G.R. No.

100152

March 31, 2000

ACEBEDO OPTICAL COMPANY, INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS, Hon. MAMINDIARA MANGOTARA, in his capacity as
Presiding Judge of the RTC, 12th Judicial Region, Br. 1, Iligan City; SAMAHANG
OPTOMETRIST Sa PILIPINAS Iligan City Chapter, LEO T. CAHANAP, City Legal Officer, and
Hon. CAMILO P. CABILI, City Mayor of Iligan, respondents.
PURISIMA, J.:
At bar is a petition for review under Rule 45 of the Rules of Court seeking to nullify the dismissal by
the Court of Appeals of the original petition for certiorari, prohibition and mandamus filed by the
herein petitioner against the City Mayor and City Legal Officer of Iligan and the Samahang
Optometrist sa Pilipinas Iligan Chapter (SOPI, for brevity).
The antecedent facts leading to the filing of the instant petition are as follows:
Petitioner applied with the Office of the City Mayor of Iligan for a business permit. After consideration
of petitioner's application and the opposition interposed thereto by local optometrists, respondent
City Mayor issued Business Permit No. 5342 subject to the following conditions:
1. Since it is a corporation, Acebedo cannot put up an optical clinic but only a commercial
store;
2. Acebedo cannot examine and/or prescribe reading and similar optical glasses for patients,
because these are functions of optical clinics;
3. Acebedo cannot sell reading and similar eyeglasses without a prescription having first
been made by an independent optometrist (not its employee) or independent optical clinic.
Acebedo can only sell directly to the public, without need of a prescription, Ray-Ban and
similar eyeglasses;
4. Acebedo cannot advertise optical lenses and eyeglasses, but can advertise Ray-Ban and
similar glasses and frames;
5. Acebedo is allowed to grind lenses but only upon the prescription of an independent
optometrist. 1
On December 5, 1988, private respondent Samahan ng Optometrist Sa Pilipinas (SOPI), Iligan
Chapter, through its Acting President, Dr. Frances B. Apostol, lodged a complaint against the
petitioner before the Office of the City Mayor, alleging that Acebedo had violated the conditions set
forth in its business permit and requesting the cancellation and/or revocation of such permit.
Acting on such complaint, then City Mayor Camilo P. Cabili designated City Legal Officer Leo T.
Cahanap to conduct an investigation on the matter. On July 12, 1989, respondent City Legal Officer
submitted a report to the City Mayor finding the herein petitioner guilty of violating all the conditions
of its business permit and recommending the disqualification of petitioner from operating its business
in Iligan City. The report further advised that no new permit shall be granted to petitioner for the year
1989 and should only be given time to wind up its affairs.

On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of Business
Permit effective as of said date and giving petitioner three (3) months to wind up its affairs.
On October 17, 1989, petitioner brought a petition for certiorari, prohibition and mandamus with
prayer for restraining order/preliminary injunction against the respondents, City Mayor, City Legal
Officer and Samahan ng Optometrists sa Pilipinas-Iligan City Chapter (SOPI), docketed as Civil
Case No. 1497 before the Regional Trial Court of Iligan City, Branch I. Petitioner alleged that (1) it
was denied due process because it was not given an opportunity to present its evidence during the
investigation conducted by the City Legal Officer; (2) it was denied equal protection of the laws as
the limitations imposed on its business permit were not imposed on similar businesses in Iligan City;
(3) the City Mayor had no authority to impose the special conditions on its business permit; and (4)
the City Legal Officer had no authority to conduct the investigation as the matter falls within the
exclusive jurisdiction of the Professional Regulation Commission and the Board of Optometry.
Respondent SOPI interposed a Motion to Dismiss the Petition on the ground of non-exhaustion of
administrative remedies but on November 24, 1989, Presiding Judge Mamindiara P. Mangotara
deferred resolution of such Motion to Dismiss until after trial of the case on the merits. However, the
prayer for a writ of preliminary injunction was granted. Thereafter, respondent SOPI filed its answer.

1wphi1.nt

On May 30, 1990, the trial court dismissed the petition for failure to exhaust administrative remedies,
and dissolved the writ of preliminary injunction it earlier issued. Petitioner's motion for
reconsideration met the same fate. It was denied by an Order dated June 28, 1990.
On October 3, 1990, instead of taking an appeal, petitioner filed a petition for certiorari, prohibition
and mandamus with the Court of Appeals seeking to set aside the questioned Order of Dismissal,
branding the same as tainted with grave abuse of discretion on the part of the trial court.
On January 24, 1991, the Ninth Division 2 of the Court of Appeals dismissed the petition for lack of
merit. Petitioner's motion reconsideration was also denied in the Resolution dated May 15, 1991.
Undaunted, petitioner has come before this court via the present petition, theorizing that:
A.
THE RESPONDENT COURT, WHILE CORRECTLY HOLDING THAT THE RESPONDENT
CITY MAYOR ACTED BEYOND HIS AUTHORITY IN IMPOSING THE SPECIAL
CONDITIONS IN THE PERMIT AS THEY HAD NO BASIS IN ANY LAW OR ORDINANCE,
ERRED IN HOLDING THAT THE SAID SPECIAL CONDITIONS NEVERTHELESS BECAME
BINDING ON PETITIONER UPON ITS ACCEPTANCE THEREOF AS A PRIVATE
AGREEMENT OR CONTRACT.
B.
THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE CONTRACT
BETWEEN PETITIONER AND THE CITY OF ILIGAN WAS ENTERED INTO BY THE
LATTER IN THE PERFORMANCE OF ITS PROPRIETARY FUNCTIONS.
The petition is impressed with merit.
Although petitioner agrees with the finding of the Court of Appeals that respondent City Mayor acted
beyond the scope of his authority in imposing the assailed conditions in subject business permit, it

has excepted to the ruling of the Court of Appeals that the said conditions nonetheless became
binding on petitioner, once accepted, as a private agreement or contract. Petitioner maintains that
the said special conditions are null and void for being ultra vires and cannot be given effect; and
therefore, the principle of estoppel cannot apply against it.
On the other hand, the public respondents, City Mayor and City Legal Officer, private respondent
SOPI and the Office of the Solicitor General contend that as a valid exercise of police power,
respondent City Mayor has the authority to impose, as he did, special conditions in the grant of
business permits.
Police power as an inherent attribute of sovereignty is the power to prescribe regulations to promote
the health, morals, peace, education, good order or safety and general welfare of the people. 9 The
State, through the legislature, has delegated the exercise of police power to local government units,
as agencies of the State, in order to effectively accomplish and carry out the declared objects of their
creation. 4 This delegation of police power is embodied in the general welfare clause of the Local
Government Code which provides:
Sec. 6. General Welfare. Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or
incidental for its efficient and effective governance, and those which are essential to the
promotion of the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant
scientific and technological capabilities, improve public morals, enhance economic prosperity
and social justice, promote full employment among their residents, maintain peace and
order, and preserve the comfort and convenience of their inhabitants.
The scope of police power has been held to be so comprehensive as to encompass almost all
matters affecting the health, safety, peace, order, morals, comfort and convenience of the
community. Police power is essentially regulatory in nature and the power to issue licenses or grant
business permits, if exercised for a regulatory and not revenue-raising purpose, is within the ambit of
this power. 5
The authority of city mayors to issue or grant licenses and business permits is beyond cavil. It is
provided for by law. Section 171, paragraph 2 (n) of Batas Pambansa Bilang 337 otherwise known
as the Local Government Code of 1983, reads:
Sec. 171. The City Mayor shall:
xxx

xxx

xxx

n) Grant or refuse to grant, pursuant to law, city licenses or permits, and revoke the same for
violation of law or ordinance or the conditions upon which they are granted.
However, the power to grant or issue licenses or business permits must always be exercised in
accordance with law, with utmost observance of the rights of all concerned to due process and equal
protection of the law.
Succinct and in point is the ruling of this Court, that:

. . . While a business may be regulated, such regulation must, however, be within the bounds
of reason,i.e., the regulatory ordinance must be reasonable, and its provision cannot be
oppressive amounting to an arbitrary interference with the business or calling subject of
regulation. A lawful business or calling may not, under the guise of regulation, be
unreasonably interfered with even by the exercise of police power. . . .
xxx

xxx

xxx

. . . The exercise of police power by the local government is valid unless it contravenes the
fundamental law of the land or an act of the legislature, or unless it is against public policy or
is unreasonable, oppressive, partial, discriminating or in derogation of a common right. 6
In the case under consideration, the business permit granted by respondent City Mayor to petitioner
was burdened with several conditions. Petitioner agrees with the holding by the Court of Appeals
that respondent City Mayor acted beyond his authority in imposing such special conditions in its
permit as the same have no basis in the law or ordinance. Public respondents and private
respondent SOPI, on the other hand, are one in saying that the imposition of said special conditions
on petitioner's business permit is well within the authority of the City Mayor as a valid exercise of
police power.
As aptly discussed by the Solicitor General in his Comment, the power to issue licenses and permits
necessarily includes the corollary power to revoke, withdraw or cancel the same. And the power to
revoke or cancel, likewise includes the power to restrict through the imposition of certain conditions.
In the case of Austin-Hardware, Inc. vs.Court of Appeals, 7 it was held that the power to license
carries with it the authority to provide reasonable terms and conditions under which the licensed
business shall be conducted. As the Solicitor General puts it:
If the City Mayor is empowered to grant or refuse to grant a license, which is a broader
power, it stands to reason that he can also exercise a lesser power that is reasonably
incidental to his express power, i.e. to restrict a license through the imposition of certain
conditions, especially so that there is no positive prohibition to the exercise of such
prerogative by the City Mayor, nor is there any particular official or body vested with such
authority. 8
However, the present inquiry does not stop there, as the Solicitor General believes. The power or
authority of the City Mayor to impose conditions or restrictions in the business permit is indisputable.
What petitioner assails are the conditions imposed in its particular case which, it complains, amount
to a confiscation of the business in which petitioner is engaged.
Distinction must be made between the grant of a license or permit to do business and the issuance
of a license to engage in the practice of a particular profession. The first is usually granted by the
local authorities and the second is issued by the Board or Commission tasked to regulate the
particular profession. A business permit authorizes the person, natural or otherwise, to engage in
business or some form of commercial activity. A professional license, on the other hand, is the grant
of authority to a natural person to engage in the practice or exercise of his or her profession.
In the case at bar, what is sought by petitioner from respondent City Mayor is a permit to engage in
the business of running an optical shop. It does not purport to seek a license to engage in the
practice of optometry as a corporate body or entity, although it does have in its employ, persons who
are duly licensed to practice optometry by the Board of Examiners in Optometry.

The case of Samahan ng Optometrists sa Pilipinas vs. Acebedo International Corporation, G.R. No.
117097, 9promulgated by this Court on March 21, 1997, is in point. The factual antecedents of that
case are similar to those of the case under consideration and the issue ultimately resolved therein is
exactly the same issue posed for resolution by this Court en banc.
In the said case, the Acebedo International Corporation filed with the Office of the Municipal Mayor
an application for a business permit for the operation of a branch of Acebedo Optical in Candon,
Ilocos Sur. The application was opposed by the Samahan ng Optometrists sa Pilipinas-Ilocos Sur
Chapter, theorizing that Acebedo is a juridical entity not qualified to practice optometry. A committee
was created by the Office of the Mayor to study private respondent's application. Upon
recommendation of the said committee, Acebedo's application for a business permit was denied.
Acebedo filed a petition with the Regional Trial Court but the same was dismissed. On appeal,
however, the Court of Appeals reversed the trial court's disposition, prompting the Samahan ng
Optometrists to elevate the matter to this Court.
The First Division of this Court, then composed of Honorable Justice Teodoro Padilla, Josue
Bellosillo, Jose Vitug and Santiago Kapunan, with Honorable Justice Regino Hermosisima, Jr.
as ponente, denied the petition and ruled in favor of respondent Acebedo International Corporation,
holding that "the fact that private respondent hires optometrists who practice their profession in the
course of their employment in private respondent's optical shops, does not translate into a practice
of optometry by private respondent itself," 10 The Court further elucidated that in both the old and new
Optometry Law, R.A. No. 1998, superseded by R.A. No. 8050, it is significant to note that there is no
prohibition against the hiring by corporations of optometrists. The Court concluded thus:
All told, there is no law that prohibits the hiring by corporations of optometrists or considers
the hiring by corporations of optometrists as a practice by the corporation itself of the
profession of optometry.
In the present case, the objective of the imposition of subject conditions on petitioner's business
permit could be attained by requiring the optometrists in petitioner's employ to produce a valid
certificate of registration as optometrist, from the Board of Examiners in Optometry. A business
permit is issued primarily to regulate the conduct of business and the City Mayor cannot, through the
issuance of such permit, regulate the practice of a profession, like that of optometry. Such a function
is within the exclusive domain of the administrative agency specifically empowered by law to
supervise the profession, in this case the Professional Regulations Commission and the Board of
Examiners in Optometry.
It is significant to note that during the deliberations of the bicameral conference committee of the
Senate and the House of Representatives on R.A. 8050 (Senate Bill No. 1998 and House Bill No.
14100), the committee failed to reach a consensus as to the prohibition on indirect practice of
optometry by corporations. The proponent of the bill, former Senator Freddie Webb, admitted thus:
Senator Webb: xxx xxx xxx
The focus of contention remains to be the proposal of prohibiting the indirect practice of
optometry by corporations. We took a second look and even a third look at the issue in the
bicameral conference, but a compromise remained elusive. 11
1wphi1

Former Senator Leticia Ramos-Shahani likewise voted her reservation in casting her vote:
Senator Shahani: Mr. President.

The optometry bills have evoked controversial views from the members of the panel. While
we realize the need to uplift the standards of optometry as a profession, the consesnsus of
both Houses was to avoid touching sensitive issues which properly belong to judicial
determination. Thus, the bicameral conference committee decided to leave the issue of
indirect practice of optometry and the use of trade names open to the wisdom of the Courts
which are vested with the prerogative of interpreting the laws. 12
From the foregoing, it is thus evident that Congress has not adopted a unanimous position on the
matter of prohibition of indirect practice of optometry by corporations, specifically on the hiring and
employment of licensed optometrists by optical corporations. It is clear that Congress left the
resolution of such issue for judicial determination, and it is therefore proper for this Court to resolve
the issue.
Even in the United States, jurisprudence varies and there is a conflict of opinions among the federal
courts as to the right of a corporation or individual not himself licensed, to hire and employ licensed
optometrists. 13
Courts have distinguished between optometry as a learned profession in the category of law and
medicine, and optometry as a mechanical art. And, insofar as the courts regard optometry as merely
a mechanical art, they have tended to find nothing objectionable in the making and selling of
eyeglasses, spectacles and lenses by corporations so long as the patient is actually examined and
prescribed for by a qualified practitioner. 14
The primary purpose of the statute regulating the practice of optometry is to insure that optometrical
services are to be rendered by competent and licensed persons in order to protect the health and
physical welfare of the people from the dangers engendered by unlicensed practice. Such purpose
may be fully accomplished although the person rendering the service is employed by a
corporation. 15
Furthermore, it was ruled that the employment of a qualified optometrist by a corporation is not
against public policy. 16 Unless prohibited by statutes, a corporation has all the contractual rights that
an individual has 17 and it does not become the practice of medicine or optometry because of the
presence of a physician or optometrist. 18The manufacturing, selling, trading and bartering of
eyeglasses and spectacles as articles of merchandise do not constitute the practice of optometry. 19
In the case of Dvorine vs. Castelberg Jewelry Corporation, 20 defendant corporation conducted as
part of its business, a department for the sale of eyeglasses and the furnishing of optometrical
services to its clients. It employed a registered optometrist who was compensated at a regular salary
and commission and who was furnished instruments and appliances needed for the work, as well as
an office. In holding that corporation was not engaged in the practice of optometry, the court ruled
that there is no public policy forbidding the commercialization of optometry, as in law and medicine,
and recognized the general practice of making it a commercial business by advertising and selling
eyeglasses.
To accomplish the objective of the regulation, a state may provide by statute that corporations
cannot sell eyeglasses, spectacles, and lenses unless a duly licensed physician or a duly qualified
optometrist is in charge of, and in personal attendance at the place where such articles are sold. 21 In
such a case, the patient's primary and essential safeguard lies in the optometrist's control of the
"treatment" by means of prescription and preliminary and final examination. 22
In analogy, it is noteworthy that private hospitals are maintained by corporations incorporated for the
purpose of furnishing medical and surgical treatment. In the course of providing such treatments,

these corporations employ physicians, surgeons and medical practitioners, in the same way that in
the course of manufacturing and selling eyeglasses, eye frames and optical lenses, optical shops
hire licensed optometrists to examine, prescribe and dispense ophthalmic lenses. No one has ever
charged that these corporations are engaged in the practice of medicine. There is indeed no valid
basis for treating corporations engaged in the business of running optical shops differently.
It also bears stressing, as petitioner has pointed out, that the public and private respondents did not
appeal from the ruling of the Court of Appeals. Consequently, the holding by the Court of Appeals
that the act of respondent City Mayor in imposing the questioned special conditions on petitioner's
business permit is ultra vires cannot be put into issue here by the respondents. It is well-settled that:
A party who has not appealed from the decision may not obtain any affirmative relief from the
appellate court other than what he had obtain from the lower court, if any, whose decision is
brought up on appeal. 23
. . . an appellee who is not an appellant may assign errors in his brief where his purpose is to
maintain the judgment on other grounds, but he cannot seek modification or reversal of the
judgment or affirmative relief unless he has also appealed. 24
Thus, respondents' submission that the imposition of subject special conditions on petitioner's
business permit is not ultra vires cannot prevail over the finding and ruling by the Court of Appeals
from which they (respondents) did not appeal.
Anent the second assigned error, petitioner maintains that its business permit issued by the City
Mayor is not a contract entered into by Iligan City in the exercise of its proprietary functions, such
that although petitioner agreed to such conditions, it cannot be held in estoppel since ultra vires acts
cannot be given effect.
Respondents, on the other hand, agree with the ruling of the Court of Appeals that the business
permit in question is in the nature of a contract between Iligan City and the herein petitioner, the
terms and conditions of which are binding upon agreement, and that petitioner is estopped from
questioning the same. Moreover, in the Resolution denying petitioner's motion for reconsideration,
the Court of Appeals held that the contract between the petitioner and the City of Iligan was entered
into by the latter in the performance of its proprietary functions.
This Court holds otherwise. It had occasion to rule that a license or permit is not in the nature of a
contract but a special privilege.
. . . a license or a permit is not a contract between the sovereignty and the licensee or
permitee, and is not a property in the constitutional sense, as to which the constitutional
proscription against impairment of the obligation of contracts may extend. A license is rather
in the nature of a special privilege, of a permission or authority to do what is within its terms.
It is not in any way vested, permanent or absolute. 25
It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner
acquiesced in the special conditions imposed by the City Mayor in subject business permit does not
preclude it from challenging the said imposition, which is ultra vires or beyond the ambit of authority
of respondent City Mayor. Ultra vires acts or acts which are clearly beyond the scope of one's
authority are null and void and cannot be given any effect. The doctrine of estoppel cannot operate
to give effect to an act which is otherwise null and void or ultra vires.

The Court of Appeals erred in adjudging subject business permit as having been issued by
responded City Mayor in the performance of proprietary functions of Iligan City. As hereinabove
elaborated upon, the issuance of business licenses and permits by a municipality or city is
essentially regulatory in nature. The authority, which devolved upon local government units to issue
or grant such licenses or permits, is essentially in the exercise of the police power of the State within
the contemplation of the general welfare clause of the Local Government Code.
WHEREFORE, the petition is GRANTED; the Decision of the Court of Appeals in CA-GR SP No.
22995 REVERSED: and the respondent City Mayor is hereby ordered to reissue petitioner's
business permit in accordance with law and with this disposition. No pronouncement as to costs.
SO ORDERED.

G.R. No. L-17821

November 29, 1963

PRIMITIVO LOVINA, and NELLY MONTILLA, plaintiffs-appellees,

vs.
HON. FLORENCIO MORENO, as Secretary of Public Works and Communications, and
BENJAMIN YONZON, defendants-appellants.
Gil R. Carlos and Associates for plaintiffs-appellees.
Office of the Solicitor General for defendants-appellants.
REYES, J.B.L., J.:
This is an appeal from a decision of the Court of First Instance of Manila (Branch X), in its Civil Case
No. 41639, enjoining the Secretary of Public Works and Communications from causing the removal
of certain dams and dikes in a fishpond owned by Primitivo and Nelly Lovina in the Municipality of
Macabebe Province of Pampanga, covered by T.C.T. No. 15905.
The cause started by a petition of numerous residents of the said municipality to the Secretary of
Public Works and Communications, complaining that appellees had blocked the "Sapang Bulati", a
navigable river in Macabebe, Pampanga, and asking that the obstructions be ordered removed,
under the provisions of Republic Act No. 2056. After notice and hearing to the parties, the said
Secretary found the constructions to be a public nuisance in navigable waters, and, in his decision
dated 11 August 1959, ordered the land owners, spouses Lovina, to remove five (5) closures of
Sapang Bulati; otherwise, the Secretary would order their removal at the expense of the respondent.
After receipt of the decision, the respondent filed a petition in the Court of First Instance of Manila to
restrain the Secretary from enforcing his decision. The trial court, after due hearing, granted a
permanent injunction, which is now the subject of the present appeal.
The respondents-appellants, Florencio Moreno, Secretary of Public Works and Communications,
and Benjamin Yonzon, investigator, question the jurisdiction of the trial court, and attribute to it the
following errors:
1. The trial court erred in holding in effect, that Republic Act No. 2056 is unconstitutional:
2. The trial court erred in receiving evidence de novo at the trial of the case;
3. The trial court erred in substituting its judgment for that of defendant Secretary of Public
Works and Communications and in reversing the latter's finding that the stream in question is
a navigable river which was illegally closed by plaintiffs;
4. The trial court erred in holding that the Sapang Bulati is a private stream; and
5. The lower court erred in not holding that plaintiffs should first exhaust administrative
remedy before filing the instant petition.
The position of the plaintiffs-appellees in the court below was that Republic Act No. 2056 is
unconstitutional because it invests the Secretary of Public Works and Communications with
sweeping, unrestrained, final and unappealable authority to pass upon the issues of whether a river
or stream is public and navigable, whether a dam encroaches upon such waters and is constitutive
as a public nuisance, and whether the law applies to the state of facts, thereby Constituting an
alleged unlawful delegation of judicial power to the Secretary of Public Works and Communications.

Sections 1 and 2 of Republic Act 2056 provides:

Section 1. Any provision or provisions of law to the contrary notwithstanding, the construction
or building of dams, dikes or any other works which encroaches into any public navigable
river, stream, coastal waters and any other navigable public waters or waterways as well as
the construction or building of dams, dikes or any other works in areas declared as
communal fishing grounds, shall be ordered removed as public nuisances or a prohibited
constructions as herein provided: Provided, however, That the Secretary of Public Works
and Communications may authorize the construction of any such work when public interest
or safety so requires or when it is absolutely necessary for the protection of private property.
Section 2. When it is found by the Secretary of Public Works and Communications, after due
notice and hearing, that any dam, dike or any other works now existing or may there after be
constructed encroaches into any public navigable waters, or that they are constructed in
areas declared as communal fishing grounds, he shall have the authority to order the
removal of any such works and shall give the party concerned a period not to exceed thirty
days for the removal of the same: Provided, That fishpond constructions or works on
communal fishing grounds introduced in good faith before the areas we proclaimed as
fishing grounds shall be exempted from the provisions of this Act, provided such
constructions or works do not obstruct or impede the free passage of any navigable river,
stream, or would not cause inundations of agricultural areas: Provided, further, That should
the party concerned fail to comply with the order of the Secretary of Public Works and
Communications within the period so stated in the order, such removal shall be effected by
the Secretary of Public Works and Communications at the expense of the said party within
ten days following the expiration of the period given the party concerned:Provided,
furthermore, That the investigation and hearing to be conducted by the Secretary of Public
Works and Communications under this section shall be terminated and decided by him within
a period which shall not exceed ninety days from the time he shall have been notified in
writing or a written complaint shall have been filed with him by any interested party apprising
him of the existence of a dam, dike or any other works that encroaches into any other public
navigable river, stream, coastal waters or any other public navigable waters or waterways
and in areas declared as communal fishing grounds: Provided, still furthermore, That the
failure on the part of the Secretary of Public Works and Communications without justifiable or
valid reason to terminate and decide a case or effect the removal of any such works, as
provided for in this section, shall constitute an offense punishable under section three of this
Act: And provided, finally, That the removal of any such works shall not impair fishponds
completed or about to be completed which do not encroach or obstruct any public navigable
river or stream and/or which would not cause inundations of agricultural areas and which
have been constructed in good faith before the area was declared communal fishing
grounds.
The objections of the appellees to the constitutionality of Republic Act No. 2056, not only as an
undue delegation of judicial power to the Secretary of Public Works but also for being unreasonable
and arbitrary, are not tenable. It will be noted that the Act (R.A. 2056) merely empowers the
Secretary to remove unauthorized obstructions or encroachments upon public streams,
constructions that no private person was anyway entitled to make, because the bed of navigable
streams is public property, and ownership thereof is not acquirable by adverse possession (Palanca
vs. Commonwealth, 69 Phil. 449).
It is true that the exercise of the Secretary's power under the Act necessarily involves the
determination of some questions of fact, such as the existence of the stream and its previous
navigable character; but these functions, whether judicial or quasi-judicial, are merely incidental to

the exercise of the power granted by law to clear navigable streams of unauthorized obstructions or
encroachments, and authorities are clear that they are, validly conferable upon executive officials
provided the party affected is given opportunity to be heard, as is expressly required by Republic Act
No. 2056, section 2.
It thus appears that the delegation by Congress to executive or administrative agencies of
functions of judicial, or at least, quasi-judicial functions is incidental to the exercise by such
agencies of their executive or administrative powers, is not in violation of the Separation of
Powers so far as that principle is recognized by the Federal Constitution nor is it in violation
of due process of law. (3 Willoughby on the Const. of the U.S., pp. 1654-1655)
The mere fact that an officer is required by law to inquire the existence of certain facts and to
apply the law thereto in order to determine what his official conduct shall be and the fact that
these acts may affect private, rights do not constitute an exercise of judicial powers.
Accordingly, a statute may give to non-judicial officers the power to declare the existence of
facts which call into operation its provisions, and similarly may grant to commissioners and
other subordinate officer, power to ascertain and determine appropriate facts as a basis for
procedure in the enforcement of particular laws. (11 Am. Jur., Const. Law, p. 950, sec. 235)
s. 237. Powers to determine cases within Statute. One important class of cases in which
discretion may properly be vested in administrative officers, which class is almost an
operation of the general rule relating to the ascertainment of facts, consists of those cases in
which a general rule or prohibition is laid down and power is vested in an executive officer to
determine when particular cases do or do not fall within such rule or prohibition. Power
exercised under such statutes, calling for the exercise of judgment in the execution of a
ministerial act, is never judicial in nature within the sense prohibited by the Constitution. (11
Am. Jur., Const. Law, sec. 237, p. 952)
A direct precedent can be found in the "Bridge cases" upholding the constitutionality of the U.S.
River and Harbor Act of March 3, 1899, that empowered (sec. 18) the Secretary of War to take
action, after hearing, for the removal or alteration of bridges unreasonably obstructing navigation. On
the issue of undue delegation of power, the U.S. Supreme Court ruled as follows:
Congress thereby declared that whenever the Secretary of War should find any bridge
theretofore or thereafter constructed over any of the navigable waterways of the United
States to be an unreasonable obstruction to the free navigation of such waters on account of
insufficient height, width of span, or otherwise, it should be the duty of the Secretary, after
hearing the parties concerned, to take action looking to the removal or alteration of the
bridge, so as to render navigation through or under it reasonably free, easy, and
unobstructed. As this court repeatedly has held, this is not an unconstitutional delegation of
legislative or judicial power to the Secretary. Union Bridge Co. vs. United States, 204 U.S.
364, 385, 51 L. ed. 523, 533, 27 Sup. Ct. Rep. 367; Monongahela Bridge Co. v. United
States, 216 U.S. 177, 192,54 L. ed. 435, 441, 30 Sup. Ct. Rep. 356; Hannibal Bridge Co. v.
United States, 221 U.S. 194. 205, 55 L. ed. 699, 703, 31 Sup. Ct. Rep. 603. The statute itself
prescribes the general rule applicable to all navigable waters, and merely charged the
Secretary of War with the duty of ascertaining in each case, upon notice to the parties
concerned, whether the particular bridge came within the general rule. Of course, the
Secretary's finding must be based upon the conditions as they exist at the time he acts. But
the law imposing this duty upon him speaks from the time of its enactment. (Louisville Bridge
Co. v. U.S., 61 L. ed. 395). (Emphasis supplied)

Appellees invoke American rulings that abatement as nuisances of properties of great value can not
be done except through court proceedings; but these rulings refer
to summary abatements without previous hearing, and are inapplicable to the case before us where
the law provides, and the investigator actually held, a hearing with notice to the complainants and
the, appellees, who appeared therein. It is noteworthy that Republic Act 2605 authorizes removal of
the unauthorized dikes either as "public nuisances or as prohibited constructions" on public
navigable streams, and those of appellees clearly are in the latter class.
It may not be amiss to state that the power of the Secretary of Public Works to investigate and clear
public streams free from unauthorized encroachments and obstructions was granted as far back as
Act 3208 of the old Philippine Legislature, and has been upheld by this Court (Palanca vs.
Commonwealth, supra; Meneses vs. Commonwealth, 69 Phil. 647). We do not believe that the
absence of an express appeal to the courts under the present Republic Act 2056 is a substantial
difference, so far as the Constitution is concerned, for it is a well-known rule that due process does
not have to be judicial process; and moreover, the judicial review of the Secretary's decision would
always remain, even if not expressly granted, whenever his act violates the law or the Constitution,
or imports abuse of discretion amounting to excess of jurisdiction.
The argument that the action of the Secretary amounts to a confiscation of private property leads us
directly to the issue of fact whether a navigable portion of the Bulati creek had once traversed the
registered lot of the appellees Lovina and connected with Manampil creek that borders said lot on
the northwest before it was closed by Jose de Leon, Lovina's predecessor. The Secretary of Public
Works has found from the evidence before him that, originally, the sapang (creek) Bulati flowed
across the property in question, and connected the Nasi river withsapang Manampil; that in 1926 or
thereabouts, the Bulati creek was 2 meters deep at high tide and 1/2 meter deep at low tide, and the
people used it as fishing grounds and as a communication way, navigating along its length in
bancas; that former registered owner, Jose de Jesus, closed about meters of the course of
the sapangBulati that lay within the lot in question by constructing dams or dikes at both sides and
converting the lot into a fishpond.
The appellees, on the other hand, rely on the 1916 registration plan of the property (Exh. C),
showing it to be merely bounded by the Bulati creek on the southeast, as well as on the testimony
introduced at the hearing of prohibition case (over the objection of the Government counsel) that the
Bulati creek did not enter the property.
The Court of First Instance found that "according to the location plan, Exhibit "C", the "Bulati creek,
on which dikes and dams in question were constructed was a mere estero and could not be
considered a navigable stream then." It is not explained how such fact could appear solely from the
plan Exhibit "C" (no other proof being referred to), unless indeed the court below so concluded from
the fact that in said plan the Bulati creek does not appear to run within the registered lot. The
conclusion of lower court is not supported by its premises, because by law, the issuance of a Torrens
title does not confer title navigable streams (which are fluvial highways) within registered property,
nor is it conclusive on their non-existence, unless the boundaries of such streams had been
expressly delimited in the registration plan (Act 496, sec. 39 cf. Palanca vs. Commonwealth, 69 Phil.
449; Meneses Commonwealth, 69 Phil. 647), so that delimitation of their course may be made even
after the decree of registration has become final. In the present case, in truth the very plan of the
appellees, Exhibit "C", shows parallel reentrant lines, around its point 65 and between points 44 and
that indicate the existence of a stream connecting the sapang Bulati on the southeast and
the sapang Manampil on the northwest, and which the surveyor apparently failed delimit for some
undisclosed reason. That the stream was the prolongation of thesapang Bulati, that formerly flow
across the registered lot, is also shown by the fact that appellees' plan Exhibit "C", the westward
continuation the Bulati creek (west of point 65), which bounds the registered lot, is labelled "Etero

Mabao". The plan thus corroborates the previously summarized testimony laid before investigator
Yonzon and relied upon by the Secretary in his administrative decision. Even more, appellees' own
caretaker, Yambao, showed investigator Yonzon the old course of the Bulati within the fishpond itself;
and this evidence is, likewise, confirmed by the cross-section profile of the ground near the dams in
question (See plan Annex "AA" of Yonzon's Report), where the old channel of the creek is clearly
discernible. To be sure, appellees contend that they were not shown this plan; but in their evidence
before the court of first instance, they never attempted, or offered, to prove that said plan is
incorrect.
That the creek was navigable in fact before it was closed was also testified to by the government
witnesses, whose version is corroborated as we have seen.
Considering the well-established rule that findings of fact in executive decisions in matters within
their jurisdiction are entitled to respect from the courts in the absence of fraud, collusion, or grave
abuse of discretion (Com. of Customs vs. Valencia, 54 O.G. 3505), none of which has been shown
to exist in this case, we agree with appellant that the court below erred in rejecting the findings of
fact of the Secretary of Public Works.
The findings of the Secretary can not be enervated by new evidence not laid down before him, for
that would be tantamount to holding a new investigation, and to substitute for the discretion and
judgment of the Secretary the discretion and judgment of the court, to whom the statute had
entrusted the case. It is immaterial that the present action should be one for prohibition or injunction
and not one for certiorari, in either event the case must be resolved upon the evidence submitted to
the Secretary, since a judicial review of executive decisions does not import a trial de novo, but only
an ascertainment of whether the executive findings are not in violation of the constitution or of the
laws, and are free from fraud or imposition, and whether they find reasonable support in the
evidence.1 Here, the proof preponderates in favor of the Secretary's decision.
Nevertheless, we, agree with appellees that they can not be charged with failure to exhaust
administrative remedies, for the Secretary's decision is that of the President, in the absence of
disapproval (Villena vs. Secretary of the interior, 67 Phil. 451).
Finally, there being a possibility that when they purchased the property in question the appellees
Lovina were not informed of the illegal closure of the Bulati creek, their action, if any, against their
vendor, should be, and is hereby, reserved.
In resume, we rule:
(1) That Republic Act No. 2056 does not constitute an unlawful delegation of judicial power to the
Secretary of Public Works;
(2) That absence of any mention of a navigable stream within a property covered by Torrens title
does not confer title to it nor preclude a subsequent investigation and determination of its existence;
(3) That the findings of fact of the Secretary of Public Works under Republic Act No. 2056 should be
respected in the absence of illegality, error of law, fraud, or imposition, so long as the said, findings
are supported by substantial evidence submitted to him.
(4) That ownership of a navigable stream or of its bed is not acquirable by prescription.

WHEREFORE, the decision appealed from is reversed, and the writs of injunction issued therein are
annulled and set aside. Costs against appellees Lovina.

G.R. No. 166715

August 14, 2008

ABAKADA GURO PARTY LIST (formerly AASJS)1 OFFICERS/MEMBERS SAMSON S.

ALCANTARA, ED VINCENT S. ALBANO, ROMEO R. ROBISO, RENE B. GOROSPE and EDWIN
R. SANDOVAL, petitioners,
vs.
HON. CESAR V. PURISIMA, in his capacity as Secretary of Finance, HON. GUILLERMO L.
PARAYNO, JR., in his capacity as Commissioner of the Bureau of Internal Revenue, and HON.
ALBERTO D. LINA, in his Capacity as Commissioner of Bureau of Customs, respondents.
DECISION
CORONA, J.:
This petition for prohibition1 seeks to prevent respondents from implementing and enforcing Republic
Act (RA) 93352 (Attrition Act of 2005).
RA 9335 was enacted to optimize the revenue-generation capability and collection of the Bureau of
Internal Revenue (BIR) and the Bureau of Customs (BOC). The law intends to encourage BIR and
BOC officials and employees to exceed their revenue targets by providing a system of rewards and
sanctions through the creation of a Rewards and Incentives Fund (Fund) and a Revenue
Performance Evaluation Board (Board).3 It covers all officials and employees of the BIR and the
BOC with at least six months of service, regardless of employment status. 4
The Fund is sourced from the collection of the BIR and the BOC in excess of their revenue targets
for the year, as determined by the Development Budget and Coordinating Committee (DBCC). Any
incentive or reward is taken from the fund and allocated to the BIR and the BOC in proportion to their
contribution in the excess collection of the targeted amount of tax revenue. 5
The Boards in the BIR and the BOC are composed of the Secretary of the Department of Finance
(DOF) or his/her Undersecretary, the Secretary of the Department of Budget and Management
(DBM) or his/her Undersecretary, the Director General of the National Economic Development
Authority (NEDA) or his/her Deputy Director General, the Commissioners of the BIR and the BOC or
their Deputy Commissioners, two representatives from the rank-and-file employees and a
representative from the officials nominated by their recognized organization. 6
Each Board has the duty to (1) prescribe the rules and guidelines for the allocation, distribution and
release of the Fund; (2) set criteria and procedures for removing from the service officials and
employees whose revenue collection falls short of the target; (3) terminate personnel in accordance
with the criteria adopted by the Board; (4) prescribe a system for performance evaluation; (5)
perform other functions, including the issuance of rules and regulations and (6) submit an annual
report to Congress.7
The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were tasked to
promulgate and issue the implementing rules and regulations of RA 9335, 8 to be approved by a Joint
Congressional Oversight Committee created for such purpose. 9
Petitioners, invoking their right as taxpayers filed this petition challenging the constitutionality of RA
9335, a tax reform legislation. They contend that, by establishing a system of rewards and
incentives, the law "transform[s] the officials and employees of the BIR and the BOC into

mercenaries and bounty hunters" as they will do their best only in consideration of such rewards.
Thus, the system of rewards and incentives invites corruption and undermines the constitutionally
mandated duty of these officials and employees to serve the people with utmost responsibility,
integrity, loyalty and efficiency.
Petitioners also claim that limiting the scope of the system of rewards and incentives only to officials
and employees of the BIR and the BOC violates the constitutional guarantee of equal protection.
There is no valid basis for classification or distinction as to why such a system should not apply to
officials and employees of all other government agencies.
In addition, petitioners assert that the law unduly delegates the power to fix revenue targets to the
President as it lacks a sufficient standard on that matter. While Section 7(b) and (c) of RA 9335
provides that BIR and BOC officials may be dismissed from the service if their revenue collections
fall short of the target by at least 7.5%, the law does not, however, fix the revenue targets to be
achieved. Instead, the fixing of revenue targets has been delegated to the President without
sufficient standards. It will therefore be easy for the President to fix an unrealistic and unattainable
target in order to dismiss BIR or BOC personnel.
Finally, petitioners assail the creation of a congressional oversight committee on the ground that it
violates the doctrine of separation of powers. While the legislative function is deemed accomplished
and completed upon the enactment and approval of the law, the creation of the congressional
oversight committee permits legislative participation in the implementation and enforcement of the
law.
In their comment, respondents, through the Office of the Solicitor General, question the petition for
being premature as there is no actual case or controversy yet. Petitioners have not asserted any
right or claim that will necessitate the exercise of this Courts jurisdiction. Nevertheless, respondents
acknowledge that public policy requires the resolution of the constitutional issues involved in this
case. They assert that the allegation that the reward system will breed mercenaries is mere
speculation and does not suffice to invalidate the law. Seen in conjunction with the declared
objective of RA 9335, the law validly classifies the BIR and the BOC because the functions they
perform are distinct from those of the other government agencies and instrumentalities. Moreover,
the law provides a sufficient standard that will guide the executive in the implementation of its
provisions. Lastly, the creation of the congressional oversight committee under the law enhances,
rather than violates, separation of powers. It ensures the fulfillment of the legislative policy and
serves as a check to any over-accumulation of power on the part of the executive and the
implementing agencies.
After a careful consideration of the conflicting contentions of the parties, the Court finds that
petitioners have failed to overcome the presumption of constitutionality in favor of RA 9335, except
as shall hereafter be discussed.
Actual Case And Ripeness
An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims
susceptible of judicial adjudication.10 A closely related requirement is ripeness, that is, the question
must be ripe for adjudication. And a constitutional question is ripe for adjudication when the
governmental act being challenged has a direct adverse effect on the individual challenging it. 11Thus,
to be ripe for judicial adjudication, the petitioner must show a personal stake in the outcome of the
case or an injury to himself that can be redressed by a favorable decision of the Court. 12

In this case, aside from the general claim that the dispute has ripened into a judicial controversy by
the mere enactment of the law even without any further overt act, 13 petitioners fail either to assert
any specific and concrete legal claim or to demonstrate any direct adverse effect of the law on them.
They are unable to show a personal stake in the outcome of this case or an injury to themselves. On
this account, their petition is procedurally infirm.
This notwithstanding, public interest requires the resolution of the constitutional issues raised by
petitioners. The grave nature of their allegations tends to cast a cloud on the presumption of
constitutionality in favor of the law. And where an action of the legislative branch is alleged to have
infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle
the dispute.14
Accountability of
Public Officers
Section 1, Article 11 of the Constitution states:
Sec. 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism, and justice, and lead modest lives.
Public office is a public trust. It must be discharged by its holder not for his own personal gain but for
the benefit of the public for whom he holds it in trust. By demanding accountability and service with
responsibility, integrity, loyalty, efficiency, patriotism and justice, all government officials and
employees have the duty to be responsive to the needs of the people they are called upon to serve.
Public officers enjoy the presumption of regularity in the performance of their duties. This
presumption necessarily obtains in favor of BIR and BOC officials and employees. RA 9335 operates
on the basis thereof and reinforces it by providing a system of rewards and sanctions for the purpose
of encouraging the officials and employees of the BIR and the BOC to exceed their revenue targets
and optimize their revenue-generation capability and collection.15
The presumption is disputable but proof to the contrary is required to rebut it. It cannot be overturned
by mere conjecture or denied in advance (as petitioners would have the Court do) specially in this
case where it is an underlying principle to advance a declared public policy.
Petitioners claim that the implementation of RA 9335 will turn BIR and BOC officials and employees
into "bounty hunters and mercenaries" is not only without any factual and legal basis; it is also purely
speculative.
A law enacted by Congress enjoys the strong presumption of constitutionality. To justify its
nullification, there must be a clear and unequivocal breach of the Constitution, not a doubtful and
equivocal one.16 To invalidate RA 9335 based on petitioners baseless supposition is an affront to the
wisdom not only of the legislature that passed it but also of the executive which approved it.
Public service is its own reward. Nevertheless, public officers may by law be rewarded for exemplary
and exceptional performance. A system of incentives for exceeding the set expectations of a public
office is not anathema to the concept of public accountability. In fact, it recognizes and reinforces
dedication to duty, industry, efficiency and loyalty to public service of deserving government
personnel.

In United States v. Matthews,17 the U.S. Supreme Court validated a law which awards to officers of
the customs as well as other parties an amount not exceeding one-half of the net proceeds of
forfeitures in violation of the laws against smuggling. Citing Dorsheimer v. United States,18 the U.S.
Supreme Court said:
The offer of a portion of such penalties to the collectors is to stimulate and reward their zeal
and industry in detecting fraudulent attempts to evade payment of duties and taxes.
In the same vein, employees of the BIR and the BOC may by law be entitled to a reward when, as a
consequence of their zeal in the enforcement of tax and customs laws, they exceed their revenue
targets. In addition, RA 9335 establishes safeguards to ensure that the reward will not be claimed if it
will be either the fruit of "bounty hunting or mercenary activity" or the product of the irregular
performance of official duties. One of these precautionary measures is embodied in Section 8 of the
law:
SEC. 8. Liability of Officials, Examiners and Employees of the BIR and the BOC. The
officials, examiners, and employees of the [BIR] and the [BOC] who violate this Act or who
are guilty of negligence, abuses or acts of malfeasance or misfeasance or fail to exercise
extraordinary diligence in the performance of their duties shall be held liable for any loss or
injury suffered by any business establishment or taxpayer as a result of such violation,
negligence, abuse, malfeasance, misfeasance or failure to exercise extraordinary diligence.
Equal Protection
Equality guaranteed under the equal protection clause is equality under the same conditions and
among persons similarly situated; it is equality among equals, not similarity of treatment of persons
who are classified based on substantial differences in relation to the object to be
accomplished.19When things or persons are different in fact or circumstance, they may be treated in
law differently. InVictoriano v. Elizalde Rope Workers Union,20 this Court declared:
The guaranty of equal protection of the laws is not a guaranty of equality in the application of
the laws upon all citizens of the [S]tate. It is not, therefore, a requirement, in order to avoid
the constitutional prohibition against inequality, that every man, woman and child should be
affected alike by a statute. Equality of operation of statutes does not mean indiscriminate
operation on persons merely as such, but on persons according to the circumstances
surrounding them. It guarantees equality, not identity of rights. The Constitution does not
require that things which are different in fact be treated in law as though they were the
same. The equal protection clause does not forbid discrimination as to things that are
different. It does not prohibit legislation which is limited either in the object to which it
is directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification. Classification
in law, as in the other departments of knowledge or practice, is the grouping of things in
speculation or practice because they agree with one another in certain particulars. A law is
not invalid because of simple inequality. The very idea of classification is that of inequality, so
that it goes without saying that the mere fact of inequality in no manner determines the
matter of constitutionality. All that is required of a valid classification is that it be
reasonable, which means that the classification should be based on substantial
distinctions which make for real differences, that it must be germane to the purpose of
the law; that it must not be limited to existing conditions only; and that it must apply
equally to each member of the class. This Court has held that the standard is satisfied if

the classification or distinction is based on a reasonable foundation or rational basis

and is not palpably arbitrary.
In the exercise of its power to make classifications for the purpose of enacting laws over
matters within its jurisdiction, the state is recognized as enjoying a wide range of discretion. It
is not necessary that the classification be based on scientific or marked differences of things
or in their relation. Neither is it necessary that the classification be made with mathematical
nicety. Hence, legislative classification may in many cases properly rest on narrow
distinctions, for the equal protection guaranty does not preclude the legislature from
recognizing degrees of evil or harm, and legislation is addressed to evils as they may
appear.21 (emphasis supplied)
The equal protection clause recognizes a valid classification, that is, a classification that has a
reasonable foundation or rational basis and not arbitrary.22 With respect to RA 9335, its expressed
public policy is the optimization of the revenue-generation capability and collection of the BIR and
the BOC.23 Since the subject of the law is the revenue- generation capability and collection of the
BIR and the BOC, the incentives and/or sanctions provided in the law should logically pertain to the
said agencies. Moreover, the law concerns only the BIR and the BOC because they have the
common distinct primary function of generating revenues for the national government through the
collection of taxes, customs duties, fees and charges.
The BIR performs the following functions:
Sec. 18. The Bureau of Internal Revenue. The Bureau of Internal Revenue, which shall be
headed by and subject to the supervision and control of the Commissioner of Internal
Revenue, who shall be appointed by the President upon the recommendation of the
Secretary [of the DOF], shall have the following functions:
(1) Assess and collect all taxes, fees and charges and account for all revenues
collected;
(2) Exercise duly delegated police powers for the proper performance of its functions and
duties;
(3) Prevent and prosecute tax evasions and all other illegal economic activities;
(4) Exercise supervision and control over its constituent and subordinate units; and
(5) Perform such other functions as may be provided by law.24
xxx

xxx

xxx (emphasis supplied)

On the other hand, the BOC has the following functions:

Sec. 23. The Bureau of Customs. The Bureau of Customs which shall be headed and
subject to the management and control of the Commissioner of Customs, who shall be
appointed by the President upon the recommendation of the Secretary[of the DOF] and
hereinafter referred to as Commissioner, shall have the following functions:
(1) Collect custom duties, taxes and the corresponding fees, charges and penalties;

(2) Account for all customs revenues collected;

(3) Exercise police authority for the enforcement of tariff and customs laws;
(4) Prevent and suppress smuggling, pilferage and all other economic frauds within all ports
of entry;
(5) Supervise and control exports, imports, foreign mails and the clearance of vessels and
aircrafts in all ports of entry;
(6) Administer all legal requirements that are appropriate;
(7) Prevent and prosecute smuggling and other illegal activities in all ports under its
jurisdiction;
(8) Exercise supervision and control over its constituent units;
(9) Perform such other functions as may be provided by law.25
xxx

xxx

xxx (emphasis supplied)

Both the BIR and the BOC are bureaus under the DOF. They principally perform the special function
of being the instrumentalities through which the State exercises one of its great inherent functions
taxation. Indubitably, such substantial distinction is germane and intimately related to the purpose of
the law. Hence, the classification and treatment accorded to the BIR and the BOC under RA 9335
fully satisfy the demands of equal protection.
Undue Delegation
Two tests determine the validity of delegation of legislative power: (1) the completeness test and (2)
the sufficient standard test. A law is complete when it sets forth therein the policy to be executed,
carried out or implemented by the delegate.26 It lays down a sufficient standard when it provides
adequate guidelines or limitations in the law to map out the boundaries of the delegates authority
and prevent the delegation from running riot.27 To be sufficient, the standard must specify the limits of
the delegates authority, announce the legislative policy and identify the conditions under which it is
to be implemented.28
RA 9335 adequately states the policy and standards to guide the President in fixing revenue targets
and the implementing agencies in carrying out the provisions of the law. Section 2 spells out the
policy of the law:
SEC. 2. Declaration of Policy. It is the policy of the State to optimize the revenuegeneration capability and collection of the Bureau of Internal Revenue (BIR) and the Bureau
of Customs (BOC) by providing for a system of rewards and sanctions through the creation
of a Rewards and Incentives Fund and a Revenue Performance Evaluation Board in the
above agencies for the purpose of encouraging their officials and employees to exceed their
revenue targets.
Section 4 "canalized within banks that keep it from overflowing"29 the delegated power to the
President to fix revenue targets:

SEC. 4. Rewards and Incentives Fund. A Rewards and Incentives Fund, hereinafter
referred to as the Fund, is hereby created, to be sourced from the collection of the BIR and
the BOC in excess of their respective revenue targets of the year, as determined by the
Development Budget and Coordinating Committee (DBCC), in the following percentages:

Excess of Collection of the Excess Percent (%) of the Excess Collection to Accrue
the Revenue Targets
to the Fund

30% or below

15%

More than 30%

15% of the first 30% plus 20% of the

remaining excess

The Fund shall be deemed automatically appropriated the year immediately following the
year when the revenue collection target was exceeded and shall be released on the same
fiscal year.
Revenue targets shall refer to the original estimated revenue collection expected of
the BIR and the BOC for a given fiscal year as stated in the Budget of Expenditures
and Sources of Financing (BESF) submitted by the President to Congress. The BIR
and the BOC shall submit to the DBCC the distribution of the agencies revenue targets as
allocated among its revenue districts in the case of the BIR, and the collection districts in the
case of the BOC.
xxx

xxx

xxx (emphasis supplied)

Revenue targets are based on the original estimated revenue collection expected respectively of the
BIR and the BOC for a given fiscal year as approved by the DBCC and stated in the BESF submitted
by the President to Congress.30 Thus, the determination of revenue targets does not rest solely on
the President as it also undergoes the scrutiny of the DBCC.
On the other hand, Section 7 specifies the limits of the Boards authority and identifies the conditions
under which officials and employees whose revenue collection falls short of the target by at least
7.5% may be removed from the service:
SEC. 7. Powers and Functions of the Board. The Board in the agency shall have the
following powers and functions:
xxx

xxx

xxx

(b) To set the criteria and procedures for removing from service officials and employees
whose revenue collection falls short of the target by at least seven and a half percent
(7.5%), with due consideration of all relevant factors affecting the level of collection as
provided in the rules and regulations promulgated under this Act, subject to civil service
laws, rules and regulations and compliance with substantive and procedural due
process: Provided, That the following exemptions shall apply:

1. Where the district or area of responsibility is newly-created, not exceeding two

years in operation, as has no historical record of collection performance that can be
used as basis for evaluation; and
2. Where the revenue or customs official or employee is a recent transferee in the
middle of the period under consideration unless the transfer was due to
nonperformance of revenue targets or potential nonperformance of revenue targets:
Provided, however, That when the district or area of responsibility covered by
revenue or customs officials or employees has suffered from economic difficulties
brought about by natural calamities orforce majeure or economic causes as may be
determined by the Board, termination shall be considered only after careful and
proper review by the Board.
(c) To terminate personnel in accordance with the criteria adopted in the preceding
paragraph: Provided, That such decision shall be immediately executory: Provided, further,
That the application of the criteria for the separation of an official or employee from
service under this Act shall be without prejudice to the application of other relevant
laws on accountability of public officers and employees, such as the Code of Conduct
and Ethical Standards of Public Officers and Employees and the Anti-Graft and
Corrupt Practices Act;
xxx

xxx

xxx (emphasis supplied)

Clearly, RA 9335 in no way violates the security of tenure of officials and employees of the BIR and
the BOC. The guarantee of security of tenure only means that an employee cannot be dismissed
from the service for causes other than those provided by law and only after due process is accorded
the employee.31 In the case of RA 9335, it lays down a reasonable yardstick for removal (when the
revenue collection falls short of the target by at least 7.5%) with due consideration of all relevant
factors affecting the level of collection. This standard is analogous to inefficiency and incompetence
in the performance of official duties, a ground for disciplinary action under civil service laws. 32 The
action for removal is also subject to civil service laws, rules and regulations and compliance with
substantive and procedural due process.
At any rate, this Court has recognized the following as sufficient standards: "public interest," "justice
and equity," "public convenience and welfare" and "simplicity, economy and welfare." 33 In this case,
the declared policy of optimization of the revenue-generation capability and collection of the BIR and
the BOC is infused with public interest.
Separation Of Powers
Section 12 of RA 9335 provides:
SEC. 12. Joint Congressional Oversight Committee. There is hereby created a Joint
Congressional Oversight Committee composed of seven Members from the Senate and
seven Members from the House of Representatives. The Members from the Senate shall be
appointed by the Senate President, with at least two senators representing the minority. The
Members from the House of Representatives shall be appointed by the Speaker with at least
two members representing the minority. After the Oversight Committee will have approved
the implementing rules and regulations (IRR) it shall thereafter become functus officio and
therefore cease to exist.

The Joint Congressional Oversight Committee in RA 9335 was created for the purpose of approving
the implementing rules and regulations (IRR) formulated by the DOF, DBM, NEDA, BIR, BOC and
CSC. On May 22, 2006, it approved the said IRR. From then on, it became functus officio and
ceased to exist. Hence, the issue of its alleged encroachment on the executive function of
implementing and enforcing the law may be considered moot and academic.
This notwithstanding, this might be as good a time as any for the Court to confront the issue of the
constitutionality of the Joint Congressional Oversight Committee created under RA 9335 (or other
similar laws for that matter).
The scholarly discourse of Mr. Justice (now Chief Justice) Puno on the concept of congressional
oversight in Macalintal v. Commission on Elections34 is illuminating:
Concept and bases of congressional oversight
Broadly defined, the power of oversight embraces all activities undertaken by Congress
to enhance its understanding of and influence over the implementation of legislation it
has enacted. Clearly, oversight concerns post-enactment measures undertaken by
Congress: (a) to monitor bureaucratic compliance with program objectives, (b) to
determine whether agencies are properly administered, (c) to eliminate executive
waste and dishonesty, (d) to prevent executive usurpation of legislative authority, and
(d) to assess executive conformity with the congressional perception of public
interest.
The power of oversight has been held to be intrinsic in the grant of legislative power itself
and integral to the checks and balances inherent in a democratic system of government. x x
xxxxxxx
Over the years, Congress has invoked its oversight power with increased frequency to check
the perceived "exponential accumulation of power" by the executive branch. By the
beginning of the 20th century, Congress has delegated an enormous amount of legislative
authority to the executive branch and the administrative agencies. Congress, thus, uses its
oversight power to make sure that the administrative agencies perform their functions within
the authority delegated to them. x x x x x x x x x
Categories of congressional oversight functions
The acts done by Congress purportedly in the exercise of its oversight powers may be
divided into three categories, namely: scrutiny, investigation and supervision.
a. Scrutiny
Congressional scrutiny implies a lesser intensity and continuity of attention to
administrative operations. Its primary purpose is to determine economy and
efficiency of the operation of government activities. In the exercise of legislative
scrutiny, Congress may request information and report from the other branches of
government. It can give recommendations or pass resolutions for consideration of
the agency involved.
xxx

xxx

xxx

b. Congressional investigation
While congressional scrutiny is regarded as a passive process of looking at the facts
that are readily available, congressional investigation involves a more intense
digging of facts. The power of Congress to conduct investigation is recognized by the
1987 Constitution under section 21, Article VI, xxx
xxx
xxx
c. Legislative supervision
The third and most encompassing form by which Congress exercises its oversight power is
thru legislative supervision. "Supervision" connotes a continuing and informed awareness on
the part of a congressional committee regarding executive operations in a given
administrative area. While both congressional scrutiny and investigation involve inquiry
into past executive branch actions in order to influence future executive branch
performance, congressional supervision allows Congress to scrutinize the exercise of
delegated law-making authority, and permits Congress to retain part of that delegated
authority.
Congress exercises supervision over the executive agencies through its veto power. It
typically utilizes veto provisions when granting the President or an executive agency the
power to promulgate regulations with the force of law. These provisions require the President
or an agency to present the proposed regulations to Congress, which retains a "right" to
approve or disapprove any regulation before it takes effect. Such legislative veto provisions
usually provide that a proposed regulation will become a law after the expiration of a certain
period of time, only if Congress does not affirmatively disapprove of the regulation in the
meantime. Less frequently, the statute provides that a proposed regulation will become law if
Congress affirmatively approves it.
Supporters of legislative veto stress that it is necessary to maintain the balance of power
between the legislative and the executive branches of government as it offers lawmakers a
way to delegate vast power to the executive branch or to independent agencies while
retaining the option to cancel particular exercise of such power without having to pass new
legislation or to repeal existing law. They contend that this arrangement promotes democratic
accountability as it provides legislative check on the activities of unelected administrative
agencies. One proponent thus explains:
It is too late to debate the merits of this delegation policy: the policy is too deeply
embedded in our law and practice. It suffices to say that the complexities of modern
government have often led Congress-whether by actual or perceived necessity- to
legislate by declaring broad policy goals and general statutory standards, leaving the
choice of policy options to the discretion of an executive officer. Congress articulates
legislative aims, but leaves their implementation to the judgment of parties who may
or may not have participated in or agreed with the development of those aims.
Consequently, absent safeguards, in many instances the reverse of our constitutional
scheme could be effected: Congress proposes, the Executive disposes. One
safeguard, of course, is the legislative power to enact new legislation or to change
existing law. But without some means of overseeing post enactment activities of the
executive branch, Congress would be unable to determine whether its policies have
been implemented in accordance with legislative intent and thus whether legislative
intervention is appropriate.

Its opponents, however, criticize the legislative veto as undue encroachment upon the
executive prerogatives. They urge that any post-enactment measures undertaken by
the legislative branch should be limited to scrutiny and investigation; any measure
beyond that would undermine the separation of powers guaranteed by the
Constitution. They contend that legislative veto constitutes an impermissible evasion of the
Presidents veto authority and intrusion into the powers vested in the executive or judicial
branches of government. Proponents counter that legislative veto enhances separation of
powers as it prevents the executive branch and independent agencies from accumulating too
much power. They submit that reporting requirements and congressional committee
investigations allow Congress to scrutinize only the exercise of delegated law-making
authority. They do not allow Congress to review executive proposals before they take effect
and they do not afford the opportunity for ongoing and binding expressions of congressional
intent. In contrast, legislative veto permits Congress to participate prospectively in the
approval or disapproval of "subordinate law" or those enacted by the executive branch
pursuant to a delegation of authority by Congress. They further argue that legislative veto "is
a necessary response by Congress to the accretion of policy control by forces outside its
chambers." In an era of delegated authority, they point out that legislative veto "is the most
efficient means Congress has yet devised to retain control over the evolution and
implementation of its policy as declared by statute."
In Immigration and Naturalization Service v. Chadha, the U.S. Supreme Court resolved the
validity of legislative veto provisions. The case arose from the order of the immigration
judge suspending the deportation of Chadha pursuant to 244(c)(1) of the Immigration and
Nationality Act. The United States House of Representatives passed a resolution vetoing the
suspension pursuant to 244(c)(2) authorizing either House of Congress, by resolution, to
invalidate the decision of the executive branch to allow a particular deportable alien to
remain in the United States. The immigration judge reopened the deportation proceedings to
implement the House order and the alien was ordered deported. The Board of Immigration
Appeals dismissed the aliens appeal, holding that it had no power to declare unconstitutional
an act of Congress. The United States Court of Appeals for Ninth Circuit held that the House
was without constitutional authority to order the aliens deportation and that 244(c)(2)
violated the constitutional doctrine on separation of powers.
On appeal, the U.S. Supreme Court declared 244(c)(2) unconstitutional. But the Court
shied away from the issue of separation of powers and instead held that the provision
violates the presentment clause and bicameralism. It held that the one-house veto was
essentially legislative in purpose and effect. As such, it is subject to the procedures set out in
Article I of the Constitution requiring the passage by a majority of both Houses and
presentment to the President. x x x x x x x x x
Two weeks after the Chadha decision, the Court upheld, in memorandum decision, two lower
court decisions invalidating the legislative veto provisions in the Natural Gas Policy Act of
1978 and the Federal Trade Commission Improvement Act of 1980. Following this
precedence, lower courts invalidated statutes containing legislative veto provisions although
some of these provisions required the approval of both Houses of Congress and thus met
the bicameralism requirement of Article I. Indeed, some of these veto provisions were not
even exercised.35(emphasis supplied)
In Macalintal, given the concept and configuration of the power of congressional oversight and
considering the nature and powers of a constitutional body like the Commission on Elections, the
Court struck down the provision in RA 9189 (The Overseas Absentee Voting Act of 2003) creating a
Joint Congressional Committee. The committee was tasked not only to monitor and evaluate the

implementation of the said law but also to review, revise, amend and approve the IRR promulgated
by the Commission on Elections. The Court held that these functions infringed on the constitutional
independence of the Commission on Elections.36
With this backdrop, it is clear that congressional oversight is not unconstitutional per se, meaning, it
neither necessarily constitutes an encroachment on the executive power to implement laws nor
undermines the constitutional separation of powers. Rather, it is integral to the checks and balances
inherent in a democratic system of government. It may in fact even enhance the separation of
powers as it prevents the over-accumulation of power in the executive branch.
However, to forestall the danger of congressional encroachment "beyond the legislative sphere," the
Constitution imposes two basic and related constraints on Congress. 37 It may not vest itself, any of
its committees or its members with either executive or judicial power.38 And, when it exercises its
legislative power, it must follow the "single, finely wrought and exhaustively considered, procedures"
specified under the Constitution,39 including the procedure for enactment of laws and presentment.
Thus, any post-enactment congressional measure such as this should be limited to scrutiny and
investigation. In particular, congressional oversight must be confined to the following:
(1) scrutiny based primarily on Congress power of appropriation and the budget hearings
conducted in connection with it, its power to ask heads of departments to appear before and
be heard by either of its Houses on any matter pertaining to their departments and its power
of confirmation40 and
(2) investigation and monitoring41 of the implementation of laws pursuant to the power of
Congress to conduct inquiries in aid of legislation.42
Any action or step beyond that will undermine the separation of powers guaranteed by the
Constitution. Legislative vetoes fall in this class.
Legislative veto is a statutory provision requiring the President or an administrative agency to
present the proposed implementing rules and regulations of a law to Congress which, by itself or
through a committee formed by it, retains a "right" or "power" to approve or disapprove such
regulations before they take effect. As such, a legislative veto in the form of a congressional
oversight committee is in the form of an inward-turning delegation designed to attach a
congressional leash (other than through scrutiny and investigation) to an agency to which Congress
has by law initially delegated broad powers.43 It radically changes the design or structure of the
Constitutions diagram of power as it entrusts to Congress a direct role in enforcing, applying or
implementing its own laws.44
Congress has two options when enacting legislation to define national policy within the broad
horizons of its legislative competence.45 It can itself formulate the details or it can assign to the
executive branch the responsibility for making necessary managerial decisions in conformity with
those standards.46 In the latter case, the law must be complete in all its essential terms and
conditions when it leaves the hands of the legislature.47 Thus, what is left for the executive branch or
the concerned administrative agency when it formulates rules and regulations implementing the law
is to fill up details (supplementary rule-making) or ascertain facts necessary to bring the law into
actual operation (contingent rule-making).48
Administrative regulations enacted by administrative agencies to implement and interpret the law
which they are entrusted to enforce have the force of law and are entitled to respect. 49 Such rules
and regulations partake of the nature of a statute50 and are just as binding as if they have been

written in the statute itself. As such, they have the force and effect of law and enjoy the presumption
of constitutionality and legality until they are set aside with finality in an appropriate case by a
competent court.51 Congress, in the guise of assuming the role of an overseer, may not pass upon
their legality by subjecting them to its stamp of approval without disturbing the calculated balance of
powers established by the Constitution. In exercising discretion to approve or disapprove the IRR
based on a determination of whether or not they conformed with the provisions of RA 9335,
Congress arrogated judicial power unto itself, a power exclusively vested in this Court by the
Constitution.
Considered Opinion of
Mr. Justice Dante O. Tinga
Moreover, the requirement that the implementing rules of a law be subjected to approval by
Congress as a condition for their effectivity violates the cardinal constitutional principles of
bicameralism and the rule on presentment.52
Section 1, Article VI of the Constitution states:
Section 1. The legislative power shall be vested in the Congress of the Philippines
which shall consist of a Senate and a House of Representatives, except to the extent
reserved to the people by the provision on initiative and referendum. (emphasis supplied)
Legislative power (or the power to propose, enact, amend and repeal laws) 53 is vested in Congress
which consists of two chambers, the Senate and the House of Representatives. A valid exercise of
legislative power requires the act of both chambers. Corrollarily, it can be exercised neither solely by
one of the two chambers nor by a committee of either or both chambers. Thus, assuming the validity
of a legislative veto, both a single-chamber legislative veto and a congressional committee
legislative veto are invalid.
Additionally, Section 27(1), Article VI of the Constitution provides:
Section 27. (1) Every bill passed by the Congress shall, before it becomes a law, be
presented to the President. If he approves the same, he shall sign it, otherwise, he shall
veto it and return the same with his objections to the House where it originated, which shall
enter the objections at large in its Journal and proceed to reconsider it. If, after such
reconsideration, two-thirds of all the Members of such House shall agree to pass the bill, it
shall be sent, together with the objections, to the other House by which it shall likewise be
reconsidered, and if approved by two-thirds of all the Members of that House, it shall
become a law. In all such cases, the votes of each House shall be determined
by yeas or nays, and the names of the members voting for or against shall be entered in its
Journal. The President shall communicate his veto of any bill to the House where it
originated within thirty days after the date of receipt thereof; otherwise, it shall become a law
as if he had signed it. (emphasis supplied)
Every bill passed by Congress must be presented to the President for approval or veto. In the
absence of presentment to the President, no bill passed by Congress can become a law. In this
sense, law-making under the Constitution is a joint act of the Legislature and of the Executive.
Assuming that legislative veto is a valid legislative act with the force of law, it cannot take effect
without such presentment even if approved by both chambers of Congress.
In sum, two steps are required before a bill becomes a law. First, it must be approved by both
Houses of Congress.54 Second, it must be presented to and approved by the President.55 As

summarized by Justice Isagani Cruz56 and Fr. Joaquin G. Bernas, S.J.57, the following is the
procedure for the approval of bills:
A bill is introduced by any member of the House of Representatives or the Senate except for
some measures that must originate only in the former chamber.
The first reading involves only a reading of the number and title of the measure and its
referral by the Senate President or the Speaker to the proper committee for study.
The bill may be "killed" in the committee or it may be recommended for approval, with or
without amendments, sometimes after public hearings are first held thereon. If there are
other bills of the same nature or purpose, they may all be consolidated into one bill under
common authorship or as a committee bill.
Once reported out, the bill shall be calendared for second reading. It is at this stage that the
bill is read in its entirety, scrutinized, debated upon and amended when desired. The second
reading is the most important stage in the passage of a bill.
The bill as approved on second reading is printed in its final form and copies thereof are
distributed at least three days before the third reading. On the third reading, the members
merely register their votes and explain them if they are allowed by the rules. No further
debate is allowed.
Once the bill passes third reading, it is sent to the other chamber, where it will also undergo
the three readings. If there are differences between the versions approved by the two
chambers, a conference committee58 representing both Houses will draft a compromise
measure that if ratified by the Senate and the House of Representatives will then be
submitted to the President for his consideration.
The bill is enrolled when printed as finally approved by the Congress, thereafter
authenticated with the signatures of the Senate President, the Speaker, and the Secretaries
of their respective chambers59
The Presidents role in law-making.
The final step is submission to the President for approval. Once approved, it takes effect as
law after the required publication.60
Where Congress delegates the formulation of rules to implement the law it has enacted pursuant to
sufficient standards established in the said law, the law must be complete in all its essential terms
and conditions when it leaves the hands of the legislature. And it may be deemed to have left the
hands of the legislature when it becomes effective because it is only upon effectivity of the statute
that legal rights and obligations become available to those entitled by the language of the statute.
Subject to the indispensable requisite of publication under the due process clause, 61 the
determination as to when a law takes effect is wholly the prerogative of Congress. 62 As such, it is
only upon its effectivity that a law may be executed and the executive branch acquires the duties
and powers to execute the said law. Before that point, the role of the executive branch, particularly of
the President, is limited to approving or vetoing the law.63
From the moment the law becomes effective, any provision of law that empowers Congress or any
of its members to play any role in the implementation or enforcement of the law violates the principle

of separation of powers and is thus unconstitutional. Under this principle, a provision that requires
Congress or its members to approve the implementing rules of a law after it has already taken effect
shall be unconstitutional, as is a provision that allows Congress or its members to overturn any
directive or ruling made by the members of the executive branch charged with the implementation of
the law.
Following this rationale, Section 12 of RA 9335 should be struck down as unconstitutional. While
there may be similar provisions of other laws that may be invalidated for failure to pass this standard,
the Court refrains from invalidating them wholesale but will do so at the proper time when an
appropriate case assailing those provisions is brought before us.64
The next question to be resolved is: what is the effect of the unconstitutionality of Section 12 of RA
9335 on the other provisions of the law? Will it render the entire law unconstitutional? No.
Section 13 of RA 9335 provides:
SEC. 13. Separability Clause. If any provision of this Act is declared invalid by a competent
court, the remainder of this Act or any provision not affected by such declaration of invalidity
shall remain in force and effect.
In Tatad v. Secretary of the Department of Energy,65 the Court laid down the following rules:
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. x x x
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.
The separability clause of RA 9335 reveals the intention of the legislature to isolate and detach any
invalid provision from the other provisions so that the latter may continue in force and effect. The
valid portions can stand independently of the invalid section. Without Section 12, the remaining
provisions still constitute a complete, intelligible and valid law which carries out the legislative intent
to optimize the revenue-generation capability and collection of the BIR and the BOC by providing for
a system of rewards and sanctions through the Rewards and Incentives Fund and a Revenue
Performance Evaluation Board.
To be effective, administrative rules and regulations must be published in full if their purpose is to
enforce or implement existing law pursuant to a valid delegation. The IRR of RA 9335 were
published on May 30, 2006 in two newspapers of general circulation 66 and became effective 15 days

thereafter.67 Until and unless the contrary is shown, the IRR are presumed valid and effective even
without the approval of the Joint Congressional Oversight Committee.
WHEREFORE, the petition is hereby PARTIALLY GRANTED. Section 12 of RA 9335 creating a
Joint Congressional Oversight Committee to approve the implementing rules and regulations of the
law is declared UNCONSTITUTIONAL and therefore NULL and VOID. The constitutionality of the
remaining provisions of RA 9335 is UPHELD. Pursuant to Section 13 of RA 9335, the rest of the
provisions remain in force and effect.
SO ORDERED.

G.R. No. L-32166 October 18, 1977

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
HON. MAXIMO A. MACEREN CFI, Sta. Cruz, Laguna, JOSE BUENAVENTURA, GODOFREDO
REYES, BENJAMIN REYES, NAZARIO AQUINO and CARLO DEL ROSARIO, accused-appellees.
Office of the Solicitor General for appellant.
Rustics F. de los Reyes, Jr. for appellees.

AQUINO, J.:

t.hqw

This is a case involving the validity of a 1967 regulation, penalizing electro fishing in fresh water
fisheries, promulgated by the Secretary of Agriculture and Natural Resources and the Commissioner
of Fisheries under the old Fisheries Law and the law creating the Fisheries Commission.
On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario Aquino and
Carlito del Rosario were charged by a Constabulary investigator in the municipal court of Sta. Cruz,
Laguna with having violated Fisheries Administrative Order No. 84-1.
It was alleged in the complaint that the five accused in the morning of March 1, 1969 resorted to
electro fishing in the waters of Barrio San Pablo Norte, Sta. Cruz by "using their own motor banca,
equipped with motor; with a generator colored green with attached dynamo colored gray or
somewhat white; and electrocuting device locally known as sensored with a somewhat webbed
copper wire on the tip or other end of a bamboo pole with electric wire attachment which was
attached to the dynamo direct and with the use of these devices or equipments catches fish thru
electric current, which destroy any aquatic animals within its cuffed reach, to the detriment and
prejudice of the populace" (Criminal Case No. 5429).
Upon motion of the accused, the municipal court quashed the complaint. The prosecution appealed.
The Court of First Instance of Laguna affirmed the order of dismissal (Civil Case No. SC-36). The
case is now before this Court on appeal by the prosecution under Republic Act No. 5440.
The lower court held that electro fishing cannot be penalize because electric current is not an
obnoxious or poisonous substance as contemplated in section I I of the Fisheries Law and that it is
not a substance at all but a form of energy conducted or transmitted by substances. The lower court

further held that, since the law does not clearly prohibit electro fishing, the executive and judicial
departments cannot consider it unlawful.
As legal background, it should be stated that section 11 of the Fisheries Law prohibits "the use of
any obnoxious or poisonous substance" in fishing.
Section 76 of the same law punishes any person who uses an obnoxious or poisonous substance in
fishing with a fine of not more than five hundred pesos nor more than five thousand, and by
imprisonment for not less than six months nor more than five years.
It is noteworthy that the Fisheries Law does not expressly punish .electro fishing." Notwithstanding
the silence of the law, the Secretary of Agriculture and Natural Resources, upon the
recommendation of the Commissioner of Fisheries, promulgated Fisheries Administrative Order No.
84 (62 O.G. 1224), prohibiting electro fishing in all Philippine waters. The order is quoted below:
+.wph!1

SUBJECT: PROHIBITING ELECTRO FISHING IN ALL WATERS

+.wph!1

OF THE PHILIPPINES.
Pursuant to Section 4 of Act No. 4003, as amended, and Section 4 of R.A. No. 3512, the following
rules and regulations regarding the prohibition of electro fishing in all waters of the Philippines are
promulgated for the information and guidance of all concerned.
+.wph!1

SECTION 1. Definition. Words and terms used in this Order 11 construed as

follows:
(a) Philippine waters or territorial waters of the Philippines' includes all waters of the
Philippine Archipelago, as defined in the t between the United States and Spain,
dated respectively the tenth of December, eighteen hundred ninety eight and the
seventh of November, nineteen hundred. For the purpose of this order, rivers, lakes
and other bodies of fresh waters are included.
(b) Electro Fishing. Electro fishing is the catching of fish with the use of electric
current. The equipment used are of many electrical devices which may be battery or
generator-operated and from and available source of electric current.
(c) 'Persons' includes firm, corporation, association, agent or employee.
(d) 'Fish' includes other aquatic products.
SEC. 2. Prohibition. It shall be unlawful for any person to engage in electro
fishing or to catch fish by the use of electric current in any portion of the Philippine
waters except for research, educational and scientific purposes which must be
covered by a permit issued by the Secretary of Agriculture and Natural Resources
which shall be carried at all times.
SEC. 3. Penalty. Any violation of the provisions of this Administrative Order
shall subject the offender to a fine of not exceeding five hundred pesos (P500.00) or
imprisonment of not extending six (6) months or both at the discretion of the Court.

SEC. 4. Repealing Provisions. All administrative orders or parts thereof

inconsistent with the provisions of this Administrative Order are hereby revoked.
SEC. 5. Effectivity. This Administrative Order shall take effect six (60) days
after its publication in the Office Gazette.
On June 28, 1967 the Secretary of Agriculture and Natural Resources, upon the recommendation of
the Fisheries Commission, issued Fisheries Administrative Order No. 84-1, amending section 2 of
Administrative Order No. 84, by restricting the ban against electro fishing to fresh water fisheries (63
O.G. 9963).
Thus, the phrase "in any portion of the Philippine waters" found in section 2, was changed by the
amendatory order to read as follows: "in fresh water fisheries in the Philippines, such as rivers,
lakes, swamps, dams, irrigation canals and other bodies of fresh water."
The Court of First Instance and the prosecution (p. 11 of brief) assumed that electro fishing is
punishable under section 83 of the Fisheries Law (not under section 76 thereof), which provides that
any other violation of that law "or of any rules and regulations promulgated thereunder shall subject
the offender to a fine of not more than two hundred pesos (P200), or in t for not more than six
months, or both, in the discretion of the court."
That assumption is incorrect because 3 of the aforequoted Administrative Order No. 84 imposes a
fm of not exceeding P500 on a person engaged in electro fishing, which amount the 83. It seems
that the Department of Fisheries prescribed their own penalty for swift fishing which penalty is less
than the severe penalty imposed in section 76 and which is not Identified to the at penalty imposed
in section 83.
Had Administrative Order No. 84 adopted the fighter penalty prescribed in on 83, then the crime of
electro fishing would be within the exclusive original jurisdiction of the inferior court (Sec. 44 [f],
Judiciary Law; People vs. Ragasi, L-28663, September 22,
We have discussed this pre point, not raised in the briefs, because it is obvious that the crime of
electro fishing which is punishable with a sum up to P500, falls within the concurrent original
jurisdiction of the inferior courts and the Court of First instance (People vs. Nazareno, L-40037, April
30, 1976, 70 SCRA 531 and the cases cited therein).
And since the instant case was filed in the municipal court of Sta. Cruz, Laguna, a provincial capital,
the order of d rendered by that municipal court was directly appealable to the Court, not to the Court
of First Instance of Laguna (Sec. 45 and last par. of section 87 of the Judiciary Law; Esperat vs.
Avila, L-25992, June 30, 1967, 20 SCRA 596).
It results that the Court of First Instance of Laguna had no appellate jurisdiction over the case. Its
order affirming the municipal court's order of dismissal is void for lack of motion. This appeal shall be
treated as a direct appeal from the municipal court to this Court. (See People vs. Del Rosario, 97
Phil. 67).
In this appeal, the prosecution argues that Administrative Orders Nos. 84 and 84-1 were not issued
under section 11 of the Fisheries Law which, as indicated above, punishes fishing by means of an
obnoxious or poisonous substance. This contention is not well-taken because, as already stated, the
Penal provision of Administrative Order No. 84 implies that electro fishing is penalized as a form of
fishing by means of an obnoxious or poisonous substance under section 11.

The prosecution cites as the legal sanctions for the prohibition against electro fishing in fresh water
fisheries (1) the rule-making power of the Department Secretary under section 4 of the Fisheries
Law; (2) the function of the Commissioner of Fisheries to enforce the provisions of the Fisheries Law
and the regulations Promulgated thereunder and to execute the rules and regulations consistent with
the purpose for the creation of the Fisheries Commission and for the development of fisheries (Sec.
4[c] and [h] Republic Act No. 3512; (3) the declared national policy to encourage, Promote and
conserve our fishing resources (Sec. 1, Republic Act No. 3512), and (4) section 83 of the Fisheries
Law which provides that "any other violation of" the Fisheries Law or of any rules and regulations
promulgated thereunder "shall subject the offender to a fine of not more than two hundred pesos, or
imprisonment for not more than six months, or both, in the discretion of the court."
As already pointed out above, the prosecution's reference to section 83 is out of place because the
penalty for electro fishing under Administrative order No. 84 is not the same as the penalty fixed in
section 83.
We are of the opinion that the Secretary of Agriculture and Natural Resources and the Commissioner
of Fisheries exceeded their authority in issuing Fisheries Administrative Orders Nos. 84 and 84-1
and that those orders are not warranted under the Fisheries Commission, Republic Act No. 3512.
The reason is that the Fisheries Law does not expressly prohibit electro fishing. As electro fishing is
not banned under that law, the Secretary of Agriculture and Natural Resources and the
Commissioner of Fisheries are powerless to penalize it. In other words, Administrative Orders Nos.
84 and 84-1, in penalizing electro fishing, are devoid of any legal basis.
Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could
have been easily embodied in the old Fisheries Law.
That law punishes (1) the use of obnoxious or poisonous substance, or explosive in fishing; (2)
unlawful fishing in deepsea fisheries; (3) unlawful taking of marine molusca, (4) illegal taking of
sponges; (5) failure of licensed fishermen to report the kind and quantity of fish caught, and (6) other
violations.
Nowhere in that law is electro fishing specifically punished. Administrative Order No. 84, in punishing
electro fishing, does not contemplate that such an offense fails within the category of "other
violations" because, as already shown, the penalty for electro fishing is the penalty next lower to the
penalty for fishing with the use of obnoxious or poisonous substances, fixed in section 76, and is not
the same as the penalty for "other violations" of the law and regulations fixed in section 83 of the
Fisheries Law.
The lawmaking body cannot delegate to an executive official the power to declare what acts should
constitute an offense. It can authorize the issuance of regulations and the imposition of the penalty
provided for in the law itself. (People vs. Exconde 101 Phil. 11 25, citing 11 Am. Jur. 965 on p. 11
32).
Originally, Administrative Order No. 84 punished electro fishing in all waters. Later, the ban against
electro fishing was confined to fresh water fisheries. The amendment created the impression that
electro fishing is not condemnable per se. It could be tolerated in marine waters. That circumstances
strengthens the view that the old law does not eschew all forms of electro fishing.
However, at present, there is no more doubt that electro fishing is punishable under the Fisheries
Law and that it cannot be penalized merely by executive revolution because Presidential Decree No.
704, which is a revision and consolidation of all laws and decrees affecting fishing and fisheries and

which was promulgated on May 16, 1975 (71 O.G. 4269), expressly punishes electro fishing in fresh
water and salt water areas.
That decree provides:

+.wph!1

SEC. 33. Illegal fishing, dealing in illegally caught fish or fishery/aquatic products.
It shall he unlawful for any person to catch, take or gather or cause to be caught,
taken or gathered fish or fishery/aquatic products in Philippine waters with the use of
explosives, obnoxious or poisonous substance, or by the use of electricity as defined
in paragraphs (1), (m) and (d), respectively, of Section 3 hereof: ...
The decree Act No. 4003, as amended, Republic Acts Nos. 428, 3048, 3512 and 3586, Presidential
Decrees Nos. 43, 534 and 553, and all , Acts, Executive Orders, rules and regulations or parts
thereof inconsistent with it (Sec. 49, P. D. No. 704).
The inclusion in that decree of provisions defining and penalizing electro fishing is a clear recognition
of the deficiency or silence on that point of the old Fisheries Law. It is an admission that a mere
executive regulation is not legally adequate to penalize electro fishing.
Note that the definition of electro fishing, which is found in section 1 (c) of Fisheries Administrative
Order No. 84 and which is not provided for the old Fisheries Law, is now found in section 3(d) of the
decree. Note further that the decree penalty electro fishing by "imprisonment from two (2) to four (4)
years", a punishment which is more severe than the penalty of a time of not excluding P500 or
imprisonment of not more than six months or both fixed in section 3 of Fisheries Administrative Order
No. 84.
An examination of the rule-making power of executive officials and administrative agencies and, in
particular, of the Secretary of Agriculture and Natural Resources (now Secretary of Natural
Resources) under the Fisheries Law sustains the view that he ex his authority in penalizing electro
fishing by means of an administrative order.
Administrative agent are clothed with rule-making powers because the lawmaking body finds it
impracticable, if not impossible, to anticipate and provide for the multifarious and complex situations
that may be encountered in enforcing the law. All that is required is that the regulation should be
germane to the defects and purposes of the law and that it should conform to the standards that the
law prescribes (People vs. Exconde 101 Phil. 1125; Director of Forestry vs. Mu;oz, L-24796, June
28, 1968, 23 SCRA 1183, 1198; Geukeko vs. Araneta, 102 Phil. 706, 712).
The lawmaking body cannot possibly provide for all the details in the enforcement of a particular
statute (U.S. vs. Tupasi Molina, 29 Phil. 119, 125, citing U.S. vs. Grimaud 220 U.S. 506;
Interprovincial Autobus Co., Inc. vs. Coll. of Internal Revenue, 98 Phil. 290, 295-6).
The grant of the rule-making power to administrative agencies is a relaxation of the principle of
separation of powers and is an exception to the nondeleption of legislative, powers. Administrative
regulations or "subordinate legislation calculated to promote the public interest are necessary
because of "the growing complexity of modem life, the multiplication of the subjects of governmental
regulations, and the increased difficulty of administering the law" Calalang vs. Williams, 70 Phil. 726;
People vs. Rosenthal and Osme;a, 68 Phil. 328).
Administrative regulations adopted under legislative authority by a particular department must be in
harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its

general provisions. By such regulations, of course, the law itself cannot be extended. (U.S. vs.
Tupasi Molina, supra). An administrative agency cannot amend an act of Congress (Santos vs.
Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the d of Administrators, L-25619, June 30,
1970, 33 SCRA 585; Manuel vs. General Auditing Office, L-28952, December 29, 1971, 42 SCRA
660; Deluao vs. Casteel, L-21906, August 29, 1969, 29 SCRA 350).
The rule-making power must be confined to details for regulating the mode or proceeding to carry
into effect the law as it his been enacted. The power cannot be extended to amending or expanding
the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the
statute cannot be sanctioned. (University of Santo Tomas vs. Board of Tax A 93 Phil. 376, 382, citing
12 C.J. 845-46. As to invalid regulations, see of Internal Revenue vs. Villaflor 69 Phil. 319, Wise &
Co. vs. Meer, 78 Phil. 655, 676; Del March vs. Phil. Veterans Administrative, L-27299, June 27,
1973, 51 SCRA 340, 349).
There is no question that the Secretary of Agriculture and Natural Resources has rule-making
powers. Section 4 of the Fisheries law provides that the Secretary "shall from time to time issue
instructions, orders, and regulations consistent" with that law, "as may be and proper to carry into
effect the provisions thereof." That power is now vested in the Secretary of Natural Resources by on
7 of the Revised Fisheries law, Presidential December No. 704.
Section 4(h) of Republic Act No. 3512 empower the Co of Fisheries "to prepare and execute upon
the approval of the Secretary of Agriculture and Natural Resources, forms instructions, rules and
regulations consistent with the purpose" of that enactment "and for the development of fisheries."
Section 79(B) of the Revised Administrative Code provides that "the Department Head shall have the
power to promulgate, whenever he may see fit do so, all rules, regulates, orders, memorandums,
and other instructions,not contrary to law, to regulate the proper working and harmonious and
efficient administration of each and all of the offices and dependencies of his Department, and for
the strict enforcement and proper execution of the laws relative to matters under the jurisdiction of
said Department; but none of said rules or orders shall prescribe penalties for the violation thereof,
except as expressly authorized by law."
Administrative regulations issued by a Department Head in conformity with law have the force of law
(Valerie vs. Secretary of culture and Natural Resources, 117 Phil. 729, 733; Antique Sawmills, Inc.
vs. Zayco, L- 20051, May 30, 1966, 17 SCRA 316). As he exercises the rule-making power by
delegation of the lawmaking body, it is a requisite that he should not transcend the bound
demarcated by the statute for the exercise of that power; otherwise, he would be improperly
exercising legislative power in his own right and not as a surrogate of the lawmaking body.
Article 7 of the Civil Code embodies the basic principle that administrative or executive acts, orders
and regulations shall be valid only when they are not contrary to the laws or the Constitution."
As noted by Justice Fernando, "except for constitutional officials who can trace their competence to
act to the fundamental law itself, a public office must be in the statute relied upon a grant of power
before he can exercise it." "department zeal may not be permitted to outrun the authority conferred
by statute." (Radio Communications of the Philippines, Inc. vs. Santiago, L-29236, August 21, 1974,
58 SCRA 493, 496-8).
"Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon
the administrative agency by law, partake of the nature of a statute, and compliance therewith may
be enforced by a penal sanction provided in the law. This is so because statutes are usually couched
in general terms, after expressing the policy, purposes, objectives, remedies and sanctions intended

by the legislature. The details and the manner of carrying out the law are oftentimes left to the
administrative agency entrusted with its enforcement. In this sense, it has been said that rules and
regulations are the product of a delegated power to create new or additional legal provisions that
have the effect of law." The rule or regulation should be within the scope of the statutory authority
granted by the legislature to the administrative agency. (Davis, Administrative Law, p. 194, 197, cited
in Victories Milling Co., Inc. vs. Social Security Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule or regulation issued to implement said law,
the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of
the basic law (People vs. Lim, 108 Phil. 1091).
This Court in its decision in the Lim case, supra, promulgated on July 26, 1960, called the attention
of technical men in the executive departments, who draft rules and regulations, to the importance
and necessity of closely following the legal provisions which they intend to implement so as to avoid
any possible misunderstanding or confusion.
The rule is that the violation of a regulation prescribed by an executive officer of the government in
conformity with and based upon a statute authorizing such regulation constitutes an offense and
renders the offender liable to punishment in accordance with the provisions of the law (U.S. vs.
Tupasi Molina, 29 Phil. 119, 124).
In other words, a violation or infringement of a rule or regulation validly issued can constitute a crime
punishable as provided in the authorizing statute and by virtue of the latter (People vs. Exconde 101
Phil. 1125, 1132).
It has been held that "to declare what shall constitute a crime and how it shall be punished is a
power vested exclusively in the legislature, and it may not be delegated to any other body or agency"
(1 Am. Jur. 2nd, sec. 127, p. 938; Texas Co. vs. Montgomery, 73 F. Supp. 527).
In the instant case the regulation penalizing electro fishing is not strictly in accordance with the
Fisheries Law, under which the regulation was issued, because the law itself does not expressly
punish electro fishing.
The instant case is similar to People vs. Santos, 63 Phil. 300. The Santos case involves section 28
of Fish and Game Administrative Order No. 2 issued by the Secretary of Agriculture and Natural
Resources pursuant to the aforementioned section 4 of the Fisheries Law.
Section 28 contains the proviso that a fishing boat not licensed under the Fisheries Law and under
the said administrative order may fish within three kilometers of the shoreline of islands and
reservations over which jurisdiction is exercised by naval and military reservations authorities of the
United States only upon receiving written permission therefor, which permission may be granted by
the Secretary upon recommendation of the military or naval authorities concerned. A violation of the
proviso may be proceeded against under section 45 of the Federal Penal Code.
Augusto A. Santos was prosecuted under that provision in the Court of First Instance of Cavite for
having caused his two fishing boats to fish, loiter and anchor without permission from the Secretary
within three kilometers from the shoreline of Corrigidor Island.
This Court held that the Fisheries Law does not prohibit boats not subject to license from fishing
within three kilometers of the shoreline of islands and reservations over which jurisdiction is
exercised by naval and military authorities of the United States, without permission from the

Secretary of Agriculture and Natural Resources upon recommendation of the military and naval
authorities concerned.
As the said law does not penalize the act mentioned in section 28 of the administrative order, the
promulgation of that provision by the Secretary "is equivalent to legislating on the matter, a power
which has not been and cannot be delegated to him, it being expressly reserved" to the lawmaking
body. "Such an act constitutes not only an excess of the regulatory power conferred upon the
Secretary but also an exercise of a legislative power which he does not have, and therefore" the said
provision "is null and void and without effect". Hence, the charge against Santos was dismiss.
A penal statute is strictly construed. While an administrative agency has the right to make ranks and
regulations to carry into effect a law already enacted, that power should not be confused with the
power to enact a criminal statute. An administrative agency can have only the administrative or
policing powers expressly or by necessary implication conferred upon it. (Glustrom vs. State, 206
Ga. 734, 58 Second 2d 534; See 2 Am. Jr. 2nd 129-130).
Where the legislature has delegated to executive or administrative officers and boards authority to
promulgate rules to carry out an express legislative purpose, the rules of administrative officers and
boards, which have the effect of extending, or which conflict with the authority granting statute, do
not represent a valid precise of the rule-making power but constitute an attempt by an administrative
body to legislate (State vs. Miles, Wash. 2nd 322, 105 Pac. 2nd 51).
In a prosecution for a violation of an administrative order, it must clearly appear that the order is one
which falls within the scope of the authority conferred upon the administrative body, and the order
will be scrutinized with special care. (State vs. Miles supra).
The Miles case involved a statute which authorized the State Game Commission "to adopt,
promulgate, amend and/or repeal, and enforce reasonable rules and regulations governing and/or
prohibiting the taking of the various classes of game.
Under that statute, the Game Commission promulgated a rule that "it shall be unlawful to offer, pay
or receive any reward, prize or compensation for the hunting, pursuing, taking, killing or displaying of
any game animal, game bird or game fish or any part thereof."
Beryl S. Miles, the owner of a sporting goods store, regularly offered a ten-down cash prize to the
person displaying the largest deer in his store during the open for hunting such game animals. For
that act, he was charged with a violation of the rule Promulgated by the State Game Commission.
It was held that there was no statute penalizing the display of game. What the statute penalized was
the taking of game. If the lawmaking body desired to prohibit the display of game, it could have
readily said so. It was not lawful for the administrative board to extend or modify the statute. Hence,
the indictment against Miles was quashed. The Miles case is similar to this case.
WHEREFORE, the lower court's decision of June 9, 1970 is set aside for lack of appellate
jurisdiction and the order of dismissal rendered by the municipal court of Sta. Cruz, Laguna in
Criminal Case No. 5429 is affirmed. Costs de oficio.
SO ORDERED.

G.R. No. L-32096 October 24, 1970

ROMEO F. EDU, in his capacity as Land Transportation Commissioner, petitioner,
vs.
HON. VICENTE G. ERICTA in his capacity as Judge of the Court of First Instance of Rizal, Br.
XVIII, Quezon City, and TEDDY C. GALO respondents.
Office of the Solicitor General Felix Q. Antonio, Acting Assistant Solicitor General Hector C. Fule and
Solicitor Vicente A. Torres for petitioner.
Teddy C. Galo in his own behalf.
Judge Vicente Ericta in his own behalf.

FERNANDO, J.:.
Petitioner Romeo F. Edu, the Land Transportation Commissioner, would have us rule squarely on
the constitutionality of the Reflector Law1 in this proceeding for certiorari and prohibition against
respondent Judge, the Honorable Vicente G. Ericta of the Court of First Instance of Rizal, Quezon City
Branch, to annul and set aside his order for the issuance of a writ of preliminary injunction directed
against Administrative Order No. 2 of petitioner for the enforcement of the aforesaid statute, in a pending
suit in his court for certiorari and prohibition, filed by the other respondent Teddy C. Galo assailing; the
validity of such enactment as well as such administrative order. Respondent Judge, in his answer, would
join such a plea asking that the constitutional and legal questions raised be decided "once and for all."
Respondent Teddy C. Galo who was quite categorical in his assertion that both the challenged legislation
and the administrative order transgress the constitutional requirements of due process and nondelegation, is not averse either to such a definitive ruling. Considering the great public interest involved
and the reliance by respondent Galo and the allegation that the repugnancy to the fundamental law could
be discerned on the face of the statute as enacted and the executive order as promulgated, this Court,
sees no obstacle to the determination in this proceeding of the constitutional questions raised. For
reasons to be hereafter stated, we sustain the validity of the Reflector Law and Administrative Order No. 2
issued in the implementation thereof, the imputation of constitutional infirmity being at best flimsy and
insubstantial.
As noted in the answer of respondent Judge, respondent Galo on his behalf and that of other
motorist filed on May 20, 1970 a suit for certiorari and prohibition with preliminary injunction assailing
the validity of the challenged Act as an invalid exercise of the police power, for being violative of the
due process clause. This he followed on May 28, 1970 with a manifestation wherein he sought as an
alternative remedy that, in the event that respondent Judge would hold said statute constitutional,
Administrative Order No. 2 of the Land Transportation Commissioner, now petitioner, implementing
such legislation be nullified as an undue exercise of legislative power. There was a hearing on the
plea for the issuance of a writ of preliminary injunction held on May 27. 1970 where both parties
were duly represented, but no evidence was presented. The next day, on May 28, 1970, respondent
Judge ordered the issuance of a preliminary injunction directed against the enforcement of such
administrative order. There was the day after, a motion for its reconsideration filed by the Solicitor
General representing petitioner. In the meanwhile, the clerk of court of respondent Judge issued, on
June 1, 1970 the writ of preliminary injunction upon the filing of the required bond. The answer
before the lower court was filed by petitioner Edu on June 4, 1970. Thereafter, on June 9, 1970,
respondent Judge denied the motion for reconsideration of the order of injunction. Hence this
petition for certiorari and prohibition filed with this court on June 18, 1970.

In a resolution of June 22, 1970, this Court required respondents to file an answer to the petition
for certiorari and prohibition. Respondent Judge, the Honorable Vicente G. Ericta, did file his answer
on June 30, 1970 explaining why he restrained the enforcement of Administrative Order No. 2 and,
as noted at the outset, joining the Solicitor General in seeking that the legal questions raised namely
the constitutionality of the Reflector Law and secondly the validity of Administrative Order No. 2
alleged to be in excess of the authority conferred on petitioner and therefore violative of the principle
of non-delegation of legislative power be definitely decided. It was on until July 6, 1970 that
respondent Galo filed his answer seeking the dismissal of this petition concentrating on what he
considered to be the patent invalidity of Administrative Order No. 2 as it went beyond the authority
granted by the Reflector Law, even assuming that it is constitutional. In the meanwhile, on July 2,
1970, the petition was called for hearing with Solicitor Vicente Torres appearing for petitioner and
respondent Galo for himself. It was made clear during the course of such argumentation that the
matter of the constitutionality of the Reflector Law was likewise under consideration by this Court.
The case is thus ripe for decision.
We repeat that we find for petitioner and sustain the Constitutionality of the Reflector Law as well as
the validity of Administrative Order No. 2.
1. The threshold question is whether on the basis of the petition, the answers, and the oral
argument, it would be proper for this Court to resolve the issue of the constitutionality of the
Reflector Law. Our answer, as indicated, is in the affirmative. It is to be noted that the main thrust of
the petition before us is to demonstrate in a rather convincing fashion that the challenged legislation
does not suffer from the alleged constitutional infirmity imputed to it by the respondent Galo. Since
the special civil action for certiorari and prohibition filed before him before respondent Judge would
seek a declaration of nullity of such enactment by the attribution of the violation the face thereof of
the due process guarantee in the deprivation of property rights, it would follow that there is sufficient
basis for us to determine which view should prevail. Moreover, any further hearing by respondent
Judge would likewise to limited to a discussion of the constitutional issues raised, no allegations of
facts having made. This is one case then where the question of validity is ripe for determination. If
we do so, further effort need not be wasted and time is saved moreover, the officials concerned as
well as the public, both vitally concerned with a final resolution of questions of validity, could know
the definitive answer and could act accordingly. There is a great public interest, as was mentioned,
to be served by the final disposition of such crucial issue, petitioner praying that respondent Galo be
declared having no cause of action with respondent Judge being accordingly directed to dismiss his
suit.
There is another reinforcement to this avenue of approach. We have done so before in a
suit, Climaco v. Macadaeg, 2 involving the legality of a presidential directive. That was a petition for the review and reversal of a
writ of preliminary injunction issued by the then Judge Macadaeg. We there announced that we "have decided to pass upon the question of
the validity of the presidential directive ourselves, believing that by doing so we would be putting an end to a dispute, a delay in the
disposition of which has caused considerable damage and injury to the Government and to the tobacco planters themselves."

There is no principle of constitutional adjudication that bars this Court from similarly passing upon
the question of the validity of a legislative enactment in a proceeding before it to test the propriety of
the issuance of a preliminary injunction. The same felt need for resolving once and for all the vexing
question as to the constitutionality of a challenged enactment and thus serve public interest exists.
What we have done in the case of an order proceeding from one of the coordinate branches, the
executive, we can very well do in the matter before us involving the alleged nullity of a legislative act.
Accordingly, there is nothing to preclude the grant of the writs prayed for, the burden of showing the
constitutionality of the act having proved to be as will now be shown too much for respondent Galo.
2. The Reflector Law reads in full: "(g) Lights and reflector when parked or disabled. Appropriate
parking lights or flares visible one hundred meters away shall be displayed at a corner of the vehicle

whenever such vehicle is parked on highways or in places that are not well-lighted or is placed in
such manner as to endanger passing traffic. Furthermore, every motor vehicle shall be provided at
all times with built-in reflectors or other similar warning devices either pasted, painted or attached to
its front and back which shall likewise be visible at light at least one hundred meters away. No
vehicle not provided with any of the requirements mentioned in this subsection shall be
registered."3 It is thus obvious that the challenged statute is a legislation enacted under the police power
to promote public safety.
Justice Laurel, in the first leading decision after the Constitution came to force, Calalang v.
Williams,4 identified police power with state authority to enact legislation that may interfere with personal
liberty or property in order to promote the general welfare. Persons and property could thus "be subjected
to all kinds of restraints and burdens in order to secure the general comfort, health and prosperity of the
state." Shortly after independence in 1948, Primicias v. Fugoso,5 reiterated the doctrine, such a
competence being referred to as "the power to prescribe regulations to promote the health, morals,
peace, education, good order or safety, and general welfare of the people." The concept was set forth in
negative terms by Justice Malcolm in a pre-Commonwealth decision as "that inherent and plenary power
in the State which enables it to prohibit all things hurtful to the comfort, safety and welfare of society." 6 In
that sense it could be hardly distinguishable as noted by this Court in Morfe v. Mutuc7 with the totality of
legislative power.
It is in the above sense the greatest and most powerful attribute of government. It is to quote Justice
Malcolm anew "the most essential, insistent, and at least illimitable of powers," 8 extending as Justice Holmes
aptly pointed out "to all the great public needs." 9 Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future
where it could be done, provides enough room for an efficient and flexible response to conditions and circumstances thus assuring the
greatest benefits. In the language of Justice Cardozo: "Needs that were narrow or parochial in the past may be interwoven in the present
with the well-being of the nation. What is critical or urgent changes with the
time." 10 The police power is thus a dynamic agency, suitably vague and far from precisely defined, 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 insure communal peace,
safety, good order, and welfare.

It would then be to overturn a host of decisions impressive for their number and unanimity were this
Court to sustain respondent Galo. 11 That we are not disposed to do, especially so as the attack on the
challenged statute ostensibly for disregarding the due process safeguard is angularly unpersuasive. It
would be to close one's eyes to the hazards of traffic in the evening to condemn a statute of this
character. Such an attitude betrays lack of concern for public safety. How can it plausibly alleged then that
there was no observance of due process equated as it has always been with that is reasonable? The
statute assailed is not infected with arbitrariness. It is not the product of whim or caprice. It is far from
oppressive. It is a legitimate response to a felt public need. It can stand the test of the most
unsymphatetic appraisal.
Respondent Galo is of a different mind, having been unable to resist the teaching of many American
State Court decisions referred to in the secondary source, American Jurisprudence principally relied
upon by him. He ought to have been cautioned against an indiscriminate acceptance of such
doctrines predicated on what was once a fundamental postulate in American public law, laissez faire.
It is to be admitted that there was a period when such a concept did influence American court
decisions on constitutional law. As was explicitly stated by Justice Cardozo speaking of that era:
"Laissez-faire was not only a counsel of caution which would do well to heed. It was a categorical
imperative which statesmen as well as judges must obey." 12 For a long time legislation tending to
reduce economic inequality foundered on the rock that was the due process clause, enshrining as it did
the liberty of contract, based on such a basic assumption.

The New Deal administration of President Roosevelt more responsive to the social and economic
forces at work changed matters greatly. By 1937, there was a greater receptivity by the American
Supreme Court to an approach not too reverential of property rights. Even earlier, in 1935, Professor
Coker of Yale, speaking as a historian, could already discern a contrary drift. He did note the
expending range of governmental activity in the United States. 13 What is undeniable is that by
1943, laissez-faire was no longer the dominant theory. In the language of Justice Jackson in the leading
case of West Virginia State Board of Education v. Barnette: 14 "We must, transplant these rights to a soil in
which the laissez-faire concept or non-interference has withered at least as to economic affairs, and
social advancements are increasingly sought through closer integration of society and through expanded
and strengthened governmental controls."
While authoritative precedents from the United States federal and state jurisdictions were deferred to
when the Philippines was still under American rule, it cannot be said that the laissez-faire principle
was invariably adhered to by us even then As early as 1919, in the leading case of Rubi v. Provincial
Board of Mindoro, 15 Justice Malcolm already had occasion to affirm: "The doctrines of laissez-faire and
of unrestricted freedom of the individual, as axioms of economic and political theory, are of the past. The
modern period has shown a widespread belief in the amplest possible demonstration of government
activity. The Courts unfortunately have sometimes seemed to trail after the other two branches of the
Government in this progressive march." People v. Pomar, 16 a 1924 decision which held invalid under the
due process clause a provision providing for maternity leave with pay thirty days before and thirty days
after confinement could be cited to show that such a principle did have its day. It is to be remembered
though that our Supreme Court had no other choice as the Philippines was then under the United States,
and only recently the year before, the American Supreme Court in Adkins v. Children's Hospital, 17 in line
with the laissez-faire theory, did hold that a statute providing for minimum wages was constitutionally
infirm.
What is more, to erase any doubts, the Constitutional Convention saw to it that the concept
of laissez-faire was rejected. It entrusted to our government the responsibility of coping with social
and economic problems with the commensurate power of control over economic affairs. Thereby it
could live up to its commitment to promote the general welfare through state action. No constitutional
objection to regulatory measures adversely affecting property rights, especially so when public
safety is the aim, is likely to be heeded, unless of course on the clearest and most satisfactory proof
of invasion of rights guaranteed by the Constitution. On such a showing, there may be a declaration
of nullity, but not because the laissez-faire principle was disregarded but because the due process,
equal protection, or non-impairment guarantees would call for vindication.
To repeat, our Constitution which took effect in 1935 erased whatever doubts there might be on that
score. Its philosophy is a repudiation of laissez-faire. One of the leading members of the
Constitutional Convention, Manuel A. Roxas, later the first President of the Republic, made it clear
when he disposed of the objection of Delegate Jose Reyes of Sorsogon, who noted the "vast
extensions in the sphere of governmental functions" and the "almost unlimited power to interfere in
the affairs of industry and agriculture as well as to compete with existing business" as "reflections of
the fascination exerted by [the then] current tendencies" in other jurisdictions. 18 He spoke thus: "My
answer is that this constitution has definite and well defined philosophy not only political but social and
economic. ... If in this Constitution the gentlemen will find declarations of economic policy they are there
because they are necessary to safeguard the interests and welfare of the Filipino people because we
believe that the days have come when in self-defense, a nation may provide in its constitution those
safeguards, the patrimony, the freedom to grow, the freedom to develop national aspirations and national
interests, not to be hampered by the artificial boundaries which a constitutional provision automatically
imposes. 19
It was not expected then when in a concurring opinion, Justice Laurel, who likewise sat in the
Constitutional Convention and was one of its leading lights, explicitly affirmed in a concurring
opinion, later quoted with approval in the leading case of Antamok Goldfields Mining Co. v. Court of

Industrial Relations, 20 that the Constitution did away with the laissez-faire doctrine. In the course of such concurring opinion and
after noting the changes that have taken place calling for a more affirmative role by the government and its undeniable power to curtail
property rights, he categorically declared the doctrine in People v. Pomar no longer retains "its virtuality as a living principle." 21

It is in the light of such rejection of the laissez-faire principle that during the Commonwealth era, no
constitutional infirmity was found to have attached to legislation covering such subjects as collective
bargaining, 22 security of tenure,23 minimum wages, 24 compulsory arbitration, 25 the regulation of tenancy 26 as well as the issuance
of
securities, 27 and control of public services. 28 So it is likewise under the Republic this Court having given the seal of approval to more
favorable tenancy laws, 29 nationalization of the retail trade, 30 limitation of the hours of labor, 31 imposition of price

control, 32 requirement of separation pay for one month,

33

and social security scheme. 34

Respondent Galo thus could have profited by a little more diligence in the scrutiny of Philippine
decisions rendered with not unexpected regularity, during all the while our Constitution has been in
force attesting to the demise of such a shibboleth as laissez-faire. It was one of those fighting faiths
that time and circumstances had upset, to paraphrase Holmes. Yet respondent Galo would seek to
vivify and resurrect it. That, it would appear, is a vain quest, a futile undertaking. The Reflector Law
is thus immune from the attack so recklessly hurled against it. It can survive, and quite easily too, the
constitutional test.
3. The same lack of success marks the effort of respondent Galo to impugn the validity of
Administrative Order No. 2 issued by petitioner in his official capacity, duly approved by the
Secretary of Public Works and Communications, for being contrary to the principle of non-delegation
of legislative power. Such administrative order, which took effect on April 17, 1970, has a provision
on reflectors in effect reproducing what was set forth in the Act. Thus: "No motor vehicles of
whatever style, kind, make, class or denomination shall be registered if not equipped with reflectors.
Such reflectors shall either be factory built-in-reflector commercial glass reflectors, reflection tape or
luminous paint. The luminosity shall have an intensity to be maintained visible and clean at all times
such that if struck by a beam of light shall be visible 100 meters away at night." 35 Then came a
section on dimensions, placement and color. As to dimensions the following is provided for: "Glass
reflectors Not less than 3 inches in diameter or not less than 3 inches square; Reflectorized Tape At
least 3 inches wide and 12 inches long. The painted or taped area may be bigger at the discretion of the
vehicle owner." 36 Provision is then made as to how such reflectors are to be "placed, installed, pasted or
painted." 37 There is the further requirement that in addition to such reflectors there shall be installed,
pasted or painted four reflectors on each side of the motor vehicle parallel to those installed, pasted or
painted in front and those in the rear end of the body thereof. 38 The color required of each reflectors,
whether built-in, commercial glass, reflectorized tape or reflectorized paint placed in the front part of any
motor vehicle shall be amber or yellow and those placed on the sides and in the rear shall all be red. 39
Penalties resulting from a violation thereof could be imposed. Thus: "Non-compliance with the
requirements contained in this Order shall be sufficient cause to refuse registration of the motor
vehicle affected and if already registered, its registration maybe suspended in pursuance of the
provisions of Section 16 of RA 4136; [Provided], However, that in the case of the violation of Section
1(a) and (b) and paragraph (8) Section 3 hereof, a fine of not less than ten nor more than fifty pesos
shall be imposed. 40 It is not to be lost sight of that under Republic Act No. 4136, of which the Reflector
Law is an amendment, petitioner, as the Land Transportation Commissioner, may, with the approval of the
Secretary of Public Works and Communications, issue rules and regulations for its implementation as
long as they do not conflict with its provisions. 41 It is likewise an express provision of the above statute
that for a violation of any of its provisions or regulations promulgated pursuant thereto a fine of not less
than P10 nor not less than P50 could be imposed. 42
It is a fundamental principle flowing from the doctrine of separation of powers that Congress may not
delegate its legislative power to the two other branches of the government, subject to the exception
that local governments may over local affairs participate in its exercise. What cannot be delegated is

the authority under the Constitution to make laws and to alter and repeal them; the test is the
completeness of the statute in all its term and provisions when it leaves the hands of the legislature.
To determine whether or not there is an undue delegation of legislative power the inquiry must be
directed to the scope and definiteness of the measure enacted. The legislature does not abdicate its
functions when it describes what job must be done, who is to do it, and what is the scope of his
authority. For a complex economy, that may indeed be the only way in which the legislative process
can go forward. A distinction has rightfully been made between delegation of power to make the laws
which necessarily involves a discretion as to what it shall be, which constitutionally may not be done,
and delegation of authority or discretion as to its execution to exercised under and in pursuance of
the law, to which no valid objection call be made. The Constitution is thus not to be regarded as
denying the legislature the necessary resources of flexibility and practicability.
To avoid the taint of unlawful delegation, there must be a standard, which implies at the very least
that the legislature itself determines matters of principle and lay down fundamental policy. Otherwise,
the charge of complete abdication may be hard to repel. A standard thus defines legislative policy,
marks its limits, its maps out its boundaries and specifies the public agency to apply it. It indicates
the circumstances under which the legislative command is to be effected. It is the criterion by which
legislative purpose may be carried out. Thereafter, the executive or administrative office designated
may in pursuance of the above guidelines promulgate supplemental rules and regulations.
The standard may be either express or implied. If the former, the non-delegation objection is easily
met. The standard though does not have to be spelled out specifically. It could be implied from the
policy and purpose of the act considered as a whole. In the Reflector Law, clearly the legislative
objective is public safety. That is sought to be attained as in Calalang v. Williams is "safe transit upon
the roads." 43
This is to adhere to the recognition given expression by Justice Laurel in a decision announced not
long after the Constitution came into force and effect that the principle of non-delegation "has been
made to adapt itself the complexities of modern governments, giving rise to the adoption, within
certain limits, of the principle of "subordinate legislation" not only in the United States and England
but in practically all modern governments." 44He continued: "Accordingly, with the growing complexity of
modern life, the multiplication of the subjects of governmental regulation, and the increased difficulty of
administering the laws, there is a constantly growing tendency toward the delegation of greater powers by
the legislature and toward the approval of the practice by the courts." 45 Consistency with the conceptual
approach requires the reminder that what is delegated is authority non-legislative in character, the
completeness of the statute when it leaves the hands of Congress being assumed.
Our later decisions speak to the same effect. Thus from, Justice J. B. L. Reyes in People vs.
Exconde: 46 "It is well establish in this jurisdiction that, while the making of laws is a non-delegable activity
that corresponds exclusively to Congress, nevertheless the latter may constitutionally delegate authority
to promulgate rules and regulations to implement a given legislation and effectuate its policies, for the
reason that the legislature often finds it impracticable (if not impossible) to anticipate and proved for the
multifarious and complex situations that may be met in carrying the law in effect. All that is required is that
the regulation should germane to the objects and purposes of the law; that the regulation be not in
contradiction with it; but conform to the standards that the law prescribes ... " 47
An even more explicit formulation of the controlling principle comes from the pen of the then Justice,
now Chief Justice, Concepcion: "Lastly, the legality of Circular No. 21 is assailed upon the ground
that the grant of authority to issue the same constitutes an undue delegation of legislative power. It is
true that, under our system of government, said power may not be delegated except to local
governments. However, one thing is to delegate the power to determine what the law shall be, and
another thing to delegate the authority to fix the details in theexecution of enforcement of a policy set
out in the law itself. Briefly stated, the rule is that the delegated powers fall under the second

category, if the law authorizing the, delegation furnishes a reasonable standard which "sufficiently
marks the field within which the Administrator is to act so that it may be known whether he has kept
within it in compliance with the legislative will." (Yakus vs. United States, 88 L. ed.
848) ... It should be noted, furthermore, that these powers must be construed and exercised in
relation to the objectives of the law creating the Central Bank, which are, among others, "to maintain
monetary stability in the Philippines," and "to promote a rising level of production, employment and
real income in the Philippines." (Section 2, Rep. Act No. 265). These standards are sufficiently
concrete and definite to vest in the delegated authority, the character of administrative details in the
enforcement of the law and to place the grant said authority beyond the category of a delegation
of legislative powers ... " 48
It bears repeating that the Reflector Law construed together with the Land Transportation Code.
Republic Act No. 4136, of which it is an amendment, leaves no doubt as to the stress and emphasis
on public safety which is the prime consideration in statutes of this character. There is likewise a
categorical affirmation Of the power of petitioner as Land Transportation Commissioner to
promulgate rules and regulations to give life to and translate into actuality such fundamental
purpose. His power is clear. There has been no abuse. His Administrative Order No. 2 can easily
survive the attack, far-from-formidable, launched against it by respondent Galo.
WHEREFORE, the writs of certiorari and prohibition prayed for are granted, the orders of May 28,
1970 of respondent Judge for the issuance of a writ of preliminary injunction, the writ of preliminary
injunction of June 1, 1970 and his order of June 9, 1970 denying reconsideration are annulled and
set aside. Respondent Judge is likewise directed to dismiss the petition for certiorari and prohibition
filed by respondent Teddy C. Galo, there being no cause of action as the Reflector Law and
Administrative Order No. 2 of petitioner have not been shown to be tainted by invalidity. Without
pronouncement as to costs.

MANILA ELECTRIC COMPANY

(MERALCO),
Petitioner,

G.R. No. 145399

Present:

- versus ENERGY REGULATORY BOARD

(ERB), and EDGAR L. TI, doing
business under the name and
style of ELT ENTERPRISE,
Respondents.

PUNO, J., Chairperson,

SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.
Promulgated:
March 17, 2006

x------------------------------------------------------------------------------------x

DECISION
GARCIA, J.:
Before us is this petition for review on certiorari to annul and set aside the
decision[1] dated September 22, 2000 of the Court of Appeals (CA) in CA G.R. SP No.
56946, which effectively affirmed the Orders of the Energy Regulatory Board [2] (ERB)
dated October 22, 1999 and December 27, 1999 in ERB Case No. 99-67.
The assailed CA decision upheld public respondent ERBs exercise of jurisdiction over
cases involving complaints for reconnection of electric service cut-off for alleged
violation of Republic Act (R.A.) No. 7832, otherwise known as the Anti-electricity and
Electric Transmission Lines/Materials Pilferage Act of 1994, as well as ERBs authority
to issue a provisional order of reconnection.
The factual background:
On October 18, 1999, herein private respondent Edgar L. Ti, doing business under
the name and style ELT Enterprise, filed a verified complaint[3] before the ERB
against petitioner Manila Electric Company (MERALCO). In it, Ti alleged inter
alia that MERALCO unlawfully disconnected partially the electric service in his
business establishment located at Little Baguio, San Juan, Metro Manila and seized
three (3) of his electric meters on mere suspicion of meter tampering.Aggravating
the situation, Ti adds, was the fact that the notice of disconnection was served at
night, while the actual disconnection was not done in the presence of the owner of
ELT Enterprise or his representative. The unauthorized disconnection, Ti claimed,
has caused him great damage which, if not immediately addressed, would result to
irreparable injury. He thus prayed that pending hearing of his complaint, docketed
as ERB Case No. 99-67, electric service be restored in his establishment.
In an Order dated October 22, 1999,[4] the ERB, by way of provisional relief,
ordered the desired reconnection of electric service and, at the same, directed
MERALCO to submit its comment on the complaint.

On October 29, 1999, MERALCO moved for a reconsideration of the aforementioned

provisional reconnection order, alleging that an inspection conducted by its service
inspectors accompanied by elements of the Philippine National Police found Ti to
have tampered three (3) electric meters installed in his business premises by
manipulating the dial pointers thereof. The fraudulent act of Ti, according to
MERALCO, constituted a violation of R.A. No. 7832 legally warranting the immediate
disconnection of the electric supply on his establishment, as provided under Section
4[5] in relation to Section 6[6] thereof. MERALCO further argued that the ERB is
without jurisdiction to issue a provisional relief and order the restoration of electric
service, that authority being vested only on regular courts.
On the same day, MERALCO instituted a criminal complaint against Ti for
violation of R. A. No. 7832 before the Prosecutors Office of Rizal. The criminal
complaint appears to be still pending resolution.
On November 11, 1999, MERALCO filed its comment [7] to Tis complaint in ERB
Case No. 99-67 and there moved for the dismissal thereof on the ground of lack of
jurisdiction.
On December 27, 1999, the ERB issued an Order[8] denying MERALCOs
motion for reconsideration, thereby virtually reiterating the reconnection directive
contained in its earlier Order of October 22, 1999.[9] Partly wrote the ERB in
its December 27, 1999 Order:
[Petitioner MERALCOs] contention that this Board has no jurisdiction over the subject matter of
the instant complaint, which is the restoration of the partial shutdown of the electric service to
complainants building, cannot be upheld. The law gives consumers who have a cause of grievance
against any public utility, such as herein [petitioner] MERALCO, a complete, speedy and adequate
remedy. That is the purpose of Commonwealth Act No. 146, as amended, creating the Public
Service Commission, this Boards predecessor office, and prescribing its duties and powers, and
the reason why it was enacted .[10] (Words in bracket added.)

Dissatisfied, MERALCO went to the CA on a petition for certiorari, thereat docketed

as CA-G.R. SP No. 56946, assailing as having been issued without jurisdiction or with
grave abuse of discretion, the ERBs orders dated October 22, 1999 and December
27, 1999.
Eventually, the CA, in a Decision dated September 22, 2000,[11] veritably
rejected MERALCOs imputation of lack of jurisdiction or grave abuse of discretion on
the part of the ERB and, accordingly, affirmed the latters twin assailed orders and
dismissed MERALCOs recourse thereto. Partly says the CA in its decision:
The agency charged with regulatory and adjudicatory functions covering the
energy sector is the Energy Regulatory Board created under E.O. No. 172 dated May 8,
1987. The nucleus of the ERB was the Board of Energy established by P.D. No. 1206
dated October 6, 1977, which had the power to regulate and fix power rates to be charged
by electric companies and to issue certificates of public convenience for the operation of
electric power utilities and services. [12]
xxx xxx xxx
xxx. E.O. No. 172, dated June 5, 1987, saw the further need to create an independent
body which gave birth to the present ERB. The aim of course is to achieve a more

coherent and effective policy formulation, coordination, implementation and monitoring

within the energy sector, and to consolidate in one body all the regulatory and
adjudicatory functions covering the energy sector.[13]
xxx xxx xxx
There should be no debate then about ERBs possessing jurisdiction to regulate
and adjudicate matters relating to its functions as highlighted above. The law clearly
affords any customer, like private respondent, a plain, complete and adequate remedy for
any grievance against a public utility, and the ERB not only has the right, but the duty as
well, to grant relief in proper cases. Relevant provisions of the Public Service Act have
been substantially carried over in statutes creating independent specialized agencies, like
ERB, with regulatory and adjudicatory powers.[14]
Hence, petitioner MERALCOs present recourse, on the following grounds:
A.
THE CONCLUSION OF THE [CA] THAT THE PUBLIC RESPONDENT HAS
JURISDICTION TO HEAR CONTROVERSIES BETWEEN PRIVATE RESPONDENT
AND PETITIONER ARISING FROM VIOLATION OF THE SERVICE CONTRACT
AND CASES FALLING UNDER R.A. 7832 IS CONTRARY TO EXISTING LAW.
B.
THE [CA] ERRONEOUSLY CONCLUDED THAT PUBLIC RESPONDENT HAS
AUTHORITY TO ISSUE PROVISIONAL REMEDY IN THE NATURE OF WRIT OF
PRELIMINARY MANDATORY INJUNCTION. ASSUMING ARGUENDO THAT IT
HAS THE POWER, IT VIOLATED R.A. 7832 WHEN IT ORDERED THE
RECONNECTION OF SERVICE WITHOUT THE REQUISITE BOND.[15]
The pivotal issue before the Court turns on whether or not public respondent
ERB has jurisdiction to order the reconnection of electric service in cases arising
from alleged violation of R. A. No. 7832.
Petitioner MERALCO urges the resolution of the issue in the negative on the
rationale that there is no provision in Executive Order (E.O.) No. 172, series of 1987,
the ERB charter, granting that agency adjudicative jurisdiction over violations of R.
A. No. 7832, let alone order the restoration of a disconnected electric service. Such
jurisdiction, as petitioner insisted all along, is vested with the regular courts.
The Court disagrees.
Jurisdiction is conferred by law. [16] Corollary to this basic postulate is the
general rule that the jurisdiction of a court or tribunal over the subject matter is
determined by the allegations in the complaint[17] or petition and not in those of the
defendants answer or similar responsive pleading.
To determine the ERBs jurisdiction, a look at the legislative history of the
regulatory agencies preceding it is apropos. These agencies and the corresponding
statute or issuance creating each are as indicated below:

1. The first regulatory body, the Board of Rate Regulation (BRR), was
created by virtue of Act No. 1779.[18] Its regulatory mandate under Section 5 of the
law was limited to fixing or regulating rates of every public service corporation.
2. In 1913, Act No. 2307[19] created the Board of Public Utility
Commissioners (BPUC) to take over the functions of the BRR. By express provision
of Act No. 2307, the BPUC was vested with jurisdiction, supervision and control over
all public utilities and their properties and franchises.
3. On November 7, 1936, Commonwealth Act (C.A.) No. 146, or the
Public Service Act (PSA), was passed creating the Public Service
Commission (PSC) to replace the BPUC. Like the BPUC, the PSC was expressly
granted jurisdiction, supervision and control over public services, with the
concomitant authority of calling on the public force to exercise its power, to wit:
SEC. 13. Except as otherwise provided herein, the Commission shall have
general supervision and regulation of, jurisdiction and control over, all public utilities,
and also over their property, property rights, equipment, facilities and franchises so far as
may be necessary for the purpose of carrying out the provisions of this Act, and in the
exercise of its authority it shall have the necessary powers and the aid of the public
force xxx xxx xxx. (Emphasis supplied)
Section 14 of C.A. No. 146 defines the term public service or public utility as
including every individual, copartnership, association, corporation or joint-stock
company, . . . that now or hereafter may own, operate, manage or control within the
Philippines, for hire or compensation, any common carrier, xxx xxx,electric light,
heat, power, xxx xxx, when owned, operated and managed for public use or
service within the Philippines xxx xxx. Under the succeeding Section 17(a), the PSC
has the power even without prior hearing
(a) To investigate, upon its own initiative, or upon complaint in writing, any matter concerning
any public service as regards matters under its jurisdiction; to require any public service
to furnish safe, adequate and proper service as the public interest may require and
warrant, to enforce compliance with any standard, rule, regulation, order or other
requirement of this Act or of the Commission, xxx.

4. Then came Presidential Decree (P.D.) No. 1,[20] reorganizing the

national government and implementing the Integrated Reorganization
Plan.Under the reorganization plan, jurisdiction, supervision and control over public
services related to electric light, and power heretofore vested in the PSC were
transferred to the Board of Power and Waterworks (BOPW).
Later, P.D. No. 1206[21] abolished the BOPW. Its powers and function relative
to power utilities, including its authority to grant provisional relief, [22]were
transferred to the newly-created Board of Energy (BOE).
5. On May 8, 1987, then President Corazon C. Aquino issued E.O. No.
172 reconstituting the BOE into the ERB, transferring
the formers functions andpowers under P.D. No. 1206 to the
latter[23] and consolidating in and entrusting on the ERB all the regulatory and
adjudicatory functions covering the energy sector. [24] Section 14 of E.O. No. 172

states that (T)he applicable provisions of [C.A.] No. 146, as amended, otherwise
known as the Public Service Act; xxx and [P.D.] No. 1206, as amended, creating the
Department of Energy, shall continue to have full force and effect, except insofar as
inconsistent with this Order.[25]
Given the foregoing consideration, it is valid to say that certain provisions of
the PSA (C.A. No. 146, as amended) have been carried over in the executive
order, i.e., E.O. No. 172, creating the ERB. Foremost of these relate to the transfer to
the ERB of the jurisdiction and control heretofore pertaining to and exercised by the
PSC over electric, light and power corporations owned, operated and/or managed
for public use or service. And as Section 17(a) of C.A. No. 146, as amended, supra,
provides, this jurisdiction and control includes the power to investigate any matter
concerning any public service and to require any public utility or public service
corporation to furnish adequate and proper service. Any suggestion that the
transfer of PSCs functions and powers to the ERB is inconsistent with E.O. No. 172
must be rejected, the principal objective of the said issuance being precisely to
reinforce the powers of the ERB as the sole regulatory body over the energy sector.
[26]

Needless to stress, petitioner MERALCO, being an electric service provider, is

under the regulatory jurisdiction and supervision of the ERB.
What remains to be determined then is whether or not, based on the
allegations in private respondent Tis complaint in ERB Case No. 99-67, the ERBs
jurisdiction, supervision and/or control over petitioner MERALCO is/are duly invoked.
The pertinent allegations in the complaint are, as follows:
3.
[Respondent Ti] is the owner of ELT Center a consumer of electric light and
power for its 8-storey building supplied by [Meralco] since his operation in
October 1998 to the present.
4.
That [Meralco] through its authorized inspectors, agents or representatives
swooped down on the ELT Building and proceeded by force, to disconnect the
electric service of [respondent Ti] and in the process seized three (3) electric
meters . The claim of the raiding team that the tampering on the electric meters
confiscated was done in flagrante delicto is a pure fabrication . without any
factual basis. This unfortunate incident occurred on October 13 and 14, 1999
between the unholy hours of 11:30 pm 1:30 am .
5.
That the Notices of Disconnection dated October 13, 1999 were served at the
unholy hours of the night when there was nobody in the premises to acknowledge
receipt of the same. The three (3) disconnection notices dated October 13,
1999 were served only on the security guard on duty . xxx
xxx xxx xxx
11. A public service corporation like [Meralco] should not resort to unlawful acts in
ferreting out electric pilferers like what was done in the instant case .
12. [Meralco] should be reminded of its responsibility as a public service corporation
which is clothed with public interest not to resort to oppression and abuse of
authority which do not speak well of a giant corporation .[27]
It is fairly clear from the foregoing that the ERB can properly take cognizance
of respondent Tis complaint for reconnection of electric service in ERB Case No. 99-

67, touching as it does on the obligation of a public utility to supply adequate

electricity and proper service to the consuming public. It bears to reiterate that the
ERB, by force of the aforecited Sections 13 and 17(a) of C.A. No 146, as amended, in
relation to Section 14 of E.O. No. 172, has jurisdiction, control and supervision over
all public services, their franchises and properties, with power to investigate any
matter respecting its jurisdiction and to require any public service to furnish safe,
adequate and proper service as the public interest may require. To us, the power of
control and supervision over public utilities would otherwise be a meaningless
delegation were the ERB is precluded from requiring a public utility to reconnect
pending the determination of propriety of the disconnection. For sure, respondent
Tis complaint prayed for no other relief than the immediate restoration in his
business establishment of electric light and power service, to wit:
WHEREFORE premises considered, it is respectfully prayed of this Honorable
Board to order respondent Meralco to restore the partial shutdown of electric light and
power service that it unlawfully cut-off from the business establishment of herein
complainant, pending notice and hearing, and that the order granting provisional relief
should be issued immediately upon the filing of this complaint to prevent any further
serious and irreparable damage and injury to herein complainant.
That after, notice and hearing, the provisional relief herein Granted should be
made PERMANENT.[28]
There can be no quibbling that the ERB may investigate and ascertain the
propriety of the disconnection due to an alleged violation of R. A. No.
7832.Necessarily, in the course of such investigation, the ERB may, if factually and
legally justified, order the electric service provider, petitioner MERALCO in this
instance, to reconnect the consumers, private respondents in this case, power
supply and resume service. Compelling the complaining consumer to still go to
court to secure, if proper, a reconnection order, as petitioners line of argument
urges, would be reading into R. A. No. 7832 something not written therein.
In any event, Section 9[29] of R. A. No. 7832 speaks of restraining orders or
writs of injunction against the exercise by an electric provider of its right and
authority to disconnect electric service. Here, the provisional relief granted by the
ERB in its challenged Order of October 22, 1999 is for reconnection precisely
because petitioner MERALCO had already disconnected the power supply to Tis
premises.
In this connection, it is significant to note that under Section 6 itself of R. A.
No. 7832, the right and authority of a private electric utility to immediately
disconnect an electric service upon written notice or warning to a customer may be
done without the need of a court or administrative order. We quote the
pertinent provision of Section 6:
SEC. 6. Disconnection of Electric Service. The private electric utility or rural
electric cooperative concerned shall have the right and authority to disconnect
immediately the electric service after serving a written notice or warning to that
effect, without the need of a court or administrative order, and deny restoration of the
same, when the owner of the house or establishment concerned or someone acting in his
behalf shall have been caught in flagrante delicto doing any of the acts enumerated in

Section 4(a) hereof, or when any of the circumstances so enumerated shall have been
discovered for the second time: xxx (Emphasis supplied).
Inferentially, the express mention of an administrative order under the
aforequoted provision negates MERALCOs principal submission that only the regular
courts may issue orders in matters involving violations of R. A. No. 7832. And more
specifically in the subject of disconnection, the legislature thereby implicitly
recognized the participation of an administrative body although a public utility need
not secure a prior order, whether from the court or from the former, in order to
effect a disconnection. Had the intention of Congress been to vest exclusively on
the regular courts cases involving violation of R. A. No. 7832, there is simply no
sense for it to include the term administrative order in Section 6.
The above conclusion is no more than being faithful to the rule that every
part of a statute should be given effect, a statute being enacted as an integrated
measure and not as a hodgepodge of conflicting provisions. [30] In line with this rule,
it behooves courts to adopt a construction that will give effect to every part of the
statute, its every word, if at all possible. [31]
The criminal aspect of the alleged violation of R. A. No. 7832 is of course a
different matter. A circumspect look at E.O. No. 172 yields no indication that the
ERBs jurisdiction extends to adjudication of criminal complaints for infringement of
R. A. No. 7832.
While a complaint for reconnection of a customers electric service is interrelated to the criminal action for violation of R. A. No. 7832, the determination of the
propriety of the reconnection remains distinct and independent from the criminal
action. The dominant and primordial objective of a criminal prosecution is the
punishment of the offender, while a complaint for reconnection is intended merely
to address a consumers grievance against an electric service provider with respect
to the generation, transmission and supply of electric service. In fact, any
determination or ruling in the reconnection case is without prejudice to the criminal
liability which may be imposed in the criminal action. There is absolutely no conflict
between the exercise by the ERB of its power to entertain a complaint for
reconnection of electric service and the regular courts jurisdiction to entertain and
act on a criminal action against private respondent Ti for violation of R. A. No. 7832.
The reason therefor is not hard to discern: a criminal action affects the social order
while an action for reconnection of electric service pertains to the public utilitys
obligation to provide public service which partakes of the nature of a civil action and
affects private rights.[32]
It is petitioners posture that it is not within the ERBs power to grant a
provisional relief. Hence, its argument that the ERB gravely abused its discretion
when it ordered MERALCO to immediately reconnect Tis electric service pending
hearing of the main action in ERB Case No. 99-67.
Again, the Court disagrees.

Petitioner has evidently lost sight of Section 8 of E.O. No. 172 which explicitly
vests on the ERB, as an incident to its principal functions, the authority to grant
provisional relief, thus:
SEC. 8. Authority to Grant Provisional Relief. The [Energy Regulatory] Board may,
upon the filing of an application, petition or complaint or at any stage thereafter and
without prior hearing, on the basis of supporting papers duly verified or
authenticated, grant provisional relief on motion of a party in the case or on its own
initiative, without prejudice to a final decision after hearing, should the Board find that
the pleadings, together with such affidavits, documents and other evidence which may be
submitted in support of the motion, substantially support the provisional
order: . (Emphasis and words in bracket supplied.)
Furthermore, Section 2, Rule 13 of the Rules of Practice and Procedure
Governing Hearings Before the ERB,[33] provides as follows:
Section 2. Provisional relief. Upon the filing of an application, petition or complaint, or
at any stage thereafter, the Board may grant on motion of the pleader or on its own
initiative, the relief prayed for without prejudice to a final decision after completion of
the hearing should the Board find that the pleading, together with the affidavits and
supporting documents attached thereto and such additional evidence as may have been
presented, substantially support the provisional order; Provided: That the Board
may, motu proprio, continue to issue orders or grant relief in the exercise of its powers of
general supervision under existing laws. (Emphasis supplied.)
As hereinabove explained, the ERB is endowed with the authority to hear and
adjudicate complaints for reconnection of electric service and to grant provisional or
ancillary relief during the pendency of the main action. At bottom then, the ERB did
no more than to exercise its legal mandate when it ordered petitioner MERALCO to
immediately restore the electric service at respondent Tis business establishment
pending hearing of the main case. The Court finds the ERBs provisional action to be
both factually and legally justified. Hence, the imputation of grave abuse of
discretion on its part is without leg to stand on.
Lastly, petitioner contends that the ERBs Order of October 22, 1999,
directing the reconnection of electric service at the business premises ofrespondent
Ti is in the nature of a writ of preliminary mandatory injunction which the ERB has
no legal basis to issue. Petitioner cites in this regard Section 9 of R. A. No. 7832
which reads:
SEC. 9. Restriction on the Issuance of Restraining Orders or Writs of Injunction. No writ of
injunction or restraining order shall be issued by any court against any private electric
utility or rural electric cooperative exercising the right and authority to disconnect electric
service as provided in this Act, unless there is prima facie evidence that the disconnection
was made with evident bad faith or grave abuse of authority. (Emphasis supplied)
The Court remains unconvinced.
Administrative agencies, such as the ERB, are not considered courts; they are
neither part of the judicial system nor are they deemed judicial tribunals. [34]The
prohibition against the issuance of restraining order or writs of injunction does not

thus apply to ERB as the term court contemplated in the aforequoted provision
refers to a regular court belonging to the judicial department.
Parenthetically, Section 14 of R. A. No. 7832 authorizes the ERB to issue the
necessary implementing rules and regulations to ensure the efficient and effective
implementation of its provisions. Pursuant to such authority, the ERB, as aptly
observed by the CA, has approved, upon MERALCOs behest, the Terms and
Conditions of Service which apply to and govern all service connections in all places
within its franchise area. Specifically, the Terms and Conditions of Service provides
the customer an understanding of the limitations attendant to his use of the electric
service by MERALCO and further sets forth the rights and responsibilities of both the
customer and MERALCO under the electric service. These rules, to borrow from the
assailed decision of the CA, clearly afford any customer, like private respondent Ti, a
plain and adequate remedy for any grievance against a public utility.
WHEREFORE, the instant petition is DENIED and the assailed decision of the
Court of Appeals dated September 22, 2000 is AFFIRMED.
Costs against petitioner.
SO ORDERED.

G.R. No. L-12426

February 16, 1959

PHILIPPINE LAWYER'S ASSOCIATION, petitioner,

vs.
CELEDONIO AGRAVA, in his capacity as Director of the Philippines Patent Office, respondent.
Arturo A. Alafriz for petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for respondent.
MONTEMAYOR, J.:
This is the petition filed by the Philippine Lawyer's Association for prohibition and injunction against
Celedonio Agrava, in his capacity as Director of the Philippines Patent Office.
On may 27, 1957, respondent Director issued a circular announcing that he had scheduled for June
27, 1957 an examination for the purpose of determining who are qualified to practice as patent
attorneys before the Philippines Patent Office, the said examination to cover patent law and
jurisprudence and the rules of practice before said office. According to the circular, members of the
Philippine Bar, engineers and other persons with sufficient scientific and technical training are
qualified to take the said examination. It would appear that heretofore, respondent Director has been
holding similar examinations.
It is the contention of the petitioner Philippine Lawyer's Association that one who has passed the bar
examinations and is licensed by the Supreme Court to practice law in the Philippines and who is in
good standing, is duly qualified to practice before the Philippines Patent Office, and that
consequently, the cat of the respondent Director requiring members of the Philippine Bar in good
standing to take and pass an examination given by the Patent Office as a condition precedent to
their being allowed to practice before said office, such as representing applicants in the preparation
and prosecution of applications for patent, is in excess of his jurisdiction and is in violation of the law.
In his answer, respondent Director, through the Solicitor General, maintains that the prosecution of
patent cases "does not involve entirely or purely the practice of law but includes the application of
scientific and technical knowledge and training, so much so that, as a matter of actual practice, the
prosecution of patent cases may be handled not only by lawyers, but also engineers and other
persons with sufficient scientific and technical training who pass the prescribed examinations as
given by the Patent Office; . . . that the Rules of Court do not prohibit the Patent Office, or any other
quasi-judicial body from requiring further condition or qualification from those who would wish to
handle cases before the Patent Office which, as stated in the preceding paragraph, requires more of
an application of scientific and technical knowledge than the mere application of provisions of law; . .
. that the action taken by the respondent is in accordance with Republic Act No. 165, otherwise
known as the Patent Law of the Philippines, which similar to the United States Patent Law, in
accordance with which the United States Patent Office has also prescribed a similar examination as
that prescribed by respondent. . . .
Respondent further contends that just as the Patent law of the United States of America authorizes
the Commissioner of Patents to prescribe examinations to determine as to who practice before the
United States Patent Office, the respondent, is similarly authorized to do so by our Patent Law,
Republic Act No. 165.
Although as already stated, the Director of Patents, in the past, would appear to have been holding
tests or examinations the passing of which was imposed as a required qualification to practice
before the Patent Office, to our knowledge, this is the first time that the right of the Director of

Patents to do so, specially as regards members of the bar, has been questioned formally, or
otherwise put in issue. And we have given it careful thought and consideration.
The Supreme Court has the exclusive and constitutional power with respect to admission to the
practice of law in the Philippines1 and to any member of the Philippine Bar in good standing may
practice law anywhere and before any entity, whether judicial or quasi-judicial or administrative, in
the Philippines. Naturally, the question arises as to whether or not appearance before the patent
Office and the preparation and the prosecution of patent applications, etc., constitutes or is included
in the practice of law.
The practice of law is not limited to the conduct of cases or litigation in court; it embraces the
preparation of pleadings and other papers incident to actions and social proceedings, the
management of such actions and proceedings on behalf of clients before judges and courts,
and in addition, conveying. In general, alladvice to clients, and all action taken for them in
matters connected with the law corporation services, assessment and condemnation
services contemplating an appearance before a judicial body, the foreclosure of a mortgage,
enforcement of a creditor's claim in bankruptcy and insolvency proceedings, and conducting
proceedings in attachment, and in matters of estate and guardianship have been held to
constitute law practice as do the preparation and drafting of legal instruments, where the
work done involves the determination by the trained legal mind of the legal effect of facts and
conditions. (5 Am. Jur. p. 262, 263). (Emphasis supplied).
Practice of law under modern conditions consists in no small part of work performed outside
of any court and having no immediate relation to proceedings in court. It embraces
conveyancing, the giving of legal advice on a large variety of subjects, and the preparation
and execution of legal instruments covering an extensive field of business and trust relations
and other affairs. Although these transactions may have no direct connection with court
proceedings, they are always subject to become involved in litigation. They require in many
aspects a high degree of legal skill, a wide experience with men and affairs, and great
capacity for adaptation to difficult and complex situations. These customary functions of an
attorney or counselor at law bear an intimate relation to the administration of justice by the
courts. No valid distinction, so far as concerns the question set forth in the order, can be
drawn between that part which involves advice and drafting of instruments in his office. It is
of importance to the welfare of the public that these manifold customary functions be
performed by persons possessed of adequate learning and skill, of sound moral character,
and acting at all times under the heavy trust obligations to clients which rests upon all
attorneys. (Moran, Comments on the Rules of Court, Vol. 3 (1953 ed.), p. 665-666, citing In
re Opinion of the Justices (Mass.), 194 N.E. 313, quoted in Rhode Is. Bar Assoc. vs.
Automobile Service Assoc. (R. I. ) 179 A. 139, 144). (Emphasis ours).
In our opinion, the practice of law includes such appearance before the Patent Office, the
representation of applicants, oppositors, and other persons, and the prosecution of their applications
for patent, their oppositions thereto, or the enforcement of their rights in patent cases. In the first
place, although the transaction of business in the Patent Office involves the use and application of
technical and scientific knowledge and training, still, all such business has to be rendered in
accordance with the Patent Law, as well as other laws, including the Rules and Regulations
promulgated by the Patent Office in accordance with law. Not only this, but practice before the
Patent Office involves the interpretation and application of other laws and legal principles, as well as
the existence of facts to be established in accordance with the law of evidence and procedure. For
instance: Section 8 of our Patent Law provides that an invention shall not be patentable if it is
contrary to public order or morals, or to public health or welfare. Section 9 says that an invention
shall not be considered new or patentable if it was known or used by others in the Philippines before

the invention thereof by the inventor named in any printed publication in the Philippines or any
foreign country more than one year before the application for a patent therefor, or if it had been in
public use or on sale in the Philippines for more than one year before the application for the patent
therefor. Section 10 provides that the right to patent belongs to the true and actual inventor, his heirs,
legal representatives or assigns. Section 25 and 26 refer to connection of any mistake in a patent.
Section 28 enumerates the grounds for cancellation of a patent; that although any person may apply
for such cancellation, under Section 29, the Solicitor General is authorized to petition for the
cancellation of a patent. Section 30 mentions the requirements of a petition for cancellation. Section
31 and 32 provide for a notice of hearing of the petition for cancellation of the patent by the Director
of Patents in case the said cancellation is warranted. Under Section 34, at any time after the
expiration of three years from the day the patent was granted, any person patent on several
grounds, such as, if the patented invention is not being worked in the Philippines on a commercial
scale, or if the demand for the patented article in the Philippines on a commercial scale, or if the
demand for the patented article in the Philippines is not being met to an adequate extent and
reasonable terms, or if by reason of the patentee's refusal to grant a license on reasonable terms or
by reason of the condition attached by him to the license, purchase or use of the patented article or
working of the patented process or machine of production, the establishment of a new trade or
industry in the Philippines is prevented; or if the patent or invention relates to food or medicine or is
necessary to public health or public safety. All these things involve the applications of laws, legal
principles, practice and procedure. They call for legal knowledge, training and experience for which a
member of the bar has been prepared.
In support of the proposition that much of the business and many of the act, orders and decisions of
the Patent Director involve questions of law or a reasonable and correct evaluation of facts, the very
Patent Law, Republic Act No. 165, Section 61, provides that:
. . . . The applicant for a patent or for the registration of a design, any party to a proceeding
to cancel a patent or to obtain a compulsory license, and any party to any other proceeding
in the Office may appeal to the Supreme Court from any final order or decision of the
director.
In other words, the appeal is taken to this Tribunal. If the transaction of business in the Patent Office
and the acts, orders and decisions of the Patent Director involved exclusively or mostly technical and
scientific knowledge and training, then logically, the appeal should be taken not to a court or judicial
body, but rather to a board of scientists, engineers or technical men, which is not the case.
Another aspect of the question involves the consideration of the nature of the functions and acts of
the Head of the Patent Office.
. . . . The Commissioner, in issuing or withholding patents, in reissues, interferences, and
extensions, exercises quasi-judicial functions. Patents are public records, and it is the duty of
the Commissioner to give authenticated copies to any person, on payment of the legal fees.
(40 Am. Jur. 537). (Emphasis supplied).
. . . . The Commissioner has the only original initiatory jurisdiction that exists up to the
granting and delivering of a patent, and it is his duty to decide whether the patent is new and
whether it is the proper subject of a patent; and his action in awarding or refusing a patent is
a judicial function. In passing on an application the commissioner should decide not only
questions of law, but also questions of fact, as whether there has been a prior public use or
sale of the article invented. . . . (60 C.J.S. 460). (Emphasis supplied).

The Director of Patents, exercising as he does judicial or quasi-judicial functions, it is reasonable to

hold that a member of the bar, because of his legal knowledge and training, should be allowed to
practice before the Patent Office, without further examination or other qualification. Of course, the
Director of Patents, if he deems it advisable or necessary, may require that members of the bar
practising before him enlist the assistance of technical men and scientist in the preparation of papers
and documents, such as, the drawing or technical description of an invention or machine sought to
be patented, in the same way that a lawyer filing an application for the registration of a parcel of land
on behalf of his clients, is required to submit a plan and technical description of said land, prepared
by a licensed surveyor.
But respondent Director claims that he is expressly authorized by the law to require persons desiring
to practice or to do business before him to submit an examination, even if they are already members
of the bar. He contends that our Patent Law, Republic Act No. 165, is patterned after the United
States Patent Law; and of the United States Patent Office in Patent Cases prescribes an
examination similar to that which he (respondent) has prescribed and scheduled. He invites our
attention to the following provisions of said Rules of Practice:
Registration of attorneys and agents. A register of an attorneys and a register agents are
kept in the Patent Office on which are entered the names of all persons recognized as
entitled to represent applicants before the Patent Office in the preparation and prosecution of
applicants for patent. Registration in the Patent Office under the provisions of these rules
shall only entitle the person registered to practice before the Patent Office.
(a) Attorney at law. Any attorney at law in good standing admitted to practice before any
United States Court or the highest court of any State or Territory of the United States who
fulfills the requirements and complied with the provisions of these rules may be admitted to
practice before the Patent Office and have his name entered on the register of attorneys.
xxx

xxx

xxx

(c) Requirement for registration. No person will be admitted to practice and register unless
he shall apply to the Commissioner of Patents in writing on a prescribed form supplied by the
Commissioner and furnish all requested information and material; and shall establish to the
satisfaction of the Commissioner that he is of good moral character and of good repute and
possessed of the legal and scientific and technical qualifications necessary to enable him to
render applicants for patent valuable service, and is otherwise competent to advise and
assist him in the presentation and prosecution of their application before the Patent Office. In
order that the Commissioner may determine whether a person seeking to have his name
placed upon either of the registers has the qualifications specified, satisfactory proof of good
moral character and repute, and of sufficient basic training in scientific and technical matters
must be submitted and an examination which is held from time to time must be taken and
passed. The taking of an examination may be waived in the case of any person who has
served for three years in the examining corps of the Patent Office.
Respondent states that the promulgation of the Rules of Practice of the United States Patent Office
in Patent Cases is authorized by the United States Patent Law itself, which reads as follows:
The Commissioner of Patents, subject to the approval of the Secretary of Commerce may
prescribe rules and regulations governing the recognition of agents, attorneys, or other
persons representing applicants or other parties before his office, and may require of such
persons, agents, or attorneys, before being recognized as representatives of applicants or
other persons, that they shall show they are of good moral character and in good repute,

are possessed of the necessary qualifications to enable them to render to applicants or other
persons valuable service, and are likewise to competent to advise and assist applicants or
other persons in the presentation or prosecution of their applications or other business
before the Office. The Commissioner of Patents may, after notice and opportunity for a
hearing, suspend or exclude, either generally or in any particular case from further practice
before his office any person, agent or attorney shown to be incompetent or disreputable, or
guilty of gross misconduct, or who refuses to comply with the said rules and regulations, or
who shall, with intent to defraud in any matter, deceive, mislead, or threaten any applicant or
prospective applicant, or other person having immediate or prospective applicant, or other
person having immediate or prospective business before the office, by word, circular, letter,
or by advertising. The reasons for any such suspension or exclusion shall be duly recorded.
The action of the Commissioner may be reviewed upon the petition of the person so refused
recognition or so suspended by the district court of the United States for the District of
Columbia under such conditions and upon such proceedings as the said court may by its
rules determine. (Emphasis supplied)
Respondent Director concludes that Section 78 of Republic Act No. 165 being similar to the
provisions of law just reproduced, then he is authorized to prescribe the rules and regulations
requiring that persons desiring to practice before him should submit to and pass an examination. We
reproduce said Section 78, Republic Act No. 165, for purposes of comparison:
SEC. 78. Rules and regulations. The Director subject to the approval of the Secretary of
Justice, shall promulgate the necessary rules and regulations, not inconsistent with law, for
the conduct of all business in the Patent Office.
The above provisions of Section 78 certainly and by far, are different from the provisions of the
United States Patent Law as regards authority to hold examinations to determine the qualifications of
those allowed to practice before the Patent Office. While the U.S. Patent Law authorizes the
Commissioner of Patents to require attorneys to show that they possess the necessary qualifications
and competence to render valuable service to and advise and assist their clients in patent cases,
which showing may take the form of a test or examination to be held by the Commissioner, our
Patent Law, Section 78, is silent on this important point. Our attention has not been called to any
express provision of our Patent Law, giving such authority to determine the qualifications of persons
allowed to practice before the Patent Office.
Section 551 of the Revised Administrative Code authorizes every chief of bureau to prescribe forms
and make regulations or general orders not inconsistent with law, to secure the harmonious and
efficient administration of his branch of the service and to carry into full effect the laws relating to
matters within the jurisdiction of his bureau. Section 608 of Republic Act 1937, known as the Tariff
and Customs Code of the Philippines, provides that the Commissioner of Customs shall, subject to
the approval of the Department Head, makes all rules and regulations necessary to enforce the
provisions of said code. Section 338 of the National Internal Revenue Code, Commonwealth Act No.
466 as amended, states that the Secretary of Finance, upon recommendation of the Collector of
Internal Revenue, shall promulgate all needful rules and regulations for the effective enforcement of
the provisions of the code. We understand that rules and regulations have been promulgated not
only for the Bureau of Customs and Internal Revenue, but also for other bureaus of the Government,
to govern the transaction of business in and to enforce the law for said bureaus.
Were we to allow the Patent Office, in the absence of an express and clear provision of law giving
the necessary sanction, to require lawyers to submit to and pass on examination prescribed by it
before they are allowed to practice before said Patent Office, then there would be no reason why
other bureaus specially the Bureau of Internal Revenue and Customs, where the business in the

same area are more or less complicated, such as the presentation of books of accounts, balance
sheets, etc., assessments exemptions, depreciation, these as regards the Bureau of Internal
Revenue, and the classification of goods, imposition of customs duties, seizures, confiscation, etc.,
as regards the Bureau of Customs, may not also require that any lawyer practising before them or
otherwise transacting business with them on behalf of clients, shall first pass an examination to
qualify.
In conclusion, we hold that under the present law, members of the Philippine Bar authorized by this
Tribunal to practice law, and in good standing, may practice their profession before the Patent Office,
for the reason that much of the business in said office involves the interpretation and determination
of the scope and application of the Patent Law and other laws applicable, as well as the presentation
of evidence to establish facts involved; that part of the functions of the Patent director are judicial or
quasi-judicial, so much so that appeals from his orders and decisions are, under the law, taken to the
Supreme Court.
For the foregoing reasons, the petition for prohibition is granted and the respondent Director is
hereby prohibited from requiring members of the Philippine Bar to submit to an examination or tests
and pass the same before being permitted to appear and practice before the Patent Office. No costs.

G.R. No. L-6791

March 29, 1954

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
QUE PO LAY, defendant-appellant.
Prudencio de Guzman for appellant.
First Assistant Solicitor General Ruperto Kapunan, Jr., and Solicitor Lauro G. Marquez for appellee.
MONTEMAYOR, J.:
Que Po Lay is appealing from the decision of the Court of First Instance of Manila, finding him guilty
of violating Central Bank Circular No. 20 in connection with section 34 of Republic Act No. 265, and
sentencing him to suffer six months imprisonment, to pay a fine of P1,000 with subsidiary
imprisonment in case of insolvency, and to pay the costs.
The charge was that the appellant who was in possession of foreign exchange consisting of U.S.
dollars, U.S. checks and U.S. money orders amounting to about $7,000 failed to sell the same to the
Central Bank through its agents within one day following the receipt of such foreign exchange as
required by Circular No. 20. the appeal is based on the claim that said circular No. 20 was not
published in the Official Gazette prior to the act or omission imputed to the appellant, and that
consequently, said circular had no force and effect. It is contended that Commonwealth Act. No., 638
and Act 2930 both require said circular to be published in the Official Gazette, it being an order or
notice of general applicability. The Solicitor General answering this contention says that
Commonwealth Act. No. 638 and 2930 do not require the publication in the Official Gazette of said
circular issued for the implementation of a law in order to have force and effect.
We agree with the Solicitor General that the laws in question do not require the publication of the
circulars, regulations and notices therein mentioned in order to become binding and effective. All that
said two laws provide is that laws, resolutions, decisions of the Supreme Court and Court of
Appeals, notices and documents required by law to be of no force and effect. In other words, said
two Acts merely enumerate and make a list of what should be published in the Official Gazette,
presumably, for the guidance of the different branches of the Government issuing same, and of the
Bureau of Printing.
However, section 11 of the Revised Administrative Code provides that statutes passed by Congress
shall, in the absence of special provision, take effect at the beginning of the fifteenth day after the
completion of the publication of the statute in the Official Gazette. Article 2 of the new Civil Code
(Republic Act No. 386) equally provides that laws shall take effect after fifteen days following the
completion of their publication in the Official Gazette, unless it is otherwise provided. It is true that
Circular No. 20 of the Central Bank is not a statute or law but being issued for the implementation of
the law authorizing its issuance, it has the force and effect of law according to settled jurisprudence.
(See U.S. vs. Tupasi Molina, 29 Phil., 119 and authorities cited therein.) Moreover, as a rule,
circulars and regulations especially like the Circular No. 20 of the Central Bank in question which
prescribes a penalty for its violation should be published before becoming effective, this, on the
general principle and theory that before the public is bound by its contents, especially its penal
provisions, a law, regulation or circular must first be published and the people officially and
specifically informed of said contents and its penalties.
Our Old Civil code, ( Spanish Civil Code of 1889) has a similar provision about the effectivity of laws,
(Article 1 thereof), namely, that laws shall be binding twenty days after their promulgation, and that
their promulgation shall be understood as made on the day of the termination of the publication of

the laws in the Gazette. Manresa, commenting on this article is of the opinion that the word "laws"
include regulations and circulars issued in accordance with the same. He says:
El Tribunal Supremo, ha interpretado el articulo 1. del codigo Civil en Sentencia de 22 de
Junio de 1910, en el sentido de que bajo la denominacion generica de leyes, se
comprenden tambien los Reglamentos, Reales decretos, Instrucciones, Circulares y Reales
ordenes dictadas de conformidad con las mismas por el Gobierno en uso de su potestad.
Tambien el poder ejecutivo lo ha venido entendiendo asi, como lo prueba el hecho de que
muchas de sus disposiciones contienen la advertencia de que empiezan a regir el mismo dia
de su publicacion en la Gaceta, advertencia que seria perfectamente inutil si no fuera de
aplicacion al caso el articulo 1.o del Codigo Civil. (Manresa, Codigo Civil Espaol, Vol. I. p.
52).
In the present case, although circular No. 20 of the Central Bank was issued in the year 1949, it was
not published until November 1951, that is, about 3 months after appellant's conviction of its
violation. It is clear that said circular, particularly its penal provision, did not have any legal effect and
bound no one until its publication in the Official Gazzette or after November 1951. In other words,
appellant could not be held liable for its violation, for it was not binding at the time he was found to
have failed to sell the foreign exchange in his possession thereof.
But the Solicitor General also contends that this question of non-publication of the Circular is being
raised for the first time on appeal in this Court, which cannot be done by appellant. Ordinarily, one
may raise on appeal any question of law or fact that has been raised in the court below and which is
within the issues made by the parties in their pleadings. (Section 19, Rule 48 of the Rules of Court).
But the question of non-publication is fundamental and decisive. If as a matter of fact Circular No. 20
had not been published as required by law before its violation, then in the eyes of the law there was
no such circular to be violated and consequently appellant committed no violation of the circular or
committed any offense, and the trial court may be said to have had no jurisdiction. This question may
be raised at any stage of the proceeding whether or not raised in the court below.
In view of the foregoing, we reverse the decision appealed from and acquit the appellant, with
costs de oficio.

G.R. No. L-63915 December 29, 1986

LORENZO M. TA;ADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR
BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. (MABINI), petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON.
JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President,
MELQUIADES P. DE LA CRUZ, ETC., ET AL.,respondents.
RESOLUTION

CRUZ, J.:
Due process was invoked by the petitioners in demanding the disclosure of a number of presidential
decrees which they claimed had not been published as required by law. The government argued that
while publication was necessary as a rule, it was not so when it was "otherwise provided," as when
the decrees themselves declared that they were to become effective immediately upon their
approval. In the decision of this case on April 24, 1985, the Court affirmed the necessity for the
publication of some of these decrees, declaring in the dispositive portion as follows:
WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all
unpublished presidential issuances which are of general application, and unless so
published, they shall have no binding force and effect.
The petitioners are now before us again, this time to move for reconsideration/clarification of that
decision. 1Specifically, they ask the following questions:
1. What is meant by "law of public nature" or "general applicability"?
2. Must a distinction be made between laws of general applicability and laws which are not?
3. What is meant by "publication"?
4. Where is the publication to be made?
5. When is the publication to be made?
Resolving their own doubts, the petitioners suggest that there should be no distinction between laws
of general applicability and those which are not; that publication means complete publication; and
that the publication must be made forthwith in the Official Gazette. 2
In the Comment 3 required of the then Solicitor General, he claimed first that the motion was a request for
an advisory opinion and should therefore be dismissed, and, on the merits, that the clause "unless it is
otherwise provided" in Article 2 of the Civil Code meant that the publication required therein was not
always imperative; that publication, when necessary, did not have to be made in the Official Gazette; and
that in any case the subject decision was concurred in only by three justices and consequently not
binding. This elicited a Reply 4 refuting these arguments. Came next the February Revolution and the
Court required the new Solicitor General to file a Rejoinder in view of the supervening events, under Rule
3, Section 18, of the Rules of Court. Responding, he submitted that issuances intended only for the

internal administration of a government agency or for particular persons did not have to be 'Published;
that publication when necessary must be in full and in the Official Gazette; and that, however, the decision
under reconsideration was not binding because it was not supported by eight members of this Court. 5

The subject of contention is Article 2 of the Civil Code providing as follows:

ART. 2. Laws shall take effect after fifteen days following the completion of their publication
in the Official Gazette, unless it is otherwise provided. This Code shall take effect one year
after such publication.
After a careful study of this provision and of the arguments of the parties, both on the original petition
and on the instant motion, we have come to the conclusion and so hold, that the clause "unless it is
otherwise provided" refers to the date of effectivity and not to the requirement of publication itself,
which cannot in any event be omitted. This clause does not mean that the legislature may make the
law effective immediately upon approval, or on any other date, without its previous publication.
Publication is indispensable in every case, but the legislature may in its discretion provide that the
usual fifteen-day period shall be shortened or extended. An example, as pointed out by the present
Chief Justice in his separate concurrence in the original decision, 6 is the Civil Code which did not
become effective after fifteen days from its publication in the Official Gazette but "one year after such
publication." The general rule did not apply because it was "otherwise provided. "
It is not correct to say that under the disputed clause publication may be dispensed with altogether.
The reason. is that such omission would offend due process insofar as it would deny the public
knowledge of the laws that are supposed to govern the legislature could validly provide that a law e
effective immediately upon its approval notwithstanding the lack of publication (or after an
unreasonably short period after publication), it is not unlikely that persons not aware of it would be
prejudiced as a result and they would be so not because of a failure to comply with but simply
because they did not know of its existence, Significantly, this is not true only of penal laws as is
commonly supposed. One can think of many non-penal measures, like a law on prescription, which
must also be communicated to the persons they may affect before they can begin to operate.
We note at this point the conclusive presumption that every person knows the law, which of course
presupposes that the law has been published if the presumption is to have any legal justification at
all. It is no less important to remember that Section 6 of the Bill of Rights recognizes "the right of the
people to information on matters of public concern," and this certainly applies to, among others, and
indeed especially, the legislative enactments of the government.
The term "laws" should refer to all laws and not only to those of general application, for strictly
speaking all laws relate to the people in general albeit there are some that do not apply to them
directly. An example is a law granting citizenship to a particular individual, like a relative of President
Marcos who was decreed instant naturalization. It surely cannot be said that such a law does not
affect the public although it unquestionably does not apply directly to all the people. The subject of
such law is a matter of public interest which any member of the body politic may question in the
political forums or, if he is a proper party, even in the courts of justice. In fact, a law without any
bearing on the public would be invalid as an intrusion of privacy or as class legislation or as anultra
vires act of the legislature. To be valid, the law must invariably affect the public interest even if it
might be directly applicable only to one individual, or some of the people only, and t to the public as
a whole.

We hold therefore that all statutes, including those of local application and private laws, shall be
published as a condition for their effectivity, which shall begin fifteen days after publication unless a
different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by the President in
the exercise of legislative powers whenever the same are validly delegated by the legislature or, at
present, directly conferred by the Constitution. administrative rules and regulations must a also be
published if their purpose is to enforce or implement existing law pursuant also to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of
the administrative agency and not the public, need not be published. Neither is publication required
of the so-called letters of instructions issued by administrative superiors concerning the rules or
guidelines to be followed by their subordinates in the performance of their duties.
Accordingly, even the charter of a city must be published notwithstanding that it applies to only a
portion of the national territory and directly affects only the inhabitants of that place. All presidential
decrees must be published, including even, say, those naming a public place after a favored
individual or exempting him from certain prohibitions or requirements. The circulars issued by the
Monetary Board must be published if they are meant not merely to interpret but to "fill in the details"
of the Central Bank Act which that body is supposed to enforce.
However, no publication is required of the instructions issued by, say, the Minister of Social Welfare
on the case studies to be made in petitions for adoption or the rules laid down by the head of a
government agency on the assignments or workload of his personnel or the wearing of office
uniforms. Parenthetically, municipal ordinances are not covered by this rule but by the Local
Government Code.
We agree that publication must be in full or it is no publication at all since its purpose is to inform the
public of the contents of the laws. As correctly pointed out by the petitioners, the mere mention of the
number of the presidential decree, the title of such decree, its whereabouts (e.g., "with Secretary
Tuvera"), the supposed date of effectivity, and in a mere supplement of the Official Gazette cannot
satisfy the publication requirement. This is not even substantial compliance. This was the manner,
incidentally, in which the General Appropriations Act for FY 1975, a presidential decree undeniably of
general applicability and interest, was "published" by the Marcos administration. 7 The evident
purpose was to withhold rather than disclose information on this vital law.
Coming now to the original decision, it is true that only four justices were categorically for publication
in the Official Gazette 8 and that six others felt that publication could be made elsewhere as long as the
people were sufficiently informed. 9 One reserved his vote 10 and another merely acknowledged the need
for due publication without indicating where it should be made. 11 It is therefore necessary for the present
membership of this Court to arrive at a clear consensus on this matter and to lay down a binding decision
supported by the necessary vote.
There is much to be said of the view that the publication need not be made in the Official Gazette,
considering its erratic releases and limited readership. Undoubtedly, newspapers of general
circulation could better perform the function of communicating, the laws to the people as such
periodicals are more easily available, have a wider readership, and come out regularly. The trouble,
though, is that this kind of publication is not the one required or authorized by existing law. As far as
we know, no amendment has been made of Article 2 of the Civil Code. The Solicitor General has not
pointed to such a law, and we have no information that it exists. If it does, it obviously has not yet
been published.

At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal or modify it if
we find it impractical. That is not our function. That function belongs to the legislature. Our task is
merely to interpret and apply the law as conceived and approved by the political departments of the
government in accordance with the prescribed procedure. Consequently, we have no choice but to
pronounce that under Article 2 of the Civil Code, the publication of laws must be made in the Official
Gazett and not elsewhere, as a requirement for their effectivity after fifteen days from such
publication or after a different period provided by the legislature.
We also hold that the publication must be made forthwith or at least as soon as possible, to give
effect to the law pursuant to the said Article 2. There is that possibility, of course, although not
suggested by the parties that a law could be rendered unenforceable by a mere refusal of the
executive, for whatever reason, to cause its publication as required. This is a matter, however, that
we do not need to examine at this time.
Finally, the claim of the former Solicitor General that the instant motion is a request for an advisory
opinion is untenable, to say the least, and deserves no further comment.
The days of the secret laws and the unpublished decrees are over. This is once again an open
society, with all the acts of the government subject to public scrutiny and available always to public
cognizance. This has to be so if our country is to remain democratic, with sovereignty residing in the
people and all government authority emanating from them.
Although they have delegated the power of legislation, they retain the authority to review the work of
their delegates and to ratify or reject it according to their lights, through their freedom of expression
and their right of suffrage. This they cannot do if the acts of the legislature are concealed.
Laws must come out in the open in the clear light of the sun instead of skulking in the shadows with
their dark, deep secrets. Mysterious pronouncements and rumored rules cannot be recognized as
binding unless their existence and contents are confirmed by a valid publication intended to make
full disclosure and give proper notice to the people. The furtive law is like a scabbarded saber that
cannot feint parry or cut unless the naked blade is drawn.
WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon their
approval, or as soon thereafter as possible, be published in full in the Official Gazette, to become
effective only after fifteen days from their publication, or on another date specified by the legislature,
in accordance with Article 2 of the Civil Code.
SO ORDERED.