the province where they are geographically located. This is
as it should be because of the complex and varied problems in a highly
urbanized city due to a bigger population and greater economic activity which
require greater autonomy.
Corollary to independence however, is the concomitant loss of the right to
participate in provincial affairs, more particularly the selection of elective
provincial officials since these provincial officials have ceased to exercise any
governmental jurisdiction and authority over said city. Thus, in the case of Teves
vs. Commission on Election 7 this Court, in holding that the registered voters of
the City of Dumaguete cannot vote for the provincial officials of Negros Oriental
because the charter of the city does not expressly allow the voters in the city to
do so, ruled:

"The creation of Dumaguete City has made it a political entity separate

from and independent of the province of Negros Oriental. The purpose
of an election is to enable the electorate to choose the men that will run
their government, whether national, provincial, municipal or city. If so,
no useful end will be served by allowing in the absence of express
legislative preference the voters of a city to participate in the election
of the officials of the province which has ceased to have any
governmental jurisdiction and authority over said city.
To confirm our view that the City of Dumaguete has been segregated
from the province of Oriental Negros for purposes of provincial elections,

we should point to the penultimate section of the charter providing that

"until otherwise provided by law, the City of Dumaguete shall continue
as part of the first representative district of the Province of Oriental
Negros." This is an express exception to the general effect of separation
an exception that serves to reiterate or even establish the rule. In
other words, the Congress meant that the inhabitants of the city may
not vote for provincial officials, but may vote for their representative in
Congress."

The classification of cities into highly urbanized cities and component cities on
the basis of their regular annual income is based upon substantial distinction.
The revenue of a city would show whether or not it is capable of existence and
development as a relatively independent social, economic, and political unit. It
would also show whether the city has sufficient economic or industrial activity as
to warrant its independence from the province where it is geographically
situated. Cities with smaller income need the continued support of the provincial
government thus justifying the continued participation of the voters in the
election of provincial officials in some instances.
cdasia

The petitioners also contend that the voters in Mandaue City are denied equal
protection of the law since the voters in other component cities are allowed to
vote for provincial officials. The contention is without merit. The practice of
allowing voters in one component city to vote for provincial officials and denying
the same privilege to voters in another component city is a matter of legislative
discretion which violates neither the Constitution nor the voter's right of suffrage.
In the case of Teves vs. Commission on Election 8 the Court said:
"Petitioners' contention is that, as the Charter of Dumaguete City is
silent as to the right of its qualified voters to participate in the election
of provincial officials of Negros Oriental, and as said voters are residents
of the province, they are clearly entitled to vote for said provincial
officials.
The charters of other recently formed cities are articulate on the matter.
Thus, in the cases of Bacolod, Cabanatuan, Legaspi, Naga, and Ormoc,
their charters expressly prohibit the residents therein from voting for
provincial officials of the province to which said cities formerly belonged.
Upon the other hand, the charters of Cagayan de Oro, Butuan, Cavite,
Iloilo, Calbayog, Lipa, San Pablo, and Dagupan contain provisions
extending to their residents the privilege to take part in the election of
the provincial officials of the provinces in which said cities were
previously included.

The question that presents itself has reference to the effect of the
omission in the charter of Dumaguete City of an express provision on
the right of its residents to vote for provincial officials of Negros
Oriental, in the light of the legislative practice that, when desired, the
right is either recognized or withdrawn expressly. We are inclined to
overrule petitioners' position."

The equal protection of the law contemplates equality in the enjoyment of similar
rights and privileges granted by law. It would have been discriminatory and a
denial of the equal protection of the law if the statute prohibited an individual or
group of voters in the city from voting for provincial officials while granting it to
another individual or group of voters in the same city.
Neither can it be considered an infringement upon the petitioners' rights of
suffrage since the Constitution confers no right to a voter in a city to vote for the
provincial officials of the province where the city is located. Their right is limited
to the right to vote for elective city officials in local elections which the
questioned statutes neither withdraw nor restrict.
The petitioners further claim that to prohibit the voters in a city from voting for
elective provincial officials would impose a substantial requirement on the
exercise of suffrage and would violate the sanctity of the ballot, contrary to the
provisions of Art. VI, Section 1 of the Constitution. The prohibition contemplated
in the Constitution, however, has reference to such requirements, as the Virginia
poll tax, invalidated in Harper vs. Virginia Board of Elections, 9 or the New York
requirement that to be eligible to vote in a school district. one must be a parent
of a child enrolled in a local public school, nullified in Kramer vs. Union Free
School District, 395 U.S. 621, which impose burdens on the right of suffrage
without achieving permissible estate objectives. In this particular case, no such
burdens are imposed upon the voters of the cities of Cebu and Mandaue. They
are free to exercise their rights without any other requirement, gave that of
being registered voters in the cities where they reside and the sanctity of their
ballot is maintained.
It is also contended that the prohibition would subvert the principle of
republicanism as it would deprive a citizen his right to participate in the conduct
of the affairs of the government unit through the exercise of his right of suffrage.
It has been pointed out, however, that the provincial government has no
governmental supervision over highly urbanized cities. These cities are
independent of the province in the administration of their affairs. Such being the
case, it is but just and proper to limit the selection and election of the provincial

officials to the voters of the province whose interests are vitally affected and
exclude therefrom the voters of highly urbanized cities.
prLL

Petitioners assail the charter of the City of Mandaue as unconstitutional for not
having been ratified by the residents of the city in a plebiscite. This contention is
untenable. The Constitutional requirement that the creation, division, merger,
abolition, or alteration of the boundary of a province, city, municipality, or barrio
should be subject to the approval by the majority of the votes cast in a plebiscite
in the governmental unit or units affected 10 is a new requirement that came into
being only with the 1973 Constitution. It is prospective 11 in character and
therefore cannot affect the creation of the City of Mandaue which came into
existence on June 21, 1969.
Finally, the petitioners claim that political and gerrymandering motives were
behind the passage of Batas Blg. 51 and Section 96 of the Charter of Mandaue
City. They contend that the Province of Cebu is politically and historically known
as an opposition bailiwick and of the total 952,716 registered voters in the
province, 234,582 are from Cebu City and 44,358 come from Mandaue City, so
that 278,940 electors, or close to one-third (1/3) of the entire province of Cebu
would be barred from voting for the provincial officials of the province of Cebu.
Such charge has no factual and legal basis. "Gerrymandering" is a "term
employed to describe an apportionment of representative districts so contrived
as to give an unfair advantage to the party in power." 12 The questioned
statutes in this particular case do not apportion representative districts. The said
representative districts remain the same. Nor has it been shown that there is an
unfair advantage in favor of the candidates of the party in power. As the Solicitor
General pointed out, it may even be that the majority of the city voters are
supporters of the administration candidates, so that the enactment of the
questioned statutes will work to their disadvantage.
cdasia

WHEREFORE, the petition should be, as it is hereby dismissed. Costs against the
petitioners.
SO ORDERED.

Fernando C .J ., Barredo, Makasiar, Antonio, Aquino, Fernandez, Guerrero, Abad

Santos, De Castro and Melencio-Herrera JJ ., concur.
Teehankee, J ., takes no part.

EN BANC

[G.R. Nos. L-50581-50617. January 30, 1982.]

RUFINO V. NUEZ, petitioner, vs. SANDIGANBAYAN and the
PEOPLE OF THE PHILIPPINES,respondents.

Raymundo A. Armovit, Antonio Almirante and Amadeo Sevo for

petitioner.

The Solicitor General for respondents.

SYNOPSIS
Petitioner, accused before the Sandiganbayan of estafa through falsification of
public and commercial documents, assailed the validity of Pres. Decree No. 1486,
as amended by P.D. 1606 creating this special court on the ground that its
creation is violative of the due process, equal protection and ex post
facto clauses of the Constitution.
That Supreme Court, in dismissing the petition, held that the unconstitutionality
of such decree cannot be adjudged. The requirements of due process as applied
to criminal proceedings are considered complied with where the accused is heard
in a court of competent jurisdiction and proceeded against under the orderly
process of law, and only punished after inquiry and investigation, upon notice to
him, with an opportunity to be heard and a judgment awarded within the
authority of a constitutional law. The equal protection clause has not been
violated either despite the limitation in the accused's right to appeal as the
classification satisfies the test of substantial distinctions, germane to the
purposes of the law, the Sandiganbayan having been specially created in
response to the problem of dishonesty in the public service. The challenged
decree is likewise not contrary to the ex post facto provision of the Constitution
on the allegation that petitioner's right of appeal is being diluted or eroded
efficacy wise as the omission of the Court of Appeals as an intermediate tribunal
does not deprive petitioner of a right vital to the protection of his liberty. As held
in the case of Duncan v. Missouri, 152 US 377 "the prescribing, of different
modes of procedure and the abolition of courts and the creation of new ones,
leaving untouched all the substantial protections with which the existing laws
surrounds the person accused of crime, are not considered within the
constitutional inhibition."

SYLLABUS
1.CONSTITUTIONAL LAW; STATUTES; P.D. 1486, as amended by P.D. 1606;
CREATION OF THE SANDIGANBAYAN, A VALID EXERCISE OF THE PRESIDENT'S
LAW-MAKING AUTHORITY DURING MARTIAL LAW. While the 1973
Constitution would contemplate that an act creating a special court such as
the Sandiganbayan should come from the National Assembly, the 1976
Amendments made clear that the incumbent President "shall continue to exercise
legislative powers until martial law shall have been lifted.'' As affirmed in Aquino,
Jr. v. COMELEC, L-40004, Jan. 31, 1975 "it is not a grant of authority to legislate
but a recognition of such power as already existing in favor of the incumbent
President during the period of Martial law.
2.ID.; BILL OF RIGHTS; GUARANTEE OF EQUAL PROTECTION; A REGULATORY
MEASURE MAY CUT INTO THE RIGHTS TO LIBERTY AND PROPERTY TO ASSURE
THE GENERAL WELFARE. The constitutional guarantee is not to be given a
meaning that disregards what is, what does in fact exist. To assure that the
general welfare be promoted, which is the end of law, a regulatory measure may
cut into the rights to liberty and property. Those adversely affected may under
such circumstances invoke the equal protection clause only if they can show that
the governmental act assailed, far from being inspired by the attainment of the
common weal was prompted by the spirit of hostility, or at the very least,
discrimination that finds no support in reason. Classification is thus not ruled out,
it being sufficient from the Tuason decision "that the laws operate equally and
uniformly on all persons under similar circumstances or that all persons must be
treated in the same manner, the conditions not being different, both in the
privileges conferred and the liabilities imposed. Favoritism and undue preference
cannot be allowed. For the principle is that equal protection and security shall be
given to every person under circumstances which, if not identical, are analogous.
If law be looked upon in terms of burden or charges, those that fall within a
class should be treated in the same fashion, whatever restrictions cast on some
in the group equally binding on the rest."
3.ID.; ID.; ID.; ID.; SANDIGANBAYAN PROCEEDINGS PRESCRIBING A
DIFFERENT MODE ON APPEAL BASED ON SUBSTANTIAL DISTINCTIONS AND
NOT NECESSARILY OFFENSIVE TO THE EQUAL PROTECTION CLAUSE. The
contention that the Sandiganbayan proceedings violates petitioner's right to
equal protection because appeal as a matter of right became minimized into a
mere matter of discretion;-appeal likewise was shrunk and limited only to
questions of law, excluding a review of the facts and trial evidence; and-there is
only one chance to appeal conviction, by certiorari to the Supreme Court, instead

of the traditional two chances; while all other estafa indictees are entitled to
appeal as a matter of right covering both law and facts and to two appellate
courts, i.e., first to the Court of Appeals and thereafter to the Supreme Court is
hardly convincing, considering that the classification satisfies the test announced
by this Court in People v. Vera, 65 Phil. 56 (1937) requiring that it "must be
based on substantial distinctions which make real differences; it must be
germane to the purposes of the law; it must not be limited to existing conditions
only, and must apply equally to each member of the class." The Constitution
specifically makes mention of the creation of a special court, the Sandiganbayan,
precisely in response to a problem, the urgency of which cannot be denied,
namely, dishonesty in the public service. It follows that those who may
thereafter be tried by such court ought to have been aware as far back as Jan.
17, 1973, when the present Constitution came into force, that a different
procedure for the accused therein, whether a private citizen as petitioner is or a
public official, is not necessarily offensive to the equal protection clause of the
Constitution.
4.ID.; ID.; RIGHT AGAINST EX POST FACTO LEGISLATION; EX POST FACTO
LAW, DEFINED. In re: Kay Villegas Kami Inc., L-32485, Oct. 22, 1970, it was
held that an ex post facto law is one which: (1) makes criminal an act done
before the passage of the law and which was innocent when done, and punishes
such an act; (2) aggravates a crime, or makes it greater than it was, when
committed; (3) changes the punishment and inflicts a greater punishment than
the law annexed to the crime when committed; (4) alters the legal rules of
evidence, and authorizes conviction upon less or different testimony than the law
required at the time of the commission of the offense; (5) assuming to regulate
civil rights and remedies only, in effect imposes penalty or deprivation of a right
for something which when done was lawful; and (6) deprives a person accused
of a crime of some lawful protection to which he has become entitled, such as
the protection of a former conviction or acquittal, or a proclamation of amnesty.
5.ID.; ID.; ID.; VESTED RIGHT OF THE ACCUSED IN MODES OF PROCEDURE
VITAL FOR THE PROTECTION OF LIFE AND
LIBERTY; SANDIGANBAYAN PROVISION OMITTING THE COURT OF APPEALS AS
A REVIEWING AUTHORITY, NOT A DISREGARD OF THE EX POST
FACTO CLAUSE. It cannot be successfully argued that there is a dilution of the
right to appeal. Admittedly under Presidential Decree No. 1486, there is no
recourse to the Court of Appeals, the review coming from the Supreme Court.
The test as to whether the ex post facto clause is disregarded, in the language of
Justice Marlan in Thompson v. Utah, 170 US 343 (1898) taking "from an accused
any right that was regarded, at the time of the adoption of the constitution as

vital for the protection of life and liberty, and which he enjoyed at the time of the
commission of the offense charged against him. The omission of the Court of
Appeals as an intermediate tribunal does not deprive the accused of a right vital
to the protection of his liberty. In the first place, his innocence or guilt is passed
upon by the three-judge court of a division of respondent Court. Moreover, a
unanimous vote is required, failing which "the Presiding Justice shall a designate
two other justices from among the members of the Court to sit temporarily with
them, forming a division of five justices, and the concurrence of a majority of
such division shall be necessary for rendering judgment. Then if convicted, this
Court has the duty if he seeks a review to see whether any error of law was
committed to justify a reversal of the judgment. Petitioner makes much, perhaps
excessively so as is the wont of advocates, of the fact that there is no review of
the facts. What cannot be too sufficiently stressed is that this Court in
determining whether or not to give due course to the petition for review must be
convinced that the constitutional presumption of innocence has been overcome.
In that sense, it cannot be said that on the appellate level there is no way of
scrutinizing whether the quantum of evidence required for a finding of guilt has
been satisfied. It does seem far- fetched and highly unrealistic to conclude that
the omission of the Court of Appeals as a reviewing authority results in the loss
"vital protection" of liberty.
6.ID.; ID.; PRESUMPTION OF INNOCENCE; PEOPLE v. DRAMAYO; REVIEW OF A
JUDGMENT OF CONVICTION RENDERED BY THE SANDIGANBAYAN CALLS FOR
STRICT OBSERVANCE OF THE CONSTITUTIONAL PRESUMPTION OF
INNOCENCE. In People v. Dramayo, L-21325, Oct. 29, 1971, the Supreme
Court held: "Accusation is not, according to the fundamental law, as synonymous
with guilt. It is incumbent on the prosecution to demonstrate that culpability lies.
Appellants were not even called upon then to offer evidence on their behalf.
Their freedom is forfeit only if the requisite quantum of proof necessary for
conviction be in existence. Their guilt must be shown beyond reasonable doubt.
To such standard, this Court has always been committed. There is need,
therefore, for the most careful scrutiny of the testimony of the state, both oral
and documentary, independently of whatever defense, is offered by the accused.
Only if the judge below and thereafter the appellate tribunal could arrive at a
conclusion that the crime had been committed precisely by the person on trial
under such an exacting test should the sentence be one of conviction. It is thus
required that every circumstance favoring his innocence be duly taken into
account. The proof against him must survive the test of reason; the strongest
suspicion must not be permitted to sway judgment. The conscience must be
satisfied that on the defendant could be laid the responsibility for the offense

charged; that not only did he perpetrate the act but that it amounted to a crime.
What is required is moral certainty."

7. ID.; ID.; DUE PROCESS; OBSERVANCE OF DUE PROCESS IN CRIMINAL

PROCEEDINGS. In criminal proceedings, due process is satisfied if the accused
is "in formed as to why he is proceeded against and what charge he has to meet,
with his conviction being made to rest on evidence that is not tainted with falsity
after full opportunity for him to rebut it and the sentence being imposed in
accordance with valid law. It is assumed, of course, that the court that rendered
the decision is one of competent jurisdiction. This formulation is a reiteration of
what was decided by the American Supreme Court in a case of Philippine origin,
Ong Chang Wing v. United States, 218 US 272, decided during the period of
American rule, 1910 to be precise. Thus: "This court hat had frequent occasion
to consider the requirements of due process of law as applied to criminal
procedure, and, generally speaking. it may be said that if an accused has been
heard in a court of competent jurisdiction, and proceeded against under the
orderly processes of ]aw, and only punished after inquiry and investigation, upon
notice to him, with an opportunity to be heard, and a judgment awarded within
the authority of a constitutional law, then he has had due process of law.
BARREDO, J., concurring:
1.CONSTITUTIONAL LAW; STATUTES; P.D. 1606; SANDIGANBAYAN, A SUI
GENERIS IN THE JUDICIAL STRUCTURE ENDOWED WITH A SPECIAL
CHARACTER FOR WHICH IT SHOULD BE TREATED DIFFERENTLY FROM
ORDINARY COURTS. It should not be surprising nor unusual that the
composition of and procedure in theSandiganbayan should be designed and
allowed to be different from the ordinary courts. Constitutionally speaking,
Justice Barredo views the Sandiganbayan as sui generis in the judicial structure
designed by the makers of the 1971 Constitution. To be particularly noted must
be the fact that the mandate of the Constitution that the National Assembly
"shall create," it is not under the Article on the Judiciary (Article X) but under the
article on Accountability of Public Officers. More, the Constitution ordains it to be
a "special court." Such "special" character endowed to theSandiganbayan carries
with it certain concomittants which compel that it should be treated differently
from the ordinary courts. Of course, as a court it exercises judicial power, and so
under Section 1 of Article X, it must be subordinate to the Supreme Court. In this
respect, Justice Barredo agrees with Justice Makasiar that the rule-making power
granted to it by P.D. 1606 must of constitutional necessity be understood as

signifying that any rule it may promulgate cannot have force and effect unless
approved by the Supreme Court, as if they have originated therefrom. Section
5(5) of the Constitution empowers the Supreme Court to promulgate rules
concerning pleading, practice and procedure in all courts, and
the Sandiganbayan is one of those courts, "special" as it may be.
2.ID.; ID.; ID.; SANDIGANBAYAN'S SPECIAL COMPOSITION AND PROCEDURE
OF APPEAL DOES NOT INFRINGE THE CONSTITUTIONAL INJUNCTION AGAINST
EX POST FACTO LAWS. The special composition of the Sandiganbayanand the
special procedure of appeal provided for it in P.D. 1606 does not infringe the
constitutional injunction against ex-post facto laws. The creation of a special
court to take cognizance of, try and decide crimes already committed is not a
constitutional abnormality. Otherwise, there would be chaos in the prosecution of
offenses which in the public interest must be dealt with more expeditiously in
order to curtail any fast surging tide of evil-doing against the social order. Since
the Sandiganbayan is a collegiate trial court, it is obviously improper to make
appeals therefrom appealable to another collegiate court with the same number
of judges composing it. We must bear in mind that the Sandiganbayan's primary
and primordial reason for being is to insure the people's faith and confidence in
our public officers more than it used to be. We have only to recall that the
activism and restlessness in the later '60's and the early '70's particularly of the
youth who are always concerned with the future of the country were caused by
their conviction that graft and corruption was already intolerably pervasive in the
government and naturally they demanded and expected effective and faster and
more expeditious remedies. Thus, the Tanodbayan or Ombudsman was
conceived and as its necessary counterpart, theSandiganbayan.
3.ID.; ID.; ID.; ID.; SANDIGANBAYAN'S CONVICTION OF AN ACCUSED IN
ACCORDANCE WITH THE CONSTITUTIONAL REQUIREMENT OF PROOF BEYOND
REASONABLE DOUBT. True, in criminal eases, the Constitution mandates that
the guilt of the accused must be proven beyond reasonable doubt. But once
theSandiganbayan makes such a pronouncement, the constitutional requirement
is complied with. That the Supreme Court may review the decisions of
the Sandiganbayan only on questions of law does not, in my opinion, alter the
fact that the conviction of the accused from the factual point of view was beyond
reasonable doubt, as long as the evidence relied upon by the Sandiganbayan in
arriving at such conclusion is substantial.
4.ID.; ID.; ID.; ID.; ID.; SUPREME COURT REVIEW OF DECISIONS OF
THE SANDIGANBAYAN A BETTER GUARANTEE FOR THE ACCUSED. The
accused has a better guarantee of a real and full consideration of the evidence

and the determination of the facts where there are three judges actually seeing
and observing the demeanor and conduct of the witnesses. It is the Court's
constant jurisprudence that the appellate courts should rely on the evaluation of
the evidence by the trial judges, except in cases where pivotal points are shown
to have been overlooked by them. With more reason should this rule apply to the
review of the decision of a collegiate trial court. Moreover, when the Court of
Appeals passes on an appeal in a criminal case, it has only the records to rely on,
and yet the Supreme Court has no power to reverse its findings of fact, with only
the usual exceptions already known to all lawyers and judges. The review of the
decisions of the Sandiganbayan, whose three justices have actually seen and
observed the witnesses as provided for in P.D. 1606 is a more iron-clad
guarantee that no person accused before such special court will ever be finally
convicted without his guilt appearing beyond reasonable doubt as mandated by
the Constitution.
MAKASIAR, J., concurring and dissenting:
1.CONSTITUTIONAL LAW; STATUTES; P.D. 1606; PARAGRAPH 3, SECTION 7
THEREOF VIOLATES THE CONSTITUTIONAL GUARANTEE OF THE EQUAL
PROTECTION OF THE LAW. Persons who are charged with estafa or
malversation of funds not belonging to the government or any of its
instrumentalities, or agencies are guaranteed the right to appeal to two appellate
courts first, to the Court of Appeals, and thereafter to the Supreme Court.
Estafa and malversation of private funds are on the same category as graft and
corruption committed by public officers, who, under the decree creating
the Sandiganbayan, are only allowed one appeal to the Supreme Court (par.
3, Sec. 7, P.D. 1606). The fact that the Sandiganbayan is a collegiate trial court
does not generate any substantial distinction to validate this invidious
discrimination. Three judges sitting on the same case does not ensure a quality
of justice better than that meted out by a trial court presided by one judge. The
ultimate decisive factors are the intellectual competence, industry and integrity
of the trial judge. But a review by two appellate tribunals of the same case
certainly ensures better justice to the accused and to the people.
2.ID.; ID.; ID.; LAW-MAKING AUTHORITY RESPONSIBLE FOR CREATING
THE SANDIGANBAYAN NOT AUTHORIZED TO LIMIT THE ACCUSED'S RIGHT OF
APPEAL. The Constitution merely authorizes the law-making authority to
create the Sandiganbayan with a specific limited jurisdiction only over graft and
corruption committed by officers and employees of the government, government
instrumentalities and government-owned and controlled corporations. The
Constitution does not authorize the lawmaker to limit the right of appeal of the

accused convicted by the Sandiganbayan to only the Supreme Court. The Bill of
Rights remains as restrictions on the law-maker in creating
theSandiganbayan pursuant to the constitutional directive.
3.ID.; ID.; ID.; PAR. 3, SEC. 7 THEREOF VIOLATES PROCEDURAL DUE
PROCESS. Par. 3, Section 7 of P.D. No. 1606 trenches upon the due process
clause of the Constitution, because the right to appeal to the Court of Appeals
and thereafter to the Supreme Court was already secured under Sections 17 and
29 of the Judiciary Act of 1948, otherwise known as R.A. No. 296, as amended,
and therefore also already part of procedural due process to which the petitioner
was entitled at the time of the alleged commission of the crime charged against
him. (Marcos vs. Cruz, 68 Phil. 96; 104 (1939); People vs. Moreno, 77 Phil. 548,
555; People vs. Casiano, 1 SCRA 478 (1961); People vs. Sierra, 46 SCRA 717;
Fernando, Phil. Constitution, 1974 ed., pp. 674-675).
4.ID.; ID.; ID.; REVIEWING POWER OF THE SUPREME COURT OVER
CONVICTIONS BY THE SANDIGANBAYANLIMITED ONLY TO QUESTIONS OF
JURISDICTION OR GRAVE ABUSE OF DISCRETION. Paragraph 3 of Section 7
of P.D. No. 1606, by providing that the decisions of the Sandiganbayan can only
be reviewed by the Supreme Court through certiorari, likewise limits the
reviewing power of the Supreme Court only to question of jurisdiction or grave
abuse of discretion, and not questions of fact nor findings or conclusions of the
trial court. In other criminal cases involving offenses not as serious as graft and
corruption, all questions of fact and of law are reviewed, first by the Court of
Appeals, and then by the Supreme Court. To repeat, there is greater guarantee
of justice in criminal cases when the trial court's judgment is subject to review by
two appellate tribunals, which can appraise the evidence and the law with
greater objectivity, detachment and impartially unaffected as they are by views
and prejudices that may be engendered during the trial.

5.ID.; ID.; ID.; ID.; LIMITATION OF SUPREME COURT'S POWER OF REVIEW, A

VIOLATION OF THE CONSTITUTIONAL PRESUMPTION OF INNOCENCE.
Limiting the power of review by the Supreme Court of convictions by
the Sandiganbayan only to issues of jurisdiction or grave abuse of discretion,
likewise violates the constitutional presumption of innocence of the accused,
which presumption can only be overcome by proof beyond reasonable doubt.
(Sec. 19, Art. IV, 1973 Constitution). Even if in certiorari proceedings, the
Supreme Court, to determine whether the trial court gravely abused its
discretion, can inquire into whether the judgment of the Sandiganbayan is

supported by substantial evidence, the presumption of innocence is still violated;

because proof beyond reasonable doubt cannot be equated with substantial
evidence. Because the Supreme Court under P.D. No. 1606 is precluded from
reviewing questions of fact and the evidence submitted before
the Sandiganbayan, the Supreme Court is thereby deprived of the constitutional
power to determine whether the guilt of the accused has been established by
proof beyond reasonable doubt by proof generating moral certainty at to his
culpability and therefore subverts the constitutional presumption of innocence
in his favor which is enjoyed by all other defendants in other criminal cases,
including defendants accused of only light felonies, which are less serious than
graft and corruption.
6.ID.; ID.; ID.; INCOMPLETE COMPOSITION OF THE SANDIGANBAYAN DENIES
THE ACCUSED ADVANTAGES AND PRIVILEGES ACCORDED TO OTHER
DEFENDANTS INDICTED BEFORE OTHER TRIAL COURTS.
The Sandiganbayanis composed of a presiding Justice and 8 associate Justices,
sitting in three divisions of 3 Justices each. (Sec, 3, P.D. No. 1606). Under
Section 5 thereof, the unanimous vote of three Justices in a division shall be
necessary for the pronouncement of the judgment. In the event that the three
Justices do not reach a unanimous vote, the Presiding Justice shall designate two
other Justices from among the members of the Court to sit temporarily with
them, forming a division of five Justices, and the concurrence of the majority of
such division shall be necessary for rendering judgment. At present, there are
only 6 members of the Sandiganbayan or two divisions actually operating.
Consequently, when a member of the Division dissents, two other members may
be designated by the residing Justice to sit temporarily with the Division to
constitute a special division of five members. The fact that there are only 6
members now composing theSandiganbayan limits the choice of the Presiding
Justice to only three, instead of 6 members from whom to select the two other
Justices to compose a special division of five in case a member of the division
dissents, This situation patently diminishes to an appreciable degree the chances
of an accused for an acquittal. Applied to the petitioner, Section 5 of P.D. 1606
denies him the equal protection of the law as against those who will be
prosecuted when three more members of the Sandiganbayan will be appointed
to complete its membership of nine.
7.ID.; ID.; ID.; SEC. 1 THEREOF DISPLAYS ARBITRARY CLASSIFICATION IN
PLACING THE SANDIGANBAYAN ON THE SAME LEVEL AS THE COURT OF
APPEALS. Sec. 1 of P.D. 1606 further displays such arbitrary classification;
because it places expressly the Sandiganbayan on "the same level as the Court
of Appeals." The Sandiganbayan is a collegiate trial court and not an appellate

court; its jurisdiction is purely limited to criminal and civil cases involving graft
and corruption as well as violation of the government, its instrumentalities and
government owned or controlled corporations. The Court of Appeals is an
appellate tribunal exercising appellate jurisdiction over all cases criminal cases,
civil cases, special civil actions, special proceedings, and administrative cases
appealable from the trial courts or quasi-judicial bodies. The disparity between
the Court of Appeals and the Sandiganbayan is too patent to require extended
demonstration.
8.ID.; ID.; ID.; SECTION 14 THEREOF EFFECTIVELY MAKES
THE SANDIGANBAYAN SUPERIOR TO THE SUPREME COURT INSOFAR AS
AUTOMATIC RELEASES OF APPROPRIATIONS ARE CONCERNED. Even the
Supreme Court is not spared from such odious discrimination as it is downgraded
by Section 14 of P.D. No. 1606, which effectively makes
the Sandiganbayan superior to the Supreme Court; because said Section 14
expressly provides that "the appropriation for the Sandiganbayan shall be
automatically released in accordance with the schedule submitted by
theSandiganbayan." There is no such provision in any law or in the annual
appropriations act in favor of the Supreme Court. Under the 1982 Appropriations
Act, the funds for the Supreme Court and the entire Judiciary can only be
released by the Budget Ministry upon request therefor by the Supreme Court.
Sometimes compliance with such request is hampered by bureaucratic
procedures. Such discrimination against the Supreme Court-the highest tribunal
of the land and the only other Branch of our modified parliamentary-presidential
government the first Branch being constituted by the merger or union by the
Executive and the Batasang Pambansa emphasizes the peril to the
independence of the Judiciary, whose operations can be jeopardized and the
administration of Justice consequently obstructed or impeded by the delay or
refusal on the part of the Budget Ministry to release the needed funds for the
operation of the courts.
9.ID.; ID.; ID.; VIOLATION OF THE GUARANTEE AGAINST EX POST FACTO
LAW; VITAL RIGHT OF THE ACCUSED TO A REVIEW OF THE JUDGMENT OF
CONVICTION BY TWO APPELLANT TRIBUNALS TAKEN AWAY. In Kay Villegas
Kami (Oct. 22, 1970, 35 SCRA 429) it was ruled that an ex post facto law is one
which alters the rules of evidence and authorizes conviction upon less testimony
than the law required at the time the crime was committed, or deprives a person
accused of a crime of some lawful protection to which he has become entitled.
The indictment against the petitioner accuses him of graft and corruption
committed "from July 20, 1977 up to and including January 12, 1978," long
before the creation of the Sandiganbayan on December 10, 1978 by P.D. No.

1606 which expressly repealed P.D, No. 1486, the original charter of
the Sandiganbayan promulgated on June 11, 1978. Before the creation of
theSandiganbayan, all persons accused of malversation of public funds or graft
and corruption and estafa were entitled to a review of a trial court's judgment of
conviction by the Court of Appeals on all questions of fact and law, and
thereafter by the Supreme Court also on both questions of fact and law. This
right to a review of the judgment of conviction by two appellate tribunals on both
factual and legal issues, was already part of the constitutional right of due
process enjoyed by the petitioner in 1977. This vital right of the accused has
been taken away on Dec. 10, 1978 by P.D. No. 1606, thus placing the petitioner
under a great disadvantage for crimes he allegedly committed prior to 1978.
10.ID.; ID.; ID.; REVIEW OF SANDIGANBAYAN DECISION BY CERTIORARI;
CONSTITUTIONAL PRESUMPTION OF INNOCENCE IN FAVOR OF THE ACCUSED
IMPAIRED. Review by certiorari impairs the constitutional presumption of
innocence in favor of the accused, which requires proof beyond reasonable doubt
to rebut the presumption. P.D. No. 1606 thus in effect reduces the quality and
quantity of the evidence requisite for a criminal conviction. The conviction of
petitioner is thus facilitated or made easier by P.D. 1606, which was not so prior
to its promulgation.
11.ID.; ID.; ID.; SECTION 7 THEREOF CLASHES WITH THE CONSTITUTIONAL
RULE-MAKING AUTHORITY OF THE SUPREME COURT. Section 9 of P.D. No.
1606 authorizing the Sandiganbayan to promulgate its own rules of procedure
without requiring the approval thereof by the Supreme Court, collides with the
constitutional rule-making authority of the Supreme Court to promulgate rules of
court for all courts of the land (par. 5, Sec. 5, of Art. X of the New Constitution.).
12.ID.; ID.; ID.; SECTIONS 10, 12 and 13 OF P.D. 1606 SUBVERTS THE
CONSTITUTIONAL POWER OF SUPERVISION OVER INFERIOR COURTS
INCLUDING THE SANDIGANBAYAN. Section 10 of P.D. No. 1606 authorizing
the Sandiganbayan to "administer its own internal affairs, to adopt such rules
governing the constitution of its divisions, the allocation of cases among them
and other matters relating to its business," without requiring the approval of the
Supreme Court also contravenes the constitutional power of supervision over
the Sandiganbayan as an inferior trial court. It cannot be disputed that
the Sandiganbayan is an inferior court. Likewise, Section 12 of P.D. No. 1606
vesting the Sandiganbayan with the power to select and appoint its personnel
including a clerk of court and three deputy clerks of court and to remove them
for cause without reserving to the Supreme Court the authority to approve or
disapprove such appointments and to review such removals, aggravates the

violation of the constitutional power of supervision of the Supreme Court over

inferior courts. Section 13, of P.D. No. 1606 also contravenes the constitutional
power of the Supreme Court to supervise inferior courts; because said Section 13
requires the Sandiganbayan to submit an annual report directly to the President
without coursing the same to the Supreme Court for review and approval. That
theSandiganbayan is a specially favored court is further shown by me General
Appropriations Act of 1982 which states that "all appropriations provided herein
for the Sandiganbayan shall be administered solely by the Presiding Justice (par.
1, Sp. Provisions XXV on the Judiciary, p. 538, Gen. Appropriations Act of 1982.)
This particular provision impairs likewise the constitutional power of
administrative supervision vested in the Supreme Court over all inferior courts
(Sec. 6, Art. X, 1972 Constitution). It should be emphasized that the same
General Appropriations Act of 1982 expressly provides that the disposition of all
the appropriations for the Court of Appeals, Court of Tax Appeals, Circuit
Criminal Courts, and the Court of Agrarian Relations is expressly subject to the
approval of the Chief Justice of the Supreme Court (pp. 539-541, General
Appropriations Act of 1982). The authority delegated expressly by the
Constitution to the law-maker to create the Sandiganbayan does not include the
authority to exempt the Sandiganbayan from the constitutional supervision of the
Supreme Court.

13.ID.; ID.; ID.; CHALLENGED PROVISIONS THEREOF CAN BE DECLARED

UNCONSTITUTIONAL WITHOUT NULLIFYING THE ENTIRE STATUTE. All the
challenged provisions of P.D. No. 1606, namely, Sections 7 (par. 3) 9, 10, 12 and
13 are separable from the rest of its provisions without affecting the
completeness thereof, and can therefore be declared unconstitutional without
necessarily nullifying the entire P.D. 1606. The valid provisions amply determine
what is to be done, who is to do it, and how to do it the test for a complete
and intelligible law (Barrameda vs. Moir, 25 Phil. 44; Edu vs, Ericta, Oct. 20,
1979, 35 SCRA 481, 496-497). As a matter of fact, Section 15 acknowledges
such separability although under the jurisprudence it is merely a guide for and
persuasive, but not necessarily binding on, the Supreme Court, which can
declare an entire law unconstitutional if the challenged portions are inseparable
from the valid portions. Section 1 of P.D. No. 1606 can be considered valid by
just considering as not written therein the phrase "of the same level as the Court
of Appeals." Section 5 of P.D. 1606 could likewise be validated by simply
appointing three more members of the Sandiganbayan to complete its
membership. Paragraph 3 of Section 7 of P.D. No. 1606 can be declared
unconstitutional without affecting the completeness and validity of the remaining

provisions of P.D. No. 1606; because in the absence of said paragraph 3,

Sections 17 and 29 of the Judiciary Act of 1948, as amended, can apply.
However, the challenged provisions, especially Sections 9, 10, 12 and 13 could
remain valid provided it is understood that the powers delegated thereunder to
the Sandiganbayan are deemed subject to the approval of the Supreme Court.
DECISION
FERNANDO, J :
p

In categorical and explicit language, the Constitution provided for but did not
create a special Court, the Sandiganbayan, with "jurisdiction over criminal and
civil cases involving graft and corrupt practices and such other offenses
committed by public officers and employees, including those in governmentowned or controlled corporations, in relation to their office as may be determined
by law." 1 It came into existence with the issuance in 1978 of a Presidential
Decree. 2 Even under the 1935 Constitution, to be precise, in 1955, an anti-graft
statute was passed, 3 to be supplemented five years later by another act, 4 the
validity of which was upheld in Morfe v. Mutuc, 5 a 1968 decision. As set forth in
the opinion of the Court: "Nothing can be clearer therefore than that the AntiGraft Act of 1960 like the earlier statute was precisely aimed at curtailing and
minimizing the opportunities for official corruption and maintaining a standard of
honesty in the public service. It is intended to further promote morality in public
administration. A public office must indeed be a public trust. Nobody can cavil at
its objective; the goal to be pursued commands the assent of all. The conditions
then prevailing called for norms of such character. The times demanded such a
remedial device." 6 It should occasion no surprise, therefore, why the 1971
Constitutional Convention, with full awareness of the continuing need to combat
the evils of graft and corruption, included the above-cited provision.
Petitioner in this certiorari and prohibition proceeding assails the validity of the
Presidential Decree creating theSandiganbayan. He was accused before such
respondent Court of estafa through falsification of public and commercial
documents committed in connivance with his other co-accused, all public
officials, in several cases. 7 The informations were filed respectively on it
February 21 and March 26, 1979. Thereafter, on May 15 of that year, upon being
arraigned, he filed a motion to quash on constitutional and jurisdictional
grounds. 8 A week later, respondent Court denied such motion. 9 There was a
motion for reconsideration filed the next day; it met the same fate. 10 Hence this

petition for certiorari and prohibition. It is the claim of petitioner that Presidential
Decree No. 1486, as amended, creating the respondent Court is violative of the
due process, 11 equal protection, 12 and ex post facto 13 clauses of the
Constitution.14
The overriding concern, made manifest in the Constitution itself, to cope more
effectively with dishonesty and abuse of trust in the public service whether
committed by government officials or not, with essential cooperation of the
private citizens with whom they deal, cannot of itself justify any departure from
or disregard of constitutional rights. That is beyond question. With due
recognition, however, of the vigor and persistence of counsel of petitioner 15 in
his pleadings buttressed by scholarly and diligent research, the Court, equally
aided in the study of the issues raised by the exhaustive memorandum of the
Solicitor General, 16 is of the view that the invalidity of Presidential Decree No.
1486 as amended, creating respondent Court has not been demonstrated.
The petition then cannot be granted. The unconstitutionality of such Decree
cannot be adjudged.
1.It is to be made clear that the power of the then President and Prime Minister
Ferdinand E. Marcos to create theSandiganbayan in 1978 is not challenged in this
proceeding. While such an act should come from the National Assembly, the
1976 Amendments made clear that he as incumbent President "shall continue to
exercise legislative powers until martial law shall have been lifted." 17 Thus,
there is an affirmation of the ruling of this Court in Aquino Jr. v. Commission on
Elections 18 decided in 1975. In the language of the ponente, Justice Makasiar, it
dissipated "all doubts as to the legality of such law-making authority by the
President during the period of Martial Law, . . ." 19 As the opinion went on to
state: "It is not a grant of authority to legislate, but a recognition of such power
as already existing in favor of the incumbent President during the period of
Martial Law." 20
2.Petitioner in his memorandum invokes the guarantee of equal protection in
seeking to nullify Presidential Decree No. 1486. What does it signify? To quote
from J.M. Tuason & Co. v. Land Tenure Administration: 21 "The ideal situation is
for the law's benefits to be available to all, that none be placed outside the
sphere of its coverage. Only thus could chance and favor be excluded and the
affairs of men governed by that serene and impartial uniformity, which is of the
very essence of the idea of law." 22 There is recognition, however, in the opinion
that what in fact exists "cannot approximate the ideal. Nor is the law susceptible
to the reproach that it does not take into account the realities of the situation.

The constitutional guarantee then is not to be given a meaning that disregards

what is, what does in fact exist. To assure that the general welfare be promoted,
which is the end of law, a regulatory measure may cut into the rights to liberty
and property. Those adversely affected may under such circumstances invoke
the equal protection clause only if they can show that the governmental act
assailed, far from being inspired by the attainment of the common weal was
prompted by the spirit of hostility, or at the very least, discrimination that finds
no support in reason." 23 Classification is thus not ruled out, it being sufficient to
quote from the Tuason decision anew "that the laws operate equally and
uniformly on all persons under similar circumstances or that all persons must be
treated in the same manner, the conditions not being different, both in the
privileges conferred and the liabilities imposed. Favoritism and undue preference
cannot be allowed. For the principle is that equal protection and security shall be
given to every person under circumstances which, if not identical, are analogous.
If law be looked upon in terms of burden or charges, those that fall within a
class should be treated in the same fashion, whatever restrictions cast on some
in the group equally binding on the rest." 24
3.The premise underlying petitioner's contention on this point is set forth in his
memorandum thus: "1. TheSandiganbayan proceedings violates petitioner's right
to equal protection, because appeal as a matter of right became minimized
into a mere matter of discretion; appeal likewise was shrunk and limited only
to questions of law, excluding a review of the facts and trial evidence; and there
is only one chance to appeal conviction, by certiorari to the Supreme court,
instead of the traditional two chances; while all other estafa indictees are entitled
to appeal as a matter of right covering both law and facts and to two appellate
courts, i.e., first to the Court of Appeals and thereafter to the Supreme
Court." 25 That is hardly convincing, considering that the classification satisfies
the test announced by this Court through Justice Laurel in
People v. Vera 26 requiring that it "must be based on substantial distinctions
which make real differences; it must be germane to the purposes of the law; it
must not be limited to existing conditions only, and must apply equally to each
member of the class." 27 To repeat, the constitution specifically makes mention
of the creation of a special court, the Sandiganbayan, precisely in response to a
problem, the urgency of which cannot be denied, namely, dishonesty in the
public service. It follows that those who may thereafter be tried by such court
ought to have been aware as far back as January 17, 1973, when the present
Constitution came into force, that a different procedure for the accused therein,
whether a private citizen as petitioner is or a public official, is not necessarily
offensive to the equal protection clause of the Constitution. Petitioner, moreover,
cannot be unaware of the ruling of this Court in Co Chiong v.Cuaderno, 28 a

1949 decision, that the general guarantees of the Bill of Rights, included among
which are the due process of law and equal protection clauses must "give away
to [a] specific provision," in that decision, one reserving to "Filipino citizens of
the operation of public services or utilities." 29 The scope of such a principle is
not to be constricted. It is certainly broad enough to cover the instant situation.

4.The contention that the challenged Presidential Decree is contrary to the ex

post facto provision of the Constitution is similarly premised on the allegation
that "petitioner's right of appeal is being diluted or eroded efficacy wise . . .
." 30 A more searching scrutiny of its rationale would demonstrate the lack of
persuasiveness of such an argument. The Kay Villegas Kami 31 decision,
promulgated in 1970, cited by petitioner, supplies the most recent and binding
pronouncement on the matter. To quote from the ponencia of Justice Makasiar:
"An ex post facto law is one which: (1) makes criminal an act done before the
passage of the law and which was innocent when done, and punishes such an
act; (2) aggravates a crime, or makes it greater than it was, when committed;
(3) changes the punishment and inflicts a greater punishment than the law
annexed to the crime when committed; (4) alters the legal rules of the
evidences, and authorizes conviction upon less or different testimony than the
law required at the time of the commission of the offense; (5) assuming to
regulate civil rights and remedies only, in effect imposes penalty or deprivation
of a right for something which when done was lawful; and (6) deprives a person
accused of a crime of some lawful protection to which he has become entitled,
such as the protection of a former conviction or acquittal, or a proclamation of
amnesty." 32 Even the most careful scrutiny of the above definition fails to
sustain the claim of petitioner. The "lawful protection" to which an accused "has
become entitled" is qualified, not given a broad scope. It hardly can be argued
that the mode of procedure provided for in the statutory right to appeal is
therein embraced. This is hardly a controversial matter. This Court has spoken in
no uncertain terms. In People vs. Vilo, 33 a 1949 decision, speaking through the
then Justice, later Chief Justice Paras, it made clear that seven of the nine
Justices then composing this Court, excepting only the ponente himself and the
late Justice Perfecto, were of the opinion that Section 9 of the Judiciary Act of
1948, doing away with the requirement of unanimity under Article 47 of the
Revised Penal Code with eight votes sufficing for the imposition of the death
sentence, does not suffer from any constitutional infirmity. For them its
applicability to crimes committed before its enactment would not make the
law ex post facto.

5.It may not be amiss to pursue the subject further. The first authoritative
exposition of what is prohibited by the ex post facto clause is found in
Mekin v. Wolfe, 34 decided in 1903. Thus: "An ex post facto law has been
defined as one (a) Which makes an action done before the passing of the law
and which was innocent when done criminal, and punishes such action; or (b)
Which aggravates a crime or makes it greater than it was when committed; or
(c) Which changes the punishment and inflicts a greater punishment than the
law annexed to the crime when it was committed; or (d) Which alters the legal
rules of evidence and receives less or different testimony than the law required
at the time of the commission of the offense in order to convict the
defendant." 35 There is relevance to the next paragraph of the opinion of Justice
Cooper: "The case clearly does not come within this definition, nor can it be seen
in what way the act in question alters the situation of petitioner to his
disadvantage. It gives him, as well as the Government, the benefit of the appeal,
and is intended as furnishing the means for the correction of errors. The
possibility that the judge of the Court of First Instance may commit error in his
favor and wrongfully discharge him appears to be the only foundation for the
claim. A person can have no vested right in such a possibility." 36
6.Mekin v. Wolfe is traceable to Calder v. Bull, 37 a 1798 decision of the United
States Supreme Court. Even the very language as to what falls within the
category of this provision is well-nigh identical. Thus: "I will state what laws I
consider ex post facto laws, within the words and the intent of the prohibition.
1st. Every law that makes an action done before the passing of the law; and
which was innocent when done, criminal; and punishes such action. 2nd. Every
law that aggravates a crime, or makes it greater than it was, when committed.
3rd. Every law that changes the punishment, and inflicts a greater punishment,
than the law annexed to the crime, when committed. 4th. Every law that alters
the legal rules of evidence, and receives less, or different, testimony, than the
law required at the time of the commission of the offense, in order to convict the
offender. All these, and similar laws, are manifestly unjust and
oppressive." 38 The opinion of Justice Chase who spoke for the United States
Supreme Court went on to state: "The expressions 'ex post facto laws,' are
technical, they had been in use long before the Revolution, and had acquired an
appropriate meaning, by legislators, lawyers, and authors. The celebrated and
judicious Sir William Blackstone in his commentaries, considers anex post
facto law precisely in the same light I have done. His opinion is confirmed by his
successor, Mr. Wooddeson; and by the author of the Federalist, who I esteem
superior to both, for his extensive and accurate knowledge of the true principles
of government." 39

7.Petitioner relies on Thompson v. Utah. 40 As it was decided by the American

Supreme Court in April of 1898 the very same year when the Treaty of Paris,
by virtue of which, American sovereignty over the Philippines was acquired it
is understandable why he did so. Certainly, the exhaustive opinion of the first
Justice Harlan, as was mentioned by an author, has a cutting edge, but it cuts
both ways. It also renders clear why the obstacles to declaring unconstitutional
the challenged Presidential Decree are well-nigh insuperable. After a review of
the previous pronouncements of the American Supreme Court on this subject,
Justice Harlan made this realistic appraisal: "The difficulty is not so much as to
the soundness of the general rule that an accused has no vested right in
particular modes of procedure as in determining whether particular statutes by
their operation take from an accused any right that was regarded, at the time of
the adoption of the constitution, as vital for the protection of life and liberty, and
which he enjoyed at the time of the commission of the offense charged against
him." 41 An 1894 decision of the American Supreme Court,
Duncan v.Missouri 42 was also cited by petitioner. The opinion of the then Chief
Justice Fuller, speaking for the Court, is to the same effect. It was categorically
stated that "the prescribing of different modes of procedure and the abolition of
courts and the creation of new ones, leaving untouched all the substantial
protections with which the existing laws surrounds the person accused of crime,
are not considered within the constitutional inhibition." 43
8.Even from the standpoint then of the American decisions relied upon, it cannot
be successfully argued that there is a dilution of the right to appeal. Admittedly
under Presidential Decree No. 1486, there is no recourse to the Court of Appeals,
the review coming from this Court. The test as to whether the ex post
facto clause is disregarded, in the language of Justice Harlan in the just-cited
Thompson v. Utah decision taking "from an accused any right that was regarded,
at the time of the adoption of the constitution as vital for the protection of life
and liberty, and which he enjoyed at the time of the commission of the offense
charged against him." The crucial words are "vital for the protection of life and
liberty" of a defendant in a criminal case. Would the omission of the Court of
Appeals as an intermediate tribunal deprive petitioner of a right vital to the
protection of his liberty? The answer must be in the negative. In the first place,
his innocence or guilt is passed upon by the three-judge court of a division of
respondent Court. Moreover, a unanimous vote is required, failing which "the
Presiding Justice shall designate two other justices from among the members of
the Court to sit temporarily with them, forming a division of five justices, and the
concurrence of a majority of such division shall be necessary for rendering
judgment." 44 Then if convicted, this Court has the duty if he seeks a review to
see whether any error of law was committed to justify a reversal of the

judgment. Petitioner makes much, perhaps excessively so as is the wont of

advocates, of the fact that there is no review of the facts. What cannot be too
sufficiently stressed is that this Court in determining whether or not to give due
course to the petition for review must be convinced that the constitutional
presumption of innocence 45 has been overcome. In that sense, it cannot be said
that on the appellate level there is no way of scrutinizing whether the quantum
of evidence required for a finding of guilt has been satisfied. The standard as to
when there is proof of such weight to justify a conviction is set forth in
People v. Dramayo. 46 Thus: "Accusation is not, according to the fundamental
law, as synonymous with guilt. It is incumbent on the prosecution to
demonstrate that culpability lies. Appellants were not even called upon then to
offer evidence on their behalf. Their freedom is forfeit only if the requisite
quantum of proof necessary for conviction be in existence. Their guilt must be
shown beyond reasonable doubt. To such a standard, this Court has always been
committed. There is need, therefore, for the most careful scrutiny of the
testimony of the state, both oral and documentary, independently of whatever
defense, is offered by the accused. Only if the judge below and thereafter the
appellate tribunal could arrive at a conclusion that the crime had been committed
precisely by the person on trial under such an exacting test should the sentence
be one of conviction. It is thus required that every circumstance favoring his
innocence be duly taken into account. The proof against him must survive the
test of reason; the strongest suspicion must not be permitted to sway judgment.
The conscience must be satisfied that on the defendant could be laid the
responsibility for the offense charged; that not only did he perpetrate the act but
that it amounted to a crime. What is required then is moral certainty." 47 This
Court has repeatedly reversed convictions on a showing that this fundamental
and basic right to be presumed innocent has been disregarded. 48 It does seem
far-fetched and highly unrealistic to conclude that the omission of the Court of
Appeals as a reviewing authority results in the loss "vital protection" of liberty.

9.The argument based on denial of due process has much less to recommend it.
In the exhaustive forty-two page memorandum of petitioner, only four and a half
pages were devoted to its discussion. There is the allegation of lack of fairness.
Much is made of what is characterized as "the tenor and thrust" of the leading
American Supreme Court decision, Snyder v. Massachusetts. 49 Again this
citation cuts both ways. With his usual felicitous choice of words, Justice
Cardozo, who penned the opinion, emphasized: "The law, as we have seen, is
sedulous in maintaining for a defendant charged with crime whatever forms of
procedure are of the essence of an opportunity to defend. Privileges so

fundamental as to be inherent in every concept of a fair trial that could be

acceptable to the thought of reasonable men will be kept inviolate and inviolable,
however crushing may be the pressure of incriminating proof. But justice, though
due to the accused, is due to the accuser also. The concept of fairness must not
be strained till it is narrowed to a filament. We are to keep the balance
true." 50 What is required for compliance with the due process mandate in
criminal proceedings? In Arnault v. Pecson 51 this Court with Justice Tuason
as ponente, succinctly identified it with "a fair and impartial trial and reasonable
opportunity for the preparation of defense." 52 In criminal proceedings then, due
process is satisfied if the accused is "informed as to why he is proceeded against
and what charge he has to meet, with his conviction being made to rest on
evidence that is not tainted with falsity after full opportunity for him to rebut it
and the sentence being imposed in accordance with a valid law. It is assumed, of
course, that the court that rendered the decision is one of competent
jurisdiction." 53 The above formulation is a reiteration of what was decided by
the American Supreme Court in a case of Philippine origin, Ong Chang
Wing v. United States 54 decided during the period of American rule, 1910 to be
precise. Thus: "This court has had frequent occasion to consider the
requirements of due process of law as applied to criminal procedure, and,
generally speaking, it may be said that if an accused has been heard in a court
of competent jurisdiction, and proceeded against under the orderly processes of
law, and only punished after inquiry and investigation, upon notice to him, with
an opportunity to be heard, and a judgment awarded within the authority of a
constitutional law, then he has had due process of law." 55
10.This Court holds that petitioner has been unable to make a case calling for a
declaration of unconstitutionality of Presidential Decree No. 1486 as amended by
Presidential Decree No. 1606. The decision does not go as far as passing on any
question not affecting the right of petitioner to a trial with all the safeguards of
the Constitution. It is true that other Sections of the Decree could have been
worded to avoid any constitutional objection. As of now, however, no ruling is
called for. The view is given expression in the concurring and dissenting opinion
of Justice Makasiar that in such a case to save the Decree from the dire fate of
invalidity, they must be construed in such a way as to preclude any possible
erosion on the powers vested in this Court by the Constitution. That is a
proposition too plain to be contested. It commends itself for approval. Nor
should there be any doubt either that a review by certiorari of a decision of
conviction by the Sandiganbayan calls for strict observance of the constitutional
presumption of innocence.
WHEREFORE, the petition is dismissed. No costs.

Aquino, Guerrero, Abad Santos, Melencio-Herrera, Plana and Escolin, JJ., concur.
Ericta and Concepcion JJ., took no part.

Separate Opinions
BARREDO, J., concurring:
I concur.
I have read with great care the concurring and dissenting opinion of our learned
colleague, Mr. Justice Makasiar, and I fully agree with the view that P.D. 1606
has unduly and improperly placed the Sandiganbayan on a higher plane than the
Supreme Court insofar as the matter of automatic releases of appropriations is
concerned, which definitely should not be the case. I must say emphatically that
if such a provision was conceived to guarantee the Sandigan's independence, it
is certainly unwise to assume that the Supreme Court's independence is
unworthy of similar protection. Strong as my feeling in this respect is, I am
aware that my objection to the provision in question is not ground enough to
render the same unconstitutional. In expressing myself as I do, I am just adding
my little voice of protest in order that hopefully those concerned may hear it loud
and clear and thus give the Supreme Court its deserved superior status over
theSandiganbayan.
I regret, however, I cannot agree with the constitutional strictures expressed by
Justice Makasiar. I am more inclined to agree with our honored and distinguished
Chief Justice, whose learning in constitutional law is duly respected here and
abroad, that the arguments against the constitutionality of P.D. 1606 advanced
by its critics lack sufficient persuavity.
LLphil

It should not be surprising nor unusual that the composition of and procedure in
the Sandiganbayan should be designed and allowed to be different from the
ordinary courts. Constitutionally speaking, I view the Sandiganbayan as sui
generisin the judicial structure designed by the makers of the 1971 Constitution.
To be particularly noted must be the fact that the mandate of the Constitution
that the National Assembly "shall create," it is not under the Article on the
Judiciary (Article X) but under the article on Accountability of Public Officers.
More, the Constitution ordains it to be "a special court. To my mind, such
"special" character endowed to the Sandiganbayan carries with it certain
concomittants which compel that it should be treated differently from the
ordinary courts. Of course, as a court it exercises judicial power, and so under

Section 1 of Article X, it must be subordinate to the Supreme Court. And in this

respect, I agree with Justice Makasiar that the rule-making power granted to it
by P.D. 1606 must of constitutional necessity be understood as signifying that
any rule it may promulgate cannot have force and effect unless approved by the
Supreme Court, as if they have originated therefrom. Section 5(5) of the
Constitution empowers the Supreme Court to promulgate rules concerning
pleading, practice and procedure in all courts, and the Sandiganbayan is one of
those courts, "special" as it may be.
I am of the considered opinion, nonetheless, that the special composition of
the Sandiganbayan and the special procedure of appeal provided for it in P.D.
1606 does not infringe the constitutional injunction against ex-post facto laws.
The creation of a special court to take cognizance of, try and decide crimes
already committed is not a constitutional abnormality. Otherwise, there would be
chaos in the prosecution of offenses which in the public interest must be dealt
with more expeditiously in order to curtail any fast surging tide of evil-doing
against the social order.
Since the Sandiganbayan is a collegiate trial court, it is obviously improper to
make appeals therefrom appealable to another collegiate court with the same
number of judges composing it. We must bear in mind that
the Sandiganbayan'sprimary and primordial reason for being is to insure the
people's faith and confidence in our public officers more than it used to be. We
have only to recall that the activism and restlessness in the later `60's and the
early `70's particularly of the youth who are always concerned with the future of
the country were caused by their conviction that graft and corruption was
already intolerably pervasive in the government and naturally they demanded
and expected effective and faster and more expeditious remedies. Thus, the
Tanodbayan or Ombudsman was conceived and as its necessary counterpart,
the Sandiganbayan.
prcd

It must be against this backdrop of recent historical events that I feel We must
view the Sandiganbayan. At this point, I must emphasize that P.D. 1606 is a
legislative measure, and the rule-making power of the Supreme Court is not
insulated by the Charter against legislature's attribute of alteration, amendment
or repeal. Indeed, it is the Supreme Court that cannot modify or amend, much
less repeal, a rule of court originated by the legislative power.
Accordingly, the method of appeal provided by P.D. 1606 from decisions of
the Sandiganbayan cannot be unconstitutional. If a new or special court can be
legitimately created to try offenses already committed, like the People's Court of

Collaboration times, I cannot see how the new procedure of appeal from such
courts can be faulted as violative of the Charter.
True, in criminal cases, the Constitution mandates that the guilt of the accused
must be proved beyond reasonable doubt. But once the Sandiganbayan makes
such a pronouncement, the constitutional requirement is complied with. That the
Supreme Court may review the decisions of the Sandiganbayan only on
questions of law does not, in my opinion, alter the fact that the conviction of the
accused from the factual point of view was beyond reasonable doubt, as long as
the evidence relied upon by the Sandiganbayan in arriving at such conclusion is
substantial.
Since the creation of the Court of Appeals, the Supreme Court's power of review
over the decisions of the former even in criminal cases has been limited
statutorily or by the rules only to legal questions. We have never been supposed
to exercise the power to reweigh the evidence but only to determine its
substantiality. If that was proper and legal, and no one has yet been heard to
say the contrary, why should We wonder about the method of review of the
decisions of theSandiganbayan under P.D. 1606? With all due respect to the
observation of Justice Makasiar, I believe that the accused has a better
guarantee of a real and full consideration of the evidence and the determination
of the facts where there are three judges actually seeing and observing the
demeanor and conduct of the witnesses. It is Our constant jurisprudence that
the appellate courts should rely on the evaluation of the evidence by the trial
judges, except in cases where pivotal points are shown to have been overlooked
by them. With more reason should this rule apply to the review of the decision of
a collegiate trial court. Moreover, when the Court of Appeals passes on an appeal
in a criminal case, it has only the records to rely on, and yet the Supreme Court
has no power to reverse its findings of fact, with only the usual exceptions
already known to all lawyers and judges. I strongly believe that the review of the
decisions of theSandiganbayan, whose three justices have actually seen and
observed the witnesses as provided for in P.D. 1606 is a more iron-clad
guarantee that no person accused before such special court will ever be finally
convict without his guilt appearing beyond reasonable doubt as mandated by the
Constitution.
LexLib

MAKASIAR, J., concurring and dissenting:

Some provisions in the Sandiganbayan violate not only the constitutional
guarantees of due process as well as equal protection of the law and against the

enactment of ex post facto laws, but also the constitutional provisions on the
power of supervision of the Supreme Court over inferior courts as well as its rulemaking authority.
All the relevant cases on due process, equal protection of the law and ex post
facto laws, have been cited by the petitioner, the Solicitor General, and the
majority opinion; hence, there is no need to repeat them here.
It should be noted that petitioner does not challenge the constitutionality of P.D.
No. 1606 on the ground that it impairs the rule-making authority of the Supreme
Court and its power of supervision over inferior courts.
It should likewise be emphasized that in the opinion of the Writer, the provisions
of P.D. No. 1606 which he does not impugn, remain valid and complete as a
statute and therefore can be given effect minus the challenged portions, which
are separable from the valid provisions.
LLphil

The basic caveat for the embattled citizen is obsta principiis resist from the
very beginning any attempt to assault his constitutional liberties.

I
PARAGRAPH 3, SECTION 7 OF P.D. NO. 1606 DENIES PETITIONER DUE
PROCESS AND EQUAL PROTECTION OF THE LAW.
1.Persons who are charged with estafa or malversation of funds not belonging to
the government or any of its instrumentalities or agencies are guaranteed the
right to appeal to two appellate courts first, to the Court of Appeals, and
thereafter to the Supreme Court. Estafa and malversation of private funds are on
the same category as graft and corruption committed by public officers, who,
under the decree creating the Sandiganbayan, are only allowed one appeal to
the Supreme Court (par. 3, Sec. 7, P.D. No. 1606). The fact that
the Sandiganbayan is a collegiate trial court does not generate any substantial
distinction to validate this invidious discrimination. Three judges sitting on the
same case does not ensure a quality of justice better than that meted out by a
trial court presided by one judge. The ultimate decisive factors are the
intellectual competence, industry and integrity of the trial judge. But a review by
two appellate tribunals of the same case certainly ensures better justice to the
accused and to the people.
It should be stressed that the Constitution merely authorizes the law-making
authority to create the Sandiganbayan with a specific limited jurisdiction only

over graft and corruption committed by officers and employees of the

government, government instrumentalities and government-owned and
controlled corporations. The Constitution does not authorize the lawmaker to
limit the right of appeal of the accused convicted by the Sandiganbayan to only
the Supreme Court. The Bill of Rights remains as restrictions on the law-maker in
creating the Sandiganbayan pursuant to the constitutional directive.
It is also clear that paragraph 3, Section 7 of P.D. No. 1606 trenches upon the
due process clause of the Constitution, because the right to appeal to the Court
of Appeals and thereafter to the Supreme Court was already secured under
Sections 17 and 29 of the Judiciary Act of 1948, otherwise known as R.A. No.
296, as amended, and therefore also already part of procedural due process to
which the petitioner was entitled at the time of the alleged commission of the
crime charged against him (Marcos vs. Cruz, 68 Phil. 96, 104 [1939]; People vs.
Moreno, 77 Phil. 548, 555; People vs. Casiano, 1 SCRA 478 [1961]; People vs.
Sierra, 46 SCRA 717; Fernando, Phil. Constitution, 1974 ed., pp. 674-675). This
is also reiterated in Our discussion hereunder concerning the violation of the
constitutional prohibition against the passage of ex post facto laws.
2.Then again, paragraph 3 of Section 7 of P.D. No. 1606, by providing that the
decisions of the Sandiganbayan can only be reviewed by the Supreme Court
through certiorari, likewise limits the reviewing power of the Supreme Court only
to question of jurisdiction or grave abuse of discretion, and not questions of fact
nor findings or conclusions of the trial court. In other criminal cases involving
offenses not as serious as graft and corruption, all questions of fact and of law
are reviewed, first by the Court of Appeals, and then by the Supreme Court. To
repeat, there is greater guarantee of justice in criminal cases when the trial
court's judgment is subject to review by two appellate tribunals, which can
appraise the evidence and the law with greater objectivity, detachment and
impartiality unaffected as they are by views and prejudices that may be
engendered during the trial.
3.Limiting the power of review by the Supreme Court of convictions by
the Sandiganbayan only to issues of jurisdiction or grave abuse of discretion,
likewise violates the constitutional presumption of innocence of the accused,
which presumption can only be overcome by proof beyond reasonable doubt
(Sec. 19, Art. IV, 1973 Constitution).
Even if in certiorari proceedings, the Supreme Court, to determine whether the
trial court gravely abused its discretion, can inquire into whether the judgment of
the Sandiganbayan is supported by substantial evidence, the presumption of

innocence is still violated; because proof beyond reasonable doubt cannot be

equated with substantial evidence. Because the Supreme Court under P.D. No.
1606 is precluded from reviewing questions of fact and the evidence submitted
before the Sandiganbayan, the Supreme Court is thereby deprived of the
constitutional power to determine whether the guilt of the accused has been
established by proof beyond reasonable doubt by proof generating moral
certainty as to his culpability and therefore subverts the constitutional
presumption of innocence in his favor which is enjoyed by all other defendants in
other criminal cases, including defendants accused of only light felonies, which
are less serious than graft and corruption.
4.Furthermore, the Sandiganbayan is composed of a presiding Justice and 8
associate Justices, sitting in three divisions of 3 Justices each (Sec. 3, P.D. No.
1606). Under Section 5 thereof, the unanimous vote of three Justices in a
division shall be necessary for the pronouncement of the judgment. In the event
that the three Justices do not reach a unanimous vote, the Presiding Justice shall
designate two other Justices from among the members of the Court to sit
temporarily with them, forming a division of five Justices, and the concurrence of
the majority of such division shall be necessary for rendering judgment.
At present, there are only 6 members of the Sandiganbayan or two divisions
actually operating. Consequently, when a member of the Division dissents, two
other members may be designated by the Presiding Justice to sit temporarily
with the Division to constitute a special division of five members. The fact that
there are only 6 members now composing theSandiganbayan limits the choice of
the Presiding Justice to only three, instead of 6 members from whom to select
the two other Justices to compose a special division of five in case a member of
the division dissents. This situation patently diminishes to an appreciable degree
the chances of an accused for an acquittal. Applied to the petitioner, Section 5 of
P.D. No. 1606 denies him the equal protection of the law as against those who
will be prosecuted when three more members of the Sandiganbayan will be
appointed to complete its membership of nine.
P.D. No. 1606 therefore denies the accused advantages and privileges accorded
to other defendants indicted before other trial courts.
5.Section 1 of P.D. No. 1606 further displays such arbitrary classification;
because it places expressly theSandiganbayan on "the same level as the Court of
Appeals." As heretofore stated, the Sandiganbayan is a collegiate trial court and
not an appellate court; its jurisdiction is purely limited to criminal and civil cases
involving graft and corruption as well as violation of the prohibited drug law

committed by public officers and employees of the government, its

instrumentalities and government-owned or controlled corporations. The Court of
Appeals is an appellate tribunal exercising appellate jurisdiction over all cases
criminal cases, civil cases, special civil actions, special proceedings, and
administrative cases appealable from the trial courts or quasi-judicial bodies.
The disparity between the Court of Appeals and the Sandiganbayan is too patent
to require extended demonstration.
6.Even the Supreme Court is not spared from such odious discrimination as it is
being downgraded by Section 14 of P.D. No. 1606, which effectively makes
the Sandiganbayan superior to the Supreme Court; because said Section 14
expressly provides that "the appropriation for the Sandiganbayan shall be

automatically released in accordance with the schedule submitted by

the Sandiganbayan" (emphasis supplied). There is no such provision in any law

or in the annual appropriations act in favor of the Supreme Court. Under the
1982 Appropriations Act, the funds for the Supreme Court and the entire
Judiciary can only be released by the Budget Ministry upon request therefor by
the Supreme Court. Sometimes compliance with such request is hampered by
bureaucratic procedures. Such discrimination against the Supreme Court the
highest tribunal of the land and the only other Branch of our modified
parliamentary-presidential government the first Branch being constituted by
the merger or union of the Executive and the Batasang Pambansa emphasizes
the peril to the independence of the Judiciary, whose operations can be
jeopardized and the administration of justice consequently obstructed or
impeded by the delay or refusal on the part of the Budget Ministry to release the
needed funds for the operation of the courts.

II
P.D. NO. 1606 VIOLATES THE GUARANTEE AGAINST EX POST FACTO LAWS

1.WE ruled in Kay Villegas Kami (Oct. 22, 1970, 35 SCRA 429) that an ex post
facto law is one which alters the rules of evidence and authorizes conviction
upon less testimony than the law required at the time the crime was committed,
or deprives a person accused of a crime of some lawful protection to which he
has become entitled. The indictment against herein petitioner accuses him of
graft and corruption committed " from July 20, 1977 up to and including January
12, 1978" (Annex A, p. 24, rec.), long before the creation of
the Sandiganbayan on December 10, 1978 by P.D. No. 1606 which expressly

repealed P.D. No. 1486, the original charter of the Sandiganbayan promulgated
on June 11, 1978.
As heretofore stated, before the creation of the Sandiganbayan on December 10,
1978, all persons accused of malversation of public funds or graft and corruption
and estafa were entitled to a review of a trial court's judgment of conviction by
the Court of Appeals on all questions of fact and law, and thereafter by the
Supreme Court also on both questions of fact and law. This right to a review of
the judgment of conviction by two appellate tribunals on both factual and legal
issues, was already part of the constitutional right of due process enjoyed by the
petitioner in 1977. This vital right of the accused has been taken away on
December 10, 1978 by P.D. No. 1606, thus placing herein petitioner under a
great disadvantage for crimes he allegedly committed prior to 1978.
2.As a necessary consequence, review by certiorari impairs the constitutional
presumption of innocence in favor of the accused, which requires proof beyond
reasonable doubt to rebut the presumption (Sec. 19, Art. IV, 1973 Constitution).
P.D. No. 1606 thus in effect reduces the quality and quantity of the evidence
requisite for a criminal conviction.
The conviction of petitioner is thus facilitated or made easier by P.D. No. 1606,
which was not so prior to its promulgation.
The Sandiganbayan could not be likened to the People's Court exclusively trying
cases against national security whose decisions were appealable directly only to
the Supreme Court (Sec. 13, CA 682); because at the time the People's Court Act
or C.A. No. 682 was enacted on September 25, 1945, the Court of Appeals was
no longer existing then as it was abolished on March 10, 1945 by Executive
Order No. 37 issued by President Sergio Osmea soon after the Liberation.
Consequently, the People's Court Act could not provide for appeal to the Court of
Appeals which was revived only on October 4, 1946 by R.A. No. 52. But even
under Section 13 of the People's Court Act appeal to the Supreme Court is not
limited to the review by certiorari. The Supreme Court can review all judgments
of the People's Court both on questions of fact and of law.

III
SECTION 9 OF P.D. NO. 1606 CLASHES WITH THE CONSTITUTIONAL RULEMAKING AUTHORITY OF THE SUPREME COURT
Section 9 of P.D. No. 1606 authorizing the Sandiganbayan to promulgate its own
rules of procedure without requiring the approval thereof by the Supreme Court,

collides with the constitutional rule-making authority of the Supreme Court to

promulgate rules of court for all courts of the land (par. 5, Sec. 5 of Art. X of the
New Constitution).

IV
P.D. NO. 1606 SUBVERTS THE CONSTITUTIONAL POWER OF SUPERVISION
OVER INFERIOR COURTS INCLUDING THE SANDIGANBAYAN
Section 10 of P.D. No. 1606 authorizing the Sandiganbayan to "administer its
own internal affairs, to adopt such rules governing the constitution of its
divisions, the allocation of cases among them and other matters relating to its
business," without requiring the approval of the Supreme Court also contravenes
the constitutional power of supervision over the Sandiganbayan as an inferior
trial court. It cannot be disputed that the Sandiganbayan is an inferior court.
2.Likewise, Section 12 of P.D. No. 1606 vesting the Sandiganbayan with
the power to select and appoint its personnel including a clerk of court and three
deputy clerks of court and to remove them for cause without reserving to the

Supreme Court the authority to approve or disapprove such appointments and to

review such removals, aggravates the violation of the constitutional power of
supervision of the Supreme Court over inferior courts.

3.Section 13 of P.D. No. 1606 also contravenes the constitutional power of the
Supreme Court to supervise inferior courts; because said Section 13 requires
the Sandiganbayan to submit an annual report directly to the President without
coursing the same to the Supreme Court for review and approval.
That the Sandiganbayan is a specially favored court is further shown by the
General Appropriations Act of 1982 which states that "all appropriations provided
herein for the Sandiganbayan shall be administered solely by the Presiding
Justice, . . ." (par. 1, Sp. Provisions XXV on the Judiciary, p. 538, Gen.
Appropriations Act of 1982). This particular provision impairs likewise the
constitutional power of administrative supervision vested in the Supreme Court
over all inferior courts (Sec. 6, Art. X, 1972 Constitution). It should be
emphasized that the same General Appropriations Act of 1982 expressly provides
that the disposition of all the appropriations for the Court of Appeals, Court of
Tax Appeals, Circuit Criminal Courts, and the Court of Agrarian Relations is
expressly subject to the approval of the Chief Justice of the Supreme Court (pp.
539-541, General Appropriations Act of 1982).

The authority delegated expressly by the Constitution to the law-maker to create

the Sandiganbayan does not include the authority to exempt
the Sandiganbayan from the constitutional supervision of the Supreme Court.
All the challenged provisions of P.D. No. 1606, namely, Sections 7 (par. 3), 9, 10,
12 and 13 are separable from the rest of its provisions without affecting the
completeness thereof, and can therefore be declared unconstitutional without
necessarily nullifying the entire P.D. No. 1606. The valid provisions amply
determine what is to be done, who is to do it, and how to do it the test for a
complete and intelligible law (Barrameda vs. Moir, 25 Phil. 44; Edu vs. Ericta,
Oct. 20, 1970, 35 SCRA 481, 496-497). As a matter of fact, Section 15
acknowledges such separability although under the jurisprudence it is merely a
guide for and persuasive, but not necessarily binding on, the Supreme Court,
which can declare an entire law unconstitutional if the challenged portions are
inseparable from the valid portions.
LLpr

Section 1 of P.D. No. 1606 can be considered valid by just considering as not
written therein the phrase "of the same level as the Court of Appeals."
Section 5 of P.D. No. 1606 could likewise be validated by simply appointing three
more members of the Sandiganbayanto complete its membership.
Paragraph 3 of Section 7 of P.D. No. 1606 can be declared unconstitutional
without affecting the completeness and validity of the remaining provisions of
P.D. No. 1606; because in the absence of said paragraph 3, Sections 17 and 29
of the Judiciary Act of 1948, as amended, can apply.
LLpr

However, the challenged provisions, especially Sections 9, 10, 12 and 13 could

remain valid provided it is understood that the powers delegated thereunder to
the Sandiganbayan are deemed subject to the approval of the Supreme Court.

Teehankee, Fernandez and De Castro, JJ., concur.

EN BANC
[G.R. No. 81958. June 30, 1988.]
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS,
INC., petitioner, vs. HON. FRANKLIN M.DRILON as Secretary
of Labor and Employment, and TOMAS D. ACHACOSO, as

Administrator of the Philippine Overseas Employment

Administration, respondents.

Gutierrez & Alo Law Offices for petitioner.

DECISION
SARMIENTO, J :
p

The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for

short), a firm "engaged principally in the recruitment of Filipino workers, male
and female, for overseas placement," 1 challenges the Constitutional validity of
Department Order No. 1, Series of 1988, of the Department of Labor and
Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY
SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS," in this petition for certiorari and prohibition. Specifically, the
measure is assailed for "discrimination against males or females;" 2 that it "does
not apply to all Filipino workers but only to domestic helpers and females with
similar skills;" 3and that it is violative of the right to travel. It is held likewise to
be an invalid exercise of the lawmaking power, police power being legislative,
and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the
Constitution, providing for worker participation "in policy and decision-making
processes affecting their rights and benefits as may be provided by
law." 4Department Order No. 1, it is contended, was passed in the absence of
prior consultations. It is claimed, finally, to be in violation of the Charter's nonimpairment clause, in addition to the "great and irreparable injury" that PASEI
members face should the Order be further enforced.
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary
of Labor and Administrator of thePhilippine Overseas Employment
Administration, filed a Comment informing the Court that on March 8, 1988, the
respondent Labor Secretary lifted the deployment ban in the states of Iraq,
Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and
Switzerland. * In submitting the validity of the challenged "guidelines," the
Solicitor General invokes the police power of the Philippine State.

It is admitted that Department Order No. 1 is in the nature of a police power

measure. The only question is whether or not it is valid under the Constitution.
The concept of police power is well-established in this jurisdiction. It has been
defined as the "state authority to enact legislation that may interfere with
personal liberty or property in order to promote the general welfare." 5 As
defined, it consists of (1) an imposition of restraint upon liberty or property, (2)
in order to foster the common good. It is not capable of an exact definition but
has been, purposely, veiled in general terms to underscore its all-comprehensive
embrace.
Cdpr

"Its scope, ever-expanding to meet the exigencies of the times, even to

anticipate the future where it could be done, provides enough room for an
efficient and flexible response to conditions and circumstances thus assuring the
greatest benefits." 6
It finds no specific Constitutional grant for the plain reason that it does not owe
its origin to the Charter. Along with the taxing power and eminent domain, it is
inborn in the very fact of statehood and sovereignty. It is a fundamental
attribute of government that has enabled it to perform the most vital functions of
governance. Marshall, to whom the expression has been credited, 7 refers to it
succinctly as the plenary power of the State "to govern its citizens." 8
"The police power of the State . . . is a power coextensive with self-protection,
and it is not inaptly termed the 'law of overwhelming necessity.' It may be said
to be that inherent and plenary power in the State which enables it to prohibit all
things hurtful to the comfort, safety, and welfare of society." 9
It constitutes an implied limitation on the Bill of Rights. According to Fernando, it
is "rooted in the conception that men in organizing the state and imposing upon
its government limitations to safeguard constitutional rights did not intend
thereby to enable an individual citizen or a group of citizens to obstruct
unreasonably the enactment of such salutary measures calculated to ensure
communal peace, safety, good order, and welfare." 10 Significantly, the Bill of
Rights itself does not purport to be an absolute guaranty of individual rights and
liberties "Even liberty itself, the greatest of all rights, is not unrestricted license
to act according to one's will." 11 It is subject to the far more overriding
demands and requirements of the greater number.
Notwithstanding its extensive sweep, police power is not without its own
limitations. For all its awesome consequences, it may not be exercised arbitrarily

or unreasonably. Otherwise, and in that event, it defeats the purpose for which it
is exercised, that is, to advance the public good. Thus, when the power is used
to further private interests at the expense of the citizenry, there is a clear misuse
of the power. 12
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed validity. 13 In the absence of
clear and convincing evidence to the contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why the contested measure
should be nullified. There is no question that Department Order No. 1 applies
only to "female contract workers," 14 but it does not thereby make an undue
discrimination between the sexes. It is well-settled that "equality before the law"
under the Constitution 15 does not import a perfect identity of rights among all
men and women. It admits of classifications, provided that (1) such
classifications rest on substantial distinctions; (2) they are germane to the
purposes of the law; (3) they are not confined to existing conditions; and (4)
they apply equally to all members of the same class. 16
The Court is satisfied that the classification made the preference for female
workers rests on substantial distinctions.
As a matter of judicial notice, the Court is well aware of the unhappy plight that
has befallen our female labor force abroad, especially domestic servants, amid
exploitative working conditions marked by, in not a few cases, physical and
personal abuse. The sordid tales of maltreatment suffered by migrant Filipina
workers, even rape and various forms of torture, confirmed by testimonies of
returning workers, are compelling motives for urgent Government action. As
precisely the caretaker of Constitutional rights, the Court is called upon to protect
victims of exploitation. In fulfilling that duty, the Court sustains the Government's
efforts.
Cdpr

The same, however, cannot be said of our male workers. In the first place, there
is no evidence that, except perhaps for isolated instances, our men abroad have
been afflicted with an identical predicament. The petitioner has proffered no
argument that the Government should act similarly with respect to male workers.
The Court, of course, is not impressing some male chauvinistic notion that men
are superior to women. What the Court is saying is that it was largely a matter of
evidence (that women domestic workers are being ill-treated abroad in massive
instances) and not upon some fanciful or arbitrary yardstick that the Government

acted in this case. It is evidence capable indeed of unquestionable demonstration

and evidence this Court accepts. The Court cannot, however, say the same thing
as far as men are concerned. There is simply no evidence to justify such an
inference. Suffice it to state, then, that insofar as classifications are concerned,
this Court is content that distinctions are borne by the evidence. Discrimination in
this case is justified.
As we have furthermore indicated, executive determinations are generally final
on the Court. Under a republican regime, it is the executive branch that enforces
policy. For their part, the courts decide, in the proper cases, whether that policy,
or the manner by which it is implemented, agrees with the Constitution or the
laws, but it is not for them to question its wisdom. As a co-equal body, the
judiciary has great respect for determinations of the Chief Executive or his
subalterns, especially when the legislature itself has specifically given them
enough room on how the law should be effectively enforced. In the case at bar,
there is no gainsaying the fact, and the Court will deal with this at greater length
shortly, that Department Order No. 1 implements the rule-making powers
granted by the Labor Code. But what should be noted is the fact that in spite of
such a fiction of finality, the Court is on its own persuaded that prevailing
conditions indeed call for a deployment ban.
There is likewise no doubt that such a classification is germane to the purpose
behind the measure. Unquestionably, it is the avowed objective of Department
Order No. 1 to "enhance the protection for Filipino female overseas
workers." 17This Court has no quarrel that in the midst of the terrible
mistreatment Filipina workers have suffered abroad, a ban on deployment will be
for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is intended
to apply indefinitely so long as those conditions exist. This is clear from the
Order itself ("Pending review of the administrative and legal measures, in the
Philippines and in the host countries . . ." 18 ), meaning to say that should the
authorities arrive at a means impressed with a greater degree of permanency,
the ban shall be lifted. As a stop-gap measure, it is possessed of a necessary
malleability, depending on the circumstances of each case. Accordingly, it
provides:
9.LIFTING OF SUSPENSION. The Secretary of Labor and Employment
(DOLE) may, upon recommendation of the Philippine Overseas
Employment Administration (POEA), lift the suspension in countries
where there are:

1.Bilateral agreements or understanding with the

Philippines, and/or,
2.Existing mechanisms providing for sufficient
safeguards to ensure the welfare and protection of Filipino
workers. 19

The Court finds, finally, the impugned guidelines to be applicable to all female
domestic overseas workers. That it does not apply to "all Filipina workers" 20 is
not an argument for unconstitutionality. Had the ban been given universal
applicability, then it would have been unreasonable and arbitrary. For obvious
reasons, not all of them are similarly circumstanced. What the Constitution
prohibits is the singling out of a select person or group of persons within an
existing class, to the prejudice of such a person or group or resulting in an unfair
advantage to another person or group of persons. To apply the ban, say
exclusively to workers deployed by A, but not to those recruited by B, would
obviously clash with the equal protection clause of the Charter. It would be a
classic case of what Chase refers to as a law that "takes property from A and
gives it to B." 21 It would be an unlawful invasion of property rights and freedom
of contract and needless to state, an invalid act. 22 (Fernando says: "Where the
classification is based on such distinctions that make a real difference as infancy,
sex, and stage of civilization of minority groups, the better rule, it would seem, is
to recognize its validity only if the young, the women, and the cultural minorities
are singled out for favorable treatment. There would be an element of
unreasonableness if on the contrary their status that calls for the law ministering
to their needs is made the basis of discriminatory legislation against them. If
such be the case, it would be difficult to refute the assertion of denial of equal
protection." 23 In the case at bar, the assailed Order clearly accords protection to
certain women workers, and not the contrary.)
It is incorrect to say that Department Order No. 1 prescribes a total ban on
overseas deployment. From scattered provisions of the Order, it is evident that
such a total ban has not been contemplated. We quote:
5.AUTHORIZED DEPLOYMENT The deployment of domestic helpers
and workers of similar skills defined herein to the following [sic] are
authorized under these guidelines and are exempted from the
suspension
. LibLex

5.1Hirings by immediate members of the family of

Heads of State and Government;

5.2Hirings by Minister, Deputy Minister and the other

senior government officials; and
5.3Hirings by senior officials of the diplomatic corps
and duly accredited international organizations.
5.4Hirings by employers in countries with whom the
Philippines have [sic] bilateral labor agreements or
understanding.
xxx xxx xxx
7.VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR
SKILLS Vacationing domestic helpers and/or workers of similar skills
shall be allowed to process with the POEA and leave for worksite only if
they are returning to the same employer to finish an existing or partially
served employment contract. Those workers returning to worksite to
serve a new employer shall be covered by the suspension and the
provision of these guidelines.
xxx xxx xxx
9.LIFTING OF SUSPENSION The Secretary of Labor and Employment
(DOLE) may, upon recommendation of the Philippine Overseas
Employment Administration (POEA), lift the suspension in countries
where there are:
1.Bilateral agreements or understanding with the
Philippines, and/or,
2.Existing mechanisms providing for sufficient
safeguards to ensure the welfare and protection of Filipino
workers. 24
xxx xxx xxx

The consequence the deployment ban has on the right to travel does not impair
the right. The right to travel is subject, among other things, to the requirements
of "public safety," "as may be provided by law." 25 Department Order No. 1 is a
valid implementation of the Labor Code, in particular, its basic policy to "afford
protection to labor," 26 pursuant to the respondent Department of Labor's rulemaking authority vested in it by the Labor Code. 27 The petitioner assumes that
it is unreasonable simply because of its impact on the right to travel, but as we
have stated, the right itself is not absolute. The disputed Order is a valid
qualification thereto.

Neither is there merit in the contention that Department Order No. 1 constitutes
an invalid exercise of legislative power. It is true that police power is the domain
of the legislature, but it does not mean that such an authority may not be
lawfully delegated. As we have mentioned, the Labor Code itself vests the
Department of Labor and Employment with rule-making powers in the
enforcement whereof. 28
The petitioners' reliance on the Constitutional guaranty of worker participation
"in policy and decision-making processes affecting their rights and benefits." 29 is
not well-taken. The right granted by this provision, again, must submit to the
demands and necessities of the State's power of regulation.
LLjur

The Constitution declares that:

Sec 3.The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality
of employment opportunities for all. 30

"Protection to labor" does not signify the promotion of employment alone. What
concerns the Constitution more paramountly is that such an employment be
above all, decent, just, and humane. It is bad enough that the country has to
send its sons and daughters to strange lands because it cannot satisfy their
employment needs at home. Under these circumstances, the Government is
duty-bound to insure that our toiling expatriates have adequate protection,
personally and economically, while away from home. In this case, the
Government has evidence, an evidence the petitioner cannot seriously dispute, of
the lack or inadequacy of such protection, and as part of its duty, it has precisely
ordered an indefinite ban on deployment.
The Court finds furthermore that the Government has not indiscriminately made
use of its authority. It is not contested that it has in fact removed the prohibition
with respect to certain countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the petitioner, must
yield to the loftier purposes targetted by the Government. 31 Freedom of
contract and enterprise, like all other freedoms, is not free from restrictions,
more so in this jurisdiction, where laissez faire has never been fully accepted as
a controlling economic way of life.
This Court understands the grave implications the questioned Order has on the
business of recruitment. The concern of the Government, however, is not
necessarily to maintain profits of business firms. In the ordinary sequence of

events, it is profits that suffer as a result of Government regulation. The interest

of the State is to provide a decent living to its citizens. The Government has
convinced the Court in this case that this is its intent. We do not find the
impugned Order to be tainted with a grave abuse of discretion to warrant the
extraordinary relief prayed for.
LLphil

WHEREFORE, the petition is DISMISSED. No costs.

SO ORDERED.

Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco,

Padilla, Bidin, Cortes and Grio-Aquino, JJ., concur.
Gutierrez, Jr. and Medialdea, JJ., are on leave.

FIRST DIVISION
[G.R. No. 128845. June 1, 2000.]
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE
), petitioner, vs. HON. LEONARDO A. QUISUMBING in his
capacity as the Secretary of Labor and Employment; HON.
CRESENCIANO B. TRAJANO in his capacity as the Acting
Secretary of Labor and Employment; DR. BRIAN
MACCAULEY in his capacity as the Superintendent
of InternationalSchool-Manila;
and INTERNATIONAL SCHOOL, INC., respondents.

Azcuna Yorac Sarmiento Arroyo & Chua Law Offices for petitioner.
The Solicitor General for public respondent.
Bernas Law Office for private respondent.
SYNOPSIS
Private respondent International School, Inc. is a domestic educational institution
established primarily for dependents of foreign diplomatic personnel and other
temporary residents. It hires both foreign and local teachers as members of its
faculty classifying them as foreign-hires and local-hires. It grants foreign-hires

certain benefits as housing, transportation, shipping costs, taxes and home leave
travel allowance which are not accorded to local-hires. Foreign-hires are also
paid a salary rate of twenty-five percent (25%) more than the local-hires.
The school justified the difference on two "significant economic disadvantages"
foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited
tenure. When negotiations for a new collective bargaining agreement were held
in June 1995, petitionerInternational School Alliance of Educators (ISAE) as a
legitimate labor union and the collective bargaining representative of all the
faculty members of the school contested the difference in salary rates between
foreign and local hires. This issue, as well as the question of whether foreignhires should be included in the appropriate bargaining unit, eventually caused a
deadlock between the parties. The Department of Labor and Employment
(DOLE) assumed jurisdiction over the dispute. It subsequently issued an Order
resolving the issues in favor of the school. The motion for reconsideration of
ISAE was also denied. Hence, this petition.
The Court ruled that the point-of-hire classification employed by
respondent School to justify the distinction in the salary rates of foreign-hires
and local-hires was an invalid classification. There is no reasonable distinction
between the services rendered by foreign-hires and local-hires. The practice of
the School of according higher salaries to foreign-hires contravenes public policy
and, certainly, does not deserve the sympathy of the Court.
The Court agreed, however, that foreign-hires do not belong to the same
bargaining unit as the local-hires. The basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights. It does
not appear that foreign-hires have indicated their intention to be grouped
together with local-hires for purposes of collective bargaining. The collective
bargaining history in the School also showed that these groups were always
treated separately. Foreign-hires have limited tenure; local-hires enjoy security of
tenure. Although foreign-hires perform similar functions under the same working
conditions as the local-hires, foreign-hires are accorded certain benefits not
granted to local-hires. These benefits, such as housing, transportation, shipping
costs, taxes, and home leave travel allowance, are reasonably related to their
status as foreign-hires, and justified the exclusion of the former from the latter.
To include foreign-hires in a bargaining unit with local-hires would not assure
either group the exercise of their respective collective bargaining rights. The
orders of the Secretary of Labor were reversed and set aside insofar as they
upheld the practice of respondent School of according foreign-hires higher
salaries than local-hires.

SYLLABUS
1.POLITICAL LAW; CONSTITUTIONAL LAW; PUBLIC POLICY ABHORS
INEQUALITY AND DISCRIMINATION. That public policy abhors inequality and
discrimination is beyond contention. Our Constitution and laws reflect the policy
against these evils. The Constitution in the Article on Social Justice and Human
Rights exhorts Congress to "give highest priority to the enactment of measures
that protect and enhance the right of all people to human dignity, reduce social,
economic, and political inequalities." The very broad Article 19 of the Civil Code
requires every person, "in the exercise of his rights and in the performance of
this duties, [to] act with justice, give everyone his due, and observe honesty and
good faith."
2.INTERNATIONAL LAW; SPRINGS FROM GENERAL PRINCIPLES OF LAW WHICH
PROSCRIBE DISCRIMINATION. International law, which springs from general
principles of law, likewise proscribes discrimination. General principles of law
include principles of equity, i.e., the general principles of fairness and justice,
based on the test of what is reasonable. The Universal Declaration of Human
Rights, the International Covenant on Economic, Social, and Cultural Rights,
the International Convention on the Elimination of All Forms of Racial
Discrimination, the Convention against Discrimination in Education, the
Convention (No. 111) Concerning Discrimination in Respect of Employment and
Occupation all embody the general principle against discrimination, the very
antithesis of fairness and justice. The Philippines, through its Constitution, has
incorporated this principle as part of its national laws.
3.POLITICAL LAW; CONSTITUTIONAL LAW; SOCIAL JUSTICE AND HUMAN
RIGHTS; LABOR; HUMANE CONDITIONS OF WORK INCLUDES THE MANNER BY
WHICH EMPLOYERS TREAT THEIR EMPLOYEES. The Constitution specifically
provides that labor is entitled to "humane conditions of work." These conditions
are not restricted to the physical workplace the factory, the office or the field
but include as well the manner by which employers treat their employees.
4.LABOR AND SOCIAL LEGISLATION; LABOR CODE; THE STATE SHALL ENSURE
EQUAL WORK OPPORTUNITIES REGARDLESS OF SEX, RACE OR CREED. The
Constitution also directs the State to promote "equality of employment
opportunities for all." Similarly, the Labor Code provides that the State shall
"ensure equal work opportunities regardless of sex, race or creed." It would be
an affront to both the spirit and letter of these provisions if the State, in spite of
its primordial obligation to promote and ensure equal employment opportunities,

closes its eyes to unequal and discriminatory terms and conditions of

employment.
5.ID.; ID.; PROHIBITS DISCRIMINATION IN TERMS OF WAGES.
Discrimination, particularly in terms of wages, is frowned upon by the Labor
Code. Article 135, for example, prohibits and penalizes the payment of lesser
compensation to a female employee as against a male employee for work of
equal value. Article 248 declares it an unfair labor practice for an employer to
discriminate in regard to wages in order to encourage or discourage membership
in any labor organization.
6.INTERNATIONAL LAW; INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL
AND CULTURAL RIGHTS; INSTITUTIONALIZED THE LONG HONORED LEGAL
TRUISM OF "EQUAL PAY FOR EQUAL WORK." [T]he InternationalCovenant on
Economic, Social, and Cultural Rights, in Article 7 thereof, provides: The States
Parties to the present Covenant recognize the right of everyone to the enjoyment
of just and favourable conditions of work, which ensure, in particular: a.
Remuneration which provides all workers, as a minimum, with: i. Fair wages and
equal remuneration for work of equal value without distinction of any kind, in
particular women being guaranteed conditions of work not inferior to those
enjoyed by men, with equal pay for equal work; . . . . The foregoing provisions
impregnably institutionalize in this jurisdiction the long honored legal truism of
"equal pay for equal work." Persons who work with substantially equal
qualifications, skill, effort and responsibility, under similar conditions, should be
paid similar salaries.
7.LABOR AND SOCIAL LEGISLATION; LABOR CODE; CONDITIONS OF
EMPLOYMENT; EQUAL WORK FOR EQUAL PAY; APPLIED IN CASE AT BAR.
This rule applies to the School, its "international character" notwithstanding.
TheSchool contends that petitioner has not adduced evidence that local-hires
perform work equal to that of foreign-hires. The Court finds this argument a little
cavalier. If an employer accords employees the same position and rank, the
presumption is that these employees perform equal work. This presumption is
borne by logic and human experience. If the employer pays one employee less
than the rest, it is not for that employee to explain why he receives less or why
the others receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain why the
employee is treated unfairly. The employer in this case has failed to discharge
this burden. There is no evidence here that foreign-hires perform 25% more
efficiently or effectively than the local-hires. Both groups have similar functions
and responsibilities, which they perform under similar working conditions.

The Schoolcannot invoke the need to entice foreign-hires to leave their domicile
to rationalize the distinction in salary rates without violating the principle of equal
work for equal pay.
8.ID.; ID.; ID.; SALARY; DEFINED. "Salary" is defined in Black's Law
Dictionary (5th ed.) as "a reward or recompense for services performed."
Similarly, the Philippine Legal Encyclopedia states that "salary" is the
"[c]onsideration paid at regular intervals for the rendering of services."
In Songco v. National Labor Relations Commission, we said that: "salary" means
a recompense or consideration made to a person for his pains or industry in
another man's business. Whether it be derived from "salarium," or more
fancifully from "sal," the pay of the Roman soldier, it carries with it the
fundamental idea of compensation for services rendered.

9.ID.; ID.; ID.; ID.; "DISLOCATION FACTOR" AND FOREIGN HIRES' LIMITED
TENURE CANNOT SERVE AS VALID BASES FOR DISTINCTION IN SALARY RATES.
While we recognize the need of the School to attract foreign-hires, salaries
should not be used as an enticement to the prejudice of local-hires. The localhires perform the same services as foreign-hires and they ought to be paid the
same salaries as the latter. For the same reason, the "dislocation factor" and the
foreign-hires' limited tenure also cannot serve as valid bases for the distinction in
salary rates. The dislocation factor and limited tenure affecting foreign-hires are
adequately compensated by certain benefits accorded them which are not
enjoyed by local-hires, such as housing, transportation, shipping costs, taxes and
home leave travel allowances.
10.ID.; ID.; THE STATE HAS THE RIGHT AND DUTY TO REGULATE THE
RELATIONS BETWEEN LABOR AND CAPITAL. The Constitution enjoins the
State to "protect the rights of workers and promote their welfare," "to afford
labor full protection." The State, therefore, has the right and duty to regulate the
relations between labor and capital. These relations are not merely contractual
but are so impressed with public interest that labor contracts, collective
bargaining agreements included, must yield to the common good. Should such
contracts contain stipulations that are contrary to public policy, courts will not
hesitate to strike down these stipulations.
11.ID.; ID.; CONDITIONS OF EMPLOYMENT; POINT-OF-HIRE CLASSIFICATION
TO JUSTIFY THE DISTINCTION IN THE SALARY RATES OF FOREIGN-HIRES AND
LOCAL-HIRES IS AN INVALID CLASSIFICATION. [W]e find the point-of-hire

classification employed by respondent School to justify the distinction in the

salary rates of foreign-hires and local-hires to be an invalid classification. There is
no reasonable distinction between the services rendered by foreign-hires and
local-hires. The practice of the School of according higher salaries to foreignhires contravenes public policy and, certainly, does not deserve the sympathy of
this Court.
12.ID.; ID.; LABOR RELATIONS; COLLECTIVE BARGAINING UNIT; ELUCIDATED.
A bargaining unit is "a group of employees of a given employer, comprised of
all or less than all of the entire body of employees, consistent with equity to the
employer, indicate to be the best suited to serve the reciprocal rights and duties
of the parties under the collective bargaining provisions of the law." The factors
in determining the appropriate collective bargaining unit are (1) the will of the
employees (Globe Doctrine); (2) affinity and unity of the employees' interest,
such as substantial similarity of work and duties, or similarity of compensation
and working conditions (Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status. The basic test of an
asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their
collective bargaining rights.
cADEHI

13.ID.; ID.; ID.; ID.; FOREIGN-HIRES SHOULD NOT BELONG TO THE SAME
BARGAINING UNIT AS LOCAL-HIRES. We agree, however, that foreign-hires
do not belong to the same bargaining unit as the local-hires. . . . It does not
appear that foreign-hires have indicated their intention to be grouped together
with local-hires for purposes of collective bargaining. The collective bargaining
history in the School also shows that these groups were always treated
separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure.
Although foreign-hires perform similar functions under the same working
conditions as the local-hires, foreign-hires are accorded certain benefits not
granted to local-hires. These benefits, such as housing, transportation, shipping
costs, taxes, and home leave travel allowance, are reasonably related to their
status as foreign-hires, and justify the exclusion of the former from the latter. To
include foreign-hires in a bargaining unit with local-hires would not assure either
group the exercise of their respective collective bargaining rights.
DECISION
KAPUNAN, J :
p

Receiving salaries less than their counterparts hired abroad, the local-hires of
private respondent School, mostly Filipinos, cry discrimination. We agree. That
the local-hires are paid more than their colleagues in other schools is, of course,
beside the point. The point is that employees should be given equal pay for work
of equal value. That is a principle long honored in this jurisdiction. That is a
principle that rests on fundamental notions of justice. That is the principle we
uphold today.
Private respondent International School, Inc. (the School, for short), pursuant to
Presidential Decree 732, is a domestic educational institution established
primarily for dependents of foreign diplomatic personnel and other temporary
residents. 1 To enable the School to continue carrying out its educational
program and improve its standard of instruction, Section 2(c) of the same decree
authorizes the School to
employ its own teaching and management personnel selected by it
either locally or abroad, from Philippine or other nationalities, such
personnel being exempt from otherwise applicable laws and regulations
attending their employment, except laws that have been or will be
enacted for the protection of employees.

Accordingly, the School hires both foreign and local teachers as members of its
faculty, classifying the same into two: (1) foreign-hires and (2) local-hires.
The School employs four tests to determine whether a faculty member should be
classified as a foreign-hire or a local hire:
a.What is one's domicile?
b.Where is one's home economy?
c.To which country does one owe economic allegiance?
d.Was the individual hired abroad specifically to work in
the School and was the School responsible for bringing that
individual to the Philippines? 2
Should the answer to any of these queries point to the Philippines, the faculty
member is classified as a local hire; otherwise, he or she is deemed a foreignhire.
llcd

The School grants foreign-hires certain benefits not accorded local-hires. These
include housing, transportation, shipping costs, taxes, and home leave travel

allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%)
more than local-hires. The School justifies the difference on two "significant
economic disadvantages" foreign-hires have to endure, namely: (a) the
"dislocation factor" and (b) limited tenure. The School explains:
A foreign-hire would necessarily have to uproot himself from his home
country, leave his family and friends, and take the risk of deviating from
a promising career path all for the purpose of pursuing his profession
as an educator, but this time in a foreign land. The new foreign hire is
faced with economic realities: decent abode for oneself and/or for one's
family, effective means of transportation, allowance for the education of
one's children, adequate insurance against illness and death, and of
course the primary benefit of a basic salary/retirement compensation.
Because of a limited tenure, the foreign hire is confronted again with the
same economic reality after his term: that he will eventually and
inevitably return to his home country where he will have to confront the
uncertainty of obtaining suitable employment after a long period in a
foreign land.
The compensation scheme is simply the School's adaptive measure to
remain competitive on an internationallevel in terms of attracting
competent professionals in the field of international education. 3

When negotiations for a new collective bargaining agreement were held on June
1995, petitioner International SchoolAlliance of Educators, "a legitimate labor
union and the collective bargaining representative of all faculty members" 4 of
the School, contested the difference in salary rates between foreign and localhires. This issue, as well as the question of whether foreign-hires should be
included in the appropriate bargaining unit, eventually caused a deadlock
between the parties.
On September 7, 1995, petitioner filed a notice of strike. The failure of the
National Conciliation and Mediation Board to bring the parties to a compromise
prompted the Department of Labor and Employment (DOLE) to assume
jurisdiction over the dispute. On June 10, 1996, the DOLE Acting Secretary,
Cresenciano B. Trajano, issued an Order resolving the parity and representation
issues in favor of the School. Then DOLE Secretary Leonardo
A. Quisumbing subsequently denied petitioner's motion for reconsideration in an
Order dated March 19, 1997. Petitioner now seeks relief in this Court.

Petitioner claims that the point-of-hire classification employed by the School is

discriminatory to Filipinos and that the grant of higher salaries to foreign-hires
constitutes racial discrimination.
The School disputes these claims and gives a breakdown of its faculty members,
numbering 38 in all, with nationalities other than Filipino, who have been hired
locally and classified as local hires. 5 The Acting Secretary of Labor found that
these non-Filipino local-hires received the same benefits as the Filipino localhires:
The compensation package given to local-hires has been shown to apply
to all, regardless of race. Truth to tell, there are foreigners who have
been hired locally and who are paid equally as Filipino local hires. 6

The Acting Secretary upheld the point-of-hire classification for the distinction in
salary rates:
The principle "equal pay for equal work" does not find application in the
present case. The internationalcharacter of the School requires the
hiring of foreign personnel to deal with different nationalities and
different cultures, among the student population.
We also take cognizance of the existence of a system of salaries and
benefits accorded to foreign hired personnel which system is universally
recognized. We agree that certain amenities have to be provided to
these people in order to entice them to render their services in the
Philippines and in the process remain competitive in
the international market.

Furthermore, we took note of the fact that foreign hires have limited
contract of employment unlike the local hires who enjoy security of
tenure. To apply parity therefore, in wages and other benefits would
also require parity in other terms and conditions of employment which
include the employment contract.
cda

A perusal of the parties' 1992-1995 CBA points us to the conditions and

provisions for salary and professional compensation wherein the parties
agree as follows:
All members of the bargaining unit shall be compensated only in
accordance with Appendix C hereof provided that the
Superintendent of the School has the discretion to recruit and hire

expatriate teachers from abroad, under terms and conditions that

are consistent with accepted international practice.
Appendix C of said CBA further provides:
The new salary schedule is deemed at equity with the Overseas
Recruited Staff (OSRS) salary schedule. The 25% differential is
reflective of the agreed value of system displacement and
contracted status of the OSRS as differentiated from the tenured
status of Locally Recruited Staff (LRS).
To our mind, these provisions demonstrate the parties' recognition of
the difference in the status of two types of employees, hence, the
difference in their salaries.
The Union cannot also invoke the equal protection clause to justify its
claim of parity. It is an established principle of constitutional law that the
guarantee of equal protection of the laws is not violated by legislation or
private covenants based on reasonable classification. A classification is
reasonable if it is based on substantial distinctions and apply to all
members of the same class. Verily, there is a substantial distinction
between foreign hires and local hires, the former enjoying only a limited
tenure, having no amenities of their own in the Philippines and have to
be given a good compensation package in order to attract them to join
the teaching faculty of the School. 7

We cannot agree.
That public policy abhors inequality and discrimination is beyond contention. Our
Constitution and laws reflect the policy against these evils. The Constitution 8 in
the Article on Social Justice and Human Rights exhorts Congress to "give highest
priority to the enactment of measures that protect and enhance the right of all
people to human dignity, reduce social, economic, and political inequalities." The
very broad Article 19 of the Civil Code requires every person, "in the exercise of
his rights and in the performance of his duties, [to] act with justice, give
everyone his due, and observe honesty and good faith."
International law, which springs from general principles of law, 9 likewise
proscribes discrimination. General principles of law include principles of
equity, 10 i.e., the general principles of fairness and justice, based on the test of
what is reasonable. 11 The Universal Declaration of Human
Rights, 12 the International Covenant on Economic, Social and Cultural
Rights, 13 the International Convention on the Elimination of All Forms of Racial

Discrimination, 14 the Convention against Discrimination in Education, 15 the

Convention (No. 111) Concerning Discrimination in Respect of Employment and
Occupation 16 all embody the general principle against discrimination, the very
antithesis of fairness and justice. The Philippines, through its Constitution, has
incorporated this principle as part of its national laws.
In the workplace, where the relations between capital and labor are often
skewed in favor of capital, inequality and discrimination by the employer are all
the more reprehensible.
The Constitution 17 specifically provides that labor is entitled to "humane
conditions of work." These conditions are not restricted to the physical workplace
the factory, the office or the field but include as well the manner by which
employers treat their employees.
The Constitution 18 also directs the State to promote "equality of employment
opportunities for all." Similarly, the Labor Code 19 provides that the State shall
"ensure equal work opportunities regardless of sex, race or creed." It would be
an affront to both the spirit and letter of these provisions if the State, in spite of
its primordial obligation to promote and ensure equal employment opportunities,
closes its eyes to unequal and discriminatory terms and conditions of
employment. 20
Discrimination, particularly in terms of wages, is frowned upon by the Labor
Code. Article 135, for example, prohibits and penalizes 21 the payment of lesser
compensation to a female employee as against a male employee for work of
equal value. Article 248 declares it an unfair labor practice for an employer to
discriminate in regard to wages in order to encourage or discourage membership
in any labor organization.
Notably, the International Covenant on Economic, Social, and Cultural
Rights, supra, in Article 7 thereof, provides:
The States Parties to the present Covenant recognize the right of
everyone to the enjoyment of just and favorable conditions of work,
which ensure, in particular:
a.Remuneration which provides all workers, as a minimum, with:
i.Fair wages and equal remuneration for work of equal value
without distinction of any kind, in particular women being

guaranteed conditions of work not inferior to those

enjoyed by men, with equal pay for equal work;
xxx xxx xxx

The foregoing provisions impregnably institutionalize in this jurisdiction the long

honored legal truism of "equal pay for equal work." Persons who work with
substantially equal qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries. 22 This rule applies to the School, its
"international character" notwithstanding.
The School contends that petitioner has not adduced evidence that local-hires
perform work equal to that of foreign-hires. 23 The Court finds this argument a
little cavalier. If an employer accords employees the same position and rank, the
presumption is that these employees perform equal work. This presumption is
borne by logic and human experience. If the employer pays one employee less
than the rest, it is not for that employee to explain why he receives less or why
the others receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain why the
employee is treated unfairly.
The employer in this case has failed to discharge this burden. There is no
evidence here that foreign-hires perform 25% more efficiently or effectively than
the local-hires. Both groups have similar functions and responsibilities, which
they perform under similar working conditions.
The School cannot invoke the need to entice foreign-hires to leave their domicile
to rationalize the distinction in salary rates without violating the principle of equal
work for equal pay.
"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or
recompense for services performed." Similarly, the Philippine Legal Encyclopedia
states that "salary" is the "[c]onsideration paid at regular intervals for the
rendering of services." In Songco v. National Labor Relations Commission, 24 we
said that:
"salary" means a recompense or consideration made to a person for his
pains or industry in another man's business. Whether it be derived from
"salarium," or more fancifully from "sal," the pay of the Roman soldier, it
carries with it the fundamental idea of compensation for services
rendered. (Emphasis supplied.)

While we recognize the need of the School to attract foreign-hires, salaries

should not be used as an enticement to the prejudice of local-hires. The localhires perform the same services as foreign-hires and they ought to be paid the
same salaries as the latter. For the same reason, the "dislocation factor" and the
foreign-hires' limited tenure also cannot serve as valid bases for the distinction in
salary rates. The dislocation factor and limited tenure affecting foreign-hires are
adequately compensated by certain benefits accorded them which are not
enjoyed by local-hires, such as housing, transportation, shipping costs, taxes and
home leave travel allowances.
The Constitution enjoins the State to "protect the rights of workers and promote
their welfare," 25 "to afford labor full protection." 26 The State, therefore, has the
right and duty to regulate the relations between labor and capital. 27 These
relations are not merely contractual but are so impressed with public interest
that labor contracts, collective bargaining agreements included, must yield to the
common good. 28 Should such contracts contain stipulations that are contrary to
public policy, courts will not hesitate to strike down these stipulations.
In this case, we find the point-of-hire classification employed by
respondent School to justify the distinction in the salary rates of foreign-hires
and local hires to be an invalid classification. There is no reasonable distinction
between the services rendered by foreign-hires and local-hires. The practice of
the School of according higher salaries to foreign-hires contravenes public policy
and, certainly, does not deserve the sympathy of this Court.
We agree, however, that foreign-hires do not belong to the same bargaining unit
as the local-hires.
LLjur

A bargaining unit is "a group of employees of a given employer, comprised of all

or less than all of the entire body of employees, consistent with equity to the
employer indicate to be the best suited to serve the reciprocal rights and duties
of the parties under the collective bargaining provisions of the law." 29 The
factors in determining the appropriate collective bargaining unit are (1) the will
of the employees (Globe Doctrine); (2) affinity and unity of the employees'
interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions (Substantial Mutual Interests Rule); (3)
prior collective bargaining history; and (4) similarity of employment status. 30The
basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights. 31

It does not appear that foreign-hires have indicated their intention to be grouped
together with local-hires for purposes of collective bargaining. The collective
bargaining history in the School also shows that these groups were always
treated separately. Foreign-hires have limited tenure; local-hires enjoy security of
tenure. Although foreign-hires perform similar functions under the same working
conditions as the local-hires, foreign-hires are accorded certain benefits not
granted to local-hires. These benefits, such as housing, transportation, shipping
costs, taxes, and home leave travel allowance, are reasonably related to their
status as foreign-hires, and justify the exclusion of the former from the latter. To
include foreign-hires in a bargaining unit with local-hires would not assure either
group the exercise of their respective collective bargaining rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby
GRANTED IN PART. The Orders of the Secretary of Labor and Employment dated
June 10, 1996 and March 19, 1997, are hereby REVERSED and SET ASIDE
insofar as they uphold the practice of respondent School of according foreignhires higher salaries than local hires.
SO ORDERED.

Puno and Pardo, JJ., concur.

Davide, Jr., C.J., is on official leave.
Ynares-Santiago, J., is on leave.

EN BANC
[G.R. No. 124360. November 5, 1997.]
FRANCISCO S. TATAD, petitioner, vs. THE SECRETARY OF
THE DEPARTMENT OF ENERGY AND THE SECRETARY OF
THE DEPARTMENT OF FINANCE, respondents.
[G.R. No. 127867. November 5, 1997.]
EDCEL C. LAGMAN, JOKER P. ARROYO, ENRIQUE GARCIA,
WIGBERTO TAADA, FLAG HUMAN RIGHTS FOUNDATION,

INC., FREEDOM FROM DEBT COALITION (FDC),

SANLAKAS,petitioners, vs. HON. RUBEN TORRES in his
capacity as the Executive Secretary, HON. FRANCISCO
VIRAY, in his capacity as the Secretary of Energy, CALTEX
Philippines, Inc., PETRON Corporation and PILIPINAS
SHELL Corporation, respondents.

Brillantes, Navarro, Jumamil, Arcilla, Escolin and Martinez Law Office for
petitioner in G.R. No. 124360.
Sanidad, Abaya, Cortez, Te Madrid, Viterbo & Tan Law Firm for petitioners in
G.R. No. 127867.
Alfonso M. Cruz Law Offices for Enrique Garcia.
SYNOPSIS
Republic Act No. 8180, or the Downstream Oil Industry Regulation Act of 1996,
was enacted by Congress for the purpose of deregulating the downstream oil
industry. Its validity was challenged on the following constitutional grounds: a)
that the imposition of different tariff rates on imported crude oil and imported
refined petroleum products violates the equal protection clause; b) the
imposition of different tariff rates does not deregulate the downstream oil
industry but instead controls the oil industry; c) the inclusion of the tariff
provision in Section 5(b) of RA 8180 violates the one title-one subject
requirement of the Constitution; d) that Section 15 thereof constitutes undue
delegation of legislative power to the President and the Secretary of Energy and
violates the constitutional prohibition against monopolies; and e) that Executive
Order No. 392 implementing R.A. 8180 is arbitrary and unreasonable because it
was enacted due to the alleged depletion of OPSF fund a condition not found
in the law.
This Court has adopted a liberal construction of the one title-one subject rule. A
law having a single general subject indicated in the title may contain any number
of provisions, so long as they are not inconsistent with or foreign to the general
subject, and may be considered in furtherance of such subject by providing for
the method and means of carrying out the general subject. Section 5(b)
providing for tariff differential is germane to the subject of R.A. No. 8180 which
is the deregulation of the downstream oil industry.

Section 15 can hurdle both completeness test and the sufficient standard test.
Full deregulation at the end of March 1997 is mandatory and the Executive has
no discretion to postpone it for any purported reason. Thus, the law is complete
on the question of the final date of full deregulation.
Section 15 of R.A. No. 8180 did not mention the depletion of the OPSF fund as
basis of deregulation, thus said extraneous factor constitutes a misapplication of
R.A. No. 8180.
The 4% tariff differential and the inventory requirement are significant barriers
which discourage new players to enter the market. As the dominant players,
Petron, Shell and Caltex boast of existing refineries of various capacities and
easily comply with the inventory requirement as against prospective new players.
The offending provisions of R.A. No. 8180 so permeate its essence that the
entire law has to be struck down. R.A. No. 8180 with its anti-competition
provisions cannot be allowed by this Court to stand even while Congress is
working to remedy its defects.
TIAEac

SYLLABUS
1.CONSTITUTIONAL LAW; JUDICIARY; JUDICIAL POWER, CONSTRUED.
Judicial power includes not only the duty of the courts to settle actual
controversies involving rights which are legally demandable and enforceable, but
also the duty to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the government. The courts, as guardians of the Constitution,
have the inherent authority to determine whether a statute enacted by the
legislature transcends the limit imposed by the fundamental law. Where a statute
violates the Constitution, it is not only the right but the duty of the judiciary to
declare such act as unconstitutional and void.
EcSCHD

2.ID.; ID.; ISSUES ASSAILING THE CONSTITUTIONALITY OF R.A. 8180,

JUSTICIABLE. Even a sideglance at the petitions will reveal that petitioners
have raised constitutional issues which deserve the resolution of this Court in
view of their seriousness and their value as precedents. Our statement of facts
and definition of issues clearly show that petitioners are assailing R.A. No. 8180
because its provisions infringe the Constitution and not because the law lacks
wisdom. The principle of separation of power mandates that challenges on the
constitutionality of a law should be resolved in our courts of justice while doubts
on the wisdom of a law should be debated in the halls of Congress. Every now

and then, a law may be denounced in court both as bereft of wisdom and
constitutionally infirmed. Such denunciation will not deny this Court of its
jurisdiction to resolve the constitutionality of the said law while prudentially
refusing to pass on its wisdom.
3.REMEDIAL LAW; ACTIONS; PARTIES; TECHNICALITIES SUCH AS
PERSONALITY, STANDING OR INTEREST, ARE BRUSHED ASIDE WHERE ISSUES
ARE OF PUBLIC IMPORTANCE. The effort of respondents to question the locus
standi of petitioners must also fall on barren ground. In language too lucid to be
misunderstood, this Court has brightlined its liberal stance on a petitioner's locus
standi where the petitioner is able to craft an issue of transcendental significance
to the people. In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc.
v. Tan, we stressed: ". . . Objections to taxpayers' suit for lack of sufficient
personality, standing or interest are, however, in the main procedural matters.
Considering the importance to the public of the cases at bar, and in keeping with
the Court's duty, under the 1987 Constitution, to determine whether or not the
other branches of government have kept themselves within the limits of the
Constitution and the laws and that they have not abused the discretion given to
them, the Court has brushed aside technicalities of procedure and has taken
cognizance of these petitions." There is not a dot of disagreement between the
petitioners and the respondents on the far reaching importance of the validity of
RA No. 8180 deregulating our downstream oil industry. Thus, there is no good
sense in being hypertechnical on the standing of petitioners for they pose issues
which are significant to our people and which deserve our forthright resolution.
4.CONSTITUTIONAL LAW; CONGRESS; ONE TITLE-ONE SUBJECT RULE;
LITERALLY CONSTRUED. As a policy, this Court has adopted a liberal
construction of the one title-one subject rule. We have consistently ruled that the
title need not mirror, fully index or catalogue all contents and minute details of a
law. A law having a single general subject indicated in the title may contain any
number of provisions, no matter how diverse they may be, so long as they are
not inconsistent with or foreign to the general subject, and may be considered in
furtherance of such subject by providing for the method and means of carrying
out the general subject.
5.ID.; ID.; ID.; SECTION 5(B) PROVIDING FOR TARIFF DIFFERENTIAL,
GERMANE TO DEREGULATION OF DOWNSTREAM OIL INDUSTRY. We hold
that Section 5(b) providing for tariff differential is germane to the subject of R.A.
No. 8180 which is the deregulation of the downstream oil industry. The section is
supposed to sway prospective investors to put up refineries in our country and
make them rely less on imported petroleum.

6.ID.; ID.; POWER TO DELEGATE EXECUTION OF LAWS; TESTS. The power

of Congress to delegate the execution of laws has long been settled by this
Court. As early as 1916 in Compania General de Tabacos de Filipinas vs. The
Board of Public Utility Commissioners, this Court, thru Mr. Justice Moreland, held
that "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." Over the years, as the legal engineering of men's relationship
became more difficult, Congress has to rely more on the practice of delegating
the execution of laws to the executive and other administrative agencies. Two
tests have been developed to determine whether the delegation of the power to
execute laws does not involve the abdication of the power to make law itself. We
delineated the metes and bounds of these tests in Eastern Shipping Lines, Inc.
vs. POEA, thus: "There are two accepted tests to determine whether or not there
is a valid delegation of legislative power, viz.: the completeness test and the
sufficient standard test. Under the first test, the law must be complete in all its
terms and conditions when it leaves the legislative such that when it reaches the
delegate the only thing he will have to do is to enforce it. Under the sufficient
standard test, there must be adequate guidelines or limitations in the law to map
out the boundaries of the delegate's authority and prevent the delegation from
running riot. Both tests are intended to prevent a total transference of legislative
authority to the delegate, who is not allowed to step into the shoes of the
legislature and exercise a power essentially legislative."
caAICE

7.ID.; ID.; ID.; ID.; EVEN IF THE LAW DOES NOT EXPRESSLY PINPOINT THE
STANDARD, COURTS WILL BEND BACKWARD TO LOCATE THE SAME
ELSEWHERE. The validity of delegating legislative power is now a quiet area in
our constitutional landscape. As sagely observed, delegation of legislative power
has become an inevitability in light of the increasing complexity of the task of
government. Thus, courts bend as far back as possible to sustain the
constitutionality of laws which are assailed as unduly delegating legislative
powers. Citing Hirabayashi v. United Statesas authority, Mr. Justice Isagani A.
Cruz states "that even if the law does not expressly pinpoint the standard, the
courts will bend over backward to locate the same elsewhere in order to spare
the statute, if it can, from constitutional infirmity."

8.ID.; ID.;. SECTION 15 OF R.A. 8180, NOT UNDUE DELEGATION OF POWER.

Given the groove of the Court's rulings, the attempt of petitioners to strike down

Section 15 on the ground of undue delegation of legislative power cannot

prosper. Section 15 can hurdle both the completeness test and the sufficient
standard test. It will be noted that Congress expressly provided in R.A. No. 8180
that full deregulation will start at the end of March 1997, regardless of the
occurrence of any event. Full deregulation at the end of March 1997 is
mandatory and the Executive has no discretion to postpone it for any purported
reason. Thus, the law is complete on the question of the final date of full
deregulation. The discretion given to the President is to advance the date of full
deregulation before the end of March 1997. Section 15 lays down the standard
to guide the judgment of the President he is to time it as far as
practicable when the prices of crude oil and petroleum products in the world
market are declining and when the exchange rate of the peso in relation to the
US dollar is stable. Petitioners contend that the words "as far as practicable,"
"declining" and "stable" should have been defined in R.A. No. 8180 as they do
not set determinate or determinable standards. The stubborn submission
deserves scant consideration. The dictionary meanings of these words are well
settled and cannot confuse men of reasonable intelligence. Webster defines
"practicable" as meaning possible to practice or perform, "decline" as meaning to
take a downward direction, and "stable" as meaning firmly established. The fear
of petitioners that these words will result in the exercise of executive discretion
that will run riot is thus groundless. To be sure, the Court has sustained the
validity of similar, if not more general standards in other cases.
9.ID.; ID.; DELEGATION OF POWER; EXECUTIVE IS BEREFT OF ANY RIGHT TO
ALTER THE STANDARD SET IN R.A. 8180 BY CONSIDERING THE DEPLETION OF
OIL PRICE STABILIZATION FUND (OPSF) AS A FACTOR IN FULLY
DEREGULATING THE DOWNSTREAM OIL INDUSTRY IN FEBRUARY 1997. The
Executive department failed to follow faithfully the standards set by R.A. No.
8180 when it considered the extraneous factor of depletion of the OPSF fund.
The misappreciation of this extra factor cannot be justified on the ground that
the Executive department considered anyway the stability of the prices of crude
oil in the world market and the stability of the exchange rate of the peso to the
dollar. By considering another factor to hasten full deregulation, the Executive
department rewrote the standards set forth in R.A. 8180. The Executive is bereft
of any right to alter either by subtraction or addition the standards set in R.A.
No. 8180 for it has no power to make laws. To cede to the Executive the power
to make law is to invite tyranny, indeed, to transgress the principle of separation
of powers. The exercise of delegated power is given a strict scrutiny by courts
for the delegate is a mere agent whose action cannot infringe the terms of
agency. In the cases at bar, the Executive co-mingled the factor of depletion of
the OPSF fund with the factors of decline of the price of crude oil in the world

market and the stability of the peso to the US dollar. On the basis of the text of
E.O. No. 392, it is impossible to determine the weight given by the Executive
department to the depletion of the OPSF fund. It could well be the principal
consideration for the early deregulation. It could have been accorded an equal
significance. Or its importance could be nil. In light of this uncertainty, we rule
that early deregulation under E.O. No. 392 constitutes a misapplication of R.A.
No. 8180.
10.ID.; NATIONAL ECONOMY AND PATRIMONY; MONOPOLY AND
COMBINATION IN RESTRAINT OF TRADE, DEFINED. A monopoly is a privilege
or peculiar advantage vested in one or more persons or companies, consisting in
the exclusive right or power to carry on a particular business or trade,
manufacture a particular article, or control the sale or the whole supply of a
particular commodity. It is a form of market structure in which one or only a few
firms dominate the total sales of a product or service. On the other hand, a
combination in restraint of trade is an agreement or understanding between two
or more persons, in the form of a contract, trust, pool holding company, or other
form of association, for the purpose of unduly restricting competition,
monopolizing trade and commerce in a certain commodity, controlling its
production, distribution and price, or otherwise interfering with freedom of trade
without statutory authority. Combination in restraint of trade refers to the means
while monopoly refers to the end.
11.ID.; ID.; FREE ENTERPRISE SYSTEM DID NOT PER SE PROHIBIT THE
OPERATION OF MONOPOLIES. While the Constitution embraced free
enterprise as an economic creed, it did not prohibit per se the operation of
monopolies which can, however, be regulated in the public interest. Thus too,
our free enterprise system is not based on a market of pure and unadulterated
competition where the State pursues a strict hands-off policy and follows the letthe-devil devour the hindmost rule. Combinations in restraint of trade and unfair
competitions are absolutely proscribed and the proscription is directed both
against the State as well as the private sector. This distinct free enterprise
system is dictated by the need to achieve the goals of our national economy as
defined by Section 1, Article XII of the Constitution which are: more equitable
distribution of opportunities, income and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to raising the quality of life for
all, especially the underprivileged. It also calls for the State to protect Filipino
enterprises against unfair competition and trade practices.

12.ID.; ID.; ID.; COMPETITION, UNDERLYING PRINCIPLE. Section 19, Article

XII of our Constitution is anti-trust in history and in spirit. It espouses
competition. The desirability of competition is the reason for the prohibition
against restraint of trade, the reason for the interdiction of unfair competition,
and the reason for regulation of unmitigated monopolies. Competition is thus the
underlying principle of Section 19, Article XII of our Constitution which cannot be
violated by R.A. No. 8180.
DCHIAS

13.ID.; ID.; ID.; TARIFF DIFFERENTIAL OF 4% WORKS TO THE IMMENSE

BENEFIT OF THE THREE MAJOR LEAGUE PLAYERS IN THE OIL MARKET. In
the cases at bar, it cannot be denied that our downstream oil industry is
operated and controlled by an oligopoly, a foreign oligopoly at that, Petron, Shell
and Caltex stand as the only major league players in the oil market. All other
players belong to the lilliputian league. As the dominant players, Petron, Shell
and Caltex boast of existing refineries of various capacities. The tariff differential
of 4% therefore works to their immense benefit. Yet, this is only one edge of the
tariff differential. The other edge cuts and cuts deep in the heart of their
competitors. It erects a high barrier to the entry of new players. New players
that intend to equalize the market power of Petron, Shell and Caltex by building
refineries of their own will have to spend billions of pesos. Those who will not
build refineries but compete with them will suffer the huge disadvantage of
increasing their product cost by 4%. They will be competing on an uneven field.
The argument that the 4% tariff differential is desirable because it will induce
prospective players to invest in refineries puts the cart before the horse. The first
need is to attract new players and they cannot be attracted by burdening them
with heavy disincentives. Without new players belonging to the league of Petron,
Shell and Caltex, competition in our downstream oil industry is an idle dream.
14.ID.; ID.; ID.; ID.; PROVISION ON INVENTORY WIDENS BALANCE OF
ADVANTAGE OF THREE MAJOR OIL COMPANIES AGAINST PROSPECTIVE NEW
PLAYERS. The provision on inventory widens the balance of advantage of
Petron, Shell and Caltex against prospective new players. Petron, Shell and
Caltex can easily comply with the inventory requirement of R.A. No. 8180 in view
of their existing storage facilities. Prospective competitors again will find
compliance with this requirement difficult as it will entail a prohibitive cost. The
construction cost of storage facilities and the cost of inventory can thus scare
prospective players. Their net effect is to further occlude the entry points of new
players, dampen competition and enhance the control of the market by the three
(3) existing oil companies.

15.ID.; ID.; ID.; ID.; PREDATORY PRICING IS ANTI-COMPETITIVE. Finally,

we come to the provision on predatory pricing which is defined as ". . . selling or
offering to sell any product at a price unreasonably below the industry average
cost so as to attract customers to the detriment of competitors." Respondents
contend that this provision works against Petron, Shell and Caltex and protects
new entrants. The ban on predatory pricing cannot be analyzed in isolation. Its
validity is interlocked with the barriers imposed by R.A. No. 8180 on the entry of
new players. The inquiry should be to determine whether predatory pricing on
the part of the dominant oil companies is encouraged by the provisions in the
law blocking the entry of new players. Text-writer Hovenkamp, gives the
authoritative answer and we quote: ". . . The rationale for predatory pricing is
the sustaining of losses today that will give a firm monopoly profits in the future.
The monopoly profits will never materialize, however, if the market is flooded
with new entrants as soon as the successful predator attempts to raise its
price. Predatory pricing will be profitable only if the market contains significant
barriers to new entry." As aforediscussed, the 4% tariff differential and the
inventory requirement are significant barriers which discourage new players to
enter the market. Considering these significant barriers established by R.A. No.
8180 and the lack of players with the comparable clout of PETRON, SHELL and
CALTEX, the temptation for a dominant player to engage in predatory pricing and
succeed is a chilling reality. Petitioners' charge that this provision on predatory
pricing is anti-competitive is not without reason. Respondents belittle these
barriers with the allegation that new players have entered the market since
deregulation. A scrutiny of the list of the alleged new players will, however,
reveal that not one belongs to the class and category of PETRON, SHELL and
CALTEX. Indeed, there is no showing that any of these new players intends to
install any refinery and effectively compete with these dominant oil companies.
In any event, it cannot be gainsaid that the new players could have been more in
number and more impressive in might if the illegal entry barriers in R.A. No.
8180 were not erected.

16.STATUTORY CONSTRUCTION; STATUTES; WHERE PART OF A STATUTE IS

VOID WHILE ANOTHER PART IS VALID, THE VALID PORTION, IF SEPARABLE
FROM THE INVALID, MAY STAND AND BE ENFORCED; EXCEPTION. ". . .
The general rule is that where part of a statute is void as repugnant to the
Constitution, while another part is valid, the valid portion, if separable from the
invalid, may stand and be enforced. The presence of a separability clause in a
statute creates the presumption that the legislature intended separability, rather
than complete nullity of the statute. To justify this result, the valid portion must

be so far independent of the invalid portion that it is fair to presume that the
legislature would have enacted it by itself if it had supposed that it could not
constitutionally enact the other. Enough must remain to make a complete,
intelligible and valid statute, which carries out the legislative intent. . . .
The exception to the general rule is that when the parts of a statute are so
mutually dependent and connected, as conditions, considerations, inducements,
or compensations for each other, as to warrant a belief that the legislature
intended them as a whole, the nullity of one part will vitiate the rest. In making
the parts of the statute dependent, conditional, or connected with one another
the legislature intended the statute to be carried out as a whole and would not
have enacted it if one part is void, in which case if some parts are
unconstitutional, all the other provisions thus dependent, conditional, or
connected must fall with them."
17.CONSTITUTIONAL LAW; CONGRESS; R.A. NO. 8180, UNCONSTITUTIONAL.
R.A. No. 8180 contains a separability clause. Section 23 provides that "if for
any reason, any section or provision of this Act is declared unconstitutional or
invalid, such parts not affected thereby shall remain in full force and effect." This
separability clause notwithstanding, we hold that the offending provisions of R.A.
No. 8180 so permeate its essence that the entire law has to be struck down. The
provisions on tariff differential, inventory and predatory pricing are among the
principal props of R.A. No. 8180. Congress could not have deregulated the
downstream oil industry without these provisions. Unfortunately, contrary to their
intent, these provisions on tariff differential, inventory and predatory pricing
inhibit fair competition, encourage monopolistic power and interfere with the free
interaction of market forces. R.A. No. 8180 needs provisions to vouchsafe free
and fair competition. The need for these vouchsafing provisions cannot be
overstated.Before deregulation, PETRON, SHELL and CALTEX had no real
competitors but did not have a free run of the market because government
controls both the pricing and non-pricing aspects of the oil industry. After
deregulation, PETRON, SHELL and CALTEX remain unthreatened by real
competition yet are no longer subject to control by government with respect to
their pricing and non-pricing decisions. The aftermath of R.A. No. 8180 is a
deregulated market where competition can be corrupted and where market
forces can be manipulated by oligopolies. R.A. No. 8180 is declared
unconstitutional and E.O. NO. 372 void.
18.ID.; SUPREME COURT; GUARDIAN NOT ONLY OF THE PEOPLE'S POLITICAL
RIGHTS BUT THEIR ECONOMIC RIGHTS AS WELL. With this Decision, some
circles will chide the Court for interfering with an economic decision of Congress.
Such criticism is charmless for the Court is annulling R.A. No. 8180 not because it

disagrees with deregulation as an economic policy but because as cobbled by

Congress in its present form, the law violates the Constitution. The right call
therefor should be for Congress to write a new oil deregulation law that
conforms with the Constitution and not for this Court to shirk its duty of striking
down a law that offend the Constitution. Striking down R.A. No. 8180 may cost
losses in quantifiable terms to the oil oligopolists. But the loss in tolerating the
tampering of our Constitution is not quantifiable in pesos and centavos. More
worthy of protection than the supra-normal profits of private corporations is the
sanctity of the fundamental principles of the Constitution. Indeed when
confronted by a law violating the Constitution, the Court has no option but to
strike it down dead. Lest it is missed, the Constitution is a covenant that grants
and guarantees both the political and economic rights of the people. The
Constitution mandates this Court to be the guardian not only of the people's
political rights but their economic rights as well. The protection of the economic
rights of the poor and the powerless is of greater importance to them for they
are concerned more with the esoterics of living and less with the esoterics of
liberty. Hence, for as long as the Constitution reigns supreme so long will this
Court be vigilant in upholding the economic rights of our people especially from
the onslaught of the powerful. Our defense of the people's economic rights may
appear heartless because it cannot be half-hearted.
KAPUNAN, J., concurring opinion:
1.CONSTITUTIONAL LAW; SUPREME COURT; WITH BOUNDEN DUTY TO DECIDE
ALL CASES INVOLVING THE CONSTITUTIONALITY OF LAWS. Admittedly, the
wisdom of political and economic decisions are outside the scrutiny of the Court.
However, the political question is not some mantra that will automatically cloak
executive orders and laws (or provisions thereof) with legitimacy. It is this
Court's bounden duty under Sec. 4(2), Art. VIII of the 1987 Constitution to
decide all cases involving the constitutionality of laws and under Sec. l of the
same article, "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."
2.ID.; CONGRESS; RA 8180 (DOWNSTREAM OIL INDUSTRY DEREGULATION
ACT OF 1996); SECTION 5 THEREOF IMPOSING 4% TARIFF DIFFERENTIAL
BETWEEN IMPORTED CRUDE OIL AND IMPORTED REFINED PETROLEUM
PRODUCTS, STRUCK DOWN FOR BEING AN OBSTACLE TO THE ENTRY OF NEW
PLAYERS IN THE OIL MARKET. Respondents are one in asserting that the 4%
tariff differential between imported crude oil and imported refined petroleum
products under Section 5 of RA 8180 is intended to encourage the new entrants

to put up their own refineries in the country. The advantages of domestic

refining cannot be discounted, but we must view this intent in the proper
perspective. The primary purpose of the deregulation law is to open up the
market and establish free competition. The priority of the deregulation law,
therefore, is to encourage new oil companies to come in first. Incentives to
encourage the building of local refineries should be provided after the new oil
companies have entered the Philippine market and are actively participating
therein. The threshold question therefore is, is the 4% tariff differential a barrier
to the entry of new oil companies in the Philippine market? It is. Since the
prospective oil companies do not (as yet) have local refineries, they would have
to import refined petroleum products, on which a 7% tariff duty is imposed. On
the other hand, the existing oil companies already have domestic refineries and,
therefore, only import crude oil which is taxed at a lower rate of 3%. Tariffs are
part of the costs of production. Hence, this means that with the 4% tariff
differential (which becomes an added cost) the prospective players would have
higher production costs compared to the existing companies and it is precisely
this factor which could seriously affect its decision to enter the market. Viewed in
this light, the tariff differential between imported crude oil and refined petroleum
products becomes an obstacle to the entry of new players in the Philippine oil
market. It defeats the purpose of the law and should thus be struck down.
DTAHEC

3.ID., ID., ID.; SECTIONS 6 AND 9, DECLARED UNCONSTITUTIONAL. The

same rationale holds true for the two other assailed provisions (Section 6 and 9)
in the Oil Deregulation law. The primordial purpose of the law, J. Kapunan
reiterates, is to create a truly free and competitive market. To achieve this goal,
provisions that show the possibility, or even the merest hint, of deterring or
impeding the ingress of new blood in the market should be eliminated outright.
He is confident that our lawmakers can formulate other measures that would
accomplish the same purpose (insure security and continuity of petroleum crude
products supply and prevent fly by night operators, in the case of the minimum
inventory requirement, for instance) but would not have on the downside the
effect of seriously hindering the entry of prospective traders in the market. The
overriding consideration, which is the public interest and public benefit calls for
the levelling of the playing fields for the existing oil companies and the
prospective new entrants. Only when there are many players in the market will
free competition reign and economic development begin. Consequently, Section
6 and Section 9(b) of R.A. No. 8180 should similarly be struck down.
AaDSTH

PANGANIBAN, J., concurring opinion:

1.CONSTITUTIONAL LAW; SUPREME COURT; HAS THE DUTY, NOT JUST THE
POWER, TO DETERMINE WHETHER A LAW OR A PART THEREOF OFFENDS THE
CONSTITUTION. Under the Constitution, this Court has in appropriate
cases the DUTY, not just the power, to determine whether a law or a part
thereof offends the Constitution and, if so, to annul and set it aside. Because a
serious challenge has been hurled against the validity of one such law, namely
RA 8180 its criticality having been preliminarily determined from the petition,
comments, reply and, most tellingly, the oral argument on September 30, 1997
this Court, in the exercise of its mandated judicial discretion, issued the status
quo order to prevent the continued enforcement and implementation of a law
that was prima facie found to be constitutionally infirm. Indeed, after careful
final deliberation, said law is now ruled to be constitutionally defective thereby
disabling respondent oil companies from exercising their erstwhile power,
granted by such defective statute, to determine prices by themselves.

2.ID.; ID.; HAS NO POWER TO PASS UPON THE WISDOM, MERITS AND
PROPRIETY OF THE ACTS OF ITS CO-EQUAL BRANCHES IN GOVERNMENT.
Concededly, this Court has no power to pass upon the wisdom, merits and
propriety of the acts of its co-equal branches in government. However, it does
have the prerogative to uphold the Constitution and to strike down and annul a
law that contravenes the Charter. From such duty and prerogative, it shall never
shirk or shy away.
3.ID.; ID.; UPHOLDS CONSTITUTIONAL ADHERENCE TO A TRULY COMPETITIVE
ECONOMY BY INVALIDATING RA. 8180. By annulling RA 8180, this Court is
not making a policy statement against deregulation. Quite the contrary, it is
simply invalidating a pseudo deregulation law which in reality restrains free trade
and perpetuates a cartel, an oligopoly. The Court is merely upholding
constitutional adherence to a truly competitive economy that releases the
creative energyof free enterprise. It leaves to Congress, as the policy-setting
agency of the government, the speedy crafting of a genuine, constitutionally
justified oil deregulation law.
MELO, J., dissenting opinion:
1.REMEDIAL LAW; ACTIONS; POLITICAL QUESTION IS NOT A JUSTICIABLE
CONTROVERSY; IMPOSITION OF DIFFERENT TARIFF RATES ON IMPORTED
CRUDE OIL AND IMPORTED REFINED PETROLEUM PRODUCTS, A POLITICAL
QUESTION. The instant petitions do not raise a justiciable controversy as the

issues raised therein pertain to the wisdom and reasonableness of the provisions
of the assailed law. The contentions made by petitioners, that the "imposition of

different tariff rates on imported crude oil and imported refined petroleum
products will not foster a truly competitive market, nor will it level the playing
fields" and that said imposition "does not deregulate the downstream oil
industry, instead, it controls the oil industry, contrary to the avowed policy of the
law," are clearly policy matters which are within the province of the political
departments of the government. These submissions require a review of issues
that are in the natural of political questions, hence, clearly beyond the ambit of
judicial inquiry.
cCAIDS

2.CONSTITUTIONAL LAW; POLITICAL QUESTION, CONSTRUED. A political

question refers to a question of policy or to issues which, under the Constitution,
are to be decided by the people in their sovereign capacity, or in regard to which
full discretionary authority has been delegated to the legislative or executive
branch of the government. Generally, political questions are concerned with
issues dependent upon the wisdom, not the legality, of a particular measure
(Taada vs. Cuenco, 100 Phil. 101 [1957]).
3.REMEDIAL LAW; ACTIONS; PARTIES; PROPER PARTIES; MEMBERS OF
CONGRESS; ASSAILED ACTS MUST AFFECT OR IMPAIR THEIR RIGHTS AND
PREROGATIVES AS LEGISLATORS; CASE AT BAR. The petitioners do not have
the necessary locus standi to file the instant consolidated petitions. Petitioners
Lagman, Arroyo, Garcia, Taada, and Tatad assail the constitutionality of the
above-stated laws through the instant consolidated petitions in their capacity as
members of Congress, and as taxpayers and concerned citizens. However, the
existence of a constitutional issue in a case does not per se confer or clothe a
legislator with locus standi to bring suit. In Phil. Constitution Association
(PHILCONSA) vs. Enriquez (235 SCRA 506 [1994]), we held that members of
Congress may properly challenge the validity of an official act of any department
of the government only upon showing that the assailed official act affects or
impairs their rights and prerogatives as legislators. In Kilosbayan, Inc., et al. vs.
Morato, et al. (246 SCRA 540 [1995]), this Court further clarified that "if the
complaint is not grounded on the impairment of the power of Congress,
legislators do not have standing to question the validity of any law or official
action." Republic Act No. 8180 clearly does not violate or impair prerogatives,
powers, and rights of Congress, or the individual members thereof, considering
that the assailed official act is the very act of Congress itself authorizing the full
deregulation of the downstream oil industry.

4.ID.; ID.; ID.; ID.; AS TAXPAYERS OR CONCERNED CITIZENS; ASSAILED

ACTION MUST BE AN UNCONSTITUTIONAL EXERCISE OF SPENDING POWER OF
CONGRESS; ABSENCE OF ALLEGATION OF ILLEGAL DISBURSEMENT OF PUBLIC
MONEY IN CASE AT BAR. Neither can petitioners sue as taxpayers or
concerned citizens. A condition sine qua non for the institution of a taxpayer's
suit is an allegation that the assailed action is an unconstitutional exercise of the
spending powers of Congress or that it constitutes an illegal disbursement of
public funds. The instant consolidated petitions do not allege that the assailed
provisions of the law amount to an illegal disbursement of public money. Hence,
petitioners cannot, even as taxpayers or concerned citizens, invoke this Court's
power of judicial review.
5.ID.; ID.; ID.; ID.; ID.; INTEREST OF PERSON ASSAILING THE
CONSTITUTIONALITY OF STATUTE MUST BE DIRECT AND PERSONAL; ABSENCE
OF SUCH INTEREST IN CASE AT BAR. Petitioners, including Flag, FDC, and
Sanlakas, can not be deemed proper parties for lack of a particularized interest
or elemental substantial injury necessary to confer on them locus standi. The
interest of the person assailing the constitutionality of a statute must be direct
and personal. He must be able to show, not only that the law is invalid, but also
that he has sustained or is in immediate danger of sustaining some direct injury
as a result of its enforcement, and not merely that he suffers thereby in some
indefinite way. It must appear that the person complaining has been or is about
to be denied some right or privilege to which he is lawfully entitled or that he is
about to be subjected to some burdens or penalties by reason of the statute
complained of. Petitioners have not established such kind of interest.
6.CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; ONE TITLE-ONE
SUBJECT RULE; PROVISION OF LAW NEED NOT BE EXPRESSED IN THE TITLE
OF LAW; PROVISION MUST BE EMBRACED WITHIN SUBJECT EXPRESSED IN
TITLE. Section 5 (b) of Republic Act No. 8180 is not violative of the "one titleone subject" rule under Section 26 (1), Article VI of the Constitution. It is not
required that a provision of law be expressed in the title thereof as long as the
provision in question is embraced within the subject expressed in the title of the
law. The "title of a bill does not have to be a catalogue of its contents and will
suffice if the matters embodied in the text are relevant to each other and may be
inferred from the title." (Association of Small Landowners in the Phils., Inc. vs.
Sec. of Agrarian Reform, 175 SCRA 343 [1989]). An "act having a single general
subject, indicated in the title, may contain any number of provisions, no matter
how diverse they may be, so long as they are not inconsistent with or foreign to
the general subject, and may be considered in furtherance of such subject by

providing for the method and means of carrying out the general object." (Sinco,
Phil. Political Law, 11th ed., p. 225)
7.ID.; ID.; ID.; ID.; ID.; TARIFF PROVISION IN SEC. 5 (B) OF RA 8180,
GERMANE TO THE PURPOSE OF SAID LAW. The questioned tariff provision in
Section 5 (b) was provided as a means to implement the deregulation of the
downstream oil industry and hence, is germane to the purpose of the assailed
law. The general subject of Republic Act No. 8180, as expressed in its title, "An
Act Deregulating the Downstream Oil Industry, and for Other Purposes,"
necessarily implies that the law provides for the means for such deregulation.
One such means is the imposition of the differential tariff rates which are
provided to encourage new investors as well as existing players to put up new
refineries. The aforesaid provision is thus germane to, and in furtherance of, the
object of deregulation. The trend of jurisprudence, ever since Sumulong vs.
COMELEC (73 Phil. 288 [1941]), is to give the above-stated constitutional
requirement a liberal interpretation. Hence, there is indeed substantial
compliance with said requirement.
8.ID., ID.; ID.; CONFERENCE COMMITTEE; CAN INCLUDE AN AMENDMENT TO A
HOUSE OR SENATE BILL PROVIDED IT IS GERMANE TO THE SUBJECT
THEREOF. As regards the power of the Bicameral Conference Committee to
include in its report an entirely new provision that is neither found in the House
bill or Senate bill, this Court already upheld such power in Tolentino vs. Sec. of
Finance (235 SCRA 630 [1994]), where we ruled that the conference committee
can even include an amendment in the nature of a substitute so long as such
amendment is germane to the subject of the bill before it.
9.ID.; ID.; "ENROLLED BILL THEORY"; CONSTRUED. Lastly, in view of the
"enrolled bill theory" pronounced by this Court as early as 1947 in the case
of Mabanag vs. Lopez Vito (78 Phil. 1 [1947]), the duly authenticated copy of the
bill, signed by the proper officers of each house, and approved by the President,
is conclusive upon the courts not only of its provisions but also of its due
enactment.
10.ID.; ID.; DELEGATION OF LEGISLATIVE POWER; CONSTRUED. Congress
may validly provide that a statute shall take effect or its operation shall be
revived or suspended or shall terminate upon the occurrence of certain events or
contingencies the ascertainment of which may be left to some official agency. In
effect, contingent legislation may be issued by the Executive Branch pursuant to
a delegation of authority to determine some fact or state of things upon which
the enforcement of a law depends (Cruz, Phil. Political Law, 1996 ed., p. 96; Cruz

vs. Youngberg, 56 Phil. 234 [1931]). This is a valid delegation since what the

delegate performs is a matter of detail whereas the statute remains complete in

all essential matters. Section 15 falls under this kind of delegated authority.
Notably, the only aspect with respect to which the President can exercise
"discretion" is the determination of whether deregulation may be implemented
on or before March, 1997, the deadline set by Congress. If he so decides,
however, certain conditions must first be satisfied, to wit: (1) the prices of crude
oil and petroleum products in the world market are declining, and (2) the
exchange rate of the peso in relation to the US Dollar is stable. Significantly, the
so-called "discretion" pertains only to the ascertainment of the existence of
conditions which are necessary for the effectivity of the law and not a discretion
as to what the law shall be.

11.ID; ID.; ID.; SUFFICIENT STANDARDS TEST; COMPLIED WITH IN R.A. 8180.
The law satisfies the sufficient standards test. The words "practicable",
"declining", and "stable", as used in Section 15 of the assailed law are sufficient
standards that saliently "map out the boundaries of the delegate's authority by
defining the legislative policy and indicating the circumstances under which it is
to be pursued and effected." (Cruz, Phil. Political Law, 1996 ed., p. 98).
Considering the normal and ordinary definitions of these standards, the factors to
be considered by the President and/or Secretary of Energy in implementing full
deregulation are, as mentioned, determinate and determinable.
12.ID.; ID.; R.A. 8180; NOT VIOLATIVE OF CONSTITUTIONAL PROHIBITION
AGAINST MONOPOLIES, COMBINATION OF TRADES AND UNFAIR
COMPETITION. The three provisions relied upon by petitioners (Section 5 [b]
on tariff differential, Section 6 on the 40-day minimum inventory requirement,
and Section 9 [b] on the prohibited act of predatory pricing) actually promote,
rather than restrain, free trade and competition. The 4% tariff differential aims
to ensure the stable supply of petroleum products by encouraging new entrants
to put up oil refineries in the Philippines and to discourage fly-by-night importers.
As regards the 40-day inventory requirement, it must be emphasized that the
10% minimum requirement is based on the refiners' and importers' annual sales
volume, and hence, obviously inapplicable to new entrants as they do not have
an annual sales volume yet. Contrary to petitioners' argument, this requirement
is not intended to discourage new or prospective players in the downstream oil
industry. Rather, it guarantees "security and continuity of petroleum crude and
products supply." (Section 6, Republic Act No. 8180). This legal requirement is
meant to weed out entities not sufficiently qualified to participate in the local

downstream oil industry. Consequently, it is meant to protect the industry from

fly-by-night business operators whose sole interest would be to make quick
profits and who may prove unreliable in the effort to provide an adequate and
steady supply of petroleum products in the country. In effect, the aforestated
provision benefits not only the three respondent oil companies but all entities
serious and committed to put up storage facilities and to participate as serious
players in the local oil industry. Moreover, it benefits the entire consuming public
by its guarantee of an "adequate continuous supply of environmentally-clean and
high-quality petroleum products." It ensures that all companies in the
downstream oil industry operate according to the same high standards, that the
necessary storage and distribution facilities are in place to support the level of
business activities involved, and that operations are conducted in a safe and
environmentally sound manner for the benefit of the consuming public.
caHASI

13.ID.; ID.; ID.; NOT VIOLATIVE OF THE EQUAL PROTECTION CLAUSE. The
assailed tariff differential is likewise not violative of the equal protection clause of
the Constitution. It is germane to the declared policy of Republic Act No. 8180
which is to achieve (1) fair prices; and (2) adequate and continuous supply of
environmentally-clean and high quality petroleum products. Said adequate and
continuous supply of petroleum products will be achieved if new investors or
players are enticed to engage in the business of refining crude oil in the country.
Existing refining companies, are similarly encouraged to put up additional
refining companies. All of this can be made possible in view of the lower tariff
duty on imported crude oil than that levied on imported refined petroleum
products. In effect, the lower tariff rates will enable the refiners to recoup their
investments considering that they will be investing billions of pesos in putting up
their refineries in the Philippines. That incidentally the existing refineries will be
benefited by the tariff differential does not negate the fact that the intended
effect of the law is really to encourage the construction of new refineries,
whether by existing players or by new players.
cDIHES

14.REMEDIAL LAW; SUPREME COURT; NOT A TRIER OF FACTS. As to the

alleged cartel among the three respondent oil companies, much as we suspect
the same, its existence calls for a finding of fact which this Court is not in the
position to make. We cannot be called to try facts and resolve factual issues such
as this (Trade Unions of the Phils. vs. Laguesma, 236 SCRA 586
[1994]; Ledesma vs. NLRC, 246 SCRA 247 [1995]).
FRANCISCO, J., dissenting opinion:

1.CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; LAW-MAKING POWER;

ONE SUBJECT-ONE TITLE RULE; OBJECT OF THE RULE. The Constitution
mandates that "every bill passed by Congress shall embrace only one subject
which shall be expressed in the title thereof." The object sought to be
accomplished by this mandatory requirement has been explained by the Court in
the vintage case of Central Capiz v. Ramirez, thus: "The object sought to be
accomplished and the mischief proposed to be remedied by this provision are
well known. Legislative assemblies, for the dispatch of business, often pass bills
by their titles only without requiring them to be read. A specious title sometimes
covers legislation which, if its real character had been disclosed, would not have
commanded assent. To prevent surprise and fraud on the legislature is one of
the purposes this provision was intended to accomplish. Before the adoption of
this provision the title of a statute was often no indication of its subject or
contents.
2.ID.; ID.; ID.; ID.; TO BE GIVEN A PRACTICAL RATHER THAN A TECHNICAL
CONSTRUCTION. The interpretation of "one subject-one title" rule, however,
is never intended to impede or stifle legislation. The requirement is to be given a
practical rather than a technical construction and it would be sufficient
compliance if the title expresses the general subject and all the provisions of the
enactment are germane and material to the general subject.
3.ID.; ID.; ID.; ID.; RULE REQUIRES THAT THE TITLE SHOULD NOT COVER
LEGISLATION INCONGRUOUS IN ITSELF. Congress is not required to employ
in the title of an enactment, language of such precision as to mirror, fully index
or catalogue all the contents and the minute details therein. All that is required is
that the title should not cover legislation incongruous in itself, and which by no
fair intendment can be considered as having a necessary or proper connection.
Hence, the title "An Act Amending Certain Sections of Republic Act.
4.ID; ID.; ID.; ID.; ID.; CASE AT BAR. In the case at bar, the title "An Act
Deregulating The Downstream Oil Industry, And For Other Purposes" is adequate
and comprehensive to cover the imposition of tariff rates. The tariff provision
under Section 5 (b) is one of the means of effecting deregulation. It must be
observed that even prior to the passage of Republic Act No. 8180 oil products
have always been subject to tariff and surely Congress is cognizant of such fact.
The imposition of the seven percent (7%) and three percent (3%) duties on
imported gasoline and refined petroleum products and on crude oil, respectively,
are germane to the deregulation of the oil industry. The title, in fact, even
included the broad and all-encompassing phrase "And For Other Purposes"
thereby indicating the legislative intent to cover anything that has some relation

to or connection with the deregulation of the oil industry. The tax provision is a
mere tool and mechanism considered essential by Congress to fulfill Republic Act
No. 8180's objective of fostering a competitive market and achieving the social
policy objectives of fair prices. To curtail any adverse impact which the tariff
treatment may cause by its application, and perhaps in answer to petitioners'
apprehension Congress included under the assailed section a proviso that will
effectively eradicate the tariff difference in the treatment of refined petroleum
products and crude oil by stipulating "that beginning on January 1, 2004 the

tariff rate on imported crude oil and refined petroleum products shall be the
same."

5.POLITICAL LAW; POLITICAL QUESTION; ISSUE WHETHER TARIFF FOSTERS A

TRULY COMPETITIVE MARKET, NOT WITHIN THE POWER OF THE COURT TO
RESOLVE. The contention that tariff "does not foster a truly competitive
market" and therefore restrains trade and does not help achieve the purpose of
deregulation is an issue not within the power of the Court to resolve.
Nonetheless, the Court's pronouncement in Tio vs. Videogram Regulatory
Board appears to be worth reiterating: The power to impose taxes is one so

unlimited in force and so searching in extent, that the courts scarcely venture to
declare that it is subject to any restrictions whatever, except such as rest in the
discretion of the authority which exercises it.
EcDTIH

6.CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; LEGISLATIVE

BICAMERAL CONFERENCE COMMITTEE; PERMITTED TO DRAFT ESSENTIALLY A
NEW BILL. Any objection on the validity of provisions inserted by the
legislative bicameral conference committee has been passed upon by the Court
in the recent case of Tolentino v.Secretary of Finance, which, in my view, laid to
rest any doubt as to the validity of the bill emerging out of a Conference
Committee. The Court in that case, speaking through Mr. Justice Mendoza, said:
"As to the possibility of an entirely new bill emerging out of a Conference
Committee, it has been explained: 'Under Congressional rules of procedure,
conference committees are not expected to make any material change in the
measure at issue, either by deleting provisions to which both houses have
already agreed or by inserting new provisions. But this is a difficult provision to
enforce. Note the problem when one house amends a proposal originating in
either house by striking out everything following the enacting clause and
substituting provisions which make it an entirely new bill. The versions are now
altogether different, permitting a conference committee to draft essentially a
new bill. . . ' "

7.ID.; BILL OF RIGHTS; EQUAL PROTECTION CLAUSE; CLASSIFICATION BASED

ON SUBSTANTIAL DISQUALIFICATIONS; CASE AT BAR. The other contention
of petitioners that Section 5(b) "violates the equal protection of the laws
enshrined in Article III, Section 1 of the Constitution" deserves a short shrift for
the equal protection clause does not forbid reasonable classification based upon
substantial distinctions where the classification is germane to the purpose of the
law and applies equally to all the members of the class. The imposition of three
percent (3%) tariff on crude oil, which is four percent (4%) lower than those
imposed on refined oil products, as persuasively argued by the Office of the
Solicitor General, is based on the substantial distinction that importers of crude
oil, by necessity, have to establish and maintain refinery plants to process and
refine the crude oil thereby adding to their production costs. To encourage these
importers to set up refineries involving huge expenditures and investments which
peddlers and importers of refined petroleum products do not shoulder, Congress
deemed it appropriate to give a lower tariff rate to foster the entry of new
"players" and investors in line with the law's policy to create a competitive
market. The residual contention that there is no substantial distinction in the
imposition of seven percent (7%) and three percent (3%) tariff since the law
itself will level the tariff rates between the imported crude oil and refined
petroleum products come January 1, 2004, to my mind, is addressed more to the
legislative's prerogative to provide for the duration and period of effectivity of the
imposition. If Congress, after consultation, analysis of material data and due
deliberations, is convinced that by January 1, 2004, the investors and importers
of crude oil would have already recovered their huge investments and
expenditures in establishing refineries and plants then it is within its prerogative
to lift the tariff differential. Such matter is well within the pale of legislative
power which the Court may not fetter. Besides, this again is in line with Republic
Act No. 8180's avowed policy to foster a truly competitive market which can
achieve the social policy objectives of fair, if not lower, prices.
8.ID.; POLITICAL QUESTION; QUERY ON WHY LOWERING OF PRICES OF OIL
PRODUCTS SHOULD BE PENALIZED, NOT FOR THIS COURT TO TRAVERSE.
The query on why lowering of prices should be penalized and the broad scope of
predatory pricing is not for this Court to traverse the same being reserved for
Congress. The Court should not lose sight of the fact that its duty under Article 5
of the Revised Penal Code is not to determine, define and legislate what act or
acts should be penalized, but simply to report to the Chief Executive the reasons
why it believes an act should be penalized, as well as why it considers a penalty
excessive.

9.ID.; LEGISLATIVE DEPARTMENT; DELEGATION OF POWER; TEST. The

settled rule is that the legislative department may not delegate its power. Any
attempt to abdicate it is unconstitutional and void, based on the principle
of potestas delegata non delegare potest. In testing whether a statute
constitutes an undue delegation of legislative power or not, it is usual to inquire
whether the statute was complete in all its terms and provisions when it left the
hands of the legislative so that nothing was left to the judgment of any other
appointee or delegate of the legislature. An enactment is said to be incomplete
and invalid if it does not lay down any rule or definite standard by which the
administrative officer may be guided in the exercise of the discretionary powers
delegated to it.
10.ID.; ID.; ID.; GUIDELINE ON HOW TO DISTINGUISH WHICH POWER MAY OR
MAY NOT BE DELEGATED. InPeople v. Vera, the Court laid down a guideline
on how to distinguish which power may or may not be delegated by Congress, to
wit: " 'The true distinction,' said Judge Ranney, 'is between the delegation of
power to make the law, which necessarily involves a discretion as to what it shall
be, and conferring an authority or discretion as to its execution, to be exercised
under and in pursuance of the law. The first cannot be done; to the latter no
valid objection can be made.' (Cincinnati, W. & Z.R. Co. vs. Clinton County
Comrs. [1852]; 1 Ohio St., 77, 88 See also, Sutherland on Statutory
Construction, Sec. 68.)"
11.ID.; ID.; ID.; THERE IS NOTHING LEGISLATIVE IN ASCERTAINING THE
EXISTENCE OF FACTS OR CONDITIONS AS BASIS OF EFFICACY OF LAW.
Applying these parameters, J. Francisco fails to see any taint of
unconstitutionality that could vitiate the validity of Section 15. The discretion to
ascertain when may the prices of crude oil in the world market be deemed
"declining" or when may the peso-dollar exchange rate be considered "stable"
relates to the assessment and appreciation of facts. There is nothing essentially
legislative in ascertaining the existence of facts or conditions as the basis of the
taking into effect of a law so as to make the provision an undue delegation of
legislative power.
12.ID., ID.; ID.; NO UNDUE DELEGATION BY ABSENCE OF LACK OF
DEFINITIONS OF TERMS. The alleged lack of definitions of the terms
employed in the statute does not give rise to undue delegation either for the
words of the statute, as a rule, must be given its literal meaning.
13.ID.; ID.; WITH LATITUDE TO PROVIDE THAT LAW MAY TAKE EFFECT UPON
HAPPENING OF FUTURE CONTINGENCY. Petitioners' contentions are

concerned with the details of execution by the executive officials tasked to

implement deregulation. No proviso in Section 15 may be construed as
objectionable for the legislature has the latitude to provide that a law may take
effect upon the happening of future specified contingencies leaving to some
other person or body the power to determine when the specified contingency
has arisen.
14.ID.; EXECUTIVE DEPARTMENT; EXECUTIVE ORDER NO. 392,
CONSTITUTIONAL. The policy of Republic Act No. 8180 is to deregulate the
downstream oil industry and to foster a truly competitive market which could
lead to fair prices and adequate supply of environmentally clean and high-quality
petroleum products. This is the guiding principle installed by Congress upon
which the executive department of the government must conform. Section 15 of
Republic Act No. 8180 sufficiently supplied the metes and bounds for the
execution of full deregulation. In fact, a cursory reading of Executive Order No.
392 which advanced deregulation to February 8, 1997 convincingly shows the
determinable factors or standards, enumerated under Section 15, which were
taken into account by the Chief Executive in declaring full
deregulation. J. Francisco cannot see his way clear on how or why Executive
Order No. 392, as professed by petitioners, may be declared unconstitutional for
adding the "depletion of buffer fund" as one of the grounds for advancing the
deregulation. The enumeration of factors to be considered for full deregulation
under Section 15 did not proscribe the Chief Executive from acknowledging other
instances that can equally assuage deregulation. What is important is that the
Chief Executive complied with and met the minimum standards supplied by the
law. Executive Order No. 392 may not, therefore, be branded as
unconstitutional.
15.ID.; POLITICAL QUESTION; MATTERS WHICH FUNDAMENTALLY STRIKE AT
THE WISDOM OF THE LAW AND THE POLICY ADOPTED BY CONGRESS.
Petitioners' vehement objections on the short seven (7) month transition period
under Section 15 and the alleged resultant de facto formation of cartel are
matters which fundamentally strike at the wisdom of the law and the policy
adopted by Congress. These are outside the power of the courts to settle;
thus J.Francisco fails to see the need to digress any further.
16.REMEDIAL LAW; SUPREME COURT; ISSUE PERTAINING TO THE EFFICACY
OF INCORPORATING IN THE LAW ADMINISTRATIVE SANCTIONS, OUTSIDE THE
COURT'S SPHERE AND COMPETENCE. The administrative fine under Section
20 is claimed to be inconsistent with deregulation. The imposition of
administrative fine for failure to meet the reportorial and minimum inventory

requirements, far from petitioners' submission, are geared towards

accomplishing the noble purpose of the law. The inventory requirement ensures
the security and continuity of petroleum crude and products supply, while the
reportorial requirement is a mere devise for the Department of Energy to monitor
compliance with the law. In any event, the issue pertains to the efficacy of
incorporating in the law the administrative sanctions which lies outside the
Court's sphere and competence.
17.CONSTITUTIONAL LAW; SEPARATION OF POWERS; ISSUE OF WHETHER OR
NOT THE LAW FAILED TO ACHIEVE ITS POLICY, MATTER CLEARLY BEYOND
THIS COURT'S DOMAIN. Nothing is so fundamental in our system of
government than its division into three distinct and independent branches, the
executive, the legislative and the judiciary, each branch having exclusive
cognizance of matters within its jurisdiction, and supreme within its own sphere.
It is true that there is sometimes an inevitable overlapping and interlacing of
functions and duties between these departments. But this elementary tenet
remains: the legislative is vested with the power to make law, the judiciary to
apply and interpret it. In cases like this, "the judicial branch of the government
has only one duty to lay the article of the Constitution which is invoked beside
the statute which is challenged and to decide whether the latter squares with the
former." This having been done and finding no constitutional infirmity therein,
the Court's task is finished. Now whether or not the law fails to achieve its

avowed policy because Congress did not carefully evaluate the long term effects
of some of its provisions is a matter clearly beyond this Court's domain .

18.REMEDIAL LAW; COURTS; WILL RESOLVE EVERY PRESUMPTION IN FAVOR

OF STATUTES' VALIDITY. The question of validity of every statute is first
determined by the legislative department of the government, and the courts will
resolve every presumption in favor of its validity. The courts will assume that the
validity of the statute was fully considered by the legislature when adopted. The
wisdom of advisability of a particular statute is not a question for the courts to
determine. If a particular statute is within the constitutional power of the
legislative to enact, it should be sustained whether the courts agree or not in the
wisdom of its enactment. This Court continues to recognize that in the
determination of actual cases and controversies, it must reflect the wisdom and
justice of the people as expressed through their representatives in the executive
and legislative branches of government. Thus, the presumption is always in favor
of constitutionality for it is likewise always presumed that in the enactment of a
law or the adoption of a policy it is the people who speak through their
representatives. This principle is one of caution and circumspection in the
exercise of the grave and delicate function of judicial review.
aSCHIT

DECISION
PUNO, J :
p

The petitions at bar challenge the constitutionality of Republic Act No. 8180
entitled "An Act Deregulating the Downstream Oil Industry and For Other
Purposes". 1 R.A. No. 8180 ends twenty six (26) years of government regulation
of the downstream oil industry. Few cases carry a surpassing importance on the
life of every Filipino as these petitions for the upswing and downswing of our
economy materially depend on the oscillation of oil.
prcd

First, the facts without the fat. Prior to 1971, there was no government agency
regulating the oil industry other than those dealing with ordinary commodities.
Oil companies were free to enter and exit the market without any government
interference There were four (4) refining companies (Shell, Caltex, Bataan
Refining Company and Filoil Refining) and six (6) petroleum marketing
companies (Esso, Filoil, Caltex, Getty, Mobil and Shell), then operating in the
country. 2

In 1971, the country was driven to its knees by a crippling oil crisis. The

government, realizing that petroleum and its products are vital to national
security and that their continued supply at reasonable prices is essential to the
general welfare, enacted the Oil Industry Commission Act. 3 It created the Oil
Industry Commission (OIC) to regulate the business of importing, exporting, reexporting, shipping, transporting, processing, refining, storing, distributing,
marketing and selling crude oil, gasoline, kerosene, gas and other refined
petroleum products. The OIC was vested with the power to fix the
market prices of petroleum products, to regulate the capacities of refineries, to
license new refineries and to regulate the operations and trade practices of the
industry. 4
In addition to the creation of the OIC, the government saw the imperious need
for a more active role of Filipinos in the oil industry. Until the early seventies, the
downstream oil industry was controlled by multinational companies. All the oil
refineries and marketing companies were owned by foreigners whose economic
interests did not always coincide with the interest of the Filipino. Crude oil was
transported to the country by foreign-controlled tankers. Crude processing was
done locally by foreign-owned refineries and petroleum products were marketed

through foreign-owned retail outlets. On November 9, 1973, President Ferdinand

B. Marcos boldly created the Philippine National Oil Corporation (PNOC) to break
the control by foreigners of our oil industry. 5 PNOC engaged in the business of
refining, marketing, shipping, transporting, and storing petroleum. It acquired
ownership of ESSO Philippines and Filoil to serve as its marketing arm. It bought
the controlling shares of Bataan Refining Corporation, the largest refinery in the
country. 6 PNOC later put up its own marketing subsidiary Petrophil. PNOC
operated under the business name PETRON Corporation. For the first time, there
was a Filipino presence in the Philippine oil market.
In 1984, President Marcos through Section 8 of Presidential Decree No. 1956,
created the Oil Price Stabilization Fund(OPSF) to cushion the effects of frequent
changes in the price of oil caused by exchange rate adjustments or increase in
the world market prices of crude oil and imported petroleum products. The fund
is used (1) to reimburse the oil companies for cost increases in crude oil and
imported petroleum products resulting from exchange rate adjustment and/or
increase in world market prices of crude oil, and (2) to reimburse oil companies
for cost underrecovery incurred as a result of the reduction of domestic prices of
petroleum products. Under the law, the OPSF may be sourced from:
1.any increase in the tax collection from ad valorem tax or customs duty
imposed on petroleum products subject to tax under P.D. No.
1956 arising from exchange rate adjustment,
2.any increase in the tax collection as a result of the lifting of tax
exemptions of government corporations, as may be determined
by the Minister of Finance in consultation with the Board
of Energy,
3.any additional amount to be imposed on petroleum products to
augment the resources of the fund through an appropriate order
that may be issued by the Board of Energy requiring payment of
persons or companies engaged in the business of importing,
manufacturing and/or marketing petroleum products, or
4.any resulting peso costs differentials in case the actual peso costs paid
by oil companies in the importation of crude oil and petroleum
products is less than the peso costs computed using the reference
foreign exchange rate as fixed by the Board of Energy. 7

By 1985, only three (3) oil companies were operating in the country Caltex,
Shell and the government-owned PNOC.

In May, 1987, President Corazon C. Aquino signed Executive Order No. 172
creating the Energy Regulatory Board to regulate the business of importing,
exporting, re-exporting, shipping, transporting, processing, refining, marketing
and distributing energy resources "when warranted and only when public
necessity requires." The Board had the following powers and functions:
1.Fix and regulate the prices of petroleum products;
2.Fix and regulate the rate schedule or prices of piped gas to be charged
by duly franchised gas companies which distribute gas by means
of underground pipe system;
3.Fix and regulate the rates of pipeline concessionaries under the
provisions of R.A. No. 387, as amended . . .;
4.Regulate the capacities of new refineries or additional capacities of
existing refineries and license refineries that may be organized
after the issuance of (E.O. No. 172) under such terms and
conditions as are consistent with the national interest; and
5.Whenever the Board has determined that there is a shortage of any
petroleum product, or when public interest so requires, it may
take such steps as it may consider necessary, including the
temporary adjustment of the levels of prices of petroleum
products and the payment to the Oil Price Stabilization Fund . . .
by persons or entities engaged in the petroleum industry of such
amounts as may be determined by the Board, which may enable
the importer to recover its cost of importation. 8

On December 9, 1992, Congress enacted R.A. No. 7638 which created

the Department of Energy to prepare, integrate, coordinate, supervise and
control all plans, programs, projects, and activities of the government in relation
to energyexploration, development, utilization, distribution and
conservation. 9 The thrust of the Philippine energy program under the law was
toward privatization of government agencies related to energy, deregulation of
the power and energyindustry and reduction of dependency on oil-fired
plants. 10 The law also aimed to encourage free and active participation and
investment by the private sector in all energy activities. Section 5(e) of the law
states that "at the end of four (4) years from the effectivity of this Act, the
Department shall, upon approval of the President, institute the programs
and timetable of deregulation of appropriate energy projects and activities of
the energy industry."

Pursuant to the policies enunciated in R.A. No. 7638, the government approved
the privatization of Petron Corporation in 1993. On December 16, 1993, PNOC
sold 40% of its equity in Petron Corporation to the Aramco Overseas
Company.
LexLib

In March 1996, Congress took the audacious step of deregulating the

downstream oil industry. It enacted R.A. No. 8180, entitled the "Downstream Oil
Industry Deregulation Act of 1996." Under the deregulated environment, "any
person or entity may import or purchase any quantity of crude oil and petroleum
products from a foreign or domestic source, lease or own and operate refineries
and other downstream oil facilities and market such crude oil or use the same for
his own requirement," subject only to monitoring by the Department of Energy.
11

The deregulation process has two phases: the transition phase and the full
deregulation phase. During the transition phase, controls of the non-pricing
aspects of the oil industry were to be lifted. The following were to be

accomplished: (1) liberalization of oil importation, exportation, manufacturing,

marketing and distribution, (2) implementation of an automatic pricing
mechanism, (3) implementation of an automatic formula to set margins of
dealers and rates of haulers, water transport operators and pipeline
concessionaires, and (4) restructuring of oil taxes. Upon full
deregulation, controls on the price of oil and the foreign exchange cover were to
be lifted and the OPSF was to be abolished.
The first phase of deregulation commenced on August 12, 1996.

On February 8, 1997, the President implemented the full deregulation of the

Downstream Oil Industry through E.O. No.392.
The petitions at bar assail the constitutionality of various provisions of R.A. No.
8180 and E.O. No. 392.

In G.R. No. 124360, petitioner Francisco S. Tatad seeks the annulment of section
5 (b) of R.A. No. 8180. Section 5 (b) provides:

"b)Any law to the contrary notwithstanding and starting with the

effectivity of this Act, tariff duty shall be imposed and collected on
imported crude oil at the rate of three percent (3%) and imported
refined petroleum products at the rate of seven percent (7%), except
fuel oil and LPG, the rate for which shall be the same as that for
imported crude oil: Provided, That beginning on January 1, 2004 the

tariff rate on imported crude oil and refined petroleum products shall be
the same: Provided, further, That this provision may be amended only
by an Act of Congress."

The petition is anchored on three arguments:

First, that the imposition of different tariff rates on imported crude oil and
imported refined petroleum products violates the equal protection clause.
Petitioner contends that the 3%-7% tariff differential unduly favors the three
existing oil refineries and discriminates against prospective investors in the
downstream oil industry who do not have their own refineries and will have to
source refined petroleum products from abroad.

Second, that the imposition of different tariff rates does not deregulate the
downstream oil industry but instead controls the oil industry, contrary to the
avowed policy of the law. Petitioner avers that the tariff differential between
imported crude oil and imported refined petroleum products bars the entry of
other players in the oil industry because it effectively protects the interest of oil
companies with existing refineries. Thus, it runs counter to the objective of the
law "to foster a truly competitive market."
Third, that the inclusion of the tariff provision in section 5(b) of R.A. No. 8180
violates Section 26(1) Article VI of the Constitution requiring every law to have
only one subject which shall be expressed in its title. Petitioner contends that the
imposition of tariff rates in section 5(b) of R.A. No. 8180 is foreign to the subject
of the law which is the deregulation of the downstream oil industry.

In G.R. No. 127867, petitioners Edcel C. Lagman, Joker P. Arroyo, Enrique

Garcia, Wigberto Taada, Flag Human Rights Foundation, Inc., Freedom from
Debt Coalition (FDC) and Sanlakas contest the constitutionality of section 15 of
R.A. No. 8180 and E.O. No. 392. Section 15 provides:
"Sec. 15.Implementation of Full Deregulation. Pursuant to Section
5(e) of Republic Act No. 7638, the DOE shall, upon approval of the
President, implement the full deregulation of the downstream oil
industry not later than March 1997. As far as practicable, the DOE shall
time the full deregulation when the prices of crude oil and petroleum
products in the world market are declining and when the exchange rate
of the peso in relation to the US dollar is stable. Upon the
implementation of the full deregulation as provided herein, the transition

phase is deemed terminated and the following laws are deemed

repealed:
xxx xxx xxx

E.O. No. 392 states in full, viz.:

"WHEREAS, Republic Act No. 7638, otherwise known as the
"Department of Energy Act of 1992, " provides that, at the end of four
years from its effectivity last December 1992, "the Department
(of Energy) shall, upon approval of the President, institute the programs
and time table of deregulation of appropriate energy projects and
activities of the energy sector;
"WHEREAS, Section 15 of Republic Act No. 8180, otherwise known as
the "Downstream Oil Industry Deregulation Act of 1996," provides that
"the DOE shall, upon approval of the President, implement full
deregulation of the downstream oil industry not later than March, 1997.
As far as practicable, the DOE shall time the full deregulation when the
prices of crude oil and petroleum products in the world market are
declining and when the exchange rate of the peso in relation to the US
dollar is stable;
"WHEREAS, pursuant to the recommendation of the Department
of Energy, there is an imperative need to implement the full
deregulation of the downstream oil industry because of the following
recent developments: (i) depletion of the buffer fund on or about 7
February 1997 pursuant to the Energy Regulatory Board's Order dated
16 January 1997; (ii) the prices of crude oil had been stable at $21-$23
per barrel since October 1996 while prices of petroleum products in the
world market had been stable since mid-December of last year.
Moreover, crude oil prices are beginning to soften for the last few days
while prices of some petroleum products had already declined; and (iii)
the exchange rate of the peso in relation to the US dollar has been
stable for the past twelve (12) months, averaging at around P26.20 to
one US dollar;
"WHEREAS, Executive Order No. 377 dated 31 October 1996 provides
for an institutional framework for the administration of the deregulated
industry by defining the functions and responsibilities of various
government agencies;
"WHEREAS, pursuant to Republic Act No. 8180, the deregulation of the
industry will foster a truly competitive market which can better achieve

the social policy objectives of fair prices and adequate, continuous

supply of environmentally-clean and high quality petroleum products;
"NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of
the Philippines, by the powers vested in me by law, do hereby declare
the full deregulation of the downstream oil industry."

In assailing section 15 of R.A. No. 8180 and E.O. No. 392, petitioners offer the
following submissions:
First, section 15 of R.A. No. 8180 constitutes an undue delegation of legislative
power to the President and the Secretaryof Energy because it does not provide a
determinate or determinable standard to guide the Executive Branch in
determining when to implement the full deregulation of the downstream oil
industry. Petitioners contend that the law does not define when it is practicable
for the Secretary of Energy to recommend to the President the full deregulation
of the downstream oil industry or when the President may consider it practicable
to declare full deregulation. Also, the law does not provide any specific standard
to determine when the prices of crude oil in the world market are considered to
be declining nor when the exchange rate of the peso to the US dollar is
considered stable.
Second, petitioners aver that E.O. No. 392 implementing the full deregulation of
the downstream oil industry is arbitrary and unreasonable because it was
enacted due to the alleged depletion of the OPSF fund a condition not found
in R.A. No. 8180.
Third, section 15 of R.A. No. 8180 and E.O. No. 392 allow the formation of a de
facto cartel among the three existing oil companies Petron, Caltex and Shell
in violation of the constitutional prohibition against monopolies, combinations in
restraint of trade and unfair competition.
Respondents, on the other hand, fervently defend the constitutionality of R.A.
No. 8180 and E.O. No. 392. In addition, respondents contend that the issues
raised by the petitions are not justiciable as they pertain to the wisdom of the
law. Respondents further aver that petitioners have no locus standi as they did
not sustain nor will they sustain direct injury as a result of the implementation of
R.A. No. 8180.
The petitions were heard by the Court on September 30, 1997. On October 7,
1997, the Court ordered the private respondents oil companies "to maintain the
status quo and to cease and desist from increasing the prices of gasoline and

other petroleum fuel products for a period of thirty (30) days . . . subject to
further orders as conditions may warrant."
We shall now resolve the petitions on the merit. The petitions raise procedural
and substantive issues bearing on the constitutionality of R.A. No. 8180 and E.O.
No. 392. The procedural issues are: (1) whether or not the petitions raise a
justiciable controversy, and (2) whether or not the petitioners have the standing
to assail the validity of the subject law and executive order. The substantive
issues are: (1) whether or not section 5(b) violates the one title one subject
requirement of the Constitution; (2) whether or not the same section violates the
equal protection clause of the Constitution; (3) whether or not section 15
violates the constitutional prohibition on undue delegation of power; (4) whether
or not E.O. No. 392 is arbitrary and unreasonable; and (5) whether or not R.A.
No. 8180 violates the constitutional prohibition against monopolies, combinations
in restraint of trade and unfair competition.
We shall first tackle the procedural issues. Respondents claim that the avalanche
of arguments of the petitioners assail the wisdom of R.A. No. 8180. They aver
that deregulation of the downstream oil industry is a policy decision made by
Congress and it cannot be reviewed, much less be reversed by this Court. In
constitutional parlance, respondents contend that the petitions failed to raise a
justiciable controversy.
Respondents' joint stance is unnoteworthy. Judicial power includes not only the
duty of the courts to settle actual controversies involving rights which are legally
demandable and enforceable, but also the duty to determine whether or not
there has been grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the
government. 12 The courts, as guardians of the Constitution, have the inherent
authority to determine whether a statute enacted by the legislature transcends
the limit imposed by the fundamental law. Where a statute violates the
Constitution, it is not only the right but the duty of the judiciary to declare such
act as unconstitutional and void. 13 We held in the recent case of Taada
v. Angara: 14
"xxx xxx xxx
In seeking to nullify an act of the Philippine Senate on the ground that it
contravenes the Constitution, the petition no doubt raises a justiciable
controversy. Where an action of the legislative branch is seriously
alleged to have infringed the Constitution, it becomes not only the right
but in fact the duty of the judiciary to settle the dispute. The question

thus posed is judicial rather than political. The duty to adjudicate

remains to assure that the supremacy of the Constitution is upheld.
Once a controversy as to the application or interpretation of a
constitutional provision is raised before this Court, it becomes a legal
issue which the Court is bound by constitutional mandate to decide."

Even a sideglance at the petitions will reveal that petitioners have raised
constitutional issues which deserve the resolution of this Court in view of their
seriousness and their value as precedents. Our statement of facts and definition
of issues clearly show that petitioners are assailing R.A. No. 8180 because its
provisions infringe the Constitution and not because the law lacks wisdom. The
principle of separation of power mandates that challenges on the constitutionality
of a law should be resolved in our courts of justice while doubts on the wisdom
of a law should be debated in the halls of Congress. Every now and then, a law
may be denounced in court both as bereft of wisdom and constitutionally
infirmed. Such denunciation will not deny this Court of its jurisdiction to resolve
the constitutionality of the said law while prudentially refusing to pass on its
wisdom.
cdrep

The effort of respondents to question the locus standi of petitioners

must also fall on barren ground. In language too lucid to be misunderstood,
this Court has brightlined its liberal stance on a petitioner's locus standiwhere
the petitioner is able to craft an issue of transcendental significance to the
people. 15 In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas,
Inc. v. Tan, 16 we stressed:
"xxx xxx xxx
Objections to taxpayers' suit for lack of sufficient personality, standing or
interest are, however, in the main procedural matters. Considering the
importance to the public of the cases at bar, and in keeping with the
Court's duty, under the 1987 Constitution, to determine whether or not
the other branches of government have kept themselves within the
limits of the Constitution and the laws and that they have not abused
the discretion given to them, the Court has brushed aside technicalities
of procedure and has taken cognizance of these petitions."

There is not a dot of disagreement between the petitioners and the respondents
on the far reaching importance of the validity of RA No. 8180 deregulating our
downstream oil industry. Thus, there is no good sense in being hypertechnical on

the standing of petitioners for they pose issues which are significant to our
people and which deserve our forthright resolution.
We shall now track down the substantive issues. In G.R. No. 124360 where
petitioner is Senator Tatad, it is contended that section 5(b) of R.A. No. 8180 on
tariff differential violates the provision 17 of the Constitution requiring every law
to have only one subject which should be expressed in its title. We do not concur
with this contention. As a policy, this Court has adopted a liberal construction of
the one title - one subject rule. We have consistently ruled 18 that the title need
not mirror, fully index or catalogue all contents and minute details of a law. A
law having a single general subject indicated in the title may contain any number
of provisions, no matter how diverse they may be, so long as they are not
inconsistent with or foreign to the general subject, and may be considered in
furtherance of such subject by providing for the method and means of carrying
out the general subject. 19 We hold that section 5(b) providing for tariff
differential is germane to the subject of R.A. No. 8180 which is the deregulation
of the downstream oil industry. The section is supposed to sway prospective
investors to put up refineries in our country and make them rely less on imported
petroleum. 20 We shall, however, return to the validity of this provision when we
examine its blocking effect on new entrants to the oil market.
We shall now slide to the substantive issues in G.R. No. 127867. Petitioners
assail section 15 of R.A. No. 8180 which fixes the time frame for the full
deregulation of the downstream oil industry. We restate its pertinent portion for
emphasis, viz.:
"Sec. 15.Implementation of Full Deregulation. Pursuant to section
5(e) of Republic Act No. 7638, the DOE shall, upon approval of the
President, implement the full deregulation of the downstream oil
industry not later than March 1997. As far as practicable, the DOE shall
time the full deregulation when the prices of crude oil and petroleum
products in the world market are declining and when the exchange rate
of the peso in relation to the US dollar is stable. . ."

Petitioners urge that the phrases "as far as practicable," "decline of crude oil
prices in the world market" and "stability of the peso exchange rate to the US
dollar" are ambivalent, unclear and inconcrete in meaning. They submit that they
do not provide the "determinate or determinable standards" which can guide the
President in his decision to fully deregulate the downstream oil industry. In
addition, they contend that E.O. No. 392 which advanced the date of full
deregulation is void for it illegally considered the depletion of the OPSF fund as a
factor.

The power of Congress to delegate the execution of laws has long been settled
by this Court. As early as 1916 inCompaia General de Tabacos de Filipinas
vs. The Board of Public Utility Commissioners, 21 this Court thru, Mr. Justice
Moreland, held that "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." Over the years, as the legal engineering of men's relationship
became more difficult, Congress has to rely more on the practice of delegating
the execution of laws to the executive and other administrative agencies. Two
tests have been developed to determine whether the delegation of the power to
execute laws does not involve the abdication of the power to make law itself. We
delineated the metes and bounds of these tests in Eastern Shipping Lines,
Inc. vs. POEA, 22 thus:
"There are two accepted tests to determine whether or not there is a
valid delegation of legislative power, viz.: the completeness test and the
sufficient standard test. Under the first test, the law must be complete in
all its terms and conditions when it leaves the legislative such that when
it reaches the delegate the only thing he will have to do is to enforce it.
Under the sufficient standard test, there must be adequate guidelines or
limitations in the law to map out the boundaries of the delegate's
authority and prevent the delegation from running riot. Both tests are
intended to prevent a total transference of legislative authority to the
delegate, who is not allowed to step into the shoes of the legislature and
exercise a power essentially legislative."

The validity of delegating legislative power is now a quiet area in our

constitutional landscape. As sagely observed, delegation of legislative power has
become an inevitability in light of the increasing complexity of the task of
government. Thus, courts bend as far back as possible to sustain the
constitutionality of laws which are assailed as unduly delegating legislative
powers. Citing Hirabayashi v. United States 23 as authority, Mr. Justice Isagani A.
Cruz states "that even if the law does not expressly pinpoint the standard, the
courts will bend over backward to locate the same elsewhere in order to spare
the statute, if it can, from constitutional infirmity." 24
Given the groove of the Court's rulings, the attempt of petitioners to strike down
section 15 on the ground of undue delegation of legislative power cannot
prosper. Section 15 can hurdle both the completeness test and the sufficient
standard test. It will be noted that Congress expressly provided in R.A. No. 8180
that full deregulation will start at the end of March 1997, regardless of the

occurrence of any event. Full deregulation at the end of March 1997 is

mandatory and the Executive has no discretion to postpone it for any purported
reason. Thus, the law is complete on the question of the final date of full
deregulation. The discretion given to the President is to advance the date of full
deregulation before the end of March 1997. Section 15 lays down the standard
to guide the judgment of the President he is to time it as far as
practicable when the prices of crude oil and petroleum products in the world
market are declining and when the exchange rate of the peso in relation to the
US dollar is stable.
Petitioners contend that the words "as far as practicable," "declining" and
"stable" should have been defined in R.A. No. 8180 as they do not set
determinate or determinable standards. The stubborn submission deserves scant
consideration. The dictionary meanings of these words are well settled and
cannot confuse men of reasonable intelligence. Webster defines "practicable" as
meaning possible to practice or perform, "decline" as meaning to take a
downward direction, and "stable" as meaning firmly established. 25 The fear of
petitioners that these words will result in the exercise of executive discretion that
will run riot is thus groundless. To be sure, the Court has sustained the validity of
similar, if not more general standards in other cases. 26
It ought to follow that the argument that E.O. No. 392 is null and void as it was
based on indeterminate standards set by R.A. 8180 must likewise fail. If that
were all to the attack against the validity of E.O. No. 392, the issue need not
further detain our discourse. But petitioners further posit the thesis that the
Executive misapplied R.A. No. 8180 when it considered the depletion of the OPSF
fund as a factor in fully deregulating the downstream oil industry in February
1997. A perusal of section 15 of R.A. No. 8180 will readily reveal that it only
enumerated two factors to be considered by the Department of Energy and the
Office of the President, viz.: (1) the time when the prices of crude oil and
petroleum products in the world market are declining, and (2) the time when the
exchange rate of the peso in relation to the US dollar is stable. Section 15 did not
mention the depletion of the OPSF fund as a factor to be given weight by the
Executive before ordering full deregulation. On the contrary, the debates in
Congress will show that some of our legislators wanted to impose as a precondition to deregulation a showing that the OPSF fund must not be in
deficit. 27We therefore hold that the Executive department failed to follow
faithfully the standards set by R.A. No. 8180 when it considered the extraneous
factor of depletion of the OPSF fund. The misappreciation of this extra factor
cannot be justified on the ground that the Executive department considered
anyway the stability of the prices of crude oil in the world market and the

stability of the exchange rate of the peso to the dollar. By considering another
factor to hasten full deregulation, the Executive department rewrote the
standards set forth in R.A. 8180. The Executive is bereft of any right to alter
either by subtraction or addition the standards set in R.A. No. 8180 for it has no
power to make laws. To cede to the Executive the power to make law is to invite
tyranny, indeed, to transgress the principle of separation of powers. The exercise
of delegated power is given a strict scrutiny by courts for the delegate is a mere
agent whose action cannot infringe the terms of agency. In the cases at bar, the
Executive co-mingled the factor of depletion of the OPSF fund with the factors of
decline of the price of crude oil in the world market and the stability of the peso
to the US dollar. On the basis of the text of E.O. No. 392, it is impossible to
determine the weight given by the Executive department to the depletion of the
OPSF fund. It could well be the principal consideration for the early deregulation.
It could have been accorded an equal significance. Or its importance could be nil.
In light of this uncertainty, we rule that the early deregulation under E.O. No.
392 constitutes a misapplication of R.A. No. 8180.

We now come to grips with the contention that some provisions of R.A. No. 8180
violate section 19 of Article XII of the 1987 Constitution. These provisions are:
(1)Section 5 (b) which states "Any law to the contrary
notwithstanding and starting with the effectivity of this Act, tariff
duty shall be imposed and collected on imported crude oil at the
rate of three percent (3%) and imported refined petroleum
products at the rate of seven percent (7%) except fuel oil and
LPG, the rate for which shall be the same as that for imported
crude oil. Provided, that beginning on January 1, 2004 the tariff
rate on imported crude oil and refined petroleum products shall
be the same. Provided, further, that this provision may be
amended only by an Act of Congress."
(2)Section 6 which states "To ensure the security and continuity of
petroleum crude and products supply, the DOE shall require the
refiners and importers to maintain a minimum inventory
equivalent to ten percent (10%) of their respective annual sales
volume or forty (40) days of supply, whichever is lower," and
cdphil

(3)Section 9 (b) which states "To ensure fair competition and prevent
cartels and monopolies in the downstream oil industry, the
following acts shall be prohibited:

xxx xxx xxx

(b)Predatory pricing which means selling or offering to sell any
product at a price unreasonably below the industry average cost
so as to attract customers to the detriment of competitors."

On the other hand, section 19 of Article XII of the Constitution allegedly violated
by the aforestated provisions of R.A. No. 8180 mandates: "The State shall
regulate or prohibit monopolies when the public interest so requires. No
combinations in restraint of trade or unfair competition shall be allowed."
A monopoly is a privilege or peculiar advantage vested in one or more persons or
companies, consisting in the exclusive right or power to carry on a particular
business or trade, manufacture a particular article, or control the sale or the
whole supply of a particular commodity. It is a form of market structure in which
one or only a few firms dominate the total sales of a product or service. 28 On the
other hand, a combination in restraint of trade is an agreement or understanding
between two or more persons, in the form of a contract, trust, pool, holding
company, or other form of association, for the purpose of unduly restricting
competition, monopolizing trade and commerce in a certain commodity,
controlling its production, distribution and price, or otherwise interfering with
freedom of trade without statutory authority. 29 Combination in restraint of trade
refers to the means while monopoly refers to the end. 30
Article 186 of the Revised Penal Code and Article 28 of the New Civil Code
breathe life to this constitutional policy.Article 186 of the Revised Penal Code
penalizes monopolization and creation of combinations in restraint of
trade, 31while Article 28 of the New Civil Code makes any person who shall
engage in unfair competition liable for damages. 32
Respondents aver that sections 5(b), 6 and 9(b) implement the policies and
objectives of R.A. No. 8180. They explain that the 4% tariff differential is
designed to encourage new entrants to invest in refineries. They stress that the
inventory requirement is meant to guaranty continuous domestic supply of
petroleum and to discourage fly-by-night operators. They also submit that the
prohibition against predatory pricing is intended to protect prospective entrants.
Respondents manifested to the Court that new players have entered the
Philippines after deregulation and have now captured 3%-5% of the oil market.
The validity of the assailed provisions of R.A. No. 8180 has to be decided in light
of the letter and spirit of our Constitution, especially section 19, Article XII.
Beyond doubt, the Constitution committed us to the free enterprise system but it

is a system impressed with its own distinctness. Thus, while the Constitution
embraced free enterprise as an economic creed, it did not prohibit per se the
operation of monopolies which can, however be regulated in the public
interest. 33 Thus too, our free enterprise system is not based on a market of
pure and unadulterated competition where the State pursues a strict hands-off
policy and follows the let-the-devil devour the hindmost rule. Combinations in
restraint of trade and unfair competitions are absolutely proscribed and the
proscription is directed both against the State as well as the private
sector. 34 This distinct free enterprise system is dictated by the need to achieve
the goals of our national economy as defined by section 1, Article XII of the
Constitution which are: more equitable distribution of opportunities, income and
wealth; a sustained increase in the amount of goods and services produced by
the nation for the benefit of the people; and an expanding productivity as the
key to raising the quality of life for all, especially the underprivileged. It also calls
for the State to protect Filipino enterprises against unfair competition and trade
practices.
Section 19, Article XII of our Constitution is anti-trust in history and in spirit. It
espouses competition. The desirability of competition is the reason for the
prohibition against restraint of trade, the reason for the interdiction of unfair
competition, and the reason for regulation of unmitigated monopolies.
Competition is thus the underlying principle of section 19, Article XII of our
Constitution which cannot be violated by R.A. No. 8180. We subscribe to the
observation of Prof. Gellhorn that the objective of anti-trust law is "to assure a
competitive economy, based upon the belief that through competition producers
will strive to satisfy consumer wants at the lowest price with the sacrifice of the
fewest resources. Competition among producers allows consumers to bid for
goods and services, and thus matches their desires with society's opportunity
costs." 35 He adds with appropriateness that there is a reliance upon "the
operation of the 'market' system (free enterprise) to decide what shall be
produced, how resources shall be allocated in the production process, and to
whom the various products will be distributed. The market system relies on the
consumer to decide what and how much shall be produced, and on competition,
among producers to determine who will manufacture it."
Again, we underline in scarlet that the fundamental principle espoused by section
19, Article XII of the Constitution is competition for it alone can release the
creative forces of the market. But the competition that can unleash these
creative forces is competition that is fighting yet is fair. Ideally, this kind of
competition requires the presence of not one, not just a few but several players.
A market controlled by one player (monopoly) or dominated by a handful of

players (oligopoly) is hardly the market where honest-to-goodness competition

will prevail. Monopolistic or oligopolistic markets deserve our careful scrutiny and
laws which barricade the entry points of new players in the market should be
viewed with suspicion.
Prescinding from these baseline propositions, we shall proceed to examine
whether the provisions of R.A. No. 8180 on tariff differential, inventory reserves,
and predatory prices imposed substantial barriers to the entry and exit of new
players in our downstream oil industry. If they do, they have to be struck down
for they will necessarily inhibit the formation of a truly competitive market.
Contrariwise, if they are insignificant impediments, they need not be stricken
down.
In the cases at bar, it cannot be denied that our downstream oil industry is
operated and controlled by an oligopoly, a foreign oligopoly at that. Petron, Shell
and Caltex stand as the only major league players in the oil market. All other
players belong to the lilliputian league. As the dominant players, Petron, Shell
and Caltex boast of existing refineries of various capacities. The tariff differential
of 4% therefore works to their immense benefit. Yet, this is only one edge of the
tariff differential. The other edge cuts and cuts deep in the heart of their
competitors. It erects a high barrier to the entry of new players. New players
that intend to equalize the market power of Petron, Shell and Caltex by building
refineries of their own will have to spend billions of pesos. Those who will not
build refineries but compete with them will suffer the huge disadvantage of
increasing their product cost by 4%. They will be competing on an uneven field.
The argument that the 4% tariff differential is desirable because it will induce
prospective players to invest in refineries puts the cart before the horse. The first
need is to attract new players and they cannot be attracted by burdening them
with heavy disincentives. Without new players belonging to the league of Petron,
Shell and Caltex, competition in our downstream oil industry is an idle dream.
The provision on inventory widens the balance of advantage of Petron, Shell and
Caltex against prospective new players. Petron, Shell and Caltex can easily
comply with the inventory requirement of R.A. No. 8180 in view of their existing
storage facilities. Prospective competitors again will find compliance with this
requirement difficult as it will entail a prohibitive cost. The construction cost of
storage facilities and the cost of inventory can thus scare prospective players.
Their net effect is to further occlude the entry points of new players, dampen
competition and enhance the control of the market by the three (3) existing oil
companies.

Finally, we come to the provision on predatory pricing which is defined as ". . .

selling or offering to sell any product at a price unreasonably below the industry
average cost so as to attract customers to the detriment of competitors."
Respondents contend that this provision works against Petron, Shell and Caltex
and protects new entrants. The ban on predatory pricing cannot be analyzed in
isolation. Its validity is interlocked with the barriers imposed by R.A. No. 8180 on
the entry of new players. The inquiry should be to determine whether predatory
pricing on the part of the dominant oil companies is encouraged by the
provisions in the law blocking the entry of new players. Textwriter Hovenkamp, 36 gives the authoritative answer and we quote:

"xxx xxx xxx

"The rationale for predatory pricing is the sustaining of losses today that
will give a firm monopoly profits in the future. The monopoly profits will
never materialize, however, if the market is flooded with new entrants
as soon as the successful predator attempts to raise its price. Predatory

pricing will be profitable only if the market contains significant barriers

to new entry."

As aforediscussed, the 4% tariff differential and the inventory requirement are

significant barriers which discourage new players to enter the market.
Considering these significant barriers established by R.A. No. 8180 and the lack
of players with the comparable clout of PETRON, SHELL and CALTEX, the
temptation for a dominant player to engage in predatory pricing and succeed is a
chilling reality. Petitioners' charge that this provision on predatory pricing is anticompetitive is not without reason.
Respondents belittle these barriers with the allegation that new players have
entered the market since deregulation. A scrutiny of the list of the alleged new
players will, however, reveal that not one belongs to the class and category of
PETRON, SHELL and CALTEX. Indeed, there is no showing that any of these new
players intends to install any refinery and effectively compete with these
dominant oil companies. In any event, it cannot be gainsaid that the new players
could have been more in number and more impressive in might if the illegal
entry barriers in R.A. No. 8180 were not erected.
We come to the final point. We now resolve the total effect of the untimely
deregulation, the imposition of 4% tariff differential on imported crude oil and
refined petroleum products, the requirement of inventory and the prohibition on

predatory pricing on the constitutionality of R.A. No. 8180. The question is

whether these offending provisions can be individually struck down without
invalidating the entire R.A. No. 8180. The ruling case law is well stated by
authorAgpalo, 37 viz.:
"xxx xxx xxx
The general rule is that where part of a statute is void as repugnant to
the Constitution, while another part is valid, the valid portion, if
separable from the invalid, may stand and be enforced. The presence of
a separability clause in a statute creates the presumption that the
legislature intended separability, rather than complete nullity of the
statute. To justify this result, the valid portion must be so far
independent of the invalid portion that it is fair to presume that the
legislature would have enacted it by itself if it had supposed that it could
not constitutionally enact the other. Enough must remain to make a
complete, intelligible and valid statute, which carries out the legislative
intent. . .
The exception to the general rule is that when the parts of a statute are
so mutually dependent and connected, as conditions, considerations,
inducements, or compensations for each other, as to warrant a belief
that the legislature intended them as a whole, the nullity of one part will
vitiate the rest. In making the parts of the statute dependent,
conditional, or connected with one another, the legislature intended the
statute to be carried out as a whole and would not have enacted it if
one part is void, in which case if some parts are unconstitutional, all the
other provisions thus dependent, conditional, or connected must fall
with them."
cdtech

R.A. No. 8180 contains a separability clause. Section 23 provides that "if for any
reason, any section or provision of this Act is declared unconstitutional or invalid,
such parts not affected thereby shall remain in full force and effect." This
separability clause notwithstanding, we hold that the offending provisions of R.A.
No. 8180 so permeate its essence that the entire law has to be struck down. The
provisions on tariff differential, inventory and predatory pricing are among the
principal props of R.A. No. 8180. Congress could not have deregulated the
downstream oil industry without these provisions. Unfortunately, contrary to their
intent, these provisions on tariff differential, inventory and predatory pricing
inhibit fair competition, encourage monopolistic power and interfere with the free
interaction of market forces. R.A. No. 8180 needs provisions to vouchsafe free
and fair competition. The need for these vouchsafing provisions cannot be
overstated. Before deregulation, PETRON, SHELL and CALTEX had no real

competitors but did not have a free run of the market because government
controls both the pricing and non-pricing aspects of the oil industry. After
deregulation, PETRON, SHELL and CALTEX remain unthreatened by real
competition yet are no longer subject to control by government with respect to
their pricing and non-pricing decisions. The aftermath of R.A. No. 8180 is a
deregulated market where competition can be corrupted and where market
forces can be manipulated by oligopolies.
The fall out effects of the defects of R.A. No. 8180 on our people have not
escaped Congress. A lot of our leading legislators have come out openly
with bills seeking the repeal of these odious and offensive provisions in R.A. No.
8180. In the Senate, Senator Freddie Webb has filed S.B. No. 2133 which is the
result of the hearings conducted by the Senate Committee on Energy. The
hearings revealed that (1) there was a need to level the playing field for the new
entrants in the downstream oil industry, and (2) there was no law punishing a
person for selling petroleum products at unreasonable prices. Senator Alberto
G. Romulo also filed S.B. No. 2209 abolishing the tariff differential beginning
January 1, 1998. He declared that the amendment ". . . would mean that instead

of just three (3) big oil companies there will be other major oil companies to
provide more competitive prices for the market and the consuming
public."Senator Heherson T . Alvarez, one of the principal proponents of R.A. No.
8180, also filed S.B. No. 2290 increasing the penalty for violation of its section 9.
It is his opinion as expressed in the explanatory note of the bill that the present
oil companies are engaged in cartelization despite R.A. No. 8180, viz.:
"xxx xxx xxx
"Since the downstream oil industry was fully deregulated in February
1997, there have been eight (8) fuel price adjustments made by the
three oil majors, namely: Caltex Philippines, Inc.; Petron Corporation;
and Pilipinas Shell Petroleum Corporation. Very noticeable in the price
adjustments made, however, is the uniformity in the pump prices of
practically all petroleum products of the three oil companies. This,
despite the fact, that their selling rates should be determined by a
combination of any of the following factors: the prevailing peso-dollar
exchange rate at the time payment is made for crude purchases,
sources of crude, and inventory levels of both crude and refined
petroleum products. The abovestated factors should have resulted in
different, rather than identical prices.

The fact that the three (3) oil companies' petroleum products are
uniformly priced suggests collusion, amounting to cartelization, among

Caltex Philippines, Inc., Petron Corporation and Pilipinas Shell Petroleum

Corporation to fix the prices of petroleum products in violation of
paragraph (a), Section 9 of R.A. No. 8180.

To deter this pernicious practice and to assure that present and

prospective players in the downstream oil industry conduct their
business with conscience and propriety, cartel-like activities ought to be
severely penalized."

Senator Francisco S. Tatad also filed S.B. No. 2307 providing for a uniform tariff
rate on imported crude oil and refined petroleum products. In the explanatory
note of the bill, he declared in no uncertain terms that ". . . the present setuphas raised serious public concern over the way the three oil companies have
uniformly adjusted the prices of oil in the country, an indication of a possible

existence of a cartel or a cartel-like situation within the downstream oil

industry. This situation is mostly attributed to the foregoing provision on tariff
differential, which has effectively discouraged the entry of new players in the
downstream oil industry."

In the House of Representatives, the moves to rehabilitate R.A. No. 8180 are
equally feverish. Representative Leopoldo E. San Buenaventura has filed H.B. No.
9826 removing the tariff differential for imported crude oil and imported refined
petroleum products. In the explanatory note of the bill, Rep. Buenaventura
explained:
"xxx xxx xxx
As we now experience, this difference in tariff rates between imported
crude oil and imported refined petroleum products, unwittingly provided

a built-in-advantage for the three existing oil refineries in the country

and eliminating competition which is a must in a free enterprise
economy. Moreover, it created a disincentive for other players to engage
even initially in the importation and distribution of refined petroleum
products and ultimately in the putting up of refineries. This tariff

differential virtually created a monopoly of the downstream oil industry

by the existing three oil companies as shown by their uniform and
capricious pricing of their products since this law took effect, to the
great disadvantage of the consuming public.

Thus, instead of achieving the desired effects of deregulation, that of

free enterprise and a level playing field in the downstream oil
industry, R.A. 8180 has created an environment conducive to

cartelization, unfavorable,increased, unrealistic prices of petroleum

products in the country by the three existing refineries."

Representative Marcial C. Punzalan, Jr., filed H.B. No. 9981 to prevent collusion

among the present oil companies by strengthening the oversight function of the
government particularly its ability to subject to a review any adjustment in the
prices of gasoline and other petroleum products. In the explanatory note of the
bill, Rep. Punzalan, Jr., said:

"xxx xxx xxx

To avoid this, the proposed bill seeks to strengthen the oversight

function of government, particularly its ability to review the prices set for
gasoline and other petroleum products. It grants the Energy Regulatory
Board (ERB) the authority to review prices of oil and other petroleum
products, as may be petitioned by a person, group or any entity, and to
subsequently compel any entity in the industry to submit any and all
documents relevant to the imposition of new prices. In cases where the
Board determines that there exist collusion, economic conspiracy, unfair
trade practice, profiteering and/or overpricing, it may take any step
necessary to protect the public, including the readjustment of the prices
of petroleum products. Further, the Board may also impose the fine and
penalty of imprisonment, as prescribed in Section 9 of R.A. 8180, on any
person or entity from the oil industry who is found guilty of such
prohibited acts.
By doing all of the above, the measure will effectivity provide Filipino
consumers with a venue where their grievances can be heard and
immediately acted upon by government.
Thus, this bill stands to benefit the Filipino consumer by making the
price-setting process more transparent and making it easier to prosecute
those who perpetrate such prohibited acts as collusion, overpricing,
economic conspiracy and unfair trade."
cdtai

Representative Sergio A.F. Apostol filed H.B. No. 10039 to remedy an omission in
R.A. No. 8180 where there is no agency in government that determines what is
"reasonable" increase in the prices of oil products. Representative Dante
O. Tinga, one of the principal sponsors of R.A. No. 8180, filed H.B. No. 10057 to
strengthen its anti-trust provisions. He elucidated in its explanatory note:
"xxx xxx xxx

The definition of predatory pricing, however, needs to be tightened up

particularly with respect to the definitive benchmark price and the
specific anti-competitive intent. The definition in the bill at hand which
was taken from the Areeda-Turner test in the United States on
predatory pricing resolves the questions. The definition reads, 'Predatory
pricing means selling or offering to sell any oil product at a price below
the average variable cost for the purpose of destroying competition,
eliminating a competitor or discouraging a competitor from entering the
market.'
The appropriate actions which may be resorted to under the Rules of
Court in conjunction with the oil deregulation law are adequate. But to
stress their availability and dynamism, it is a good move to incorporate
all the remedies in the law itself. Thus, the present bill formalizes the
concept of government intervention and private suits to address the
problem of antitrust violations. Specifically, the government may file an
action to prevent or restrain any act of cartelization or predatory pricing,
and if it has suffered any loss or damage by reason of the antitrust
violation it may recover damages. Likewise, a private person or entity
may sue to prevent or restrain any such violation which will result in
damage to his business or property, and if he has already suffered
damage he shall recover treble damages. A class suit may also be
allowed.
To make the DOE Secretary more effective in the enforcement of the
law, he shall be given additional powers to gather information and to
require reports."

Representative Erasmo B. Damasing filed H.B. No. 7885 and has a more
unforgiving view of R.A. No. 8180. He wants it completely repealed. He
explained:
"xxx xxx xxx
Contrary to the projections at the time the bill on the Downstream Oil
Industry Deregulation was discussed and debated upon in the plenary
session prior to its approval into law, there aren't any new players or
investors in the oil industry. Thus, resulting in practically a cartel or
monopoly in the oil industry by the three (3) big oil companies, Caltex,
Shell and Petron. So much so, that with the deregulation now being
partially implemented, the said oil companies have succeeded in
increasing the prices of most of their petroleum products with little or no
interference at all from the government. In the month of August, there
was an increase of Fifty centavos (50) per liter by subsidizing the same

with the OPSF, this is only temporary as in March 1997, or a few months
from now, there will be full deregulation (Phase II) whereby the increase
in the prices of petroleum products will be fully absorbed by the
consumers since OPSF will already be abolished by then. Certainly, this
would make the lives of our people, especially the unemployed ones,
doubly difficult and unbearable.

The much ballyhooed coming in of new players in the oil industry is

quite remote considering that these prospective investors cannot fight
the existing and well established oil companies in the country today,

namely, Caltex, Shell and Petron. Even if these new players will come in,
they will still have no chance to compete with the said three (3) existing
big oil companies considering that there is an imposition of oil tariff
differential of 4% between importation of crude oil by the said oil
refineries paying only 3% tariff rate for the said importation and 7%
tariff rate to be paid by businessmen who have no oil refineries in the
Philippines but will import finished petroleum/oil products which is being
taxed with 7% tariff rates.

So, if only to help the many who are poor from further suffering as a
result of unmitigated increase in oil products due to deregulation, it is a
must that the Downstream Oil Industry Deregulation Act of 1996, or
R.A.8180 be repealed completely."

Various resolutions have also been filed in the Senate calling for an immediate
and comprehensive review of R.A. No. 8180 to prevent the downpour of its ill
effects on the people. Thus, S. Res. No. 574 was filed by Senator Gloria
M.Macapagal entitled Resolution "Directing the Committee on Energy to Inquire
Into The Proper Implementation of the Deregulation of the Downstream Oil
Industry and Oil Tax Restructuring As Mandated Under R.A. Nos. 8180 and 8184,
In Order to Make The Necessary Corrections In the Apparent Misinterpretation Of
The Intent And Provision Of The Laws And Curb The Rising Tide Of
Disenchantment Among The Filipino Consumers And Bring About The Real
Intentions And Benefits Of The Said Law." Senator Blas P. Ople filed S. Res. No.
664 entitled resolution "Directing the Committee onEnergy To Conduct An
Inquiry In Aid Of Legislation To Review The Government's Oil Deregulation Policy
In Light Of The Successive Increases In Transportation, Electricity And Power
Rates, As Well As Of Food And Other Prime Commodities And Recommend
Appropriate Amendments To Protect The Consuming Public." Senator Ople
observed:
"xxx xxx xxx

WHEREAS, since the passage of R.A. No. 8180, the Energy Regulatory
Board (ERB) has imposed successive increases in oil prices which has
triggered increases in electricity and power rates, transportation fares,
as well as in prices of food and other prime commodities to the
detriment of our people, particularly the poor;

WHEREAS, the new players that were expected to compete with the oil
cartel-Shell, Caltex and Petron-have not come in;
WHEREAS, it is imperative that a review of the oil deregulation policy be
made to consider appropriate amendments to the existing law such as
an extension of the transition phase before full deregulation in order to
give the competitive market enough time to develop;
WHEREAS, the review can include the advisability of providing some
incentives in order to attract the entry of new oil companies to effect a
dynamic competitive market;
WHEREAS, it may also be necessary to defer the setting up of the
institutional framework for full deregulation of the oil industry as
mandated under Executive Order No. 377 issued by President Ramos
last October 31, 1996. . . ."

Senator Alberto G. Romulo filed S. Res. No. 769 entitled resolution "Directing the
Committees on Energy and Public Services In Aid of Legislation To Assess The
Immediate Medium And Long Term Impact of Oil Deregulation On Oil Prices And
The Economy." Among the reasons for the resolution is the finding that "the

requirement of a 40-day stock inventory effectively limits the entry of other oil
firms in the market with the consequence that instead of going down oil prices
will rise."

Parallel resolutions have been filed in the House of

Representatives. Representative Dante O. Tinga filed H. Res. No. 1311 "Directing

The Committee on Energy To Conduct An Inquiry, In Aid of Legislation, Into The

Pricing Policies And Decisions Of The Oil Companies Since The Implementation of
Full Deregulation Under The Oil Deregulation Act (R.A. No. 8180) For the
Purpose of Determining In The Context Of The Oversight Functions Of Congress
Whether The Conduct Of The Oil Companies, Whether Singly Or Collectively,
Constitutes Cartelization Which Is A Prohibited Act Under R.A. No. 8180, And
What Measures Should Be Taken To Help Ensure The Successful Implementation
Of The Law In Accordance With Its Letter And Spirit, Including Recommending
Criminal Prosecution Of the Officers Concerned Of the Oil Companies If
Warranted By The Evidence, And For Other Purposes." Representatives Marcial

C . Punzalan, Jr., Dante O. Tinga and Antonio E. Bengzon III filed H.R. No. 894

directing the House Committee on Energy to inquire into the proper

implementation of the deregulation of the downstream oil industry. House
Resolution No. 1013 was also filed byRepresentatives Edcel C. Lagman, Enrique
T. Garcia, Jr. and Joker P. Arroyo urging the President to immediately suspend
the implementation of E.O. No. 392.
In recent memory there is no law enacted by the legislature afflicted with so
much constitutional deformities as R.A. No. 8180. Yet, R.A. No. 8180 deals with
oil, a commodity whose supply and price affect the ebb and flow of the lifeblood
of the nation. Its shortage of supply or a slight, upward spiral in its price shakes
our economic foundation. Studies show that the areas most impacted by the
movement of oil are food manufacture, land transport, trade, electricity and
water.38 At a time when our economy is in a dangerous downspin, the
perpetuation of R.A. No. 8180 threatens to multiply the number of our people
with bent backs and begging bowls. R.A. No. 8180 with its anti-competition

provisions cannot be allowed by this Court to stand even while Congress is

working to remedy its defects.
llcd

The Court, however, takes note of the plea of PETRON, SHELL and CALTEX to lift
our restraining order to enable them to adjust upward the price of petroleum and
petroleum products in view of the plummeting value of the peso. Their plea,
however, will now have to be addressed to the Energy Regulatory Board as the
effect of the declaration of unconstitutionality of R.A. No. 8180 is to revive the
former laws it repealed. 39 The length of our return to the regime of regulation
depends on Congress which can fasttrack the writing of a new law on oil
deregulation in accord with the Constitution.
With this Decision, some circles will chide the Court for interfering with an
economic decision of Congress. Such criticism is charmless for the Court is
annulling R.A. No. 8180 not because it disagrees with deregulation as an
economic policy but because as cobbled by Congress in its present form, the law
violates the Constitution. The right call therefor should be for Congress to write a
new oil deregulation law that conforms with the Constitution and not for this
Court to shirk its duty of striking down a law that offends the Constitution.
Striking down R.A. No. 8180 may cost losses in quantifiable terms to the oil
oligopolists. But the loss in tolerating the tampering of our Constitution is not
quantifiable in pesos and centavos. More worthy of protection than the supranormal profits of private corporations is the sanctity of the fundamental
principles of the Constitution. Indeed when confronted by a law violating the

Constitution, the Court has no option but to strike it down dead. Lest it is missed,
the Constitution is a covenant that grants and guarantees both the political
and economic rights of the people. The Constitution mandates this Court to be
the guardian not only of the people's political rights but their economic rights as
well. The protection of the economic rights of the poor and the powerless is of
greater importance to them for they are concerned more with the esoterics of
living and less with the esoterics of liberty. Hence, for as long as the Constitution
reigns supreme so long will this Court be vigilant in upholding the economic
rights of our people especially from the onslaught of the powerful. Our defense
of the people's economic rights may appear heartless because it cannot be halfhearted.
IN VIEW WHEREOF, the petitions are granted. R.A. No. 8180 is declared
unconstitutional and E.O. No. 372 void.
SO ORDERED.

Regalado, Davide, Jr., Romero, Bellosillo and Vitug, JJ ., concur.

Mendoza, J ., concurs in the result.
Narvasa, C .J ., is on leave.