ROMS
promulgation of administrative rules and regulations to
G.R. No. L-24796 June 28, 1968
DIRECTOR OF FORESTRY, FOREST STATION
WARDEN, DISTRICT 13, BUREAU OF FORESTRY,
BOARD OF DIRECTORS, NATIONAL WATERWORKS
AND SEWERAGE AUTHORITY 1 and CHIEF OF STAFF,
ARMED FORCES OF THE PHILIPPINES, petitioners,
vs.
HON. EMMANUEL M. MUÑOZ, as Judge of the Court of
First Instance of Bulacan, Branch I, the SHERIFF OF
THE PROVINCE of BULACAN, and PINAGCAMALIGAN
INDO-AGRO DEVELOPMENT CORPORATION,
INC.,respondents.
SANCHEZ, J.:
FACTS:Pinagcamaligan Indo-Agro Development
Corporation, Inc. (Piadeco) is a company engaged in
logging. It was given a Certificate of Private Woodland
Registration so that it can operate in a 72,000 hectare land.
It also has a Titulo de Propriedad which it acquired in 1894
under the Spanish regime.
In 1964, the NAWASA (National Water and Sewerage
Authority) director ordered the cancellation of Piadeco’s
certificate because it encroached beyond what was
allowed in the certificate. It actually cut trees in the Angat
and Marikina watershed area which was prohibited. The
lower court ruled in favor of Piadeco. Piadeco also had a
settlement with Nawasa. Lower court approved the
compromise agreement and held that Piadeco was the
ownerof the land in question; that its operation was not in
violation of forestry rules and regulations; that aside from
its regulation certificate, Piadeco was permitted by Nawasa
thru the latter's Resolution 1050, Section of 1963, to
conduct selective logging within the Angat-Marikina
Watershed.
Piadeco sought to renew its certificate but it was denied by
the Asst. Director of Forestry. The Director ruled that the
Spanish title is no longer recognized and should have
never been used to apply for a Certificate but still Piadeco
continued logging operations. Thereafter, the President of
the Philippines directed the Secretary of Agriculture and
Natural Resources to lead the stop of illegal logging
operations, thus, they wrote Secretary of National Defense
with the request that units of the Armed Forces of the
Philippines be detailed at the areas involved, deputizing
them agents of the Bureau of Forestry to assist in the
enforcement of forest laws, rules and regulations, and the
protection of the forests. Piadeco’s log cuts were seized,
hence, this petition for prohibition and injunction.
ISSUE: Whether or not Piadeco can claim ownership over
the property and whether that Forestry Administrative
Order 12-2 is valid.
HELD: No. The Spanish title it acquired cannot be used to
register for another Certificate. There should be no
question now that Forestry Administrative Order 12-2 has
the force and effect of law. It was promulgated pursuant to
law. Section 1817, Revised Administrative Code,
empowers the Bureau of Forestry, with the approval of the
department head, to issue regulations “deemed expedient
or necessary to secure the protection and conservation of
the public forests in such manner as to insure a continued
supply of valuable timber and other forest products for the
future, and regulating the use and occupancy of the forests
and forest reserves, to the same end.” Forestry
Administrative Order 12-2 was recommended by the
Director of Forestry, and approved by the Secretary of
Agriculture and Natural Resources. It is no less a valid law.
It is an administrative regulation germane to the objects
and purposes of the law. A rule shaped out by
jurisprudence is that when Congress authorized the
implement a given legislation, “[a]ll that is required is that
the regulation should be 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.”
G.R. No. L-16704 March 17, 1962
VICTORIAS MILLING COMPANY, INC., petitioner-
appellant,
vs.
SOCIAL SECURITY COMMISSION, respondent-appellee.
BARRERA, J.:
Facts: The Social Security Commission issued Circular No.
22 on October 15, 1958 requiring all employers in
computing premiums to include employee’s remuneration
all bonuses and overtime time pay, as well as the cash
value of other media remunerate
The petitioner Victorias Milling Company, Inc. protest
against the circular as it is contrary to a previous Circular
No. 7 dated October 7, 1957. Circular No. 7 excludes
overtime pay and bonus in the computation of the
employers’ and the employees’ respective monthly
premium contributions. Petitioner through counsel
questioned the validity of Circular 22 for lack of authority on
the part of the Social Security Commission to promulgate it
without the approval of the President and for lack of
publication in the Official Gazette.
Social Security Commission ruled that Circular No. 22 is
not a rule or regulation that needed the approval of the
President and publication in the Official Gazette to be
effective, but a mere administrative interpretation of the
statute, a mere statement of general policy or opinion as to
how the law should be construed. Hence, this appeal to the
Supreme Court.
IssueWhether or not Circular No. 22 is rule and regulation
as contemplated in Section 4(a) of Republic Act 1161
empowering the Social Security Commission “to adopt,
amend and repeal subject to the approval of the President
such rules and regulations as may be necessary to carry
out the provisions and purposes of this Act”
Held: No. The Supreme Court finds that Circular No. 22
purports merely to advise employers-members of the
System of what, in the light of the amendment of the law,
they should include in determining the monthly
compensation of their employees upon which the social
security contributions should be based, and that such
circular did not require presidential approval and
publication in the Official Gazette for its effectivity.
There can be no doubt that there is a distinction between
an administrative rule or regulation and an administrative
interpretation of a law whose enforcement is entrusted to
an administrative body. When an administrative agency
promulgates rules and regulations, it "makes" a new law
with the force and effect of a valid law, while when it
renders an opinion or gives a statement of policy, it merely
interprets a pre-existing law (Parker, Administrative Law, p.
197; Davis, Administrative Law, p. 194). 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 often times 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. (Davis, op. cit., p.
194.) .
Republic Act No. 1161 before its amendment defines
compensation as: All remuneration for employment include
the cash value of any remuneration paid in any medium
other than cash. Except:
that part of the remuneration in excess of P500 received
during the month;
bonuses, allowances or overtime pay; and
dismissal and all other payments which the employer may
make, although not legally required to do so.
Republic Act No. 1792 changed the definition of
“compensation” to: (f) Compensation — All remuneration
for employment include the cash value of any remuneration
paid in any medium other than cash except that part of the
remuneration in excess of P500.00 rceived during the
month.
Circular No. 22 was issued to advise the employers and
employees concerned with the interpretation of the law as
amended which was Social Security Commission’s duty to
enforce. The Commission simply stated their opinion as to
how the law should be construed and that such circular did
not require presidential approval and publication in the
Official Gazette for its effectivity. Whereas if it renders an
opinion or a statement of policy, it merely interprets a pre-
existing law. Administrative interpretation of law is at best
merely advisory for it is the courts that finally determine
what the law means.
IN VIEW OF THE FOREGOING, the Resolution appealed
from is hereby affirmed, with costs against appellant. So
ordered.
BACHI
PERALTA vs. CIVIL SERVICE COMMISSION
212 SCRA 425, G.R. No. 95832, August 10, 1992
Facts:
Petitioner was appointed Trade-Specialist II on 25
September 1989 in the Department of Trade and Industry
(DTI). His appointment was classified as
"Reinstatement/Permanent". Petitioner received his initial
salary, covering the period from September to October
1989. Since he had no accumulated leave credits, DTI
deducted from his salary the amount corresponding to his
absences during the covered period, inclusive of Saturdays
and Sundays.
Petitioner sent a memorandum to Amando T. Alvis (Chief,
General Administrative Service) inquiring as to the law on
salary deductions, if the employee has no leave credits.
Amando T. Alvis answered petitioner's query in a
memorandum citing Chapter 5.49 of the Handbook of
Information on the Philippine Civil Service which states that
"when an employee is on leave without pay on a day
before or on a day immediately preceding a Saturday,
Sunday or Holiday, such Saturday, Sunday, or Holiday
shall also be without pay.
Petitioner sent a letter addressed to CSC Chairman
Patricia Sto. Tomas raising the question: 'Is an employee
who was on leave of absence without pay on a day before
or on a day time immediately preceding a Saturday,
Sunday or Holiday, also considered on leave of absence
without pay on such Saturday, Sunday or Holiday?
Petitioner: he cannot be deprived of his pay or salary
corresponding to the intervening Saturdays, Sundays or
Holidays (in the factual situation posed), and that the
withholding (or deduction) of the same is tantamount to a
deprivation of property without due process of law.
Respondent Commission promulgated Resolution No. 90-
497, ruling that the action of the DTI in deducting from the
salary of petitioner, a part thereof corresponding to six (6)
days is in order.
Issue:
Whether or not the CSC resolution is valid.
Held:
No. The court ruled that the construction by the respondent
Commission of R.A. 2625 is not in accordance with the
legislative intent. R.A. 2625 specifically provides that
government employees are entitled to fifteen (15) days’
vacation leave of absence with full pay and fifteen (15)
days sick leave with full pay, exclusive of Saturdays,
Sundays and Holidays in both cases. Thus, the law speaks
of the granting of a right and the law does not provide for a
distinction between those who have accumulated leave
credits and those who have exhausted their leave credits in
order to enjoy such right. The fact remains that government
employees, whether or not they have accumulated leave
credits, are not required by law to work on Saturdays,
Sundays and Holidays and thus they cannot be declared
absent on such non-working days. They cannot be or are
not considered absent on non-working days; they cannot
and should not be deprived of their salary corresponding to
said non-working days just because they were absent
without pay on the day immediately prior to, or after said
non-working days. A different rule would constitute a
deprivation of property without due process.
Furthermore, before their amendment by R.A. 2625,
Sections 284 and 285-A of the Revised Administrative
Code applied to all government employee without any
distinction. It follows that the effect of the amendment
similarly applies to all employees enumerated in Sections
284 and 285-A, whether or not they have accumulated
leave credits.
The general rule vis-a-vis legislation is that an
unconstitutional act is not a law; it confers no rights; it
imposes no duties; it affords no protection; it creates no
office; it is in legal contemplation as inoperative as though
it had never been passed.
“When an administrative or executive agency renders an
opinion, or issues a statement of policy, it merely interprets
a pre-existing law; and the administrative interpretation of
the law is at best advisory, for it is the courts that finally
determine what the law means.”
AILA
ANNIE SAND, LYDIA VALDES, LUZ SABAS, JOSEFINA
A. MENDOZA and ROSARIO A. ORDIZ, in their capacity
as Chairman and Members of the Board of Examiners
for Nurses, petitioners, vs. ABAD SANTOS
EDUCATIONAL INSTITUTION, SCHOOL OF NURSING
and HON. WALFRIDO DE LOS ANGELES, Judge of the
Court of First Instance of Rizal, Branch IV, Quezon
City, respondents / G.R. No. L-30918 July 18, 1974 /
TEEHANKEE, J.:
Facts:
Abad Santos School of Nursing filed an action for
declaratory relief against petitioners seeking a declaration
that "Article VIII, Rule 69, section 5 of the rules and
regulations of petitioner board is void, illegal and ineffective
and without force of law and that respondent school is not
required to comply with the terms and provisions thereof.
CFI rendered its decision holding that petitioner
board has "the full authority under section 9, Republic Act
No. 877, as amended to promulgate said rules and
regulations," particularly the cited regulation providing for
periodic inspection of nursing schools, the board "may
apply only the same to new schools or colleges
established or opened after the promulgation of said
rules and regulations" and "conversely" may not be
given "retroactive effect" and "cannot be enforced on
schools and colleges already duly accredited by the
Bureau of Private Schools" prior to the promulgation
by the board of the 1967 rules and regulations. Thus
"paragraph 5, Rule 69, Art. VIII of the Rules and
Regulations promulgated by the respondents members of
the Board of Examiners for Nurses is void, illegal and of no
effect against herein petitioner and its graduates."
Hence, the present petition seeking a reversal of
respondent court's judgment and for a declaration of
validity of the disputed rule.
Issue:
Whether Section 5, Rule 69, Article VIII of the Rules and
Regulations is valid.
Ruling:
VALID. The said Rule is germane to the purpose of the
law.
The Philippine Nursing Act, Republic Act No. 877 as
amended by Republic Act No. 4704 expressly empowers in
section 9 thereof the petitioner board "subject to the
approval of the President of the Philippines to promulgate
such rules and regularly as may be necessary to carry out
the provisions of such Act." Also, Section 3 of the said Act
specifically empowers petitioner board to inspect nursing
colleges and schools and vests it with authority "to issue,
suspend, revoke, or reissue certificates of registration for
practice of nursing.
Respondent court's view that petitioner board's power of
periodic inspection would apply only to new nursing
schools opened after the promulgation of the rule and not
to existing schools already accredited by the Bureau of
Private Schools would lead to the absurd result whereby
petitioner board would be utterly helpless with reference to
existing schools and powerless to require them
to maintain the minimum standards under pain of
disqualifying their deficient graduates from the nurses'
examination. Thus the Rule will be applied retroactively.
Board of Nursing’s rule providing for periodic inspection of
nursing schools and barring from admission to the nurses’
examination graduates of schools found to be sub standard
during the period the deficiency existed is valid exercise of
police power. It cannot be gainsaid that the cited regulation
is one of the many of a proper exercise of police power by
the State which is called to upon to it and assure in the
interest of public health and welfare that colleges and
schools of nursing are properly conducted and maintained
in accordance with the standards fixed; that they do not
become sub-standard or fall below the standards; and that
only qualified graduates are allowed to take the State
examination and thereafter license to practice the noble
profession of nursing.
AMERICAN TOBACCO COMPANY, CARNATION
COMPANY, CURTISS CANDY COMPANY, CUDAHY
PACKING CO., CLUETT, PEABODY & CO., INC.,
CANNONMILLS COMPANY, FORMICA CORPORATION,
GENERALMOTORS CORPORATION, INTERNATIONAL
LATEX CORPORATION, KAYSER-ROTH
CORPORATION, M and R DIETETIC LABORATORIES,
INC., OLIN MATHIESON, PARFUM CIRO, INC.,
PROCTER and GAMBLE COMPANY, PROCTER and
GAMBLE PHILIPPINE MANUFACTURING
CORPORATION, PARFUMS PORVIL DENTRIFICES DU
DOCTEUR PIERRE REUNIS SOCIETE ANONYME, R.J.
REYNOLDS TOBACCO COMPANY, SWIFT AND
COMPANY, STERLING PRODUCTS INTERNATIONAL,
THE CLOROX COMPANY, WARNER LAMBERT
PHARMACEUTICALS COMPANY and ZENITH RADIO
CORPORATION, petitioners, vs.THE DIRECTOR OF
PATENTS, ATTYS. AMANDO L. MARQUEZ, TEOFILO P.
VELASCO, RUSTICO A. CASIA and HECTOR D.
BUENALUZ, respondents. / G.R. No. L-26803 October
14, 1975 / ANTONIO, J.:
Facts:
Petitioners challenge the validity of Rule 168 of the
"Revised Rules of Practice before the Philippine Patent
Office in Trademark Cases" authorizing the Director of
Patents to designate any ranking official of said office to
hear "inter partes" proceedings. Said Rule likewise
provides that "all judgments determining the merits of the
case shall be personally and directly prepared by the
Director and signed by him." Petitioners are parties in the
opposition, interference and cancellation proceedings in
said Office.
Isuue:
Whether Rule 168 of the Revised Rules of Practice before
the Philippine Patent Office in Trademark Cases is valid.
Ruling:
VALID. The rule that requires an administrative officer to
exercise his own judgment and discretion does not
preclude him from utilizing, as a matter of practical
administrative procedure, the aid of subordinates to
investigate and report to him the facts, on the basis of
which the officer makes his decisions. 14 It is sufficient that
the judgment and discretion finally exercised are those of
the officer authorized by law. Neither does due process of
law nor the requirements of fair hearing require that the
actual taking of testimony be before the same officer who
will make the decision in the case. As long as a party is not
deprived of his right to present his own case and submit
evidence in support thereof, and the decision is supported
by the evidence in the record, there is no question that the
requirements of due process and fair trial are fully
met. 15 In short, there is no abnegation of responsibility on
the part of the officer concerned as the actual decision
remains with and is made by said officer. 16 It is, however,
required that to "give the substance of a hearing, which is
for the purpose of making determinations upon evidence
the officer who makes the determinations must consider
and appraise the evidence which justifies them." 17
In the case at bar, while the hearing officer may make
preliminary rulings on the myriad of questions raised at the
hearings of these cases, the ultimate decision on the
merits of all the issues and questions involved is left to the
Director of Patents. Apart from the circumstance that the
point involved is procedural and not jurisdictional,
petitioners have not shown in what manner they have been
prejudiced by the proceedings.
Under the Trade-mark Law (Republic Act No. 166 ), the
Director of Patents is vested with jurisdiction over the
above-mentioned cases. Likewise, the Rules of Practice in
Trade-mark Cases contains a similar provision, thus:
168. Original Jurisdiction over inter partes
proceedings. — The Director of Patents
shall have original jurisdiction over inter
partes proceedings, [In the event that the
Patent Office is provided with an Examiner
of Interferences, this Examiner shall then
have the original jurisdiction over these
cases, instead of the Director. In the case
that the Examiner of Interferences takes
over the original jurisdiction over inter
partes proceedings, his final decisions
shall be subject to appeal to the Director of
Patents within three months of the receipt
of notice decision. Such appeals shall be
governed by Sections 2, 3, 4, 6, 7, 8,10,
11, 12, 13, 14, 15, and 22 of Rule 41 of the
Rules of Court insofar as said sections are
applicable and appropriate, and the appeal
fee shall be [P25.00.] Such inter
partes proceedings in the Philippine Patent
Office under this Title shall be heard
before the Director of Patents, any hearing
officer, or any ranking official designated
by the Director, but all judgments
determining the merits of the case shall be
personally and directly prepared by the
Director and signed by him. (Emphasis
supplied.)
Under section 3 of RA 165, the Director of Patents is
"empowered to obtain the assistance of technical, scientific
or other qualified officers or employees of other
departments, bureaus, offices, agencies and
instrumentalities of the Government, including corporations
owned, controlled or operated by the Government, when
deemed necessary in the consideration of any matter
submitted to the Office relative to the enforcement of the
provisions" of said Act. Section 78 of the same Act also
empowers "the Director, subject to the approval of the
Department Head," to "promulgate the necessary rules and
regulations, not inconsistent with law, for the conduct of all
business in the Patent Office." The aforecited statutory
authority undoubtedly also applies to the administration
and enforcement of the Trade-mark Law (Republic Act No.
166).
It has been held that power-conferred upon an
administrative agency to which the administration of a
statute is entrusted to issue such regulations and orders as
may be deemed necessary or proper in order to carry out
its purposes and provisions maybe an adequate source of
authority to delegate a particular function, unless by
express provisions of the Act or by implication it has been
withheld.4 There is no provision either in Republic Act No.
165 or 166 negativing the existence of such authority, so
far as the designation of hearing examiners is concerned.
Nor can the absence of such authority be fairly inferred
from contemporaneous and consistent Executive
interpretation of the Act.
The nature of the power and authority entrusted to The
Director of Patents suggests that the aforecited laws
(Republic Act No. 166, in relation to Republic Act No. 165)
should be construed so as to give the aforesaid official the
administrative flexibility necessary for the prompt and
expeditious discharge of his duties in the administration of
said laws. As such officer, he is required, among others, to
determine the question of priority in patent interference
proceedings,5 decide applications for reinstatement of a
lapsed patent,6 cancellations of patents under Republic Act
No. 165,7 inter partes proceedings such as
oppositions,8 claims of interference, 9 cancellation cases
under the Trade-mark Law 10and other matters in
connection with the enforcement of the aforesaid laws. It
could hardly be expected, in view of the magnitude of his
responsibility, to require him to hear personally each and
every case pending in his Office. This would leave him little
time to attend to his other duties. 11 For him to do so and at
the same time attend personally to the discharge of every
other duty or responsibility imposed upon his Office by law
would not further the development of orderly and
responsible administration. The reduction of existing delays
in regulating agencies requires the elimination of needless
work at top levels. Unnecessary and unimportant details
often occupy far too much of the time and energy of the
heads of these agencies and prevent full and expeditious
consideration of the more important issues. the remedy is a
far wider range of delegations to subordinate officers. This
sub-delegation of power has been justified by "sound
principles of organization" which demand that "those at the
top be able to concentrate their attention upon the larger
and more important questions of policy and practice, and
their time be freed, so far as possible, from the
consideration of the smaller and far less important matters
of detail." 12
Thus, it is well-settled that while the power to decide
resides solely in the administrative agency vested by law,
this does not preclude a delegation of the power to hold a
hearing on the basis of which the decision of the
administrative agency will be
made. 13
GANI
Rabor vs Civil Service Commission
244 SCRA 614 (1995)
Facts:
DionisioRabor is a Utility worker in the Office of the
Mayor in Davao city. Since he already reached the age of
68, he is now advised to apply for retirement but then he
wishes for extension so he can avail the benefit s of the
retirement laws given to the employees of the Government
by GSIS, in which one of the requirements is that you have
served for 15 years in the government; by that time, it is
just his 13th year in the government that’s why he
requested for extension of service and he also presents a
GSIS certificate witha notation to the effect that his service
is extended for him to complete the 15-
years requirement for retirement. The government of
Davao City wrote to the Regional Director of the Civil
Service Commission, Region XI (CSRO-XI) and Director
Cawad states that Rabor’s request is contrary to
Memorandum Circular No. 65 for it is stated to such
memorandum that employees who have reached the
compulsory retirement age of 65 shall not be retained and,
only in meritorious cases, may be extend only for 6
months. Mayor Duterte then informed Rabor about the
decision of CSRO-XI and advised him to stop reporting
starting August 16, 1991.
Then, he sent a letter to CSRO-XI asking for
extension and asking for another 2 years so he could avail
the benefits given to government employees. His request
was denied. Rabor next wrote to the Office of the President
seeking for reconsideration of CSRO-XI. The Office of the
President referred it to the Civil Service Commission but
again, CSC dismissed his appeal and affirmed decision of
CSRO-XI and stated CSC M.C No 27, s. 1990:
1. Any request for extension of service of
compulsory retirees to complete the fifteen
years service requirement for retirement shall
be allowed only to permanent appointees in
the career service who are regular members of
the Government Service Insurance System
(GSIS) and shall be granted for a period of not
exceeding one (1) year.
Plus the fact that as early as October 1988 Rabor already
reached the retirement age.
On October 28, 1992, invoking the decision in
Cena v. Civil Service Commission, the petitioner sought
for reconsideration and asked for reinstatement with back
salaries and benefits. And again, his reconsideration was
denied. Then he filed a petition to the Supreme Court
appealing from CSC. Rabor contends that his case
squarely falls within the ruling in the case of Cena.
Opposing, CSC stated that it is different for the court gave
the discretion to the Land Registration Authority.
CENA’s case
Gaudencio Cena was appointed Registrar
of the Register of Deeds of Malabon,
Metropolitan Manila. Before reaching his
65th birthday, for his total years in the
service will just be 11 years and 9 months
bythen, Cena requested the Secretary of
Justice, through the Administrator of the
Land Registration Authority ("LRA") that he
be allowed to extend his service to
complete the fifteen-year service
requirement to enable him to retire with the
full benefit of an Old-Age Pension under
Section 11 (b) of P.D. No. 1146. If Cena's
request were granted, he would complete
fifteen (15) years of government service on
15 April 1994, at the age of sixty-eight (68)
years. CSC affirmed his request but for 1
year only so he filed an appeal to the SC
and the SC granted his request. Thus the
court concluded:
Accordingly, the Petition is GRANTED.
The Land Registration Authority (LRA) and
Department of Justice has the discretion to
allow petitioner Gaudencio Cena to extend
his 11 years, 9 months and 6 days of
government to complete the fifteen-year
service so that he may retire with full
benefits under Section 11, paragraph (b) of
P.D. 1146
The Court reached the above conclusion
primarily on the basis of the "plain and
ordinary meaning" of Section 11 (b) of P.D.
No. 1146. Section 11 may be quoted in its
entirety:
Sec. 11 Conditions for Old-Age Pension.
— (a) Old-Age Pension shall be paid to a
member who
(1) has at least fifteen (15) years of
service;
(2) is at least sixty (60) years of age; and
(3) is separated from the service.
(b) unless the service is extended by
appropriate authorities, retirement shall be
compulsory for an employee at sixty-five-
(65) years of age with at least fifteen (15)
years of service; Provided, that if he has
less than fifteen (15) years of service, he
shall he allowed to continue in the service
to completed the fifteen (15) years.
While Section 11 (b) appeared cast in
verbally unqualified terms, there were (and
still are) two (2) administrative issuances
which prescribe limitations on the
extension of service that may be granted
to an employee who has reached sixty-five
(65) years of age; the Civil Service
Commission Circular No. 27, Series of
1990 and Memorandum Circular No. 65 of
the Office of the President. The former
limits the extension for only three years
and the latter, only on meritorious reasons,
limits up to 6 months only. And
Medialdea, J. resolved the challenges
posed by the above two (2) administrative
regulations by, firstly, considering
as invalid Civil Service Memorandum No.
27 and, secondly, by interpreting the Office
of the President's Memorandum Circular
No. 65 as inapplicable to the case of
Gaudencio T. Cena. Medialdea, J wrote:
The Civil Service Commission
Memorandum Circular No. 27 being in the
nature of an administrative regulation,
must be governed by the principle that
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 . . . The rule on limiting
to one the year the extension of service of
an employee who has reached the
compulsory retirement age of sixty-five
(65) years, but has less than fifteen (15)
years of service under Civil Service
Memorandum Circular No. 27, S. 1990,
cannot likewise be accorded validity
because it has no relationship or
connection with any provision of P.D. 1146
supposed to be carried into effect. The rule
was an addition to or extension of the law,
not merely a mode of carrying it into effect.
The Civil Service Commission has no
power to supply perceived omissions in
P.D. 1146.
ISSUE:
WON the ruling, regarding the validity of CSC M.C No. 27,
in the case of Cena can be use as basis for granting
Rabor’s request.
HELD:
NO.Clearly, therefore, Cena when it required a
considerably higher degree of detail in the statute to be
implemented, went against prevailing doctrine. It seems
clear that if the governing or enabling statute is quite
detailed and specific to begin with, there would be very
little need (or occasion) for implementing administrative
regulations. It is, however, precisely the inability of
legislative bodies to anticipate all (or many) possible
detailed situations in respect of any relatively complex
subject matter, that makes subordinate, delegated rule-
making by administrative agencies so important and
unavoidable. All that may be reasonably; demanded is a
showing that the delegated legislation consisting of
administrative regulations are germane to the general
purposes projected by the governing or enabling statute.
This is the test that is appropriately applied in respect of
Civil Service Memorandum Circular No. 27, Series of 1990,
and to this test we now turn.
Like what Mr. Justice J.B.L. Reyes said in the
ruling of People v. Exconde case:
It is well established 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 and 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 provide for the multifarious
and complex situations that may be met in
carrying the law into effect. All that is
required is that the regulation should be
germane to the objects and purposes of
the law; that the regulation be not in
contradiction with it, but conform to
standards that the law prescribes
Plus, not only P.D. No. 1146 is the statute that should
appropriately be examined is the present Civil Service
law there is Administrative Code of 1987 which provides
the Commission was acting as "the central personnel
agency of the government empowered to promulgate
policies, standards and guidelines for efficient, responsive
and effective personnel administration in the government."
Another thing, the SC find it very difficult to
suppose that the limitation of permissible extensions of
service after an employee has reached sixty-five (65) years
of age has no reasonable relationship or is not germane to
the foregoing provisions of the present Civil Service Law.
The physiological and psychological processes associated
with ageing in human beings are in fact related to the
efficiency and quality of the service that may be expected
from individual persons. The policy considerations which
guided the Civil Service Commission in limiting the
maximum extension of service allowable for compulsory
retirees, were summarized by Griño-Aquino, J. in her
dissenting opinion in Cena:
Worth pondering also are the points raised
by the Civil Service Commission that
extending the service of compulsory
retirees for longer than one (1) year would:
(1) give a premium to late-comers in the
government service and in effect
discriminate against those who enter the
service at a younger age; (2) delay the
promotion of the latter and of next-in-rank
employees; and (3) prejudice the chances
for employment of qualified young civil
service applicants who have already
passed the various government
examination but must wait for jobs to be
vacated by "extendees" who have long
passed the mandatory retirement age but
are enjoying extension of their government
service to complete 15 years so they may
qualify for old-age pension.
SC’s conclusion is that the doctrine of Cena should be and
is hereby modified to this extent: that Civil Service
Memorandum Circular No. 27, Series of 1990, more
specifically paragraph (1) thereof, is hereby declared valid
and effective. Section 11 (b) of P.D. No. 1146 must,
accordingly, be read together with Memorandum Circular
No. 27. We reiterate, however, the holding in Cena that the
head of the government agency concerned is vested with
discretionary authority to allow or disallow extension of the
service of an official or employee who has reached sixty-
five (65) years of age without completing fifteen (15) years
of government service; this discretion is, nevertheless, to
be exercised conformably with the provisions of Civil
Service Memorandum Circular No. 27, Series of 1990.
The Conference Maritime Manning Agencies, Inc. vs.
POEA
243 SCRA 666 (1995)
Conference of Maritime Agencies, Inc. vs. POEA
Facts:
Petitioner Conference of Maritime Manning Agencies,
Inc., an incorporated association of licensed Filipino
manning agencies, and its co-petitioners, all licensed
manning agencies which hire and recruit Filipino seamen
for and in behalf of their respective foreign ship-owner-
principals, urge us to annul Resolution No. 01, series of
1994, of the Governing Board" of the POEA and POEA
Memorandum Circular No. 05.
Petitioners contend that POEA does not have the
power and authority to fix and promulgate rates affecting
death and workmen's compensation of Filipino seamen
working in ocean-going vessels; only Congress can.
Governing Board Resolution No. 1: the POEA
Governing Board resolves to amend and increase the
compensation and other benefits as specified under Part II,
Section. C, paragraph 1 and Section L, paragraphs 1 and 2
of the POEA Standard Employment Contract for Seafarers
Issue/Held: WON the POEA can promulgate rules by
virtue of delegation of legislative power. Yes.
Ratio:
The constitutional challenge of the rule-making power
of the POEA-based on impermissible delegation of
legislative power had been, as correctly contented by the
public respondents, brushed aside by this Court in Eastern
Shipping Lines, Inc. vs. POEA.
o The governing Board of the Administration (POEA)
shall promulgate the necessary rules and
regulations to govern the exercise of the
adjudicatory functions of the Administration
(POEA).
o To many of the problems attendant upon present-
day undertakings, the legislature may not have the
competence to provide the required direct and
efficacious not to say, specific solutions. These
solutions may, however, be expected from its
delegates, who are supposed to be experts in the
particular fields assigned to them.
While the making of laws is a non-delegable power that
pertains exclusively to Congress, nevertheless, the latter
may constitutionally delegate the authority to promulgate
rules and regulations to implement a given legislation and
effectuate its policies, for the reason that the legislature
finds it impracticable, if not impossible, to anticipate
situations that may be met in carrying the law into effect.
All that is required is that the regulation should be germane
to the objects and purposes of the law; that the regulation
be not in contradiction to but in conformity with the
standards prescribed by the law. (Principle of Subordinate
Legislation)
That the challenged resolution and memorandum
circular, which merely further amended the previous
Memorandum Circular No. 02, strictly conform to the
sufficient and valid standard of "fair and equitable
employment practices" prescribed in E.O. No. 797 can no
longer be disputed.
RON
Realty Exchange Venture Corp. vs. Sendino | Kapunan
(1994)
FACTS
- Private respondent Sendino entered into a reservation
agreement with Realty Exchange Venture, Inc. (REVI) for a
house and lot in a subdivision. She paid a partial
reservation fee and paid the full down payment.
- However, for alleged non-compliance with the
requirement of submission of the appropriate documents,
REVI, informed respondent of the cancellation of the
contract.
- Sendino filed a complaint for Specific Performance
against REVI with the Adjudication and Legal Affairs
(OAALA) of the Housing and Land Use Regulatory Board
(HLURB).
- The HLURB, whose authority to hear and decide the
complaint was challenged by REVI, rendered its judgment
in favor of private respondent and ordered REVI to
continue with the sale of the house and lot.
- An appeal from this decision was taken to the HLURB
OAALA Arbiter, which affirmed the Board's decision. The
decision of the OAALA Arbiter was appealed to the Office
of the President, herein public respondent. Appeal
dismissed.
ISSUE/S & HELD:
WON THE HLURB HAS QUASI-JUDICIAL FUNCTIONS,
NOTWITHSTANDING ABSENCE OF EXPRESS GRANT
BY EXECUTIVE ORDER NO. 90 WHICH CREATED IT.
YES.
RATIONALE
- While E.O. 85 abolished the Ministry of Human
Settlements (MHS), it is patently clear from a reading of its
provisions that the said executive order did not abolish the
Human Settlements Regulatory Commission (HSRC)
which continued to exercise its powers and functions. In
spite of the Aquino Government's stated intention of
eradicating what it considered the vestiges of the previous
regime, it was not its intention to create a vacuum by
abolishing those juridical agencies which performed vital
administrative functions.
- The President subsequently issued Executive Order No.
90, series of 1986, recognizing the Human Settlements
Regulatory Commission (renamed the HLURB) as one of
the principal housing agencies of the government.
- Prior to this, Executive Order No. 648 in 1981 transferred
all the functions of the National Housing Authority to the
Human Settlements Regulatory Commission (HSRC)
consolidating all regulatory functions relating to land use
and housing development in a single entity.
- Being the sole regulatory body for housing and land
development, the renamed body, the HLURB, would have
been reduced to a functionally sterile entity if, as the
petitioner contends, it lacked the powers exercised by its
predecessor which included the power to settle disputes
concerning land use and housing development and
acquisition.
- Moreover, this Court, in United Housing Corporation vs.
Hon. Dayrit, has had the occasion to definitively rule that
the HLURB could exercise the same quantum of judicial or
quasi-judicial powers possessed by the HSRC under the
MHS in the exercise of its regulatory functions.
- Section 1 of PD 1344: the National Housing Authority
shall have exclusive jurisdiction to hear and decide cases
of the following nature: (c) Cases involving specific
performance of contractual and statutory obligations filed
by buyers of subdivision lot or condominium unit against
the owner, developer, dealer, broker or salesman.
- This is reinforced by section 8 of EO 648: Transfer of
Functions. — The Regulatory functions of the NHA are
hereby transferred to the Human Settlements Regulatory
Commission. . . . Among the regulatory functions are . . .
(11) Hear and decide cases of unsound real estate
business practices, claims involving refund filed against
project owners, developers, dealers, brokers, or salesmen
and cases of specific performance.
- There is no question that a statute may vest exclusive
original jurisdiction in an administrative agency over certain
disputes and controversies falling within the agency's
special expertise.
- In general, the quantum of judicial or quasi-judicial
powers which an administrative agency may exercise is
defined in the agency's enabling act.
- Going to petitioners' contention that the decision of the
OAALA should have been rendered by the Board of
Commissioners sitting en banc, instead of by a division of
three:
- Under Section 5 of E.O. 648 which defines the powers
and duties of the Commission, the Board is specifically
mandated to "(a)dopt rules of procedure for the conduct of
its business" and perform such functions necessary for the
effective accomplishment of (its) above mentioned
functions."
- Nothing in the provisions of either E.O. 90 or E.O. 648
denies or withholds the power or authority to delegate
adjudicatory functions to a division.
- We cannot see how the Board, for the purpose of
effectively carrying out its administrative responsibilities
and quasi-judicial powers as a regulatory body should be
denied the power, as a matter of practical administrative
procedure, to constitute its adjudicatory boards into various
divisions.
- After all, the power conferred upon an administrative
agency to issue rules and regulations necessary to carry
out its functions has been held "to be an adequate source
of authority to delegate a particular function, unless by
express provision of the Act or by implication it has been
withheld."
See PDF
RYAN Philracom was granted exclusive jurisdiction and
control over every aspect of the conduct of horse racing,
Dagan vs Phil. Racing Commission including the framing and scheduling of races, the
Facts: The controversy stemmed from a directive issued construction and safety of race tracks, and the security of
by the Philippine Racing Commission (Philracom) directing racing. P.D. No. 420 is already complete in itself.
the Manila Jockey Club, Inc. (MJCI) and Philippine Racing Section 9 of the law fixes the standards and
Club, Inc. (PRCI) to immediately come up with their limitations to which Philracom must conform in the
respective Clubs’ House Rule to address Equine Infectious performance of its functions, to wit:
Anemia (EIA) problem and to rid their facilities of horses a. To enforce all laws, decrees
infected with EIA. Said directive was issued pursuant to and executive orders relating to
Administrative Order by the Department of Agriculture horse-racing that are not
declaring it unlawful for any person, firm or corporation to expressly or implied repealed or
ship, drive, or transport horses from any locality or place modified by this Decree,
except when accompanied by a certificate issued by the including all such existing rules
authority of the Director of the Bureau of Animal Industry and regulations until otherwise
(BAI). In compliance with the directive, Manila Jockey Club modified or amended by the
and Phil Racing Club ordered the owners of racehorses Commission;
stable in their establishments to submit the horses to blood b. To prescribe additional rules
sampling and administration of the Coggins Test to and regulations not otherwise
determine whether they are afflicted with the EIA virus. inconsistent with this Decree;
Petitioners and racehorse owners refused to c. To register race horses, horse
comply with the directive. First, they alleged that there had owners or associations or
been no prior consultation with horse owners. Second, federations thereof, and to
they claimed that neither official guidelines nor regulations regulate the construction of race
had been issued relative to the taking of blood samples. tracks and to grant permit for the
And third, they asserted that no documented case of EIA holding of races;
had been presented to justify the undertaking. d. To issue, suspend or revoke
Despite resistance from petitioners, the blood permits and licenses and to
testing proceeded. The horses, whose owners refused to impose or collect fees for the
comply were banned from the races, were removed from issuance of such licenses and
the actual day of race, prohibited from renewing their permits to persons required to
licenses or evicted from their stables. obtain the same;
e. To review, modify, approve or
Issue: Whether or not the CA acted with grave abuse of disapprove the rules and
discretion in ruling in favor of compelling petitioners to regulations issued by any
subject their racehorses to blood testing. person or entity concerning the
conduct of horse races held by
Ruling: There was no grave abuse of discretion on the them;
part of Philracom in issuing the contested guidelines and f. To supervise all such race
on the part MJCI and PRCI in complying with Philracom’s meeting to assure integrity at all
directive. times. It can order the
The validity of an administrative issuance, such as suspension of any racing event
the assailed guidelines, hinges on compliance with the in case of violation of any law,
following requisites:1. Its promulgation must be ordinance or rules and
authorized by the legislature; regulations;
2. It must be promulgated in accordance with the g. To prohibit the use of improper
prescribed procedure; devices, drugs, stimulants or
3. It must be within the scope of the authority other means to enhance or
given by the legislature; diminish the speed of horse or
4. It must be reasonable materially harm their condition;
Philracom’s authority is drawn from P.D. No. 420. The h. To approve the annual budget
delegation made in the presidential decree is valid. of the omission and such
Philracom did not exceed its authority. And the issuances supplemental budgets as may
are fair and reasonable. be necessary;
The rule is that what has been delegated cannot i. To appoint all personnel,
be delegated, or as expressed in the Latin maxim: potestas including an Executive Director
delegate non delegare potest. This rule is based upon the of the Commission, as it may be
ethical principle that such delegated power constitutes not deem necessary in the exercise
only a right but a duty to be performed by the delegate by and performance of its powers
the instrumentality of his own judgment acting immediately and duties; and
upon the matter of legislation and not through the j. To enter into contracts
intervening mind of another. This rule however admits of involving obligations chargeable
recognized exceptions such as the grant of rule-making to or against the funds of the
power to administrative agencies. Commission.
However, in every case of permissible delegation, Clearly, there is a proper legislative delegation of
there must be a showing that the delegation itself is rule-making power to Philracom. Clearly too, for its part
valid. It is valid only if the law (a) is complete in itself, Philracom has exercised its rule-making power in a proper
setting forth therein the policy to be executed, carried out, and reasonable manner. More specifically, its discretion to
or implemented by the delegate; and (b) fixes a standard— rid the facilities of MJCI and PRCI of horses afflicted with
the limits of which are sufficiently determinate and EIA is aimed at preserving the security and integrity of
determinable—to which the delegate must conform in the horse races.
performance of his functions. A sufficient standard is one Petitioners also question the supposed delegation
which defines legislative policy, marks its limits, maps out by Philracom of its rule-making powers to MJCI and
its boundaries and specifies the public agency to apply it. PRCI. There is no delegation of power to speak of between
Philracom, as the delegator and MJCI and PRCI as
delegates. The Philracom directive is merely instructive in
character. Philracom had instructed PRCI and MJCI to
“immediately come up with Club’s House Rule to address
the problem and rid their facilities of horses infected with
EIA.” MJCI’s duty is not derived from the delegated
authority of Philracom but arises from the franchise granted
to them by Congress allowing MJCI “to do and carry out all
such acts, deeds and things as may be necessary to give
effect to the foregoing.”
While it is conceded that the guidelines were
issued a month after Philracom’s directive, this
circumstance does not render the directive nor the
guidelines void. The directive’s validity and effectivity are
not dependent on any supplemental guidelines. Philracom
has every right to issue directives to MJCI and PRCI with
respect to the conduct of horse racing, with or without
implementing guidelines.
As a rule, the issuance of rules and regulations in
the exercise of an administrative agency of its quasi-
legislative power does not require notice and hearing.
In Abella, Jr. v. Civil Service Commission, the Court ruled
that prior notice and hearing are not essential to the validity
of rules or regulations issued in the exercise of quasi-
legislative powers since there is no determination of past
events or facts that have to be established or ascertained.
The assailed guidelines prescribe the procedure for
monitoring and eradicating EIA. These guidelines are in
accord with Philracom’s mandate under the law to regulate
the conduct of horse racing in the country. Anent the fourth
requisite, the assailed guidelines do not appear to be
unreasonable or discriminatory. In fact, all horses stabled
at the MJCI and PRCI’s premises underwent the same
procedure. The guidelines implemented were undoubtedly
reasonable as they bear a reasonable relation to the
purpose sought to be accomplished, i.e., the complete
riddance of horses infected with EIA.
1. Dagan v. Philippine Racing Commission, G.R. No.
175220, February 12, 2009
Lesson: Requisites, explained.
SC’s words: The validity of an administrative issuance,
such as the assailed guidelines, hinges on compliance with
the following requisites:
1. Its promulgation must be authorized by the legislature;
2. It must be promulgated in accordance with the
prescribed procedure;
3. It must be within the scope of the authority given by
the legislature;
4. It must be reasonable.
All the prescribed requisites are met as regards the
questioned issuances. Philracom’s authority is drawn from
P.D. No. 420. The delegation made in the presidential
decree is valid. Philracom did not exceed its authority. And
the issuances are fair and reasonable. Xxx
P.D. No. 420 hurdles the tests of completeness and
standards sufficiency.
Philracom was created for the purpose of carrying out the
declared policy in Section 1 which is “to promote and direct
the accelerated development and continued growth of
horse racing not only in pursuance of the sports
development program but also in order to insure the full
exploitation of the sport as a source of revenue and
employment.” Furthermore, Philracom was granted
exclusive jurisdiction and control over every aspect of the
conduct of horse racing, including the framing and
scheduling of races, the construction and safety of race
tracks, and the security of racing. P.D. No. 420 is already
complete in itself.
Clearly, there is a proper legislative delegation of rule-
making power to Philracom. Clearly too, for its part
Philracom has exercised its rule-making power in a proper
and reasonable manner. More specifically, its discretion to
rid the facilities of MJCI and PRCI of horses afflicted with
EIA is aimed at preserving the security and integrity of
horse races.
Petitioners also question the supposed delegation by
Philracom of its rule-making powers to MJCI and PRCI.
There is no delegation of power to speak of between
Philracom, as the delegator and MJCI and PRCI as
delegates. The Philracom directive is merely instructive in
character. Philracom had instructed PRCI and MJCI to
“immediately come up with Club’s House Rule to address
the problem and rid their facilities of horses infected with
EIA.” PRCI and MJCI followed-up when they ordered the
racehorse owners to submit blood samples and subject
their race horses to blood testing. Compliance with the
Philracom’s directive is part of the mandate of PRCI and
MJCI under Sections 11 of R.A. No. 7953 and Sections 1
and 2 of 8407.
As correctly proferred by MJCI, its duty is not derived from
the delegated authority of Philracom but arises from the
franchise granted to them by Congress allowing MJCI “to
do and carry out all such acts, deeds and things as may be
necessary to give effect to the foregoing.” As justified by
PRCI, “obeying the terms of the franchise and abiding by
whatever rules enacted by Philracom is its duty.”
As to the second requisite, petitioners raise some
infirmities relating to Philracom’s guidelines. They question
the supposed belated issuance of the guidelines, that is,
only after the collection of blood samples for the Coggins
Test was ordered. While it is conceded that the guidelines
were issued a month after Philracom’s directive, this
circumstance does not render the directive nor the
guidelines void. The directive’s validity and effectivity are
not dependent on any supplemental guidelines. Philracom
has every right to issue directives to MJCI and PRCI with
respect to the conduct of horse racing, with or without
implementing guidelines.
On publication: Petitioners also argue that Philracom’s
guidelines have no force and effect for lack of publication
and failure to file copies with the University of the
Philippines (UP) Law Center as required by law.
As a rule, the issuance of rules and regulations in the
exercise of an administrative agency of its quasi-legislative
power does not require notice and hearing, In Abella, Jr. v.
Civil Service Commission, this Court had the occasion to
rule that prior notice and hearing are not essential to the
validity of rules or regulations issued in the exercise of
quasi-legislative powers since there is no determination of
past events or facts that have to be established or
ascertained.
The third requisite for the validity of an administrative
issuance is that it must be within the limits of the powers
granted to it. The administrative body may not make rules
and regulations which are inconsistent with the provisions
of the Constitution or a statute, particularly the statute it is
administering or which created it, or which are in
derogation of, or defeat, the purpose of a statute.
The assailed guidelines prescribe the procedure for
monitoring and eradicating EIA. These guidelines are in
accord with Philracom’s mandate under the law to regulate
the conduct of horse racing in the country.
Anent the fourth requisite, the assailed guidelines do not
appear to be unreasonable or discriminatory. In fact, all
horses stabled at the MJCI and PRCI’s premises
underwent the same procedure. The guidelines
implemented were undoubtedly reasonable as they bear a
reasonable relation to the purpose sought to be
accomplished, i.e., the complete riddance of horses
infected with EIA.
It also appears from the records that MJCI properly notified
the racehorse owners before the test was conducted.
Those who failed to comply were repeatedly warned of
certain consequences and sanctions.
Furthermore, extant from the records are circumstances
which allow respondents to determine from time to time the
eligibility of horses as race entries. The lease contract
executed between petitioner and MJC contains a proviso
reserving the right of the lessor, MJCI in this case, the right
to determine whether a particular horse is a qualified
horse. In addition, Philracom’s rules and regulations on
horse racing provide that horses must be free from any
contagious disease or illness in order to be eligible as race
entries.
All told, we find no grave abuse of discretion on the part of
Philracom in issuing the contested guidelines and on the
part MJCI and PRCI in complying with Philracom’s
directive.
ROMS
G.R. No. L-37869 February 17, 1933
PANAY AUTOBUS COMPANY, petitioner-appellant,
vs.
PHILIPPINE RAILWAY CO., respondent-appellee.
VICKERS, J.:
DOCTRINE: An administrative agency cannot delegate its
power to set rates unless it is specifically provided in a law.
When the administrative agency is given the power to set
rates, a company may only propose rates and such
proposal is still subject to the approval of said agency.
There are cases (as in vessels) when the company set
rates when the law is silent on the matter (the law only
gives the administrative agency the authority ot set max
rates). However legislature still has not authorized the
Public Service Commission to delegate the power to fix
rates to common carriers or other public services
FACTS: On April 8, 1932, R. R. Hancock, vice-president
and general manager of the Philippine Railway Co.(RESP),
filed with the Public Service Commission a petition to be
allowed to “alter the freight rates of the Philippine Railway
Company on the Cebu and Panay Divisions whenever in
our judgment we find it necessary in order to meet the
competition of road trucks and auto busses” in line with
their previous request to be allowed to “alter our passenger
rates at will”
According to them(RESP), they need to be able to adjust
and fix rates because freight, as well as passengers, is
handled by road trucks and auto busses without regard to
any regulation or law they run up and down the highways
and into station grounds bargaining for every piece of
freight and every passenger.
The changes are based primarily on the railway rates. The
trucks simply go to a shipper and ask that what the railway
charges, and then offer to haul the freight at a few
centavos less per bultoor ton.Because their rates are fixed
they are left with no chance to secure the freight and
Railway Company is placed at a great disadvantage in not
being able to bid for the business, and consequently loses
out whenever the road autos can charge a slightly lower
rate.
On June 28, 1932 the Panay Autobus Company filed its
opposition to the applications of the Philippine Railway Co.
on the following grounds:
1. That the opponent company operates a bus
service in the Island of Panay with the right and
privilege to transport passengers and freight at
schedule of rates fixed by this Honorable
Commission;
2. That the petition for flexible rates could not be
granted by this Honorable as it is against the
fundamental principles of public utility regulation;
3. That the granting of a flexible rate will work ruinous
competition with other common carriers in the
field"; and on the same date asked for a rehearing
on the ground that the decision was contrary to law
and the fundamental principles of public utility
regulation. The motion for a rehearing was denied
by the commission on July 20, 1932.
Hence, this petition.
ISSUE: Whether the Public Service Commission can
delegate to the Phil Railway Co. the power of altering its
freight rates
RULING: No. The Supreme Court ruled that the Public
Service Commission was not authorized by law to delegate
to the Philippine Railway Co. the power of altering its
freight rates whenever it should find it necessary to do so
in order to meet the competition of road trucks and
autobuses, or to change its freight rates at will, or to regard
its present rates as maximum rates, and to fix lower rates
whenever in the opinion of the Philippine Railway Co. it
would be to its advantage to do so because the legislature
has not authorized such act.
The rates of public services like the Philippine Railway Co.
have been approved or fixed by the Public Service
Commission and any change in such rates must be
authorized or approved by the Public Service Commission
after they have been shown to be just and reasonable.
Section 16 of the Public Service Commission prohibits any
public service from exacting any unjustly discriminatory
rate, clearly, the commission cannot determine in advance
whether or not the new rates of the Philippine
Railway Co, will be just and reasonable, because it does
not know what those rates will be since respondent
company can change the rates at will.
In the present case the Philippine Railway Co. in effect
asked for permission to change its freight rates at will. It
may change them every day or every hour, whenever it
deems it necessary to do so in order to meet competition
or whenever in its opinion it would be to its advantage.
Such a procedure would create a most unsatisfactory state
of affairs and largely defeat the purposes of the public
service law. RULING:
Decision in question as grants the application of the
Philippine Railway Co. in case No. 31724 to reduce its
rates at will to meet competition is reversed, with the costs
in favor of the appellant.
G.R. No. 115381 December 23, 1994
KILUSANG MAYO UNO LABOR CENTER, petitioner,
vs.
HON. JESUS B. GARCIA, JR., the LAND
TRANSPORTATION FRANCHISING AND REGULATORY
BOARD, and the PROVINCIAL BUS OPERATORS
ASSOCIATION OF THE PHILIPPINES, respondents.
FACTS:
In 1990, DOTC Sec. Oscar Orbos issued Memo Circular to
LTFRB Chair Remedios Fernando to allow provincial bus
to change passenger rates w/in a fare range of 15% above
or below the LTFRB official rate for a 1yr. period. This is in
line with the liberalization of regulation in the transport
sector which the government intends to implement and to
make progress towards greater reliance on free market
forces.
Fernando respectfully called attention of DOTC Sec. that
the Public Service Act requires publication and notice to
concerned parties and public hearing. In Dec. 1990,
Provincial Bus Operators Assoc. of the Phils. (PBOAP)
filed an application for across the board fare rate increase,
which was granted by LTFRB. In 1992, then DOTC Sec.
Garcia issued a memo to LTFRB suggesting a swift action
on adoption of procedures to implement the Department
Order & to lay down deregulation policies. Pursuant to
LTFRB Guideline, PBOAP, w/o benefit of public hearing
announced a 20% fare rate increase.
Petitioner Kilusang Mayo Uno (KMU) opposed the move
and filed a petition before LTFRB w/c was denied. Hence
the instant petition for certiorari w/ urgent prayer for a TRO,
w/c was readily granted by the Supreme Court.
ISSUE: Whether the authority granted by LTFB to
provincial buses to set a fare range above existing
authorized fare range is unconstitutional and invalid.
RULING: YES. The grant of power by LTFRB of its
delegated authority is unconstitutional. The doctrine of
Potestas delegate non delegari (what has been delegated
cannot be delegated) is applicable because a delegated
power constitutes not only a right but a duty to be
performed by the delegate thru instrumentality of his own
judgment. To delegate this power is a negation of the duty
in violation of the trust reposed in the delegate mandated
to discharge such duty. Also, to give provincial buses the
power to charge their fare rates will result to a chaotic state
of affairs ad this would leave the riding public at the mercy
of transport operators who can increase their rates
arbitrarily whenever it pleases or when they deem it
necessary.
VIGAN ELECTRIC LIGHT COMPANY, INC. vs. THE
PUBLIC SERVICE COMMISSION
G.R. No. L-19850 January 30, 1964
FACTS:
In an alleged letter-petition, petitioner was charged with
black market of electric meters and that its meters were
installed in bad faith to register excessive rates. Petitioner
received a communication from General Auditing Office
(GAO) that it will be audited. PSC issued subsequently a
subpoena duces tecum requiring petitioners to produce
before PSC, during a conference scheduled for April 10,
1962, certain book of accounts. Petitioner moved to quash
such subpoena. The conference was postponed twice until
it was finally cancelled. In May 1962, PSC issued an order,
which after finding that petitioner had an excess of
revenues by 18%, lowered the present meter rates of
petitioner. Hence, this petition for certiorari is instituted.
This case is an original action for certiorari to annul an
order of respondent Public Service Commission ordering
the reduction of rates of Vigan Electric Light Co. PSC
averred that Vigan Electric making a net operating profit in
excess of the allowable return of 12% on its invested
capital, and that it is in the public interest and in
consonance with Section 3 of Republic Act No. 3043 that
reduction of its rates to the extent of its excess revenue be
put into effect immediately.
Vigan Electric contended that the reduction of rate is
unconstitutional because it has been ordered without
notice and hearing, thus issued without due process of law.
In defense, PSC maintains that rate-fixing is a legislative
function; that legislative or rule-making powers may
constitutionally be exercised without previous notice of
hearing; and that the decision in Ang Tibay vs. Court of
Industrial Relations (69 Phil., 635)—in which we held that
such notice and hearing are essential to the validity of a
decision of the Public Service Commission—is not in point
because, unlike the order complained of—which
respondent claims to be legislative in nature—the Ang
Tibay case referred to a proceeding involving the exercise
of judicial functions.
ISSUE
Whether or not order of respondent Public Service
Commission ordering the reduction of rates of Vigan
Electric Light Co is valid.
HELD:
When the rules and/or rates laid down by an administrative
agency are meant to apply to all enterprises of a given kind
throughout the Philippines—they may partake of a
legislative character.
When the rules and/or rates laid down by an administrative
agency applies exclusively to a particular party, predicated
upon a finding of fact, based upon a report submitted by
the General Auditing Office, which fact is denied by said
party, it is held that in making said finding of fact said
agency performed a function partaking of a quasi-judicial
character, the valid exercise of which demands previous
notice and hearing.
Where the determination of the issue complained of
partakes of the nature of a quasi-judicial function of the
Public Service Commission and its order was issued
without previous notice and hearing of the party affected, it
is held that said order is null and void for violation of the
due process clause.
In support to its special defense, respondent PSC
maintains that rate-fixing is a legislative function; that
legislative or rule-making powers may constitutionally be
exercised without previous notice or hearing. Although the
rule-making power and even the power to fix rates—when
such rules and/or rates are meant to apply to all
enterprises of a given kind throughout the Philippines—
may partake of a legislative character, such is not the
nature of the order complained of. Indeed, the same
applies exclusively to petitioner herein. What is more, it is
predicated upon the finding of fact—based upon a report
submitted by the General Auditing Office—that petitioner is
making a profit of more than 12% of its invested capital,
which is denied by petitioner. Obviously, the latter is
entitled to cross-examine the maker of said report, and to
introduce evidence to disprove the contents thereof and/or
explain or complement the same, as well as to refute the
conclusion drawn therefrom by the respondent. In other
words, in making said finding of fact, respondent performed
a function partaking of a quasi-judicial character the valid
exercise of which demands previous notice and hearing.
Ynchausti Co v Public Utility Commission
FACTS:
Petitioner is a shipping company operating the steamship
Venus. By virtue of a decision by the Public Utility
Commissioner (PUC), said steamship was granted the
authority to be used in the Manila-Iloilo route. In operating
the Manila-Iloilo route, the steamship was given a schedule
of departure from Manila on Tuesdays at 5pm and
departure from Iloilo on Fridays at 5pm. Furthermore, the
vessel is not allowed to make any change in the schedule
nor withdraw or suspend operation except upon authority
of the Commission. On Nov 10 1920, petitioner applied for
a change in the schedule, i.e. departure from Manila on
Wednesday at 4 PM and Iloilo on Saturday.
Petitioner cites the ff. reasons:
 The vessel reaches Manila on Sundays when there
is no labor available
 The two working days between the trips left are not
enough for unloading and loading
“The control of the streets and highways is in the state in
trust for the public for whose use and convenience they are
dedicated as a means of transportation and
communication, thereby affording to the public the means
by which they may go from place to place, communicate
with each other and enjoy such other conveniences as the
various kinds of service provided by municipal public
utilities afford. As the streets and highways are dedicated
exclusively for the use and convenience of the public
generally, it follows that the legislature acting for the state,
or any municipal agency to which this power may have
been delegated, should make no grant which will materially
interfere with the uses for which the streets and highways
are dedicated."
“The rule of law is now universally accepted that when
private property is devoted to a public use it is subject to
public regulation and control.”
Munn v Illinois is also cited:
Property is clothed with a public interest and devoted to a
public use when used in a manner to make it of public
consequence, and to affect the entire community, so that
when one devotes property to a use in which the public has
an interest, he virtually grants to the public an interest in
that use, and submits it to public regulation and control for
the common good to the extent of the interest so granted.”

On Nov 18, petitioner applied for a permit to temporarily

use the proposed schedule pending the hearing. PUC
granted temporary permits. The proposed change met
various protests, leading the respondent to revoke the
temporary permits in a decision dated July 27, 1922. The
PUC cited its power to control the schedule of the
petitioner operating as a common carrier. Petitioner
brought the case via certiorari, as stipulated in §37 of Act
No. 2307 or the Public Utility Law.

The bone of contention is the validity of Sec. 19 of Act No.

2307, as amended by Acts No. 2313 and 2362, which
provides:
Nor shall any public carrier by land or water within the
Philippine Islands or any public utility, without the approval
of the Commission first had, make any permanent change
in its time tables and sailing schedules or in its service, or
fail to continue to call at any of its regular points or ports of
call.

ISSUES:

Whether or not Sec. 19 of Act No. 2307, as amended by

Acts No. 2313 and 2362 is valid.

HELD:

Petition denied.

YES. The language of the provision is clear. There is clear

legislative intent to grant the power to fix sailing schedules.
The waterways are analogous to the roads and highways
of the Philippine Islands.

The Commission is vested with a large, discretionary,

administrative power. The Court must not interfere when
the legal exercise of discretion is involved.

Through the public hearings, it was clear from evidence

gathered that the rescheduling will run against public
interest.

The Court cited Pond on Public Utilities