ADMINISTRATIVE LAW

CHAPTER 4 CASES

VIII. RULES OF PROCEDURE AND EVIDENCE

1. ANG TIBAY v. CIR

EN BANC

[G.R. No. 46496. February 27, 1940.]

ANG TIBAY, represented by TORIBIO TEODORO, manager and proprietor, and NATIONAL WORKERS' BROTHERHOOD, petitioners, vs. THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.

Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial Relations.

Antonio D. Paguia; for National Labor Union.

Claro M. Recto; for petitioner "Ang Tibay".

Jose M. Casal; for National Workers' Brotherhood.

SYLLABUS

1. COURT OF INDUSTRIAL RELATIONS; POWER. — The nature of the Court of Industrial Relations and of its power is extensively discussed in the decision.

2. ID.; ID.; TECHNICAL RULES OF PROCEDURE; DUE PROCESS OF LAW. — The Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and Commonwealth Act No. 103 requires it to act according to justice and equity and substantial merits of the case, without regard to technicalities or legal evidence but may inform its mind in such manner as it may deem just and equitable (Goseco vs. Court of Industrial Relations et al., G. R. No. 46673). The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does not mean that it can, in justiciable cases coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character.

3. ID.; ID.; ID.; ID.; CARDINAL PRIMARY RIGHTS. — There are cardinal primary rights which must be respected even in proceedings of this character. The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. Not only must there be some evidence to support a finding or conclusion, but the evidence must be substantial. The decision must be

rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. The Court of Industrial Relations should, in all controvercial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered. The performance of this duty is inseparable from the authority conferred upon it.

4. ID.; ID. ; ID. ; ID. ; ID.; CASE AT BAR ; NEW TRIAL GRANTED. — In the light of the foregoing fundamental principles, it is sufficient to observe here that, except as to the alleged agreement between the Ang Tibay and the National Workers' Brotherhood (appendix A), the record is barren and does not satisfy the thirst for a factual basis upon which to predicate, in a rational way, a conclusion of law. This result, however, does not now preclude the concession of a new trial prayed for by the respondent National Labor Union, Inc. The interest of justice would be better served if the movant is given opportunity to present at the hearing the documents referred to in his motion and such other evidence as may be relevant to the main issue involved. The legislation which created the Court of Industrial Relations and under which it acts is new. The failure to grasp the fundamental issue involved is not entirely attributable to the parties adversely affected by the result. Accordingly, the motion for a new trial should be, and the same is hereby, granted, and the entire record of this' case shall be remanded to the Court of Industrial Relations, with instruction that it re-open the case, receive all such evidence as may be relevant, and otherwise proceed in accordance with the requirements set forth in the decision.

D E C I S I O N

LAUREL, J p:

The Solicitor-General in behalf of the respondent Court of Industrial Relations in the above-entitled case has filed a motion for reconsideration and moves that, for the reasons stated in his motion, we reconsider the following legal conclusions of the majority opinion of this Court:

"1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o que no sea para una determinada, termina o bien por voluntad de cualquiera de las partes o cada vez que llega el plazo fijado para el pago de los salarios segun costumbre en la localidad o cuando se termine la obra;

"2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya colectivamente, con ella, sin tiempo fijo, y que se han visto obligados a cesar en sus trabajos por haberse declarado paro forzoso en la fabrica en la cual trabajan, dejan de ser empleados u obreros de la misma;

"3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus obreros sin tiempo fijo de duracion y sin ser para una obra determinada y que se niega a readmitir

a dichos obreros que cesaron como consecuencia de un paro forzoso, no es culpable de practica injusta ni incurre en la sancion penal del articulo 5 de la Ley No. 213 del Commonwealth, aunque su negativa a readmitir se deba a que dichos obreros pertenecen a un determinado organismo obrero, puesto que tales ya han dejado de ser empleados suyos por terminacion del contrato en virtud del paro."

The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the judgment rendered by the majority of this Court and the remanding of the case to the Court of Industrial Relations for a new trial, and avers:

"1. That Toribio Teodoro's claim that on September 26,1938, there was shortage of leather soles in ANG TIBAY making it necessary for him to temporarily lay off the members of the National Labor Union Inc., is entirely false and unsupported by the records of the Bureau of Customs and the Books of Accounts of native dealers in leather.

"2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme adopted to systematically discharge all the members of the National Labor Union, Inc., from work.

"3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re supposed delay of leather soles from the States) was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army.

"4. That the National Workers' Brotherhood of ANG TIBAY is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal. (281 U. S., 548, petitioner's printed memorandum, p. 25.)

"5. That in the exercise by the laborers of their rights to collective bargaining, majority rule and elective representation are highly essential and indispensable. ( Sections 2 and 5, Commonwealth Act No. 213.)

"6. That the century provisions of the Civil Code which had been (the) principal source of dissensions and continuous civil war in Spain cannot and should not be made applicable in interpreting and applying the salutary provisions of a modern labor legislation of American origin where industrial peace has always been the rule.

"7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating against the National Labor Union, Inc., and unjustly favoring the National Workers' Brotherhood.

"8. That the exhibits hereto attached are so inaccessible to the respondents that even with the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations.

"9. That the attached documents and exhibits are of such far-reaching importance and effect that their admission would necessarily mean the modification and reversal of the judgment rendered herein."

The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the respondent Court of Industrial Relations and to the motion for new trial of the respondent National Labor Union, Inc.

In view of the conclusion reached by us and to be herein- after stated with reference to the motion for a new trial of the respondent National Labor Union, Inc., we are of the opinion that it is not necessary to pass upon the motion for reconsideration of the Solicitor-General. We shall proceed to dispose of the motion for new trial of the respondent labor union. Before doing this, however, we deem it necessary, in the interest of orderly procedure in cases of this nature, to make several observations regarding the nature of the powers of the Court of Industrial Relations and emphasize certain guiding principles which should be observed in the trial of cases brought before it. We have re-examined the entire record of the proceedings had before the Court of Industrial Relations in this case, and we have found no substantial evidence to indicate that the exclusion of the 89 laborers here was due to their union affiliation or activity. The whole transcript taken contains what transpired during the hearing and is more of a record of contradictory and conflicting statements of opposing counsel, with sporadic conclusion drawn to suit their own views. It is evident that these statements and expressions of views of counsel have no evidentiary value.

The Court of Industrial Relations is a special court whose functions are specifically stated in the law of its creation (Commonwealth Act No. 103). It is more an administrative board than a part of the integrated judicial system of the nation. It is not intended to be a mere receptive organ of the Government. Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and deciding only cases that are presented to it by the parties litigant, the function of the Court of Industrial Relations, as will appear from perusal of its organic law, is more active, affirmative and dynamic. It not only exercises judicial or quasijudicial functions in the determination of disputes between employers and employees but its functions are far more comprehensive and extensive. It has jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question, matter controversy or dispute arising between, and/or affecting, employers and employees or laborers, and landlords and tenants or farm-laborers, and regulate the relations between them, subject to, and in accordance with, the provisions ofCommonwealth Act No. 103 (section 1). It shall take cognizance for purposes of prevention, arbitration, decision and settlement, of any industrial or agricultural dispute causing or likely to cause a strike or lockout, arising from differences as regards wageshares or compensation, hours of labor or conditions of tenancy or employment, between employers and employees or laborers and between landlords and tenants or farm-laborers, provided that the number of employees, laborers or tenants or farm-laborers involved exceeds thirty, and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or by any or both of the parties to the controversy and certified by the Secretary of Labor as existing and proper to be death with by

the Court for the sake of public interest. (Section A, ibid.) It shall, before hearing the dispute and in the course of such hearing, endeavor to reconcile the parties and induce them to settle the dispute by amicable agreement. (Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it shall investigate and study all pertinent facts related to the industry concerned or to the industries established in a designated locality, with a view to determining the necessity and fairness of fixing and adopting for such industry or locality a minimum wage or share of laborers or tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants or lessees to landowners. (Section 5, ibid.) In fine, it may appeal to voluntary arbitration in the settlement of industrial disputes; may employ mediation or conciliation for that purpose, or recur to the more effective system of official investigation and compulsory arbitration in order to determine specific controversies between labor and capital in industry and in agriculture. There is in reality here a mingling of executive and judicial functions, which is a departure from the rigid doctrine of the separation of governmental powers.

 

In the case of Goseco vs. Court of Industrial Relations et al., G. R. No. 46673, promulgated September 13, 1939, we had occasion to point out that the Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and the Act requires it to "act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as it may deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be restricted to the specific relief claimed or demands made by the parties to the industrial or agricultural dispute, but may include in the award, order or decision any matter or determination which may be deemed necessary or expedient for the purpose of settling the dispute or of preventing further industrial or agricultural disputes. (Section 13, ibid.) And in the light of this legislative policy, appeals to this Court have been especially regulated by the rules recently promulgated by this Court to carry into effect the avowed legislative purpose. The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does not mean that it can, in justiciable cases coming before it, entirely ignore or disregard the fundamental and essential requirements of due Process in trials and investigations of an administrative character. There are cardinal primary rights which must be respected even in proceedings of this character:

(1) The first of these rights is the right to a hearing which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. In the language of Chief Justice Hughes, in Morgan v. U. S., 304 U. S. 1, 58 S. Ct. 773, 999, 82 Law. ed 1129, "the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play."

(2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights

which he asserts but the tribunal must consider the evidence presented. (Chief Justice Hughes in Morgan v. U. S. 298 U. S. 468, 56 S. Ct. 906, 80 Law. ed. 1288.) In the language of this Court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce evidence, without the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside without notice or consideration."

(3) "While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. A decision with absolutely nothing to support it is a nullity, a place when directly attached." (Edwards vs. McCoy, supra.) This principle emanates from the more fundamental principle that the genius of constitutional government is contrary to the vesting of unlimited power anywhere. Law is both a grant and a limitation upon power.

(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs. Agustin, G. R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the evidence must be "substantial." (Washington, Virginia & Maryland Coach Co. v. National Labor Relations Board, 301 U. S. 142, 147, 57 S. Ct. 648, 650, 81 Law ed 965.) Substantial evidence is more than a mere scintilla It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."

(Appalachian Electric Power v. National Labor Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that 'the rules of evidence prevailing in courts of law and equity shall not be controlling.' The obvious purpose of this and similar provisions is to free administrative boards from the compulsion of technical rules so that the mere admission of matter which would be deemed incompetent in judicial proceedings would not invalidate the administrative order. (Interstate Commerce Commission v. Baird, 194 U. S. 25, 44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville & Nashville R. Co., 227 U. S. 88, 93, 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene & Southern Ry. Co., 265 U. S. 274, 288, 44 S. Ct. 565, 569, 68 Law. ed. lola; Tagg Bros. & Moorhead v. United States, 280 U. S. 420, 442, 50 S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable flexibility in administrative procedure does not go so far as to justify orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"

(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. (Interstate Commence Commission vs. L. & N. R. Co., 227 U. S. 88, 33 S. Ct. 185, 57 Law. ed. 431.)Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case against them. It should

not, however, detract from their duty actively to see that the law is enforced, and for that purpose, to use the authorized legal methods of securing evidence and informing itself of facts material and relevant to the controversy. Boards of inquiry may be appointed for the purpose of investigating and determining the facts in any given case, but their report and decision are only advisory. (Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations may refer any industrial or agricultural dispute of any matter under its consideration or advisement to a local board of inquiry, a provincial fiscal, a justice of the peace or any public official in any part of the Philippines for investigation, report and recommendation, and may delegate to such board or public official such powers and functions as the said Court of Industrial Relations may deem necessary, but such delegation shall not affect the exercise of the Court itself of any of its powers (Section 10, ibid.)

(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. It may be that the volume of work is such that it is literally impossible for the titular heads of the Court of Industrial Relations personally to decide all controversies coming before them. In the United States the difficulty is solved with the enactment of statutory authority authorizing examiners or other subordinates to render final decision, with right to appeal to board or commission, but in our case there is no such statutory authority.

(7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the vario issues involved, and the reasons for the decisions rendered. The performance of this duty is inseparable from the authority conferred upon it.

In the light of the foregoing fundamental principles, it is sufficient to observe here that, except as to the alleged agreement between the Ang Tibay and the National Workers' Brotherhood (appendix A), the record is barren and does not satisfy the thirst for a factual basis upon which to predicate, in a rational way, a conclusion of law.

This result, however, does not now preclude the concession of a new trial prayed for by the respondent National Labor Union, Inc. In the portion of the petition hereinabove quoted of the National Labor Union, Inc., it is alleged that "the supposed lack of leather material claimed by Toribio Teodoro was but a scheme adopted to systematically discharge all the members of the National Labor Union, Inc., from work" and this averment is desired to be proved by the petitioner with the "records of the Bureau of Customs and the Books of Accounts of native dealers in leather"; that "the National Workers' Brotherhood Union of Ang Tibay is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal." Petitioner further alleges under oath that the exhibits attached to the petition to prove his substantial averments "are so inaccessible to the respondents that even with the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations", and that the documents attached to the petition "are of such far reaching importance and effect that their

admission would necessarily mean the modification and reversal of the judgment rendered therein." We have considered the reply of Ang Tibay and its arguments against the petition. By and large, after considerable discussion, we have come to the conclusion that the interest of justice would be better served if the movant is given opportunity to present at the hearing the documents referred to in his motion and such other evidence as may be relevant to the main issue involved. The legislation which created the Court of Industrial Relations and under which it acts is new. The failure to grasp the fundamental issue involved is not entirely attributable to the parties adversely affected by the result. Accordingly, the motion for a new trial should be, and the same is hereby granted, and the entire record of this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen the case, receive all such evidence as may be relevant, and otherwise proceed in accordance with the requirements set forth hereinabove. So ordered.

 

Avanceña, C.J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.

||| (Ang Tibay v. Court of Industrial Relations, G.R. No. 46496, [February 27, 1940], 69 PHIL 635-645)

RULE MAKING POWER

PRINCIPLE OF NON-DELEGATION OF POWERS

2. KMU v. GARCIA

FIRST DIVISION

[G.R. No. 115381. December 23, 1994.]

KILUSANG MAYO UNO LABOR CENTER, petitioner, vs. HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD, and the PROVINCIAL BUSES OPERATORS ASSOCIATION OF THE PHILIPPINES, respondents.

D E C I S I O N

KAPUNAN, J p:

Public utilities are privately owned and operated businesses whose service are essential to the general public. They are enterprises which specially cater to the needs of the public and conduce to their comfort and convenience. As such, public utility services are impressed with public interest and concern. The same is true with respect to the business of common carrier which holds such a peculiar relation to the public interest that there is superinduced upon it the right of public regulation when private properties are affected with public interest, hence, they cease to be juris privati only. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect grants to the public an interest in that use, and must submit to the control by the public for the common good, to the extent of the interest he has thus created. 1

An abdication of the licensing and regulatory government agencies of their functions as the instant petition seeks to show, is indeed lamentable. Not only is it an unsound administrative policy but it is inimical to public trust and public interest as well.

The instant petition for certiorari assails the constitutionality and validity of certain memoranda, circulars and/or orders of the Department of Transportation and Communications (DOTC) and the Land Transportation Franchising and Regulatory Board LTFRB) 2 which, among others, (a) authorize provincial bus and jeepney operators to increase or decrease the prescribed transportation fares without application therefor with the LTFRB and without hearing and approval thereof by said agency in violation of Sec. 16(c) of Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act, and in derogation of LTFRB's duty to fix and determine just and reasonable fares by delegating that function to bus operators, and (b) establish a presumption of public need in favor of applicants for certificates of public convenience (CPC) and place on the oppositor the burden of proving that there is no need for the proposed service, in patent violation not only of Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act mandating that fares should be "just and reasonable." It is, likewise, violative of the

Rules of Court which places upon each party the burden to prove his own affirmative allegations. 3 The offending provisions contained in the questioned issuances pointed out by petitioner, have resulted in the introduction into our highways and thoroughfares thousands of old and smoke-belching buses, many of which are right-hand driven, and have exposed our consumers to the burden of spiraling costs of public transportation without hearing and due process. cdrep

The following memoranda, circulars and/or orders are sought to be nullified by the instant petition, viz: (a) DOTC Memorandum Order 90-395, dated June 26, 1990 relative to the implementation of a fare range scheme for provincial bus services in the country; (b) DOTC Department Order No. 92-587, dated March 30, 1992, defining the policy framework on the regulation of transport services; (c) DOTC Memorandum dated October 8, 1992, laying down rules and procedures to implement Department Order No. 92-587; (d) LTFRB Memorandum Circular No. 92-009, providing implementing guidelines on the DOTC Department Order No. 92-587; and (e) LTFRB Order dated March 24, 1994 in Case No. 94-3112.

The relevant antecedents are as follows:

On June 26, 1990, then Secretary of DOTC, Oscar M. Orbos, issued Memorandum Circular No. 90-395 to then LTFRB Chairman, Remedios A.S. Fernando allowing provincial bus operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official rate for a period of one (1) year. The text of the memorandum order reads in full:

One of the policy reforms and measures that is in line with the thrusts and the priorities set out in the Medium-Term Philippine Development Plan (MTPDP) 1987 — 1992) is the liberalization of regulations in the transport sector. Along this line, the Government intends to move away gradually from regulatory policies and make progress towards greater reliance on free market forces.

Based on several surveys and observations, bus companies are already charging passenger rates above and below the official fare declared by LTFRB on many provincial routes. It is in this context that some form of liberalization on public transport fares is to be tested on a pilot basis.

In view thereof, the LTFRB is hereby directed to immediately publicize a fare range scheme for all provincial bus routes in country (except those operating within Metro Manila). Transport operators shall be allowed to charge passengers within a range of fifteen percent (15%) above and fifteen percent (15%) below the LTFRB official rate for a period of one year.

Guidelines and procedures for the said scheme shall be prepared by LTFRB in coordination with the DOTC Planning Service.

The implementation of the said fare range scheme shall start on 6 August 1990.

For compliance. (Emphasis ours.)

Finding the implementation of the fare range scheme "not legally feasible," Remedios A.S. Fernando submitted the following memorandum to Oscar M. Orbos on July 24, 1990, to wit:

With reference to DOTC Memorandum Order No. 90-395 dated 26 June 1990 which the LTFRB received on 19 July 1990, directing the Board "to immediately publicize a fare range scheme for all provincial bus routes in the country (except those operating within Metro Manila)" that will allow operators "to charge passengers within a range of fifteen percent (15%) above and fifteen percent (15%) below the LTFRB official rate for a period of one year" the undersigned is respectfully adverting the Secretary's attention to the following for his consideration:

1. Section 16 (c) of the Public Service Act prescribes the following for the fixing and determination of rates -- (a) the rates to be approved should be proposed by public service operators; (b) there should be a publication and notice to concerned or affected parties in the territory affected; (c) a public hearing should be held for the fixing of the rates; hence, implementation of the proposed fare range scheme on August 6 without complying with the requirements of the Public Service Act may not be legally feasible.

2. To allow bus operators in the country to charge fares fifteen (15%) above the present LTFRB fares in the wake of the devastation, death and suffering caused by the July 16 earthquake will not be socially warranted and will be politically unsound; most likely public criticism against the DOTC and the LTFRB will be triggered by the untimely motu propio implementation of the proposal by the mere expedient of publicizing the fare range scheme without calling a public hearing, which scheme many as early as during the Secretary's predecessor know through newspaper reports and columnists' comments to be Asian Development Bank and World Bank inspired.

3. More than inducing a reduction in bus fares by fifteen percent (15%) the implementation of the proposal will instead trigger an upward adjustment in bus fares by fifteen percent (15%) at a time when hundreds of thousands of people in Central and Northern Luzon, particularly in Central Pangasinan, La Union, Baguio City, Nueva Ecija, and the Cagayan Valley are suffering from the devastation and havoc caused by the recent earthquake.

4. In lieu of the said proposal, the DOTC with its agencies involved in public transportation can consider measures and reforms in the industry that will be socially uplifting, especially for the people in the areas devastated by the recent earthquake.

In view of the foregoing considerations, the undersigned respectfully suggests that the implementation of the proposed fare range scheme this year be further studied and evaluated.

On December 5, 1990, private respondent Provincial Bus Operators Association of the Philippines, Inc. (PBOAP) filed an application for fare rate increase. An across-the-board increase

of eight and a half centavos (P0.085) per kilometer for all types of provincial buses with a minimum-maximum fare range of fifteen (15%) percent over and below the proposed basic per kilometer fare rate, with the said minimum-maximum fare range applying only to ordinary, first class and premium class buses and a fifty-centavo (P0.50) minimum per kilometer fare for aircon buses, was sought.

On December 6, 1990, private respondent PBOAP reduced its applied proposed fare to an across-the-board increase of six and a half (P0.065) centavos per kilometer for ordinary buses. The decrease was due to the drop in the expected price of diesel. llcd

The application was opposed by the Philippine Consumers Foundation, Inc. and Perla C. Bautista alleging that the proposed rates were exorbitant and unreasonable and that the application contained no allegation on the rate of return of the proposed increase in rates.

On December 14, 1990, public respondent LTFRB rendered a decision granting the fare rate increase in accordance with the following schedule of fares on a straight computation method, viz:

AUTHORIZED FARES

 LUZON MIN. OF 5 KMS. SUCCEEDING KM.

REGULAR P1.50 P0.37STUDENT P1.15 P0.28

 

VISAYAS/MINDANAO

REGULAR P1.60 P0.375STUDENT P1.20 P0.285

FIRST CLASS (PER KM.)

 LUZON P0.385 VISAYAS/MINDANAO P0.395

PREMIERE CLASS (PER KM.)

 LUZON P0.395 VISAYAS/ MINDANAO P0.405

AIRCON (PER KM.) P0.415.4

On March 30, 1992, then Secretary of the Department of Transportation and Communications Pete Nicomedes Prado issued Department Order No. 92-587 defining the policy framework on the regulation of transport services. The full text of the said order is reproduced below in view of the importance of the provisions contained therein:

 

WHEREAS, Executive Order No. 125 as amended, designates the Department of Transportation and Communications

(DOTC) as the primary policy, planning, regulating and implementing agency on transportation;

WHEREAS, to achieve the objective of a viable, efficient, and dependable transportation system, the transportation regulatory agencies under or attached to the DOTC have to harmonize their decisions and adopt a common philosophy and direction;

WHEREAS, the government proposes to build on the successful liberalization measures pursued over the last five years and bring the transport sector nearer to a balanced longer term regulatory framework;

NOW, THEREFORE, pursuant to the powers granted by laws to the DOTC, the following policies and principles in the economic regulation of land, air, and water transportation services are hereby adopted:

1. Entry into and exit out of the industry. Following the Constitutional dictum against monopoly, no franchise holder shall be permitted to maintain a monopoly on any route. A minimum of two franchise holders shall be permitted to operate on any route.

The requirements to grant a certificate to operate, or certificate of public convenience, shall be: proof of Filipino citizenship, financial capability, public need, and sufficient insurance cover to protect the riding public.

In determining public need, the presumption of need for a service shall be deemed in favor of the applicant. The burden of proving that there is no need for a proposed service shall be with the oppositor(s).

In the interest of providing efficient public transport services, the use of the 'prior operator' and the 'priority of filing' rules shall be discontinued. The route measured capacity test or other similar tests of demand for vehicle/vessel fleet on any route shall be used only as a guide in weighing the merits of each franchise application and not as a limit to the services offered.

Where there are limitations in facilities, such as congested road space in urban areas, or at airports and ports, the use of demand management measures in conformity with market principles may be considered.

The right of an operator to leave the industry is recognized as a business decision, subject only to the filing of appropriate notice and following a phase-out period, to inform the public and to minimize disruption of services.

2. Rate and Fare Setting. Freight rates shall be freed gradually from government controls. Passenger fares shall also be deregulated, except for the lowest class of passenger service (normally third class passenger transport) for which the government will fix indicative or reference fares. Operators of particular services may fix their own fares within a range 15% above and below the indicative or reference rate.

Where there is lack of effective competition for services, or on specific routes, or for the transport of particular commodities, maximum mandatory freight rates or passenger fares shall be set temporarily by the government pending actions to increase the level of competition.

For unserved or single operator routes, the government shall contract such services in the most advantageous terms to the public and the government, following public bids for the services. The advisability of bidding out the services or using other kinds of incentives on such routes shall be studied by the government.

3. Special Incentives and Financing for Fleet Acquisition. As a matter of policy, the government shall not engage in special financing and incentive programs, including direct subsidies for fleet acquisition and expansion. Only when the market situation warrants government intervention shall programs of this type be considered. Existing programs shall be phased out gradually.

The Land Transportation Franchising and Regulatory Board, the Civil Aeronautics Board, the Maritime Industry Authority are hereby directed to submit to the office of the Secretary, within forty-five (45) days of this Order, the detailed rules and procedures for the Implementation of the policies herein set forth. In the formulation of such rules, the concerned agencies shall be guided by the most recent studies on the subjects, such as the Provincial Road Passenger Transport Study, the Civil Aviation Master Plan, the Presidential Task Force on the Inter-island Shipping Industry, and the Inter-island Liner Shipping Rate Rationalization Study.

For the compliance of all concerned. (Emphasis ours)

On October 8, 1992, public respondent Secretary of the Department of Transportation and Communications Jesus B. Garcia, Jr. issued a memorandum to the Acting Chairman of the LTFRB suggesting swift action on the adoption of rules and procedures to implement above-quoted Department Order No. 92-587 that laid down deregulation and other liberalization policies for the transport sector. Attached to the said memorandum was a revised draft of the required rules and procedures covering (i) Entry Into and Exit Out of the Industry and (ii) Rate and Fare Setting, with comments and suggestions from the World Bank incorporated therein. Likewise, resplendant from the said memorandum is the statement of the DOTC Secretary that the adoption of the rules and procedures is a pre-requisite to the approval of the Economic Integration Loan from the World Bank. 5

On February 17, 1993, the LTFRB issued Memorandum Circular No. 92-009 promulgating the guidelines for the implementation of DOTC Department Order No. 92-587. The Circular provides, among others, the following challenged portions:

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IV. Policy Guidelines on the Issuance of Certificate of Public Convenience:

The issuance of a Certificate of Public Convenience is determined by public need. The presumption of public need for a service shall be deemed in favor of the applicant, while burden of proving that there is no need for the proposed service shall be the oppositor's.

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V. Rate and Fare Setting

The control in pricing shall be liberalized to introduce price competition complementary with the quality of service, subject to prior notice and public hearing. Fares shall not be provisionally authorized without public hearing.

A. On the General Structure of Rates

1. The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicative or reference rate as the basis for the expanded fare range.

2. Fare systems for aircon buses are liberalized to cover first class and premier services.

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(Emphasis ours).

Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent of the existing fares. Said increased fares were to be made effective on March 16, 1994.

On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares.

On March 24, 1994, the LTFRB issued one of the assailed orders dismissing the petition for lack of merit. The dispositive portion reads:

PREMISES CONSIDERED, this Board after considering the arguments of the parties, hereby DISMISSES FOR LACK OF MERIT the petition filed in the above-entitled case. This petition in this case was resolved with dispatch at the request of petitioner to enable it to immediately avail of the legal remedies or options it is entitled under existing laws.

SO ORDERED.6

Hence, the instant petition for certiorari with an urgent prayer for issuance of a temporary restraining order.

The Court, on June 20, 1994, issued a temporary restraining order enjoining, prohibiting and preventing respondents from implementing the bus fare rate increase as well as the questioned orders and memorandum circulars. This meant that provincial bus fares were rolled back to the levels duly

authorized by the LTFRB prior to March 16, 1994. A moratorium was likewise enforced on the issuance of franchises for the operation of buses, jeepneys, and taxicabs.

Petitioner KMU anchors its claim on two (2) grounds. First, the authority given by respondent LTFRB to provincial bus operators to set a fare range of plus or minus fifteen (15) percent, later increased to plus twenty (20%) and minus twenty-five (-25%) percent, over and above the existing authorized fare without having to file a petition for the purpose, is unconstitutional, invalid and illegal. Second, the establishment of a presumption of public need in favor of an applicant for a proposed transport service without having to prove public necessity, is illegal for being violative of the Public Service Act and the Rules of Court.

In its Comment, private respondent PBOAP, while not actually touching upon the issues raised by the petitioner, questions the wisdom and the manner by which the instant petition was filed. It asserts that the petitioner has no legal standing to sue or has no real interest in the case at bench and in obtaining the reliefs prayed for.

In their Comment filed by the Office of the Solicitor General, public respondents DOTC Secretary Jesus B. Garcia, Jr. and the LTFRB asseverate that the petitioner does not have the standing to maintain the instant suit. They further claim that it is within DOTC and LTFRB's authority to set a fare range scheme and establish a presumption of public need in applications for certificates of public convenience.

We find the instant petition impressed with merit.

At the outset, the threshold issue of locus standi must be struck. Petitioner KMU has the standing to sue.

The requirement of locus standi inheres from the definition of judicial power. Section 1 of Article VIII of the Constitution provides:

 

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Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

In Lamb v. Phipps,7 we ruled that judicial power is the power to hear and decide causes pending between parties who have the right to sue in the courts of law and equity. Corollary to this provision is the principle of locus standi of a party litigant. One who is directly affected by and whose interest is immediate and substantial in the controversy has the standing to sue. The rule therefore requires that a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision so as to warrant an invocation of the court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. 8

In the case at bench, petitioner, whose members had suffered and continue to suffer grave and irreparable injury and damage from the implementation of the questioned memoranda, circulars and/or orders, has shown that it has a clear legal right that was violated and continues to be violated with the enforcement of the challenged memoranda, circulars and/or orders. KMU members, who avail of the use of buses, trains and jeepneys everyday, are directly affected by the burdensome cost of arbitrary increase in passenger fares. They are part of the millions of commuters who comprise the riding public. Certainly, their rights must be protected, not neglected nor ignored. cdll

Assuming arguendo that petitioner is not possessed of the standing to sue, this court is ready to brush aside this barren procedural infirmity and recognize the legal standing of the petitioner in view of the transcendental importance of the issues raised. And this act of liberality is not without judicial precedent. As early as theEmergency Powers Cases, this Court had exercised its discretion and waived the requirement of proper party. In the recent case of Kilosbayan, Inc., et al. v. Teofisto Guingona, Jr., et al., 9 we ruled in the same lines and enumerated some of the cases where the same policy was adopted, viz:

. . . A party's standing before this Court is a procedural technicality which it may, in the exercise of its discretion, set aside in view of the importance of the issues raised. In the landmark Emergency Powers Cases, [G.R. No. L-2044 (Araneta v. Dinglasan); G.R. No. L-2756 (Araneta v. Angeles); G.R. No. L-3054 (Rodriguez v. Tesorero de Filipinas); G.R. No. L-3055 (Guerrero v. Commissioner of Customs); and G.R. No. L-3056 (Barredo v. Commission on Elections), 84 Phil. 368 (1949)], this Court brushed aside this technicality because 'the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure. (Avelino vs. Cuenco, G.R. No. L-2621).' Insofar as taxpayers' suits are concerned, this Court had declared that it 'is not devoid of discretion as to whether or not it should be entertained,' (Tan v. Macapagal, 43 SCRA 677, 680 [1972]) or that it 'enjoys an open discretion to entertain the same or not.' [Sanidad v. COMELEC, 73 SCRA 333 (1976)].

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In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and even association of planters, and non-profit civic organizations were allowed to initiate and prosecute actions before this court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies or instrumentalities. Among such cases were those assailing the constitutionality of (a) R.A. No. 3836 insofar as it allows retirement gratuity and commutation of vacation and sick leave to Senators and Representatives and to elective officials of both Houses of Congress (Philippine ConstitutionAssociation, Inc. v. Gimenez, 15 SCRA 479 [1965]); (b) Executive Order No. 284, issued by President Corazon C. Aquino on 25 July 1987, which allowed members of the cabinet, their undersecretaries, and assistant secretaries to hold other

government offices or positions (Civil Liberties Union v. Executive Secretary, 194 SCRA 317 [1991]); (c) the automatic appropriation for debt service in the General Appropriations Act (Guingona v. Carague, 196 SCRA 221 [1991]; (d) R.A. No. 7056 on the holding of desynchronized elections (Osmeña v. Commission on Elections, 199 SCRA 750 [1991]; (e) P.D. No. 1869 (the charter of the Philippine Amusement and Gaming Corporation) on the ground that it is contrary to morals, public policy, and order (Basco v. Philippine Gaming and Amusement Corp., 197 SCRA 52 [1991]); and (f) R.A. No. 6975, establishing the Philippine National Police. (Carpio v. Executive Secretary, 206 SCRA 290 [1992]).

Other cases where we have followed a liberal policy regarding locus standi include those attacking the validity or legality of (a) an order allowing the importation of rice in the light of the prohibition imposed by R.A. No. 3452 (Iloilo Palay and Corn Planters Association, Inc. v. Feliciano, 13 SCRA 377 [1965]; (b) P.D. Nos. 991 and 1033 insofar as they proposed amendments to the Constitution and P.D. No. 1031 insofar as it directed the COMELEC to supervise, control, hold, and conduct the referendum-plebiscite on 16 October 1976 (Sanidad v. Commission on Elections, supra); (c) the bidding for the sale of the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo, Japan (Laurel v. Garcia, 187 SCRA 797 [1990]); (d) the approval without hearing by the Board of Investments of the amended application of the Bataan Petrochemical Corporation to transfer the site of its plant from Bataan to Batangas and the validity of such transfer and the shift of feedstock from naphtha only to naphtha and/or liquefied petroleum gas (Garcia v. Board of Investments, 177 SCRA 374 [1989]; Garcia v. Board of Investments, 191 SCRA 288 [1990]); (e) the decisions, orders, rulings, and resolutions of the Executive Secretary, Secretary of Finance, Commissioner of Internal Revenue, Commissioner of Customs, and the Fiscal Incentives Review Board exempting the National Power Corporation from indirect tax and duties (Maceda v. Macaraig, 197 SCRA 771 [1991]); (f) the orders of the Energy Regulatory Board of 5 and 6 December 1990 on the ground that the hearings conducted on the second provisional increase in oil prices did not allow the petitioner substantial cross-examination; (Maceda v. Energy Regulatory Board, 199 SCRA 454 [1991]); (g) Executive Order No. 478 which levied a special duty of P0.95 per liter of imported oil products (Garcia v. Executive Secretary, 211 SCRA 219 [1992]); (h) resolutions of the Commission on Elections concerning the apportionment, by district, of the number of elective members of Sanggunians (De Guia vs. Commission on Elections, 208 SCRA 420 [1992]); and (i) memorandum orders issued by a Mayor affecting the Chief of Police of Pasay City (Pasay Law and Conscience Union, Inc. v. Cuneta, 101 SCRA 662 [1980]).

In the 1975 case of Aquino v. Commission on Elections (62 SCRA 275 [1975]), this Court, despite its unequivocal ruling that the petitioners therein had no personality to file the petition, resolved nevertheless to pass upon the issues raised because of the far-reaching implications of the petition. We did no less in De Guia v. COMELEC (Supra) where, although we declared that De Guia 'does not appear to have locus standi, a standing in law, a personal or substantial interest,' we brushed

aside the procedural infirmity 'considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent.'

Now on the merits of the case.

On the fare range scheme.

Section 16 (c) of the Public Service Act, as amended, reads:

Sec. 16. Proceedings of the Commission, upon notice and hearing. — The Commission shall have power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to the contrary:

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(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as well as commutation, mileage kilometrage, and other special rates which shall be imposed, observed, and followed thereafter by any public service: Provided, That the Commission may, in its discretion, approve rates proposed by public services provisionally and without necessity of any hearing; but it shall call a hearing thereon within thirty days thereafter, upon publication and notice to the concerns operating in the territory affected: Provided, further, That in case the public service equipment of an operator is used principally or secondarily for the promotion of a private business, the net profits of said private business shall be considered in relation with the public service of such operator for the purpose of fixing the rates. (Emphasis ours).

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Under the foregoing provision, the Legislature delegated to the defunct Public Service Commission the power of fixing the rates of public services. Respondent LTFRB, the existing regulatory body today, is likewise vested with the same under Executive Order No. 202 dated June 19, 1987. Section 5 (c) of the said executive order authorizes LTFRB "to determine, prescribe, approve and periodically review and adjust, reasonable fares, rates and other related charges, relative to the operation of public land transportation services provided by motorized vehicles."

 

Such delegation of legislative power to an administrative agency is permitted in order to adapt to the increasing complexity of modern life. As subjects for governmental regulation multiply, so does the difficulty of administering the laws. Hence, specialization even in legislation has become necessary. Given the task of determining sensitive and delicate matters as route-fixing and rate-making for the transport sector, the responsible regulatory body is entrusted with the power of subordinate legislation. With this authority, an administrative body and in this case, the LTFRB, may implement broad policies laid down in a statute by "filling in"

the details which the Legislature may neither have time or competence to provide. However, nowhere under the aforesaid provisions of law are the regulatory bodies, the PSC and LTFRB alike, authorized to delegate that power to a common carrier, a transport operator, or other public service.

In the case at bench, the authority given by the LTFRB to the provincial bus operators to set a fare range over and above the authorized existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislative authority. Potestas delegata non delegari potest. What has been delegated cannot be delegated. This doctrine is based on the ethical principle that such as delegated power constitutes not only a right but a duty to be performed by the delegate through the instrumentality of his own judgment and not through the intervening mind of another. 11 The policy of allowing the provincial bus operators to change and increase their fares at will would result not only to a chaotic situation but to an anarchic state of affairs. This would leave the riding public at the mercy of transport operators who may increase fares every hour, every day, every month or every year, whenever it pleases them or whenever they deem it "necessary" to do so. In Panay Autobus Co. v. Philippine Railway Co., 12 where respondent Philippine Railway Co. was granted by the Public Service Commission the authority to change its freight rates at will, this Court categorically declared that:

In our opinion, the Public Service Commission was not authorized by law to delegate to the Philippine Railway Co. the power of altering its freight rates whenever it should find it necessary to do so in order to meet the competition of road trucks and autobuses, or to change its freight rates at will, or to regard its present rates as maximum rates, and to fix lower rates whenever in the opinion of the Philippine Railway Co. it would be to its advantage to do so.

The mere recital of the language of the application of the Philippine Railway Co. is enough to show that it is untenable. The Legislature has delegated to the Public Service Commission the power of fixing the rates of public services, but it has not authorized the Public Service Commission to delegate that power to a common carrier or other public service. The rates of public services like the Philippine Railway Co. have been approved or fixed by the Public Service Commission, and any change in such rates must be authorized or approved by the Public Service Commission after they have been shown to be just and reasonable. The public service may, of course, propose new rates, as the Philippine Railway Co. did in case No. 31827, but it cannot lawfully make said new rates effective without the approval of the Public Service Commission, and the Public Service Commission itself cannot authorize a public service to enforce new rates without the prior approval of said rates by the commission. The commission must approve new rates when they are submitted to it, if the evidence shows them to be just and reasonable, otherwise it must disapprove them. Clearly, the commission cannot determine in advance whether or not the new rates of the Philippine Railway Co. will be just and reasonable, because it does not know what those rates will be.

In the present case the Philippine Railway Co. in effect asked for permission to change its freight rates at will. It may change them every day or every hour, whenever it deems it necessary to do so in order to meet competition or whenever in its opinion it would be to its advantage. Such a procedure would create a most unsatisfactory state of affairs and largely defeat the purposes of the public service law. 13 (Emphasis ours).

One veritable consequence of the deregulation of transport fares is a compounded fare. If transport operators will be authorized to impose and collect an additional amount equivalent to 20% over and above the authorized fare over a period of time, this will unduly prejudice a commuter who will be made to pay a fare that has been computed in a manner similar to those of compounded bank interest rates.

Picture this situation. On December 14, 1990, the LTFRB authorized provincial bus operators to collect a thirty-seven (P0.37) centavo per kilometer fare for ordinary buses. At the same time, they were allowed to impose and collect a fare range of plus or minus 15% over the authorized rate. Thus P0.37 centavo per kilometer authorized fare plus P0.05 centavos (which is 15% of P0.37 centavo) is equivalent to P0.42 centavos, the allowed rate in 1990. Supposing the LTFRB grants another five (P0.05) centavo increase per kilometer in 1994, then, the base or reference for computation would have to be P0.47 centavos (which is P0.42 + P0.05 centavos). If bus operators will exercise their authority to impose an additional 20% over and above the authorized fare, then the fare to be collected shall amount to P0.56 (that is, P0.47 authorized LTFRB rate plus 20% of P0.47 which is P0.29). In effect, commuters will be continuously subject, not only to a double fare adjustment but to a compounding fare as well. On their part, transport operators shall enjoy a bigger chunk of the pie. Aside from fare increase applied for, they can still collect an additional amount by virtue of the authorized fare range. Mathematically, the situation translates into the following:

 Year *  LTFRB  Fare Range Fare to be  authorized  collected  rate **   per kilometer

 1990 P0.37 15% (P0.05) P0.42 1994 P0.42 + 0.05 = 0.47 20% (P0.09) P0.56 1998 P0.56 + 0.05 = 0.61 20% (P0.12) P0.73 2002 P0.73 + 0.05 = 0.78 20% (P0.16) P0.94

Moreover, rate making or rate fixing is not an easy task. It is a delicate and sensitive government function that requires dexterity of judgment and sound discretion with the settled goal of arriving at a just and reasonable rate acceptable to both the public utility and the public. Several factors, in fact, have to be taken into consideration before a balance could be achieved. A rate should not be confiscatory as would place an operator in a situation where he will continue to operate at a loss. Hence, the rate should enable public utilities to generate revenues sufficient to cover operational costs and provide reasonable return on the investments. On the other hand, a rate which is too high becomes discriminatory. It is contrary to public

interest. A rate, therefore, must be reasonable and fair and must beaffordable to the end user who will utilize the services.

Given the complexity of the nature of the function of rate-fixing and its far-reaching effects on millions of commuters, government must not relinquish this important function in favor of those who would benefit and profit from the industry. Neither should the requisite notice and hearing be done away with. The people, represented by reputable oppositors, deserve to be given full opportunity to be heard in their opposition to any fare increase.

The present administrative procedure, 14 to our mind, already mirrors an orderly and satisfactory arrangement for all parties involved. To do away with such a procedure and allow just one party, an interested party at that, to determine what the rate should be will undermine the right of the other parties to due process. The purpose of a hearing is precisely to determine what a just and reasonable rate is. 15 Discarding such procedural and constitutional right is certainly inimical to our fundamental law and to public interest.

On the presumption of public need.

A certificate of public convenience (CPC) is an authorization granted by the LTFRB for the operation of land transportation services for public use as required by law. Pursuant to Section 16(a) of the Public Service Act, as amended, the following requirements must be met before a CPC may be granted, to wit: (i) the applicant must be a citizen of the Philippines, or a corporation or co-partnership, association or joint-stock company constituted and organized under the laws of the Philippines, at least 60 per centum of its stock or paid-up capital must belong entirely to citizens of the Philippines; (ii) the applicant must be financially capable of undertaking the proposed service and meeting the responsibilities incident to its operation; and (iii) the applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. It is understood that there must be proper notice and hearing before the PSC can exercise its power to issue a CPC.

While adopting in toto the foregoing requisites for the issuance of a CPC, LTFRB Memorandum Circular No. 92-009, Part IV, provides for yet incongruous and contradictory policy guideline on the issuance of a CPC. The guidelines states:

The issuance of a Certificate of Public Convenience is determined by public need. The presumption of public need for a service shall be deemed in favor of the applicant, while the burden of proving that there is no need for the proposed service shall be the oppositor's. (Emphasis ours).

The above-quoted provision is entirely incompatible and inconsistent with Section 16(c)(iii) of the Public Service Act which requires that before a CPC will be issued, the applicant must prove by proper notice and hearing that the operation of the public service proposed will promote public interest in a proper and suitable manner. On the contrary, the policy guideline states that the presumption of public need for a

public service shall be deemed in favor of the applicant. In case of conflict between a statute and an administrative order, the former must prevail.

 

By its terms, public convenience or necessity generally means something fitting or suited to the public need. 16 As one of the basic requirements for the grant of a CPC, public convenience and necessity exists when the proposed facility or service meets a reasonable want of the public and supply a need which the existing facilities do not adequately supply. The existence or non-existence of public convenience and necessity is therefore a question of fact that must be established by evidence, real and/or testimonial; empirical data; statistics and such other means necessary, in a public hearing conducted for that purpose. The object and purpose of such procedure, among other things, is to look out for, and protect, the interests of both the public and the existing transport operators.

Verily, the power of a regulatory body to issue a CPC is founded on the condition that after full-dress hearing and investigation, it shall find, as a fact, that the proposed operation is for the convenience of the public. 17 Basic convenience is the primary consideration for which a CPC is issued, and that fact alone must be consistently borne in mind. Also, existing operators is subject routes must be given an opportunity to offer proof and oppose the application. Therefore, an applicant must, at all times, be required to prove his capacity and capability to furnish the service which he has undertaken to render. 18 And all this will be possible only if a public hearing were conducted for that purpose. LLjur

Otherwise stated, the establishment of public need in favor of an applicant reverses well-settled and institutionalized judicial, quasi-judicial and administrative procedures. It allows the party who initiates the proceedings to prove, by mere application, his affirmative allegations. Moreover, the offending provisions of the LTFRB memorandum circular in question would in effect amend the Rules of Court by adding another disputable presumption in the enumeration of 37 presumptions under Rule 131, Section 5 of the Rules of Court. Such usurpation of this Court's authority cannot be countenanced as only this Court is mandated by law to promulgate rules concerning pleading, practice and procedure. 19

Deregulation, while it may be ideal in certain situations, may not be ideal at all in our country given the present circumstances. Advocacy of liberalized franchising and regulatory process is tantamount to an abdication by the government of its inherent right to exercise police power, that is, the right of government to regulate public utilities for protection of the public and the utilities themselves.

While we recognize the authority of the DOTC and the LTFRB to issue administrative orders to regulate the transport sector, we find that they committed grave abuse of discretion in issuing DOTC Department Order No. 92-587 defining the policy framework on the regulation of transport services and LTFRB Memorandum Circular No. 92-009 promulgating the

implementing guidelines on DOTC Department Order No. 92-587, the said administrative issuances being amendatory and violative of the Public Service Act and the Rules of Court. Consequently, we rule that the twenty (20%) per centum fare increase imposed by respondent PBOAP on March 16, 1994 without the benefit of a petition and a public hearing is null and void and of no force and effect. No grave abuse of discretion however was committed in the issuance of DOTC Memorandum Order No. 90-395 and DOTC Memorandum dated October 8, 1992, the same being merely internal communications between administrative officers.

WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED and the challenged administrative issuances and orders, namely: DOTC Department Order No. 92-587, LTFRB Memorandum Circular No. 92-009, and the order dated March 24, 1994 issued by respondent LTFRB are hereby DECLARED contrary to law and invalid insofar as they affect provisions therein (a) delegating to provincial bus and jeepney operators the authority to increase or decrease the duly prescribed transportation fares; and (b) creating a presumption of public need for a service in favor of the applicant for a certificate of public convenience and placing the burden of proving that there is no need for the proposed service to the oppositor. LexLib

The Temporary Restraining Order issued on June 20, 1994 is hereby MADE PERMANENT insofar as it enjoined the bus fare rate increase granted under the provisions of the aforementioned administrative circulars, memoranda and/or orders declared invalid.

No pronouncement as to costs.

SO ORDERED.

Padilla, Davide, Jr., Bellosillo and Quiason, JJ., concur.

||| (Kilusang Mayo Uno Labor Center v. Garcia, Jr., G.R. No. 115381, [December 23, 1994])

ISSUES ON RULE-MAKING POWER

A. PERMISSIBILITY OF DELEGATION

3. PASEI v. TORRES

EN BANC

[G.R. No. 101279. August 6, 1992.]

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. petitioner, vs. HON. RUBEN D. TORRES, as Secretary of the Department of Labor & Employment, and JOSE N. SARMIENTO, as Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, respondents.

De Guzman, Meneses & Associates for petitioner.

SYLLABUS

1. ADMINISTRATIVE LAW; ADMINISTRATIVE BODIES; VESTURE OF QUASI LEGISLATIVE AND QUASI JUDICIAL POWERS. — The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More and more administrative bodies are necessary to help in the regulation of society's ramified activities. "Specialized in the particular field assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice."

2. LABOR LAW; OVERSEAS EMPLOYMENT; DOLE AND POEA CIRCULARS; POWER TO RESTRICT AND REGULATE INVOLVES A GRANT OF POLICE POWER. — It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuances discloses that the same fall within the "administrative and policing powers expressly or by necessary implication conferred" upon the respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or stop" and whereas the power to "regulate" means "the power to protect, foster, promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons" (Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218).

3. ID.; ID.; ID.; INVALID FOR LACK OF PROPER PUBLICATION AND FILING IN THE OFFICE OF NATIONAL ADMINISTRATIVE REGISTER. — Nevertheless, the DOLE and POEA circulars are legally invalid, defective and unenforceable for lack of proper publication and filing in the Office of the National Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987.

D E C I S I O N

GRIÑO-AQUINO, J p:

This petition for prohibition with temporary restraining order was filed by the Philippine Association of Service Exporters (PASEI, for short), to prohibit and enjoin the Secretary of the Department of Labor and Employment (DOLE) and the Administrator of the Philippine Overseas Employment Administration (or POEA) from enforcing and implementing DOLE Department Order No. 16, Series of 1991 and POEA Memorandum Circular Nos. 30 and 37, Series of 1991, temporarily suspending the recruitment by private employment agencies of Filipino domestic helpers for Hong Kong and vesting in the DOLE, through the facilities of the POEA, the task of processing and deploying such workers.

PASEI is the largest national organization of private employment and recruitment agencies duly licensed and authorized by the POEA, to engage in the business of obtaining overseas employment for Filipino landbased workers, including domestic helpers. LLphil

On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids employed in Hong Kong, DOLE Secretary Ruben D. Torres issuedDepartment Order No. 16, Series of 1991, temporarily suspending the recruitment by private employment agencies of "Filipino domestic helpers going to Hong Kong" (p. 30, Rollo). The DOLE itself, through the POEA took over the business of deploying such Hong Kong-bound workers.

"In view of the need to establish mechanisms that will enhance the protection for Filipino domestic helpers going to Hong Kong, the recruitment of the same by private employment agencies is hereby temporarily suspended effective 1 July 1991. As such, the DOLE through the facilities of the Philippine Overseas Employment Administration shall take over the processing and deployment of household workers bound for Hong Kong, subject to guidelines to be issued for said purpose.

"In support of this policy, all DOLE Regional Directors and the Bureau of Local Employment's regional offices are likewise directed to coordinate with the POEA in maintaining a manpower pool of prospective domestic helpers to Hong Kong on a regional basis.

"For compliance." (Emphasis ours; p. 30, Rollo.)

Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30, Series of 1991, dated July 10, 1991, providing GUIDELINES on the Government processing and deployment of Filipino domestic helpers to Hong Kong and the accreditation of Hong Kong recruitment agencies intending to hire Filipino domestic helpers.

"Subject: Guidelines on the Temporary Government Processing and Deployment of Domestic Helpers to Hong Kong.

"Pursuant to Department Order No. 16, series of 1991 and in order to operationalize the temporary government processing and deployment of domestic helpers (DHs) to Hong Kong resulting from the temporary suspension of recruitment by private employment agencies for said skill and host market, the following guidelines and mechanisms shall govern the implementation of said policy:

"I. Creation of a Joint POEA-OWWA Household Workers Placement Unit (HWPU).

"An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the supervision of the POEA shall take charge of the various operations involved in the Hong Kong-DH industry segment:

"The HWPU shall have the following functions in coordination with appropriate units and other entities concerned:

"1. Negotiations with and Accreditation of Hong Kong Recruitment Agencies

"2. Manpower Pooling

"3. Worker Training and Briefing

"4. Processing and Deployment

"5. Welfare Programs.

"II. Documentary Requirements and Other Conditions for Accreditation of Hong Kong Recruitment Agencies or Principals. LexLib

"Recruitment agencies in Hong Kong intending to hire Filipino DHs for their employers may negotiate with the HWPU in Manila directly or through the Philippine Labor Attache's Office in Hong Kong.

"xxx xxx xxx

"X. Interim Arrangement

"All contracts stamped in Hong Kong as of June 30 shall continue to be processed by POEA until 31 July 1991 under the name of the Philippine agencies concerned. Thereafter, all contracts shall be processed with the HWPU.

"Recruitment agencies in Hong Kong shall submit to the Philippine Consulate General in Hong Kong a list of their accepted applicants in their pool within the last week of July. The last day of acceptance shall be July 31 which shall then be the basis of HWPU in accepting contracts for processing. After the exhaustion of their respective pools the only source of applicants will be the POEA manpower pool.

"For strict compliance of all concerned." (pp. 31-35, Rollo.)

On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 37, Series of 1991, on the processing of employment contracts of domestic workers for Hong Kong.

"TO: All Philippine and Hong Kong Agencies engaged in the recruitment of Domestic helpers for Hong Kong.

"Further to Memorandum Circular No. 30, series of 1991 pertaining to the government processing and deployment of domestic helpers (DHs) to Hong Kong, processing of employment contracts which have been attested by the Hong Kong Commissioner of Labor up to 30 June 1991 shall be processed by the POEA Employment Contracts Processing Branch up to 15 August 1991 only.

"Effective 16 August 1991, all Hong Kong recruitment agent/s hiring DHs from the Philippines shall recruit under the new scheme which requires prior accreditation with the POEA.

"Recruitment agencies in Hong Kong may apply for accreditation at the Office of the Labor Attache, Philippine Consulate General where a POEA team is posted until 31 August 1991. Thereafter, those who failed to have themselves

accredited in Hong Kong may proceed to the POEA-OWWA Household Workers Placement Unit in Manila for accreditation before their recruitment and processing of DHs shall be allowed.

"Recruitment agencies in Hong Kong who have some accepted applicants in their pool after the cut-off period shall submit this list of workers upon accreditation. Only those DHs in said list will be allowed processing outside of the HWPU manpower pool.

"For strict compliance of all concerned." (Emphasis supplied, p. 36, Rollo.)

On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the aforementioned DOLE and POEA circulars and to prohibit their implementation for the following reasons:

1. that the respondents acted with grave abuse of discretion and/or in excess of their rule-making authority in issuing said circulars;

2. that the assailed DOLE and POEA circulars are contrary to the Constitution, are unreasonable, unfair and oppressive; and

3. that the requirements of publication and filing with the Office of the National Administrative Register were not complied with.

There is no merit in the first and second grounds of the petition.

Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate recruitment and placement activities. LLpr

"Art. 36. Regulatory Power. — The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this title [Regulation of Recruitment and Placement Activities] and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this title." (Italics ours.)

On the other hand, the scope of the regulatory authority of the POEA, which was created by Executive Order No. 797 on May 1, 1982 to take over the functions of the Overseas Employment Development Board, the National Seamen Board, and the overseas employment functions of the Bureau of Employment Services, is broad and far-ranging for:

 

1. Among the functions inherited by the POEA from the defunct Bureau of Employment Services was the power and duty:

"'2. To establish and maintain a registration and/or licensing system to private sector participation in the recruitment and placement of workers, locally and overseas, . . . .' (Art. 15, Labor Code, italics supplied)." (p. 13, Rollo.)

2. It assumed from the defunct Overseas Employment Development Board the power and duty:

"'3. To recruit and place workers for overseas employment of Filipino contract workers, on a government to government arrangement and in such other sectors as policy may dictate . . . .' (Art. 17, Labor Code.)" (p. 13, Rollo.)

3. From the National Seamen Board, the POEA took over:

"2. To regulate and supervise the activities of agents or representatives of shipping companies in the hiring of seamen for overseas employment; and secure the best possible terms of employment for contract seamen workers and secure compliance therewith." (Art. 20, Labor Code.)

The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More and more administrative bodies are necessary to help in the regulation of society's ramified activities. "Specialized in the particular field assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice" (Ibid.).

It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuances discloses that the same fall within the "administrative and policing powers expressly or by necessary implication conferred" upon the respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or stop" (p. 62, Rollo) and whereas the power to "regulate" means "the power to protect, foster, promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons" (Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218).

The Solicitor General, in his Comment, aptly observed:

" . . . Said Administrative Order [i.e., DOLE Administrative Order No. 16] merely restricted the scope or area of petitioner's business operations by excluding therefrom recruitment and deployment of domestic helpers for Hong Kong till after the establishment of the `mechanisms' that will enhance the protection of Filipino domestic helpers going to Hong Kong. In fine, other than the recruitment and deployment of Filipino domestic helpers for Hongkong, petitioner may still deploy other class of Filipino workers either for Hongkong and other countries and all other classes of Filipino workers for other countries. Cdpr

"Said administrative issuances, intended to curtail, if not to end, rampant violations of the rule against excessive collections of placement and documentation fees, travel fees

and other charges committed by private employment agencies recruiting and deploying domestic helpers to Hongkong. [They are] reasonable, valid and justified under the general welfare clause of the Constitution, since the recruitment and deployment business, as it is conducted today, is affected with public interest.

"xxx xxx xxx

"The alleged takeover [of the business of recruiting and placing Filipino domestic helpers in Hongkong] is merely a remedial measure, and expires after its purpose shall have been attained. This is evident from the tenor of Administrative Order No. 16 that recruitment of Filipino domestic helpers going to Hongkong by private employment agencies are hereby 'temporarily suspended effective July 1. 1991.'

"The alleged takeover is limited in scope, being confined to recruitment of domestic helpers going to Hongkong only.

"xxx xxx xxx

" . . . the justification for the takeover of the processing and deploying of domestic helpers for Hongkong resulting from the restriction of the scope of petitioner's business is confined solely to the unscrupulous practice of private employment agencies victimizing applicants for employment as domestic helpers for Hongkong and not the whole recruitment business in the Philippines." (pp. 62-65. Rollo.)

The questioned circulars are therefore a valid exercise of the police power as delegated to the executive branch of Government.

Nevertheless, they are legally invalid, defective and unenforceable for lack of proper publication and filing in the Office of the National Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987 which provide:

"Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in the Official Gazette, unless it is otherwise provided. . . . ." (Civil Code.)

"Art. 5. Rules and Regulations. — The Department of Labor and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation." (Emphasis supplied, Labor Code, as amended.)

Section 3. Filing. — (1) Every agency shall file with the University of the Philippines Law Center, three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months shall not thereafter be the basis of any sanction against any party or persons." (Underscoring supplied, Chapter 2, Book VII of the Administrative Code of 1987.)

"Section 4. Effectivity. — In addition to other rule-making requirements provided by law not inconsistent with this Book, each rule shall become effective fifteen (15) days from the date of filing as above provided unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall take appropriate measures to make emergency rules known to persons who may be affected by them." (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987.)

Once more, we advert to our ruling in Tañada vs. Tuvera, 146 SCRA 446 that:

" . . . Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation," (p. 447.).LLjur

"Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties." (p. 448.)

"We agree that publication must be in full or it is no publication at all since its purpose is to inform the public of the content of the laws." (p. 448.)

For lack of proper publication, the administrative circulars in question may not be enforced and implemented.

WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order No. 16, Series of 1991, and POEA Memorandum Circular Nos. 30 and 37, Series of 1991, by the public respondents is hereby SUSPENDED pending compliance with the statutory requirements of publication and filing under the aforementioned laws of the land. cdll

SO ORDERED.

Narvasa, C . J ., Gutierrez, Jr ., Cruz, Feliciano, Padilla, Bidin, Medialdea, Regalado, Davide, Jr ., Romero, Nocon and Bellosillo, JJ ., concur.

||| (Philippine Ass'n. of Service Exporters, Inc. v. Torres, G.R. No. 101279, [August 6, 1992])

4. SANTIAGO v. COMELEC

EN BANC

[G.R. No. 127325. March 19, 1997.]

MIRIAM DEFENSOR SANTIAGO, ALEXANDER PADILLA, and MARIA ISABEL ONGPIN, petitioners, vs. COMMISSION ON ELECTIONS, JESUS DELFIN, ALBERTO PEDROSA &

CARMEN PEDROSA, in their capacities as founding members of the People's Initiative for Reforms, Modernization and Action (PIRMA), respondents.

SENATOR RAUL S. ROCO, DEMOKRASYA-IPAGTANGGOL ANG KONSTITUSYON (DIK), MOVEMENT OF ATTORNEYS FOR BROTHERHOOD INTEGRITY AND NATIONALISM, INC. (MABINI), INTEGRATED BAR OF THE PHILIPPINES (IBP), and LABAN NG DEMOKRATIKONG PILIPINO (LABAN), petitioners-intervenors.

Roco Bunag Kapunan & Migallos for movant Raul S. Roco.

Rene V . Sarmiento and R.A.V . Saguisag for movants DIK & MABINI.

Pete Quirino Quadra for respondents Sps. Alberto & Carmen Pedrosa.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; COMELEC'S FAILURE TO ACT ON MOTION TO DISMISS AND ITS INSISTENCE TO HOLD ON TO THE PETITION RENDERED RIPE AND VIABLE THE PETITION UNDER SECTION 2 OF RULE 65 OF THE RULES OF COURT. — Except for the petitioners and intervenor Roco, the parties paid no serious attention to the fifth issue, i.e., whether it is proper for this Court to take cognizance of this special civil action when there is a pending case before the COMELEC. . . It must be recalled that intervenor Roco filed with the COMELEC a motion to dismiss the Delfin Petition on the ground that the COMELEC has no jurisdiction or authority to entertain the petition. The COMELEC made no ruling thereon evidently because after having heard the arguments of Delfin and the oppositors at the hearing on 12 December 1996, it required them to submit within five days their memoranda or oppositions/memoranda. The COMELEC's failure to act on Roco's motion to dismiss and its insistence to hold onto the petition rendered ripe and viable the instant petition under Section 2 of Rule 65 of the Rules of Court.

2. ID.; ID.; THE COURT MAY BRUSH ASIDE TECHNICALITIES OF PROCEDURE IN CASES OF TRANSCENDENTAL IMPORTANCE. — The Court may brush aside technicalities of procedure in cases of transcendental importance. As we stated in Kilosbayan, Inc. v. Guingona, Jr.: A Party's standing before this Court is a procedural technicality which it may, in the exercise of its discretion, set aside in view of the importance of issues raised. In the landmark Emergency Powers Cases, this Court brushed aside this technicality because the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure.

3. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS; PROVISION ON THE RIGHT OF THE PEOPLE TO DIRECTLY PROPOSE AMENDMENTS TO THE CONSTITUTION, NOT SELF-EXECUTORY. — Section 2 of Article XVII of the Constitution is not self-executory. In his book, Joaquin Bernas, a member of

the 1986 Constitutional Commission, stated: Without implementing legislation Section 2 cannot operate. Thus, although this mode of amending the Constitution is a mode of amendment which bypasses congressional action, in the last analysis it still is dependent on congressional action. Bluntly stated the right of the people to directly propose amendments to the Constitution through the system of initiative would remain entombed in the cold niche of the Constitution until Congress provides for its implementation. Stated otherwise, while the Constitution has recognized or granted that right, the people cannot exercise it if Congress, for whatever reason, does not provide for its implementation.

4. ID.; ID.; ID.; R.A. 6735; INTENDED TO COVER INITIATIVE TO PROPOSE AMENDMENTS TO THE CONSTITUTION. — We agree that R.A. No. 6735 was, as its history reveals, intended to cover initiative to propose amendments to the Constitution. The Act is a consolidation of House Bill No. 21505 and Senate Bill No. 17. The former was prepared by the committee on Suffrage and Electoral Reforms of Representatives on the basis of two House Bills referred to it, viz., (a) House Bill No. 497, which dealt with the initiative and referendum mentioned in Sections 1 and 32 of Article VI of the Constitution; and (b) House Bill No. 988, which dealt with the subject matter of House Bill No. 497, as well as with initiative and referendum under Section 3 of Article XVII of the Constitution. Senate Bill No. 17 solely, dealt with initiative and referendum concerning ordinances or resolutions of local government units. The Bicameral Conference Committee consolidated Senate Bill No. 17 and House Bill No. 21505 into a draft bill, which was subsequently approved on 8 June 1989 by the Senate and by the House of Representatives. This approved bill is now R.A. No. 6735.

5. ID.; ID.; ID.; ID.; CONGRESS, INVESTED WITH THE POWER TO PROVIDE FOR THE RULES IMPLEMENTING THE EXERCISE OF THE RIGHT. — There is, of course, no other better way for Congress to implement the exercise of the right than through the passage of a statute or legislative act. This is the essence or rationale of the last minute amendment by the Constitutional Commission to substitute the last paragraph of Section 2 of Article XVII then reading: "The Congress shall by law provide for the implementation of the exercise of this right with the Congress shall provide for the implementation of the exercise of this right." This substitute amendment was an investiture on Congress of a power to provide for the rules implementing the exercise of the right. The "rules" means "the details on how [the right] is to be carried out."

6. ID.; ID.; ID.; ID.; NOT IN FULL COMPLIANCE WITH THE POWER AND DUTY OF CONGRESS TO PROVIDE FOR THE IMPLEMENTATION OF THE EXERCISE OF THE RIGHT. — First, Contrary to the assertion of public respondent COMELEC, Section 2 of the Act does not suggest an initiative on amendments to the Constitution. The inclusion of the word "Constitution" therein was a delayed afterthought. That word is neither germane nor relevant to said section, which exclusively relates to initiative and referendum on national laws and local laws, ordinances, and resolutions. That section is silent as to amendments on the Constitution. As pointed out earlier,

initiative on the Constitution is confined only to proposals to AMEND. The people are not accorded the power to "directly propose, enact, approve, or reject, in whole or in part, the Constitution" through the system of initiative. They can only do so with respect to "laws, ordinances, or resolutions."' . . . Second. It is true that Section 3 (Definition of Terms) of the Act defines initiative on amendments to the Constitution and mentions it as one of the three systems of initiative, and that Section 5 (Requirements) restates the constitutional requirements as to the percentage of the registered voters who must submit the proposal. But unlike in the case of the other systems ofinitiative, the Act does not provide for the contents of a petition for initiative on the Constitution. Section 5 paragraph (c) requires, among other things, a statement of the proposed law sought to be enacted, approve or rejected, amended or repealed, as the case may be. It does not include, as among the contents of the petition, the provisions of the Constitution sought to be amended, in the case of initiative on the Constitution. . . . The use of the clause "proposed laws sought to be enacted, approved or rejected, amended or repealed" only strengthens the conclusion that Section 2, quoted earlier, excludes initiative on amendments to the Constitution.Third. While the Act provides subtitles for National Initiative and Referendum (Subtitle, II) and for Local Initiative and Referendum (Subtitle III), no subtitle is provided forinitiative on the Constitution. This conspicuous silence as to the latter simply means that the main thrust of the Act is initiative and referendum on national and local laws. If Congress intended R.A. No. 6735 to fully provide for the implementation of the initiative on amendments to the Constitution, it could have provided for a subtitle therefor, considering that in the order of things, the primacy of interest, or hierarchy of values, the right of the people to directly propose amendments to the Constitution is far more important than the initiative on national and local laws. . . . The foregoing brings us to the conclusion that R.A. No. 6735 is incomplete, inadequate, or wanting in essential terms and conditions insofar as initiative on amendments to the Constitution is concerned. Its lacunae on this substantive matter are fatal and. cannot be cured by "empowering" the COMELEC "to promulgate such rules and regulations as may be necessary to carry out the purposes of [the] Act."

7. ID.; ID.; ID.; ID.; SUBTITLING OF THE ACT, NOT ACCURATE. — A further examination of the Act even reveals that the subtitling is not accurate. Provisions not germane to the subtitle on National Initiative and Referendum are placed therein, like (1) paragraphs (b) and (c) of Section 9, (2) that portion of Section 1] (Indirect Initiative) referring to indirect initiative with the legislative bodies of local governments, and (3) Section 12 on Appeal, since it applies to decisions of the COMELEC on the findings of sufficiency or insufficiency of the petition for initiative or referendum, which could be petitions for both national and local initiative and referendum.

8. ID.; ID.; ID.; ID.; SECTION 18 ON AUTHORITY OF COURTS UNDER SUBTITLE ON LOCAL INITIATIVE AND REFERENDUM, MISPLACED. — Section 18 on "Authority of Courts" under subtitle III on Local Initiative and Referendum is

misplaced, since the provision therein applies to both national and local initiative and referendum.

9. ID.; ID.; ID.; ID.; FAILED TO GIVE SPECIAL ATTENTION ON THE SYSTEM OF INITIATIVE ON AMENDMENTS TO THE CONSTITUTION WHICH IS MORE IMPORTANT BEING THE PARAMOUNT SYSTEM OF INITIATIVE. — While R.A. No. 6735 exerted utmost diligence and care in providing for the details in the implementation of initiative and referendum on national and local legislation thereby giving them special attention, it failed, rather intentionally, to do so on the system of initiative on amendments to the Constitution. Upon the other hand, as to initiative on amendments to the Constitution, R.A. No. 6735, in all of its twenty-three sections, merely (a) mentions the word "Constitution" in Section 2. (b) defines "initiative on the Constitution" and includes it in the enumeration of the three systems of initiative in Section 3; (c) speaks of "plebiscite" as the process by which the proposition, in an initiative on the Constitution may be approved or rejected by the people., (d) reiterates the constitutional requirements as to the number of voters who should sign the petition; and (e) provides for the date of effectivity of the approved proposition. There was, therefore, an obvious downgrading of the more important or the paramount system of initiative. R.A. No. 6735 thus delivered a humiliating blow to the system of initiative on amendments to the Constitution by merely paying it a reluctant lip service.

 

10. ID.; ID.; ID.; ID.; ARGUMENT THAT INITIATIVE ON AMENDMENTS TO THE CONSTITUTION IS SUBSUMED UNDER SUBTITLE ON NATIONAL INITIATIVE AND REFERENDUM, NOT ACCEPTABLE. — We cannot accept the argument that the initiative on amendments to the Constitution is subsumed under the subtitle on National Initiative and Referendum because it is national in scope. Our reading of Subtitle II (National Initiative and Referendum) and Subtitle III (Local Initiative and Referendum) leaves no room for doubt that the classification is not based on the scope of the initiative involved, but on its nature and character. It is national initiative," if what is proposed to be adopted or enacted is a national law, or a law which only Congress can pass. It is "local initiative" if what is proposed to be adopted or enacted is a law,ordinance, or resolution which only the legislative bodies of the governments of the autonomous regions, provinces, cities, municipalities, and barangays can pass. This classification of initiative into national and local is actually based on Section 3 of the Act.

11. ID.; ID.; ID.; ID.; COMELEC DOES NOT HAVE THE POWER TO VALIDLY PROMULGATE RULES AND REGULATIONS TO IMPLEMENT THE EXERCISE OF THE RIGHT OF THE PEOPLE TO DIRECTLY PROPOSE AMENDMENTS TO THE CONSTITUTION UNDER R.A. 6735. — It logically follows that the COMELEC cannot validly promulgate rules and regulations to implement the exercise of the right of the people to directly propose amendments to the Constitution through the system of initiative. It does not have that power under R.A. No. 6735. Reliance on the COMELEC's power under Section 2(1) of Article IX-C of the Constitution is

misplaced, for the laws and regulations referred to therein are those promulgated by the COMELEC under (a) Section 3 of Article IX-C of the Constitution, or (b) a law where subordinate legislation is authorized and which satisfies the "completeness" and the "sufficient standard" tests.

12. ID.; ID.; ID.; ID.; DELFIN PETITION, DEFECTIVE BECAUSE IT DOES NOT CONTAIN THE SIGNATURES OF THE REQUIRED NUMBER OF VOTERS. — Under Section 2 of Article XVII of the Constitution and Section 5(b) of R.A. No. 6735, a petition for initiative on the Constitution must be signed by at least 12% of the total number of registered voters of which every legislative district is represented by at least 3% of the registered voters therein. The Delfin Petition does not contain signatures of the required number of voters. Delfin himself admits that he has not yet gathered signatures and that the purpose of his petition is primarily to obtain assistance in his drive to gather signatures. Without the required signatures, the petition cannot be deemed validly initiated.

13. ID.; ID.; ID.; ID.; DELFIN PETITION, NOTHING MORE THAN A MERE SCRAP OF PAPER. — The COMELEC acquires jurisdiction over a petition for initiative only after its filing. The petition then is the initiatory pleading. Nothing before its filing is cognizable by the COMELEC, sitting en banc. . . . Since the Delfin Petition is not the initiatory petition under R.A. No. 6735 and COMELEC Resolution No. 2300, it cannot be entertained or given cognizance of by the COMELEC. The respondent Commission must have known that the petition does not fall under any of the actions or proceedings under the COMELEC Rules of Procedure or under Resolution No. 2300, for which reason it did not assign to the petition a docket number. Hence, the said petition was merely entered as UND, meaning, undocketed. That petition was nothing more than a mere scrap of paper, which should not have been dignified by the Order of 6 December 1996, the hearing on 12 December 1996, and the order directing Delfin and the oppositors to file their memoranda or oppositions. In so dignifying it, the COMELEC acted without jurisdiction or with grave abuse of discretion and merely wasted its time, energy, and resources.

14. POLITICAL LAW; LEGISLATIVE DEPARTMENT ; DELEGATION OF POWER; WHAT HAS BEEN DELEGATED CANNOT BE DELEGATED; EXCEPTIONS THEREOF. — The rule is that what has been delegated, cannot be delegated or as expressed in a Latin maxim: potestas delegata non delegari potest. The recognized exceptions to the rule are as follows: (1) Delegation of tariff powers to the President under Section 28(2) of Article VI of the Constitution; (2) Delegation of emergency powers to the President under Section 23 (2) of Article VI of the Constitution; (3) Delegation to the people at large; (4) Delegation to local governments; and (5) Delegation to administrative bodies.

15. ID.; ID.; ID.; REQUISITES FOR VALID DELEGATION; SUFFICIENT STANDARD; CONSTRUED; R.A. 6735 MISERABLY FAILED TO SATISFY BOTH REQUIREMENTS. — In every case of permissible delegation, there must be a showing that the delegation itself is valid. It is valid only if the law (a) is complete in itself, setting forth therein the policy to be executed, carried out, or implemented by the delegate; and (b)

fixes a standard — the limits of which are sufficiently determinate and determinable — to which the delegate must conform in the performance of his functions. A sufficient standard is one which defines legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It indicates the circumstances under which the legislative command is to be effected. Insofar as initiative to propose amendments to the Constitution is concerned, R.A. No. 6735 miserably failed to satisfy both requirements in subordinate legislation. The delegation of the power to the COMELEC is then invalid.

PUNO, J., concurring and dissenting:

1. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS: R.A. 6735; SUFFICIENTLY IMPLEMENTS THE RIGHTS OF THE PEOPLE TO INITIATE AMENDMENTS TO THE CONSTITUTION THRU INITIATIVE. — I submit that R.A. No. 6735 sufficiently implements the right of the people to initiate amendments to the Constitution thru initiative. . . . We need not torture the text of said law to reach the conclusion that it implements people's initiative to amend the Constitution. R.A. No. 6735 is replete with references to this prerogative of the people. First, the policy statement declares: "Sec. 2. Statement of Policy. — The power of the people under a system of initiative and referendum to directly propose, enact, approve or reject, in whole or in part, the Constitution, laws, ordinances, or resolutions passed by any legislative body upon compliance with the requirements and guaranteed." Second, the law defines "initiative" as "the power of the people to propose amendments to the Constitution or to propose and enact legislations through an election called for the purpose," and "plebiscite" as "the electoral process by which an initiative on the Constitution is approved or rejected by the people." Third, the law provides the requirements for a petition for initiative to amend the Constitution. Section 5(b) states that "(a) petition for an initiative on the 1987 Constitution must have at least twelve per centum (12%) of the total number of registered voters as signatories, of which every legislative district must be represented by at least three per centum (3%) of the registered voters therein." It also states that "(i)nitiative on the Constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution and only once every five (5) years thereafter." Finally, R.A. No. 6735 fixes the effectivity date of the amendment. Section 9(b) states that "(t)he proposition in an initiative on the Constitution approved by a majority of the votes cast in the plebiscite shall become effective as to the day of the plebiscite."

2. ID.; ID.; ID.; ID.; SUFFICIENTLY STATES THE POLICY AND STANDARDS TO GUIDE THE COMELEC IN PROMULGATING THE IMPLEMENTING RULES AND REGULATIONS OF THE LAW; CASE AT BAR. — R.A. No. 6735 sufficiently states the policy and the standards to guide the COMELEC in promulgating the law's implementing rules and regulations of the law. . . . In the case at bar, the policy and the standards are bright-lined in R.A. No. 6735. A 20-20 look at the law cannot miss them. They were not written by our legislators in invisible ink. The policy and standards can also be found in no less than Section 2, Article XVII of the

Constitution on Amendments or Revisions. There is thus no reason to hold that the standards provided for in R.A. No. 6735 are insufficient for in other cases we have upheld as adequate more general standards such as "simplicity and dignity," "public interest," "public welfare," "interest of law and order," "justice and equity," "adequate and efficient instruction," "public safety," "public policy," "greater national interest, "protect the local consumer by stabilizing and subsidizing domestic pump rates," and "promote simplicity, economy and efficiency in government." A due regard and respect to the legislature, a co-equal and coordinate branch of government, should counsel this Court to refrain from refusing to effectuate laws unless they are clearly unconstitutional.

3. ID.; ID.; ID.; ID.; COMELEC RESOLUTION NO. 2300 MERELY PROVIDES THE PROCEDURE TO EFFECTUATE THE POLICY OF R.A. 6735, HENCE, DID NOT VIOLATE THE RULES ON VALID DELEGATION. — In enacting R.A. No. 6735, it cannot be said that Congress totally transferred its power to enact the law implementing people's initiative to COMELEC. A close look at COMELEC Resolution No. 2300 will show that it merely provided the procedure to effectuate the policy of R.A. No. 6735 giving life to the people's initiative to amend the Constitution. The debates in the Constitutional Commission make it clear that the rules of procedure to enforce the people's initiative can be delegated. . . . The prohibition against the legislature is to impair the substantive right of the people to initiate amendments to the Constitution. It is not, however, prohibited from legislating the procedure to enforce the people's right of initiative or to delegate it to another body like the COMELEC with proper standard.

 

4. ID.; ID.; ID.; ID.; ARGUMENT ON LACK OF SUB-TITLE ON PEOPLE'S INITIATIVE TO AMEND THE CONSTITUTION, SHOULD BE GIVEN THE WEIGHT OF HELIUM. — The argument that R.A. No. 6735 does not include people's initiative to amend the Constitution simply because it lacks a sub-title on the subject should be given the weight of helium. Again, the hoary rule in statutory construction is that headings prefixed to titles, chapters and sections of a statute may be consulted in aid of interpretation, but inferences drawn therefrom are entitled to very little weight, and they can never control the plain terms of the enacting clauses.

5. ID.; ID.; ID.; ID.; ID.; LAPSES IN R.A. 6735 ARE TO BE EXPECTED, FOR LAWS ARE NOT ALWAYS WRITTEN IN IMPECCABLE ENGLISH. — It is unfortunate that the majority decision resorts to a strained interpretation of R.A. No. 6735 to defeat its intent which it itself concedes is to implement people's initiative to propose amendments to the Constitution. Thus, it laments that the word "Constitution" is neither germane nor relevant to the Policy thrust of Section 2 and that the statute's subtitling is not accurate. These lapses are to be expected for laws are not always written in impeccable English. Rightly, the Constitution does not require our legislators to be word-smiths with the ability to write bills with poetic commas like Jose Garcia Villa or in lyrical prose like Winston Churchill. But it has always been our good policy not to refuse to effectuate the intent of a law on the ground that it is

badly written. As the distinguished Vicente Francisco reminds us: "Many laws contain words which have not been used accurately. But the use of inapt or inaccurate language or words, will not vitiate the statute if the legislative intention can be ascertained. The same is equally true with reference to awkward, slovenly, or ungrammatical expressions, that is, such expressions and words will be construed as carrying the meaning the legislature intended that they bear, although such a construction necessitates a departure from the literal meaning of the words used."

6. ID.; ID.; ID.; ID.; PETITION AGAINST RESPONDENTS PEDROSAS SHOULD BE DISMISSED BECAUSE IT STATES NO CAUSE OF ACTION. — The petition should be dismissed with respect to the Pedrosas. The inclusion of the Pedrosas in the petition is utterly baseless. The records show that the case at bar started when respondent Delfin alone and by himself filed with the COMELEC a Petition to Amend the Constitution to Lift Term Limits of Elective Officials by People's Initiative. The Pedrosas did not join the petition. . . . Petitioners sued the COMELEC, Jesus Delfin, Alberto Pedrosa and Carmen Pedrosa in their capacities as founding members of the People's Initiative for Reform, Modernization and Action (PIRMA). The suit is an original action for prohibition with prayer for temporary restraining order and/or writ of preliminary injunction. The petition on its face states no cause of action against the Pedrosas. The only allegation against the Pedrosas is that they are founding members of the PIRMA which proposes to undertake the signature drive for people's initiative to amend the Constitution.

7 ID.; ID.; ID.; ID.; SOLICITATION OF SIGNATURES IS A RIGHT GUARANTEED IN BLACK AND WHITE BY SECTION 2 OF ARTICLE XVII OF THE CONSTITUTION. — One need not draw a picture to impart the proposition that in soliciting signatures to start a people's initiative to amend the Constitution the Pedrosas are not engaged in any criminal act. Their solicitation of signatures is a right guaranteed in black and white by Section 2 of Article XVII of the Constitution which provides that ". . . amendments to this Constitution may likewise be directly proposed by the people through initiative . . . ." This right springs from the principle proclaimed in Section 1, Article II of the Constitution that in a democratic and republican state "sovereignty resides in the people and all government authority emanates from them." The Pedrosas are part of the people and their voice is part of the voice of the people. They may constitute but a particle of our sovereignty but no power can trivialize them for sovereignty is indivisible.

8. ID.; ID.; ID.; RESPONDENTS' RIGHT OF SOLICITING SIGNATURES TO AMEND THE CONSTITUTION, CANNOT BE ABRIDGED WITHOUT ANY IFS AND BUTS. — Section 16 of Article XIII of the Constitution provides: "The right of the people and their organizations to effective and reasonable participation at all levels of social, political and economic decision-making shall not be abridged. The State shall by law, facilitate the establishment of adequate consultation mechanisms." This is another novel provision of the 1987 Constitution strengthening the sinews of the sovereignty of our people. In soliciting signatures to amend the Constitution, the Pedrosas are participating in the political decision-making

process of our people. The Constitution says their right cannot be abridged without any ifs and buts. We cannot put a question mark on their right.

9. ID.; ID.; ID.; RESPONDENTS' CAMPAIGN TO AMEND THE CONSTITUTION IS AN EXERCISE OF THEIR FREEDOM OF SPEECH AND EXPRESSION AND THEIR RIGHT TO PETITION THE GOVERNMENT FOR REDRESS OF GRIEVANCES. — The Pedrosas' campaign to amend the Constitution is an exercise of their freedom of speech and expression. We have memorialized this universal right in all our fundamental laws from the Malolos Constitution to the 1987 Constitution. We have iterated and reiterated in our rulings that freedom of speech is a preferred right, the matrix of other important rights of our people. Undeniably, freedom speech enervates the essence of the democratic creed of think and let think. For this reason, the Constitution encourages speech even if it protects the speechless.

10. ID.; ID.; ID.; RESPONDENTS, RIGHT TO SOLICIT SIGNATURES TO START A PEOPLE'S INITIATIVE TO AMEND THE CONSTITUTION DOES NOT DEPEND ON ANY LAW. — It is thus evident that the right of the Pedrosas to solicit signatures to start a people's initiative to amend the Constitution does not depend on any law, much less on R.A. No. 6735 or COMELEC Resolution No. 2300. No law, no Constitution can chain the people to an undesirable status quo. To be sure, there are no irrepealable laws just as there are no irrepealable Constitutions. Change is the predicate of progress and we should not fear change. Mankind has long recognized the truism that the only constant in life is change and so should the majority.

11. STATUTORY CONSTRUCTION; INTENT OF THE LEGISLATURE; THE INTENT OF R.A. 6735 IS TO IMPLEMENT THE PEOPLE'S INITIATIVE TO AMEND THE CONSTITUTION. — Our effort to discover the meaning of R.A. No. 6735 should start with the search of the intent of our lawmakers. A knowledge of this intent is criticalfor the intent of the legislature is the law and the controlling factor in its interpretation. Stated otherwise, intent is the essence of the law, the spirit which gives life to its enactment. . . . Since it is crystalline that the intent of R.A. No. 6735 is to implement the people's initiative to amend the Constitution, it is our bounden duty to interpret the law as it was intended by the legislature. We have ruled that once intent is ascertained, it must be enforced even if it may not be consistent with the strict letter of the law and this ruling is as old as the mountain. We have also held that where a law is susceptible of more than one interpretation, that interpretation which will most tend to effectuate the manifest intent of the legislature will be adopted. The text of R.A. No. 6735 should therefore be reasonably construed to effectuate its intent to implement the people's initiative to amend the Constitution. . . . All said, it is difficult to agree with the majority decision that refuses to enforce the manifest intent or spirit of R.A. No. 6735 to implement the people's initiative to amend the Constitution. It blatantly disregards the rule cast in concrete that the letter of the law is its body but its spirit is its soul.

12. POLITICAL LAW; LEGISLATIVE DEPARTMENT; DELEGATION OF POWER; SUFFICIENT STANDARD; PURPOSE THEREOF. — Former Justice Isagani A. Cruz similarly elucidated that "a sufficient standard is intended to map out the boundaries of the delegates' authority by defining the legislative policy and indicating the circumstances under which it is to be pursued and effected. The purpose of the sufficient standard is to prevent a total transference of legislative power from the lawmaking body to the delegate."

13. ID.; ID.; ID.; THE COURT HAS PRUDENTIALLY REFRAINED FROM INVALIDATING ADMINISTRATIVE RULES ON THE GROUND OF LACK OF ADEQUATE STANDARD. —A survey of our case law will show that this Court has prudentially refrained from invalidating administrative rules on the ground of lack of adequate legislative standard to guide their promulgation. As aptly perceived by former Justice Cruz, "even if the law itself does not expressly pinpoint the standard, the courts will bend backward to locate the same elsewhere in order to spare the statute, if it can, from constitutional infirmity.

VITUG, J., separate opinion:

1. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS; R.A. 6735; DELFIN PETITION, UTTERLY DEFICIENT. — The Delfin petition is thus utterly deficient. Instead of complying with the constitutional imperatives, the petition would rather have much of its burden passed on, in effect, to the COMELEC. The petition would require COMELEC to schedule "signature gathering all over the country," to cause the necessary publication of the petition "in newspapers of general and local circulation," and to instruct "Municipal Election Registrars in all Regions of the Philippines to assist petitioners and volunteers in establishing signing stations at the time and on the dates designated for the purpose.

2. ID.; ID.; ID.; TEMPORARY RESTRAINING ORDER ISSUED BY THE COURT SHOULD BE HELD TO COVER ONLY THE DELFIN PETITION. — The TRO earlier issued by the Court which, consequentially, is made permanent under the ponencia should be held to cover only the Delfin petition and must not be so understood as having intended or contemplated to embrace the signature drive of the Pedrosas. The grant of such a right is clearly implicit in the constitutional mandate on people initiative.

 

FRANCISCO, J., dissenting and concurring:

1. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS; R.A. 6735; AMPLY COVERS AN INITIATIVE ON THE CONSTITUTION. — Republic Act No. 6735, otherwise known as "The Initiative and Referendum Act" amply covers an initiative on the Constitution. In its definition of terms, Republic Act No. 6735 definesinitiative as "the power of the people to propose amendments to the constitution or to propose and enact legislations through an election called for the purpose." The

same section, in enumerating the three systems of initiative, included in "initiative on the constitution which refers to a petition proposing amendments to the constitution." Paragraph (e) again of Section 3 defines "plebiscite" as "the electoral process by which an initiative on the constitution is approved or rejected by the people." And as to the material requirements for an initiative on the Constitution, Section 5(b) distinctly enumerates the following: "A petition for an initiative on the 1987 Constitution must have at least twelve per centum (12%) of the total number of the registered voters as signatories, of which every legislative distinct must be represented by at least three per centum (3%) of the registered voters therein. Initiative on the constitution may be exercised only after five (5) years from the ratification of 1987 Constitution and only once every five years thereafter." These provisions were inserted, on purpose, by Congress the intent being to provide for the implementation of the right to propose an amendment to the Constitution by way of initiative. "A legal provision," the Court has previously said, "must not be construed as to be a useless surplusage, and accordingly, meaningless, in the sense of adding nothing to the law or having no effect whatsoever thereon". . . . Clearly then, Republic Act No. 6735 covers an initiative on the constitution. Any other construction as what petitioners foist upon the Court constitute a betrayal of the intent and spirit behind the enactment.

2. ID.; ID.; ID.; ID.; COMELEC CANNOT TAKE ANY ACTION ON DELFIN PETITION BECAUSE IT IS UNACCOMPANIED BY THE REQUIRED PERCENTAGE OF REGISTERED VOTERS; CASE AT BAR. — I agree with the ponencia that the Commission on Elections, at present, cannot take any action (such as those contained in the Commission's orders dated December 6, 9, and 12, 1996 [Annexes B, C and B-1 ]) indicative of its having already assumed jurisdiction over private respondents' petition. This is so because from the tenor of Section 5 (b) of R.A. No. 6735 it would appear that proof of procurement of the required percentage of registered voters at the time the petition for initiative is filed, is a jurisdictional requirement. Here private respondents' petition is unaccompanied by the required signatures. This defect notwithstanding, it is without prejudice to the refiling of their petition once compliance with the required percentage is satisfactorily shown by private respondents. In the absence, therefore, of an appropriate petition before the Commission on Elections, any determination of whether private respondents' proposal constitutes an amendment or revision is premature.

3. STATUTORY CONSTRUCTION; EVERY PART OF THE STATUTE MUST BE INTERPRETED WITH REFERENCE TO THE CONTEXT. — It is a rule that every part of the statute must be interpreted with reference to the context, i.e., that every part of the statute must be construed together with the other parts and kept subservient to the general intent of the whole enactment. Thus, the provisions of Republic Act No. 6735 may not be interpreted in isolation. The legislative intent behind every law is to be extracted from the statute as a whole.

PANGANIBAN, J., concurring and dissenting:

1. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS; R.A. 6735; TAKEN

TOGETHER AND INTERPRETED PROPERLY, THE CONSTITUTION, R.A. 6735 AND COMELEC RESOLUTION 2300 ARE SUFFICIENT TO IMPLEMENT CONSTITUTIONAL INITIATIVES. — While R.A. 6735 may not be a perfect law it was — as the majority openly concedes — intended by the legislature to cover and, I respectfully submit, it contains enough provisions to effectuate an initiative on the Constitution. I completely agree with the inspired and inspiring opinions of Mr. Justice Reynato S. Puno and Mr. Justice Ricardo J. Francisco that RA 6735, the Roco law on initiative, sufficiently implements the right of the people to initiate amendments to the Constitution. Such views, which I shall no longer repeat nor elaborate on, are thoroughly consistent with this Court's unanimous en banc rulings in Subic Bay Metropolitan Authority vs. Commission on Elections, that "provisions for initiative . . . are (to be) liberally construed to effectuate their purposes, to facilitate and not hamper the exercise by the voters of the rights granted thereby'; and in Garcia vs. Comelec, that any effort to trivialize the effectiveness of people's initiatives ought to be rejected."

2. ID.; ID.; ID .; ID.; MAJORITY'S POSITION ALL TOO SWEEPING AND ALL TOO EXTREMIST. — I find the majority's position all too sweeping and all too extremist. It is equivalent to burning the whole house to exterminate the rats, and to killing the patient to relieve him of pain. What Citizen Delfin wants the Comelec to do we should reject. But we should not thereby preempt any future effort to exercise the right of initiative correctly and judiciously. The fact that the Delfin Petition proposes a misuse of initiative does not justify a ban against its proper use. Indeed, there is a right way to do the right thing at the right time and for the right reason.

3. ID.; ID.; ID.; ID.; COMELEC CANNOT ENTERTAIN ANY PETITION IN THE ABSENCE OF THE REQUIRED NUMBER OF SIGNATURES. — Until and unless an initiatory petition can show the required number of signatures — in this case, 12% of all the registered voters in the Philippines with at least 3% in every legislative district — no public funds may be spent and no government resources may be used in an initiative to amend the Constitution. Verily, the Comelec cannot even entertain any petition absent such signatures.

4. ID.; ID.; ID.; ID.; WISELY EMPOWERED THE COMMISSION ON ELECTIONS TO PROMULGATE RULES AND REGULATIONS. — No law can completely and absolutely cover all administrative details. In recognition of this, R.A. 6735 wisely empowered the Commission on Elections "to promulgate such rules and regulations as may be necessary to carry out the purposes of this Act." And pursuant thereto, the Comelec issued its Resolution 2300 on 16 January 1991. Such Resolution, by its very words, was promulgated "to govern the conduct of initiative on the Constitution and initiative and referendum on national and local laws," not by the incumbent Commission on Elections by one then composed of Acting Chairperson Haydee B. Yorac, Comms. Alfredo E. Abueg, Jr., Leopoldo L. Africa, Andres R. Flores, Dario C. Rama and Magdara B. Dimaampao. All of these Commissioners who signed resolution 2300 have retired from the Commission, and thus we cannot ascribe any vile motive unto them, other than

an honest, sincere and exemplary effort to give life to a cherished right of our people.

5. ID.; ID.; ID.; ID.; THE COURT HAS NO POWER TO RESTRAIN ANYONE FROM EXERCISING THEIR RIGHT OF INITIATIVE. — The Court has no power to restrain them from exercising their right of initiative. The right to propose amendments to the Constitution is really a species of the right of free speech and free assembly. And certainly, it would be tyrannical and despotic to stop anyone from speaking freely and persuading others to conform to his/her beliefs. As the eminent Voltaire once said, "I may disagree with what you say, but I will defend to the death your right to say it." After all, freedom is not really for the thought we agree with, but as Justice Holmes wrote, "freedom for the thought that we hate."

D E C I S I O N

DAVIDE, JR., J p:

The heart of this controversy brought to us by way of a petition for prohibition under Rule 65 of the Rules of Court is the right of the people to directly propose amendments to the Constitution through the system of initiative under Section 2 of Article XVII of the 1987 Constitution. Undoubtedly, this demands special attention, as this system of initiative was unknown to the people of this country, except perhaps to a few scholars before the drafting of the 1987 Constitution. The 1986 Constitutional Commission itself, through the original proponent 1 and the main sponsor 2 of the proposed Article on Amendments or Revision of the Constitution, characterized this system as "innovative". 3 Indeed it is, for both under the 1935 and 1973 Constitutions, only two methods of proposing amendments to, or revision of, the Constitution were recognized, viz., (1) by Congress upon a vote of three-fourths of all its members and (2) by a constitutional convention. 4 For this and the other reasons hereafter discussed, we resolved to give due course to this petition.

On 6 December 1996, private respondent Atty. Jesus S. Delfin filed with public respondent Commission on Elections (hereafter, COMELEC) a "Petition to Amend the Constitution, to Lift Term Limits of Elective Officials, by People's Initiative" (hereafter, Delfin Petition) 5 wherein Delfin asked the COMELEC for an order

1. Fixing the time and dates for signature gathering all over the country;

2. Causing the necessary publications of said Order and the attached "Petition for Initiative on the 1987 Constitution, in newspapers of general and local circulation;

3. Instructing Municipal Election Registrars in all Regions of the Philippines, to assist Petitioners and volunteers, in establishing signing stations at the time and on the dates designated for the purpose.

Delfin alleged in his petition that he is a founding member of the Movement for People's Initiative, 6 a group of citizens desirous to avail of the system intended to institutionalize people power; that he and the members of the Movement and

other volunteers intend to exercise the power to directly propose amendments to the Constitution granted under Section 2, Article XVII of the Constitution; that the exercise of that power shall be conducted in proceedings under the control and supervision of the COMELEC; that, as required in COMELEC Resolution No. 2300, signature stations shall be established all over the country, with the assistance of municipal election registrars, who shall verify the signatures affixed by individual signatories; that before the Movement and other volunteers can gather signatures, it is necessary that the time and dates to be designated for the purpose be first fixed in an order to be issued by the COMELEC; and that to adequately inform the people of the electoral process involved, it is likewise necessary that the said order, as well as the Petition on which the signatures shall be affixed, be published in newspapers of general and local circulation, under the control and supervision of the COMELEC.

 

The Delfin Petition further alleged that the provisions sought to be amended are Sections 4 and 7 of Article VI, 7 Section 4 of Article VII, 8 and Section 8 of Article X9 of the Constitution. Attached to the petition is a copy of a "Petition for Initiative on the 1987 Constitution" 10 embodying the proposed amendments which consist in the deletion from the aforecited sections of the provisions concerning term limits, and with the following proposition:

DO YOU APPROVE OF LIFTING THE TERM LIMITS OF ALL ELECTIVE GOVERNMENT OFFICIALS, AMENDING FOR THE PURPOSE SECTIONS 4 AND 7 OF ARTICLE VI, SECTION 4 OF ARTICLE VII, AND SECTION 8 OF ARTICLE X OF THE 1987 PHILIPPINE CONSTITUTION?

According to Delfin, the said Petition for Initiative will first be submitted to the people, and after it is signed by at least twelve per cent of the total number of registered voters in the country it will be formally filed with the COMELEC.

Upon the filing of the Delfin Petition, which was forthwith given the number UND 96-037 (INITIATIVE), the COMELEC, through its Chairman, issued an Order 11 (a) directing Delfin "to cause the publication of the petition, together with the attached Petition for Initiative on the 1987 Constitution (including the proposal, proposed constitutional amendment, and the signature form), and the notice of hearing in three (3) daily newspapers of general circulation at his own expense" not later than 9 December 1996; and (b) setting the case for hearing on 12 December 1996 at 10:00 a.m.

At the hearing of the Delfin Petition on 12 December 1996, the following appeared: Delfin and Atty. Pete Q. Quadra; representatives of the People's Initiative for Reforms, Modernization and Action (PIRMA); intervenor-oppositor Senator Raul S. Roco, together with his two other lawyers and representatives of, or counsel for, the Integrated Bar of the Philippines (IBP), Demokrasya-Ipagtanggol ang Konstitusyon (DIK), Public Interest Law Center, and Laban ng Demokratikong Pilipino (LABAN). 12Senator Roco, on that same day, filed a Motion to Dismiss the Delfin Petition on the

ground that it is not the initiatory petition properly cognizable by the COMELEC.

After hearing their arguments, the COMELEC directed Delfin and the oppositors to file their "memoranda and/or oppositions/memoranda" within five days. 13

On 18 December 1996, the petitioners herein — Senator Miriam Defensor Santiago, Alexander Padilla, and Maria Isabel Ongpin — filed this special civil action for prohibition raising the following arguments:

(1) The constitutional provision on people's initiative to amend the Constitution can only be implemented by law to be passed by Congress. No such law has been passed; in fact, Senate Bill No. 1290 entitled An Act Prescribing and Regulating Constitutional Amendments by People's Initiative, which petitioner Senator Santiago filed on 24 November 1995, is still pending before the Senate Committee on Constitutional Amendments.

(2) It is true that R.A. No. 6735 provides for three systems of initiative, namely, initiative on the Constitution, on statutes, and on local legislation. However, it failed to provide any subtitle initiative on the Constitution, unlike in the other modes of initiative, which are specifically provided for in Subtitle II and Subtitle III. This deliberate omission indicates that the matter of people's initiative to amend the Constitution was left to some future law. Former Senator Arturo Tolentino stressed this deficiency in the law in his privilege speech delivered before the Senate in 1994: "There is not a single word in that law which can be considered as implementing [the provision on constitutional initiative]. Such implementing provisions have been obviously left to a separate law."

(3) Republic Act No. 6735 provides for the effectivity of the law after publication in print media. This indicates that the Act covers only laws and not constitutional amendments because the latter take effect only upon ratification and not after publication.

(4) COMELEC Resolution No. 2300, adopted on 16 January 1991 to govern "the conduct of initiative on the Constitution and initiative and referendum on national and local laws, is ultra vires insofar as initiative on amendments to the Constitution is concerned, since the COMELEC has no power to provide rules and regulations for the exercise of the right of initiative to amend the Constitution. Only Congress is authorized by the Constitution to pass the implementing law.

(5) The people's initiative is limited to amendments to the Constitution, not to revision thereof. Extending or lifting of term limits constitutes a revision and is, therefore, outside the power of the people's initiative. cdtai

(6) Finally, Congress has not yet appropriated funds for people's initiative; neither the COMELEC nor any other government department, agency, or office has realigned funds for the purpose.

To justify their recourse to us via the special civil action for prohibition, the petitioners allege that in the event the

COMELEC grants the Delfin Petition, the people's initiative spearheaded by PIRMA would entail expenses to the national treasury for general re-registration of voters amounting to at least P180 million, not to mention the millions of additional pesos in expenses which would be incurred in the conduct of the initiative itself. Hence, the transcendental importance to the public and the nation of the issues raised demands that this petition for prohibition be settled promptly and definitely, brushing aside technicalities of procedure and calling for the admission of a taxpayer's and legislator's suit. 14 Besides, there is no other plain, speedy, and adequate remedy in the ordinary course of law.

On 19 December 1996, this Court (a) required the respondents to comment on the petition within a non-extendible period of ten days from notice; and (b) issued a temporary restraining order, effective immediately and continuing until further orders, enjoining public respondent COMELEC from proceeding with the Delfin Petition, and private respondents Alberto and Carmen Pedrosa from conducting a signature drive for people's initiative to amend the Constitution.

On 2 January 1997, private respondents, through Atty. Quadra, filed their Comment 15 on the petition. They argue therein that:

1. IT IS NOT TRUE THAT IT WOULD ENTAIL EXPENSES TO THE NATIONAL TREASURY FOR GENERAL REGISTRATION OF VOTERS AMOUNTING TO AT LEAST PESOS: ONE HUNDRED EIGHTY MILLION (P180,000,000.00)" IF THE COMELEC GRANTS THE PETITION FILED BY RESPONDENT DELFIN BEFORE THE COMELEC."

2. NOT A SINGLE CENTAVO WOULD BE SPENT BY THE NATIONAL GOVERNMENT IF THE COMELEC GRANTS THE PETITION OF RESPONDENT DELFIN. ALL EXPENSES IN THE SIGNATURE GATHERING ARE ALL FOR THE ACCOUNT OF RESPONDENT DELFIN AND HIS VOLUNTEERS PER THEIR PROGRAM OF ACTIVITIES AND EXPENDITURES SUBMITTED TO THE COMELEC. THE ESTIMATED COST OF THE DAILY PER DIEM OF THE SUPERVISING SCHOOL TEACHERS IN THE SIGNATURE GATHERING TO BE DEPOSITED and TO BE PAID BY DELFIN AND HIS VOLUNTEERS IS P2,571,200.00;

3. THE PENDING PETITION BEFORE THE COMELEC IS ONLY ON THE SIGNATURE GATHERING WHICH BY LAW COMELEC IS DUTY BOUND "TO SUPERVISE CLOSELY" PURSUANT TO ITS "INITIATORY JURISDICTION" UPHELD BY THE HONORABLE COURT IN ITS RECENT SEPTEMBER 26, 1996 DECISION IN THE CASE OF SUBIC BAY METROPOLITAN AUTHORITY VS . COMELEC, ET . AL. G.R. NO. 125416;

4. REP. ACT NO. 6735 APPROVED ON AUGUST 4, 1989 IS THE ENABLING LAW IMPLEMENTING THE POWER OF PEOPLE INITIATIVE TO PROPOSE AMENDMENTS TO THE CONSTITUTION. SENATOR DEFENSOR-SANTIAGO'S SENATE BILL NO. 1290 IS A DUPLICATION OF WHAT ARE ALREADY PROVIDED FOR IN REP. ACT NO. 6735;

5. COMELEC RESOLUTION NO. 2300 PROMULGATED ON JANUARY 16, 1991 PURSUANT TO REP. ACT 6735 WAS UPHELD BY THE HONORABLE COURT IN THE RECENT SEPTEMBER 26, 1996 DECISION IN THE CASE OF SUBIC BAY METROPOLITAN AUTHORITY VS. COMELEC, ET AL. G.R. NO. 125416 WHERE THE HONORABLE COURT SAID: "THE COMMISSION ON ELECTIONS CAN DO NO LESS BY SEASONABLY AND JUDICIOUSLY PROMULGATING GUIDELINES AND RULES FOR BOTH NATIONAL AND LOCAL USE, IN IMPLEMENTING OF THESE LAWS."

6. EVEN SENATOR DEFENSOR-SANTIAGO'S SENATE BILL NO. 1290 CONTAINS A PROVISION DELEGATING TO THE COMELEC THE POWER TO "PROMULGATE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO CARRY OUT THE PURPOSES OF THIS ACT." (SEC. 12, S.B. NO. 1290, ENCLOSED AS ANNEX E, PETITION);

7. THE LIFTING OF THE LIMITATION ON THE TERM OF OFFICE OF ELECTIVE OFFICIALS PROVIDED UNDER THE 1987 CONSTITUTION IS NOT A "REVISION" OF THE CONSTITUTION. IT IS ONLY AN AMENDMENT. "AMENDMENT ENVISAGES AN ALTERATION OF ONE OR A FEW SPECIFIC PROVISIONS OF THE CONSTITUTION. REVISION CONTEMPLATES A RE-EXAMINATION OF THE ENTIRE DOCUMENT TO DETERMINE HOW AND TO WHAT EXTENT IT SHOULD BE ALTERED." (PP. 412-413, 2ND. ED. 1992, 1097 PHIL. CONSTITUTION, BY JOAQUIN G. BERNAS, SJ.).

Also on 2 January 1997, private respondent Delfin filed in his own behalf a Comment 16 which starts off with an assertion that the instant petition is a "knee-jerk reaction to a draft 'Petition for Initiative on the 1987 Constitution' . . . which is not formally filed yet." What he filed on 6 December 1996 was an "Initiatory Pleading" or "Initiatory Petition," which was legally necessary to start the signature campaign to amend the Constitution or to put the movement to gather signatures under COMELEC power and function. On the substantive allegations of the petitioners, Delfin maintain as follows:

(1) Contrary to the claim of the petitioners, there is a law, R.A. No. 6735, which governs the conduct of initiative to amend the Constitution. The absence therein of a subtitle for such initiative is not fatal, since subtitles are not requirements for the validity or sufficiency of laws.

(2) Section 9(b) of R.A. No. 6735 specifically provides that the proposition in an initiative to amend the Constitution approved by the majority of the votes cast in the plebiscite shall become effective as of the day of the plebiscite.

 

(3) The claim that COMELEC Resolution No. 2300 is ultra vires is contradicted by (a) Section 2, Article IX-C of the Constitution, which grants the COMELEC the power to enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum, and recall; and (b) Section 20 of R.A. 6735, which empowers the COMELEC

to promulgate such rules and regulations as may be necessary to carry out the purposes of the Act.

(4) The proposed initiative does not involve a revision of, but mere amendment to, the Constitution because it seeks to alter only a few specific provisions of the Constitution, or more specifically, only those which lay term limits. It does not seek to reexamine or overhaul the entire document.

As to the public expenditures for registration of voters, Delfin considers petitioners' estimate of P180 million as unreliable, for only the COMELEC can give the exact figure. Besides, if there will be a plebiscite it will be simultaneous with the 1997 Barangay Elections. In any event, fund requirements for initiative will be a priority government expense because it will be for the exercise of the sovereign power of the people.

In the Comment 17 for the public respondent COMELEC, filed also on 2 January 1997, the Office of the Solicitor General contends that:

(1) R.A. No. 6735 deals with, inter alia, people's initiative to amend the Constitution. Its Section 2 on Statement of Policy explicitly affirms, recognizes, and guarantees that power; and its Section 3, which enumerates the three systems of initiative, includes initiative on the Constitution and defines the same as the power to propose amendments to the Constitution. Likewise, its Section 5 repeatedly mentions initiative on the Constitution.

(2) A separate subtitle on initiative on the Constitution is not necessary in R.A. No. 6735 because, being national in scope, that system of initiative is deemed included in the subtitle on National Initiative and Referendum; and Senator Tolentino simply overlooked pertinent provisions of the law when he claimed that nothing therein was provided for initiative on the Constitution.

(3) Senate Bill No. 1290 is neither a competent nor a material proof that R.A. No. 6735 does not deal with initiative on the Constitution.

(4) Extension of term limits of elected officials constitutes a mere amendment to the Constitution, not a revision thereof.

(5) COMELEC Resolution No. 2300 was validly issued under Section 20 of R.A. No. 6735 and under the Omnibus Election Code. The rule-making power of the COMELEC to implement the provisions of R.A. No. 6735 was in fact upheld by this Court in Subic Bay Metropolitan Authority vs. COMELEC.

On 14 January 1997, this Court (a) confirmed nunc pro tunc the temporary restraining order; (b) noted the aforementioned Comments and the Motion to Lift Temporary Restraining Order filed by private respondents through Atty. Quadra, as well as the latter's Manifestation stating that he is the counsel for private respondents Alberto and Carmen Pedrosa only and the Comment he filed was for the Pedrosas; and (c) granted the Motion for Intervention filed on 6 January 1997 by Senator Raul Roco and allowed him to file his Petition in Intervention not later than 20 January 1997; and (d) set the case for hearing on 23 January 1997 at 9:30 a.m.

On 17 January 1997, the Demokrasya-Ipagtanggol ang Konstitusyon (DIK) and the Movement of Attorneys for Brotherhood Integrity and Nationalism, Inc. (MABINI), filed a Motion for Intervention. Attached to the motion was their Petition in Intervention, which was later replaced by an Amended Petition in Intervention wherein they contend that:

(1) The Delfin proposal does not involve a mere amendment to, but a revision of, the Constitution because, in the words of Fr. Joaquin Bernas, SJ., 18 it would involve a change from a political philosophy that rejects unlimited tenure to one that accepts unlimited tenure; and although the change might appear to be an isolated one, it can affect other provisions, such as, on synchronization of elections and on the State policy of guaranteeing equal access to opportunities for public service and prohibiting political dynasties. 19 A revision cannot be done by initiative which, by express provision of Section 2 of Article XVII of the Constitution, is limited toamendments.

(2) The prohibition against reelection of the President and the limits provided for all other national and local elective officials are based on the philosophy of governance, "to open up the political arena to as many as there are Filipinos qualified to handle the demands of leadership, to break the concentration of political and economic powers in the hands of a few, and to promote effective proper empowerment for participation in policy and decision-making for the common good"; hence, to remove the term limits is to negate and nullify the noble vision of the 1987 Constitution.

(3) The Delfin proposal runs counter to the purpose of initiative particularly in a conflict-of-interest situation. Initiative is intended as a fallback position that may be availed of by the people only if they are dissatisfied with the performance of their elective officials, but not as a premium for good performance. 20

(4) R.A. No 6735 is deficient and inadequate in itself to be called the enabling law that implements the people's initiative on amendments to the Constitution. It fails to state (a) the proper parties who may file the petition, (b) the appropriate agency before whom the petition is to be filed, (c) the contents of the petition, (d) the publication of the same, (e) the ways and means of gathering the signatures of the voters nationwide and 3% per legislative district, (f) the proper parties who may oppose or question the veracity of the signatures, (g) the role of the COMELEC in the verification of the signatures and the sufficiency of the petition, (h) the appeal from any decision of the COMELEC, (i) the holding of a plebiscite, and (g) the appropriation of funds for such people's initiative. Accordingly, there being no enabling law, the COMELEC has no jurisdiction to hear Delfin's petition.

(5) The deficiency of R.A. No. 6735 cannot be rectified or remedied by COMELEC Resolution No. 2300, since the COMELEC is without authority to legislate the procedure for a people's initiative under Section 2 of Article XVII of the Constitution. That function exclusively pertains to Congress. Section 20 of R.A. No. 6735 does not constitute a legal basis

for the Resolution, as the former does not set a sufficient standard for a valid delegation of power.

On 20 January 1997, Senator Raul Roco filed his Petition in Intervention. 21 He avers that R.A. No. 6735 is the enabling law that implements the people's right to initiate constitutional amendments. This law is a consolidation of Senate Bill No. 17 and House Bill No. 21505; he co-authored the House Bill and even delivered a sponsorship speech thereon. He likewise submits that the COMELEC was empowered under Section 20 of that law to promulgate COMELEC Resolution No. 2300. Nevertheless, he contends that the respondent Commission is without jurisdiction to take cognizance of the Delfin Petition and to order its publication because the said petition is not the initiatory pleading contemplated under the Constitution, Republic Act No. 6735, and COMELEC Resolution No. 2300. What vests jurisdiction upon the COMELEC in an initiative on the Constitution is the filing of a petition for initiative which is signed by the required number of registered voters. He also submits that the proponents of a constitutional amendment cannot avail of the authority and resources of the COMELEC to assist them in securing the required number of signatures, as the COMELEC's role in an initiative on the Constitution is limited to the determination of the sufficiency of the initiative petition and the call and supervision of a plebiscite, if warranted.cdt

On 20 January 1997, LABAN filed a Motion for Leave to Intervene.

The following day, the IBP filed a Motion for Intervention to which it attached a Petition in Intervention raising the following arguments:

(1) Congress has failed to enact an enabling law mandated under Section 2, Article XVII of the 1987 Constitution.

(2) COMELEC Resolution No. 2300 cannot substitute for the required implementing law on the initiative to amend the Constitution.

(3) The Petition for Initiative suffers from a fatal defect in that it does not have the required number of signatures.

(4) The petition seeks, in effect a revision of the Constitution, which can be proposed only by Congress or a constitutional convention. 22

On 21 January 1997, we promulgated a Resolution (a) granting the Motions for Intervention filed by the DIK and MABINI and by the IBP, as well as the Motion for Leave to Intervene filed by LABAN; (b) admitting the Amended Petition in Intervention of DIK and MABINI, and the Petitions in Intervention of Senator Roco and of the IBP; (c) requiring the respondents to file within a nonextendible period of five days their Consolidated Comments on the aforesaid Petitions in Intervention; and (d) requiring LABAN to file its Petition in Intervention within a nonextendible period of three days from notice, and the respondents to comment thereon within a nonextendible period of five days from receipt of the said Petition in Intervention.

At the hearing of the case on 23 January 1997, the parties argued on the following pivotal issues, which the Court formulated in light of the allegations and arguments raised in the pleadings so far filed:

1. Whether R.A. No. 6735, entitled An Act Providing for a System of Initiative and Referendum and Appropriating Funds Therefor, was intended to include or coverinitiative on amendments to the Constitution; and if so, whether the Act, as worded, adequately covers such initiative.

2. Whether that portion of COMELEC Resolution No. 2300 (In re: Rules and Regulations Governing the Conduct of Initiative on the Constitution, and Initiative and Referendum on National and Local Laws) regarding the conduct of initiative on amendments to the Constitution is valid, considering the absence in the law of specific provisions on the conduct of such initiative.

 

3. Whether the lifting of term limits of elective national and local officials, as proposed in the draft "Petition for Initiative on the 1987 Constitution," would constitute a revision of, or an amendment to, the Constitution.

4. Whether the COMELEC can take cognizance of, or has jurisdiction over, a petition solely intended to obtain an order (a) fixing the time and dates for signature gathering; (b) instructing municipal election officers to assist Delfin's movement and volunteers in establishing signature stations; and (c) directing or causing the publication of, inter alia, the unsigned proposed Petition for Initiative on the 1987 Constitution.

5. Whether it is proper for the Supreme Court to take cognizance of the petition when there is a pending case before the COMELEC.

After hearing them on the issues, we required the parties to submit simultaneously their respective memoranda within twenty days and requested intervenor Senator Roco to submit copies of the deliberations on House Bill No. 21505.

On 27 January 1997, LABAN filed its Petition in Intervention wherein it adopts the allegations and arguments in the main Petition. It further submits that the COMELEC should have dismissed the Delfin Petition for failure to state a sufficient cause of action and that the Commission's failure or refusal to do so constituted grave abuse of discretion amounting to lack of jurisdiction.

On 28 January 1997, Senator Roco submitted copies of portions of both the Journal and the Record of the House of Representatives relating to the deliberations of House Bill No. 21505, as well as the transcripts of stenographic notes on the proceedings of the Bicameral Conference Committee, Committee on Suffrage and Electoral Reforms, of 6 June 1989 on House Bill No. 21505 and Senate Bill No. 17.

Private respondents Alberto and Carmen Pedrosa filed their Consolidated Comments on the Petitions in Intervention of

Senator Roco, DIK and MABINI, and IBP. 23 The parties thereafter filed, in due time, their separate memoranda. 24

As we stated in the beginning, we resolved to give due course to this special civil action.

For a more logical discussion of the formulated issues, we shall first take up the fifth issue which appears to pose a prejudicial procedural question.

I

THE INSTANT PETITION IS VIABLE DESPITE THE PENDENCY IN THE COMELEC OF THE DELFIN PETITION.

Except for the petitioners and intervenor Roco, the parties paid no serious attention to the fifth issue, i.e., whether it is proper for this Court to take cognizance of this special civil action when there is a pending case before the COMELEC. The petitioners provide an affirmative answer. Thus:

28. The Comelec has no jurisdiction to take cognizance of the petition filed by private respondent Delfin. This being so, it becomes imperative to stop the Comelec from proceeding any further, and under the Rules of Court, Rule 65, Section 2, a petition for prohibition is the proper remedy.

29. The writ of prohibition is an extraordinary judicial writ issuing out of a court of superior jurisdiction and directed to an inferior court, for the purpose of preventing the inferior tribunal from usurping a jurisdiction with which it is not legally vested. (People v. Vera, supra., p. 84). In this case the writ is an urgent necessity, in view of the highly divisive and adverse environmental consequences on the body politic of the questioned Comelec order. The consequent climate of legal confusion and political instability begs for judicial statesmanship.

30. In the final analysis, when the system of constitutional law is threatened by the political ambitions of man, only the Supreme Court can save a nation in peril and uphold the paramount majesty of the Constitution. 25

It must be recalled that intervenor Roco filed with the COMELEC a motion to dismiss the Delfin Petition on the ground that the COMELEC has no jurisdiction or authority to entertain the petition. 26 The COMELEC made no ruling thereon evidently because after having heard the arguments of Delfin and the oppositors at the hearing on 12 December 1996, it required them to submit within five days their memoranda or oppositions/memoranda. 27 Earlier, or specifically on 6 December 1996, it practically gave due course to the Delfin Petition by ordering Delfin to cause the publication of the petition, together with the attached Petition for Initiative, the signature form, and the notice of hearing; and by setting the case for hearing. The COMELEC's failure to act on Roco's motion to dismiss and its insistence to hold on to the petition rendered ripe and viable the instant petition under Section 2 of Rule 65 of the Rules of Court, which provides:

SEC. 2. Petition for prohibition. — Where the proceedings of any tribunal, corporation, board, or person, whether exercising

functions judicial or ministerial, are without or in excess of its or his jurisdiction, or with grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant to desist from further proceedings in the action or matter specified therein.

It must also be noted that intervenor Roco claims that the COMELEC has no jurisdiction over the Delfin Petition because the said petition is not supported by the required minimum number of signatures of registered voters. LABAN also asserts that the COMELEC gravely abused its discretion in refusing to dismiss the Delfin Petition, which does not contain the required number of signatures. In light of these claims, the instant case may likewise be treated as a special civil action for certiorariunder Section I of Rule 65 of the Rules of Court.

In any event, as correctly pointed out by intervenor Roco in his Memorandum, this Court may brush aside technicalities of procedure in cases of transcendental importance. As we stated in Kilosbayan, Inc. v. Guingona, Jr.; 28

A party's standing before this Court is a procedural technicality which it may, in the exercise of its discretion, set aside in view of the importance of issues raised. In the landmark Emergency Powers Cases, this Court brushed aside this technicality because the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure.

II

R.A. NO. 6735 INTENDED TO INCLUDE THE SYSTEM OF INITIATIVE ON AMENDMENTS TO THE CONSTITUTION, BUT IS, UNFORTUNATELY, INADEQUATE TO COVER THAT SYSTEM.

Section 2 of Article XVII of the Constitution provides:

SEC. 2. Amendments to this Constitution may likewise be directly proposed by the people through initiative upon a petition of at least twelve per centum of the total number of registered voters, of which every legislative district must be represented by at least three per centum of the registered voters therein. No amendment under this section shall be authorized within five years following the ratification of this Constitution nor oftener than once every five years thereafter.

The Congress shall provide for the implementation of the exercise of this right.

This provision is not self-executory. In his book, 29 Joaquin Bernas, a member of the 1986 Constitutional Commission, stated:

Without implementing legislation Section 2 cannot operate. Thus, although this mode of amending the Constitution is a mode of amendment which bypasses congressional action, in the last analysis it still is dependent on congressional action.

Bluntly stated, the right of the people to directly propose amendments to the Constitution through the system of initiative would remain entombed in the cold niche of the Constitution until Congress provides for its implementation. Stated otherwise, while the Constitution has recognized or granted that right, the people cannot exercise it if Congress, for whatever reason, does not provide for its implementation.

This system of initiative was originally included in Section 1 of the draft Article on Amendment or Revision proposed by the Committee on Amendments and Transitory Provisions of the 1986 Constitutional Commission in its Committee Report No. 7 (Proposed Resolution No. 332). 30 That section reads as follows:

SEC. 1.  Any amendment to, or revision of, this Constitution may be proposed:

(a) by the National Assembly upon a vote of three-fourths of all its members; or

(b) by a constitutional convention; or

(c) directly by the people themselves thru initiative as provided for in Article _____ Section _____ of the Constitution. 31

After several interpellations, but before the period of amendments, the Committee submitted a new formulation of the concept of initiative which it denominated as Section 2; thus:

MR. SUAREZ.

Thank you, Madam President. May we respectfully call attention of the Members of the Commission that pursuant to the mandate given to us last night, we submitted this afternoon a complete Committee Report No. 7 which embodies the proposed provision governing the matter of initiative. This is now covered by Section 2 of the complete committee report. With the permission of the Members, may I quote Section 2:

"The people may, after five years from the date of the last plebiscite held, directly propose amendments to this Constitution thru initiative upon petition of at least ten percent of the registered voters."

This completes the blanks appearing in the original Committee Report No. 7. 32

The interpellations on Section 2 showed that the details for carrying out Section 2 are left to the legislature. Thus:

FR. BERNAS.

Madam President, just two simple, clarificatory questions.

First, on Section 1 on the matter of initiative upon petition of at least 10 percent, there are no details in the provision on how to carry this out. Do we understand therefore that we are leaving this matter to the legislature?

 

MR. SUAREZ.

That is right, Madam President.

FR. BERNAS.

And do we also understand, therefore, that for as long as the legislature does not pass the necessary implementing law on this, this will not operate?

MR. SUAREZ.

That matter was also taken up during the committee hearing, especially with respect to the budget appropriations which would have to be legislated so that the plebiscite could be called. We deemed it best that this matter be left to the legislature. The Gentleman is right. In any event, as envisioned, no amendment through the power of initiative can be called until after five years from the date of the ratification of this Constitution. Therefore, the first amendment that could be proposed through the exercise of this initiative power would be after five years. It is reasonably expected that within that five-year period, the National Assembly can come up with the appropriate rules governing the exercise of this power.

FR. BERNAS.

Since the matter is left to the legislature — the details on how this is to be carried out — is it possible that, in effect, what will be presented to the people for ratification is the work of the legislature rather than of the people? Does this provision exclude that possibility?

MR. SUAREZ.

No, it does not exclude that possibility because even the legislature itself as a body could propose that amendment, maybe individually or collectively, if it fails to muster the three-fourths vote in order to constitute itself as a constituent assembly and submit that proposal to the people for ratification through the process of an initiative.

xxx xxx xxx

MS. AQUINO.

Do I understand from the sponsor that the intention in the proposal is to vest constituent power in the people to amend the Constitution?

MR. SUAREZ.

That is absolutely correct, Madam President.

MS. AQUINO.

I fully concur with the underlying precept of the proposal in terms of institutionalizing popular participation in the drafting of the Constitution or in the amendment thereof, but I would have a lot of difficulties in terms of accepting the draft of Section 2, as written. Would the sponsor agree with me that in the hierarchy of legal mandate, constituent power has primacy over all other legal mandates?

MR. SUAREZ.

The Commissioner is right, Madam President.

MS. AQUINO.

And would the sponsor agree with me that in the hierarchy of legal values, the Constitution is source of all legal mandates and that therefore we require a great deal of circumspection in the drafting and in the amendments of the Constitution?

MR. SUAREZ.

That proposition is nondebatable.

MS. AQUINO.

Such that in order to underscore the primacy of constituent power we have a separate article in the Constitution that would specifically cover the process and the modes of amending the Constitution?

MR. SUAREZ.

That is right, Madam President.

MS. AQUINO.

Therefore, is the sponsor inclined, as the provisions are drafted now, to again concede to the legislature the process or the requirement of determining the mechanics of amending the Constitution by people's initiative?

MR. SUAREZ.

The matter of implementing this could very well be placed in the hands of the National Assembly, not unless we can incorporate into this provision the mechanics that would adequately cover all the conceivable situations. 33

It was made clear during the interpellations that the aforementioned Section 2 is limited to proposals to AMEND — not to REVISE — the Constitution; thus:

MR. SUAREZ.

. . . This proposal was suggested on the theory that this matter of initiative, which came about because of the extraordinary developments this year, has to be separated from the traditional modes of amending the Constitution as embodied in Section 1. The committee members felt that this system of initiative should not extend to the revision of the entire Constitution, so we removed it from the operation of Section 1 of the proposed Article on Amendment or Revision. 34

xxx xxx xxx

MS. AQUINO.

In which case, I am seriously bothered by providing this process of initiative as a separate section in the Article on Amendment. Would the sponsor be amenable to accepting an amendment in terms of realigning Section 2 as another

subparagraph (c) of Section 1, instead of setting it up as another separate section as if it were a self-executing provision?

MR. SUAREZ.

We would be amenable except that, as we clarified a while ago, this process of initiative is limited to the matter of amendment and should not expand into a revision which contemplates a total overhaul of the Constitution. That was the sense that was conveyed by the Committee.

MS. AQUINO.

In other words, the Committee was attempting to distinguish the coverage of modes (a) and (b) in Section 1 to include the process of revision; whereas theprocess of initiation to amend, which is given to the public, would only apply to amendments?

MR. SUAREZ.

That is right. Those were the terms envisioned in the Committee. 35

Amendments to the proposed Section 2 were thereafter introduced by then Commissioner Hilario G. Davide, Jr., which the Committee accepted. Thus:

MR. DAVIDE.

Thank you Madam President. I propose to substitute the entire Section 2 with the following:

xxx xxx xxx

MR. DAVIDE.

Madam President, I have modified the proposed amendment after taking into account the modifications submitted by the sponsor himself and the honorable Commissioners Guingona, Monsod, Rama, Ople, de los Reyes and Romulo. The modified amendment in substitution of the proposed Section 2 will now read as follows:

"SEC. 2. — AMENDMENTS TO THIS CONSTITUTION MAY LIKEWISE BE DIRECTLY PROPOSED BY THE PEOPLE THROUGH INITIATIVE UPON A PETITION OF AT LEAST TWELVE PERCENT OF THE TOTAL NUMBER OF REGISTERED VOTERS, OF WHICH EVERY LEGISLATIVE DISTRICT MUST BE REPRESENTED BY AT LEAST THREE PERCENT OF THE REGISTERED VOTERS THEREOF. NO AMENDMENT UNDER THIS SECTION SHALL BE AUTHORIZED WITHIN FIVE YEARS FOLLOWING THE RATIFICATION OF THIS CONSTITUTION NOR OFTENER THAN ONCE EVERY FIVE YEARS THEREAFTER.

THE NATIONAL ASSEMBLY SHALL BY LAW PROVIDE FOR THE IMPLEMENTATION OF THE EXERCISE OF THIS RIGHT.

MR. SUAREZ.

Madam President, considering that the proposed amendment is reflective of the sense contained in Section 2 of our completed Committee Report No. 7, we accept the proposed amendment. 36

The interpellations which ensued on the proposed modified amendment to Section 2 clearly showed that it was a legislative act which must implement the exercise of the right. Thus:

MR. ROMULO.

Under Commissioner Davide's amendment, is it possible for the legislature to set forth certain procedures to carry out the initiative . . .?

MR. DAVIDE.

It can.

xxx xxx xxx

MR. ROMULO.

But the Commissioner's amendment does not prevent the legislature from asking another body to set the proposition in proper form.

MR. DAVIDE.

The Commissioner is correct. In other words, the implementation of this particular right would be subject to legislation, provided the legislature cannot determine anymore the percentage of the requirement.

MR. ROMULO.

But the procedures, including the determination of the proper form for submission to the people, may be subject to legislation.

MR. DAVIDE.

As long as it will not destroy the substantive right to initiate. In other words, none of the procedures to be proposed by the legislative body must diminish or impair the right conceded here.

MR. ROMULO.

In that provision of the Constitution can the procedures which I have discussed be legislated?

MR. DAVIDE.

Yes. 37

Commissioner Davide also reaffirmed that his modified amendment strictly confines initiative to AMENDMENTS to — NOT REVISION of — the Constitution. Thus:

MR. DAVIDE.

With pleasure, Madam President.

MR. MAAMBONG.

My first question: Commissioner Davide's proposed amendment on line 1 refers to "amendment." Does it not cover the word "revision" as defined by Commissioner Padilla when he made the distinction between the words "amendments" and "revision"?

MR. DAVIDE.

No, it does not, because "amendments" and "revision" should be covered by Section 1. So insofar as initiative is concerned, it can only relate to "amendments" not "revision." 38

Commissioner Davide further emphasized that the process of proposing amendments through initiative must be more rigorous and difficult than the initiative on legislation. Thus:

MR. DAVIDE.

A distinction has to be made that under this proposal, what is involved is an amendment to the Constitution. To amend a Constitution would ordinarily require a proposal by the National Assembly by a vote of three-fourths; and to call a constitutional convention would require a higher number. Moreover, just to submit the issue of calling a constitutional convention, a majority of the National Assembly is required, the import being that the process of amendment must be made more rigorous and difficult than probably initiating an ordinary legislation or putting an end to a law proposed by the National Assembly by way of a referendum. I cannot agree to reducing the requirement approved by the Committee on the Legislative because it would require another voting by the Committee, and the voting as precisely based on a requirement of 10 percent. Perhaps, I might present such a proposal, by way of an amendment, when the Commission shall take up the Article on the Legislative or on the National Assembly on plenary sessions. 39

The Davide modified amendments to Section 2 were subjected to amendments, and the final version, which the Commission approved by a vote of 31 in favor and 3 against, reads as follows:

MR. DAVIDE.

Thank you Madam President. Section 2, as amended, reads as follows: "AMENDMENT TO THIS CONSTITUTION MAY LIKEWISE BE DIRECTLY PROPOSED BY THE PEOPLE THROUGH INITIATIVE UPON A PETITION OF AT LEAST TWELVE PERCENT OF THE TOTAL NUMBER OF REGISTERED VOTERS, OF WHICH EVERY LEGISLATIVE DISTRICT MUST BE REPRESENTED BY AT LEAST THREE PERCENT OF THE REGISTERED VOTERS THEREOF. NO AMENDMENT UNDER THIS SECTION SHALL BE AUTHORIZED WITHIN FIVE YEARS FOLLOWING THE RATIFICATION OF THIS CONSTITUTION NOR OFTENER THAN ONCE EVERY FIVE YEARS THEREAFTER.

 

THE NATIONAL ASSEMBLY SHALL BY LAW PROVIDE FOR THE IMPLEMENTATION OF THE EXERCISE OF THIS RIGHT. 40

The entire proposed Article on Amendments or Revisions was approved on second reading on 9 July 1986. 41 Thereafter, upon his motion for reconsideration, Commissioner Gascon was allowed to introduce an amendment to Section 2 which, nevertheless, was withdrawn. In view thereof, the Article was again approved on Second and Third Readings on 1 August 1986. 42

However, the Committee on Style recommended that the approved Section 2 be amended by changing "percent" to "per centum" and "thereof" to "therein" and deleting the phrase "by law" in the second paragraph so that said paragraph reads: The Congress 43 shall provide for the implementation of the exercise of this right. 44This amendment was approved and is the text of the present second paragraph of Section 2.

The conclusion then is inevitable that, indeed, the system of initiative on the Constitution under Section 2 of Article XVII of the Constitution is not self-executory.

Has Congress "provided" for the implementation of the exercise of this right? Those who answer the question in the affirmative, like the private respondents and intervenor Senator Roco, point to us R.A. No. 6735.

There is, of course, no other better way for Congress to implement the exercise of the right than through the passage of a statute or legislative act. This is the essence or rationale of the last minute amendment by the Constitutional Commission to substitute the last paragraph of Section 2 of Article XVII then reading:

The Congress 45 shall by law provide for the implementation of the exercise of this right.

with

The Congress shall provide for the implementation of the exercise of this right.

This substitute amendment was an investiture on Congress of a power to provide for the rules implementing the exercise of the right. The "rules" means "the details on how [the right] is to be carried out." 46

We agree that R.A. No. 6735 was, as its history reveals, intended to cover initiative to propose amendments to the Constitution. The Act is a consolidation of House Bill No. 21505 and Senate Bill No. 17. The former was prepared by the Committee on Suffrage and Electoral Reforms of the House of Representatives on the basis of two House Bills referred to it, viz., (a) House Bill No. 497, 47 which dealt with the initiative and referendum mentioned in Sections 1 and 32 of Article VI of the Constitution; and (b) House Bill No. 988, 48 which dealt with the subject matter of House Bill No. 497, as well as with initiative and referendum under Section 3 of Article X (Local Government) and initiative provided for in Section 2 of Article XVII of the Constitution. Senate Bill No. 17 49 solely dealt with

initiative and referendum concerning ordinances or resolutions of local government units. The Bicameral Conference Committee consolidated Senate Bill No. 17 and House Bill No. 21505 into a draft bill, which was subsequently approved on 8 June 1989 by the Senate 50 and by the House of Representatives. 51 This approved bill is now R.A. No. 6735.

But is R.A. No. 6735 a full compliance with the power and duty of Congress to "provide for the implementation of the exercise of the right?"

A careful scrutiny of the Act yields a negative answer.

First. Contrary to the assertion of public respondent COMELEC, Section 2 of the Act does not suggest an initiative on amendments to the Constitution. The said section reads:

SEC. 2.  Statement and Policy. — The power of the people under a system of initiative and referendum to directly propose, enact, approve or reject, in whole or in part, the Constitution, laws, ordinances, or resolutions passed by any legislative body upon compliance with the requirements of this Act is hereby affirmed, recognized and guaranteed. (Emphasis supplied).

The inclusion of the word "Constitution" therein was a delayed afterthought. That word is neither germane nor relevant to said section, which exclusively relates to initiative and referendum on national laws and local laws, ordinances, and resolutions. That section is silent as to amendments on the Constitution. As pointed out earlier, initiative on the Constitution is confined only to proposals to AMEND. The people are not accorded the power to "directly propose, enact, approve, or reject, in whole or in part, the Constitution" through the system of initiative. They can only do so with respect to "laws, ordinances, or resolutions."

The foregoing conclusion is further buttressed by the fact that this section was lifted from Section 1 of Senate Bill No. 17, which solely referred to a statement of policy on local initiative and referendum and appropriately used the phrases "propose and enact," "approve or reject" and "in whole or in part." 52

Second. It is true that Section 3 (Definition of Terms) of the Act defines initiative on amendments to the Constitution and mentions it as one of the three systems of initiative, and that Section 5 (Requirements) restates the constitutional requirements as to the percentage of the registered voters who must submit the proposal. But unlike in the case of the other systems of initiative, the Act does not provide for the contents of a petition for initiative on the Constitution. Section 5, paragraph (c) requires, among other things, statement of the proposed law sought to be enacted, approved or rejected, amended or repealed, as the case may be. It does not include, as among the contents of the petition, the provisions of the Constitution sought to be amended, in the case of initiative on the Constitution. Said paragraph (c) reads in full as follows: cda

(c) The petition shall state the following:

c.1 contents or text of the proposed law sought to be enacted, approved or rejected, amended or repealed, as the case may be;

c.2 the proposition;

c.3 the reason or reasons therefor;

c.4 that it is not one of the exceptions provided therein;

c.5 signatures of the petitioners or registered voters; and

c.6 an abstract or summary proposition is not more than one hundred (100) words which shall be legibly written or printed at the top of every page of the petition. (Emphasis supplied).

The use of the clause "proposed laws sought to be enacted, approved or rejected, amended or repealed" only strengthens the conclusion that Section 2, quoted earlier, excludes initiative on amendments to the Constitution.

Third. While the Act provides subtitles for National Initiative and Referendum (Subtitle II) and for Local Initiative and Referendum (Subtitle III), no subtitle is provided forinitiative on the Constitution. This conspicuous silence as to the latter simply means that the main thrust of the Act is initiative and referendum on national and local laws. If Congress intended R.A. No. 6735 to fully provide for the implementation of the initiative on amendments to the Constitution, it could have provided for a subtitle therefor, considering that in the order of things, the primacy of interest, or hierarchy of values, the right of the people to directly propose amendments to the Constitution is far more important than the initiative on national and local laws.

We cannot accept the argument that the initiative on amendments to the Constitution is subsumed under the subtitle on National Initiative and Referendum because it is national in scope. Our reading of Subtitle II (National Initiative and Referendum) and Subtitle III (Local Initiative and Referendum) leaves no room for doubt that the classification is not based on the scope of the initiative involved, but on its nature and character. It is "national initiative," if what is proposed to be adopted or enacted is a national law, or a law which only Congress can pass. It is "local initiative" if what is proposed to be adopted or enacted is a law, ordinance, or resolution which only the legislative bodies of the governments of the autonomous regions, provinces, cities, municipalities, and barangays can pass. This classification of initiative into national and local is actually based on Section 3 of the Act, which we quote for emphasis and clearer understanding:

SEC. 3. Definition of Terms —

xxx xxx xxx

There are three (3) systems of initiative, namely:

a.1 Initiative on the Constitution which refers to a petition proposing amendments to the Constitution;

a.2 Initiative on Statutes which refers to a petition proposing to enact a national legislation; and

a.3 Initiative on local legislation which refers to a petition proposing to enact a regional, provincial, city, municipal, or barangay law, resolution or ordinance. (Emphasis supplied).

Hence, to complete the classification under subtitles there should have been a subtitle on initiative on amendments to the Constitution. 53

A further examination of the Act even reveals that the subtitling is not accurate. Provisions not germane to the subtitle on National Initiative and Referendum are placed therein, like (1) paragraphs (b) and (c) of Section 9, which reads:

(b) The proposition in an initiative on the Constitution approved by the majority of the votes cast in the plebiscite shall become effective as to the day of the plebiscite.

(c) A national or local initiative proposition approved by majority of the votes cast in an election called for the purpose shall become effective fifteen (15) days after certification and proclamation of the Commission. (Emphasis supplied).

(2) that portion of Section 11 (Indirect Initiative) referring to indirect initiative with the legislative bodies of local governments; thus:

SEC. 11. Indirect Initiative. — Any duly accredited people's organization, as defined by law, may file a petition for indirect initiative with the House of Representatives, and other legislative bodies. . .

and (3) Section 12 on Appeal, since it applies to decisions of the COMELEC on the findings of sufficiency or insufficiency of the petition for initiative or referendum, which could be petitions for both national and local initiative and referendum.

 

Upon the other hand, Section 18 on "Authority of Courts" under subtitle III on Local Initiative and Referendum is misplaced, 54 since the provision therein applies to both national and local initiative and referendum. It reads:

SEC. 18. Authority of Courts. — Nothing in this Act shall prevent or preclude the proper courts from declaring null and void any proposition approved pursuant to this Act for violation of the Constitution or want of capacity of the local legislative body to enact the said measure.

Curiously, too, while R.A. No. 6735 exerted utmost diligence and care in providing for the details in the implementation of initiative and referendum on national and local legislation thereby giving them special attention, it failed, rather intentionally, to do so on the system of initiative on amendments to the Constitution. Anent the initiative on national legislation, the Act provides for the following:

(a) The required percentage of registered voters to sign the petition and the contents of the petition;

(b) The conduct and date of the initiative;

(c) The submission to the electorate of the proposition and the required number of votes for its approval;

(d) The certification by the COMELEC of the approval of the proposition;

(e) The publication of the approved proposition in the Official Gazette or in a newspaper of general circulation in the Philippines; and

(f) The effects of the approval or rejection of the proposition. 55

As regards local initiative, the Act provides for the following:

(a) The preliminary requirement as to the number of signatures of registered voters for the petition;

(b) The submission of the petition to the local legislative body concerned;

(c) The effect of the legislative body's failure to favorably act thereon, and the invocation of the power of initiative as a consequence thereof;

(d) The formulation of the proposition;

(e) The period within which to gather the signatures;

(f) The persons before whom the petition shall be signed;

(g) The issuance of a certification by the COMELEC through its official in the local government unit concerned as to whether the required number of signatures have been obtained;

(h) The setting of a date by the COMELEC for the submission of the proposition to the registered voters for their approval, which must be within the period specified therein;

(i) The issuance of a certification of the result;

(j) The date of effectivity of the approved proposition;

(k) The limitations on local initiative; and

(l) The limitations upon local legislative bodies. 56

Upon the other hand, as to initiative on amendments to the Constitution, R.A. No. 6735, in all of its twenty-three sections, merely (a) mentions, the word "Constitution" in Section 2; (b) defines "initiative on the Constitution" and includes it in the enumeration of the three systems of initiative in Section 3; (c) speaks of "plebiscite" as the process by which the proposition in an initiative on the Constitution may be approved or rejected by the people; (d) reiterates the constitutional requirements as to the number of voters who should sign the petition; and (e) provides for the date of effectivity of the approved proposition.

There was, therefore, an obvious downgrading of the more important or the paramount system of initiative. R.A. No. 6735 thus delivered a humiliating blow to the system of initiative on

amendments to the Constitution by merely paying it a reluctant lip service. 57

The foregoing brings us to the conclusion that R.A. No. 6735 is incomplete, inadequate, or wanting in essential terms and conditions insofar as initiative on amendments to the Constitution is concerned. Its lacunae on this substantive matter are fatal and cannot be cured by "empowering" the COMELEC "to promulgate such rules and regulations as may be necessary to carry out the purposes of [the] Act. 58

The rule is that what has been delegated, cannot be delegated or as expressed in a Latin maxim:potestas delegata non delegari potest. 59 The recognized exceptions to the rule are as follows:

(1) Delegation of tariff powers to the President under Section 28(2) of Article VI of the Constitution;

(2) Delegation of emergency powers to the President under Section 23(2) of Article VI of the Constitution;

(3) Delegation to the people at large;

(4) Delegation to local governments; and

(5) Delegation to administrative bodies. 60

Empowering the COMELEC, an administrative body exercising quasi-judicial functions, to promulgate rules and regulations is a form of delegation of legislative authority under no. 5 above. However, in every case of permissible delegation, there must be a showing that the delegation itself is valid. It is valid only if the law (a) is complete in itself, setting forth therein the policy to be executed, carried out, or implemented by the delegate; and (b) fixes a standard — the limits of which are sufficiently determinate and determinable — to which the delegate must conform in the performance of his functions. 61 A sufficient standard is one which defines legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It indicates the circumstances under which the legislative command is to be effected. 62

Insofar as initiative to propose amendments to the Constitution is concerned, R.A. No. 6735 miserably failed to satisfy both requirements in subordinate legislation. The delegation of the power to the COMELEC is then invalid.

III

COMELEC RESOLUTION NO. 2300, INSOFAR AS IT PRESCRIBES RULES AND REGULATIONS ON THE CONDUCT OF INITIATIVE ON AMENDMENTS TO THE CONSTITUTION, IS VOID.

It logically follows that the COMELEC cannot validly promulgate rules and regulations to implement the exercise of the right of the people to directly propose amendments to the Constitution through the system of initiative. It does not have that power under R.A. No. 6735. Reliance on the COMELEC's power under Section 2(1) of Article IX-C of the Constitution is misplaced, for the laws and regulations referred to therein are

those promulgated by the COMELEC under (a) Section 3 of Article IX-C of the Constitution, or (b) a law where subordinate legislation is authorized and which satisfies the "completeness" and the "sufficient standard" tests.

IV

COMELEC ACTED WITHOUT JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION IN ENTERTAINING THE DELFIN PETITION.

Even if it be conceded ex gratia that R.A. No. 6735 is a full compliance with the power of Congress to implement the right to initiate constitutional amendments, or that it has validly vested upon the COMELEC the power of subordinate legislation and that COMELEC Resolution No. 2300 is valid, the COMELEC acted without jurisdiction or with grave abuse of discretion in entertaining the Delfin Petition.

Under Section 2 of Article XVII of the Constitution and Section 5(b)of R.A. No. 6735, a petition for initiative on the Constitution must be signed by at least 12% of the total number of registered voters of which every legislative district is represented by at least 3% of the registered voters therein. The Delfin Petition does not contain signatures of the required number of voters. Delfin himself admits that he has not yet gathered signatures and that the purpose of his petition is primarily to obtain assistance in his drive to gather signatures. Without the required signatures, the petition cannot be deemed validly initiated.

The COMELEC acquires jurisdiction over a petition for initiative only after its filing. The petition then is the initiatory pleading. Nothing before its filing is cognizable by the COMELEC, sitting en banc. The only participation of the COMELEC or its personnel before the filing of such petition are (1) to prescribe the form of the petition; 63 (2) to issue through its Election Records and Statistics Office a certificate on the total number of registered voters in each legislative district; 64 (3) to assist, through its election registrars, in the establishment of signature stations; 65 and (4) to verify, through its election registrars, the signatures on the basis of the registry list of voters, voters' affidavits, and voters' identification cards used in the immediately preceding election. 66

Since the Delfin Petition is not the initiatory petition under R.A. No. 6735 and COMELEC Resolution No. 2300, it cannot be entertained or given cognizance of by the COMELEC. The respondent Commission must have known that the petition does not fall under any of the actions or proceedings under the COMELEC Rules of Procedure or under Resolution No. 2300, for which reason it did not assign to the petition a docket number. Hence, the said petition was merely entered as UND, meaning, undocketed. That petition was nothing more than a mere scrap of paper, which should not have been dignified by the Order of 6 December 1996, the hearing on 12 December 1996, and the order directing Delfin and the oppositors to file their memoranda or oppositions. In so dignifying it, the COMELEC acted without jurisdiction or with grave abuse of discretion and merely wasted its time, energy, and resources.

The foregoing considered, further discussion on the issue of whether the proposal to lift the term limits of elective national and local officials is an amendment to, and not a revision of, the Constitution is rendered unnecessary, if not academic.

CONCLUSION

This petition must then be granted, and the COMELEC should be permanently enjoined from entertaining or taking cognizance of any petition for initiative on amendments to the Constitution until a sufficient law shall have been validly enacted to provide for the implementation of the system.

We feel, however, that the system of initiative to propose amendments to the Constitution should no longer be kept in the cold; it should be given flesh and blood, energy and strength. Congress should not tarry any longer in complying with the constitutional mandate to provide for the implementation of the right of the people under that system. cdll

 

WHEREFORE, judgment is hereby rendered

a) GRANTING the instant petition;

b) DECLARING R. A. No. 6735 inadequate to cover the system of initiative on amendments to the Constitution, and to have failed to provide sufficient standard for subordinate legislation;

c) DECLARING void those parts of Resolution No. 2300 of the Commission on Elections prescribing rules and regulations on the conduct of initiative or amendments to the Constitution; and

d) ORDERING the Commission on Elections to forthwith DISMISS the DELFIN petition (UND-96-037).

The Temporary Restraining Order issued on 18 December 1996 is made permanent as against the Commission on Elections, but is LIFTED as against private respondents.

Resolution on the matter of contempt is hereby reserved.

SO ORDERED.

Narvasa, C .J ., Regalado, Romero, Bellosillo, Kapunan, Hermosisima and Torres, Jr., JJ ., concur.

Padilla, J., took no part.

||| (Defensor Santiago v. COMELEC, G.R. No. 127325, [March 19, 1997], 336 PHIL 848-930)

B. VALIDITY OF DELEGATION

i. COMPLETENESS TEST

5. US v. ANG TANG HO

EN BANC

[G.R. No. L-17122. February 27, 1922.]

THE UNITED STATES, plaintiff-appellee, vs. NAG TANG Ho, defendant-appellant.

Williams & Ferrier for appellant.

Acting Attorney-General Tuason for appellee.

SYLLABUS

1. ORGANIC LAW. — 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; 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.

2. POWER. — 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.

3. THE POWER TO DELEGATE. — 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. One the other hand, if the act within itself does not define a crime and is not complete, and some legislative act remains to be done to make it law or a crime, the doing of which is vested in the Governor-General, the is a delegation of legislative power, is unconstitutional and avoid.

4. No CRIME TO SELL. — After the passage of Act No. 2868, and without any rules and regulations of the Governor-General, a dealer in rice could sell it at any price and he would not commit a crime. There was no legislative act which made it a crime to sell rice at any price.

5. CRIME BY PROCLAMATION. — When Act No. 2868 is analyzed, it is the violation of the Proclamation of the Governor-General which constitutes the crime. The alleged sale was made a crime, if at all, because of the Proclamation by the Governor-General.

6. UNCONSTITUTIONAL. — In so far as Act No. 2868 undertakes to authorize the Governor-General, in his discretion, to issue a proclamation fixing the price and to make the sale of it in violation of the proclamation a crime, it is unconstitutional and void.

7. CONSTITUTION. — The Constitution is something solid, permanent and substantial. It stability protects the rights, liberty, and property rights of the rich and the poor alike, and its construction ought not to change with emergencies or conditions.

8. PRIVATE RIGHTS. — In the instant case, the law was not dealing with Government property. It was dealing with private property and private rights which are sacred under the Constitution.

9. PRIVATE PROPERTY. — In the instant case, the rice was the personal, private property of the defendant. The Government had not bought it, did not claim to own it, or have any interest in it at the time the defendant sold it to one of his customers.

10. POWER VESTED IN THE LEGISLATURE. — By the organic act and subject only to constitutional limitations, the power to legislate and enact laws is vested exclusively in the Legislature, which is elected by a direct vote of the people of the Philippine Islands.

11. OPINION LIMITED. — This opinion is confined to the right of the Governor-General to issue a proclamation fixing the maximum price at which rice should be sold, and to make it a crime to sell it at a higher price, and to that extent holds that it is an unconstitutional delegation of legislative power. It does not decide or undertake to construe the constitutionality of any of the remaining portions of Act No. 2868.

D E C I S I O N

JOHNS, J p:

At its special session of 1919, the Philippine Legislature passed Act No. 2868, entitled "An Act penalizing the monopoly and hoarding of, and speculation in palay, rice, and corn under extraordinary circumstances, regulating the distribution and sale thereof, and authorizing the Governor-General, with the consent of the Council of States. to issue the necessary rules and regulations therefor, and making an appropriation for this purpose," the material provisions of which are as follows:

"Section 1. The Governor-General is hereby authorized, whenever, for any cause, conditions arise resulting in an extraordinary rise in the price of palay, rice or corn, to issue and promulgate, with the consent of the Council of States, temporary rules and emergency measures for carrying out the purpose of this Act. to wit:

"(a) To prevent the monopoly and hoarding of, and speculation in, palay rice or corn.

"(b) To establish and maintain a government control of the distribution or sale of the commodities referred to or have such distribution or sale made by the Government itself.

"(c) To fix, from time to time, the quantities of palay, rice, or corn that a company or individual may acquire, and the maximum sale price that the industrial or merchant may demand.

"(d) . . .

"SEC. 2. It shall be unlawful to destroy, limit, prevent or in the other manner obstruct the production or milling of palay, rice or

corn for the purpose of raising the prices thereof; to corner or hoard said products as defined in section three of this Act; . . ."

Section 3 defines what shall constitute a monopoly or hoarding of palay, rice or corn within the meaning of this Act, but does not specify the price of rice of define any basis for fixing the price.

"SEC. 4. The violations of any of the provisions of this Act or of the regulations, orders and decrees promulgated in accordance therewith shall be punished by a fine of not more than five thousand pesos, or by imprisonment for not more than two years, or both, in the discretion of the court: Provided, That in the case of companies or corporations, the manager or administrator shall be criminally liable.

"SEC. 7. At any time that the Governor-General, with the consent of the Council of State, shall consider that the public interest requires the application of the provisions of this Act, he shall so declare by proclamation, and any provisions of other laws inconsistent herewith shall from then on be temporarily suspended.

"Upon the cessation of the reasons foe which such proclamation was issued, the Governor-General, with the consent of the Council of States, shall declare the application of this Act to have likewise terminated, and all laws temporarily suspended by virtue of the same shall again take effect, but such termination shall not prevent the prosecution of any proceedings or cause begun prior to such termination, nor the filing of any proceedings for an offense committed during the period covered by the Governor-General's proclamation."

August 1, 1919, the Governor-General issued a proclamation fixing the price at which rice should be sold.

August 8, 1919, a complaint was filed against the defendant, NAG Tang Ho, charging him with the sale of rice at an excessive price as follows:

"The undersigned accuses NAG Tang Ho of a violation of Executive Order No. 53 of the Governor-General of the Philippines, dated the 1st of August, 1919, in relation with the provisions of sections 1, 2 and 4 Act No. 2868, committed as follows:

"That on or about the 6th day of August, 1919, in the city of Manila, Philippine Islands, the said NAG Tang Ho. voluntarily, illegally and criminally sold to Pedro Trinidad, one Janet of rice at the price of eighty centavos (P.80). which is a price greater than that fixed by Executive Order No. 53 of the Governor-General of the Philippines, dated the 1st of August, 1919, under the authority of section 1 of Act No. 2868. Contrary to law."

Upon this charge, he was tried, found guilty and sentenced to five months' imprisonment and to pay a fine of P500, from which he appealed to this court, claiming that the lower court erred in finding Executive Order No. 53 of 1919, to be of any force and effect, in finding the accused guilty of the offense charged, and in imposing the sentence.

The official records show that Act was to take effect on its approval; that it was approved July 30,1919; that the Governor-General issued his proclamation on the 1st of August, 1919; and that the law was first published on the 13th of August, 1919; and that the proclamation itself was first published on the 20th of August, 1919.

The question here involves an analysis and construction of Act No. 2868, in so far as it authorizes the Governor-General to fix the price at which rice should be sold. It will be noted that section 1 authorizes the Governor-General, with the consent of the Council of State, for any cause resulting in an extraordinary rise in the price of palay, rice or corn, to issue and promulgated temporary rules and emergency measures for carrying out the purposes of the Act. By its very terms, the promulgation of temporary rules and emergency measures is left to the discretion of the Governor-General. The Legislature does not undertake reasons the Governor-General shall issue the proclamation, but says that it may be issued " for any cause," and leaves the question as to what is "any cause" to the discretion of the Governor-General. The Act also says: "For any cause, conditions arise resulting in an extraordinary rise in the price of palay, rice or corn." The Legislature does not specify or define what is "an extraordinary rise." That is also left to the discretion of the Governor-General. The Act also says that the Governor-General, "with the consent of the Council of State," is authorized to issue and promulgate "temporary rules and emergency measures for carrying out the purposes of this Act." It does not specify or define what is a temporary rule or an emergency measure, or how long such temporary rules or emergency measures shall remain in force and effect, or when they shall take effect. That is to say the Legislature itself has no in any manner specified or defined any basis for the order, but has left it to the sole judgment and discretion of the Governor-General to say what is or what is not "a cause," and what is or what is not "an extraordinary rise in the price of rice," and as to what a temporary rule or an emergency measure for the carrying out the purpose of the Act Under this state of facts, if the law is valid and the Governor-General issues a proclamation fixing the minimum price at which rice should be sold, any dealer who, with or without notice, sells rice at a higher price, is a criminal. There may not have been any cause, and the price may not have been extraordinary, and there may not have been an emergency, but, if the Governor-General found the existence of such facts and issued a proclamation, and rice is sold at any higher price, the seller commits a crime.

 

By the organic law of the Philippine Islands and the Constitution of the United States all power are vested in the Legislative, Executive and Judiciary. It is the duty of the Legislature to make the law; of the Executive to execute the law; and of the Judiciary to construe the law. The Legislature has no authority to executive or construe the law, the Executive has no authority to make or construe the law, and the Judiciary has no power to make or executive 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. Assuming, without deciding, that the Legislature itself has the power to fix the price at which rice is to be sold, can it delegate that power to another, and, if so, was that power legally delegated by Act. No. 2868? In other words, does the Act delegate legislative power to the Governor-General? By the Organic Law, all legislative power is vested in the Legislature, and the power conferred upon the Legislature to make laws cannot be delegated to the Governor-General, or any one else. The Legislative cannot delegate the 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 the law into effect, then the Legislature itself 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 a crime, and is not a law, and some legislative act remains to be done to make it a law or a crime, the doing of which is vested in the Governor-General, then the Act is a delegation of legislative power, is unconstitutional and avoid.

The Supreme Court of the United States in what is known as the Grainer Cases (94 U. S.. 183-187; 24 L, ed., 94), first laid down the rule:

"Railroad companies are engaged in public employment affecting the public interest and, under the decision in Mun vs. Ill., ante subject to Legislative control as to their rates of fare and freight unless protect by their charters.

"The Illinois statute of Mar. 23, 1874, to established reasonable maximum rates of charges for the transportation of freights and passengers on the different railroads of the State is not void as being repugnant to the Constitution of the United States or to that of the State."

It was there for the first time held in substance that a railroad was a public utility, and that, being a public utility, the State had power to establish reasonable maximum freight and passenger rates. This was followed by the State of Minnesota in enacting a similar law, providing for and empowering, a railroad commission to hear and determine what was a just and reasonable rate. The constitutionality of this law was attacked and upheld by the Supreme Court of Minnesota in a learned and exhaustive opinion by Justice Mitchell, in the case of State vs. Chicago, Milwaukee & St. Paul Ribs. Co. (38 Minn., 281), in which the court held:

"Regulations of railway tariffs — Conclusiveness of commission's tariffs. — Under Laws 1887, c. 10, sec. 8, the determination of the railroad and warehouse commission as to what are equal and reasonable fares rates for the transportation of persons and property by a railway company is conclusive, and, in proceedings by mandamus to compel compliance with the tariff of rates recommended and published by them, no issue can be raise or inquiry had on that question.

"Same — Constitution — Delegation of power to commission. — The authority thus given to the commission to determine, in the exercise of their discretion and judgment, what are equal and reasonable rates, is not a delegation of legislative power."

It will be noted that the law creating the railroad commission expressly provides —

"That all charges by any common carrier for the transportation of passengers and property shall be equal and reasonable."

With that as a basis for the law, power is then given to the railroad commission to investigate all the facts, to hear and determine what is a just and reasonable rate. Even then that law does not make the violation of the order of the commission a crime. The only remedy is a civil proceeding. It was there held —

"That the legislature itself has the power to regulate railroad charges is now too well settled to require either argument or citation of authority.

"The difference between the power to say what the law shall be, and the power to adopt rules and regulations, or to investigate and determine the facts, in order to carry into effect a law already passed, is apparent. The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and the conferring an authority or discretion to be exercised under and in pursuance of the law.

"The legislature enacts that all freight rates and passenger fares should be just and reasonable. It had the undoubted power to fix these rates at whatever it deemed equal and reasonable.

"They have not delegated to the commission any authority or discretion as to what the law shall be, — which would not be allowable, — but have merely conferred upon it an authority and discretion, to be exercised in the execution of the law, and under and in pursuance of it, which is entirely permissible. The legislature itself has passed upon the expediency of the law, and what it shall be. The commission is intrusted with no authority or discretion upon these questions. It can neither make nor unmade a single provision of law. It is merely charged with the administration of the law, and with no other power."

The delegation of legislative power was before the Supreme Court of Wisconsin in Doling vs Lancaster Ins. Co. (92 Wis., 63). The opinion says:

"The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made.'

"The act, in our judgment, wholly fails to provide definitely and clearly what the standard policy should contain so that it could be put in use as a uniform policy required to take the place of all others, without the determination of the insurance commissioner in respect to matters involving the exercise of a legislative discretion that could not be delegated, and without which the act could not possibly be put in use as an act in

conformity to which all fire insurance policies were required to be issued.

"The result of all the cases on this subject is that a law must be complete, in all its terms and provisions, when it leaves the legislative branch of the government, and nothing must be left to the judgment of the electors or other appointee or delegate of the legislature, so that, in form and substances, it is a law in all its details in presenting, but which may be left to take effect in future, if necessary, upon the ascertainment of any prescribed fact or event."

The delegation of legislative power was before the Supreme Court in United States vs. Grimed (220 U. S., 506; 55 L. ed., 563), where it was held that the rules and regulations of the Secretary of Agriculture as to a trespass on government land in a forest reserve were valid constitutional. The Act there provided that the Secretary of Agriculture " . . . may make such rules and regulations and establish such service as will insure the objects of such reservation; namely, to regulate their occupancy and use, and to preserve the forests thereon from destruction; and any violation of the provisions of this act or such rules and regulations shall be punished, . . ."

The brief of the United States Solicitor-General says:

"In refusing permits to use s forest reservation for stock grazing, except upon stated terms or in stated ways, the Secretary of Agriculture merely asserts and enforces the proprietary right of the United States over land which it owns. The regulations of the Secretary, therefore, is not an exercise of legislative, or even of administrative, power; but is an ordinary and legitimate refusal of the landowner's authorized agent to allow persons having no right in the land to use it as they will. The right of proprietary control is altogether different from governmental authority."

The opinion says:

"From the beginning of the government, various acts have been passed conferring upon executive officers power to make rules and regulations, — not for the government of their departments, but for administering the laws which did govern. None of these statutes could confer legislative power. But when Congress had legislated and indicated its will, it could give to those who were to act under such general provisions power to fill up the details' by the establishment of administrative rules and regulations, the violation of which be punished by fine imprisonment fixed by Congress, or by penalties fixed by Congress, or measured by the injury done.

"That 'Congress cannot delegate legislative power is a principle universally recognized as vital to the integrity and maintenance of the system of government ordained by the Constitution.'

"If, after the passage of the act and the promulgation the rule, the defendants drove and grazed their sheep upon the reserve, in violation of the regulations, they were making an unlawful use of the government's property. In doing so they thereby made themselves liable to the penalty imposed by Congress."

"The subject as to which the Secretary can regulate are defined. The lands are set apart as a forest reserve. He is required to make provision to protect them from depredations and from harmful uses. He is authorized 'to regulate the occupancy and use and to use to preserve the forests from destruction.' A violation of reasonable rules regulating the use and occupancy of the property is made a crime, not by the Secretary, but by Congress."

 

The above are leading cases in the United States on the question of delegating legislative power. It will be noted that in the "Grainer Cases," it was held that a railroad company was a public corporation, and that a railroad was a public utility, and that, for such reasons the Legislature had the power to fix and determine just and reasonable rates for freight and passengers.

The Minnesota case held that, so long as the rates were just and reasonable, the legislature could delegate the power to ascertain the facts and determine from the facts what were just and reasonable rates, and that in vesting the commission with such power was not a delegation of legislative power.

The Wisconsin case was a civil action founded upon a "Wisconsin standard policy of fire insurance," and the court held that "the act, . . . wholly fails to provide definitely and clearly what the standard policy should contain, so that it could be put in use as a uniform policy required to take the place of all others, without the determination of the insurance commissioner in respect to matters involving the exercise of a legislative discretion that could not be delegated.''

The case of the United States Supreme Court, supra, dealt with rules and regulations which were promulgated by the Secretary of Agriculture for Government land in the forest reserve. These hold that the legislature only can enact a law, and that it cannot delegate its legislative authority.

The line of cleavage between what is and what is not a delegation of legislative power is pointed out and clearly defined. As the Supreme Court of Wisconsin says:

"That no part of the legislative power can be delegated by the legislature to any other department of the government, executive or judicial, is a fundamental principle in constitutional law, essential to the integrity and maintenance of the system of government established by the constitution.

"Where an act is clothed with all the forms of law, and is complete in and of itself, it may be provided that it shall become operative only upon some certain act or event, or, in like manner, that its operation shall be suspended.

The legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action to depend."

"All saloons in said village shall be closed at 11 o'clock P. M. each day and remain closed until 5 o'clock on the following morning, unless by special permission of the president."

Construing it in 136 Wis., 526 128 A. S. R., 1100, 1 the Supreme Court of that State says:

"We regard the ordinance as void for two reasons: First, because it attempts to confer arbitrary power upon an executive officer, and allows him, in executing the ordinance, to make unjust and groundless discriminations among persons similarly situated; second, because the power to regulate saloons is a law-making power vested in the village board, which cannot be delegated. A legislative body cannot delegate to a mere administrative officer power to make a law, but it can make a law with provisions that it shall go into effect or be suspended in its operation upon the ascertainment of a fact or state of facts by an administrative of board. In the present case the ordinance by its terms gives power to the president to decide arbitrarily, and in the exercise of his own discretion, when a saloon shall close. This is an attempt to vest legislative discretion in him, and cannot be sustained."

The legal principle involved there is squarely in point here.

It must conceded that, after the passage of Act No. 2868, and before any rules and regulations were promulgated by the Governor-General, a dealer in rice could sell it at any price, even at a peso per "Janet," and that he would not commit a crime, because there would be no law fixing the price of rice, and the sale of it at any price would not be a crime. That is to say, in the absence of a proclamation, it was not a crime to sell rice at any price. Hence, it must follow that, if the defendant committed a crime, it was because the Governor-General issued the proclamation. There was no act of the Legislature making it a crime to sell rice at any price, and without the proclamation, the sale of it at any price was not crime.

The Executive Order 1 provides"

(5) The maximum selling price of palay, rice or corn is hereby fixed, for the time being as follows:

"In Manila —

"Palay at P6.75 per sack of 1/2 kilos, or 29 centavos per Janet.

"Rice at P15 per sack of 57 1/2 kilos, or 63 centavos per Janet.

"Corn at P8 per sack of 57 1/2 kilos, or 34 centavos per Janet.

"In the provinces producing palay, rice and corn, the maximum price shall be the Manila price less the cost of transportation from the source of supply and necessary handling expenses to the place of sale, to be determined by the provincial treasures or their deputies.

"In provinces, obtaining their supplies from Manila or other producing provinces, the maximum price shall be the authorized price at the place of supply or the Manila price as the case may be, plus the transportation cost, from the place of supply and the necessary handling expenses, to the place of

sale, to be determined by the provincial treasurers or their deputies.

"(6) Provincial treasurers and their deputies are hereby directed to communicate with, and execute all instructions emanating from the Director of Commerce and Industry, for the most effective and proper enforcement of the above regulations in their respective localities,"

The law says that the Governor-General may fix "the maximum sale price that industrial or merchant may demand." The law is a general law and not a local or special law.

The proclamation undertakes to fix one price for rice in Manila and other and different prices in other and different provinces in the Philippines Islands, and delegates the power to determine the other and different prices to provincial treasurers and their deputies. Here, then, you would have a delegation of legislative power to the Governor-General, and a delegation by him of that power to provincial treasurers and their deputies, who "are hereby directed to communicate with, and executive all instructions emanating from the Director of Commerce and Industry, for the most effective and proper enforcement of the above regulations in their respective localities." The issuance of the proclamation by the Governor-General was the exercise of the power delegation of a power, and was even a subdelegation of that power.

Assuming that it is valid, Act No. 2868 is a general law and does not authorize the Governor-General to fix one price of rice in Manila and another price in Iloilo. It only purports to authorize him fix the price of rice in the Philippine Islands under a law, which is general and uniform, and not local or special. Under the terms of the law, the price of rice fixed in the proclamation must be the same all over the Islands. There cannot be one price at Manila and another at Iloilo. Again, it is a matter of common knowledge, and of which this court will take judicial notice, that there are many kinds of rice with different and corresponding market values, and that there is a wide range in the price, which varies with grade and quality. Act No. 2868 makes no distinction in price for the grade quality of the rice, and the proclamation, upon which the defendant was tried and convicted, fixes the selling price of rice in Manila "at P15 per sack of 57 1/2 kilos, or 63 centavo per Janet," and is uniform as to all grades of rice, and says nothing about grade or quality. Again, it will be noted that the law is confined to palay, rice and corn. They are products of the Philippine Islands. Hemp, tobacco, coconut, chickens, eggs, and many other things are also products. Any law which singles out palay, rice or corn from the numerous, but is a local or special law. If such a law is valid, then by the same principle, the Governor-General could be authorized by proclamation to fix the price of meat, eggs chickens, coconut, hemp, and tobacco, or any other of the Islands. In the very nature of things, all of that class of laws should be general and uniform. Otherwise, there would be an unjust discrimination of property rights, which, under the law, must be equal and uniform. Act No. 2868 is nothing more than a floating law, which, in the discretion and by a proclamation of the Governor-General, makes it a floating crime to sell rice at a price in excess of the proclamation, without regard to grade or quality.

When Act No. 2868 is analyzed, it is the violation of the proclamation of the Governor-General which constitutes the crime. Without that proclamation, it was no crime to sell rice at any price. In other words, the Legislature left it to the sole discretion of the Governor-General to say what was and what was not "any cause" for enforcing the act, and what was and what was not "an extraordinary rise in the price of palay, rice or corn," and under certain undefined conditions to fix the price at which rice should be sold, without regard to grade or quality, also to say whether a proclamation should be issued, if so, when, and whether or not the law should be enforced, how long it should be enforced, and when the law should be suspended. The Legislature did not specify or define what was "any cause," or what was "an extraordinary rise in the price of rice, palay or corn." Neither did it specify or define the conditions upon which the proclamation should be issued. In the absence of the proclamation no crime was committed. The alleged sale was made a crime, if at all, because the Governor-General issued the proclamation. The act or proclamation does not say anything about the different grades or qualities of rice, and the defendant is charged with the sale" of one Janet of rice at the price of eighty centavos (P0.80) which is a price greater than fixed by Executive Order No. 53."

 

We are clearly of the opinion and hold that Act No. 2868 in so far as it undertakes to authorize the Governor-General in his discretion to issue a proclamation, fixing the price of rice, and to make the sale of rice in violation of the proclamation a crime, is unconstitutional and void.

It may be urged that there was an extraordinary rise in the price of rice and profiteering, which worked a severe hardship, on the poorer classes, and that an emergency existed, but the question here presented is the constitutionality of a particular portion of a statute, and none of such matters is an argument for, or against, its constitutionality.

The Constitution is something solid, permanent and substantial. Its stability protects the life, liberty and property rights of the rich and the poor alike, and that protection ought not to change with the wind or any emergency condition. The fundamental question involved in this case is the right of the people of the Philippine Islands to be and live under a republican form of government. We make the board statement that no state or nation, living under a republican form of government, under the terms and conditions specified in Act No. 2868, has ever enacted a law delegating the power to any one, to fix the price at which rice should be sold. That power can never be delegated under a republican form of government.

In the fixing of the price at which the defendant should sell his rice, the law was not dealing with government property. It was dealing with private property and private rights, which are sacred under the Constitution. If this law should be sustained, upon the same principle and for the same reason, the Legislature could authorize the Governor-General to fix the price of every product or commodity in the Philippine Islands,

and empower him to make it a crime to sell any product at any other or different price.

It may be said that this was a war measure, and that for such reason the provision of the Constitution should be suspended. But the stubborn fact remains that at all times the judicial power was in full force and effect, and that while that power was in force and effect, such a provision of the Constitution could not be, and was not, suspended even in times of war. It may be claimed that during the war, the United States Government undertook to, and did, fix the price at which wheat and flour should be bought and sold, and that is true. There, the United States had declared war, and at the time was at war with other nations, and it was a war measure, but it is also true that in doing so, and as a part of the same act, the United States commandeered all the wheat and flour, and took possession of it, either or constructive, and the government itself became the owner of the wheat and flour, and fixed the price to be paid for it. That is not case. Here, the rice sold was the personal and private property of the defendant, who sold it to one of his customers. The government had not bought and did not claim to own the rice, or have any interest in it. and at the time of the alleged sale, it was the personal, private property of the defendant. It may be that the law was passed in the interest of the public, but the members of this court have taken a solemn oath to uphold and defend the Constitution, and it ought not to be construed to meet the changing winds or emergency conditions. Again we say that no state or nation under a republican form of government ever enacted a law authorizing any executive, under the conditions stated, to fix the price at which a private person would sell his own rice, and make the broad statement that no decision of any court, on principle or by analogy. will ever be found which sustains the constitutionality of that particular portion of Act No. 2868 here in question. By the terms of the Organic Act, subject only to constitutional limitations, the power Legislature, which is elated by a direct vote of the people of the Philippine Island. As to the question here involved, the authority of the Governor-General to fix the maximum price at which palay, rice and corn may be sold in the manner and under the conditions stated is a delegation of legislative power in violation of the organic law.

This opinion is confined to the particular question here involved, which is the right of the Governor-General, upon the terms and conditions stated in the Act, to fix the price of rice and make it a crime to sell it at a higher price, and which holds that portion of the Act unconstitutional. It does not decide or undertake to construe the constitutionality of any of the remaining of the Act.

The judgment of the lower court is reversed, and the defendant discharged. So ordered.

Araullo, C. J., Johnson, Street, and Ostrand, JJ., concur.

Romualdez, J., concurs in the result.

||| (United States v. Ang Tang Ho, G.R. No. L-17122, [February 27, 1922], 43 PHIL 1-19)

ii. SUFFICIENT TEST STANDARD

6. YNOT v. IAC

EN BANC

[G.R. No. 74457. March 20, 1987.]

RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE COURT, THE STATION COMMANDER, INTEGRATED NATIONAL POLICE, BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY, respondents.

Ramon A. Gonzales for petitioner.

D E C I S I O N

CRUZ, J p:

The essence of due process is distilled in the immortal cry of Themistocles to Alcibiades: "Strike — but hear me first!'" It is this cry that the petitioner in effect repeats here as he challenges the constitutionality of Executive Order No. 626-A. Cdpr

The said executive order reads in full as follows:

"WHEREAS, the President has given orders prohibiting the interprovincial movement of carabaos and the slaughtering of carabaos not complying with the requirements of Executive Order No. 626 particularly with respect to age;

"WHEREAS, it has been observed that despite such orders the violators still manage to circumvent the prohibition against interprovincial movement of carabaos by transporting carabeef instead; and.

"WHEREAS, in order to achieve the purposes and objectives of Executive Order No. 626 and the prohibition against interprovincial movement of carabaos, it is necessary to strengthen the said Executive Order and provide for the disposition of the carabaos and carabeef subject of the violation;.

"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby promulgate the following:

"SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no carabao regardless of age, sex, physical condition or purpose and no carabeef shall be transported from one province to another. The carabao or carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and forfeiture by the government, to be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos.

"SECTION 2. This Executive Order shall take effect immediately.

"Done in the City of Manila, this 25th day of October, in the year of Our Lord, nineteen hundred and eighty.

(SGD.) FERDINAND E. MARCOSPresidentRepublic of the Philippines"

The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on January 13, 1984, when they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of the above measure. 1 The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon his filing of a supersedeas bond of P12,000.00. After considering the merits of the case, the court sustained the confiscation of the carabaos and, since they could no longer be produced, ordered the confiscation of the bond. The court also declined to rule on the constitutionality of the executive order, as raised by the petitioner, for lack of authority and also for its presumed validity. 2

The petitioner appealed the decision to the Intermediate Appellate Court, * 3 which upheld the trial court, ** and he has now come before us in this petition for review on certiorari. prcd

The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes outright confiscation of the carabao or carabeef being transported across provincial boundaries. His claim is that the penalty is invalid because it is imposed without according the owner a right to be heard before a competent and impartialcourt as guaranteed by due process. He complains that the measure should not have been presumed, and so sustained, as constitutional. There is also a challenge to the improper exercise of the legislative power by the former President under Amendment No. 6 of the 1973 Constitution. 4

While also involving the same executive order, the case of Pesigan v. Angeles 5 is not applicable here. The question raised there was the necessity of the previous publication of the measure in the Official Gazette before it could be considered enforceable. We imposed the requirement then on the basis of due process of law. In doing so, however, this Court did not, as contended by the Solicitor General, impliedly affirm the constitutionality of Executive Order No. 626-A. That is an entirely different matter.

This Court has declared that while lower courts should observe a becoming modesty in examining constitutional questions, they are nonetheless not prevented from resolving the same whenever warranted, subject only to review by the highest tribunal. 6 We have jurisdiction under the Constitution to "review, revise, reverse, modify or affirm on appeal or certiorari, as the law or rules of court may provide," final judgments and orders of lower courts in, among others, all cases involving the constitutionality of certain measures. 7 This simply means that the resolution of such cases may be made in the first instance by these lower courts.

And while it is true that laws are presumed to be constitutional, that presumption is not by any means conclusive and in fact may be rebutted. Indeed, if there be a clear showing of their invalidity, and of the need to declare them so, then "will be the time to make the hammer fall, and heavily," 8 to recall Justice Laurel's trenchant warning. Stated otherwise, courts should not follow the path of least resistance by simply presuming the constitutionality of a law when it is questioned. On the contrary, they should probe the issue more deeply, to relieve the abscess, paraphrasing another distinguished jurist, 9 and so heal the wound or excise the affliction.

Judicial power authorizes this; and when the exercise is demanded, there should be no shirking of the task for fear of retaliation, or loss of favor, or popular censure, or any other similar inhibition unworthy of the bench, especially this Court. LLjur

The challenged measure is denominated an executive order but it is really presidential decree, promulgating a new rule instead of merely implementing an existing law. It was issued by President Marcos not for the purpose of taking care that the laws were faithfully executed but in the exercise of his legislative authority under Amendment No. 6. It was provided thereunder that whenever in his judgment there existed a grave emergency or a threat or imminence thereof or whenever the legislature failed or was unable to act adequately on any matter that in his judgment required immediate action, he could, in order to meet the exigency, issue decrees, orders or letters of instruction that were to have the force and effect of law. As there is no showing of any exigency to justify the exercise of that extraordinary power then, the petitioner has reason, indeed, to question the validity of the executive order. Nevertheless, since the determination of the grounds was supposed to have been made by the President "in his judgment," a phrase that will lead to protracted discussion not really necessary at this time, we reserve resolution of this matter until a more appropriate occasion. For the nonce, we confine ourselves to the more fundamental question of due process.

It is part of the art of constitution-making that the provisions of the charter be cast in precise and unmistakable language to avoid controversies that might arise on their correct interpretation. That is the ideal. In the case of the due process clause, however, this rule was deliberately not followed and the wording was purposely kept ambiguous. In fact, a proposal to delineate it more clearly was submitted in the Constitutional Convention of 1934, but it was rejected by Delegate Jose P. Laurel, Chairman of the Committee on the Pill of Rights, who forcefully argued against it. He was sustained by the body. 10

The due process clause was kept intentionally vague so it would remain also conveniently resilient. This was felt necessary because due process is not, like some provisions of the fundamental law, an "iron rule" laying down an implacable and immutable command for all seasons and all persons. Flexibility must be the best virtue of the guaranty. The very elasticity of the due process clause was meant to make it adapt easily to every situation, enlarging or constricting its

protection as the changing times and circumstances may require.

Aware of this, the courts have also hesitated to adopt their own specific description of due process lest they confine themselves in a legal straitjacket that will deprive them of the elbow room they may need to vary the meaning of the clause whenever indicated. Instead, they have preferred to leave the import of the protection open-ended, as it were, to be "gradually ascertained by the process of inclusion and exclusion in the course of the decision of cases as they arise." 11 Thus, Justice Felix Frankfurter of the U.S. Supreme Court, for example, would go no farther than to define due process - and in so doing sums it all up — as nothing more and nothing less than "the embodiment of the sporting idea of fair play." 12

When the barons of England extracted from their sovereign liege the reluctant promise that that Crown would thenceforth not proceed against the life, liberty or property of any of its subjects except by the lawful judgment of his peers or the law of the land, they thereby won for themselves and their progeny that splendid guaranty of fairness that is now the hallmark of the free society. The solemn vow that King John made at Runnymede in 1215 has since then resounded through the ages, as a ringing reminder to all rulers, benevolent or base, that every person, when confronted by the stern visage of the law, is entitled to have his say in a fair and open hearing of his cause. prLL

 

The closed mind has no place in the open society. It is part of the sporting idea of fair play to hear "the other side" before an opinion is formed or a decision is made by those who sit in judgment. Obviously, one side is only one-half of the question; the other half must also be considered if an impartial verdict is to be reached based on an informed appreciation of the issues in contention. It is indispensable that the two sides complement each other, as unto the bow the arrow, in leading to the correct ruling after examination of the problem not from one or the other perspective only but in its totality. A judgment based on less that this full appraisal, on the pretext that a hearing is unnecessary or useless, is tainted with the vice of bias or intolerance or ignorance, or worst of all, in repressive regimes, the insolence of power.

The minimum requirements of due process are notice and hearing 13 which, generally speaking, may not be dispensed with because they are intended as a safeguard against official arbitrariness. It is a gratifying commentary on our judicial system that the jurisprudence of this country is rich with applications of this guaranty as proof of our fealty to the rule of law and the ancient rudiments of fair play. We have consistently declared that every person, faced by the awesome power of the State, is entitled to "the law of the land," which Daniel Webster described almost two hundred years ago in the famous Dartmouth College Case, 14 as "the law which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial." It has to be so if the rights of every person are to be secured beyond the reach of officials who, out

of mistaken zeal or plain arrogance, would degrade the due process clause into a worn and empty catchword.

This is not to say that notice and hearing are imperative in every case for, to be sure, there are a number of admitted exceptions. The conclusive presumption, for example, bars the admission of contrary evidence as long as such presumption is based on human experience or there is a rational connection between the fact proved and the fact ultimately presumed therefrom. 15 There are instances when the need for expeditious action will justify omission of these requisites, as in the summary abatement of a nuisance per se, like a mad dog on the loose, which may be killed on sight because of the immediate danger it poses to the safety and lives of the people. Pornographic materials, contaminated meat and narcotic drugs are inherently pernicious and may be summarily destroyed. The passport of a person sought for a criminal offense may be cancelled without hearing, to compel his return to the country he has fled. 16 Filthy restaurants may be summarily padlocked in the interest of the public health and bawdy houses to protect the public morals. 17 In such instances, previous judicial hearing may be omitted without violation of due process in view of the nature of the property involved or the urgency of the need to protect the general welfare from a clear and present danger. cdll

The protection of the general welfare is the particular function of the police power which both restraints and is restrained by due process. The police power is simply defined as the power inherent in the State to regulate liberty and property for the promotion of the general welfare. 18 By reason of its function, it extends to all the great public needs and is described as the most pervasive, the least limitable and the most demanding of the three inherent powers of the State, far outpacing taxation and eminent domain. The individual, as a member of society, is hemmed in by the police power, which affects him even before he is born and follows him still after he is dead — from the womb to beyond the tomb — in practically everything he does or owns. Its reach is virtually limitless. It is a ubiquitous and often unwelcome intrusion. Even so, as long as the activity or the property has some relevance to the public welfare, its regulation under the police power is not only proper but necessary. And the justification is found in the venerable Latin maxims, Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which call for the subordination of individual interests to the benefit of the greater number.

It is this power that is now invoked by the government to justify Executive Order No. 626-A, amending the basic rule in Executive Order No. 626, prohibiting the slaughter of carabaos except under certain conditions. The original measure was issued for the reason, as expressed in one of its Whereases, that "present conditions demand that the carabaos and the buffaloes be conserved for the benefit of the small farmers who rely on them for energy needs." We affirm at the outset the need for such a measure. In the face of the worsening energy crisis and the increased dependence of our farms on these traditional beasts of burden, the government would have been remiss, indeed, if it had not taken steps to protect and preserve them.

A similar prohibition was challenged in United States v. Toribio, 19 where a law regulating the registration, branding and slaughter of large cattle was claimed to be a deprivation of property without due process of law. The defendant had been convicted thereunder for having slaughtered his own carabao without the required permit, and he appealed to the Supreme Court. The conviction was affirmed. The law was sustained as a valid police measure to prevent the indiscriminate killing of carabaos, which were then badly needed by farmers. An epidemic had stricken many of these animals and the reduction of their number had resulted in an acute decline in agricultural output, which in turn had caused an incipient famine. Furthermore, because of the scarcity of the animals and the consequent increase in their price, cattle-rustling had spread alarmingly, necessitating more effective measures for the registration and branding of these animals. The Court held that the questioned statute was a valid exercise of the police power and declared in part as follows:

"To justify the State in thus interposing its authority in behalf of the public, it must appear, first, that the interests of the public generally, as distinguished from those of a particular class, require such interference; and second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. . . .

"From what has been said, we think it is clear that the enactment of the provisions of the statute under consideration was required by `the interests of the public generally, as distinguished from those of a particular class' and that the prohibition of the slaughter of carabaos for human consumption, so long as these animals are fit for agricultural work or draft purposes was a `reasonably necessary' limitation on private ownership, to protect the community from the loss of the services of such animals by their slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy the luxury of animal food, even when by so doing the productive power of the community may be measurably and dangerously affected."

In the light of the tests mentioned above, we hold with the Toribio Case that the carabao, as the poor man's tractor, so to speak, has a direct relevance to the public welfare and so is a lawful subject of Executive Order No. 626. The method chosen in the basic measure is also reasonably necessary for the purpose sought to be achieved and not unduly oppressive upon individuals, again following the above-cited doctrine. There is no doubt that by banning the slaughter of these animals except where they are at least seven years old if male and eleven years old if female upon issuance of the necessary permit, the executive order will be conserving those still fit for farm work or breeding and preventing their improvident depletion. llcd

But while conceding that the amendatory measure has the same lawful subject as the original executive order, we cannot say with equal certainty that it complies with the second requirement, viz., that there be a lawful method. We note that to strengthen the original measure, Executive Order No. 626-A imposes an absolute ban not on the slaughter of the carabaos but on their movement, providing that "no carabao

regardless of age, sex, physical condition or purpose (sic) and no carabeef shall be transported from one province to another." The object of the prohibition escapes us. The reasonable connection between the means employed and the purpose sought to be achieved by the questioned measure is missing.

We do not see how the prohibition of the interprovincial transport of carabaos can prevent their indiscriminate slaughter, considering that they can be killed anywhere, with no less difficulty in one province than in another. Obviously, retaining the carabaos in one province will not prevent their slaughter there, any more than moving them to another province will make it easier to kill them there. As for the carabeef, the prohibition is made to apply to it as otherwise, so says executive order, it could be easily circumvented by simply killing the animal. Perhaps so. However, if the movement of the live animals for the purpose of preventing their slaughter cannot be prohibited, it should follow that there is no reason either to prohibit their transfer as, not to be flippant, dead meat.

Even if a reasonable relation between the means and the end were to be assumed, we would still have to reckon with the sanction that the measure applies for violation of the prohibition. The penalty is outright confiscation of the carabao or carabeef being transported, to be meted out by the executive authorities, usually the police only. In the Toribio Case, the statute was sustained because the penalty prescribed was fine and imprisonment, to be imposed by the court after trial and conviction of the accused. Under the challenged measure, significantly, no such trial is prescribed, and the property being transported is immediately impounded by the police and declared, by the measure itself, as forfeited to the government.

 

In the instant case, the carabaos were arbitrarily confiscated by the police station commander, were returned to the petitioner only after he had filed a complaint for recovery and given a supersedeas bond of P12,000.00, which was ordered confiscated upon his failure to produce the carabaos when ordered by the trial court. The executive order defined the prohibition, convicted the petitioner and immediately imposed punishment, which was carried out forthright. The measure struck at once and pounced upon the petitioner without giving him a chance to be heard, thus denying him the centuries-old guaranty of elementary fair play.

It has already been remarked that there are occasions when notice and hearing may be validly dispensed with notwithstanding the usual requirement for these minimum guarantees of due process. It is also conceded that summary action may be validly taken in administrative proceedings as procedural due process is not necessarily judicial only. 20 In the exceptional cases accepted, however, there is a justification for the omission of the right to a previous hearing, to wit, the immediacy of the problem sought to be corrected and the urgency of the need to correct it. cdphil

In the case before us, there was no such pressure of time or action calling for the petitioner's peremptory treatment. The properties involved were not even inimical per se as to require their instant destruction. There certainly was no reason why the offense prohibited by the executive order should not have been proved first in a courtof justice, with the accused being accorded all the rights safeguarded to him under the Constitution. Considering that, as we held in Pesigan v. Angeles, 21 Executive Order No. 626-A is penal in nature, the violation thereof should have been pronounced not by the police only but by a court of justice, which alone would have had the authority to impose the prescribed penalty, and only after trial and conviction of the accused.

We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed in the questioned executive order. It is there authorized that the seized property shall "be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos." (Emphasis supplied.) The phrase "may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the said officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a "roving commission," a wide and sweeping authority that is not "canalized within banks that keep it from overflowing," in short, a clearly profligate and therefore invalid delegation of legislative powers.

To sum up then, we find that the challenged measure is an invalid exercise of the police power because the method employed to conserve the carabaos is not reasonably necessary to the purpose of the law and, worse, is unduly oppressive. Due process is violated because the owner of the property confiscated is denied the right to be heard in his defense and is immediately condemned and punished. The conferment on the administrative authorities of the power to adjudge the guilt of the supposed offender is a clear encroachment on judicial functions and militates against the doctrine of separation of powers. There is, finally, also an invalid delegation of legislative powers to the officers mentioned therein who are granted unlimited discretion in the distribution of the properties arbitrarily taken. For these reasons, we hereby declare Executive Order No. 626-A unconstitutional.

We agree with the respondent court, however, that the police station commander who confiscated the petitioner's carabaos is not liable in damages for enforcing the executive order in accordance with its mandate. The law was at that time presumptively valid, and it was his obligation, as a member of

the police, to enforce it. It would have been impertinent of him, being a mere subordinate of the President, to declare the executive order unconstitutional and, on his own responsibility alone, refuse to execute it. Even the trial court, in fact, and the Court of Appeals itself did not feel they had the competence, for all their superior authority, to question the order we now annul.

The Court notes that if the petitioner had not seen fit to assert and protect his rights as he saw them, this case would never have reached us and the taking of his property under the challenged measure would have become a fait accompli despite its invalidity. We commend him for his spirit. Without the present challenge, the matter would have ended in that pump boat in Masbate and another violation of the Constitution, for all its obviousness, would have been perpetrated, allowed without protest, and soon forgotten in the limbo of relinquished rights. LLpr

The strength of democracy lies not in the rights it guarantees but in the courage of the people to invoke them whenever they are ignored or violated. Rights are but weapons on the wall if, like expensive tapestry, all they do is embellish and impress. Rights, as weapons, must be a promise of protection. They become truly meaningful, and fulfill the role assigned to them in the free society, if they are kept bright and sharp with use by those who are not afraid to assert them.

WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except as affirmed above, the decision of the Court of Appeals is reversed. Thesupersedeas bond is cancelled and the amount thereof is ordered restored to the petitioner. No costs.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Gutierrez, Jr., Paras, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.

Melencio-Herrera and Feliciano, JJ., on leave.

||| (Ynot v. Intermediate Appellate Court, G.R. No. 74457, [March 20, 1987], 232 PHIL 615-632)

iii. VALIDITY OF EXERCISE

1. NOT INCONSISTENT WITH CONSTITUTION

7. DAR v. SUTTON

EN BANC

[G.R. No. 162070. October 19, 2005.]

DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI B. PONCE (OIC), petitioner, vs. DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T. SUTTON, respondents.

D E C I S I O N

PUNO, J p:

This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, which declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and void for being violative of the Constitution.

The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform program of the government, respondents made a voluntary offer to sell (VOS) 1 their landholdings to petitioner DAR to avail of certain incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform Law (CARL)of 1988, took effect. It included in its coverage farms used for raising livestock, poultry and swine.

On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR, 2 this Court ruled that lands devoted to livestock and poultry-raising are not included in the definition of agricultural land. Hence, we declared as unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage of agrarian reform.

In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their VOS as their landholding was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL. 3

On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected respondents' land and found that it was devoted solely to cattle-raising and breeding. He recommended to the DAR Secretary that it be exempted from the coverage of the CARL.

On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the supporting papers they submitted in connection therewith. 4 Petitioner ignored their request.

On December 27, 1993, DAR issued A.O. No. 9, series of 1993, 5 which provided that only portions of private agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the operations of the CARL.

On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire landholding is exempted from the CARL. 6

On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order 7 partially granting the application of respondents for exemption from the coverage ofCARL. Applying the retention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents' land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of respondents' landholding to be segregated and placed under Compulsory Acquisition. DTAHEC

Respondents moved for reconsideration. They contend that their entire landholding should be exempted as it is devoted exclusively to cattle-raising. Their motion was denied. 8 They filed a notice of appeal 9 with the Office of the President assailing: (1) the reasonableness and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio between land and livestock in determining the land area qualified for exclusion from the CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms case which declared cattle-raising lands excluded from the coverage of agrarian reform.

On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR. 10 It ruled that DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O. provided the guidelines to determine whether a certain parcel of land is being used for cattle-raising. However, the issue on the constitutionality of the assailed A.O. was left for the determination of the courts as the sole arbiters of such issue.

On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993, void for being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform program of the government. The dispositive portion reads:

WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 is hereby DECLARED null and void. The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the Department of Agrarian Reform's ruling that petitioners' landholding is covered by the agrarian reform program of the government is REVERSED and SET ASIDE.

SO ORDERED. 11

Hence, this petition.

The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which prescribes a maximum retention limit for owners of lands devoted to livestock raising.

Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued DAR A.O. No. 9 to limit the area of livestock farm that may be retained by a landowner pursuant to its mandate to place all public and private agricultural lands under the coverage of agrarian reform. Petitioner also contends that the A.O. seeks to remedy reports that some unscrupulous landowners have converted their agricultural farms to livestock farms in order to evade their coverage in the agrarian reform program.

Petitioner's arguments fail to impress.

Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and regulations. They have been granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to them. Delegated rule-making has become a practical necessity in modern governance due to the increasing complexity and variety of public functions. However, while administrative rules and regulations have the force and effect of law, they are not immune from judicial review. 12 They may be properly challenged before the courts to ensure that they do not violate the Constitution and no grave abuse of administrative discretion is committed by the administrative body concerned.

The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be issued by authority of a law and must not contravene the provisions of the Constitution. 13 The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution. Nor can it be used to enlarge the power of the administrative agency beyond the scope intended. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by administrative agencies and the scope of their regulations. 14

In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine and poultry-raising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or "agricultural activity." The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances. 15

Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.

The subsequent case of Natalia Realty, Inc. v. DAR 16 reiterated our ruling in the Luz Farms case. In Natalia Realty, the Court held that industrial, commercial and residential lands are not covered by the CARL. 17 We stressed anew that while Section 4 of R.A. No. 6657 provides that the CARL shall cover all public and private agricultural

lands, the term "agricultural land" does not include lands classified as mineral, forest, residential, commercial or industrial. Thus, in Natalia Realty, even portions of the Antipolo Hills Subdivision, which are arable yet still undeveloped, could not be considered as agricultural lands subject to agrarian reform as these lots were already classified as residential lands.

A similar logical deduction should be followed in the case at bar. Lands devoted to raising of livestock, poultry and swine have been classified as industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O., it was seeking to address the reports it has received that some unscrupulous landowners have been converting their agricultural lands to livestock farms to avoid their coverage by the agrarian reform. Again, we find neither merit nor logic in this contention. The undesirable scenario which petitioner seeks to prevent with the issuance of the A.O. clearly does not apply in this case . Respondents' family acquired their landholdings as early as 1948. They have long been in the business of breeding cattle in Masbate which is popularly known as the cattle-breeding capital of the Philippines. 18 Petitioner DAR does not dispute this fact. Indeed, there is no evidence on record that respondents have just recently engaged in or converted to the business of breeding cattle after the enactment of the CARL that may lead one to suspect that respondents intended to evade its coverage. It must be stressed that what the CARL prohibits is the conversion of agricultural lands for non-agricultural purposes after the effectivity of the CARL.There has been no change of business interest in the case of respondents.

 

Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without substantial change is an implied legislative approval and adoption of the previous law. On the other hand, by making a new law, Congress seeks to supersede an earlier one. 19 In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881 20 which amended certain provisions of the CARL. Specifically, the new law changed the definition of the terms "agricultural activity" and "commercial farming" by dropping from its coverage lands that are devoted to commercial livestock, poultry and swine-raising. 21With this significant modification, Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian reform.

In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. They cannot amend or extend the Constitution. To be valid, they must conform to and be consistent with the Constitution. In case of conflict between an administrative order and the provisions of the Constitution, the latter prevails. 22 The assailed A.O. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the 1987 Constitution.

IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, are AFFIRMED. No pronouncement as to costs. ISEHTa

SO ORDERED.

Davide, Jr., C.J., Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario and Garcia, JJ., concur.

||| (Department of Agrarian Reform v. Sutton, G.R. No. 162070, [October 19, 2005], 510 PHIL 177-186)

2. NOT INCONSISTENT WITH STATUTE

8. SOL GEN v. MM

EN BANC

[G.R. No. 102782. December 11, 1991.]

THE SOLICITOR GENERAL, RODOLFO A. MALAPIRA, STEPHEN A. MONSANTO, DAN R. CALDERON, and GRANDY N. TRIESTE, petitioners, vs. THE METROPOLITAN MANILA AUTHORITY and the MUNICIPALITY OF MANDALUYONG, respondents.

SYLLABUS

1. REMEDIAL LAW; PROCEDURAL RULES; MAY BE RELAXED OR SUSPENDED IN THE INTEREST OF SUBSTANTIAL JUSTICE. — Unquestionably, the Court has the power to suspend procedural rules in the exercise of its inherent power, as expressly recognized in the Constitution, to promulgate rules concerning "pleading, practice and procedure in all courts." In proper cases, procedural rules may be relaxed or suspended in the interest of substantial justice, which otherwise may be miscarried because of a rigid and formalistic adherence to such rules. The Court has taken this step in a number of such cases, notably Araneta v. Dinglasan, 84 Phil. 368, where Justice Tuason justified the deviation on the ground that "the transcendental importance to the public of these cases demands that they be settled promptly and definitely brushing aside, if we must, technicalities of procedure."

2. CONSTITUTIONAL LAW; DELEGATION OF LEGISLATIVE POWER; HELD VALID IN CASE AT BAR. — The Metro Manila Authority sustains Ordinance No. 11-Series of 1991, under the specific authority conferred upon it by EO 392, while Ordinance No. 7, Series of 1988, is justified on the basis of the General Welfare Clause embodied in the Local Government Code. It is not disputed that both measures were enacted to promote the comfort and convenience of the public and to alleviate the worsening traffic problems in Metropolitan Manila due in large part to violations of traffic rules. The Court holds that there is a valid delegation of legislative power to promulgate such measures, it appearing that the requisites of such delegation

are present. These requisites are: 1) the completeness of the statute making the delegation; and 2) the presence of a sufficient standard.

3. ID.; ID.; ID.; — Under the first requirement, the statute must leave the legislature complete in all its terms and provisions such that all the delegate will have to do when the statute reaches it is to implement it. What only can be delegated is not the discretion to determine what the law shall be but the discretion to determine how the law shall be enforced. This has been done in the case at bar. As a second requirement, the enforcement may be effected only in accordance with a sufficient standard, the function of which is to map out the boundaries of the delegate's authority and thus "prevent the delegation from running riot." This requirement has also been met. It is settled that the "convenience and welfare" of the public, particularly the motorists and passengers in the case at bar, is an acceptable sufficient standard to delimit the delegate's authority.

4. ID.; ID.; QUESTION POSED IS THE VALIDITY OF THE EXERCISE OF SUCH DELEGATED POWER; TEST TO DETERMINE VALIDITY OF MUNICIPAL ORDINANCE. — The measures in question are enactments of local governments acting only as agents of the national legislature. Necessarily, the acts of these agents must reflect and conform to the will of their principal. To test the validity of such acts in the specific case now before us, we apply the particular requisites of a valid ordinance as laid down by the accepted principles governing municipal corporations. According to Elliot, a municipal ordinance, to be valid: 1) must not contravene the Constitution or any statute; 2) must not be unfair or oppressive; 3) must not be partial or discriminatory; 4) must not prohibit but may regulate trade; 5) must not be unreasonable; and 6) must be general and consistent with public policy.

5. ID.; ID.; ID.; MUNICIPAL ORDINANCE DOES NOT CONFORM TO EXISTING LAW. — A careful study of the Gonong decision will show that the measures under consideration do not pass the first criterion because they do not conform to existing law. The pertinent law is PD 1605. PD 1605 does not allow either the removal of license plates or the confiscation of driver's licenses for traffic violations committed in Metropolitan Manila. There is nothing in the provisions of Secs. 1, 3, 5 and 8 of the decree authorizing the Metropolitan Manila Commission (and now the Metropolitan Manila Authority) to impose such sanctions. In fact, the said provisions prohibit the imposition of such sanctions in Metropolitan Manila. The Commission was allowed to "impose fines and otherwise discipline" traffic violators only "in such amounts and under such penalties as are herein prescribed," that is, by the decree itself. Nowhere is the removal of license plates directly imposed by the decree or at least allowed by it to be imposed by the Commission. Notably, Section 5 thereof expressly provides that "in case of traffic violations, the driver's license shall not be confiscated." These restrictions are applicable to the Metropolitan Manila Authority and all other local political subdivisions comprising Metropolitan Manila, including the Municipality of Mandaluyong.

6. ID.; ID.; ID.; CASE AT BAR. — The requirement that the municipal enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the local government unit cannot contravene but must obey at all times the will of their principal. In the case before us, the enactments in question, which are merely local in origin, cannot prevail against the decree, which has the force and effect of a statute. The self-serving language of Section 2 of the challenged ordinance is worth nothing. Curiously, it is the measure itself, which was enacted by the Metropolitan Manila Authority, that authorizes the Metropolitan Manila Authority to impose the questioned sanction. The measures in question do not merely add to the requirement of PD 1605 but, worse, impose sanctions the decree does not allow and in fact actually prohibits. In so doing, the ordinances disregard and violate and in effect partially repeal the law.

7. ID.; ID.; ID.; PD 1605 APPLIES ONLY TO METROPOLITAN MANILA AREA AND AN EXCEPTION TO THE GENERAL AUTHORITY CONFERRED BY REPUBLIC ACT 4136 ON THE COMMISSIONER OF LAND TRANSPORTATION. — We here emphasize the ruling in the Gonong Case that PD 1605 applies only to the Metropolitan Manila area. It is an exception to the general authority conferred by R.A. No. 4136 on the Commissioner of Land Transportation to punish violations of traffic rules elsewhere in the country with the sanctions therein prescribed, including those here questioned. The Court agrees that the challenged ordinances were enacted with the best of motives and shares the concern of the rest of the public for the effective reduction of traffic problems in Metropolitan Manila through the imposition and enforcement of more deterrent penalties upon traffic violators. At the same time, it must also reiterate the public misgivings over the abuses that may attend the enforcement of such sanctions, including the illicit practices described in detail in the Gonong decision. At any rate, the fact is that there is no statutory authority for — and indeed there is a statutory prohibition against — the imposition of such penalties in the Metropolitan Manila area.

8. ID.; ID.; IT IS FOR CONGRESS TO EXERCISE ITS DISCRETION TO DETERMINE WHETHER OR NOT TO IMPOSE THE QUESTIONED SANCTIONS. — It is for Congress to determine, in the exercise of its own discretion, whether or not to impose such sanctions, either directly through a statute or by simply delegating authority to this effect to the local governments in Metropolitan Manila. Without such action, PD 1605 remains effective and continues to prohibit the confiscation of license plates of motor vehicles (except under the conditions prescribed in LOI 43) and of driver's licenses as well for traffic violations in Metropolitan Manila.

D E C I S I O N

CRUZ, J p:

In Metropolitan Traffic Command, West Traffic District vs. Hon. Arsenio M. Gonong, G.R. No. 91023, promulgated on July 13, 1990, 1 the Court held that the confiscation of the license plates of motor vehicles for traffic violations was not among the sanctions that could be imposed by the Metro Manila Commission under PD 1605 and was permitted only under the conditions laid down by LOI 43 in the case of stalled vehicles obstructing the public streets. It was there also observed that even the confiscation of drivers licenses for traffic violations was not directly prescribed by the decree nor was it allowed by the decree to be imposed by the Commission. No motion for reconsideration of that decision was submitted. The judgment became final and executory on August 6, 1990, and it was duly entered in the Book of Entries of Judgments on July 13, 1990.

Subsequently, the following developments transpired:

In a letter dated October 17, 1990, Rodolfo A. Malapira complained to the Court that when he was stopped for an alleged traffic violation, his driver's license was confiscated by Traffic Enforcer Angel de los Reyes in Quezon City.

On December 18, 1990, the Caloocan-Manila Drivers and Operators Association sent a letter to the Court asking who should enforce the decision in the above-mentioned case, whether they could seek damages for confiscation of their driver's licenses, and where they should file their complaints.

Another letter was received by the Court on February 14, 1991, from Stephen L. Monsanto, complaining against the confiscation of his driver's license by Traffic Enforcer A.D. Martinez for an alleged traffic violation in Mandaluyong.

This was followed by a letter-complaint filed on March 7, 1991, from Dan R. Calderon, a lawyer, also for confiscation of his driver's license by Pat. R.J. Tano-an of the Makati Police Force. cdll

 

Still another complaint was received by the Court dated April 29, 1991, this time from Grandy N. Trieste, another lawyer, who also protested the removal of his front license plate by E. Ramos of the Metropolitan Manila Authority-Traffic Operations Center and the confiscation of his driver's license by Pat. A.V. Emmanuel of the Metropolitan Police Command-Western Police District.

Required to submit a Comment on the complaint against him, Allan D. Martinez invoked Ordinance No. 7, Series of 1988, of Mandaluyong, authorizing the confiscation of driver's licenses and the removal of license plates of motor vehicles for traffic violations.

For his part, A.V. Emmanuel said he confiscated Trieste's driver's license pursuant to a memorandum dated February 27, 1991, from the District Commander of the Western Traffic District of the Philippine National Police, authorizing such sanction under certain conditions.

Director General Cesar P. Nazareno of the Philippine National Police assured the Court in his own Comment that his office

had never authorized the removal of the license plates of illegally parked vehicles and that he had in fact directed full compliance with the above-mentioned decision in a memorandum, copy of which he attached, entitled Removal of Motor Vehicle License Plates and dated February 28, 1991. cdtai

Pat. R.J. Tano-an, on the other hand, argued that the Gonong decision prohibited only the removal of license plates and not the confiscation of driver's licenses.

On May 24, 1990, the Metropolitan Manila Authority issued Ordinance No. 11, Series of 1991, authorizing itself "to detach the license plate/tow and impound attended/unattended/abandoned motor vehicles illegally parked or obstructing the flow of traffic in Metro Manila."

On July 2, 1991, the Court issued the following resolution:

The attention of the Court has been called to the enactment by the Metropolitan Manila Authority of Ordinance No. 11, Series of 1991, providing inter alia that:

SECTION 2. Authority to Detach Plate / Tow and Impound. — The Metropolitan Manila Authority, thru the Traffic Operations Center, is authorized to detach the license plate, tow and impound attended unattended abandoned motor vehicles illegally parked or obstructing the flow of traffic in Metro Manila. LLjur

The provision appears to be in conflict with the decision of the Court in the case at bar (as reported in 187 SCRA 432), where it was held that the license plates of motor vehicles may not be detached except only under the conditions prescribed in LOI 43. Additionally, the Court has received several complaints against the confiscation by police authorities of driver's licenses for alleged traffic violations, which sanction is, according to the said decision, not among those that may be imposed under PD 1605.

To clarify these matters for the proper guidance of law-enforcement officers and motorists, the Court Resolved to require the Metropolitan Manila Authority and the Solicitor General to submit, within ten (10) days from notice hereof, separate COMMENTS on such sanctions in light of the said decision.

In its Comment, the Metropolitan Manila Authority defended the said ordinance on the ground that it was adopted pursuant to the powers conferred upon it by EO 392. It particularly cited Section 2 thereof vesting in the Council (its governing body) the responsibility among others of:

1. Formulation of policies on the delivery of basic services requiring coordination or consolidation for the Authority; and

2. Promulgation of resolutions and other issuances of metropolitan wide application, approval of a code of basic services requiring coordination, and exercise of its rule-making powers. (Emphasis supplied)

The Authority argued that there was no conflict between the decision and the ordinance because the latter was meant to supplement and not supplant the latter. It stressed that the decision itself said that the confiscation of license plates was invalid in the absence of a valid law or ordinance, which was why Ordinance No. 11 was enacted. The Authority also pointed out that the ordinance could not be attacked collaterally but only in a direct action challenging its validity.

For his part, the Solicitor General expressed the view that the ordinance was null and void because it represented an invalid exercise of a delegated legislative power. The fee in the measure was that it violated existing law, specifically PD 1605, which does not permit, and so impliedly prohibits, the removal of license plates and the confiscation of driver's licenses for traffic violations in Metropolitan Manila. He made no mention, however, of the alleged impropriety of examining the said ordinance in the absence of a formal challenge to its validity. LexLib

On October 24, 1991, the Office of the Solicitor General submitted a motion for the early resolution of the questioned sanctions, to remove once and for all the uncertainty of their validity. A similar motion was filed by the Metropolitan Manila Authority, which reiterated its contention that the incidents in question should be dismissed because there was no actual case or controversy before the Court.

The Metropolitan Manila Authority is correct in invoking the doctrine that the validity of a law or act can be challenged only in a direct action and not collaterally. That is indeed the settled principle. However, that rule is not inflexible and may be relaxed by the Court under exceptional circumstances, such as those in the present controversy. Cdpr

The Solicitor General notes that the practices complained of have created a great deal of confusion among motorists about the state of the law on the questioned sanctions. More importantly, he maintains that these sanctions are illegal, being violative of law and the Gonong decision, and should therefore be stopped. We also note the disturbing report that one policeman who confiscated a driver's license dismissed the Gonong decision as "wrong" and said the police would not stop their "habit" unless they received orders "from the top." Regrettably, not one of the complainants has filed a formal challenge to the ordinances, including Monsanto and Trieste, who are lawyers and could have been more assertive of their rights.

Given these considerations, the Court feels it must address the problem squarely presented to it and decide it as categorically rather than dismiss the complaints on the basis of the technical objection raised and thus, through its inaction, allow them to fester.

The step we now take is not without legal authority or judicial precedent. Unquestionably, the Court has the power to suspend procedural rules in the exercise of its inherent power, as expressly recognized in the Constitution, to promulgate rules concerning "pleading, practice and procedure in all courts." 2 In proper cases, procedural rules may be relaxed or

suspended in the interest of substantial justice, which otherwise may be miscarried because of a rigid and formalistic adherence to such rules.

The Court has taken this step in a number of such cases, notably Araneta vs. Dinglasan, 3 where Justice Tuason justified the donation on the ground that "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure."

We have made similar rulings in other cases, thus:

Be it remembered that rules of procedure are but mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be avoided. (Aznar III vs. Bernad, G.R. No. 81190, May 9, 1988, 161 SCRA 276.) Time and again, this Court has suspended its own rules and excepted a particular case from their operation whenever the higher interests of justice so require. In the instant petition, we forego a lengthy disquisition of the proper procedure that should have been taken by the parties involved and proceed directly to the merits of the case. (Piczon vs. Court of Appeals, 190 SCRA 31) LibLex

Three of the cases were consolidated for argument and the other two were argued separately on other dates. Inasmuch as all of them present the same fundamental question which, in our view, is decisive, they will be disposed of jointly. For the same reason we will pass up the objection to the personality or sufficiency of interest of the petitioners in case G.R. No. L-3054 and case G.R. No. L 3056 and the question whether prohibition lies in cases G.R. Nos. L-2044 and L2756. No practical benefit can be gained from a discussion of these procedural matters, since the decision in the cases wherein the petitioners' cause of action or the propriety of the procedure followed is not in dispute, will be controlling authority on the others. Above all, the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure. (Avelino vs. Cuenco, G.R. No. L-2821 cited in Araneta vs. Dinglasan, 84 Phil. 368.)

Accordingly, the Court will consider the motion to resolve filed by the Solicitor General a petition for prohibition against the enforcement of Ordinance No. 11 -Series of 1991, of the Metropolitan Manila Authority, and Ordinance No. 7, Series of 1988, of the Municipality of Mandaluyong. Stephen A. Monsanto, Rodolfo A. Malapira, Dan R. Calderon, and Grandy N. Trieste are considered co-petitioners and the Metropolitan Manila Authority and the Municipality of Mandaluyong are hereby impleaded as respondents. This petition is docketed as G.R. No. 102782. The comments already submitted are duly noted and shall be taken into account by the Court in the resolution of the substantive issues raised.

It is stressed that this action is not intended to disparage procedural rules, which the Court has recognized often enough as necessary to the orderly administration of justice. If we are relaxing them in this particular case, it is because of the failure

of the proper parties to file the appropriate proceeding against the acts complained of, and the necessity of resolving, in the interest of the public, the important substantive issues raised.

 

Now to the merits.

The Metro Manila Authority sustains Ordinance No. 11-Series of 1991, under the specific authority conferred upon it by EO 392, while Ordinance No. 7, Series of 1988, is justified on the basis of the General Welfare Clause embodied in the Local Government Code. 4 It is not disputed that both measures were enacted to promote the comfort and convenience of the public and to alleviate the worsening traffic problems in Metropolitan Manila due in large part to violations of traffic rules. cdtai

The Court holds that there is a valid delegation of legislative power to promulgate such measures, it appearing that the requisites of such delegation are present. These requisites are: 1) the completeness of the statute making the delegation; and 2) the presence of a sufficient standard. 5

Under the first requirement, the statute must leave the legislature complete in all its terms and provisions such that all the delegate will have to do when the statute reaches it is to implement it. What only can be delegated is not the discretion to determine what the law shall be but the discretion to determine how the law shall be enforced. This has been done in the case at bar.

As a second requirement, the enforcement may be effected only in accordance with a sufficient standard, the function of which is to map out the boundaries of the delegate's authority and thus "prevent the delegation from running riot." This requirement has also been met. It is settled that the "convenience and welfare" of the public, particularly the motorists and passengers in the case at bar, is an acceptable sufficient standard to delimit the delegate's authority. 6

But the problem before us is not the validity of the delegation of legislative power. The question we must resolve is the validity of the exercise of such delegated power.cdll

The measures in question are enactments of local governments acting only as agents of the national legislature. Necessarily, the acts of these agents must reflect and conform to the will of their principal. To test the validity of such acts in the specific case now before us, we apply the particular requisites of a valid ordinance as laid down by the accepted principles governing municipal corporations.

According to Elliot, a municipal ordinance, to be valid: 1) must not contravene the Constitution or any statute; 2) must not be unfair or oppressive; 3) must not be partial or discriminatory; 4) must not prohibit but may regulate trade; 5) must not be unreasonable; and 6) must be general and consistent with public policy. 7

A careful study of the Gonong decision will show that the measures under consideration do not pass the first criterion

because they do not conform to existing law. The pertinent law is PD 1605. PD 1605 does not allow either the removal of license plates or the confiscation of driver's licenses for traffic violations committed in Metropolitan Manila. There is nothing in the following provisions of the decree authorizing the Metropolitan Manila Commission (and now the Metropolitan Manila Authority) to impose such sanctions:

SECTION 1. The Metropolitan Manila Commission shall have the power to impose fines and otherwise discipline drivers and operators of motor vehicles for violations of traffic laws, ordinances, rules and regulations in Metropolitan Manila in such amounts and under such penalties as are herein prescribed. For this purpose, the powers of the Land Transportation Commission and the Board of Transportation under existing laws over such violations and punishment thereof are hereby transferred to the Metropolitan Manila Commission. When the proper penalty to be imposed is suspension or revocation of driver's license or certificate of public convenience, the Metropolitan Manila Commission or its representatives shall suspend or revoke such license or certificate. The suspended or revoked driver's license or the report of suspension or revocation of the certificate of public convenience shall be sent to the Land Transportation Commission or the Board of Transportation, as the case may be, for their records update.

xxx xxx xxx

SECTION 3. Violations of traffic laws, ordinances, rules and regulations, committed with a twelve-month period, reckoned from the date of birth of the licensee, shall subject the violator to graduated fines as follows: P10.00 for the first offense, P20.00 for the second offense, P50.00 for the third offense, a one-year suspension of driver's license for the fourth offense, and a revocation of the driver's license for the fifth offense: Provided, That the Metropolitan Manila Commission may imposehigher penalties as it may deem proper for violations of its ordinances prohibiting or regulating the use of certain public roads, streets and thoroughfares in Metropolitan Manila.

xxx xxx xxx

SECTION 5. In case of traffic violations, the drivers license shall not be confiscated but the erring driver shall be immediately issued a traffic citation ticket prescribed by the Metropolitan Manila Commission which shall state the violation committed, the amount of fine imposed for the violation and an advice that he can make payment to the city or municipal treasurer where the violation was committed or to the Philippine National Bank or Philippine Veterans Bank or their branches within seven days from the date of issuance of the citation ticket.

If the offender fails to pay the fine imposed within the period herein prescribed, the Metropolitan Manila Commission or the law enforcement agency concerned shall endorse the case to the proper fiscal for appropriate proceedings preparatory to the filing of the case with the competent traffic court, city or municipal court. cdrep

If at the time a driver renews his driver's license and records show that he has an unpaid fine, his driver's license shall not be renewed until he has paid the fine and corresponding surcharges.

xxx xxx xxx

SECTION 8. Insofar as the Metropolitan Manila area is concerned, all laws, decrees, orders, ordinances, rules and regulations, or parts thereof inconsistent herewith are hereby repealed or modified accordingly. (Emphasis supplied).

In fact, the above provisions prohibit the imposition of such sanctions in Metropolitan Manila. The Commission was allowed to "impose fines and otherwise discipline" traffic violators only "in such amounts and under such penalties as are herein prescribed," that is, by the decree itself. Nowhere is the removal of license plates directly imposed by the decree or at least allowed by it to be imposed by the Commission. Notably, Section 5 thereof expressly provides that "in case of traffic violations, the driver's license shall not be confiscated." These restrictions are applicable to the Metropolitan Manila Authority and all other local political subdivisions comprising Metropolitan Manila, including the Municipality of Mandaluyong. cdll

The requirement that the municipal enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself.) 8 They are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the local government unit cannot contravene but must obey at all times the will of their principal. In the case before us, the enactments in question, which are merely local in origin, cannot prevail against the decree, which has the force and effect of a statute.

The self-serving language of Section 2 of the challenged ordinance is worth noting. Curiously, it is the measure itself, which was enacted by the Metropolitan Manila Authority, that authorizes the Metropolitan Manila Authority to impose the questioned sanction. cdtai

In Villacorta vs. Bernardo, 9 the Court nullified an ordinance enacted by the Municipal Board of Dagupan City for being violative of the Land Registration Act. The decision held in part:

In declaring the said ordinance null and void, the court a quo declared:

"From the above-recited requirements, there is no showing that would justify the enactment of the questioned ordinance. Section 1 of said ordinance clearly conflicts with Section 44 of Act 496, because the latter law does not require subdivision plans to be submitted to the City Engineer before the same is submitted for approval to and verification by the General Land Registration Office or by the Director of Lands as provided for in Section 58 of said Act. Section 2 of the same ordinance also contravenes the provisions of Section 44 of Act 496, the latter

being silent on a service fee of P0.03 per square meter of every lot subject of such subdivision application; Section 3 of the ordinance in question also conflicts with Section 44 of Act 496, because the latter law does not mention of a certification to be made by the City Engineer before the Register of Deeds allows registration of the subdivision plan; and the last section of said ordinance imposes a penalty for its violation, which Section 44 of Act 496 does not impose. In other words, Ordinance 22 of the City of Dagupan imposes upon a subdivision owner additional conditions.

xxx xxx xxx

"The Court takes note of the laudable purpose of the ordinance in bringing to a halt the surreptitious registration of lands belonging to the government. But as already intimated above, the powers of the board in enacting such a laudable ordinance cannot be held valid when it shall impede the exercise of rights granted in a general law and/or make a general law subordinated to a local ordinance."

We affirm.

To sustain the ordinance would be to open the floodgates to other ordinances amending and so violating national laws in the guise of implementing them. Thus, ordinances could be passed imposing additional requirements for the issuance of marriage licenses, to prevent bigamy; the registration of vehicles, to minimize carnapping; the execution of contracts, to forestall fraud; the validation of passports, to deter imposture; the exercise of freedom of speech, to reduce disorder; and so on. The list is endless, but the means, even if the end be valid, would be ultra vires. LibLex

 

The measures in question do not merely add to the requirement of PD 1605 but, worse, impose sanctions the decree does not allow and in fact actually prohibits. In so doing, the ordinances disregard and violate and in effect partially repeal the law.

We here emphasize the ruling in the Gonong Case that PD 1605 applies only to the Metropolitan Manila area. It is an exception to the general authority conferred by R.A. No. 4136 on the Commissioner of Land Transportation to punish violations of traffic rules elsewhere in the country with the sanctions therein prescribed, including those here questioned.

The Court agrees that the challenged ordinances were enacted with the best of motives and shares the concern of the rest of the public for the effective reduction of traffic problems in Metropolitan Manila through the imposition and enforcement of more deterrent penalties upon traffic violators. At the same time, it must also reiterate the public misgivings over the abuses that may attend the enforcement of such sanctions, including the illicit practices described in detail in the Gonong decision. At any rate, the fact is that there is no statutory authority for — and indeed there is a statutory prohibition against — the imposition of such penalties in the Metropolitan Manila area. Hence, regardless of their merits, they cannot be

imposed by the challenged enactments by virtue only of the delegated legislative powers. LibLex

It is for Congress to determine, in the exercise of its own discretion, whether or not to impose such sanctions, either directly through a statute or by simply delegating authority to this effect to the local governments in Metropolitan Manila. Without such action, PD 1605 remains effective and continues to prohibit the confiscation of license plates of motor vehicles (except under the conditions prescribed in LOI 43) and of driver's licenses as well for traffic violations in Metropolitan Manila.

WHEREFORE, judgment is hereby rendered:

(1) declaring Ordinance No. 11, Series of 1991, of the Metropolitan Manila Authority and Ordinance No. 7, Series of 1988, of the Municipality of Mandaluyong, NULL and VOID; and

(2) enjoining all law-enforcement authorities in Metropolitan Manila from removing the license plates of motor vehicles (except when authorized under LOI 43) and confiscating driver's licenses for traffic violations within the said area.

SO ORDERED

Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea, Regalado, Davide, Jr. and Romero, JJ., concur.

Nocon, J., took no part.

||| (The Solicitor General v. Metropolitan Manila Authority, G.R. No. 102782, [December 11, 1991])

3. CANNOT AMEND ACT OF CONGRESS

9. BOIE-TAKEDA v. DELA SERNA

SECOND DIVISION

[G.R. No. 92174. December 10, 1993.]

BOIE-TAKEDA CHEMICALS, INC., petitioner, vs. HON. DIONISIO C. DE LA SERNA, Acting Secretary of the Department of Labor and Employment,respondent.

[G.R. No. 102552. December 10, 1993.]

PHILIPPINE FUJI XEROX CORP., petitioner, vs. CRESENCIANO B. TRAJANO, Undersecretary of the Department of Labor and Employment, and PHILIPPINE FUJI XEROX EMPLOYEES UNION, respondents.

Herrera, Laurel, De los Reyes, Roxas & Teehankee for Boie-Takeda Chemicals, Inc. and Phil. Fuji Xerox Corp.

The Solicitor General for public respondents.

SYLLABUS

1. LABOR LAW AND SOCIAL LEGISLATION; WAGES; BASIC SALARY, CONSTRUED; CASE AT BAR. — Contrary to respondents' contention, Memorandum Order No. 28did not repeal, supersede or abrogate P.D. 851. As may be gleaned from the language of Memorandum Order No. 28, it merely "modified" Section 1 of the decree by removing the P1,000.00 salary ceiling. The concept of 13th Month Pay as envisioned, defined and implemented under P.D. 851 remained unaltered, and while entitlement to said benefit was no longer limited to employees receiving a monthly basic salary of not more than P1,000.00, said benefit was, and still is, to be computed on the basic salary of the employee-recipient as provided under P.D. 851. Thus, the interpretation given to the term "basic salary" as defined in P.D. 851 applies equally to "basic salary" under Memorandum Order No. 28. The term "basic salary" is to be understood in its common, generally-accepted meaning, i.e., as a rate of pay for a standard work period exclusive of such additional payments as bonuses and overtime. This is how the term was also understood in the case of Pless v. Franks, 308 S.W. 2d. 402, 403, 202 Tenn. 630, which held that in statutes providing that pension should not be less than 50 percent of "basic salary" at the time of retirement, the quoted words meant the salary than an employee (e.g., a policeman) was receiving at the time he retired without taking into consideration any extra compensation to which he might be entitled for extra work. In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed or guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work period. Commissions are given for extra efforts exerted in consummating sales or other related transactions. They are, as such, additional pay, which this Court has made clear do not form part of the "basic salary." In including commissions in the computation of the 13th month pay, the second paragraph of Section 5 (a) of the Revised Guidelines on the Implementation of the 13th Month Pay Law unduly expanded the concept of "basic salary" as defined in P.D. 851. It is a fundamental rule that implementing rules cannot add to or detract from the provisions of the law it is designed to implement. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law they are intended to carry into effect. They cannot widen its scope. An administrative agency cannot amend an act of Congress. (Cebu Oxygen & Acetylene Co., Inc. vs. Drilon, 176 SCRA 24, citing Manuel vs. General Auditing Office, 42 SCRA 660.)

D E C I S I O N

NARVASA, C.J. p:

What item or items of employee remuneration should go into the computation of thirteenth month pay is the basic issue presented in these consolidated petitions. Otherwise stated, the question is whether or not the respondent labor officials in computing said benefit, committed "grave abuse of discretion amounting to lack of jurisdiction," by giving effect to Section 5 of the Revised Guidelines on the Implementation of the Thirteenth Month Pay (Presidential Decree No. 851)

promulgated by then Secretary of Labor and Employment, Hon. Franklin Drilon, and overruling petitioners' contention that said provision constituted a usurpation of legislative power because not justified by or within the authority of the law sought to be implemented besides violative of the equal protection of the law clause of the Constitution.

Resolution of the issue entails, first, a review of the pertinent provisions of the laws and implementing regulations. cdrep

Sections 1 and 2 of Presidential Decree No. 851, the Thirteenth Month Pay Law, read as follows:

SEC. 1. All employers are hereby required to pay all their employees receiving basic salary of not more than P1,000.00 a month, regardless of the nature of the employment, a 13th month pay not later than December 24 of every year.

Sec. 2. Employers already paying their employees a 13th month pay or its equivalent are not covered by this Decree.

The Rules and Regulations Implementing P.D. 851 promulgated by then Labor Minister Blas Ople on December 22, 1975 contained the following relevant provisions relative to the concept of "thirteenth month pay" and the employers exempted from giving it, to wit:.

SEC. 2. Definition of certain terms. — . . .

a) "Thirteenth month pay" shall mean one twelfth (1/12) of the basic salary of an employee within a calendar year;

b) "Basic Salary" shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowances granted pursuant to Presidential Decree No. 525 or Letter of Instructions No. 174, profit-sharing payments, and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975. Cdpr

SEC. 3. Employers covered. — . . . (The law applies) to all employers except to:

xxx xxx xxx

c) Employers already paying their employees a 13-month pay or more in a calendar year or its equivalent at the time of this issuance;

xxx xxx xxx

e) Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall be covered by this issuance insofar as such workers are concerned.

xxx xxx xxx

The term "its equivalent" as used in paragraph (c) shall include Christmas bonus, mid-year bonus, profit-sharing payments and other cash bonuses amounting to not less than 1/12th of the basic salary but shall not include cash and stock dividends, cost of living allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits. Where an employer pays less than 1/12th of the employee's basic salary, the employer shall pay the difference.

Supplementary Rules and Regulations Implementing P.D. 851 were subsequently issued by Minister Ople which inter alia set out items of compensation not included in the computation of the 13th month pay, viz.:

SEC. 4. Overtime pay, earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th month pay. LibLex

On August 13, 1986, President Corazon C. Aquino promulgated Memorandum Order No. 28, which contained a single provision modifying Presidential Decree No. 851by removing the salary ceiling of P1,000.00 a month set by the latter, as follows:

Section 1 of Presidential Decree No. 851 is hereby modified to the extent that all employers are hereby required to pay all their rank-and-file employees a 13th month pay not later than December 24, of every year.

Slightly more than a year later, on November 16, 1987, Revised Guidelines on the Implementation of the 13th Month Pay Law were promulgated by then Labor Secretary Franklin Drilon which, among other things, defined with particularity what remunerative items were and were not embraced in the concept of 13th month pay, and specifically dealt with employees who are paid a fixed or guaranteed wage plus commission. The relevant provisions read:

4. Amount and payment of 13th Month Pay.

xxx xxx xxx

The basic salary of an employee for the purpose of computing the 13th month pay shall include all remunerations or earnings paid by his employer for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances. However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees. llcd

xxx xxx xxx

5. 13th Month Pay for Certain Types of Employees.

(a) Employees Paid by Results. — Employees who are paid on piece work basis are by law entitled to the 13th month pay.

Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay based on their total earnings during the calendar year, i.e., on both their fixed or guaranteed wage and commission.

This was the state of the law when the controversies at bar arose out of the following antecedents:

(RE G.R. No. 92174) A routine inspection was conducted on May 2, 1989 in the premises of petitioner Boie-Takeda Chemicals, Inc. by Labor and Development Officer Reynaldo B. Ramos under Inspection Authority No. 4-209-89. Finding that Boie-Takeda had not been including the commissions earned by its medical representatives in the computation of their 13th month pay, Ramos served a Notice of Inspection Results 1 on Boie-Takeda through its president, Mr. Benito Araneta, requiring Boie-Takeda within ten (10) calendar days from notice to effect restitution or correction of "the underpayment of 13th month pay for the year(s) 1986, 1987 and 1988 of Med Rep (Revised Guidelines on the Implementation of 13th month pay # 5) in the total amount of P558,810.89."

 

Boie-Takeda wrote the Labor Department contesting the Notice of Inspection Results, and expressing the view "that the commission paid to our medical representatives are not to be included in the computation of the 13th month pay . . . (since the) law and its implementing rules speak of REGULAR or BASIC salary and therefore exclude all other remunerations which are not part of the REGULAR salary." It pointed out that, "If no sales is (sic) made under the effort of a particular representative, there is no commission during the period when no sale was transacted, so that commissions are not and cannot be legally defined as regular in nature." 2 LibLex

Regional Director Luna C. Piezas directed Boie-Takeda to appear before his Office on June 9 and 16, 1989. On the appointed dates, however, and despite due notice, no one appeared for Boie-Takeda, and the matter had perforce to be resolved on the basis of the evidence at hand. On July 24, 1989, Director Piezas issued an Order 3directing Boie-Takeda:

". . . to pay . . . (its) medical representatives and its managers the total amount of FIVE HUNDRED SIXTY FIVE THOUSAND SEVEN HUNDRED FORTY SIX AND FORTY SEVEN CENTAVOS (P565,746.47) representing underpayment of thirteenth (13th) month pay for the years 1986, 1987, 1988, inclusive, pursuant to the . . . revised guidelines within ten (10) days from receipt of this Order."

A motion for reconsideration 4 was seasonably filed by Boie-Takeda under date of August 3, 1989. Treated as an appeal, it was resolved on January 17, 1990 by then Acting Labor Secretary Dionisio de la Serna, who affirmed the July 24, 1989 Order with modification that the sales commissions earned by Boie-Takeda's medical representatives before August 13, 1989, the effectivity date of Memorandum Order No. 28 and its Implementing Guidelines, shall be excluded in the computation of their 13th month pay. 5

Hence the petition docketed as G.R. No. 92174.

[RE G.R. No. 102552) A similar Routine Inspection was conducted in the premises of Philippine Fuji Xerox Corp. on September 7, 1989 pursuant to Routine Inspection Authority No. NCR-LSED-RI-494-89. In his Notice of Inspection Results, 6 addressed to the Manager, Mr. Nicolas O. Katigbak, Senior Labor and Employment Officer Nicanor M. Torres noted the following violation committed by Philippine Fuji Xerox Corp., to wit: cdrep

"Underpayment of 13th month pay of 62 employees, more or less — pursuant to Revised Guidelines on the Implementation of the 13th month pay law for the period covering 1986, 1987 and 1988."

Philippine Fuji Xerox was requested to effect rectification and/or restitution of the noted violation within five (5) working days from notice.

No action having been taken thereon by Philippine Fuji Xerox, Mr. Eduardo G. Gonzales, President of Philxerox Employees Union, wrote then Labor Secretary Franklin Drilon requesting a follow-up of the inspection findings. Messrs. Nicolas and Gonzales were summoned to appear before Labor Employment and Development Officer Mario F. Santos, NCR Office, Department of Labor for a conciliation conference. When no amicable settlement was reached, the parties were required to file their position papers.

Subsequently, Regional Director Luna C. Piezas issued an Order dated August 23, 1990, 7 disposing as follows:

"WHEREFORE, premises considered, Respondent PHILIPPINE FUJI XEROX is hereby ordered to restitute to its salesmen the portion of the 13th month pay which arose out of the non-implementation of the said revised guidelines, ten (10) days from receipt hereof, otherwise, Mr. NICANOR TORRES, the SR. LABOR EMPLOYMENT OFFICER is hereby Ordered to proceed to the premises of the Respondent for the purpose of computing the said deficiency (sic) should respondent fail to heed this Order."

Philippine Fuji Xerox appealed the aforequoted Order to the Office of Secretary of Labor. In an Order dated October 10, 1991, Undersecretary Cresenciano B. Trajano denied the appeal for lack of merit. Hence, the petition in G.R. No. 102552, which was ordered consolidated with G.R. No. 92174 as involving the same issue. cdll

In their almost identically-worded petitions, petitioners, through common counsel, attribute grave abuse of discretion to respondent labor officials Hon. Dionisio dela Serna and Undersecretary Cresenciano B. Trajano in issuing the questioned Orders of January 17, 1990 and October 10, 1991, respectively. They maintain that under P. D. 851, the 13th month pay is based solely on basic salary. As defined by the law itself and clarified by the Implementing and Supplementary Rules as well as by the Supreme Court in a long line of decisions, remunerations which do not form part of the basic or regular salary of an employee, such as commissions, should

not be considered in the computation of the 13th month pay. This being the case, the Revised Guidelines on the Implementation of the 13th Month Pay Law issued by then Secretary Drilon providing for the inclusion of commissions in the 13th month pay, were issued in excess of the statutory authority conferred by P.D. 851. According to petitioners, this conclusion becomes even more evident when considered in light of the opinion rendered by Labor Secretary Drilon himself in "In Re: Labor Dispute at the Philippine Long Distance Telephone Company" which affirmed the contemporaneous interpretation by then Secretary Ople that commissions are excluded from basic salary. Petitioners further contend that assuming that Secretary Drilon did not exceed the statutory authority conferred by P.D. 851, still the Revised Guidelines are null and void as they violate the equal protection of the law clause. LLpr

Respondents through the Office of the Solicitor General question the propriety of petitioner's attack on the constitutionality of the Revised Guidelines in a petition forcertiorari, which, they contend, should be confined purely to the correction of errors and/or defects of jurisdiction, including matters of grave abuse of discretion amounting to lack or excess of jurisdiction and not extend to a collateral attack on the validity and/or constitutionality of a law or statute. They aver that the petitions do not advance any cogent reason or state any valid ground to sustain the allegation of grave abuse of discretion, and that at any rate, P.D. No. 851, otherwise known as the 13th Month Pay Law has already been amended by Memorandum Order No. 28 issued by President Corazon C. Aquino on August 13, 1986 so that commissions are now imputed into the computation of the 13th Month Pay. They add that the Revised Guidelines issued by then Labor Secretary Drilon merely clarified a gray area occasioned by the silence of the law as to the nature of commissions; and worked no violation of the equal protection clause of the Constitution, said Guidelines being based on reasonable classification. Respondents point to the case of Songco vs. National Labor Relations Commission, 183 SCRA 610, wherein this Court declared that Article 97(f) of the Labor Code is explicit that commission is included in the definition of the term "wage".

We rule for the petitioners.

Contrary to respondents' contention, Memorandum Order No. 28 did not repeal, supersede or abrogate P.D. 851. As may be gleaned from the language ofMemorandum Order No. 28, it merely "modified" Section 1 of the decree by removing the P1,000.00 salary ceiling. The concept of 13th Month Pay as envisioned, defined and implemented under P.D. 851 remained unaltered, and while entitlement to said benefit was no longer limited to employees receiving a monthly basic salary of not more than P1,000.00, said benefit was, and still is, to be computed on the basic salary of the employee-recipient as provided under P.D. 851. Thus, the interpretation given to the term "basic salary" as defined in P.D. 851 applies equally to "basic salary" under Memorandum Order No. 28.

In the case of San Miguel Corp. vs. Inciong, 103 SCRA 139, this Court delineated the coverage of the term "basic salary" as used in P.D. 851. We said at some length: llcd

"Under Presidential Decree 851 and its implementing rules, the basic salary of an employee is used as the basis in the determination of his 13th month pay. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus.

"Under the Rules and Regulations Implementing Presidential Decree 851, the following compensations are deemed not part of the basic salary:

a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instructions No. 174;

b) Profit-sharing payments;

c) All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975.

"Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 issued by then Labor Secretary Blas Ople, overtime pay, earnings and other remunerations are excluded as part of the basic salary and in the computation of the 13th month pay.

"The exclusion of cost-of-living allowances under Presidential Decree 525 and Letter of Instructions No. 174, and profit-sharing payments indicate the intention to strip basic salary of other payments which are properly considered as 'fringe' benefits. Likewise, the catch-all exclusionary phrase 'all allowances and monetary benefits which are not considered or integrated as part of the basic salary' shows also the intention to strip basic salary of any and additions which may be in the form of allowances or 'fringe' benefits.

"Moreover, the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more emphatic in declaring that earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay. cdphil

"While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee, this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically exclude from the definitions of basic salary earnings and other remunerations paid by employer to an employee. A cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad inclusion is now a subject of broad exclusion. The Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition of basic salary.

 

"The all embracing phrase 'earnings and other remunerations' which are deemed not part of the basic salary includes within its meaning payments for sick, vacation, or maternity leaves, premium for works performed on rest days and special

holidays, pays for regular holidays and night differentials. As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay. If they were not excluded, it is hard to find any 'earnings and other remunerations' expressly excluded in the computation of the 13th-month pay. Then the exclusionary provision would prove to be idle and with no purpose.

"This conclusion finds strong support under the Labor Code of the Philippines. To cite a few provisions: cdphil

'Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, additional compensation equivalent to his regular wage plus at least twenty-five (25%) percent thereof.'

It is clear that overtime pay is an additional compensation other than and added to the regular wage or basic salary, for reason of which such is categorically excluded from the definition of basic salary under the Supplementary Rules and Regulations Implementing Presidential Decree 851.

In Article 93 of the same Code, paragraph.

'c) work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee.'.

"It is likewise clear that premiums for special holiday which is at least 30% of the regular wage is an additional pay other than and added to the regular wage or basic salary. For similar reason, it shall not be considered in the computation of the 13th-month pay.

Quite obvious from the foregoing is that the term "basic salary" is to be understood in its common, generally-accepted meaning, i.e., as a rate of pay for a standard work period exclusive of such additional payments as bonuses and overtime. 8 This is how the term was also understood in the case of Pless v. Franks, 308 S.W. 2d. 402, 403, 202 Tenn. 630, which held that in statutes providing that pension should not be less than 50 percent of "basic salary" at the time of retirement, the quoted words meant the salary than an employee (e.g., a policeman) was receiving at the time he retired without taking into consideration any extra compensation to which he might be entitled for extra work. 9 LibLex

In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed or guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work period. Commissions are given for extra efforts exerted in consummating sales or other related transactions. They are, as such, additional pay, which this Court has made clear do not form part of the "basic salary."

Respondents would do well to distinguish this case from Songco vs. National Labor Relations Commission, supra, upon which they rely so heavily. What was involved therein was the term "salary" without the restrictive adjective "basic". Thus, in said case, we construed the term in its generic sense to refer to all types of "direct remunerations for

services rendered," including commissions. In the same case, we also took judicial notice of the fact "that some salesmen do not receive any basic salary but depend on commissions and allowances or commissions alone, although an employer-employee relationship exists," which statement is quite significant in that it speaks of a "basic salary" apart and distinct from "commissions" and "allowances". Instead of supporting respondents' stand, it would appear that Songco itself recognizes that commissions are not part of "basic salary."

In including commissions in the computation of the 13th month pay, the second paragraph of Section 5 (a) of the Revised Guidelines on the Implementation of the 13th Month Pay Law unduly expanded the concept of "basic salary" as defined in P.D. 851. It is a fundamental rule that implementing rules cannot add to or detract from the provisions of the law it is designed to implement. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law they are intended to carry into effect. They cannot widen its scope. An administrative agency cannot amend an act of Congress. 10 LLpr

Having reached this conclusion, we deem it unnecessary to discuss the other issues raised in these petitions.

WHEREFORE, the consolidated petitions are hereby GRANTED. The second paragraph of Section 5 (a) of the Revised Guidelines on the Implementation of the 13th Month Pay Law issued on November 16, 1987 by then Labor Secretary Franklin M. Drilon is declared null and void as being violative of the law said Guidelines were issued to implement, hence issued with grave abuse of discretion correctible by the writ of prohibition and certiorari. The assailed Orders of January 17, 1990 and October 10, 1991 based thereon are SET ASIDE.

SO ORDERED.

Padilla, Regalado, Nocon and Puno, JJ ., concur.

||| (Boie-Takeda Chemicals, Inc. v. De La Serna, G.R. No. 92174, 102552, [December 10, 1993])

4. CANNOT EXCEED PROVISIONS OF BASIC LAW

10. UBFHAI v. BF HOMES 310 SCRA 304

FIRST DIVISION

[G.R. No. 124873. July 14, 1999.]

UNITED BF HOMEOWNER'S ASSOCIATION, and HOME INSURANCE AND GUARANTY CORPORATION, petitioners, vs. BF HOMES, INC., respondent.

Veneranda Acayler-Cruz for United BF Homeowner's Association.

Roberto C. Abrajano for petitioner Home Insurance and Guaranty Corp.

Hector Danny D. Uy for respondents.

SYNOPSIS

The Securities and Exchange Commission (SEC) placed respondent BF Homes, Inc. (BFHI) under receivership to undergo a ten-year (10) rehabilitation program due to its financial difficulties. Petitioner UBFHAI was created and registered with the Home Insurance and Guaranty Corporation (HIGC) in 1989, and recognized as the sole representative of all the homeowners' association inside the BF Homes Parañaque Subdivision. Respondent BFHI, through its receiver, turned over to petitioner UBFHAI the administration and operation of the subdivision's clubhouse and a strip of open space in 1989 and 1993, respectively. In 1994, the first receiver was relieved and a new committee of receivers, composed of respondent BFHI's eleven (11) members of the board of directors was appointed. Petitioner UBFHAI filed with the HIGC a petition for mandamus with preliminary injunction against respondent BFHI alleging that the committee of receivers illegally revoked their security agreement with the previous receiver. Without filing an answer to the petition with HIGC, respondent BFHI filed with the Court of Appeals a petition for prohibition for the issuance of preliminary injunction and temporary restraining order, to enjoin HIGC from proceeding with the case. The Court of Appeals granted respondent BFHI's petition for prohibition and also ordered HIGC's hearing officer to refrain from hearing and to dismiss it for lack of jurisdiction. Assailed in this petition for review on certiorari is the decision and resolution of the Court of Appeals.

The Supreme Court held that Rule II, Section 1 (b) of HIGC's "Revised Rules of Procedure in the Hearing of Homeowners' Disputes" is void, without ruling on the validity of the rest of the rules. Neither can HIGC claim original and exclusive jurisdiction over the petition for mandamus under the two other types of disputes enumerated in PD 902-A and its revised rules. The dispute is not one involving the members of the homeowners association nor is it one between any and/or all of the members and the association of which they are members. The parties are the homeowners' association and the owner-developer, acting at the same time as the corporation's committee of receivers. The Court decision and resolution appealed from were affirmed.

SYLLABUS

1. COMMERCIAL LAW; CORPORATION CODE; HOME INSURANCE AND GUARANTY CORPORATION (HIGC); POWERS AND FUNCTIONS THEREOF; LIMITATIONS. — Originally, administrative supervision over homeowners' associations was vested by law with the Securities and Exchange Commission. On May 3, 1979, pursuant toExecutive Order 535, this function was delegated to the Home Insurance and Guaranty Corporation (HIGC). Section 2 of Executive Order 535 provides: "2. In addition to the powers and functions vested under the Home Financing Act, the Corporation, shall

have among others, the following additional powers; (a) To require submission of and register articles of incorporation of homeowners associations and issue certificates of incorporation/registration, upon compliance by the registering associations with the duly promulgated rules and regulations thereon; maintain a registry thereof; and exercise all the powers, authorities and responsibilities that are vested on the Securities and Exchange Commission with respect to homeowners association, the provision of Act 1459, as amended by P.D. 902-A, to the contrary notwithstanding;" By virtue of this amendatory law, the HIGC not only assumed the regulatory and adjudicative functions of the SEC over homeowners' associations, but also the original and exclusive jurisdiction to hear and decide cases involving: "(b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity." On December 21, 1989, the HIGC adopted its rules of procedure in the hearing of homeowners' disputes. Section 1(b), Rule II enumerated the types of disputes over which the HIGC has jurisdiction, and these include: "Section 1. Types of Disputes — The HIGC or any person, officer, body, board, or committee duly designated or created by it shall have jurisdiction to hear and decide cases involving the following: . . . (b) Controversies arising out of intra-corporate relations between and among members of the association, between any and/or all of them and the association of which they are members, and insofar as it concerns its right to exist as a corporate entity, between the association and the state/general public or other entity." Therefore, in relation to Section 5 (b), Presidential Decree 902-A, the HIGC's jurisdiction over homeowners' disputes is limited to controversies that arise out of the following intra-corporate relations: (1) between and among members of the association; (2) between any or all of them and the association of which they are members or associates; and (3) between such association and the state, insofar as it concerns their individual franchise or right to exist as such entity.

2. POLITICAL LAW; LEGISLATIVE ENACTMENT; AN ADMINISTRATIVE AGENCY CANNOT AMEND AN ACT OF CONGRESS; RATIONALE; CASE AT BAR. — As early as 1970, in the case of Teoxon vs. Members of the Board of Administrators (PVA), 33 SCRA 585, 588 [1970], we ruled that the power to promulgate rules in the implementation of a statute is necessarily limited to what is provided for in the legislative enactment. Its terms must be followed for an administrative agency cannot amend an Act of Congress. The rule-making power must be confined to details for regulating the mode or proceedings to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand the statutory requirements or to embrace matters not covered by the statute." (Land Bank of the Philippines vs. Court of Appeals, 285 SCRA 404, 407 [1996]). If a discrepancy occurs between the basic law and an implementing rule or regulation, it is the former that prevails. (Nasipit Lumber Company, Inc. vs.

National Wages and Productivity Commission, 289 SCRA 667, 681 [1981]). In the present case, the HIGC went beyond the authority provided by the law when it promulgated the revised rules of procedure. There was a clear attempt to unduly expand the provisions of Presidential Decree 902-A. As provided in the law, insofar as the association's franchise or corporate existence is involved, it is only the State, not the "general public or other entity" that could question this. The appellate court correctly held that: "The inclusion of the phrase GENERAL PUBLIC OR OTHER ENTITY is a matter which HIGC cannot legally do . . . ." The rule-making power of a public administrative body is a delegated legislative power, which it may not use either to abridge the authority given it by Congress or the Constitution or to enlarge its power beyond the scope intended. Constitutional and statutory provisions control what rules and regulations may be promulgated by such a body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. Moreover, where the legislature has delegated to an executive or administrative officers and boards authority to promulgate rules to carry out an express legislative purpose, the rules of administrative officers and boards, which have the effect of extending, or which conflict with the authority-granting statute, do not represent a valid exercise of the rule-making power but constitute an attempt by an administrative body to legislate. "A statutory grant of powers should not be extended by implication beyond what may be necessary for their just and reasonable execution." It is axiomatic that a rule or regulation must bear upon, and be consistent with, the provisions of the enabling statute if such rule or regulation is to be valid.

D E C I S I O N

PARDO, J p:

Assailed in this petition for review on certiorari is the decision 1 and resolution 2 of the Court of Appeals granting respondent BFHI's petition for prohibition, and ordering Atty. Roberto C. Abrajano, hearing officer of the Home Insurance and Guaranty Corporation, to refrain from hearing HIGC CASE NO. HOA-95-027 and to dismiss it for lack of jurisdiction. cdrep

The antecedent facts are as follows:

Petitioner United BF Homeowners' Association, Inc. (UBFHAI) is the umbrella organization and sole representative of all homeowners in the BF Homes Parañaque Subdivision, a seven hundred sixty five (765) hectare subdivision located in the south of Manila. Respondent BF Homes, Inc. (BFHI) is the owner-developer of the said subdivision, which first opened in 1968. 3

In 1988, because of financial difficulties, the Securities and Exchange Commission (SEC) placed respondent BFHI under receivership to undergo a ten-year (10) rehabilitation program, and appointed Atty. Florencio B. Orendain receiver. The program was composed of two stages: (1) payment of

obligations to external creditors; and (2) payment of obligations to Banco Filipino. 4 llcd

When Atty. Florencio B. Orendain took over management of respondent BFHI in 1988, several things were not in order in the subdivision. 5 Preliminary to the rehabilitation, Atty. Orendain entered into an agreement with the two major homeowners' associations, the BF Parañaque Homeowners Association, Inc. (BFPHAI) and the Confederation of BF Homeowners Association, Inc. (CBFHAI), for the creation of a single, representative homeowners' association and the setting up of an integrated security program that would cover the eight (8) entry and exit points to and from the subdivision. On December 20, 1988, this tripartite agreement was reduced into a memorandum of agreement, and amended on March 1989.

 

Pursuant to these agreements, on May 18, 1989, petitioner UBFHAI was created and registered with the Home Insurance and Guaranty Corporation (HIGC), 6 and recognized as the sole representative of all the homeowners' association inside the subdivision.

Respondent BFHI, through its receiver, turned over to petitioner UBFHAI the administration and operation of the subdivision's clubhouse at #37 Pilar Banzon Street, 7and a strip of open space in Concha Cruz Garden Row, 8 on June 23, 1989 and May, 1993, respectively. cdrep

On November 7, 1994, the first receiver was relieved and a new committee of receivers, composed of respondent BFHI's eleven (11) members of the board of directors was appointed. 9

On April 7, 1995, based on BFHI's title to the main roads, the newly appointed committee of receivers sent a letter to the different homeowners' association in the subdivision informing them that as a basic requirement for BFHI's rehabilitation, respondent BFHI would be responsible for the security of the subdivision in order to centralize it and abate the continuing proliferation of squatters. 10

On the same day, petitioner UBFHAI filed with the HIGC a petition for mandamus with preliminary injunction against respondent BFHI. 11 In substance, petitioner UBFHAI alleged that the committee of receivers illegally revoked their security agreement with the previous receiver. They complained that even prior to said date, the new committee of receivers committed the following acts: (1) deferred petitioner UBFHAI's purchase of additional pumps; (2) terminated the collection agreement for the community assessment forged by the petitioner UBFHAI with the first receiver; (3) terminated the administration and maintenance of the Concha Cruz Garden Row; (4) sent a letter to petitioner UBFHAI stating that it recognized BFPHAI 12 only, and that the subdivision's clubhouse was to be administered by it only; and (5) took over the administration of security in the main avenues in the subdivision. cdphil

On April 11, 1995, the HIGC issued ex parte a temporary restraining order. Particularly, respondent BFHI was enjoined from:

". . . taking over the Clubhouse located at 37 Pilar Banzon St., BF Homes Parañaque, Metro Manila, taking over security in all the entry and exit points and main avenues of BF Homes Parañaque Subdivision, impeding or preventing the execution and sale at auction of the properties of BF Parañaque Homeowners Association, Inc., in HIGC HOA-90-138 and otherwise repudiating or invalidating any contract or agreement of petitioner with the former receiver/BFHI concerning funding or delivery of community services to the homeowners represented by the latter." 13

On April 24, 1995, without filing an answer to petitioner UBFHAI's petition with the HIGC, respondent BFHI filed with the Court of Appeals a petition for prohibition for the issuance of preliminary injunction and temporary restraining order, to enjoin HIGC from proceeding with the case. 14

On May 2, 1995, the HIGC issued an order deferring the resolution of petitioner UBFHAI's application for preliminary injunction, until such time that respondent BFHI's application for prohibition with the appellate court has been resolved. When the twenty-day (20) effectivity of the temporary restraining order had lapsed, the HIGC ordered the parties to maintain the status quo. 15 cda

Meanwhile, on November 27, 1995, the Court of Appeals promulgated its decision 16 granting respondent BFHI's petition for prohibition, as follows:

"WHEREFORE, premises considered, the petition is hereby GRANTED, prohibiting the public respondent Roberto C. Abrajano from proceeding with the hearing of HIGC CASE NO. HOA-95-027. Consequently, the public respondent is hereby ordered to DISMISS HIGC CASE NO. HOA-95-027 for lack of jurisdiction."

"SO ORDERED." 17

On April 24, 1996, the appellate court denied petitioner's motion for reconsideration. 18

Hence, this petition for review on certiorari. LexLib

Petitioner UBFHAI raises two issues: (1) whether or not the Rules of Procedure promulgated by the HIGC, specifically Section 1(b), Rule II of the "Rules of Procedure in the Settlement of Homeowners' Disputes" is valid; (2) whether or not the acts committed by the respondent constitute an attack on petitioner's corporate existence. 19Corollary to these, petitioner questions the appellate court's jurisdiction over the subject case.

Originally, administrative supervision over homeowners' associations was vested by law with the Securities and Exchange Commission. On May 3, 1979, pursuant toExecutive Order 535, 20 this function was delegated to the Home Insurance and Guaranty Corporation (HIGC). 21 Section 2 of Executive Order 535 provides:

"2. In addition to the powers and functions vested under the Home Financing Act, the Corporation, shall have among others, the following additional powers; Cdpr

(a) To require submission of and register articles of incorporation of homeowners associations and issue certificates of incorporation/registration, upon compliance by the registering associations with the duly promulgated rules and regulations thereon; maintain a registry thereof; and exercise all the powers, authorities and responsibilities that are vested on the Securities and Exchange Commission with respect to homeowners association, the provision of Act 1459, as amended by P.D. 902-A, to the contrary notwithstanding;"

By virtue of this amendatory law, the HIGC not only assumed the regulatory and adjudicative functions of the SEC over homeowners' associations, but also the original and exclusive jurisdiction to hear and decide cases involving:

"(b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity." 22 cdll

On December 21, 1989, the HIGC adopted its rules of procedure in the hearing of homeowners' disputes. Section 1(b), Rule II enumerated the types of disputes over which the HIGC has jurisdiction, and these include:

"SECTION 1. Types of Disputes. — The HIGC or any person, officer, body, board, or committee duly designated or created by it shall have jurisdiction to hear and decide cases involving the following:

xxx xxx xxx

(b) Controversies arising out of intra-corporate relations between and among members of the association, between any and/or all of them and the association of which they are members, and insofar as it concerns its right to exist as a corporate entity, between the association and the state/general public or other entity." [emphasis supplied] dctai

Therefore, in relation to Section 5 (b), Presidential Decree 902-A, the HIGC's jurisdiction over homeowners' disputes is limited to controversies that arise out of the following intra-corporate relations: (1) between and among members of the association; (2) between any or all of them and the association of which they are members or associates; and (3) between such association and the state, insofar as it concerns their individual franchise or right to exist as such entity. (Emphasis supplied.)

Though it would seem that Section 1(b), Rule II of the HIGC's revised rules of procedure is just a reproduction of Section 5 (b), Presidential Decree 902-A, the rules deviated from the provisions of the latter. If the provisions of the law would be followed to the letter, the third type of dispute over which the HIGC has jurisdiction should be limited only to a dispute

between the state and the association, insofar as it concerns the association's franchise or corporate existence. However, under the HIGC's revised rules of procedure, the phrase "general public or other entity" 23 was added.

It was on this third type of dispute, as provided in Section 1(b), Rule II of the HIGC's revised rules of procedure that petitioner UBFHAI anchors its claim that the HIGC has original and exclusive jurisdiction over the case. In the comment filed by the HIGC with the appellate court, it maintained that it has original and exclusive jurisdiction over the dispute pursuant to the power and authority granted it in the revised rules of procedure. Respondent BFHI disputes this, contending that the rules or procedure relied upon by petitioner are not a valid implementation of Executive Order No. 535, as amended, in relation to Presidential Decree 902-A. prLL

The question now is whether HIGC, in promulgating the above-mentioned rules of procedure, went beyond the authority delegated to it and unduly expanded the provisions of the delegating law. In relation to this, the question is whether or not the revised rules of procedure are valid.

As early as 1970, in the case of Teoxon vs. Members of the Board of Administrators (PVA), 24 we ruled that the power to promulgate rules in the implementation of a statute is necessarily limited to what is provided for in the legislative enactment. Its terms must be followed for an administrative agency cannot amend an Act of Congress. 25 "The rule-making power must be confined to details for regulating the mode or proceedings to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand the statutory requirements or to embrace matters not covered by the statute." 26 If a discrepancy occurs between the basic law and an implementing rule or regulation, it is the former that prevails. 27

In the present case, the HIGC went beyond the authority provided by the law when it promulgated the revised rules of procedure. There was a clear attempt to unduly expand the provisions of Presidential Decree 902-A. As provided in the law, insofar as the association's franchise or corporate existence is involved, it is only the State, not the "general public or other entity" that could question this. The appellate court correctly held that: "The inclusion of the phrase GENERAL PUBLIC OR OTHER ENTITY is a matter which HIGC cannot legally do . . . " 28 The rule-making power of a public administrative body is a delegated legislative power, which it may not use either to abridge the authority given it by Congress or the Constitution or to enlarge its power beyond the scope intended. Constitutional and statutory provisions control what rules and regulations may be promulgated by such a body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. 29 cdrep

 

Moreover, where the legislature has delegated to an executive or administrative officers and boards authority to promulgate rules to carry out an express legislative purpose, the rules of administrative officers and boards, which have the effect of extending, or which conflict with the authority-granting statute, do not represent a valid exercise of the rule-making power but constitute an attempt by an administrative body to legislate. 30 "A statutory grant of 'powers should not be extended by implication beyond what may be necessary for their just and reasonable execution." 31 It is axiomatic that a rule or regulation must bear upon, and be consistent with, the provisions of the enabling statute if such rule or regulation is to be valid. 32

Thus, we hold that Rule II, Section 1(b) of HIGC's "Revised Rules of Procedure in the Hearing of Homeowners' Disputes" is void, without ruling on the validity of the rest of the rules.

Neither can the HIGC claim original and exclusive jurisdiction over the petition for mandamus under the two other types of disputes enumerated in Presidential Decree 902-A and in the revised rules. The dispute is not one involving the members of the homeowners' association nor is it one between any and/or all of the members and the association of which they are members. The parties are the homeowners' association and the owner-developer, acting at the same time as the corporation's committee of receivers. Cdpr

To reiterate, the HIGC exercises a very limited jurisdiction over homeowners' disputes. The law confined this authority to controversies that arise out of the following intra-corporate relations: (1) between and among members of the association; (2) between any and/or all of them and the association of which they are members; and (3) insofar as it concerns its right to exist as a corporate entity, between the association and the state. None of the parties to the litigation can enlarge or diminish it or dictate when it shall attach or when it shall be removed. 33

Jurisdiction is defined as the power and authority of a court to hear, try and decide a case. Jurisdiction over the subject matter is conferred by the Constitution or by law. Nothing can change the jurisdiction of the court over the subject matter. That power is a matter of legislative enactment which none but the legislature may change. 34

In light of the foregoing, we do not see the need to discuss the second issue. Whether or not the acts committed or threatened to be committed by the respondent against the petitioner would constitute an attack on the latter's corporate existence would be immaterial. The HIGC has no jurisdiction to hear and resolve the dispute.LLphil

Having dispensed with the question of jurisdiction, there is no need for the HIGC to proceed with the hearing of HIGC-HOA 95-027. It would just be an exercise in futility since it has no jurisdiction.

Furthermore, it was apparent that the board of directors of respondent BFHI, acting as the committee of receivers, was only trying to find ways and means to rehabilitate the

corporation so that it can pay off its creditors. The revocation of the security agreements and the removal of administration and maintenance of certain property that are still under the name of respondent BFHI, were acts done in pursuance of the rehabilitation program. All the security agreements and undertakings were contractual in nature, which respondent BFHI, acting as a committee of receivers and being the successor of the former receiver, could very well alter or modify.

WHEREFORE, the Court DENIES the petition for review on certiorari, for lack of merit. The decision and resolution appealed from in CA-G.R. SP. NO. 37072 are AFFIRMED.cdll

No costs.

SO ORDERED.

Davide, Jr., C.J., Melo, Kapunan and Ynares-Santiago, JJ., concur.

||| (United BF Homeowner's Ass'n. v. BF Homes, Inc., G.R. No. 124873, [July 14, 1999], 369 PHIL 568-582)

5. NOT UNREASONABLE, UNFAIR, OR DISCRIMINATORY

11. LUPANGCO v. CA 160 SCRA 848

FIRST DIVISION

[G.R. No. 77372. April 29, 1988.]

LUPO L. LUPANGCO, RAYMOND S. MUNGKAL, NORMAN A. MESINA, ALEXANDER R. REGUYAL, JOCELYN P. CATAPANG, ENRICO V. REGALADO, JEROME O. ARCEGA, ERNESTO C. BLAS, JR., ELPIDIO M. ALMAZAN, KARL CAESAR R. RIMANDO, petitioners, vs. COURT OF APPEALS and PROFESSIONAL REGULATION COMMISSION, respondents.

Balgos & Perez Law Offices for petitioners.

The Solicitor General for respondents.

SYLLABUS

1. REMEDIAL LAW; P.D. NO. 223; PROFESSIONAL REGULATION COMMISSION; DECISION, ORDER OR RESOLUTION APPEALABLE TO THE REGIONAL TRIAL COURT. — There is no law providing for the next course of action for a party who wants to question a ruling or order of the Professional Regulation Commission. Consequently, Civil Case No. 86-37950, which was filed in order to enjoin the enforcement of a resolution of the respondent Professional Regulation Commission alleged to be unconstitutional, should fall within the general jurisdiction of the Court of First Instance, now the Regional Trial Court.

2. ID.; ID.; ID.; BASIS. — What is clear from Presidential Decree No. 223 is that the Professional Regulation

Commission is attached to the Office of the President for general direction and coordination. Well settled in our jurisprudence is the view that even acts of the Office of the President may be reviewed by the Court of First Instance (now the Regional Trial Court).

3. ID.; B.P. BLG 129; EXCLUSIVE APPELLATE JURISDICTION OF COURT OF APPEALS OVER FINAL ORDER OR RULING OF ADMINISTRATIVE BODIES IN EXERCISING QUASI-JUDICIAL FUNCTIONS; "QUASI-JUDICIAL," DEFINED. — In order to invoke the exclusive appellate jurisdiction of the Court of Appeals as provided for in Section 9, paragraph 3 of B.P. Blg. 129, there has to be a final order or ruling which resulted from proceedings wherein the administrative body involved exercised its quasi-judicialfunctions. In Black's Law Dictionary, quasi-judicial is defined as a term applied to the action, discretion, etc., of public administrative officers or bodies required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action, and to exercise discretion of a judicial nature. To expound thereon, quasi- judicial adjudication would mean a determination of rights, privileges and duties resulting in a decision or order which applies to a specific situation.

4. ID.; ID.; ID.; ID.; DOES NOT COVER RULES AND REGULATIONS OF GENERAL APPLICABILITY. — This does not cover rules and regulations of general applicability issued by the administrative body to implement its purely administrative policies and functions like Resolution No. 105 which was adopted by the respondent PRC as a measure to preserve the integrity of licensure examinations.

5. ADMINISTRATIVE LAW; ADMINISTRATIVE RULES AND REGULATIONS MUST NOT BE ISSUED ARBITRARILY. — It is an axiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the issuance of rules and regulations.

6. CONSTITUTIONAL LAW; RESOLUTION NO. 105 ISSUED BY THE PROFESSIONAL REGULATION COMMISSION, UNCONSTITUTIONAL FOR BEING UNREASONABLE, ARBITRARY AND A VIOLATION OF ACADEMIC FREEDOM. — Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees' right to liberty guaranteed by the Constitution. Respondent PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the licensure examinations. They cannot be restrained from taking all the lawful steps needed to assure the fulfillment of their ambition to become public accountants. They have every right to make use of their faculties in attaining success in their endeavors. They should be allowed to enjoy their freedom to acquire useful knowledge that will promote their personal growth. Another evident objection to Resolution No. 105 is that it violates the academic freedom of the schools concerned. Respondent PRC cannot interfere with the conduct of review that review schools and centers believe would best enable their enrolees to meet the standards required before becoming a full-pledged public accountant. Unless the means or methods of instruction are clearly found to be inefficient, impractical, or riddled with corruption, review

schools and centers may not be stopped from helping out their students.

D E C I S I O N

GANCAYCO, J p:

Is the Regional Trial Court of the same category as the Professional Regulation Commission so that it cannot pass upon the validity of the administrative acts of the latter? Can this Commission lawfully prohibit the examinees from attending review classes, receiving handout materials, tips or the like three (3) days before the date ofexamination? These are the issues presented to the court by this petition for certiorari to review the decision of the Court of Appeals promulgated on January 13, 1987, in CA-G.R. SP No. 10591, * declaring null and void the Order dated October 21, 1986 issued by the Regional Trial Court of Manila, Branch 32 in Civil Case No. 86-37950 entitled "Lupo L. Lupangco, et al. vs. Professional Regulation Commission."

The records show the following undisputed facts:

On or about October 6, 1986, herein respondent Professional Regulation Commission (PRC) issued Resolution No. 105 as part of its "Additional Instructions to Examinees," to all those applying for admission to take the licensure examinations in accountancy. The resolution embodied the following pertinent provisions:

"No examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer, lecturer, instructor official or employee of any of the aforementioned or similar institutions during the three days immediately preceding every examination day including the examination day.

"Any examinee violating this instruction shall be subject to the sanctions prescribed by Sec. 8, Art. III of the Rules and Regulations of the Commission." 1

On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure examinations in accountancy scheduled on October 25 and November 2 of the same year, filed in their own behalf and in behalf of all others similarly situated like them, with the Regional Trial Court of Manila, Branch XXXII, a complaint for injunction with a prayer for the issuance of a writ of preliminary injunction against respondent PRC to restrain the latter from enforcing the above-mentioned resolution and to declare the same unconstitutional.

Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the lower court had no jurisdiction to review and to enjoin the enforcement of its resolution. In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try the case and enjoined the respondent commission from enforcing and giving effect to Resolution No. 105 which it found to be unconstitutional.

Not satisfied therewith, respondent PRC, on November 10, 1986, filed with the Court of Appeals a petition for the nullification of the above Order of the lower court. Said petition was granted in the Decision of the Court of Appeals promulgated on January 13, 1987, to wit:

"WHEREFORE, finding the petition meritorious the same is hereby GRANTED and the order dated October 21, 1986 issued by respondent court is declared null and void. The respondent court is further directed to dismiss with prejudice Civil Case No. 86-37950 for want of jurisdiction over the subject matter thereof. No costs in this instance. cdrep

SO ORDERED." 2

Hence, this petition.

The Court of Appeals, in deciding that the Regional Trial Court of Manila had no jurisdiction to entertain the case and to enjoin the enforcement of Resolution No. 105, stated as its basis its conclusion that the Professional Regulation Commission and the Regional Trial Court are co-equal bodies. Thus it held —

"That the petitioner Professional Regulatory Commission is at least a co-equal body with the Regional Trial Court is beyond question, and co-equal bodies have no power to control each other or interfere with each other's acts." 3

To strengthen its position, the Court of Appeals relied heavily on National Electrification Administration vs. Mendoza, 4 which cites Pineda vs. Lantin 5 and Philippine Pacific Fishing, Inc. vs. Luna, 6 where this Court held that a Court of First Instance cannot interfere with the orders of the Securities and Exchange Commission, the two being co-equal bodies.

After a close scrutiny of the facts and the record of this case, We rule in favor of the petitioner.

The cases cited by respondent court are not in point. It is glaringly apparent that the reason why this Court ruled that the Court of First Instance could not interfere with the orders of the Securities and Exchange Commission was that this was so provided for by the law. In Pineda vs. Lantin, We explained that whenever a party is aggrieved by or disagrees with an order or ruling of the Securities and Exchange Commission, he cannot seek relief from courts of general jurisdiction since under the Rules of Court and Commonwealth Act No. 83, as amended by Republic Act No. 635, creating and setting forth the powers and functions of the old Securities and Exchange Commission, his remedy is to go to the Supreme Court on a petition for review. Likewise, in Philippine Pacific Fishing Co., Inc. vs. Luna, it was stressed that if an order of the Securities and Exchange Commission is erroneous, the appropriate remedy to take is first, within the Commission itself, then, to the Supreme Court as mandated in Presidential Decree No. 902-A, the law creating the new Securities and Exchange Commission. Nowhere in the said cases was it held that a Court of First Instance has no jurisdiction over all other government agencies. On the

contrary, the ruling was specifically limited to the Securities and Exchange Commission.

 

The respondent court erred when it placed the Securities and Exchange Commission and the Professional Regulation Commission in the same category. As already mentioned, with respect to the Securities and Exchange Commission, the laws cited explicitly provide for the procedure that need be taken when one is aggrieved by its order or ruling. Upon the other hand, there is no law providing for the next course of action for a party who wants to question a ruling or order of the Professional Regulation Commission. Unlike Commonwealth Act No. 83 and Presidential Decree No. 902-A, there is no provision in Presidential Decree No. 223, the law creating the Professional Regulation Commission, that orders or resolutions of the Commission are appealable either to the Court of Appeals or to the Supreme Court.Consequently, Civil Case No. 86-37950, which was filed in order to enjoin the enforcement of a resolution of the respondent Professional Regulation Commission alleged to be unconstitutional, should fall within the general jurisdiction of the Court of First Instance, now the Regional Trial Court. 7

What is clear from Presidential Decree No. 223 is that the Professional Regulation Commission is attached to the Office of the President for general direction and coordination. 8 Well settled in our jurisprudence is the view that even acts of the Office of the President may be reviewed by the Court of First Instance (now the Regional Trial Court). In Medalla vs. Sayo, 9 this rule was thoroughly propounded on, to wit:

"In so far as jurisdiction of the Court below to review by Certiorari decisions and/or resolutions of the Civil Service Commission and of the Presidential Executive Assistant is concerned, there should be no question but that the power of judicial review should be upheld. The following rulings buttress this conclusion:

'The objection to a judicial review of a Presidential act arises from a failure to recognize the most important principle in our system of government, i.e., the separationof powers into three co-equal departments, the executive, the legislative and the judicial, each supreme within its own assigned powers and duties. When a presidential act is challenged before the courts of justice, it is not to be implied therefrom that the Executive is being made subject and subordinate to the courts. The legality of his acts are under judicial review, not because the Executive is inferior to the courts, but because the law is above the Chief Executive himself, and the courts seek only to interpret, apply or implement it (the law). A judicial review of the President's decision on a case of an employee decided by the Civil Service Board of Appeals should be viewed in this light and the bringing of the case to the Courts should be governed by the same principles as govern the judicial review of all administrative acts of all administrative officers." 10

Republic vs. Presiding Judge, CFI of Lanao del Norte, Br. II, 11 is another case in point. Here, "the Executive Office" of the Department of Education and Culture issuedMemorandum Order No. 93 under the authority of then Secretary of Education Juan Manuel. As in this case, a complaint for injunction was filed with the Court of First Instance of Lanao del Norte because, allegedly, the enforcement of the circular would impair some contracts already entered into by public school teachers. It was the contention of petitioner therein that "the Court of First Instance is not empowered to amend, reverse and modify what is otherwise the clear and explicit provision ofthe memorandum circular issued by the Executive Office which has the force and effect of law." In resolving the issue, We held:

" . . . , We definitely state that respondent Court lawfully acquired jurisdiction in Civil Case No. II-240 (8) because the plaintiff therein asked the lower court for relief, in the form of injunction, in defense of a legal right (freedom to enter into contracts) . . . Hence there is a clear infringement of private respondent's constitutional right to enter into agreements not contrary to law, which might ran the risk of being violated by the threatened implementation of Executive Office Memorandum Circular No. 93, dated February 5, 1968, which prohibits, with certain exceptions, cashiers and disbursing officers from honoring special powers of attorney executed by the payee employees. The respondent Court is not only right but duty bound to take cognizance of cases of this nature wherein a constitutional and statutory right is allegedly infringed by the administrative action of a government office. Courts of First Instance have original jurisdiction over all civil actions in which the subject of the litigation is not capable of pecuniary estimation (Sec. 44, Republic Act 296, as amended)." 12 (Emphasis supplied.)

In San Miguel Corporation vs. Avelino, 1 3 We ruled that a judge of the Court of First Instance has the authority to decide on the validity of a city tax ordinance even after its validity had been contested before the Secretary of Justice and an opinion thereon had been rendered.

In view of the foregoing, We find no cogent reason why Resolution No. 105, issued by the respondent Professional Regulation Commission, should be exempted from the general jurisdiction of the Regional Trial Court.

Respondent PRC, on the other hand, contends that under Section 9, paragraph 3 of B.P. Blg. 129, it is the Court of Appeals which has jurisdiction over the case. The said law provides:

"SEC. 9. Jurisdiction. — The Intermediate Appellate Court shall exercise:

xxx xxx xxx

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate

jurisdiction of the Supreme Court in accordance with the Constitution, the provisionsof this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act   of   1948 ."

The contention is devoid of merit. cdrep

In order to invoke the exclusive appellate jurisdiction of the Court of Appeals as provided for in Section 9, paragraph 3 of B.P. Blg. 129, there has to be a final order or ruling which resulted from proceedings wherein the administrative body involved exercised its quasi-judicial functions. In Black's Law Dictionary, quasi-judicial is defined as a term applied to the action, discretion, etc., of public administrative officers or bodies required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action, and to exercise discretion of a judicial nature. To expound thereon, quasi- judicial adjudication would mean a determination of rights, privileges and duties resulting in a decision or order which applies to a specific situation. 14 This does not cover rules and regulations of general applicability issued by the administrative body to implement its purely administrative policies and functions like Resolution No. 105 which was adopted by the respondent PRC as a measure to preserve the integrity of licensure examinations.

The above rule was adhered to in Filipinas Engineering and Machine Shop vs. Ferrer. 15 In this case, the issue presented was whether or not the Court of First Instance had jurisdiction over a case involving an order of the Commission on Elections awarding a contract to a private party which originated from an invitation to bid. The said issue came about because under the laws then in force, final awards, judgments, decisions or orders of the Commission on Elections fall within the exclusive jurisdictionof the Supreme Court by way of certiorari. Hence, it has been consistently held that "it is the Supreme Court, not the Court of First Instance, which has exclusive jurisdiction to review on certiorari final decisions, orders, or rulings of the Commission on Elections relative to the conduct of elections and the enforcement of election laws." 16

As to whether or not the Court of First Instance had jurisdiction in said case, We said:

"We are however, far from convinced that an order of the COMELEC awarding a contract to a private party, as a result of its choice among various proposals submitted in response to its invitation to bid comes within the purview of a 'final order' which is exclusively and directly appealable to this court on certiorari. What is contemplated by the term 'final orders, rulings and decisions of the COMELEC reviewable by certiorari by the Supreme Court as provided by law are those rendered in actions or proceedings before the COMELEC and taken cognizance of by the said body in the exercise of its adjudicatory or quasi-judicial powers. (Emphasis supplied.)

xxx xxx xxx

"We agree with petitioner's contention that the order of the Commission granting the award to a bidder is not an order

rendered in a legal controversy before it wherein the parties filed their respective pleadings and presented evidence after which the questioned order was issued; and that this order of the commission was issued pursuant to its authority to enter into contracts in relation to election purposes. In short, the COMELEC resolution awarding the contract in favor of Acme was not issued pursuant to its quasi-judicial functions but merely as an incident of its inherent administrative functions over the conduct of elections, and hence, the said resolution may not be deemed as a ' final order' reviewable by certiorari by the Supreme Court. Being non-judicial in character, no contempt order may be imposed by the COMELEC from said order, and no direct and exclusive appeal by certiorari to this Tribunal be from such order. Any question arising from said order may be well taken in an ordinary civil action before the trial courts. (Emphasis supplied) 17

 

One other case that should be mentioned in this regard is Salud vs. Central Bank of the Philippines. 18 Here, petitioner Central Bank, like respondent in this case, argued that under Section 9, paragraph 3 of B.P. Blg. 129, orders of the Monetary Board are appealable only to the Intermediate Appellate Court. Thus:

"The Central Bank and its Liquidator also postulate, for the very first time, that the Monetary Board is among the "quasi-judicial . . . boards' whose judgments are within the exclusive appellate jurisdiction of the IAC; hence, it is only said Court, 'to the exclusion of the Regional Trial Courts,' that may review the Monetary Board's resolutions." 19

Anent the posture of the Central Bank, We made the following pronouncement:

"The contention is utterly devoid of merit. The IAC has no appellate jurisdiction over resolutions or orders of the Monetary Board. No law prescribes any mode ofappeal from the Monetary Board to the IAC." 2 0

In view of the foregoing, We hold that the Regional Trial Court has jurisdiction to entertain Civil Case No. 86-37950 and enjoin the respondent PRC from enforcing its resolution. LexLib

Although We have finally settled the issue of jurisdiction, We find it imperative to decide once and for all the validity of Resolution No. 105 so as to provide the much awaited relief to those who are and will be affected by it.

Of course, We realize that the questioned resolution was adopted for a commendable purpose which is "to preserve the integrity and purity of the licensure examinations." However, its good aim cannot be a cloak to conceal its constitutional infirmities. On its face, it can be readily seen that it is unreasonable in that an examinee cannot even attend any review class, briefing, conference or the like, or receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer,

lecturer, instructor, official or employee of any of the aforementioned or similar institutions . . . . 21

The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives will be barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how the Commission can manage to have a watchful eye on each and every examinee during the three days before the examination period.

It is an axiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such rules and regulations must be reasonable and fairly adapted to secure the end in view. If shown to bear no reasonable relation to the purposes for which they are authorized to be issued, then they must be held to be invalid. 22

Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees' right to liberty guaranteed by the Constitution. Respondent PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the licensure examinations. They cannot be restrained from taking all the lawful steps needed to assure the fulfillment of their ambition to become public accountants. They have every right to make use of their faculties in attaining success in their endeavors. They should be allowed to enjoy their freedom to acquire useful knowledge that will promote their personal growth. As defined in a decision of the United States Supreme Court:

"The term 'liberty' means more than mere freedom from physical restraint or the bounds of a prison. It means freedom to go where one may choose and to act in such a manner not inconsistent with the equal rights of others, as his judgment may dictate for the promotion of his happiness, to pursue such callings and vocations as may be most suitable to develop his capacities, and give to them their highest enjoyment." 23

Another evident objection to Resolution No. 105 is that it violates the academic freedom of the schools concerned. Respondent PRC cannot interfere with the conduct ofreview that review schools and centers believe would best enable their enrolees to meet the standards required before becoming a full-fledged public accountant. Unless the means or methods of instruction are clearly found to be inefficient, impractical, or riddled with corruption, review schools and centers may not be stopped from helping out their students. At this juncture, We call attention to Our pronouncement in Garcia vs. The Faculty Admission Committee, Loyola School of Theology, 24regarding academic freedom, to wit:

. . . It would follow then that the school or college itself is possessed of such a right. It decides for itself its aims and objectives and how best to attain them. It is free from outside coercion or interference save possibly when the overriding public welfare calls for some restraint. It has a wide spread of autonomy certainly extending to the choice of students. This constitutional provision is not to be construed in a niggardly manner or in a grudging fashion."

Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in the licensure examinations will be eradicated or at least minimized. Making the examinees suffer by depriving them of legitimate means of review or preparation on those last three precious days when they should be refreshing themselves with all that they have learned in the review classes and preparing their mental and psychological make-up for the examination day itself — would be like uprooting the tree to get ride of a rotten branch. What is needed to be done by the respondent is to find out the source of such leakages and stop it right there. If corrupt officials or personnel should be terminated from their loss, then so be it. Fixers or swindlers should be flushed out. Strict guidelines to be observed by examiners should be set up and if violations are committed, then licenses should be suspended or revoked. These are all within the powers of the respondent commission as provided for in Presidential Decree No. 223. But by all means the right and freedom of the examinees to avail of all legitimate means to prepare for the examinations should not be curtailed. LLjur

In the light of the above, We hereby REVERSE and SET ASIDE, the decision of the Court of Appeals in CA-G.R. SP No. 10591 and another judgment is hereby rendered declaring Resolution No. 105 null and void and of no force and effect for being unconstitutional. This decision is immediately executory. No costs.

SO ORDERED.

Narvasa and Cruz, JJ., concur.

Griño-Aquino, J., took no part. I signed the CA decision.

||| (Lupangco v. Court of Appeals, G.R. No. 77372, [April 29, 1988], 243 PHIL 107-1006)