1. PLANAS v.
GIL RULING:
GR No. L-46440
JAN 18, 1939
By: BDC
Topic: Doctrine of Separation of Powers
Petitioners: CARMEN PLANAS
Respondents: JOSE GIL, Commissioner of Civil Service
Ponente: LAUREL, J.
DOCTRINE:
The acts of the Chief Executive performed within the limits of his jurisdiction are his official acts and
courts will neither direct nor restrain executive action in such cases. The rule is non-interference.
FACTS:
· The petitioner, then a member of the municipal board of the City of Manila, criticized the acts
of certain government officials in connection with the general election for Assemblymen held
on Nov. 8, 1938, in an issue of La Vanguardia(a local daily) on November 17, 1938.
o “but the President was the first to play politics, publicly expressing his preference for
candidates of his liking; and with the President all other officials of the government
also moved, taking part in electoral campaigns.”
o “With the government machinery feverishly functioning to flatten the opposition and
prevent candidates supported by the people from going to the National Assembly,
and with frauds and violations of all rules of the civil service to push the victory the
candidates of the Nacionalista Party and the administration, all constructive
opposition in the country is useless.”
· The following day of the publication, the petitioner received a letter, signed by the secretary
of the President, Jorge B. Vargas, directing the petitioner to appear before the Commissioner
of Civil Service, either alone or accompanied by counsel, at 9am, on Nov. 22, to prove the
published statements. Failure to prove the same will be considered a sufficient cause for
suspension or removal from office.
o “In the above statement, you appear to make the following charges: (1) That the
President of the Philippines has violated the Constitution in that he has taken part
in politics, expressing his preference for the candidates of the Nacionalista Party;
(2) That the whole government machinery has been put in action to prevent the
election to the National Assembly of the candidates of the people; (3) That the
candidates of the Nacionalista Party and of the administration have won the
election through frauds and violations of the civil service rules; (4) That the
administration does not permit the people to freely elect the candidates of their
choice.
· The petitioner appeared on the said date with her counsel and addressed through a letter her
objection to the authority of the respondent to conduct the investigation.
· The respondent continued the investigation which prompted the petitioner to file this petition
for prohibition and prayed for the issuance of a writ of preliminary injunction enjoining the
respondent from continuing with the investigation.
· Petitioner contends that the authority given to respondent by means of the letter signed `By
authority of the President: Jorge B. Vargas, Secretary to the President' is without any force or
effect, since the powers and prerogatives vested in the President of the Philippines by our
Constitution and by our laws can be exercised by the President alone, and cannot be
delegated to Mr. Jorge B. Vargas or to any other person
· The SolGen, on the other hand, contends that respondent not only has jurisdiction but is in
duty to investigate the charges contained in the petitioner's published statement by virtue of
the order of the President of the Philippines; and that under the separation of powers marked
by the Constitution, the court has no jurisdiction to review the orders of the Chief Executive
which are of purely administrative in character.
ISSUE:
1. WON the SC has jurisdiction to review orders issued by the President
2. WON respondent can take cognizance of the case
1. YES.
· The acts of the Chief Executive performed within the limits of his jurisdiction are his official
acts and courts will neither direct nor restrain executive action in such cases. The rule is non-
interference. But from this legal premise, it does not necessarily follow that the SC is
precluded from making an inquiry into the validity or constitutionality of his acts when these
are properly challenged in an appropriate legal proceeding.The classical separation of
governmental powers viewed in the light of political philosophy is a relative theory of
government. There is more truism and actuality in interdependence than in independence and
separation of powers.
· In the present case, the President is not a party to the proceeding. He is neither compelled
nor restrained to act in a particular way. The CSC is the party respondent and the theory is
advanced by the Sol-Gen that because an investigation undertaken by him is directed by
authority of the President of the Philippines, the SC has no jurisdiction over the present
proceedings instituted by Planas. The argument is farfetched. A mere plea that a subordinate
officer of the government is acting under orders from the Chief Executive may be an important
averment, but is neither decisive nor conclusive upon this court. Like the dignity of his high
office, the relative immunity of the Chief Executive from judicial interference is not in
the nature of a sovereign passport for all the subordinate official and employees of the
executive Department to the extent that at the mere invocation of the authority that it
purports the jurisdiction of this court to inquire into the validity or legality of an
executive order is necessarily abated or suspended.
2. YES.
· What Article VII of the Constitution begins in its section 1 with the declaration the "The
Executive power shall be vested in a President of the Philippines." In the fulfillment of this
duty which he cannot evade, he is granted specific and express powers and functions. (Art.
VII, sec. 11.) In addition to these specific and express powers and functions, he may also
exercise those necessarily implied and included in them.
· The Constitution provides that the President "shall have control of all the executive
departments, bureaus, and offices" (Art. VII, sec. 11 [1], first clause) and shall "exercise
general supervision over all location governments as may be provided by law" (Ibid,
second clause). The President in the exercise of the executive power under the
Constitution may act through the heads of the executive departments. The heads of
the executive departments are his authorized assistants and agents in the performance
of his executive duties, and their official acts, promulgated in the regular course of
business, are presumptively his acts.
· The constitutional grant to the President of power to exercise general supervision over all local
governments and to take care that the laws be faithfully executed must be construed to
authorized him to order an investigation of the act or conduct of the petitioner herein.
Supervision implies authority to inquire into facts and conditions in order to render the power
real and effective.
· Furthermore, the petitioner is not denied the right to free speech, nor is she being investigated
because she had exercised that right. She has a perfect right to criticize the Government, its
administration, its policies and officials, but she may not, on the plea of freedom of speech
and of the press, impute violations of law and the commission of frauds and thereafter fold
her arms and decline to face an investigation conducted to elicit the truth or falsity of the
charges formulated by her.
DISPOSITIVE PORTION:
The petition is hereby dismissed, with costs against the petitioner. So ordered.
2. PHILIPPINE ISLANDS VS. SPRINGER
GR NO. L-26979
APR 1, 1927
By: DEINLA
Topic: ADMIN LAW; DOCTRINE OF SEPARATION OF POWERS; The appointment of managers of
property or a business in which the government is interested is essentially an executive act.
Petitioners: THE GOVERNMENT OF THE PHILIPPINE ISLANDS
Respondents: MILTON E. SPINGER, DALAMACIO COSTAS, and ANSELMO HILARIO
Ponente: MALCOLM, J.
 DOCTRINE:
The appointment of managers of property or a business in which the government is interested is
essentially an executive act.
FACTS:
● This is an original action of quo warranto against respondents who are directors of the National Coal
Company who were elected to their positions by the legislative members of the committee.
● The National Coal Company is a corporation organized by Act No. 2705 of the Philippine Legislature
as amended by Act No. 2822, and of the Corporation law.
● Section 4 of Act No. 2705, as amended by section 2 of Act No. 2822, which provides that "The voting
power of all such stock (in the National Coal Company) owned by the Government of the Philippine
Islands shall be vested exclusively in a committee consisting of the Governor-General, the President
of the Senate, and the Speaker of the House of Representatives."
● Subsequently, the Government-General (equivalent to President at the time) promulgated EO 37. It
declared/ordered that the provisions of the statutes creating a voting committee and enumerating the
duties and powers thereof with respect to certain corporations in which the Philippine Government is
the owner of stock, are nullities.
● Because of the invalidity of the portions of the Acts creating the voting committee or board of control,
the Governor-General would, therefore, exercise exclusively the duties and powers assumed by the
voting committee.
● A special meeting of the stockholders of the National Coal Company was called to elect directors and
the transaction of other business. The Governor-General declined to participate in the proposed
meeting but sent a representative.
● It was then and there decided that the votes represented by the stock of the Government in the National
Coal Company, should be cast in favor of five specified persons for directors of the company.
● The Governor-General, through his representative, thereupon objected to the asserted powers of the
President of the Senate and the Speaker of the House of Representatives, and the latter likewise
objected to the assertion of the Governor-General.
● The chair recognized the President of the Senate and the Speaker of the House of Representatives in
their capacity as majority members of the voting committee as the persons lawfully entitled to represent
and vote the Government stock. To this the representative of the Governor- General made protest and
demanded that it be entered of record in the minutes. The vote cast by the President of the Senate
and the Speaker of the House of Representatives was in favor of Alberto Barretto,Milton E. Springer,
Dalmacio Costas, Anselmo Hilario, and Frank B. Ingersoll.
● The Governor-General through his representative, alleging representation of the Government stock,
cast his vote in favor of Alberto Barreto, Romarico Agcaoili, Frank B. Ingersoll, H. L. Heath, and
Salvador Lagdameo.
● The chair declared the ballot cast by the President of the Senate and the Speaker of the House as
electing the names therein indicated, directors of the National Coal Company.
● Immediately after the stockholders meeting, the persons declared by the chairman to have been
elected, met and undertook to organize the board of directors of the National Coal Company by the
election of officers.
● All the directors for whom the President of the Senate and the Speaker of the House of
Representatives voted and who were declared elected at the meeting of the stockholders participated
in this meeting included among them, were the three defendants.
ISSUE: Whether the appointment of managers in a business which the government has interest in is an
executive act. YES.
RULING:
● The situation may be visualized by approaching the question by a process of elimination. Is the power
of appointment judicial? No one so contends. Is the power of appointment legislative? Not so if the
intention of the Organic Law be carried out and if the Legislature be confined to its law-making function.
Is the power of appointment executive? It is.
● The exact question of where the power of appointment to office is lodged has never heretofore arisen
in this jurisdiction. But a decision of this court and a controlling decision of the United States Supreme
Court are in point.
● In Concepcion vs. Parades, supra it was announced that "Appointment to office is intrinsically an
executive act involving the exercise of discretion."
● Myers vs. United States
o If there is a principle in our Constitution, indeed in any free Constitution more sacred than another,
it is that which separates the legislative, executive and judicial powers. If there is any point in which
the separation of the legislative and executive powers ought to be maintained with great caution, it
is that which relates to officers and offices.
o The vesting of the executive power in the President was essentially a grant of the power to execute
the laws. But the President alone and unaided could not execute the laws. He must execute them
by the assistance of subordinates. The reasonable implication, even in the absence of express
words, was that as part of his execute power he should select those who were to act for him under
his direction in the execution of the laws.
o The further implication must be, in the absence of any express limitation respecting removals, that
as his selection of administrative officers is essential to the execution of the laws by him, so must be
his power of removing those for whom he cannot continue to be responsible.
o It was urged that the natural meaning of the term "executive power" granted the President included
the appointment and removal of executive subordinates. If such appointments and removals were
not an exercise of the executive power, what were they? They certainly were not the exercise of
legislative or judicial power in government as usually understood.
o It is quite true that in state and colonial governments at the time of the Constitutional Convention,
power to make appointments and removals had sometimes been lodged in the legislatures or in the
courts, but such a disposition of it was really vesting part of the executive power in another branch
of the Government.
● Very important property rights are involved in the transactions in the governmental directed
corporations. Just as surely as the duty of caring for government property is neither judicial nor
legislative in character is it as surely executive. Yet most of the voting committee or board of control is
made up of the presiding officers of the two houses of the Legislature and they are able to dictate
action to the directors and subordinate personnel of these corporations.
● Based on the foregoing considerations, we deduce that the power of appointment in the Philippines
appertains, with minor exceptions, to the executive department; that membership in the voting
committee in question is an office or executive function; that the National Coal Company and similar
corporations are instrumentalities of the Government; that the duty to look after government agencies
and government property belongs to the executive department; that the placing of members of the
Philippine Legislature on the voting committee constitutes an invasion by the Legislative Department
of the privileges of the Executive Department.
● Under a system of government of delegated powers, under which delegation legislative power vests
in the Philippine Legislature and executive power vests in the Governor-General, and under which
Governor-General and a specified power of appointment resides in the Philippine Legislature, the latter
cannot directly or indirectly perform functions of an executive nature through the designation of its
presiding officers as majority members of a body which has executive functions.
DISPOSITIVE PORTION:
We have no hesitancy in concluding that so much of section 4 of Act No. 2705, as amended by section
2 of Act No. 2822, as purports to vest the voting power of the government-owned stock in the National
Coal Company in the President of the Senate and the Speaker of the House of Representatives, is
unconstitutional and void. It results, therefore, in the demurrer being overruled, and as it would be
impractible for the defendants to answer, judgment shall be rendered ousting and excluding them from
the offices of directors of the National Coal company. So ordered, without costs.
3. OCCEÑA V. COMELEC
GR NO. L-52265
JANUARY 28, 1980
By: CLAIRE RENDOR
Topic: DOCTRINE OF SEPARATION OF POWERS
Petitioners: SAMUEL C. OCCEÑA
Respondents: COMELEC, COMMISSION ON AUDIT, NATIONAL TREASURER, DIRECTOR OF
PRINTING
Ponente: ANTONIO, J.
DOCTRINE: The legislative power granted by Section 1, Article VIII of the Constitution to the National
Assembly has been explicitly vested during the period of transition on the Interim Batasang Pambansa
by Amendment No. 2 to the Constitution. It is a recognized principle in constitutional law that the
legislative body possesses plenary power for all purposes of civil government. The legislative power of
the Interim Batasang Pambansa is, therefore, complete, subject only to the limitation that the Interim
Batasang Pambansa shall not exercise the power of the National Assembly in the ratification of treaties.
FACTS:
· This is a petition for prohibition seeking to restrain respondents from implementing BP Blg. 51
(providing for the elective and/or appointive positions in various local governments), BP Blg. 52
(governing the election of local government officials scheduled on Jan. 30, 1980), BP Blg. 53
(defining the rights and privileges of accredited parties), and BP Blg. 54 (providing for a plebiscite,
simultaneously with the election of local officials on Jan. 30, 1980, regarding the proposed
amendment of Art. X, Sec. 7 of the 1973 Constitution.
ISSUE: 1) WON the Interim Batasang Pambansa has the power to authorize the holding of local
elections; MINOR ISSUES: 2) assuming that it has such power, WON it can authorize said elections w/o
enacting a local government code; 3) assuming it may validly perform the foregoing, WON it can
schedule such elections w/in 90 days from the passage of the enabling law; and 4) assuming, further,
that the proposed amendment to Article X, Section 7 of the Constitution is valid, WON the plebiscite can
be legally held together with the local elections.
RULING: The Court finds no merit in the petition.
1) YES
· The legislative power granted by Section 1, Article VIII of the Constitution to the National
Assembly has been explicitly vested during the period of transition on the Interim Batasang
Pambansa by Amendment No. 2 to the Constitution. The only limitation is that it shall not exercise
its treaty ratification powers provided in Art. VIII, Sec. 14(1) of the Constitution. The legislative
power has been described generally as being a power to make, alter and repeal laws.
· The essential of the legislative function is the determination of the legislative policy and its
formulation and promulgation as a defined and binding rule of conduct. It is a recognized principle
in constitutional law that the legislative body possesses plenary power for all purposes of civil
government. The legislative power of Interim Batasang Pambansa is subject only to the limitation
that it shall not exercise the power of the National Assembly in the ratification of treaties.
· The power to regulate the manner of conducting elections, to prescribe the form of the of the
official ballot, and to provide for the manner in which candidates shall be chosen is inherently and
historically legislative.
· Petitioner has not cited any provision of the Constitution, as amended by the Amendments of
1976, which expressly or by implication deny to the Interim Batasang Pambansa the authority to
call for local elections. It is a well-established rule that where no exception is made in terms, none
will be made by mere implication or construction. |
· Peralta v. COMELEC: || By the will of the people, as expressed overwhelmingly in the
plebiscite of October 15 and 16, 1976, Amendments Nos. 1 to 9 were approved, abolishing the
interim National Assembly and creating in its stead an interim Batasang Pambansa. This was
intended as a preparatory and experimental step toward the establishment of full parliamentary
government as provided for in the Constitution.
2) YES
Neither can We find in Section 1, Article XI of the Constitution any requirement that the enactment of a
local government code is a condition sine qua non for the calling of the local elections by the Interim
Batasang Pambansa. Indeed, the holding of local elections does not, in any manner, preclude the
enactment of a local government code by the Batasang Pambansa at some later period. There cannot
be any doubt that our local governments are basic and fundamental units in our democratic institutions.
To strengthen these institutions, the election of local officials should be periodically held. 5 Accordingly,
this Court is not inclined to adopt such a technical or strained construction as will unduly impair the
efficiency of the Interim Batasang Pambansa in meeting the challenges and discharging its
responsibilities in response to the problems arising in a modernizing and dynamic society. The legislative
decision to call for local elections in order to enable the Filipino people to exercise their sovereign right
to choose their local officials cannot, therefore, be faulted as a violation of the Constitution.
3) YES
Section 6 of Article XII of the Constitution does not fix an unalterable period of ninety (90) days for an
election campaign. This provision must be construed in relation to Section 5 of Article XII thereof which
grants to the Commission on Elections the power to supervise or regulate the operation of transportation,
public utilities, media of communication, etc. during the "election period". Section 6 fixes the "election
period" by stating that unless fixed by the Commission in special cases, the election period shall
commence ninety (90) days before the day of election and shall end thirty (30) days thereafter. In Peralta
v. Commission on Elections, supra, We resolved, in effect, this issue by holding that the forty-five day
period of campaign prescribed in Section 4 of the 1978 Election Code was not violative of Section 6 of
Article XII of the Constitution.
4)
Considering that the proposed amendment to Section 7 of Article X of the Constitution extending the
retirement of members of the Supreme Court and judges of inferior courts from sixty-five (65) to seventy
(70) years is but a restoration of the age of retirement provided in the 1935 Constitution and has been
intensively and extensively discussed at the Interim Batasang Pambansa, as well as through the mass
media, it cannot, therefore, be said that our people are unaware of the advantages and disadvantages
of the proposed amendment.
ACCORDINGLY, the petition is DISMISSED. This decision is immediately executory. SO ORDERED.
4. SEC. OF DOTC v. MABALOT
GR NO. 138200
February 27, 2002
Topic: CREATION, REORGANIZATION AND ABOLITION OF ADMINISTRATIVE AGENCIES
Petitioners: SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS (DOTC)
Respondent: ROBERTO MABALOT
Ponente: BUENA, J.
DOCTRINE:
The President is authorized to effect organizational changes, including the creation of offices in the
department or agency concerned.
FACTS:
· then DOTC Secretary Garcia issued Memorandum Order No. 96-735 addressed to LTFRB
Chairman Lantin
o "In the interest of the service, you are hereby directed to effect the transfer of
regional functions of that office to the DOTC-CAR Regional Office, pending
the creation of a regular Regional Franchising and Regulatory Office,
pursuant to Section 7 of Executive Order No. 202.”
· Mabalot filed a petition for certiorari and prohibition with prayer for preliminary injunction and/or
restraining order against Sec. of DOTC and LTFRB Chairman Lantin, before the RTC.
o praying that Memorandum Order No. 96-735 be declared "illegal and without
effect"
· lower court issued a temporary restraining order enjoining Sec. of DOTC from implementing
Memorandum Order No. 96-735
· then DOTC Secretary Lagdameo issued Department Order No. 97-1025
o the DOTC-CAR Regional Office is hereby established as the Regional Office
of the LTFRB and shall exercise the regional functions of the LTFRB in the
Cordillera Administrative Region (CAR)
· Mabalot filed a Motion for Leave to File Supplemental Petition assailing the validity of
Department Order No. 97-1025.
· the lower court rendered a decision, declaring Memorandum Order No. 96-733 and Department
Order No. 97-1025 null and void and without any legal effect
o as being violative of the provision of the Constitution against encroachment on
the powers of the legislative department and of the provision enjoining
appointive officials from holding any other office
· Hence, the instant petition.
· Mabalot argues that "a transfer of the powers and functions of the LTFRB Regional Office to
a DOTC Regional Office or the establishment of the latter as an LTFRB Regional Office is
unconstitutional" for being "an undue exercise of legislative power and quotes lower court's
rationale:
o "the transfer of powers and functions… could only be effected through
legislative fiat. Not even the President of the Philippines can do so. And much
less by the DOTC Secretary who is only a mere extension of the Presidency.”
ISSUE: Whether or not the Memorandum Order No. 96-733 and Department Order No. 97-1025 are
valid – YES.

RULING:
YES. Contrary to the opinion of the lower court, the President — through his duly constituted political
agent and alter ego, the DOTC Secretary in the present case — may legally and validly decree the
reorganization of the Department, particularly the establishment of DOTC-CAR as the LTFRB Regional
Office at the Cordillera Administrative Region.
· a public office may be created through any of the following modes: (1) by the Constitution
(fundamental law), (2) by law (statute duly enacted by Congress), or (3) by authority of law.
o In the instant case, the creation and establishment of LTFRB-CAR Regional
Office was made pursuant to the third mode — by authority of law, which
could be decreed for instance, through an Executive Order (E.O.)
o DOTC Secretary issued the assailed Memorandum and Department Orders
pursuant to Administrative Order No. 36 of the President: "Section 1.
Establishment of Regional Offices in the CAR — The various departments…
are hereby directed to establish forthwith their respective regional offices in
the Cordillera Administrative Region.”
· In Larin vs. Executive Secretary, we held that Presidential Decree No. 1772 which amended
Presidential Decree No. 1416 expressly grants the President the continuing authority to reorganize
the national government, which includes the power to group, consolidate bureaus and agencies, to
abolish offices, to transfer functions, to create and classify functions, services and activities and to
standardize salaries and materials.
o the establishment of DOTC-CAR as the Regional Office of LTFRB in the
Cordillera Administrative Region falls within the scope of the continuing
authority of the President to effectively reorganize the Department of
Transportation and Communications
o it must be emphasized that the reorganization was decreed "in the interest of
the service" and "for purposes of economy and more effective coordination
of the DOTC functions in the Cordillera Administrative Region."
· As to the issue regarding Sections 7 and 8, Article IX-B of the Constitution, the assailed Orders
of the DOTC Secretary do not violate them.
o in Memorandum Order No. 96-735, the organic personnel of the DOTC-CAR
were, in effect, merely designated to perform the additional duties and
functions of an LTFRB Regional Office
o no evidence was presented to clearly establish that the appointive officials and
employees of DOTC-CAR shall receive any additional compensation
DISPOSITIVE PORTION:
WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED. ACCORDINGLY, the
decision dated 31 March 1999 of the Regional Trial Court of Quezon City-Branch 81 in Special Civil
Action Case No. Q-96-26868 is REVERSED and SET ASIDE.
5. EUGENIO v. CSC
GR NO. 115836
March 31, 1995
By: RM Saraza
Topic: Creation, reorganization and abolition of administrative agencies
Petitioners: AIDA D. EUGENIO
Respondents: CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON.
SALVADOR ENRIQUEZ, JR.
Ponente: PUNO, J.
DOCTRINE:
An office created by law can only be abolished by law.
FACTS:
· Petitioner Eugenio is the Deputy of the Philippine Nuclear Research institute.
o She applied for a Career Executive Service (CES) Eligibility and a CESO rank,
which was given due course and was subsequently recommended to the
President for a CESO rank.
· However, respondent CSC passed Resolution No. 93-4359, abolishing the Career Executive
Service Board.
· Several legal issues have arisen as a result of the issuance of CSC Resolution No. 93-4359,
including whether the Civil Service Commission has authority to abolish the Career Executive
Service Board. Because these issues remain unresolved, the Office of the President has refrained
from considering appointments of career service eligibles to career executive ranks.
· Eugenio argues that CSC has violated the Constitution by: (1) usurping the legislative
functions of Congress when it abolished the CESB, an office created by law; (2) usurping the
legislative functions of Congress when it illegally authorized the the transfer of public money.
ISSUE: W/N Resolution No. 93-4359 is constitutional
RULING: NO.
· The CESB was created by PD No. 1 which adopted the Integrated Reorganization Plan. Art.
IV, Chapter I, Part III of said plain provides “A Career Executive Service Board, hereinafter referred
to in this Chapter as the Board, is created to serve as the governing body of the Career Executive
Service.”
· As the CESB was created by law, it can only be abolished by the legislature.
o AM HUR 2d on Public Officers and Employees: "Except for such offices as are
created by the Constitution, the creation of public offices is primarily a
legislative function. x x x When in the exigencies of government it is
necessary to create and define duties, the legislative department has the
discretion to determine whether additional offices shall be created, or
whether these duties shall be attached to and become ex-officio duties of
existing offices.”
· In the petition at bench, the legislature has not enacted any law authorizing the abolition of
the CESB.
· Section 17, Chapter 3, Subtitle A, Title I, Book V of the Administrative Code of 1987 as invoked
by respondent Commission must be read together with Section 16 of said Code which enumerates
the offices under the respondent Commission
"Section 17. Organizational Structure.— Each o ce of the Commission shall be headed by a Director
with at least one Assistant Director, and may have such divisions as are necessary to carry out their
respective functions. As an independent constitutional body, the Commission may effect changes in the
organization as the need arises."
"SEC. 16. Offices in the Commission. — The Commission shall have the following offices:
The Office of the Executive Director, The Merit System Protection Board, The Office of Legal
Affairs, The Office of Planning and Management, The Central Administrative Office, The
Office of Central Personnel Records, The Office of Position Classification and Compensation,
The Office of Recruitment, Examination and Placement, The Office of Career Systems and
Standards, The Office of Human Resource Development, The Office of Personnel Inspection
and Relations and Audit, The Office of Personnel Relations, The Office of Corporate Affairs,
The Office of Retirement Administration, The Regional and Field Offices.
· As read together, the inescapable conclusion is that respondent Commission's power to
reorganize is limited to offices under its control as enumerated in Section 16.
· The CESB was intended to be an autonomous entity, albeit administratively attached to
respondent Commission.
o By said attachment, CESB was not made to fall within the control of respondent
Commission.
o Under the Administrative Code of 1987, the purpose of attaching one
functionally inter-related government agency to another is to attain "policy
and program coordination.”
DISPOSITIVE PORTION:
IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent Commission
is hereby annulled and set aside. No costs.
SO ORDERED.
6. LARIN VS. EXECUTIVE SECRETARY
GR NO. 112745
OCTOBER 16, 1997
By: TARA SIOCHI
Topic: Creation, Reorganization and Abolition of Administrative Agencies; Power of the President to
dismiss
Petitioners: AQUILINO T. LARIN
Respondents: THE EXECUTIVE SECRETARY, SECRETARY OF FINANCE, COMMISSIONER OF
THE BUREAU OF INTERNAL REVENUE AND THE COMMITTEE CREATED TO INVESTIGATE THE
ADMINISTRATIVE COMPLAINT AGAINST AQUILINO T. LARIN, COMPOSED OF FRUMENCIO A.
LAGUSTAN, JOSE B. ALEJANDRINO AND JAIME M. MAZA
Ponente: TORRES, JR., J.
DOCTRINE:
A presidential appointee who belongs to the career service of the Civil Service comes under the direct
disciplining authority of the President. The fact that an officer is a presidential appointee does not give
the appointing authority the license to remove him at will or at his pleasure.
FACTS:
● The Sandiganbayan rendered a decision convicting petitioner Aquilino T. Larin, Revenue
Specific Tax Officer (who was then Assistant Commissioner of the BIR) and his co-accused
of the crimes of violation of Section 268 (4) of the National Internal Revenue Code and Section
3 (e) of R.A. 3019.
o The fact of petitioner’s conviction was reported to the President of the Philippines
by the then Acting Finance Secretary Leong through a memorandum.
● Acting by authority of the President, Sr. Deputy Executive Secretary Leonardo A. Quisumbing
issued Memorandum Order No. 164 which provides for the creation of an Executive
Committee to investigate the administrative charge against Larin.
o “The Committee shall have all the powers and prerogatives of (an) investigating
committee under the Administrative Code of 1987 including the power to summon
witnesses, administer oath or take testimony or evidence relevant to the
investigation by subpoena ad testificandum and subpoena duces tecum.”
● The Committee directed Larin to respond to the administrative charge leveled against him
through a letter.
o In compliance, Larin submitted a letter which was addressed to Atty. Lagustan, the
Chairman of the Investigating Committee.
o Larin claims that the administrative complaint against him is already barred: a) on
jurisdictional ground as the Office of the Ombudsman had already taken
cognizance of the case and had caused the filing only of the criminal charges
against him, b) by res judicata, c) by double jeopardy, and d) because to proceed
with the case would be redundant, oppressive and a plain persecution against him.
● Meanwhile, the President issued the challenged Executive Order No. 132 dated October 26,
1993 which mandates for the streamlining of the Bureau of Internal Revenue. Under said
order, some positions and functions are either abolished, renamed, decentralized or
transferred to other offices, while other offices are also created. The Excise Tax Service or
the Specific Tax Service, of which petitioner was the Assistant Commissioner, was one of
those offices that was abolished by said executive order.
o The corresponding implementing rules of EO No. 132, namely, Revenue
Administrative Orders Nos. 4-93 and 5-93, were subsequently issued by the BIR.
o Consequently, the President, in the assailed Administrative Order No. 101 found
Larin guilty of grave misconduct in the administrative charge and imposed upon
him the penalty of dismissal with forfeiture of his leave credits and retirement
benefits including disqualification for reappointment in the government service.
● Larin filed directly with this Court the instant petition to question his alleged unlawful removal
from office. In his petition, he challenged the authority of the President to dismiss him from
office.
o He argued that in so far as presidential appointees who are Career Executive
Service Officers are concerned, the President exercises only the power of control,
not the power to remove.
o He also averred that the administrative investigation conducted under
Memorandum Order No. 164 is void as it violated his right to due process.
According to him, the letter of the Committee and his position paper are not
sufficient for purposes of complying with the requirements of due process.
o He alleged that he was not informed of the administrative charges leveled against
him nor was he given official notice of his dismissal.
o Larin likewise claimed that he was removed as a result of the reorganization made
by the Executive Department in the BIR pursuant to EO No. 132. Thus, he assailed
said Executive Order No. 132 and its implementing rules, namely, Revenue
Administrative Orders 4-93 and 5-93 for being ultra vires.
o On the other hand, respondents contended that since petitioner is a presidential
appointee, he falls under the disciplining authority of the President.
● While the instant petition was pending, the Court set aside the conviction of Larin in Criminal
Case Nos. 14208 and 14209.
ISSUE#1: W/N petitioner Larin was removed from office for a legal cause under a valid proceeding.
RULING: NO.
● Although the proceedings taken complied with the requirements of procedural due process,
this Court, however, considers that petitioner was not dismissed for a valid cause.
● What precipitated the creation of the investigative committee to look into the administrative
charge against Larin is his conviction by the Sandiganbayan in Criminal Case Nos. 14208
and 14209. In a nutshell, the criminal cases refer to his alleged violation of Section 268 (4) of
the National Internal Revenue Code and of Section 3 (e) of R.A. No. 3019 as a consequence
of his act of favorably recommending the grant of tax credit to Tanduay Distillery, Inc.
● However, it must be stressed at this juncture that the conviction of petitioner by the
Sandiganbayan was set aside by this Court in our decision. We specifically ruled in no
uncertain terms that: a) petitioner can not be held negligent in relying on the certification of a
co-equal unit in the BIR, b) it is not incumbent upon Larin to go beyond the certification made
by the Revenue Accounting Division that Tanduay Distillery, Inc. had paid the ad valorem
taxes, c) there is nothing irregular or anything false in Larin’s marginal note on the
memorandum addressed to Pareno, the Chief of Alcohol Tax Division who was also one of
the accused, but eventually acquitted, in the said criminal cases, and d) there is no proof of
actual agreement between the accused, including petitioner, to commit the illegal acts
charged.
● We are not unaware of the rule that since administrative cases are independent from criminal
actions for the same act or omission, the dismissal or acquittal of the criminal charge does
not foreclose the institution of administrative action nor carry with it the relief from
administrative liability. However, the circumstantial setting of the instant case sets it miles
apart from the foregoing rule and placed it well within the exception.
● Corollarily, where the very basis of the administrative case against petitioner is his conviction
in the criminal action which was later on set aside by this Court upon a categorical and clear
finding that the acts for which he was administratively held liable are not unlawful and
irregular, the acquittal of the petitioner in the criminal case necessarily entails the dismissal
of the administrative action against him, because in such a case, there is no more basis nor
justifiable reason to maintain the administrative suit.
● Larin is a presidential appointee who belongs to the career service of the Civil Service.
Although it is a general rule that the power to remove is inherent in the power to appoint, such
power to remove is with limitations. In the case at bar, the limitation can be found in the fact
that Larin is a career service officer and under the Administrative Code of 1987, such officers
who fall under career service are characterized by the existence of security of tenure, as
contra-distinguished from non-career service whose tenure is co-terminus with that of the
appointing authority or subject to his pleasure, or limited to a period specified by law or to the
duration of a particular project for which purpose the employment was made. As a career
service officer, Larin enjoys the right to security of tenure. He can only be removed from his
office on grounds enumerated in the Administrative Code of 1987. In the case at bar, the basis
for his removal was his conviction in the Sandiganbayan – this is not one of those grounds
enumerated in the Administrative Code. Further, the Supreme Court notes that when Larin’s
conviction was appealed to the Supreme Court, the Supreme Court actually absolved Larin.
DISPOSITIVE PORTION:
IN VIEW OF THE FOREGOING, the petition is granted, and petitioner is hereby reinstated to his
position as Assistant Commissioner without loss of seniority rights and shall be entitled to full backwages
from the time of his separation from service until actual reinstatement unless, in the meanwhile, he would
have reached the compulsory retirement age of sixty-five years in which case, he shall be deemed to
have retired at such age and entitled thereafter to the corresponding retirement benefits.
7. PASEI v. TORRES
GR NO. 101279
October 5, 2000
Topic: Rule-making Power of Administrative Bodies
Petitioners: Philippine Association of Service Exporters Inc.
Respondents: Hon. Ruben D. Torres, as Secretary of Department of Labor and Employment, and Jose
N. Sarmiento, as Administrator of the Philippine Overseas Employment Administration
Ponente: Griño-Aquino
FACTS
- PASEI is engaged in the business of obtaining overseas employment for Filipino landbased
workers, including domestic helpers.
- As a result of published stories regarding the abuses suffered by Filipino housemaids
employed in Hong Kong, DOLE Secretary Ruben D. Torres issued Department Order No. 16,
Series of 1991, temporarily suspending the recruitment by private employment agencies of "Filipino
domestic helpers going to Hong Kong"
o DOLE took over the business of processing and deploying such Hong Kong-
bound workers.
- Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30
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.
o A joint POEA-OWWA Household Workers Placement Unit (HWPU) shall be
created
o All contracts stamped in HK 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.
- POEA Administrator also issued Memorandum Circular No. 37, which provides that all Hong
Kong recruitment agent/s hiring DHs from the Philippines shall recruit under the new scheme which
requires prior accreditation which the POEA.
- 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.
- Argument of the SolGen: DOLE AO 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.
o 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.
ISSUE: W/N the POEA Administrator and the Secretary of DOLE acted in excess of their rule-
making authority in issuing the said circulars - NO
HELD/RATIO
- The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not
unconstitutional, unreasonable and oppressive.
o More and more administrative bodies are necessary to help in the regulation of
society's ramified activities.
o "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"
- The Labor Code grants the Labor Secretary the power to restrict and regulate recruitment and
placement activities.
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.
- The scope of the regulatory authority of the POEA, which was created by E.O. 797 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:
O Establishing and maintaining a registration and/or licensing system to
regulate private sector participation in the recruitment and placement of
workers, locally and overseas (for POEA);
o Recruiting and placing workers for overseas employment of Filipino contract
workers on a government to government arrangement and in such other
sectors as policy may dictate (for OEDB);
o Regulating and supervising the activities of agents or representatives of shipping
companies in the hiring of seamen for overseas employment; and securing
the best possible terms of employment for contract seamen workers and
secure compliance therewith (NSB).
- The challenged administrative issuances disclose that the same fall within the "administrative
and policing powers expressly or by necessary implication conferred" upon the respondents
- The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant
of police power.
o 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"
o The circulars are a valid exercise of the police power as delegated to the
executive branch of the Government.
- As the SolGen observed, the alleged takeover is merely a remedial measure, and expires
after its purpose shall have been attained.
o 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."
o Therefore, the alleged takeover is limited in scope, being confined to
recruitment of domestic helpers going to Hongkong only.
NOTES:
The circulars are legally invalid for the 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.
- Tañada v. Tuvera: 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.)
o 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.
O 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.
- 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 Circulars 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.
8. Mateo v CA
113219
August 14, 1995
By: Rich Velarde
Topic: Powers of Administrative agencies; RTC without jurisdiction over civil action involving employee
of quasi –public corporation
Petitioners: ANICETO G. MATEO, MAXIMO SAN DIEGO, QUIRINO MATEO, DANIEL FRANCISCO,
and LEONILA KUIZON
Respondents: HONORABLE COURT OF APPEALS, HON. ARTURO A. MARAVE, and EDGAR STA.
MARIA
Ponente: Puno
DOCTRINE: The Civil Service Commission, under the Constitution, is the single arbiter of all contests
relating to the Civil service. As such, its judgments are unappealable and subject only to this Court's
certiorari judgment.
FACTS:
● Sta Maria filed a Special Civil Action for Quo Warranto and Mandamus with Preliminary Injunction
before the Regional Trial Court of Rizal, Branch 78, challenging his dismissal by petitioners
● Sta Maria had been the General Manager of the Morong Water District (MOWAD) since August
1984 with concomitant security of tenure in office and could not be removed either temporarily or
permanently, except for cause and only after compliance with the elementary rules of due process;
● Upon complaint of some Morong Water District (MOWAD) employees, petitioners, all Board
Members of MOWAD, conducted an investigation on private respondent Edgar Sta. Maria, then
General Manager.1
● On December 14, 1992, contrary to the tenets of justice and fairness, as well as for want of
procedural due process, the petitioners and members of the Board of Directors of the MOWAD
have arbitrarily, whimsically, and unilaterally stopped and prohibited Sta Maria from exercising his
rights and performing his duties as General Manager of the MOWAD and, in his place, have
designated the respondent (petitioner) Maximo San Diego as Acting General Manager
● On December 15, 1992, while petitioner was out of office on official travel, . . . thru stealth and
strategy, the respondents have conspired and helped one another in removing the petitioner from
the Office of the General Manager of the MOWAD by forcibly destroying its door and locked it with
a replaced door-knob and all attempts on his part to gain access and entry proved futile; . . .
● On January 7, 1993, . . . in confabulation with his co-respondents and members of the Board of
Directors of the MOWAD, the respondent Aniceto G. Mateo slapped the petitioner with an Order
terminating his services as General Manger
● Petitioners, in turn, moved to dismiss the case on two (2) grounds: (1) the court had no jurisdiction
over disciplinary actions of government employees which is vested exclusively in the Civil Service
Commission. RTC denied motion to dismiss
● Petitioners then elevated the matter to this Court through a petition for certiorari under Rule 65
which was referred to respondent Court of Appeals for adjudication. In its Decision, dated
November 24, 1993, respondent Court of Appeals dismissed the petition for lack of merit
ISSUES:
W/N the RTC has jurisdiction over the dismissal of an employee of a quasi-public corporation - NO
HELD/RATIO:
● There is no question that MOWAD is a quasi-public corporation created pursuant to
Presidential Decree (P.D.) No. 198, known as the provincial Water Utilities Act of 1973, as
amended
● In Davao City Water District v. Civil Service Commissions, the Court en banc ruled that
employees of government-owned or controlled corporations with original charter fall under the
jurisdiction of the Civil Service Commission,
● a water district is a corporation created pursuant to a special law — P.D. No. 198, as
amended, and as such its officers and employees are covered by the Civil Service Law.
● Indeed, the established rule is that the hiring and firing of employees of goverment-own and
controlled corporations are governed by the provisions of the Civil Service Law and Rules and
Regulations
● Presidential Decee No. 807, Executive Order No. 292, 10 and Rule II section 1 of
Memorandum Circular No. 44 series of 1990 of the Civil Service Commission spell out the
initial remedy of private respondent against illegal dismissal. They categorically provide that
the party aggrieved by a decision, ruling, order, or action of an agency of the government
involving termination of services may appeal to the Commission within fifteen (15) days.
● Thereafter, private respondent could go on certiorari to this Court under Rule 65 of the
Rules of Court if he still feels aggrieved by the ruling of the Civil Service Commission.
● The Civil Service Commission, under the Constitution, is the single arbiter of all contests
relating to the Civil service. As such, its judgments are unappealable and subject only to this
Court's certiorari judgment.
IN VIEW HEREOF, the petition is GRANTED and the decision of respondent Court of Appeals dated
November 24, 1993 and its Resolution dated January 1, 1994 in CA G.R. SP No. 31530 are
ANNULLED and SET ASIDE. No costs. SO ORDERED.
9. CARIÑO v CAPULONG
GR NO. 97203
May 26, 1993
By: Raymond Villafuerte
Topic: ADMIN LAW; Powers of Administrative Agencies; Authority to grant permit by DECS to applicant
educational institution a discretionary duty
Petitioners: HON. ISIDRO CARIÑO, substituted by HON. ARMANDO V. FABELLA (Secretary of
Education, Culture and Sports) and VENANCIO R. NAVA (Regional Director, DECS Region IX, Davao
City)
Respondents: HON. IGNACIO M. CAPULONG (Presiding Judge of RTC-Makati, Br. 134) and AMA
COMPUTER COLLEGE, INC., Davao City and AMA COMPUTER COLLEGE
Ponente:
DOCTRINE: Whether to grant or not a permit is not a ministerial duty of the Department of Education,
Culture and Sports. Rather it is a discretionary duty to be exercised in accordance with the rules and
regulations prescribed.
FACTS:
● By virtue of a “Contract of Lease with Option to Buy” entered into with Light Bringer School (LBS)
on 14 May 1990, AMA Computer College (AMA) took possession of the premises of the former
located at Marfori Heights, Davao City.
● On 21 May 1990, Regional Director Venancio R. Nava, Region IX-DECS, received AMA’s letter of
intent to operate as an educational institution in Davao City.
o Nava reminded AMA of the provisions of the Rules and Regulations of BP 232, that the
“filing of application shall be at least one (1) year before the opening of classes” and the
provisions of the Private School Law reiterated in the Educational Act of 1992 which
“prohibits the operation of unauthorized schools or course.”
● AMA proceeded to announce its opening through news and print media, and thereupon, started to
enroll students in elementary, secondary and tertiary levels.
● Taking remedial action, the DECS Regional Director directed AMA to stop enrollment and to desist
from operating without prior authorization.
● AMA, however, not only continued the enrollment but even started to hold regular classes, and
thereafter, on 15 June 1990, filed a formal application to operate.
o DECS reiterated the earlier directive which AMA continued to ignore.
o DECS denied AMA’s application and effected the closure of AMA Computer College Inc.
in Davao City.
● AMA filed with the RTC of Manila a petition for prohibition, certiorari and mandamus against the
Hon. Isidro Cariño (DEC’s Secretary) and Atty. Venancio R. Nava (Regional Director, Department
of Education, Culture and Sports, Region IX) to annul and set aside the closure order and to enjoin
the respondents from closing or padlocking AMACC, Davao City.
o RTC dismissed the petition and the subsequent MR.
● AMA filed with the RTC of Makati another petition for mandamus, with damages, preliminary
injunction and/or restraining order against the same respondents to compel them to approve AMA’s
application for permit to operate and to enjoin the closure of the school.
o Respondent Judge Ignacio Capulong issued an order directing the issuance of a writ of
preliminary injunction, enjoining the DECS respondents from closing the school.
● The DECS officers (see petitioners for names) now file this petition, claiming that respondent Judge
acted with grave abuse of discretion in issuing the order.
ISSUE: W/N respondent Makati RTC Judge Capulong committed grave abuse of discretion.
RULING: YES.
● In the case at bar, the AMA’s application for a permit to operate AMACC-Davao City as an
educational institution was denied by the petitioners.
o Otherwise stated, the AMA does NOT have a permit to operate or a certificate of
recognition from the government to undertake educational or school operations.
 o In fine, the AMA does not have any existing right that needed to be protected during the
pendency of their principal action for mandamus.
o Hence, the “closing” and/or “padlocking” of AMACC-Davao City WOULD NOT and
DID NOT violate any right of the private respondents.
● Under BP Blg. 232 and its IRRs, the establishment and operation of schools are subject to the prior
authorization of the government. And, as sanctions for operating without government permit, the
DECS is authorized either to impose the total closure of the school and/or to disqualify the school
from conferring title or degree in the non-recognized program or course of studies.
o In ordering the total closure of AMACC-Davao City, the petitioners were only performing
their duties as public officers; hence, the respondent Judge should not have issued
the writ of preliminary injunction.
● Whether to grant or not a permit is not a ministerial duty of the Department of Education,
Culture and Sports. Rather it is a discretionary duty to be exercised in accordance with the
rules and regulations prescribed.
● In the case at bar, AMA has been operating a school without a permit in blatant violation of law.
o Respondent judge Cariño has no ministerial duty to issue to AMA a permit to operate a
school in Davao City before it has even filed an application or before its application has
been first processed in accordance with the rules and regulations on the matter.
o Certainly, he is not enjoined by any law to grant such permit or to allow such operation
without a permit, without first processing an application.
o To do so is violation of the Educational Act.
DISPOSITIVE PORTION:
ACCORDINGLY, the petition is GRANTED and the order dated 15 November 1990 and the writ of
preliminary injunction dated 16 November 1990 are hereby ANNULLED and SET ASIDE. The petition
for mandamus before the respondent court is DISMISSED.
The Temporary Restraining Order heretofore issued by this Court is hereby made PERMANENT.
10. Carpio v. Exec. Secretary
GR. No. 96409
DATE: Feb. 14, 1992
By: YRREVERRE
Topic: ADMINISTRATIVE AGENCIES
Petitioners: ANTONIO M. CARPIO
Respondents: EXECUTIVE SECRETARY
Ponente: PARAS, J.
DOCTRINE: It is a fundamentally accepted principle in Constitutional Law that the President has
control of all executive departments, bureaus, and offices. Equally well accepted, as a corollary
rule to the control powers of the President, is the "Doctrine of Qualified Political Agency". As the
President cannot be expected to exercise his control powers all at the same time and in person,
he will have to delegate some of them to his Cabinet members, who in turn and by his authority,
control the bureaus and other offices under their respective jurisdictions in the executive
department.
FACTS:
● Article XVI, Section 6:
"The State shall establish and maintain one police force, which shall be national in scope and
civilian in character, to be administered and controlled by a national police commission. The
authority of local executives over the police units in their jurisdiction shall be provided by law."
● Congress passed Republic Act No. 6975 entitled
"AN ACT ESTABLISHING THE PHILIPPINE NATIONAL POLICE UNDER A REORGANIZED
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER
PURPOSES"
● The Act was approved by President Corazon C. Aquino on December 13, 1990, it was
published on December 17, 1990.
● Carpio as citizen, taxpayer and member of the Philippine Bar sworn to defend the
Constitution, filed the petition now at bar on December 20, 1990, seeking this Court's
declaration of unconstitutionality of RA 6975 with prayer for temporary restraining order.
● He advances the view that RA 6975 weakened the National Police Commission
(NAPOLCOM) by limiting its power “to administrative control” over the PNP thus, “control”
remained with the Department Secretary under whom both the NPC and the PNP were
placed; that the system of letting local executives choose local police heads also undermine
the power of the president.
● Petitioner further asserts that in manifest derogation of the power of control of the
NAPOLCOM over the PNP, RA 6975 vested the power to choose the PNP Provincial Director
and the Chiefs of Police in the Governors and Mayors, respectively; the power of "operational
supervision and control" over police units in city and municipal mayors; in the Civil Service
Commission, participation in appointments to the positions of Senior Superintendent to
Deputy Director-General as well as the administration of qualifying entrance examinations;
disciplinary powers over PNP members in the "People's Law Enforcement Boards" and in city
and municipal mayors.
ISSUE: W/N RA 6975 is unconstitutional - NO
HELD/RATIO:
● SC held that the President has control of all executive departments, bureaus, and offices.
This presidential power of control over the executive branch of government extends over all
executive officers from Cabinet Secretary to the lowliest clerk. In the landmark case of
Mondano vs. Silvosa, the power of control means “the power of the President to alter or modify
or nullify or set aside what a subordinate officer had done in the performance of his duties
and to substitute the judgment of the former with that of the latter.” It is said to be at the very
“heart of the meaning of Chief Executive.”
● As a corollary rule to the control powers of the President is the “Doctrine of Qualified Political
Agency.” As the President cannot be expected to exercise his control powers all at the same
time and in person, he will have to delegate some of them to his Cabinet members.
● Under this doctrine, which recognizes the establishment of a single executive, “all executive
and administrative organizations are adjuncts of the Executive Department, the heads of the
various executive departments are assistants and agents of the Chief Executive, and, except
in cases where the Chief Executive is required by the Constitution or law to act in person or
the exigencies of the situation demand that he act personally, the multifarious executive and
administrative functions of the Chief Executive are performed by and through the executive
departments, and the acts of the Secretaries of such departments, performed and
promulgated in the regular course of business, unless disapproved or reprobated by the Chief
Executive, are presumptively the acts of the Chief Executive.
● Thus, “the President’s power of control is directly exercised by him over the members of the
Cabinet who, in turn, and by his authority, control the bureaus and other offices under their
respective jurisdictions in the executive department.”
● The placing of NAPOLCOM and PNP under the reorganized DILG is merely an administrative
realignment that would bolster a system of coordination and cooperation among the citizenry,
local executives and the integrated law enforcement agencies and public safety agencies.
● The national police force shall be administered and controlled by a national police commission
as at any rate, and in fact, the Act in question adequately provides for administration and
control at the commission level. We agree, that "there is no usurpation of the power of control
of the NAPOLCOM under Section 51 because under this very same provision, it is clear that
the local executives are only acting as representatives of the NAPOLCOM. As such deputies,
they are answerable to the NAPOLCOM for their actions in the exercise of their functions
under that section. Thus, unless countermanded by the NAPOLCOM, their acts are valid and
binding as acts of the NAPOLCOM." It is significant to note that the local officials, as
NAPOLCOM representatives, will choose the officers concerned from a list of eligibles (those
who meet the general qualifications for appointment to the PNP) to be recommended by PNP
officials. The same holding is true with respect to the contention on the operational supervision
and control exercised by the local officials. These officials would simply be acting as
representatives of the Commission.
WHEREFORE, having in view all of the foregoing holdings, the instant petition is hereby DISMISSED for
lack of merit.
11. BLAQUERA V. ALCALA
GR NO. 109406
SEPT. 11, 1998
 By: BDC
Topic: Powers of Administrative Agencies
Petitioners: Too many to mention
Respondents: DENR, Bureau of Soils and Water Mgmt, DOA, DSWD, COA,
Ponente: Purisima, J.
DOCTRINE:
The President is the head of the government. Governmental power and authority are exercised and
implemented through him. His power includes the control over executive departments as provided under
Art. 7 Sec. 17 of the Constitution.
FACTS:
· On Feb. 21, 1992, then Pres. Aquino issued AO 268 which granted each official and employee of
the government the productivity incentive benefits in a maximum amount equivalent to 30% of the
employee’s one month basic salary but which amount not be less than P2, 000.00.
oSaid AO provided that the productivity incentive benefits shall be granted only for the year 1991.
· Accordingly, all heads of agencies, including government boards of government-owned or controlled
corporations and financial institutions, are strictly prohibited from granting productivity incentive
benefits for the year 1992 and future years pending the result of a comprehensive study being made
by the Office of the Pres.
· The petitioners, who are officials and employees of several government departments and agencies,
were paid incentive benefits for the year 1992.
· Then, on Jan. 19, 1993, then Pres. Ramos issued AO 29 authorizing the grant of productivity
incentive benefits for the year 1992 in the maximum amount of P1,000.00 and reiterating the
prohibition under Sec. 7 of AO 268, enjoining the grant of productivity incentive benefits without prior
approval of the President.
· Sec. 4 of AO 29 directed all departments, offices and agencies which authorized payment of
productivity incentive bonus for the year 1992 in excess of P1, 000.00 to immediately cause the
refund of the excess.
· In compliance therewith, the heads of the departments or agencies of the government concerned
caused the deduction from petitioners’ salaries or allowances of the amounts needed to cover the
alleged overpayments.
ISSUE: WON AO 29 AND AO 268 WERE VALID EXERCISE OF PRESIDENTIAL CONTROL OVER
EXECUTIVE DEPARTMENTS
RULING: YES.
· The Civil Service Commission handles personnel matters of the government. As the central
personnel agency of the Government, it is tasked to formulate and establish a system of incentives
and rewards for officials and employees in the public sector, alike. The functions of the Commission
have been decentralized to the different departments and agencies of the government. Specifically,
the implementation of the Incentive Award system has been decentralized to the President or to the
head of each department or agency.
· The Presidentis the head of the government. Governmental power and authority are exercised and
implemented through him. His power includes the control over executive departments as
provided under Art. 7 Sec. 17 of the Constitution.
· Control means the power of an officer to alter or modify or set aside what a subordinate officer had
done in the performance of his duties and to substitute the judgment of the former for that of the
latter.It has been held that the President can, by virtue of his power of control, review, modify, alter
or nullify any action, or decision, of his subordinate in the executive departments, bureaus, or offices
under him. He can exercise this power motu proprio without need of any appeal from any party.
· The President issued subject AOs to regulate the grant of productivity incentive benefits and to
prevent discontentment, dissatisfaction and demoralization among government personnel by
committing limited resources of government for the equal payment of incentives and awards. The
President was only exercising his power of control by modifying the acts of the respondents who
granted incentive benefits to their employees without appropriate clearance from the Office of the
President, thereby resulting in the uneven distribution of government resources. In the view of the
President, respondents did a mistake which had to be corrected. In so acting, the President
exercised a constitutionally-protected prerogative.
· Neither can it be said that the President encroached upon the authority of the Commission on Civil
Service to grant benefits to government personnel. AO 29 and AO 268 did not revoke the privilege
of employees to receive incentive benefits. The same merely regulated the grant and amount
thereof. Thus, it is not the duty of the Commission to fix the amount of the incentives. Such function
belongs to the President or his duly empowered alter ego.
DISPOSITIVE PORTION:
WHEREFORE, the Petitions in G.R. Nos. 109406, 110642, 111494, and 112056 are hereby
DISMISSED, and as above ratiocinated, further deductions from the salaries and allowances of
petitioners are hereby ENJOINED.
In G.R. No. 119597, the assailed Decision of respondent Commission on Audit is AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
12. EASTERN SHIPPING VS. POEA
GR NO. 76633
OCT 18, 1988
By: DEINLA
Topic: ADMIN LAW; DELEGATION OF POWER; Undue delegation of legislative authority.
Petitioners: EASTERN SHIPPING LINES, INC.
Respondents: PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF
LABOR AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO
Ponente: CRUZ, J.
DOCTRINE:
What can be delegated is the discretion to determine how the law may be enforced, not what the law
shall be. The ascertainment of the latter subject is a prerogative of the legislature. This prerogative
cannot be abdicated or surrendered by the legislature to the delegate.
FACTS:
● Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo,
Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797 and
Memorandum Circular No. 2 of the POEA.
● The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the POEA but
by the Social Security System and should have been filed against the State Insurance Fund. The
POEA nevertheless assumed jurisdiction and after considering the position papers of the parties ruled
in favor of the complainant.
● The award consisted of P180,000.00 as death benefits and P12,000.00 for burial expenses pursuant
to its Memorandum Circular No. 2, which became effective on February 1, 1984.
● This circular prescribed a standard contract to be adopted by both foreign and domestic shipping
companies in the hiring of Filipino seamen for overseas employment.
● Petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the principle of
non-delegation of legislative power. It contends that no authority had been given the POEA to
promulgate the said regulation; and even with such authorization, the regulation represents an
exercise of legislative discretion which, under the principle, is not subject to delegation.
ISSUE: Whether Memorandum Circular No. 2 of the POEA violates the principle of non-delegation of
legislative power. NO.
RULING:
● There are two accepted tests to determine whether there is a valid delegation of legislative power, viz,
the completeness test and the sufficient standard test.
o Under the first test, the law must be complete in all its terms and conditions when it leaves the
legislature such that when it reaches the delegate the only thing he will have to do is enforce it.
o Under the sufficient standard test, there must be adequate guidelines or stations in the law to map
out the boundaries of the delegate's authority and prevent the delegation from running riot.
● The principle of non-delegation of powers is applicable to all the three major powers of the Government
but is especially important in the case of the legislative power because of the many instances when its
delegation is permitted.
● In the case of the legislative power, such occasions have become more frequent, if not necessary.
This had led to the observation that the delegation of legislative power has become the rule and its
non-delegation the exception.
● The reason is the increasing complexity of the task of government and the growing inability of the
legislature to cope directly with the myriad problems demanding its attention. The growth of society
has ramified its activities and created peculiar and sophisticated problems that the legislature cannot
be expected reasonably to comprehend.
● To many of the problems attendant upon present-day undertakings, the legislature may not have the
competence to provide the required direct, efficacious, and specific solutions.
● These solutions may, however, be expected from its delegates, who are supposed to be experts in the
particular fields assigned to them.
● The reasons given above for the delegation of legislative powers in general are particularly applicable
to administrative bodies. With the proliferation of specialized activities and their attendant peculiar
problems, the national legislature has found it more and more necessary to entrust to administrative
agencies the authority to issue rules to carry out the general provisions of the statute.
● This is called the "power of subordinate legislation." With this power, administrative bodies may
implement the broad policies laid down in a statute by "filling in' the details which the Congress may
not have the opportunity or competence to provide.
● This is effected by their promulgation of what are known as supplementary regulations, such as the
implementing rules issued by the Department of Labor on the new Labor Code. These regulations
have the force and effect of law.
● Memorandum Circular No. 2 is one such administrative regulation. The model contract prescribed
thereby has been applied in a significant number of the cases without challenge by the employer.
● The power of the POEA (and before it the National Seamen Board) in requiring the model contract is
not unlimited as there is a sufficient standard guiding the delegate in the exercise of the said authority.
● That standard is discoverable in the executive order itself which, in creating the Philippine Overseas
Employment Administration, mandated it to protect the rights of overseas Filipino workers to "fair and
equitable employment practices."
DISPOSITIVE PORTION:
WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining
order dated December 10, 1986 is hereby LIFTED. It is so ordered.
13. TATAD V. SECRETARY OF DEPT. OF ENERGY
GR NO. 124360
NOVEMBER 5. 1997
By: CLAIRE RENDOR
Topic: DELEGATION OF POWER
Petitioners: FRANCISCO S. TATAD
Respondents: SECRETARY OF DEPT. OF ENERGY & SECRETARY OF DEPT. OF FINANCE
Ponente: PUNO, J.
DOCTRINE: There is a valid delegation of legislative power when both the completeness test and the
sufficient standard test are present.
FACTS:
● The petition challenges the constitutionality of RA 8180 entitled An Act Deregulating the
Downstream Oil Industry and For Other Purposes. RA 8180 ends 26 yrs of government
regulation of the downstream oil industry.
● Prior to 1971, there was no gov’t agency regulating the oil industry other than those dealing
w/ ordinary commodities. Oil companies were free to enter and exit the market w/o any gov’t
interference.
● When the country realized that petroleum and its products are vital to the national security &
that their continued supply is essential to the general welfare, it enacted the Oil Industry
Commission Act. It created the Oil Industry Commission (OIC).
o Then Marcos created the Philippine National Oil Corporation (PNOC) to break
the control by foreigners in our oil industry.
o In 1984, Marcos through Section 8 of Presidential Decree No. 1956, created the
Oil Price Stabilization Fund (OPSF) to cushion the effects of frequent
changes in the price of oil caused by exchange rate adjustments or increase
in the world market prices of crude oil and imported petroleum products.
o In May 1987, Pres. Cory Aquino signed EO no. 172 creating the Energy
Regulation Board to regulate the business of importing, , exporting shipping,
transporting, processing, and distributing energy resources when warranted
and only when public necessity requires.
o On December 9, 1992, Congress enacted R.A. No. 7638 which created the
Department of Energy to prepare, integrate, coordinate, supervise and
control all plans, programs, projects, and activities of the government in
relation to energy exploration, development, utilization, distribution and
conservation. Section 5(e) of the law states that "at the end of four (4) years
from the effectivity of this Act, the Department shall, upon approval of the
President, institute the programs and timetable of deregulation of appropriate
energy projects and activities of the energy industry."
o In March 1996, Congress took the audacious step of deregulating the
downstream oil industry. It enacted R.A. No. 8180, entitled the "Downstream
Oil Industry Deregulation Act of 1996." Under the deregulated environment,
"any person or entity may import or purchase any quantity of crude oil and
petroleum products from a foreign or domestic source, lease or own and
operate refineries and other downstream oil facilities and market such crude
oil or use the same for his own requirement," subject only to monitoring by
the Department of Energy.
§ The deregulation process has two phases: the transition phase and
the full deregulation phase.
§ On February 8, 1997, the President implemented the full deregulation
of the Downstream Oil Industry through E.O. No. 392.
● Sec. 15 of RA 8081: Implementation of Full Deregulation. — Pursuant to Section 5(e) of
Republic Act No. 7638, the DOE shall, upon approval of the President, implement the full
deregulation of the downstream oil industry not later than March 1997. As far as practicable,
the DOE shall time the full deregulation when the prices of crude oil and petroleum products
in the world market are declining and when the exchange rate of the peso in relation to the
US dollar is stable. Upon the implementation of the full deregulation as provided herein, the
transition phase is deemed terminated and the following laws are deemed repealed.
● The petitioner claims that Sec. 15 of RA 8081 constitutes undue delegation of legislative
power to the President and the Sec. of Energy because it does not provide a determinate or
determinable standard to guide the Executive Branch in determining when to implement full
deregulation of the downstream oil industry.
● Petitioner contents that the law does not define when it is practicable for the Sec. of Energy
to recommend to the President the full deregulation of the downstream oil industry or when
the President may consider it practicable to declare full deregulation.
● Also, the law does not provide any specific standard to determine when the prices of crude
oil in the world market are considered to be declining nor when the exchange rate of the peso
to the US dollar is considered stable.
ISSUE: WON Sec. 15 of RA 8180 constituted undue delegation of power
RULING: NO
· There are 2 tests to determine whether or not there is a valid delegation of legislative power:
1) completeness test & 2) sufficient standard test.
o Completeness – the law must be complete in all its terms and conditions when
it leaves the legislative such that when it reaches the delegate the only thing
he will have to do is to enforce it.
o Sufficient standard – there must be adequate guidelines or limitations in the
law to map out the boundaries of the delegate’s authority and prevent the
delegation from running riot.
· Congress expressly provided in RA 8180 that full deregulation will start at the end of March
1997, regardless of the occurrence of any event. Full deregulation at the end of March 1997 is
mandatory and the Executive has no discretion to postpone it for any purported reason. Thus, the
law is complete on the question of the final date of full deregulation.
· The discretion given to the President is to advance the date of full deregulation before the end
of March 1997. Section 15 lays down the standard to guide the judgment of the President — he is
to time it as far as practicable when the prices of crude oil and petroleum products in the world
market are declining and when the exchange rate of the peso in relation to the US dollar is stable.
 o Petitioners contend that the words “as far as practicable”, “declining”, and
“stable” should have defined in RA 8081 as they do not set terminate or
determinable standards.
o The dictionary meaning of these words are well settled and cannot confuse
men of reasonable intelligence.
o
IN VIEW WHEREOF, the petitions are granted. R.A. No. 8180 is declared unconstitutional and E.O. No.
372 void.
SO ORDERED.
NOTES: Why RA 8081 is unconstitutional
R.A. No. 8180 contains a separability clause. Section 23 provides that "if for any reason, any
section or provision of this Act is declared unconstitutional or invalid, such parts not affected thereby
shall remain in full force and effect." This separability clause notwithstanding, we hold that the offending
provisions of R.A. No. 8180 so permeate its essence that the entire law has to be struck down. The
provisions on tariff differential, inventory and predatory pricing are among the principal props of R.A. No.
8180. Congress could not have deregulated the downstream oil industry without these provisions.
Unfortunately, contrary to their intent, these provisions on tariff differential, inventory and predatory
pricing inhibit fair competition, encourage monopolistic power and interfere with the free interaction of
market forces. R.A. No. 8180 needs provisions to vouchsafe free and fair competition.
Other issues not related to delegation of power (I copied nalang from digest cos the case is long)
1) WON Sec 5(b) of R.A. 8180 on tariff differential violates the one title one subject requirement
of the Constitution. – NO
o The title need not mirror, fully index or catalogue all contents and minute
details of a law. A law having a single general subject indicated in the title
may contain any number of provisions, no matter how diverse they may be,
so long as they are not inconsistent with or foreign to the general subject,
and may be considered in furtherance of such subject by providing for the
method and means of carrying out the general subject. The Court held that
Sec. 5 providing for tariff differential is germane to the subject of RA 8180
which is the deregulation of the downstream oil industry.
2) WON RA 8081 violates the constitutional prohibition (Art. XII, Sec. 19) against monopolies,
combinations in restraint of trade and unfair competition – YES
o The SC declared the unconstitutionality of RA 8180 because it violated Sec 19
of Art 12 of the Constitution. It violated that provision because it only
strengthens oligopoly which is contrary to free competition. It cannot be
denied that our downstream oil industry is operated and controlled by an
oligopoly, a foreign oligopoly at that. Petron, Shell and Caltex stand as the
only major league players in the oil market. All other players belong to the
lilliputian league. As the dominant players, Petron, Shell and Caltex boast of
existing refineries of various capacities. The tariff differential of 4% therefore
works to their immense benefit. Yet, this is only one edge of the tariff
differential. The other edge cuts and cuts deep in the heart of their
competitors. It erects a high barrier to the entry of new players. New players
that intend to equalize the market power of Petron, Shell and Caltex by
building refineries of their own will have to spend billions of pesos. Those
who will not build refineries but compete with them will suffer the huge
disadvantage of increasing their product cost by 4%. They will be competing
on an uneven field. The argument that the 4% tariff differential is desirable
because it will induce prospective players to invest in refineries puts the cart
before the horse. The first need is to attract new players and they cannot be
attracted by burdening them with heavy disincentives. Without new players
belonging to the league of Petron, Shell and Caltex, competition in our
downstream oil industry is an idle dream.
o RA 8180 is unconstitutional on the ground inter alia that it discriminated against
the “new players” insofar as it placed them at a competitive disadvantage vis-
à-vis the established oil companies by requiring them to meet certain
conditions already being observed by the latter.
14. PELAEZ v. AUDITOR GENERAL
GR NO. L-23825
December 24, 1965
Topic: DELEGATION OF POWER
Petitioners: EMMANUEL PELAEZ
Respondent: THE AUDITOR GENERAL
Ponente: CONCEPCION, J.
DOCTRINE: Although Congress may delegate to another branch of the government the power to fill in
the details in the execution, enforcement or administration of a law, it is essential to forestall a violation
of the principle of separation of powers, that said law: (a) be complete in itself — it must set forth
therein the policy to be executed, carried out or implemented by the delegate — and (b) fix a standard
— the limits of which are sufficiently determinate or determinable — to which the delegate must
conform in the performance of his functions.
FACTS:
● President Macapagal, pursuant to Section 68 of the Revised Administrative Code, issued
Executive Orders Nos. 93 to 121, 124 and 126 to 129, creating 33 municipalities.
● Vice-President Pelaez instituted the present special civil action, for a writ of prohibition with
preliminary injunction, against the Auditor General to restrain him, as well as his
representatives and agents from passing in audit any expenditure of public funds in
implementation of said executive orders and/or any disbursement by said municipalities
o alleges that said executive orders are null and void upon the ground that said
Section 68 has been impliedly repealed by Republic Act 2370 and constitutes an
undue delegation of legislative power
● Auditor General avers that the present action is premature and that not all proper parties
have been impleaded.
o referring to the officials of the new political subdivisions in question
● Pelaez argues, "If the President, under this new law, cannot even create a barrio, can he
create a municipality which is composed of several barrios, since barrios are units of
municipalities?"
o third paragraph of Section 3 of Republic Act No. 2370, reads: "Barrios shall not
be created or their boundaries altered nor their names changed except under the
provisions of this Act or by Act of Congress.
● Auditor General answers that a new municipality can be created without creating new
barrios, such as, by placing old barrios under the jurisdiction of the new municipality.
o section 68 of the Revised Administrative Code provides: “The President of the
Philippines may by executive order define the boundary of any municipality…
and may change the seat of government within any subdivision to such place
therein as the public welfare may require.”
o Auditor General alleges that the power of the President to create municipalities
under this section does not amount to an undue delegation of legislative power,
relying upon Municipality of Cardona vs. Municipality of Binangonan.
ISSUE:
Whether or not Section 68 of Revised Administrative Code constitutes an undue delegation of
legislative power – YES.
RULING:
● Auditor General’s claims are untenable.
o under Section 68, the phrase "as the public welfare may require" refers
exclusively to the place to which the seat of the government may be transferred.
o Municipality of Cardona vs. Municipality of Binañgonan involved not the creation
of a new municipality, but a mere transfer of territory — from an already existing
municipality (Cardona) to another municipality (Binañgonan)
● Although Congress may delegate to another branch of the government the power to fill in
the details in the execution, enforcement or administration of a law, it is essential to forestall
a violation of the principle of separation of powers, that said law: (a) be complete in itself —
it must set forth therein the policy to be executed, carried out or implemented by the
delegate — and (b) fix a standard — the limits of which are sufficiently determinate or
 determinable — to which the delegate must conform in the performance of his functions.
o Section 68 of the Revised Administrative Code does not meet these well settled
requirements for a valid delegation of the power to fix the details in the
enforcement of a law.
o It does not enunciate any policy to be carried out or implemented by the
President. Neither does it give a standard sufficiently precise to avoid the evil
effects above referred to.
● Section 10 (1) of Article VII of our Constitution ordains: "The President shall have control of
all executive departments, bureaus or offices…”
o the power of control of the President over executive departments, bureaus or
offices implies no more than the authority to assume directly the functions thereof
or to interfere in the exercise of discretion by its officials. Such control does not
include the authority either to abolish an executive department or bureau or to
create a new one.
o As a consequence, the alleged power of the President to create municipal
corporations would necessarily connote the exercise by him of an authority even
greater than that of control which he has over the executive departments,
bureaus or offices.
o In other words, Section 68 of the Revised Administrative Code does not merely
fail to comply with the constitutional mandate above quoted, but confers upon
him more power over municipal corporations than that which he has over said
executive departments, bureaus or offices.
DISPOSITIVE PORTION:
WHEREFORE the Executive Orders in question are hereby declared null and void ab initio and the
respondent permanently restrained from passing in audit any expenditure of public funds in
implementation of said Executive Orders or any disbursement by the municipalities above referred to. It
is so ordered.
15. ABELLA V. CIVIL SERVICE COMMISSION
G.R. No. 152574
November 17, 2004
By: Sarah Zurita
Topic: Quasi-legislative power or Rule-Making Power
Petitioners: FRANCISCO ABELLA JR.
Respondents: CIVIL SERVICE COMMISSION
Ponente: PANGANIBAN, J.
DOCTRINE:
Quasi-legislative power is exercised by administrative agencies through the promulgation of rules and
regulations within the confines of the granting statute and the doctrine of non-delegation of certain
powers flowing from the separation of the great branches of the government.
FACTS:
● In 1996, Abella (lawyer) retired from the Philippine Economic Zone Authority (PEZA) as Department
Manager of the Legal Services Department.
o He completed the training program for Executive Leadership and Management pursuant to
CSC Reso. No. 850, which was the required eligibility for said position.
● 1994: The Civil Service Commission (CSC) issued Memorandum Circular No. 21 --
o sec. 4. Status of Appointment of Incumbents of Positions Included Under the Coverage of the
CES. Incumbents of positions which are declared to be Career Executive Service positions for
the first time pursuant to this Resolution who hold permanent appointments thereto shall remain
under permanent status in their respective positions. However, upon promotion or transfer
to other Career Executive Service (CES) positions, these incumbents shall be under
temporary status in said other CES positions until they qualify.
● 1998: Abella was hired by the Subic Bay Metropolitan Authority (SBMA)
● 1999: Abella was appointed as a permanent employee -- Department Manager III, Labor and
Employment Center.
● The appointment was submitted to the CSC Regional Office No. III which disapproved the appointment
because Abella’s eligibility was not appropriate.
o Abella was issued a temporary appointment as Department Manager III, Labor and
Employment Center.
● Abella appealed the disapproval of his permanent appointment. The CSC denied his motion for
reconsideration through 2 resolutions.
● Abella filed with the CA a petition for review seeking the reversal of the CSC Resolutions on the ground
that CSC Memorandum Circular No. 21, s. 1994 is unconstitutional as it rendered his earned civil
service eligibility ineffective or inappropriate for the position of Department Manager [III]
➔ CA: Abella did not have legal standing to question the disapproval of his appointment.
◆ only the appointing officer may request reconsideration of the action taken by the
CSC on appointments
◆ Abella was not the real party in interest, as his appointment was dependent on the
CSCs approval. He had no vested right in the office, since his appointment was
disapproved.
ISSUE: W/N the CSC has authority to issue rules and regulations (constitutionality of
Memorandum Circular No. 21, s. 1994)?
RULING: YES
● Abella argues that his eligibility could no longer be affected by a new eligibility requirement. He
claims that he was eligible for his previous position in PEZA; hence, he should retain his eligibility
in SBMA, notwithstanding the classification of the latter as a CES position.
○ As mandated by the Constitution, as the central personnel agency of the government, the
CSC should establish a career service and adopt measures to promote the morale,
efficiency, integrity, responsiveness, progressiveness, and courtesy in the Civil Service.
○ In the exercise of its authority, the CSC deemed it appropriate to clearly define and identify
positions covered by the Career Executive Service. Logically, the CSC had to issue
guidelines to meet this objective, specifically through the issuance of the challenged Circular.
● Entrance to the different levels in the career service, which appointments require examinations, are
grouped into three major levels.
○ Those in the third level (CES positions -- ABELLA’S POSITION) require Career Service
Executive Eligibility (CSEE) as a requirement for permanent appointment.
○ The Circular did not revoke Abella’s ELM eligibility. He was appointed to a CES position;
however, his eligibility was inadequate.
○ Abella’s government service ended when he retired in 1996; thus, his right to remain in a
CES position, notwithstanding his lack of eligibility, also ceased. Upon his reemployment
years later as department manager III, it was necessary for him to comply with the eligibility
prescribed at the time for that position.
● Petitioner contends that his due process rights -- CSCs alleged failure to notify him of a hearing
relating to the issuance of the challenged Circular.
○ The classification of positions in career service was a quasi-legislative, not a quasi-judicial,
issuance. This distinction determines whether prior notice and hearing are necessary.
○ In exercising its quasi-judicial function, an administrative body adjudicates the rights of
persons before it, in accordance with the standards laid down by the law.
○ quasi-legislative power is exercised by administrative agencies through the promulgation of
rules and regulations within the confines of the granting statute and the doctrine of non-
delegation of certain powers flowing from the separation of the great branches of the
government.
○ Significantly, the challenged Circular was an internal matter addressed to heads of
departments, bureaus and agencies. It needed no prior publication, since it had been issued
as an incident of the administrative bodys power to issue guidelines for government officials
to follow in performing their duties.
NOTES:
● IF SHE ASKS ON LEGAL STANDING:
○ the question in standing is whether such parties have alleged such a personal stake in the
outcome of the controversy to assure that concrete adverseness which sharpens the
presentation of issues upon which the court so largely depends for illumination of difficult
constitutional questions.
○ On the other hand, a real party in interest is one who would be benefited or injured by the
judgment, or one entitled to the avails of the suit.
○ If legal standing is granted to challenge the constitutionality or validity of a law or
governmental act despite the lack of personal injury on the challengers part, then
more so should Abella be allowed to contest the CSC Order disapproving his
 appointment. Clearly, he was prejudiced by the disapproval, since he could not
continue his office.
○ Although Abella had no vested right to the position, it was his eligibility that was
being questioned. Corollary to this point, he should be granted the opportunity to
prove his eligibility. He had a personal stake in the outcome of the case, which
justifies his challenge to the CSC act that denied his permanent appointment.
DISPOSITIVE PORTION:
WHEREFORE, the Petition is GRANTED insofar as it seeks legal standing for petitioner, but DENIED
insofar as it prays for the reversal of the CSC Resolutions disapproving his appointment as department
manager III of the Labor and Employment Center, Subic Bay Metropolitan Authority. Costs against
petitioner.
16. SMART COMMUNICATION VS. NTC
GR NO. 152063
AUGUST 12, 2003
By: TARA SIOCHI
Topic: Quasi-legislative power or rule-making power
Petitioners: GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC. (ISLACOM)
Respondents: COURT OF APPEALS (The Former 6th Division) and the NATIONAL
TELECOMMUNICATIONS COMMISSION
Ponente: YNARES-SANTIAGO, J.
DOCTRINE:
Administrative agencies possess quasi-legislative or rule-making powers and quasi--judicial or
administrative adjudicatory powers. The rules and regulations that administrative agencies promulgate,
which are the product of a delegated legislative power to create new and additional legal provisions that
have the effect of law, should be within the scope of the statutory authority granted by the legislature to
the administrative agency.
FACTS:
● Pursuant to its rule-making and regulatory powers, the NTC issued Memorandum Circular
No. 13-6-2000, promulgating rules and regulations on the billing of telecom services.
o The Memorandum Circular provided that it shall take effect 15 days after its
publication in a newspaper of general circulation and three certified true copies
thereof furnished the UP Law Center.
o Meanwhile, the provisions of the Memorandum Circular pertaining to the sale and
use of prepaid cards and the unit of billing for cellular mobile telephone service
took effect 90 days from the effectivity of the Memorandum Circular.
● The NTC issued a Memorandum to all cellular mobile telephone service (CMTS) operators
which contained measures to minimize if not totally eliminate the incidence of stealing of
cellular phone units.
o This was followed by another Memorandum dated October 6, 2000 addressed to
all public telecommunications entities, which reads: “This is to remind you that the
validity of all prepaid cards sold on 07 October 2000 and beyond shall be valid for
at least two (2) years from date of first use pursuant to MC 13­6­2000.”
● Petitioners Isla Communications Co., Inc. and Pilipino Telephone Corporation filed an action
for declaration of nullity of NTC Memorandum Circular No. 13-6-2000 (the Billing Circular)
and the NTC Memorandum dated October 6, 2000, with prayer for the issuance of a writ of
preliminary injunction and temporary restraining order.
o They alleged that the NTC has no jurisdiction to regulate the sale of consumer
goods such as the prepaid call cards since such jurisdiction belongs to the
Department of Trade and Industry under the Consumer Act of the Philippines; that
the Billing Circular is oppressive, confiscatory and violative of the constitutional
prohibition against deprivation of property without due process of law; that the
Circular will result in the impairment of the viability of the prepaid cellular service
by unduly prolonging the validity and expiration of the prepaid SIM and call cards;
and that the requirements of identification of prepaid card buyers and call balance
announcement are unreasonable. Hence, they prayed that the Billing Circular be
declared null and void ab initio.
o Petitioners Globe Telecom, Inc. and Smart Communications, Inc. filed a joint
Motion for Leave to Intervene and to Admit Complaint--in--Intervention which was
granted by the trial court.
● The Trial Court issued a TRO enjoining the NTC from implementing Memorandum Circular
No. 13-6-2000 and the 7 Memorandum dated October 6, 2000. NTC thus filed a SCA for
certiorari and prohibition with the CA, which granted it.
ISSUE #1: W/N the respondent court erred in holding that respondents failed to exhaust administrative
remedies.
RULING: NO.
● Administrative agencies possess quasi-legislative or rule-making powers and quasi--judicial
or administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to
make rules and regulations which results in delegated legislation that is within the confines of
the granting statute and the doctrine of non-delegability and separability of powers.
● The rules and regulations that administrative agencies promulgate, which are the product of
a delegated legislative power to create new and additional legal provisions that have the effect
of law, should be within the scope of the statutory authority granted by the legislature to the
administrative agency. It is required that the regulation be germane to the objects and
purposes of the law, and be not in contradiction to, but in conformity with, the standards
prescribed by law. They must conform to and be consistent with the provisions of the enabling
statute in order for such rule or regulation to be valid. Constitutional and statutory provisions
control with respect to what rules and regulations may be promulgated by an administrative
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. In case of conflict between a statute and an
administrative order, the former must prevail.
● In questioning the validity or constitutionality of a rule or regulation issued by an
administrative agency, a party need not exhaust administrative remedies before going
to court. This principle applies only where the act of the administrative agency concerned
was performed pursuant to its quasi-judicial function, and not when the assailed act pertained
to its rule-making or quasi-legislative power.
● Even assuming that the principle of exhaustion of administrative remedies apply in this case,
the records reveal that petitioners sufficiently complied with this requirement. Petitioners were
able to register their protests to the proposed billing guidelines. They submitted their
respective position papers setting forth their objections and submitting proposed schemes for
the billing circular. After the same was issued, petitioners wrote successive letters dated July
3, 2000 and July 5, 2000, asking for the suspension and reconsideration of the so-called
Billing Circular. This was taken by petitioners as a clear denial of the requests contained in
their previous letters, thus prompting them to seek judicial relief.
ISSUE#2: W/N NTC has jurisdiction over the case.
RULING: NO. RTC has jurisdiction.
● In like manner, the doctrine of primary jurisdiction applies only where the administrative
agency exercises its quasi-judicial or adjudicatory function. The objective of the doctrine of
primary jurisdiction is to guide a court in determining whether it should refrain from exercising
its jurisdiction until after an administrative agency has determined some question or some
aspect of some question arising in the proceeding before the court.
● However, where what is assailed is the validity or constitutionality of a rule or regulation issued
by the administrative agency in the performance of its quasi-legislative function, the regular
courts have jurisdiction to pass upon the same. The determination of whether a specific rule
or set of rules issued by an administrative agency contravenes the law or the constitution is
within the jurisdiction of the regular courts.
ISSUE#3: W/N the Billing Circular issued by NTC is unconstitutional.
RULING: REMANDED.
● In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and its
Memorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-making
power. As such, petitioners were justified in invoking the judicial power of the Regional Trial
 Court to assail the constitutionality and validity of the said issuances. Hence, the Regional
Trial Court has jurisdiction to hear and decide the case. The Court of Appeals erred in setting
aside the orders of the trial court and in dismissing the case.
DISPOSITIVE PORTION:
WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The decision of
the Court of Appeals in CA-G.R. SP No. 64274 dated October 9, 2001 and its Resolution dated January
10, 2002 are REVERSED and SET ASIDE. The Order dated November 20, 2000 of the Regional Trial
Court of Quezon City, Branch 77, in Civil Case No. Q-00-42221 is REINSTATED. This case is
REMANDED to the court a quo for continuation of the proceedings.
NOTES:
Quasi-Legislative/Rule-Making Powers Quasi-Judicial/Administrative Adjudicatory
Powers
The power to make rules and regulations which The power to hear and determine questions of
results in delegated legislation that is within the fact to which the legislative policy is to apply and
confines of the granting statute and the doctrine to decide in accordance with the standards laid
of non--delegability and separability of powers. down by the law itself in enforcing and
administering the same law.
Exercised when it performs in a judicial manner
an act which is essentially of an executive or
administrative nature, where the power to act in
such manner is incidental to or reasonably
necessary for the performance of the executive
or administrative duty entrusted to it.
17. Eastern Shipping Lines v. CA
GR NO. 116356
June 29, 1998
Topic: Nature of Quasi-Legislative Powers
Petitioners: Eastern Shipping Lines, Inc.
Respondents: Court of Appeals and Davao Pilots Association
Ponente: Panganiban
FACTS
- Davao Pilots elevated a complaint against Eastern Shipping Lines for sum of money and
attorney’s fees alleging that the former rendered pilotage services to defendant with total unpaid
fees of P703,290.18.
o Despite repeated demands, Eastern Shipping Lines failed to pay.
- Eastern Shipping Lines disputed the claims of Davao Pilots, assailing the the constitutionality
of the Executive Order 1088 upon which the latter bases its claims. It argues that:
o There is a pending case in the CA and that therefore this case is lis pendens;
o The subject of the complaint falls within the scope and authority of the
Philippine Ports Authority by virtue of PD No. 857 dated December 23, 1975;
o Executive Order No. 1088 is an unwarranted repeal or modification of the
Philippine Ports Authority Charter;
o The basis of the Executive Order 1088 is offensive, sourced from
Amendment No. 6 of the 1973 Constitution and rendered inoperative by the
Freedom Constitution of March 25, 1986 and the present Constitution; and
o The only agency vested by law to prescribe such rates, charges or fees for
services rendered by any private organization like the plaintiff within a Port
District is governed by Section 20 of PD 857.
- Eastern Shipping also argues that it is a regular patron of Davao Pilots and it has never been
remiss in paying Davao Pilots’ claim for pilotage fees.
o It insists on paying pilotage fees prescribed under PPA circulars. Because
EO 1088 sets a higher rate, petitioner now assails its constitutionality.
- RTC: Davao Pilots’ evidence of unpaid pilotage services duly supported by voluminous
documentary exhibits has not been refuted nor rebutted by defendant.
o While Eastern Shipping Lines raised no less than five (5) issues the evidence
fails to show any proof to sustain its posture.
o On the contrary, neither of Eastern Shipping Lines’ two witnesses appear to
have even grazed the outer peripheries of what could have been interesting
issues with far-reaching consequences if resolved.
- CA affirmed the trial court’s decision
- Argument of Eastern Shipping Lines: EO 1088 is unconstitutional because (1) its
interpretation and application are left to private respondent, a private person, 11 and (2) it
constitutes an undue delegation of powers.
o It insists that it should pay pilotage fees on the basis of the memorandum
circulars issued by the PPA, the administrative body vested under PD 857 12
with the power to regulate and prescribe pilotage fees.
o Because PPA circulars are inconsistent with EO 1088, they are void and
ineffective.
ISSUE: W/N EO 1088 is unconstitutional - NO
HELD/RATIO
- It is not an answer to say that E.O. No. 1088 should not be considered a statute because that
would imply the withdrawal of power from the PPA.
o What determines whether an act is a law or an administrative issuance is not
its form but its nature.
o Here as we have already said, the power to fix the rates of charges for
services, including pilotage service, has always been regarded as legislative
in character.
- E.O. NO. 1088 provides for adjusted pilotage service rates without withdrawing the power of
the PPA to impose, prescribe, increase or decrease rates, charges or fees.
o E.O. No. 1088 is not meant simply to fix new pilotage rates. Its legislative
purpose is the "rationalization of pilotage service charges, through the
imposition of uniform and adjusted rates for foreign and coastwise vessels in
all Philippine ports.
- "Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws or the Constitution."
- "[t]he conclusive effect of administrative construction is not absolute.
o Action of an administrative agency may be disturbed or set aside by the
judicial department if there is an error of law, a grave abuse of power or lack
of jurisdiction, or grave abuse of discretion clearly conflicting with either the
letter or spirit of the law."
- An administrative agency, like the PPA, has no discretion whether to implement the law or
not. Its duty is to enforce it.
- Unarguably, therefore, if there is any conflict between the PPA circular and a law, such as EO
1088, the latter prevails.
WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals is
AFFIRMED. Costs against petitioner.
18. Araneta v Gatmaitan
L-8895 and L-9191
April 30, 1957
By: Rich Velarde
Topic: Quasi-legislative power/Rule-making power
Petitioners: SALVADOR A. ARANETA, ETC., ET AL., Respondents: THE HON. MAGNO S.
GATMAITAN, ETC., ET AL
Ponente: Felix
DOCTRINES:
· One of the executive departments is that of Agriculture and Natural Resources which by law
is placed under the direction and control of the Secretary, who exercises its functions subject to
the general supervision and control of the President of the Philippines (Sec. 75, R. A. C.).
Moreover, "executive orders, regulations, decrees and proclamations relative to matters under
the supervision or jurisdiction of a Department, the promulgation whereof is expressly assigned
 by law to the President of the Philippines, shall as a general rule, be issued upon proposition and
recommendation of the respective Department
· The Legislature cannot delegate legislative power to enact any law. If Act No. 2868 is a law
unto 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.
FACTS:
· Sometime in 1950, trawl operators from Malabon, Navotas and other places migrated to this
region most of them settling at Sabang, Calabanga, Camarines Sur, for the purpose of using this
particular method of fishing in said bay
· On account of the belief of sustenance fishermen that the operation of this kind of gear caused
the depletion of the marine resources of that area, there arose a general clamor among the majority
of the inhabitants of coastal towns to prohibit the operation of trawls in San Miguel Bay.
· In response to these pleas, the President issued on April 5, 1954, Executive Order No. 22 (50
Off. Gaz., 1421) prohibiting the use of trawls in San Miguel Bay
· A group of Otter trawl operators took the matter to the court by filing a complaint for injunction
and/or declaratory relief with preliminary injunction with the Court of First Instance of Manila to
restrain the Secretary of Agriculture and Natural Resources and the Director of Fisheries from
enforcing said executive order
· The Court of First Instance ruled in favor of the trawlers and against the government. Stating
mainly that “Until the trawler is outlawed by legislative enactment, it cannot be banned from San
Miguel Bay by executive proclamation.” Thus Executive Order 22 was declared invalid.
· The government then appealed to the SC ascribing to the CFI the following errors among
others
o In ruling that the President has no authority to issue Executive Orders Nos. 22,
66 and 80 banning the operation of trawls in San Miguel Bay;
o In holding that the power to declare a closed area for fishing purposes has not
been delegated to the President of the Philippines under the Fisheries Act;
o In holding that to uphold the validity of Executive Orders Nos. 22 and 80 would
be to sanction the exercise of legislative power by executive decrees;
ISSUES:
· Whether the President of the Philippines has authority to issue Executive Orders Nos.
22, 66 and 80, banning the operation of trawls in San Miguel Bay, or, said in other
words, whether said Executive Orders Nos. 22, 66 and 80 were issued in accordance
with law; - YES, President has this power.
· Whether Executive Orders Nos. 22, 66 and 80 were valid, for the issuance thereof was
not in the exercise of legislative powers unduly delegated to the President –
YES, valid. Not legislation by Executive
HELD/RATIO:
· YES
o Section 6, 13, 75 of Act 4003 (the Fisheries Law) as amended prohibit the taking or capturing of fish
fry or fish eggs. Towards this end, the Secretary of Agriculture and Commerce shall be authorized
to provide by regulations such restrictions as may be deemed necessary to be imposed on THE
USE OF ANY FISHING NET OR FISHING DEVICE FOR THE PROTECTION OF FRY OR FISH
EGGS
o Sec 75 – “…It shall be unlawful for any person, to take, destroy or kill in any of the places
aforementioned, or in any manner disturb or drive away or take therefrom, any fish fry or fish eggs.
o As may be seen from the just quoted provisions, the law declares unlawful and fixes the penalty for
the taking (except for scientific or educational purposes or for propagation), destroying or killing of
any fish fry or fish eggs, and the Secretary of Agriculture and Commerce (now the Secretary
of Agriculture and Natural Resources) is authorized to promulgate regulations restricting the
use of any fish net or fishing device (which includes the net used by trawl fishermen) for the
protection of fry or fish eggs
o with or without said Executive Orders, the restriction and banning of trawl fishing from all Philippine
waters come, under the law, within the powers of the Secretary of Agriculture and Natural
Resources, who in compliance with his duties may even cause the criminal prosecution of those
who in violation of his instructions, regulations or orders are caught fishing with trawls in the
Philippine waters.
o Constitution Article VII Section 10(1): “The President shall have control of all the executive
departments…”
o Sec 63 Revised Administrative Code: Administrative acts and commands of the President of the
Philippines touching the organization or mode of operation of the Government or rearranging or
readjusting any of the district, divisions, parts or ports of the Philippines, and all acts and commands
governing the general performance of duties by public employees or disposing of issues of general
concern shall be made in executive orders.
o Sec 74 Revised Administrative Code: “All executive functions of the government of the Republic of
the Philippines shall be directly under the Executive Departments subject to the supervision and
control of the President of the Philippines in matters of general policy…”
o Thus, the President has control and general supervision over the Department of Agriculture and
Natural Resources. Moreover, "executive orders, regulations, decrees and proclamations relative
to matters under the supervision or jurisdiction of a Department, the promulgation whereof is
expressly assigned by law to the President of the Philippines, shall as a general rule, be issued
upon proposition and recommendation of the respective Department"
o Therefore, EO 22 is valid and issued by authority of law
· YES
o From the provisions of Act No. 4003 of the Legislature, as amended by Commonwealth Act No.
471, which have been aforequoted, We find that Congress (a) declared it unlawful "to take or
catch fry or fish eggs in the territorial waters of the Philippines; (b) towards this end, it
authorized the Secretary of Agriculture and Natural Resources to provide by the
regulations such restrictions as may be deemed necessary to be imposed on the use of any
fishing net or fishing device for the protection of fish fry or fish eggs (Sec. 13); (c) it authorized
the Secretary of Agriculture and Natural Resources to set aside and establish fishery
reservations or fish refuges and sanctuaries to be administered in the manner to be prescribed
by him and declared it unlawful for any person to take, destroy or kill in any of said places, or, in
any manner disturb or drive away or take therefrom, any fish fry or fish eggs (See. 75); and (d) it
penalizes the execution of such acts declared unlawful and in violation of this Act (No. 4003)
or of any rules and regulations promulgated thereunder, making the offender subject to a fine of
not more than P200, or imprisonment for not more than 6 months, or both, in the discretion of the
court (Sec. 83).
o In the light of these facts it is clear to Our mind that for the protection of fry or fish eggs and small
and immature fishes, Congress intended with the promulgation of Act No. 4003, to prohibit
the use of any fish net or fishing device like trawl nets that could endanger and deplete our
supply of sea food, and to that end authorized the Secretary of Agriculture and Natural
Resources to provide by regulations such restrictions as he deemed necessary in order to
preserve the aquatic resources of the land. Consequently, when the President, in response to the
clamor of the people and authorities of Camarines Sur issued Executive Order No. 80 absolutely
prohibiting fishing by means of trawls in all waters comprised within the San Miguel Bay, he did
nothing but show an anxious regard for the welfare of the inhabitants of said coastal province and
dispose of issues of general concern (Sec. 63, R.A.C.) which were in consonance and strict
conformity with the law
Wherefore, and on the strength of the foregoing considerations We render judgement, as follows:
(a) Declaring that the issues involved in case G.R. No. L-8895 have become moot, as no writ of
preliminary injunction has been issued by this Court the respondent Judge of the Court of First
Instance of Manila Branch XIV, from enforcing his order of March 3, 1955; and
(b) Reversing the decision appealed from in case G. R. No. L-9191; dissolving the writ of
injunction prayed for in the lower court by plaintiffs, if any has been actually issued by the court a
quo; and declaring Executive Orders Nos. 22, 66 and 80, series of 1954, valid for having been
issued by authority of the Constitution, the Revised Administrative Code and the Fisheries Act.
Without pronouncement as to costs. It is so ordered.
NOTE: There were actually three Executive Orders in this case. EO 22, 66, and 80. EO 22 was
what first set the regulations. 66 then amended 22. But later on, EO 80 revived the provisions of
22.
19. TAYUG RURAL BANK v CENTRAL BANK OF THE PHILIPPINES
GR NO. 97203
May 26, 1993
By: Raymond Villafuerte
Topic: ADMIN LAW; QUASI-LEGISLATIVE OR RULE-MAKING POWER; Administrative rule with penal
sanction.
Petitioners: Tayug Rural Bank
Respondents: Central Bank of the Philippines
Ponente:

DOCTRINE: An administrative agency cannot impose a penalty not so provided in the law authorizing
the promulgation of the rules and regulations, much less one that is applied retroactively.
FACTS:
From December 28, 1962 to July 30, 1963, Tayug Rural Bank, Inc. obtained 13 loans amounting to
P813,000 from the Central Bank (CB), by way of rediscounting and covered by promissory notes. As of
July 15, 1969, the outstanding balance was P444,809.45.
On December 23, 1964, the CB, through the Director of the Department of Loans and Credits, issued
Memorandum Circular DLC-8, informing all rural banks that an additional penalty interest rate of ten per
cent (10%) per annum would be assessed on all past due loans beginning January 4, 1965.
Tayug Rural Bank sued CB in the CFI of Manila to recover the 10% penalty imposed by the CB amounting
to P16,874.97, as of September 27, 1968 and to restrain the CB from continuing the imposition of the
penalty. The CB filed a counterclaim for the outstanding balance and overdue accounts of Tayug RB in
the total amount of P444,809.45 plus accrued interest and penalty at 10% per annum on the outstanding
balance until full payment. CFI found that only a question of law had been raised in the pleadings (issue
concerned DLC-8) and ruled in favor of Tayug RB.
CB appealed to the CA, which ruled that the resolution of the appeal will solely depend on the legal issue
of whether or not the Monetary Board had authority to authorize Appellant Central Bank to impose a
penalty rate of 10% per annum on past due loans of rural banks which had failed to pay their accounts
on time and ordered the certification of this case to this Court for proper determination. The entire record
of the case was thus forwarded to the SC.
○ No lesser administrative, executive office, or agency then can, contrary to the
express language of the Constitution, assert for itself a more extensive prerogative.
Necessarily, it is bound to observe the constitutional mandate.
○ There must be strict compliance with the legislative enactment.
● In case of discrepancy between the basic law and a rule or regulation issued to implement
said law, the basic law prevails because said rule or regulation cannot go beyond the terms
and provisions of the basic law.
○ Hence an administrative agency cannot impose a penalty not so provided in
the law authorizing the promulgation of the rules and regulations, much less
one that is applied retroactively.
● [GOING BACK TO THE TAYUG RB’S LOAN] Such clause was NOT a part of the promissory
notes executed by Tayug RB to secure its loans. The CB inserted the clause in the revised
DLC Form No. 11 to make it a part of the contractual obligation of rural banks securing loans
from the Central Bank, after December 23, 1964.
○ Thus, while there is now a basis for the imposition of the 10% penalty rate on
overdue accounts of rural banks, there was none during the period that Tayug RB
contracted its loans from the CB, the last of which loan was on July 30, 1963.
○ Surely, the rule cannot be given retroactive effect.
DISPOSITIVE PORTION:
PREMISES CONSIDERED, the decision of the trial court is hereby AFFIRMED with modification that
Appellee Rural Bank is ordered to pay a sum equivalent to 10% of the outstanding balance of its past
overdue accounts, but not in any case less than P500.00 as attorney's fees and costs of suit and
collection.

ISSUE: W/N the CB can validly impose the 10% penalty on Tayug RB’s past overdue loans beginning
July 4, 1965, by virtue of Memorandum Circular No. DLC-8.

RULING: NO.
● CB contends that Memorandum Circular No. DLC-8 was issued on the basis of SECs 147 &
148 of the Rules and Regulations Governing Rural Banks of the Philippines, which in turn
was adopted from SEC 3 of RA 720, which reads:
○ "SEC. 3. In furtherance of this policy, the Monetary Board of the Central Bank of
the Philippines shall formulate the necessary rules and regulations governing the
establishment and operatives of Rural Banks for the purpose of providing adequate
credit facilities to small farmers and merchants, or to cooperatives of such farmers
or merchants and to supervise the operation of such banks."
● Nowhere in any of the above-quoted pertinent provisions of R.A. 720 nor in any other
provision of R.A. 720 for that matter, is the monetary Board authorized to mete out on rural
banks an additional penalty rate on their past due accounts with Appellant.
○ As correctly stated by the trial court, while the Monetary Board possesses broad
supervisory powers, nonetheless, the retroactive imposition of
administrative penalties cannot be taken as a measure supervisory in
character.
● Administrative rules and regulations have the force and effect of law.
● There are, however, limitations to the rule-making power of administrative agencies.
○ A rule shaped out by jurisprudence is that when Congress authorizes promulgation
of administrative rules and regulations to implement given legislation, all that is
required is that the regulation be not in contradiction with it, but conform to the
standards that the law prescribes.
● The rule delineating the extent of the binding force to be given to administrative rules
and regulations was explained by the Court in Teoxon v. Member of the Board of
Administrators, thus:
○ "A rule is binding on the courts so long as the procedure fixed for its promulgation
is followed and its scope is within the statute granted by the legislature, even if the
courts are not in agreement with the policy stated therein or its innate wisdom x x
x."
○ On the other hand, "administrative interpretation of the law is at best merely
advisory, for it is the courts that finally determine what the law means."
● Indeed, it cannot be otherwise as the Constitution limits the authority of the President, in whom
all executive power resides, to take care that the laws be faithfully executed.