11 Pelaez VS Auditor General

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VOL. 15, DECEMBER 24, 1965 569

Pelaez vs. Auditor General
No. L-23825. December 24, 1965.
EMMANUEL PELAEZ, petitioner, vs. THE AUDITOR GENERAL, respondent.
Administrative law; Power of President to create municipalities.—Since January 1,

1960, when Republic Act No. 2370 became effective, barrios may "not be created or their
boundaries altered nor their names changed" except by Act of Congress or of the
corresponding" provincial board "upon petition of a majority of the voters in the areas
affected" and the "recommendation of the council of the municipality or municipalities in
which the proposed barrio is situated." This statutory denial of the presidential
authority to create a new barrio implies a negation of the bigger power to create
municipalities, each of which consists of several barrios.
Same; Same; Nature of power to create municipalities.—Whereas the power to f ix a
common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining
municipalities, may partake of an administrative nature—involving, as it does, the
adoption of means and ways to carry into effect the law creating" said municipalities—
the authority to create municipal corporations is essentially legislative in nature,
Same; Same; Same; Requisites for valid delegation of power.—Although Congress
may delegate to another branch of the government the power to fill in the details in the
execution, enforcement or administration of a law, it is essential that said
570
570 SUPREME COURT REPORTS

ANNOTATED
law: (a) be complete in itself, setting forth therein the policy to be executed, carried
out or implemented by the delegate; and (b) fix a standard—the limits of which are
sufficiently determinate or determinable—to which the delegate must conform in the
performance of his functions.
Same; Same; Same; Same; Requirements of due delegation of power not met by
Section 68 of Revised Administrative Code.—Section 68 of the Revised Administrative
Code, insofar as it grants to the President the power to create municipalities, does not
meet the well-settled requirements for a valid delegation of the power to fix the details
in the enforcement of a law. It does not enunciate any policy to be carried out or
implemented by the President.
www.central.com.ph/sfsreader/session/0000016ca8c376eee6896df6003600fb002c009e/t/?o=False 1/29
Same; Same; Same; Same; Same; Abdication of powers of Congress in favor of the

Executive.—If the validity of said delegation of powers, made in Section 68 of the
Revised Administrative Code, were upheld. there would no longer be any legal
impediment to a statutory grant of authority to the President to do anything which, in
his opinion, may be required by public welfare or public interest. Such grant of authority
would be a virtual abdication of the powers of Congress in favor of the Executive, and
would bring about a total collapse of the democratic system established by the
Constitution.
Same; Same; Same; Nature of powers dealt with in Section 68 of the Revised
Administrative Code.—It is true that in Calalang vs. WiIliams (70 Phil. 726) and
People vs. Rosenthal (68 Phil. 328), this Court had upheld "public welfare" and "public
interest," respectively, as sufficient standards for a valid delegation of the authority to
execute the law. But the doctrine laid down in these cases must be construed in relation
to the specific facts and Issues involved therein, outside of which they do not constitute
precedents and have no binding effect. Both cases involved grants
to administrative officers of powers related to the exercise of
their administrative functions, calling for the determination of questions of fact. Such is
not the nature of the powers dealt with in Section 68 of the Revised Administrative
Code. The creation of municipalities being essentially and eminently legislative in
character, the question whether or not "public interest" demands the exercise of such
power is not one of fact It is purely a legislative question (Carolina-Virginia Coastal
Highway vs.Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or a political
question (Udall vs. Severn, 79 P. 2d. 347-349).
Same; Same; Same; Same; Proof that issuance of Executive Orders in question
enteils exercise of purely legislative functions.—The fact that Executive Orders Nos. 93 to
121, 124 and 128 to 129, creating thirty-three municipalities, were issued
571
VOL. 15, DECEMBER 24, 1965 571
after the legislative bills for the creation of the said municipalities had failed to
pass Congress, is the best proof that their issuance entails the exercise of purely
legislative functions.
Same; Same; Same; Power of control over local governments.—The power of control
under Section 10 (a) of Article X of the Constitution implies the right of the President to
interfere in the exercise of such discretion as may be vested by law in the officers of the
executive departments, bureaus or offices of the national government, as well as to act
in lieu of such officers. This power is denied by the Constitution to the Executive, insofar
as local governments are concerned. With respect to the latter, the fundamental law
permits him to wield no more authority than that of checking whether said local
governments or the officers thereof perform their duties as provided by statutory
enactments. Hence, the President cannot interfere with local governments, so long as
the same or its officers act within the scope of their authority. He may not, for instance,
suspend an elective official of a regular municipality or take any disciplinary action
against him, 'except on appeal from a decision of the corresponding provincial board. If,
on the other hand, the President could create a municipality, he could, in effect, remove
any of' its officials, by creating a new municipality and including therein the barrio in
which the official concerned resides, for his office would thereby become vacant (Section
2179, Revised Administrative Code). Thus, by merely brandishing the power to create a
new municipality, without actually creating it, he could compel local officials to submit
to his dictation; thereby, in effect, exercising over them the power of control denied to
him by the Constitution.
Same; Same; Same; Same; Section 68, Revised Administrative Code repealed by the
Constitution.—The power of control of the President over executive departments,
bureaus or offices under Section 10(a) of Article X of the Constitution implies no more
than the authority to assume directly the functions thereof or to interfere in the exercise
of discretion by its officials. Manifestly, such control does not include the authority
either to abolish an executive department or bureau, or to create a new one. As a
consequence, the alleged power of the President to create municipal corporations would
necessarily connote the 'exercise by him of an authority even greater than that of
control which he has over the executive departments, bureaus or offices, Instead of
giving the President less power over local governments than that vested in him over the
executive departments, bureaus or offices, it reverses the process and does the exact
opposite, by conferring upon him more power over municipal corporations than that
which he has over executive departments, bureaus or offices. Even if, therefore, it did
not entail an undue delegation of legislative powers, as
572
572 SUPREME COURT REPORTS

ANNOTATED
it certainly does, said Section 68, as part of the Revised Administrative Code,
approved on March 10, 1967, must be deemed repealed by the subsequent adoption of
the Constitution in 1935, which is utterly incompatible and inconsistent with said
statutory enactment. (De los Santos vs. Mallare, 87 Phil. 289, 298299.)
Same; Same; Same; Municipal officials concerned duly represented in present case.
—lt is contended that not all the proper parties have been impleaded in the present
case. Suffice it to say that the records do not show, and the parties do not claim, that the
officers of any of the municipalities concerned have been appointed or elected and have
assumed office. At any rate, the Solicitor General, who has appeared on behalf of
respondent Auditor General, is the officer authorized by law "to act and represent the
Government of the Philippines, its offices and agents, in any official investigation,
proceeding or matter requiring the services of a lawyer" (Section 1661, Revised
Administrative Code), and, in connection with the creation of the municipalities
involved in this case, which involves a political, not proprietary function. said local
officials, if any, are mere agents or representatives of the national government. Their
interest in the case has accordingly been duly represented. (Mangubat vs. Osmeña, Jr.,
G.R. No. L-12837, April 30, 1959; City of Cebu vs. Judge Piccio, G.R. Nos L-
13012 & 14876. December 81, 1960.)
Same; Same; Action not premature.—The present action cannot be said to be
premature simply because respondent Auditor General has not yet acted on any of the
executive orders in question and has not intimated how he would act in connection
therewith. It is a matter of common knowledge that the President has for many years
issued executive orders creating municipal corporations and that the same have been
organized and are in actual operation, thus indicating without peradventure or doubt,
that the expenditures incidental thereto have been sanctioned, approved or passed in
audit by the General Auditing Office and its officials. There is no reason to believe that
respondent would adopt a different policy as regards the new municipalities involved in
this case, in the absence of an allegation to such effect, and none has been made by him.
ORIGINAL ACTION in the Supreme Court. Prohibition with preliminary

injunction.
The facts are stated in the opinion of the Court.
Zulueta, Gonzales, Paculdo & Associates for petitioner.
Solicitor General for respondent.
573
VOL. 15, DECEMBER 24, 1965 573

CONCEPCION, J.:
During the period from September 4 to October 29, 1064 the President of the
Philippines, purporting to act pursuant to Section 68 of the Revised
Administrative Code, issued Executive Orders Nos, 93 to 121, 124 and 1261
to
129; creating thirty-three (33) municipalities enumerated in the margin. Soon
after the date last mentioned, or on November 10, 1964 petitioner Emmanuel
Pelaez, as Vice President of the Philippines and as taxpayer, instituted the
present special civil action, for a writ of prohibition with preliminary
injunction, against the Auditor General, to restrain him, as well as his
representatives and agents from passing in audit any expenditure of public
funds in implementation of said executive orders and/or any disbursement by
,said municipalities.
Petitioner alleges that said executive orders are null and void, upon the
ground that said Section 68 has been impliedly repealed by Republic Act No.
2370 and constitutes an undue delegation of legislative power, Respondent
maintains the contrary view and avers that the present action
_______________
1
Executive Municipality Province Date Annex

Order Promulgated (Original
No. Petition)
93 Nilo Zamboanga Sept. 4, 1961 A
del Sur
94 Midsalip """ """ B
95 Pitogo """ """ C
96 Maruing """ """ D
97 Naga """ """ E "
99 Sebaste Antique "26" F "

No. Petition)
100 Molugan Misamis """ G "
Oriental
101 Malixi Surigao del "28" H "
Sur
102 Roxas Davao """ I "
103 Magsaysay " """ J "
104 Sta, Maria " """ K "
105 Badiangan Iloilo """ L "
106 Mina " Oct. 1 " M "
107 Andong Lanao del """ N "
Sur
108 Sultan """ """ O "
Alonto
109 Maguing """ """ P "
110 Dianaton """ """ Q "
111 Elpidio Mt. """ R "
Quirino Province
112 Bayog Zamboanga """ S "
del Sur
117 Gloria Oriental """ GG (Attached
Mindoro here to)
113 Maasin Cotabato """ T
114 Siayan Zamboanga """ LC
del Norte
115 Roxas """ """ V
116P Panganuran """ """ W
118 Kalilangan Bukidnon """ X
119 Lantapan " """ Y
120 Libertad Zamboanga """ Z
del Sur
121 General """ """ AA
Aguinaldo

No. Petition)
124 Rizal Surigao del "3" BB
Norte
126 Tigao Surigao del "23" CC
Sur
127 Tampakan Cotabato "26" DD
128 Maco Davao "29" EE
129 New Corella " """ FF
574
574 SUPREME COURT REPORTS ANNOTATED

is premature and that not all proper parties—referring: to the officials of the
new political subdivisions in question—have been impleaded, Subsequently,
the mayors of several municipalities adversely affected by the aforementioned
executive orders—because the latter have taken sway from the former
the barrios composing the new political subdivisions—intervened in the case.
Moreover, Attorneys Enrique M. Fernando and Emma Quisumbing-Fernando
were allowed to and did appear as amici curiae.
The third paragraph of Section 3 of Republic Act No. 2370, reads:
"Barrios shall not be created or their boundaries altered nor their names changed except
under the provisions of this Act or by Act of Congress."
Pursuant to the first two (2) paragraphs of the same Section 3:

"All barrios existing at the time of the passage of this Act shall come under the
provisions hereof.
"Upon petition of a majority of the voters in the areas affected, a new barrio may be
created or the name of an existing one may' be changed by the provincial board of the
province, upon recommendation of the council of the municipality or municipalities in
which the proposed barrio is stipulated. The recommendation of the municipal council
shall be embodied in a resolution approved by at least two-thirds of the entire
membership of the said council: Provided, however, That no new barrio may be created if
its population is less than five hundred persons."
Hence, since January 1, 1960, when Republic Act No. 2370 became effective,
barrios may "not be created or their boundaries altered nor their names
changed'' except by Act of Congress or of the corresponding provincial board
"upon petition of a majority of the voters in the areas affected" and the
"recommendation of the council of the municipality or municipalities in which
the proposed barrio is situated." Petitioner argues, accordingly: "If the
President, under this new law, cannot even create a barrio, can he create a
municipality which is composed of several barrios, since barrios are units of

municipalities?"
575
VOL. 16, DECEMBER 24, 1965 575

Respondent answers in the affirmative, upon the theory that a new

municipality can be created without creating new barrios, such as, by placing
old barrios under the jurisdiction of the new municipality. This theory
overlooks, however, the main import of the petitioner's argument, which is that
the statutory denial of the presidential authority to create a new barrio implies
a negation of the bigger power to create municipalities, each of which consists
of se everal barrios. The cogency and force of this argument is too obvious to be
denied or even questioned. Founded upon logic and experience, it cannot be
offset except by a clear manifestation of the intent of Congress to the contrary,
and no such manifestation, subsequent to the passage of Republic Act No. 2379,
has been brought to our attention.
Moreover, section 68 of the Administrative Code, upon which the disputed
executive orders are based, provides:
"The (Governor-General) President of the Philippines may by executive order define the
or boundaries, of any province, subprovince, municipality, [township] district, or other
political subdivision, and increase or diminish the territory comprised therein, may
divide any province into one or more subprovices, separate any political division other
than a province, into such portions as may be required, merge any of such subdivisions
or portions with another, name any new subdivision so created, may change the seat of
government within any subdivision to such place therein as the public welfare may
require: Provided, That the authorization of the (Philippine Legislature) Congress of the
Philippines shall first be obtained whenever the boundary of any province or
subprovince is to be defined or any province is to be divided into one or more
subprovinces. When action by the (Governor-General) President of the Philippines in
accordance herewith makes necessary a change of the territory under the jurisdiction of
any administrative officer or any judicial officer, the (Governor-General) President of
the Philippines, with the recommendation and advice of the head of the Department
having executive control of such officer, shall redistrict the territory of the several
officers affected and assign such officers to the new districts so formed.
"Upon the changing of the limits of political divisions in pursuance of the foregoing
authority, an equitable distribution of the funds and obligations of the divisions thereby
affected
576

shall be made in such manner as may be recommended by the (Insular Auditor) Auditor
General and approved by the (Governor-General) President of the Philippines,"
Respondent alleges that the power of the President to create municipalities

under this section does not amount to an undue delegation of legislative power,
relying upon Municipality of Cardona vs, Municipality of Binañgonan (86 Phil.
547), which, he claims, has settled it. Such claim is untenable, for said case
involved, not the creation of a new municipality, but a mere transfer of territory
—from an already existing municipality (Cardona) to another municipality
(Binañgonan), likewise, existing at the time of and prior to said transfer (See
Gov't of the P.I. ex rel. Municipality of Cardona vs. Municipality of Binañgonan
[34 Phil. 518, 519-520])—in consequence of the fixing and definition, pursuant
to Act. No. 1748, of the common bound aries of two municipalities.
It is obvious, however, that, whereas the power to fix such common
boundary, in order to avoid or settle conflicts of jurisdiction between adjoining
municipalities, may partake of an administrative nature—involving, as it does,
the adoption of means and ways to carry into effect the law creating said
municipalities—the authority to createmunicipal corporations is
essentially legislative in nature, In the language of other courts, it is "strictly
a legislativefunction" (State ex rel. Higgins vs. Aicklen, 119 S. 425, January 2,
1959) or "solely and exclusively the exercise of legislative power" (Udall vs.
Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme Court of Washington
has put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405,
409), "municipal
1a
corporations are purely the creatures of statutes."
Although Congress may delegate to another branch of the Government the
power to fill in the details in the execution, enforcement or administration of a
law, it is essential, to forestall a violation of the principle of separation of -
powers, that said law: (a) be complete in itself
______________
1a Except to local governments, to which legislative powers, with respect to matters of local
concern, may be delegated.
577
VOL. 15, DECEMBER 24, 1965 577

—it must set forth therein 2

the policy to be executed, carried out or
implemented by the delegate —and (b) fix a standard—the limits of which are
sufficiently determinate or determinable—to
2a
which the delegate must conform
in the performance of his functions. Indeed, without a statutory declaration of
policy, the delegate would in effect, make or formulate such policy, which is the
essence of every law; and without the aforementioned standard, there would be
no means to determine, with reasonable certainty,2bwhether the delegate has
acted within or beyond the scope of his authority. Hence, he could thereby
arrogate upon himself the power, not only to make the law, but, also—and this
is worse—to unmake it, by adopting measures inconsistent with the end sought
to be attained by the Act of Congress, thus nullifying the principle of separation
of powers and the system of checks and balances, and, consequently,
undermining the very foundation of our Republican. system.
Section 68 of the Revised Administrative Code does not meet these well
settled requirements for a valid delegation of the power to fix the details in the
enforcement of a law,
_____________
2 Calalang vs. Williams, 70 Phil. 726; Pangasinan Transp. Co. vs. Public Service Commission, 70
Phil. 221; Cruz vs. Youngberg, 56 Phil. 234; Alegre vs. Collector of Customs, 53 Phil. 394; Mulford
vs. Smith, 307 U.S. 38.
2a People vs. Lim Ho, L- 12091-2, January 28, 1960; People vs. Jolliffe. L-9553, May 13,
1959; People vs. Vera, 65 Phil. 56; U.S. vs. Ang Tang Ho, 43 Phil. 1; Compañia General de Tabacos
vs. Board of Public Utility, 34 Phil. 136; Mutual Film Co. vs. Industrial Commission, 236 U.S. 247,
59 L. Ed. 561; Mutual Film Corp. vs. Industrial Commission, 236 U.S. 230, 59 L. Ed. 552; Pamana
Refining Co. vs. Ryan, 293 U.S. 388, 79 L. Ed. 446; A.L.A. Schechter Poultry Corp. vs. U.S., 295
U.S. 495, 79 L Ed. 1570; U S. vs. Rock Royal Coop., 307 U.S. 533, 83 L. Ed. 1446; Bowles vs.
Willingham, 321 U.S. 503, 88 L. Ed. 892; Araneta vs. Gatmaitan, L-8895, April 30, 1957; Cervantes
vs. Auditor General, L-4043, May 26,1952; Phil. Association of Colleges vs. See. of Education, 51
Off. Gaz. 6230; People vs. Arnault, 48 Off. Gaz. 4805; Antamok Gold Fields vs. CIR, 68 Phil.
340; U.S. vs. Barrias, 11 Phil. 327; Yakus vs. White, 321 U.S. 414; Ammann vs. Mailonce. 332 U.S.
245
2b Vigan Electric Light Company, Inc. vs. The Public Service Commission, L-19850, January 30,
1964.
578

It does not enunciate any policy to be carried out or implemented by the

President Neither does it give a standard suf f iciently precise to avoid the evil
effects above referred to, In this connection, we do not overlook the fact that,
under the last clause of the first sentence of Section 68, the President:
"x x x may change the seat of the government within any subdivision to such place
therein as the public welfare may require"
it is apparent, however, from the language of this clause, that the phrase "as
the public welfare may require" qualified, not the clauses preceding the one just
quoted, but only the place to which the seat of the government may be
transferred. This fact becomes more apparent when 3we consider that said
Section 68 was originally Section 1 of Act No. 1748, which provided that,
"whenever in the judgment of the Governor-General the public
welfare, requires, he may, by executive order," effect the changes enumerated
therein (as in said section 68), including the change of the seat of the
government "to such place x x x
_____________
3 Whenever in the judgment of the Governor-General the public welfare requires, he may, by
executive order, enlarge, contract, or otherwise change the boundary of any province, subprovince,
municipality or township or other political subdivision, or separate any such subdivision into such
portions as may be required as aforesaid, merge any of such subdivisions or portions with another,
divide any province into one or more subprovinces as may be required as aforesaid, name any new
subdivision so created, change the seat of government within any subdivision, 'existing or created
hereunder, to such place therein as the public interests require, and shall fix in such executive
order the date when the change, merger, separation, or other action shall take effect. Whenever
such action as aforesaid creates a new political subdivision the Governor-General shall appoint
such officers for the new subdivision with such powers and duties as may be required by the
existing provisions of law applicable to the case and fix their salaries; such appointees shall hold
office until their successors are elected or appointed and qualified. Successors to the elective offices
shall be elected at the next general election following such appointment, Such equitable
distribution of the funds of changed subdivisions between the subdivisions affected shall be as is
recommended by the Insular Auditor and approved by the Governor-General.
579
VOL. 15, DECEMBER 24, 1965 579

as the public interest requires" The opening statement of said Section 1 of Act

No, 1748—which was not included in Section 68 of the Revised Administrative
Code—governed the time at which, or the conditions under which, the powers
therein conferred could be exercised; whereas the last part of the first sentence
of said section referred exclusively to the place to which the seat of the
government was to be transferred.
At any rate, the conclusion would be the same, insofar as the case at bar is
concerned, even if we assumed that the phrase "as the public welfare may
require," in said Section 68, qualifies all other clauses thereof. It is true that
in Calalang vs. Williams (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328),
this Court had upheld "public welfare" and "public interest," respectively, as
sufficient standards for a valid delegation of the authority to execute the law,
But, the doctrine laid down in these cases—as all judicial pronouncements—
must be construed in relation to the specific facts and issues involved 'therein,
outside4
of which they do not constitute precedents and have no binding
effect. The law construed in the Calalang case conferred upon the Director of
Public Works, with the approval of the Secretary of Public Works and
Communications, the power to issue rules and regulations to promote safe
transit upon national roads and streets.Upon the other hand, the Rosenthal
case referred to the authority of the Insular Treasurer, under Act No. 2581, to
issue and cancel certificates or permits for the sale of speculative
securities. Both cases involved grants to. administrative officers of powers
related to the exercise of their administrative functions, calling for the
determination of questions of fact.
Such is not the nature of the powers dealt with in section 880 As above
indicated, the creation of municipalities,
_____________
4 McGirr vs. Hamilton, 30 Phil. 563; Hebron vs. Reyes, L-9124. July 28, 1958; U.S. vs. More, 3
Cranch 159, 172; U.S. vs. Sanges, 144 U.S. 310, 319; Cross vs. Burke, 146 U.S. 82; Louisville Trust
Co. vs. Knott, 191 U.S. 225. See also, 15 C.J., 929-940; 21 C.J.S. 297, 299; 14 Am. Jur. 345.
580
is not an administrative function, but one which is essentially and eminently
legislative in character. The question of whether or not "public interest"
demands the exercise of such power is not one of fact. It
is "purely a legislative question "(Carolina-Virginia Coastal Highway vs.
Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or
a political question (Udall vs. Severn, 79 P. 2d. 347-349), As the Supreme Court
of Wisconsin has aptly characterized it, "the question as to whether
incorporation is for the best interest of the community in any case is
emphatically a question of public policy and statecraft" (In re Village of North
Milwaukee, 67 N.W. 1033, 1035-1037).
For this reason, courts of justice have annulled, as constituting undue
delegation of legislative powers, state laws granting the judicial department
the power to determine whether certain territories should be annexed to a
particular municipality (Udall vs. Severn, supra, 258-359); or vesting in a
Commission the right to determine the plan and frame of government of
proposed villages and what functions shall be exercised by the same, although
the powers and functions of the village are specifically limited by statute (In re
Municipal Charters, 86 Atl. 307-308); or conferring upon courts the authority to
declare a given town or village incorporated, and designate its metes and
bounds, upon petition of a majority of the taxable inhabitants thereof, setting
forth the area desired to be included in such village (Territory ex rel Kelly vs.
Stewart, 28 Pac. 405-409); or authorizing the territory of a town, containing a
given area and population, to be incorporated as a town, on certain steps, being
taken by the inhabitants thereof and on certain determination by a court and
subsequent vote of the inhabitants in favor thereof, insofar as the court is
allowed to determine whether the lands embraced in the petition "ought justly"
to be included in the village, and whether the interest of the inhabitants will be
promoted by such incorporation, and to enlarge and diminish the boundaries of
the proposed village "as justice may require" (In re Villages of North
Milwaukee, 67 N.W. 10351037); or creating a Municipal Board of Control which
shall 'determine whether or not the laying out, construc-
581
VOL. 15, DECEMBER 24, 1965 581

tion or operation of a toll road is in the "public interest" and whether the
requirements of the law had been complied with, in which case the board shall
enter an order creating a municipal corporation and fixing the name of the
same (Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74
S.E. 2d. 310).
Insofar as the validity of a delegation of power by Congress to the President
is concerned, the case of Schechter Poultry Corporation vs. U.S. (79 L. Ed.
1570) is quite relevant to the one at bar. The Schechter case involved the
constitutionality of Section 3 of the National Industrial Recovery Act
authorizing the President of the United States to approve "codes of fair
competiton" submitted to him by one or more trade or industrial associations or

corporations which "impose no inequitable restrictions on admission to
membership therein and are truly representative," provided that such codes
are not designed "to promote monopolies or to eliminate or oppress small
enterprises and will not operate to discriminate against them, and will tend to
effectuate the policy" of said Act. The Federal Supreme Court held:
"To summarize and conclude upon this point: Sec. 3 of the Recovery Act is without
precedent. It supplies no standards for any trade, industry or activity. It does not
undertake to prescribe rules of conduct to be applied to particular states of fact
determined by appropriate administrative procedure. Instead of prescribing rules of
conduct, it authorizes the making of codes to prescribe them. For that legislative
undertaking, Sec. 3 sets up no standards, aside from the statement of the general aims
of rehabilitation. correction and expansion described in Sec. 1. In view of the scope of
that broad declaration, and of the nature of the few restrictions that are imposed, the
discretion of the President in approving or prescribing codes, and thus enacting laws for
the government of trade and industry throughout the country, is virtually unfettered.
We think that the code making authority thus conferred is an un constitutional
delegation of legislative power."
If the term "unfair competition" is so broad as to vest in the President a

discretion that is "virtually unfettered." and, consequently, tantamount to a
delegation of legislative power, it is obvious that "public welfare," which has
even a broader connotation, leads to the same result. In
582

fact, if the validity of the delegation of powers made in Section 88 were upheld,
there would no longer be any legal impediment to a statutory grant of authority
to the President to do anything which, in his opinion, may be required by public
welfare or public interest. Such grant of authority would be a virtual abdication
of the powers of Congress in favor of the Executive, and would bring about a
total collapse of the democratic system established by our Constitution, which
it is the special duty and privilege of this Court to uphold.
It may not be amiss to note that the executive orders in question were issued
after the legislative bills for the creation of the municipalities involved in this
case had failed to pass Congress. A better proof of the fact that the issuance of
said executive orders entails the exercise of purely legislative functions can
hardly be given.
Again, Section 10(1) of Article VII of our fundamental law ordains:
"The President shall have control of all the executive departments, bureaus, or offices,
exercise general supervision over all local governments as may be provided by law, and
take care that the laws be faithfully executed."
The power of control under this provision implies the right of the President to
interfere in the exercise of such discretion as may be vested by law in the
officers of the executive departments, bureaus, or offices of the national
government, as well as to act in lieu of such officers. This power is, denied by
the Constitution to the Executive, insofar as local governments are concerned.

With respect to the latter, the fundamental law permits him to wield no
more authority than that of checking whether said local governments or the
officers thereof perform their duties as provided by statutory enactments.
Hence, the President cannot interfere with local governments, so long as the
same or its officers act within the scope of their authority, He may not enact an
ordinance which the municipal council has failed or refused to pass, even if it
had thereby violated a duty imposed thereto by law, although he may see to it
that the corresponding provincial officials take appropriate disciplinary action
therefor.
583
VOL. 15, DECEMBER 24, 1965 583

Neither may he vote, set aside or annul an ordinance passed by said council
within the scope of its jurisdiction, no matter how patently unwise it may be.
He may not even suspend an elective official of a regular municipality or take
any disciplinary action against5 him, except on appeal from a decision of the
corresponding provincial board.
Upon the other hand, if the President could create a municipality, he could,
in effect, remove any of its officials, by creating a new municipality and
including therein the barrio in which
6
the official concerned resides, for his
office would thereby become vacant, Thus, by merely brandishing the power to
create a new municipality (if he had it), without actually creating it, he could
compel local officials to submit to his dictation, thereby, in effect, exercising
over them the power of control denied to him by the Constitution.
Then, also, the power of control of the President over executive departments,
bureaus or offices implies no morethan the authority to assume directly the f
unctions thereof or to interfere in the exercise of discretion by its officials.
Manifestly, such control does not include the authority either to abolish an
executive department or bureau, or to create a new one. As a consequence, the
alleged power of the President to create municipal corporations would
necessarily connote the exercise by him of an authority even greater than that
of control which he has over the executive departments, bureaus or offices. In
other words, Section 68 of the Revised Administrative Code does not mere-
_____________
5 Hebron vs. Reyes, L-9124, July 28, 1958; Mondano vs. Silvosa, 51 Off. Gaz. 2884; Rodriguez vs.
Montinola, 50 Off. Gaz, 4820; Querubin vs. Castro, L-9779, July 31, 1958.

6 Pursuant to Section 2179 of the Revised Administrative Code:
"When a part 01 a barrio is detached from a municipality to form a new municipality or to be added to an
existing municipality, any officer of the old municipality living in the detached territory may continue to hold
his office and exert the functions thereof for the remainder of his term; but if he is resident of a barrio the
whole of which is detached, his office shall be deemed to be vacated"
584

ly fail to comply with the constitutional mandate above quoted. Instead of

giving the President less power over local governments than that vested in him
over the executive departments, bureaus or offices, it reverses the pro cess and
does the exact opposite, by conferring upon him more power over municipal
corporations than that which he has over said executive departments, bureaus
or offices.
In short, even if it did entail an undue delegation of legislative powers, as it
certainly does, said Section 68, as part of the Revised Administrative Code,
approved on March 10, 1917, must be deemed repealed by the subsequent
adoption of the Constitution, in 1935, which 7
is utterly incompatible and
inconsistent with said statutory enactment.
There are only two (2) other points left for consideration, namely,
respondent's claim (a) that "not all the proper parties"—referring to the officers
of the newly created municipalities—"have been impleaded in this case," and
(b) that "the present petition is premature/'
As regards the first point, suffice it to say that the records do not show, and
the parties do not claim, that the officers, of any of said municipalities have
been appointed or elected and assumed office. At any rate, the Solicitor
General. who has appeared on behalf of respondent Auditor General, is the
officer authorized by law "to act and represent the Government of the
Philippines, its offices and agents, in any official investigation, proceeding or
matter requiring the services of a lawyer" (Section 1661, Revised
Administrative Code), and, in connection with the creation of the
aforementioned municIpalities, which involves a political, not proprietary,
function, said local officials, if any, are mere agents or representatives of the
national government. Their8
interest in the case at bar has, accordingly, been, in
effect, duly represented.
With respect to the second point, respondent alleges that
______________
7 Delos Santos vs. Mallare, 87 Phil, 289, 298-299.
8 Mangubat vs. Osmeña, Jr., L-12837, April 20, 1959; City of Cebu vs. Judge Piccio. L-13012 &
L-14876, December 31, 1960,
585
VOL. 15, DECEMBER 24, 1965 585

he has not as yet acted on any of the executive orders in question and has not
intimated how he would act in connection therewith. It is, however, a matter of
common, public knowledge, subject to judicial cognizance, that the President
has, for many years, issued executive orders creating municipal corporations
and that the same have been organized and in actual operation, thus
indicating, without peradventure of doubt, that the expenditures incidental
thereto have been sanctioned, approved or passed in audit by the General
Auditing Office and its officials. There is no reason to believe, therefore, that
respondent would adopt a different policy as regards the new municipalities

involved in this case, in the absence of an allega-tion to such effect, and none
has been made by him
WHEREFORE, the Executive Orders in question are hereby declared null
and void ab initio and the respondent permanently restrained from passing in
audit any expenditure of public funds in implementation of said Executive
Orders or any disbursement by the municipalities above referred to. It is so
ordered.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon,

JJ., concur.
Zaldivar, J., took no part.
Bengzon, J.P., J., concurs and dessents is a seperate opinion.
Makalintal and Regala, JJ., concur with the opinion of Justice J.P.
Bengzon.
BENGZON, J.P., J., concurring and dissenting:
A sign of progress in a developing nation is the rise of new municipalities.

Fostering their rapid growth has long been the aim pursued by all three
branches of our Government.
So it was that the Governor-General during the time of the Jones Law was
given authority by the Legislature (Act No. 1748) to act upon certain details
with respect to said local governments, such as fixing of boundaries,
subdivisions and mergers. And the Supreme Court, within the framework of
the Jones Law, ruled in 1917 that the exec-
586

ution or implementation of such details, did not entail abdication of legislative

power (Government vs. Municipality of Binangonan, 34 Phil. 518; Municipality
,of Cardona vs. Municipality of Binañgonan, 36 Phil. 547). Subsequently, Act
No. 1748's aforesaid statutory authorization was embodied in Section 68 of the
Revised Administrative Code. And Chief Executives since then up to the
present continued to avail of said provision, time and again invoking it to issue
executive orders providing for the creation of municipalities.
From September 4, 1964 to October 29, 1964 the President of the Philippines
issued executive orders to create thirty-three municipalities pursuant to
Section 68 of the Revised Administrative Code. Public funds thereby stood to be
disbursed in implementation of said executive orders.
Suing as private citizen and taxpayer, Vice President Emmanuel Pelaez
filed in this Court a petition for prohibition with preliminary injunction against
the Auditor General. It seeks to restrain the respondent or any person acting in
his behalf, from passing in audit any expenditure of public funds in
implementation of the executive orders aforementioned.
Petitioner contends that the President has no power to create a municipality
by executive order. It is argued that Section 68 of the Revised Administrative
Code of 1917, so far as it purports to grant any such power, is invalid or, at the
least, already repealed, in light of the Philippine Constitution and Republic Act
2370 (The Barrio Charter),
Section 68 is again reproduced hereunder for convenience:
"SEC. 68. General authority of [Governor-General] President of the Philippines to fix
boundaries and make new subdivisions.—The[Governor-General] President of the
Philippines may by executive order define the boundary, or boundaries, of any province,
subprovince, municipality, [township] municipal district, or other political subdivision,
and increase or diminish the territory comprised therein, may divide any province into
one or more subprovinces, separate any political division other than a province, into
such portions as may be required.
587
VOL. 15, DECEMBER 24, 1965 587

merge any of such subdivisions or portions with another, name any new subdivision so
created, and may change the seat of government within any subdivision to such place
therein as the public welfare may require: Provided, That the authorization of the
[Philippine Legislature] Congress of the Philippines shall first be obtained whenever the
boundary of any province or subprovince is to be defined or any province is to be divided
into one or more subprovinces. When action by the [GovernorGeneral] President of the
Philippines in accordance herewith makes necessary a change of the territory under the
jurisdiction of any administrative officer or any judicial officer, the [Governor-General]
President of the Philippines, with the recommendation and advice of the head of the
Department having executive control of such officer, shall redistrict the territory of the
several officers to the new districts so formed.
"Upon the changing of the limits of political divisions in pursuance of the foregoing
authority, an equitable distribution of the funds and obligations of the divisions thereby
affected shall be made in such manner as may be recommended by the [Insular Audtior]
Auditor General and approved by the [Governor-General] President of the Philippines."
From such working I believe that power to create a municipality is included: to

"separate any political division other than a province, into such
portions as may be required, merge any such subdivisions or portions with
another, name any new subdivision so created." The issue, however, is whether
the legislature can validly delegate to the Executive such power,
The power to create a municipality is legislative in character. American
authorities have therefore favored the view that it cannot be delegated; that
what is delegable is not the power to create municipalities but only the power
to determine the existence of facts under which creation of a municipality will
result (37 Am. Jur. 628).
The test is said to lie in whether the statute allows any discretion on the
delegate as to whether the municipal corporation should be created, If so, there
is an attempted delegation of legislative power and the statute is invalid (Ibid.).
Now Section 68 no doubt gives the President such discretion, since it says that
the President "may by executive order" exercise the powers therein granted.
Furthermore, Section 5 of the same Code states:
588

"SEC. 5. Exercise of administrative discretion.—The exercise of the permissive powers of

all executive or administrative officers and bodies is based upon discretion, and when
such officer or body is given authority to do any act but not required to do such act, the
doing of the same shall be dependent on a sound discretion to be exercised for the good
of the service and benefit of the public, whether so expressed in the statute giving the
authority or not"
Under the prevailing rule in the United States—and Section 68 is of American

origin—the provision in question would be an invalid attempt to delegate
purely legislative powers, contrary to the principle of separation of powers.
It is very pertinent that Section 68 should be considered with the stream of
history in mind. A proper knowledge of the past is the only adequate
background for the present. Section 68 was adopted half a century ago. Political
change, two world wars, the recognition of our independence and rightful place
in the family of nations, have since taken place. In 1917 the Philippines had for
its Organic Act the Jones Law. And under the setup ordained therein 110 strict
separation of powers was adhered to. Consequently, Section 68 was not
constitutionally objectionable at the time of its enactment.
The advent of the Philippine Constitution in 1935 however altered the
situation. For not only was separation of powers strictly ordained, except only
in specific instances therein provided, but the power of the Chief Executive over
local governments suffered an explicit reduction.
Formerly, Section 21 of the Jones Law provided that the Governor-General
"shall have general supervision and control of all the departments and bureaus
of the government in the Philippine Islands," Now Section 10 (1), Article VII of
the Philippine Constitution provides: "The President shall have control of all
the executive departments, bureaus, or offices. exercise general supervision
over all local governments as may be provided by law, and take care that the
laws be faithfully executed.
In short, the power of control over local governments had now been taken
away from the Chief Executive. Again,
589
VOL. 15, DECEMBER 24, 1965 589

to fully understand the significance of this provision, one must trace its
development and growth.
As early as April 7, 1900 President McKinley of the United States, in his
Instructions to the Second Philippine Commission, laid down the policy that
our municipal governments should be "subject to the least degree of supervision
and control" on the part of the national government. Said supervision and
control was to be confined within the "narrowest limits" or so much only as
"may be necessary to secure and enforce faithful and efficient administration
by local officers/' And the national government "shall have no direct
administration except of matters of purely general concern." (See Hebron v.

Reyes, L-9158, July 28, 1958.)
All this had one aim, to enable the Filipinos to acquire experience in the art
of self-government, with the end in view of later allowing them to assume
complete management and control of the administration of their local affairs.
Such aim is the policy now embodied in Section 10(1), Article VII of the
Constitution (Rodriguez v. Montinola, 50 O.G. 4820).
It is the evident decree of the Constitution, therefore, that the President
shall have no power of control over local governments. Accordingly, Congress
cannot by law grant him such power (Hebron v. Reyes, supra). And any such
power formerly granted under the Jones Law thereby became unavoidably
inconsistent with the Philippine Constitution.
It remains to examine the relation of the power to create and the power to
control local governments. Said relationship has already been passed upon by
this Court in Hebron v. Reyes, supra, In said case, it was ruled that the power
to control is an incident of the power to create or abolish municipalities,
Respondent's view therefore, that creating municipalities and controlling their
local governments are "two worlds apart," is untenable. And since as stated, the
power to control local governments can no longer be conferred on or exercised
by the President, it follows a fortiori that the power to create them, all the more
cannot be so conferred or exercised.
590

I am compelled to conclude, therefore, that Section 10(1), Article VII of the

Constitution has repealed Section 68 of the Revised Administrative Code as far
as the latter empowers the President to create local governments. Repeal by
the Constitution of prior statutes inconsistent with it has already been
sustained in De los Santos v. Mallare, 87 Phil. 289. And it was there held that
such repeal differs from a declaration of unconstitutionality of a posterior
legislation, so much so that only a majority vote of the Court is needed to
sustain a finding of repeal.
Since the Constitution repealed Section 68 as far back as 1935, it is
academic to ask whether Republic Act 2370 likewise has provisions in conflict
with Section 68 so as to repeal it. Suffice it to state, at any rate, that statutory
prohibition on the President from creating a barrio does not, in my opinion,
warrant the inference of statutory prohibition for creating a municipality. For
although municipalities consist of barrios, there is nothing in the statute that
would preclude creation of new municipalities out of pre-existing barrios.
It is not contrary to the logic of local autonomy to be able to create larger
political units and unable to create smaller ones. For as long ago observed in
President McKinley's instructions to the Second Philippine Commission,
greater autonomy is to be imparted to the smaller of the two political units. The
smaller the unit of local government, the lesser 'is the need for the national
government's intervention in its political affairs. Furthermore, for practical
reasons, local autonomy cannot be given from the to? downwards. The national
government. in such a case, could still exercise power over the supposedly
autonomous unit, e.g., municipalities, by exercising it over the smaller units

that comprise them, e.g., the barrios. A realistic program of decentralization
therefore calls for autonomy from the bottom upwards, so that it is not
surprising for Congress to deny the national government some power over
barrios without denying it over municipalities. For this reason, I disagree with
the majority view that because the President could not create a barrio under
Republic Act 2370, a fortiori he cannot create a municipality.
591
VOL. 15, DECEMBER 24, 1965 591

It is my view, therefore, that the Constitution, and not Republic Act 2370,
repealed Section 68 of the Revised Administrative Code's provision giving the
President authority to create local governments. And for this reason I agree
with the ruling in the majority opinion that the executive orders in question
are null and void.
In thus ruling, the Court is but sustaining the fulfillment of our historic
desire to be free and independent under a republican form of government, and
exercising a function derived from the very sovereignty that it upholds,
Executive orders declared null and void.
A N N O T A T I O N
CREATION OF MUNICIPALITIES
Historical Background of the Power of Creating Municipalities in the

Philippines.
During the Spanish regime the procedure of the creation of municipalities has
been prescribed by the Leyes de las Indias (Roman Catholic Bishop of Jaro vs.
Director of Lands, 34 Phil. 528; see also Law VIII, Title VII, Book IV
of Recopilación de Leyes de los Reynos de las Indias).
In the case of Catbalogan vs. Director of Lands, 17 Phil., 214, the Court took
cognizance of the procedure for the formation of towns during the Spanish
regime, Executive authorities and officials who then represented the Spanish
government were obliged to adjust their procedures in the fulfillment of their
duties with regard to the establishment and laying out of new towns to
the Leyes de las Indias.
An Ayuntamiento corresponds to the English term municipal corporation
and the municipal government in the Islands falls short of being such a
corporation (Government of the Philippine Islands vs. Abadilla, 46 Phil. 842;
see also Roman Catholic Church vs. Municipally of Cebu, 31 Phil. 517).
592

The unit of local administration during the Spanish regime was the "pueblo"
which ordinarily embraces an area of.many square miles and contained
numerous barrios or villages.
Historical Background under the American Regime.

The law governing municipalities was first provided for in General Order No.
43, Series of 1899. This law was followed by General Order No. 40, Series of
1900 promulgated by the Military Governor. President it William McKinley's
Instructions to the Second Philippine Commission also stressed the importance
of the creation of municipal governments.
The Philippine Commission forthwith enacted Act No. 82 on January 31,
1901 providing for the organization and government of municipalities. Act No.
88 was passed on February 5, 1901 for the organization of the provinces. The
law on provincial and municipal governments were embodied in Chapters 56,
57, 64 and 67 of the Revised Administrative Code.
The Power to Create Corporations is Essentially Legislative.

The power of the municipal corporation is essentially legislative in nature. The
power is exclusive and almost unlimited. In the absence of any constitutional
limitations, a legislative body may create any corporation it deems essential for
the more efficient administration of the government (I McQuillin, Municipal
Corporations, 3rd ed.,509; 19 R.C.L. section 2).
The legislative power to create municipal corporations may not be delegated
(Cooley, Municipal Corporations, p. 30), The delegation, if at all, may be made
if the legislature imposes conditions on which the municipal corporation may
be created. The legislative may prescribe standards for guidance and authorize
an agency to determine facts on which the statute may be implemented for the
creation of such corporation.
In some jurisdictions, it has been held that the legislative
593
VOL. 15, DECEMBER 24, 1965 593

body may vest in a court the power to determine when the incorporation of the
community is necessary or useful or to determine the extent and boundary of
such corporations. (I McQuillin, Municipal Corporations, 3rd Ed., p. 505).
Usually, in the creation of municipal corporations the conditions needed in
order to obtain its incorporation as a city or town are prescribed. Such
conditions may indicate the extent of the area proposed to incorporate, the
nature of the territory, the character of the lands and the uses to which it may
be devoted, the number of inhabitants and even the density and location of the
area to be incorporated (I McQuillin, Municipal Corporations, p. 531).
The Nature of the Power to Create Municipal Corporation in the Philippines.

The power to create corporation including municipal corporation resides in the
Congress of the Philippines. Such power included in the general legislative
power of Congress states: "The legislative power shall be vested in a Congress
of the Philippines which shall consist of a Senate and a House of

Representatives" (Art VI, Section 1, Constitution of the Philippines; Tiaco vs.
Forbes, 228 U.S. 549; Asuncion vs. Yriarte, 37 Phil. 67).
Under this authority, Congress may enact laws creating provinces, sub-
provinces, cities, municipalities, municipal districts, barrios and other local
entities. It may group into one area those which are already existing. It may
subdivide them into several other local areas. It may abolish them. There is no
limitation upon Its power except the provisions of Art. VII, Section 1 of the
Constitution (Aruego, Law on Municipal Government, 1968 Ed., p. 37),
The Provincial Board may also organize barrios under Republic Act No.
2370. See also Republic Act No. 2264, June 19, 1959, Republic Act No, 5185 and
Republic Act No. 1205. For organization of municipalities, see Section 2170 of
the Revised Administrative Code as amended by Republic Act No. 2368.
594

The Nature of the Legislative Power to Create the Area For Local Government.
The legislative power to create an area of the local government involves two
things: (1) the determination of whether a local area -shall be created or not; (2)
the determination of whether said decision shall have the force of law. To leave
the decision to another agency or person to create or not to create and to
determine the conditions under which he would create, or to have discretion
whether to follow or not to follow the rule laid down in the law, would be undue
delegation of legislative power (Aruego, op. cit., 1968 Ed., p. 37).
There would be no unlawful delegation of legislative power to create the area
when the legislative power determines by law the conditions under which the
local area may be created. Not leaving this or some of them to be determined by
another agency of the government. It 10 not unlawf ul delegation of legislative
power to create when the agency has the authority to carry out the provisions
of the law and the discretion is only as to the manner of executing the law (Id.).
Creation of Barrios by Authority of Law.

Under the Revised Barrio Charter (Republic Act No. 3590) barrios may be
created directly by the lawmaking body, or a creation of the same may be
caused by another agency (Sec. 3, Republic Act No. 3590). The Barrio Charter
Law does not give the uncontrolled power to determine whether or not to create
the barrio and the conditions under which such barrio should be created
because the law has set forth specific conditions (Aruego, Id.).
Constitutional Validity of Creation under Administrative Code by the Executive.

Before the effectivity of the Administrative Code of 1918, Act 1748 was passed
authorizing the Governor General of the Philippines to make adjustment of
provincial and municipal boundaries and the change of capitals of
595
VOL. 15, DECEMBER 24, 1965 595

provinces from time to time to serve the public convenience and interest
The Supreme Court overruled the contention that the act was an undue
delegation of legislative power. The Supreme Court ruled:
"The delegation of the power referred to on the Governor General does not involve an
abdication of legislative functions on the part of the legislature with regard to the
particular subject matter with which it authorizes the Governor General to deal. It is
simply a transference of certain details with respect to provinces, municipalities, and
townships, many of them newly created, and all of them subject to more or less rapid
change both in development and center of population, the proper regulation of which
might require not only prompt action but action of such a detailed character as not to
permit the legislative body, as such, to take it efficiently." (Cardona vs. Binañgonan, 36
Phil. 547).
The Supreme Court likewise upheld the constitutional legality of an executive

order of the Governor General in redefining the boundary between the
municipalities of Cardona and Binañgonan (Government of the P.I. vs.
Municipality of Binañgonan, 35 Phil. 518).
Section 68 of the Revised Administrative Code of 1917 was enacted.
"SEC. 68. General Authority of the (Governor General) President of the Philippines to fix
boundaries and make new subdivisions.—The Governor General (now President of the
Philippines) may by executive order define the boundary, or boundaries, of any province,
subprovince, municipality, (township) municipal district (See Act 27824), or other
political subdivision, and increase or diminish the territory comprised therein, may
divide any province into one or more subprovinces, separate any political division other
than a province, into such portions as may be required, merge any of such subdivisions
or portions with another, name any new division so created, and may change the seat of
government within any subdivision into such place therein as the public welfare may
require: Provided. That the authorization of the Philippine Legislature (now Congress of
the Philippines) shall first be obtained whenever the boundary of any province or
subprovince is to be defined or any province is to be divided into one or more
subprovinces. x x x."
The Governors General and later the Presidents of the

596

Philippines create several municipalities under this section. This law

practically gave uncontrolled discretion to the executive to create new areas as
municipalities and is of doubtf ul legality, For cases on delegation of legislative
powers as valid standards for delegation of power, see People vs. Lim Ho, L-
12091-2, January 28,1960; People vs. Jolliffe, L-9553, May 13, 1959; People vs.
Vera, 65 Phil. 56; U.S. vs. Ang Tang Ho, 43 Phil. 1; Compañia General de
Tabacos vs. Board of Public Utility, 34 Phil. 136; Mutual Film Co. vs.
Industrial Commission, 236 U.S. 247, 59 L. Ed. 561; Mutual Film Corp. vs.
Industrial Commission, 236 U.S. 230, 59 L. Ed. 552; Pamana Refining Co. vs.

Ryan, 293 U.S. 388, 79 L. Ed. 446; A.L.A. Schechter Poultry Corp. vs. U.S., 295
U.S. 79 L. Ed. 1570, U.S. vs. Rock Royal Coop.,307 U.S. 533, L. Ed.
1446; Bowles vs. Willingham, 321, U.S. 503, 88 L. Ed. 892; Araneta vs.
Gatmaitan, L8895, April 30, 1957; Cervantes vs. Auditor General, L4043, May
30, 1952; Phil. Association of Colleges vs. Secretary of Education, 51 Off. Gaz.
6230; People vs. Arnault. 48 Off. Gaz, 4805; Antamok Gold Field-vs. CIR. 68
Phil. 340; U.S. vs. Barrias,11 Phil. 327; Yajus vs. White, 821 U.S. 414; Ammann
vs. Mailonce, 332 U.S. 245.
Section 68 of the Revised Administrative Code has been declared
unconstitutional in the case of Pelaez vs. Jimenez,G.R. No. L-23825. December
24, 1965. The Supreme Court thus reiterated the f undamental principle that
the creation of municipal corporations is legislative in nature.
Moreover, Section 3 of Republic Act No. 2370 which took effect on January 1,
1960 provided that barrios may not be created or their boundaries altered
except by act of Congress or by the corresponding provincial board upon
petition of the majority of the voters in the area affected and the
recommendation of the municipality in which the proposed barrios are situated.
If under this new law the President cannot create a barrio, he cannot create
municipalities which are composed of several barrios (See Republic Act No.
5185).
For creation of barrios, see Revised Barrio Charter (Republic Act No. 3590).
—JUDGE JORGE COQUIA
597
VOL. 15, DECEMBER 24, 1965 597

A N N O T A T I O N
VALID DELEGATION OF LEGISLATIVE POWER
I. Principle of separation of powers.

The separation of powers is a fundamental principle in our system of
government. It obtains not through express provision but by actual division in
our Constitution. Each department of the government has exclusive cognizance
of matters within its jurisdiction and is supreme within its own
sphere. (Angara vs. Electoral Commission, et al., 63 Phil. 139).
II. Constitutional provisions on separation of powers.

The Legislative power shall be vested in a Congress of the Philippines which
shall consist of a Senate and a House of Representatives. (Article VI, Sec,
I, Phil. Constitution).
The Executive power shall be vested in a President of the Philippines. (Art.
VII, Sec. 1, Phil. Constitution).
The Judicial power shall be vested in one Supreme Court and in such
inferior courts as may be established by law. (Art. VIII, Sec. 1, Phil.
Constitution).
The Government of the United States in the Philippines is one whose powers
have been carefully apportioned between three distinct departments which
have their powers alike, limited and defined, and are of equal dignity and,
within their respective spheres of action, equally independent. (Abueva vs.
Wood, 46 Phil. 613).
III. Importance of the principle.

It has been said that the principle of separation of powers of government is
fundamental to the very existence of every constitutional government. It
represents the most important principle of government declaring and
guaranteeing the liberties of the people. (Am. Jur. 182) Under our
constitutional system, the powers of government are distributed among three
co-ordinate and substantially independent organs: the legislative, the executive
and the
598

judicial. Each of these departments of the government derives its authority

from the Constitution, which, in turn, is the highest expression of the popular
will. Each has exclusive cognizance of the matters within the jurisdiction and is
supreme within its own sphere. (People vs. Vera, 65 Phil. 63).
By the organic law of the Philippine Islands and the Constitution of the
United States, all powers are vested in the Legislature, Executive and
Judiciary, It is the duty of the Legislature to make the law; of the Executive to
execute; and of the Judiciary to construe the law. The Legislature has no
authority to execute or construe the law; the Executive has no authority to
make or construe the law; and the judiciary has no -power to make or execute
the law. Subject to the Constitution only, the power of each branch is supreme
within its own jurisdiction, and it is for the judiciary only to say when any Act
of the Legislature is or is not constitutional. (U.S. vs. Ang Tang Ho, 48 Phil. 1).
IV. Scope of the principle of separation of powers.

The three departments of the government are co-ordinate, co-important, co-
equal and independent of each other; that each of the several departments of
the government derives its authority directly or indirectly from the people and
is responsible to them; that each has exclusive cognizance of the matters within
its jurisdiction and is supreme within its own sphere. In the exercise of the
powers of government assigned to them severally, the departments operate
harmoniously and independently of the others and the action of any one of
them in the exercise of its powers is not subject to the control by either of the
others. (Province of Tarlac vs. Gale, 26 Phil. 338; Barcelona vs. Baker, 5 Phil.
87).
V. Principle of checks and balances.
It does not follow from the fact that the three powers are to be kept separate
and distinct that the Constitution intended them to be absolutely unrestrained
and independent of each other. The Constitution has provided for
599
VOL. 15, DECEMBER 24, 1965 599

the elaborate system of checks and balances to secure coordination in the

workings of various departments of the government For example, the Chief
Executive under our Constitution in so far made a check on the Legislative
power that his assent is required in the enactment of laws. This, however, is
subject to the further check that a bill may become a law notwithstanding the
refusal of the President to approve it, by a vote of two-thirds or threefourths as
the case may be, of the National Assembly. The President has also the right to
convene the Assembly in special session whenever he chooses, On the other
hand, the National Assembly operates as a check on the Executive in the sense
that its consent through the Commission on Appointments is necessary in the
appointment of certain officers; and the concurrence of a majority of all its
members is essential to the conclusion of treaties. Furthermore, in Its power to
determine what courts, other than the Supreme Court shall be established, to
define their jurisdiction and to appropriate funds for the support, the National
Assembly exercises to a certain ,extent control over the judicial power of trying
impeachments and the judiciary in turn, with the Supreme Court as the final
arbiter, effectively checks the other departments in the exercise of its power to
determine the law, and hence, to declare executive and legislative acts void if
violative of the Constitution. (Angara vs. Electoral Commission, supra).
VI. Principle of non-delegation of powers.

The maxim of Constitutional law forbidding the delegation of legislative power
should be zealously protected. "The true distinction, therefore, is between the
delegation of power to make the law, which necessarily involves a discretion as
to what it shall be and conferring authority or discretion as to its execution, to
be exercised under and in pursuance of the law. The first cannot be done; to the
latter no valid objection can be made." (Cincinnati, W. & Z. R. Co. vs. Comrs.
Clinton County, 1 Ohio St. 88) Rubi vs. Province of Mindoro, 39 Phil. 662.
Thus, an Act of the Philippine Legislature giving to the Board of Public
Utility Commissioners power to require
600

public utility "to furnish annually a detailed report of finances and operations,
in such form and containing such matters as the Board may from time to time
by order prescribe" is invalid for the reason that it is a delegation of legislative
power to the Board of Public Utility Commissioners and is in violation of the

Act of July 1, 1902. (Compañia General de Tabacos de Filipinas vs. Board of
Public Utility Commissioners, 34 Phil. 137).
VII. Delegation of legislative power; historical development.

The power to make laws—the legislative power—is vested in a bicameral
Legislature by the Jones Law and in a unicameral National Assembly by the
Constitution. The Philippine Legislature or the National Assembly may not
escape Its duties and responsibilities by delegating that power to any other
body or authority. Any attempt to abdicate the power is unconstitutional and
void, on the principle that potestas delegata, non delegare potest. This principle
is said to have originated with the glossators, was. introduced into English, law
through a misreading of Bracton, there developed as a principle of agency, was
established by Lord Coke in the English public law in decisions forbidding the
delegation of judicial power, and found its way into America as an enlightened
principle of free Government. It has since become an accepted corollary of the
principle of separation of powers. (People vs. Vera, supra).
VIII. Exceptions to the principle of non-delegation.

The rule, however, which forbids the delegation of legislative power is not
absolute and inflexible, It admits of exceptions, An exception sanctioned by
immemorial practice permits the central legislative body to delegate legislative
power to local authorities. On quite the same principle, Congress is empowered
to delegate legislative power to such agencies in the territories of the United
States as it may select. Courts have also sustained the delegation of legislative
powers to the people at large, though some authorities maintain that this may
not be done, Doubtless, also, legislative power may be delegated by the
601
VOL. 15, DECEMBER 24, 1965 601

Constitution itself. Section 14, paragraph 2 of Article VI of the Constitution of

the Philippines provides that "the National Assembly may by law authorize the
President, subject to such limitations and restrictions as it may impose, to fix
within specified limits, tariff rates, import or export quotas, and tonnage and
wharfage dues." In times of war or other national emergency, the National
Assembly may by law authorize the President, for a limited period and subject
to such restrictions as it may prescribe, to promulgate rules and regulations to
carry out a declared national policy. (People vs. Vera, supra).
The provision of section 1 of Commonwealth Act No. 548 does not confer
legislative power upon the Director of Public Works and the Secretary 01
Public Works and Communications. The authority conferred upon them and
under which they promulgated the rules and regulations now complained of is
not to determine what public policy demands but merely to carry out the
legislative policy laid down by the National Assembly in said Act, to wit, to
promote safe transit upon, and avoid obstruction on roads and streets
designated as national roads by Acts of the National Assembly and to close
them temporarily to any or all classes of traffic "whenever the condition of the
road or the traffic thereon makes such action necessary or advisable in the
public convenience and interest." The delegated power, if at all, therefore, is not
the determination of what the law shall be, but merely the ascertainment of the
facts and circumstances upon which the application of said law is to be
predicated. (Calalang vs. Williams, 70 Phil. 726).
IX. Tests of undue delegation.

In testing whether a statute constitutes an undue delegation of legislative
power or not, it is usual to inquire whether the statute was complete in all its
terms and provisions when it left the hands of the legislature so that nothing is
left to the judgment of any other appointee or delegate of the legislature. In
U.S. vs. Ang Tang Ho (43 Phil. 1) the Supreme Court adhered to the foregoing
rule. The general rule, however, is limited by another
602

rule that to a certain extent matters of detail may be left to be filled in by rules
and regulations to be adopted or promulgated by executive officers and
administrative boards. As a rule, an act of the legislature is incomplete and
hence, invalid if it does not lay down by any rule or definite standard by which
the administrative board may be guided in the exercise of the discretionary
powers delegated to it. (People vs. Vera, supra).
In one case, appellants argue that, while Act No. 2581 empowers the Insular
Treasurer to issue and cancel certificates or permits for the sale of speculative
securities, no standard or rule is fixed in the Act which can guide said official in
determining the cases in which a certificate or permit ought to be issued,
thereby making his opinion the sole criterion in the matter of its issuance, with
the result that legislative powers being unduly delegated to the Insular
Treasurer, Act No. 2581 is unconstitutional. The Court is of the opinion that
the Act furnishes a sufficient standard for the Insular Treasurer to follow in
reaching a decision regarding the issuance or cancellation of a certificate or
permit,
In view of the intention and purpose of Act No. 2581—to protect the public
against "speculative schemes which have no more basis than so many feet of
blue sky" and against the "sale of stock in fly-by-night concerns, visionary oil
wells, distant gold mines and other like fraudulent exploitations,"—the Court
was inclined to hold that "public interest" in this case is suf f icient standard to
guide the Insular Treasurer, in reaching a decision on a matter pertaining to
the issuance of certificates or permits. (People vs. Rosenthal, 68 Phil. 328).
The Legislature cannot delegate legislative power to enact any law. If Act
No. 2868 is a law unto itself and within itself, and it does nothing more than to
authorize the Governor General to make rules and regulations to carry it into
effect, then the Legislature created the law. There is no delegation of power
and it is valid. On the other hand, if the Act within itself does not define the
crime and it is not complete, and some legislative act renains to be done to
make it a law or a crime the doing
603
VOL. 15, DECEMBER 24, 1965 603

of which is vested in the Governor General, the Act is a delegation of legislative

power, and is unconstitutional and void. (People vs. Vera, supra).
The Probation Act does not, by the force of any of Its provisions, fix and
impose upon the provincial boards any standard or guide in the exercise of
their discretionary power. What is granted is a "roving commission'' which
enables the provincial boards to exercise arbitrary discretion. By section 11 of
the Act, the Legislature does seemingly on its own authority extend the
benefits of the probation Act to the provinces but in reality leaves the entire
matter for the various provincial boards to determine. If a provincial board does
not wish to have the Act applied in its province, all that it has to do is to decline
to appropriate the needed amount for the salary of a probation officer. This is a
virtual surrender of legislative power to the provincial boards. (People vs. Vera,
supra).
The legislature may enact laws for a particular locality different from those
applicable to other localities and while recognizing the f orce of the principle
hereinabove expressed, courts in many jurisdictions have sustained the
constitutionality of the submission of option laws to the vote of the people. (6
R.C.L. 171). But option laws thus sustained treat of subjects purely local in
character which should receive different treatment in different localities placed
under different circumstances. Without denying the right of self-government
and the propriety of leaving matters of purely local concern in the hands of
local authorities or for the people of small communities to pass upon in the
matters of general legislation like that which treats of criminals in general, and
as regards the general subject of probation, discretion may not be vested in a
manner so unqualified and absolute as provided in Act No. 4221. (People vs.
Vera, supra).
X. Distinction between power to make laws and discretion as to its execution.

The true distinction is between the delegation of power to make the law, which
necessarily involves a discretion
604

Abaño vs. Aguipo
as to what it shall be, and conferring an authority or discretion as to its

execution, to be exercised under and in pursuance of the law. The first cannot
be done; to the latter no valid objection can be made. (Cincinnati, W. & Z. R.
Co. vs. Clinton Country Commissioners, 1 Ohio St. 77, 88.). See also Sutherland
on Statutory Construction, sec. 68. To the same effect are decisions of the
Supreme Court in the Municipality of Cardona vs. Municipality of
Binañgonan, 36 Phil 547; Rubi vs. Provincial Board of Mindoro, 39 Phil.
860; Cruz vs. Youngberg, 56 Phil. 234; People vs. Vera, supra.—
ATTY. JULIANA B. DE CASTRO,
Note.—When delegation of legislative powers is not alIowed. It was not the

intention of Congress, in enacting Republic Act No. 997, to authorize the
transfer of powers and jurisdiction of the courts of justice to the officials to be
appointed or offices to be created by the Reorganization Plan. Congress is well
aware of the provision of the Constitution that judicial powers are vested "only
in the Supreme Court and in such courts as the law may establish." The
Reorganization Commission was not authorized to create courts of justice, or to
take away from them their jurisdiction and transfer said jurisdiction to create
courts of justice, or take away from them their jurisdiction and transfer said
jurisdiction to the officials appointed or offices created under the
Reorganization Plan. The Legislature may not and cannot delegate its power to
legislate or create courts of justice to any other agency of the Government.
(Chinese Flour Importers' Association vs. Price Stabilization Board, L-4465,
July 12, 1961; U.S. vs. Shrevoport, 287 U.S. 7777, L. Ed. 175 and Johnson vs.
San Diego, 42 P. 249, cited in 11 Am, Jur. 921-922), Corominas. Jr. vs. Labor
Standards Commission, 2 SCRA 721.
_______________

11 Pelaez VS Auditor General

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11 Pelaez VS Auditor General

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VOL. 15, DECEMBER 24, 1965 569

No. L-23825. December 24, 1965.

EMMANUEL PELAEZ, petitioner, vs. THE AUDITOR GENERAL, respondent.

Administrative law; Power of President to create municipalities.—Since January 1,

570 SUPREME COURT REPORTS

Pelaez vs. Auditor General

Same; Same; Same; Same; Same; Abdication of powers of Congress in favor of the

VOL. 15, DECEMBER 24, 1965 571

Pelaez vs. Auditor General

572 SUPREME COURT REPORTS

Pelaez vs. Auditor General

ORIGINAL ACTION in the Supreme Court. Prohibition with preliminary

VOL. 15, DECEMBER 24, 1965 573

Executive Municipality Province Date Annex

Executive Municipality Province Date Annex

Executive Municipality Province Date Annex

574 SUPREME COURT REPORTS ANNOTATED

Pursuant to the first two (2) paragraphs of the same Section 3:

municipality which is composed of several barrios, since barrios are units of

VOL. 16, DECEMBER 24, 1965 575

Respondent answers in the affirmative, upon the theory that a new

576 SUPREME COURT REPORTS ANNOTATED

Respondent alleges that the power of the President to create municipalities

concern, may be delegated.

VOL. 15, DECEMBER 24, 1965 577

—it must set forth therein 2

578 SUPREME COURT REPORTS ANNOTATED

It does not enunciate any policy to be carried out or implemented by the

VOL. 15, DECEMBER 24, 1965 579

as the public interest requires" The opening statement of said Section 1 of Act

580 SUPREME COURT REPORTS ANNOTATED

Pelaez vs. Auditor General

VOL. 15, DECEMBER 24, 1965 581

competiton" submitted to him by one or more trade or industrial associations or

If the term "unfair competition" is so broad as to vest in the President a

582 SUPREME COURT REPORTS ANNOTATED

the Constitution to the Executive, insofar as local governments are concerned.

VOL. 15, DECEMBER 24, 1965 583

Montinola, 50 Off. Gaz, 4820; Querubin vs. Castro, L-9779, July 31, 1958.

584 SUPREME COURT REPORTS ANNOTATED

Pelaez vs. Auditor General

ly fail to comply with the constitutional mandate above quoted. Instead of

VOL. 15, DECEMBER 24, 1965 585

respondent would adopt a different policy as regards the new municipalities

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon,

BENGZON, J.P., J., concurring and dissenting:

A sign of progress in a developing nation is the rise of new municipalities.

586 SUPREME COURT REPORTS ANNOTATED

ution or implementation of such details, did not entail abdication of legislative

VOL. 15, DECEMBER 24, 1965 587

From such working I believe that power to create a municipality is included: to

588 SUPREME COURT REPORTS ANNOTATED

"SEC. 5. Exercise of administrative discretion.—The exercise of the permissive powers of

Under the prevailing rule in the United States—and Section 68 is of American

VOL. 15, DECEMBER 24, 1965 589

administration except of matters of purely general concern." (See Hebron v.

590 SUPREME COURT REPORTS ANNOTATED

I am compelled to conclude, therefore, that Section 10(1), Article VII of the

autonomous unit, e.g., municipalities, by exercising it over the smaller units

VOL. 15, DECEMBER 24, 1965 591

Historical Background of the Power of Creating Municipalities in the

592 SUPREME COURT REPORTS ANNOTATED