[POLIREV] Art. VII, Sec.

13 –
Rafael v. Embroidery & Apparel Control Prohibition against holding another
154 Board office; designation and ex-officio
capacity
G.R. No. L-19978 September 29, 1967 J. Makalintal Therese
Petitioners: Respondents:
CECILIO RAFAEL, doing business under the style THE EMBROIDERY AND APPAREL CONTROL
EL BARATO ALCE COMPANY AND INSPECTION BOARD, ET AL.,
respondents. THE EMBROIDERY AND
APPAREL CONTROL AND INSPECTION
BOARD, and THE HONORABLE SECRETARY
OF FINANCE DOMINADOR AYTONA
Recit Ready Summary

Rafael (doing business as El Barat Alce Company) is engaged is a manufacturer of embroidery and
apparel products. They import raw materials and export the manufactured products. RA 3137 created
the embroidery inspection board which has the authority to control, issue permits, inspect importations,
and liquidate re-exportation of Philippine made embroideries. The said law likewise provided for the
composition of the board. The board shall be composed of:
a. A representative from the Bureau of Customs to act as Chairman, to be designated by
the Secretary of Finance;
b. A representative from the Central Bank to be designated by its Governor;
c. A representative from the Department of Commerce and Industry to be designated by
the Secretary of Commerce and Industry;
d. A representative from the National Economic Council to be designated by its
Chairman;
e. A representative from the private sector coming from the Association of
Embroidery and Apparel Exporters of the Philippines
Quintin Santiago, the President of the Philippine Association of Embroidery and Apparel Exporters Inc.
(PAEAE) was appointed as the representative of the private sector. The petitioner, as a member of
Philippine Chamber of Embroidery and Apparel Producers Inc., questioned this appointment
specifically because their application as the representative was denied. Petitioner is now claiming that
the appointment of the law of officers who shall compose the board is unconstitutional because it
denies the President his power to make appointments.

I: W/N RA 3137 is constitutional, i.e. the appointment of officers to the board valid – YES

An examination of section 2 of the questioned statute reveals that for the chairman and members of the
Board to qualify they need only be designated by the respective department heads. With the exception
of the representative from the private sector, they sit ex-officio. In order to be designated they must
already be holding positions in the offices mentioned in the law. Thus, for instance, one who does not
hold a previous appointment in the Bureau of Customs cannot, under the Act, be designated
representative from that office. No new appointments are necessary. This is as it should be,
because the representatives so designated merely perform duties in the Board in addition to
those they already perform under their original appointments. It is significant that Congress, took
care to specify, that the representatives should come from the Bureau of Customs, Central Bank,
Department of Commerce and Industry and the National Economic Council. The obvious reason must
be because these departments and/or bureaus perform functions which have a direct relation to the
importation of raw materials, the manufacture thereof into embroidery and apparel products and their
subsequent exportation abroad.

Facts

2. Rafael is engaged the use of imported raw materials in the manufacture of embroidery and
apparel products for the purpose of exportation under the company El Barato Alce Company. His

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 company was authorized by the Collector of Customs to operate a manufacturing bonded
warehouse in Santolan, Tenejeros, Malabon, Rizal. Through this authority, the petitioner imported
raw materials exempt from duty and proceeded to manufacture them into finished products for
export.
3. RA 3137 was then enacted which created the embroidery and inspection board. This board
covered the control, issuance of entry permits, and inspection of conditionally tax-free raw material
importations by local embroidery manufacturers and the liquidation of re-exportations of Philippine
made embroideries.
4. The petitioner is assailing the validity of section 2 of the act which provides for the composition of
the board. The same is as follows:
a. A representative from the Bureau of Customs to act as Chairman, to be designated by
the Secretary of Finance;
b. A representative from the Central Bank to be designated by its Governor;
c. A representative from the Department of Commerce and Industry to be designated by
the Secretary of Commerce and Industry;
d. A representative from the National Economic Council to be designated by its
Chairman;
e. A representative from the private sector coming from the Association of
Embroidery and Apparel Exporters of the Philippines
5. Upon the recommendation of the Philippine Association of Embroidery and Apparel Exporters Inc.
(PAEAE), Quintin Santiago, the Association President, was named as the representative from the
private sector.
6. Petitioner, as a member of the Philippine Chamber of Embroidery and Apparel Producers Inc.,
questioned the choice of Santiago as the representative. He questioned the choice of Santiago
specifically because their application to the Board was rejected.
7. The board, on the other hand, made reference to a letter from Sen. Almendras, the principal
author of the bill, wherein it was clarified that the law intended the PAEAE as the sole association
being referred to under Sec. 2 of the law.
8. The court a quo ruled in favor of the petitioner and declared sec. 2 unconstitutional. Both parties
appealed the decision. The petitioner argues that the entire law should be declared
unconstitutional while the respondents argue that the entire law should be declared as valid.
Issues Ruling
W/N Sec. 2 of the law, which creates the board and appoints its officers, is constitutional? Yes
Rationale

The appointment of members of the board does not deprive the President of his power to make
appointments

Petitioners:
- While Congress may create an office, it cannot specify who shall be appointed therein
- the members of the Board can only be appointed by the President in accordance with Article
VII, Sec. 10, sub-section 3 of the Constitution
- since the Act prescribes that the chairman and members of the Board should come from
specified offices, it is equivalent to a declaration by Congress as to who should be appointed,
thereby infringing the constitutional power of the President to make appointments.

Ruling:
- This argument is untenable.
- An examination of section 2 of the questioned statute reveals that for the chairman and
members of the Board to qualify they need only be designated by the respective department
heads. With the exception of the representative from the private sector, they sit ex-officio.
o In order to be designated they must already be holding positions in the offices
mentioned in the law. Thus, for instance, one who does not hold a previous
appointment in the Bureau of Customs cannot, under the Act, be designated
representative from that office.

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 o No new appointments are necessary. This is as it should be, because the
representatives so designated merely perform duties in the Board in addition to
those they already perform under their original appointments.
- Congress may increase the power and duties of an existing office without thereby rendering it
necessary that the incumbent should be again nominated and appointed. The additional duties
are germane to the offices already held by them. It is unnecessary that they should be again
appointed by the President.
- Inasmuch as nothing in the Act, nor in the records of the case for that matter, suggests that the
designated representatives to the Board will lose or forfeit their original appointments in their
"parent" offices, it is evident that for purposes of their tenure on the Board they can be
considered as merely on detail, subject to recall by their respective chiefs.
- The arrangement envisioned in section 2 is in no wise incompatible with or violative of the
established doctrine that "the appointing power is the exclusive prerogative of the President,
upon which no limitations maybe imposed by Congress, except those resulting from the need
of securing the concurrence of the Commission on Appointments and from the exercise of the
limited power to prescribe the qualifications to a given appointive office." 
- It is significant that Congress, took care to specify, that the representatives should come from
the Bureau of Customs, Central Bank, Department of Commerce and Industry and the National
Economic Council. The obvious reason must be because these departments and/or bureaus
perform functions which have a direct relation to the importation of raw materials, the
manufacture thereof into embroidery and apparel products and their subsequent exportation
abroad.

Other issues

The law does not violate the equal protection of the laws
- It is a settled rule in constitutional law that legislation which affects with equal force all persons
of the same class and not those of another is not class legislation and does not infringe the
constitutional guarantee of equal protection of the laws
- Respondent P.A.E.A.E. was not singled out by the law in order to favor it over and above
others, but rather because it is the dominant organization in the field. Under the law no
privileges are accorded P.A.E.A.E. members which are not similarly given to non-members.
Both are within the coverage of the Act. Non-membership in the P.A.E.A.E. does not mean that
the benefits granted and the restrictions imposed by the Act shall not apply to those who
choose to venture into the business independently.

The law does not constitute undue delegation for allegedly failing to provide sufficient
standards for the basis of the board’s assessment
- Evidently the special assessment referred to applies to manufactured products which a
manufacturer intends to remove from the bonded warehouse for exportation.
- Far from empowering the Board to levy without sufficient standard, the law sets a reasonable
basis under which the special assessment maybe imposed, to wit: (a) that such special
assessment be levied on manufactured goods intended to be removed for exportation: (b) that
such special assessment should not exceed one percent of the value of the labor, processing
or finishing costs realized from the processed or finished goods exported.

Disposition
The judgment is reversed. RA 3137 is constitutional.

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