American Tobacco Co. v.

Director of Patents
G.R. No. L-26803, October 14, 1975

67 SCRA 287 Political Law Constitutional Law Due Process; Administrative Bodies

FACTS:
The American Tobacco Company (ACT) was a party to a trademark case pending before
the Philippine Patent Office. ATC challenged the validity of Rule 168 of the Revised Rules
of Practice before the Philippine Patent Office in Trademark Cases as amended,
authorizing the Director of Patents to designate any ranking official of said office to hear
inter partes proceedings.
ATC argued that the same set of Rules provides that all judgments determining the merits
of the case shall be personally and directly prepared by the Director and signed by him
hence it is improper for the director to designate a lower ranking official as hearing officers
to hear the case; that it is clear that under the Rules, the Director must personally hear the
case otherwise, there will be a violation of due process.

ISSUE: Whether or not the designation of hearing officers other than the Director of Patents
is a violation of due process.

HELD: No. The Supreme Court ruled that the power to decide resides solely in the
administrative agency vested by law, this does not preclude a delegation of the power to
hold a hearing on the basis of which the decision of the administrative agency will be made.
The rule that requires an administrative officer to exercise his own judgment and discretion
does not preclude him from utilizing, as a matter of practical administrative procedure, the
aid of subordinates to investigate and report to him the facts, on the basis of which the
officer makes his decisions. It is sufficient that the judgment and discretion finally exercised
are those of the officer authorized by law. Neither does due process of law nor the
requirements of fair hearing require that the actual taking of testimony be before the same

officer who will make the decision in the case. As long as a party is not deprived of his right
to present his own case and submit evidence in support thereof, and the decision is
supported by the evidence in the record, there is no question that the requirements of due
process and fair trial are fully met. In short, there is no abnegation of responsibility on the
part of the officer concerned as the actual decision remains with and is made by said
officer. It is, however, required that to give the substance of a hearing, which is for the
purpose of making determinations upon evidence the officer who makes the determinations
must consider and appraise the evidence which justifies them.

Emmanuel Pelaez v. Auditor General

G.R. No. L-23825, December 4, 1965

FACTS:
In 1964, President Ferdinand Marcos issued executive orders creating 33 municipalities
this was purportedly pursuant to Section 68 of the Revised Administrative Code which
provides in part:
The President 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
The then Vice President, Emmanuel Pelaez, as a taxpayer, filed a special civil action to
prohibit the auditor general from disbursing funds to be appropriated for the said
municipalities. Pelaez claims that the EOs were unconstitutional. He said that Section 68 of
the RAC had been impliedly repealed by Section 3 of RA 2370 which provides that barrios
may not be created or their boundaries altered nor their names changed except by Act of
Congress. Pelaez argues: If the President, under this new law, cannot even create a barrio,
how can he create a municipality which is composed of several barrios, since barrios are
units of municipalities?
The Auditor General countered that there was no repeal and that only barrios were barred
from being created by the President. Municipalities are exempt from the bar and that a
municipality can be created without creating barrios. He further maintains that through Sec.
68 of the RAC, Congress has delegated such power to create municipalities to the
President.
ISSUE: Whether or not Congress has delegated the power to create barrios to the
President by virtue of Sec. 68 of the RAC.

HELD: No. There was no delegation here. 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. In this case, Sec. 68 lacked any such standard. Indeed,
without a statutory declaration of policy, the delegate would, in effect, make or formulate
such policy, which is the essence of every law; and, without the aforementioned standard,
there would be no means to determine, with reasonable certainty, whether the delegate has
acted within or beyond the scope of his authority.
Further, although Sec. 68 provides the qualifying clause as the public welfare may require
which would mean that the President may exercise such power as the public welfare may
require is present, still, such will not replace the standard needed for a proper delegation
of power. In the first place, what the phrase as the public welfare may require qualifies is
the text which immediately precedes hence, the proper interpretation is the President may
change the seat of government within any subdivision to such place therein as the public
welfare may require. Only the seat of government may be changed by the President when
public welfare so requires and NOT the creation of municipality.
The Supreme Court declared that the power to create municipalities is essentially and
eminently legislative in character not administrative (not executive).

Lupangco v. Court of Appeals

G.R. No. 77372, April 29, 1988
FACTS:
On or about October 6, 1986, herein respondent Professional Regulation Commission
(PRC) issued Resolution No. 105 as parts of its "Additional Instructions to Examinees,"
to all those applying for admission to take the licensure examinations in accountancy:
No examinee shall attend any review class, briefing, conference or the like conducted
by, or shall receive any hand-out, review material, or any tip from any school, college or
university, or any review center or the like or any reviewer, lecturer, instructor official or
employee of any of the aforementioned or similar institutions during the three days
immediately proceeding every examination day including examination day.
Any examinee violating this instruction shall be subject to the sanctions prescribed by
Sec. 8, Art. III of the Rules and Regulations of the Commission.
On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure
examinations in accountancy schedule on October 25 and November 2 of the same
year, filed on their own behalf of all others similarly situated like them, with the Regional
Trial Court of Manila a complaint for injunction with a prayer with the issuance of a writ
of a preliminary injunction against respondent PRC to restrain the latter from enforcing
the above-mentioned resolution and to declare the same unconstitutional.
Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the
lower court had no jurisdiction to review and to enjoin the enforcement of its resolution.

In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try
the case and enjoined the respondent commission from enforcing and giving effect to
Resolution No. 105 which it found to be unconstitutional. Not satisfied therewith,
respondent PRC, on November 10, 1986, an appeal with the Court of Appeals. The
petition was granted.
ISSUE: Whether or not Resolution No. 105 is constitutional.
HELD: CA stated as basis its conclusion that PCS and RTC are co-equal branches.
They relied heavily on the case of National Electrification Administration vs. Mendoza
where the Court held that a Court of First Instance cannot interfere with the orders of
SEC, the two being a co-equal branch.
SC said the cases cited by CA are not in point. It is glaringly apparent that the reason
why the Court ruled that the Court of First Instance could not interfere with the orders of
SEC was that this was provided for by the law. Nowhere in the said cases was it held
that a Court of First Instance has no jurisdiction over all other government agencies. On
the contrary, the ruling was specifically limited to the SEC. The respondent court erred
when it place he SEC and PRC in the same category. There is no law providing for the
next course of action for a party who wants to question a ruling or order of the PRC.
What is clear from PD No. 223 is that PRC is attached to the Office of the President for
general direction and coordination. Well settled in our jurisprudence the view that even
acts of the Office of the President may be reviewed by the RTC. In view of the
foregoing, SC rules that RTC has jurisdiction to entertain the case and enjoin PRC from
enforcing its resolution.
As to the validity of Resolution No. 105, although the resolution has a commendable
purpose which is to preserve the integrity and purity of the licensure examinations, the
resolution is unreasonable in that an examinee cannot even attend and review class,
briefing, conference or the like or receive hand-out, review material, or any tip from any
school, college or university, or any review center. The unreasonableness is more
obvious in that one who is caught committing the prohibited acts even without ill motives
will be barred from taking future examinations.
Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the
examinees right to liberty guaranteed by the Constitution. PRC has no authority to
dictate on the reviewees as to how they should prepare themselves for the licensure
examinations specially if the steps they take are lawful.
Another evident objection to Resolution No. 105 is that it violates the academic freedom
of the schools concerned. PRC cannot interfere with the conduct of review that review

schools and centers believe would best enable their enrollees to pass the examination.
Unless the means and methods of instruction are clearly found to be inefficient,
impractical, or riddled with corruption, review schools and centers may not be stopped
from helping out their students.
The enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in
the licensure examinations will be eradicated or at least minimized. What is needed to
be done by the respondent is to find out the source of such leakages and stop it right
there.
The decision of the CA was REVERSE and SET ASIDE.

MACEDA vs. MACARAIG, JR.

G.R. No. 88291, May 31, 1991
"A taxpayer may question the legality of a law or regulation when it involves illegal
expenditure of public money."

197 SCRA 771 Political Law Control Power Acts of the Executive Secretary

FACTS:
The National Power Corporation (NAPOCOR) was created by Commonwealth Act No.
120. In 1949, it was given tax exemption by Republic Act No. 358. In 1984, Presidential
Decree No. 1931 was passed removing the tax exemption of NAPOCOR and other
government owned and controlled corporations (GOCCs). There was a reservation,
however, that the president or the Minister of Finance, upon recommendation by the
Fiscal Incentives Review Board (FIRB), may restore or modify the exemption.
In 1985, the tax exemption was revived. It was again removed in 1987 by virtue of
Executive Order 93 which again provided that upon FIRB recommendation it can again
be restored. In the same year, FIRB resolved to restore the exemption. The same was
approved by President Corazon Aquino through Executive Secretary Catalino Macaraig,
Jr. acting as her alter ego. Ernesto Maceda assailed the FIRB resolution averring that

the power granted to the FIRB is an undue delegation of legislative power.

Macedas claim was strengthened by Opinion 77 issued by then DOJ Secretary Sedfrey
Ordoez. Macaraig however did not give credence to the opinion issued by the DOJ
secretary.

ISSUE: Whether or not the Executive Secretary can validly ignore the legal opinion of
the Justice Secretary.

HELD: Yes. The Supreme Court first ruled that there is no undue delegation of
legislative power. First of all, since the NAPOCOR is a GOCC and is non-profit it can be
exempt from taxation. Also, Opinion 77 issued by DOJ Secretary Ordoez was validly
overruled by Macaraig. This action by Macaraig is valid because the Executive
Secretary, by authority of the President, has the power to modify, alter or reverse the
construction of a statute given by a department secretary pursuant to the presidents
control power.

Tatad v. Secretary of the Department of Energy

G.R. No. 124360, November 5, 1997

FACTS:
Considering that oil is not endemic to this country, history shows that the government has
always been finding ways to alleviate the oil industry. The government created laws
accommodate these innovations in the oil industry. One such law is the Downstream Oil
Deregulation Act of 1996 or RA 8180. This law allows that 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. Tatad assails the constitutionality of the law. He claims, among
others, that the imposition of different tariff rates on imported crude oil and imported refined

petroleum products violates the equal protection clause. Tatad contends that the 3%-7%
tariff differential unduly favors the three existing oil refineries and discriminates against
prospective investors in the downstream oil industry who do not have their own refineries
and will have to source refined petroleum products from abroad.3% is to be taxed on
unrefined crude products and 7% on refined crude products.

ISSUE: Whether or not RA 8180 is constitutional.

HELD: 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.

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--vis the established oil
companies by requiring them to meet certain conditions already being observed by the
latter.

VICENTE VILLAFLOR v. COURT OF APPEALS and NASIPIT LUMBER CO., INC.

G.R. No. 95694 October 9, 1997

FACTS:

The case is a petition for review on certiorari seeking the reversal of the CAs order affirming the
dismissal by the lower court of petitioners complaint against Private Respondent Nasipit
Lumber Co., Incorporated.
The synopsis of the case is as follows:

The Petitioner bought a large tract of land containing one hundred forty (140) hectares to four
(4) different owners in 1940. The land was part of the public domain, but the petitioners
predecessor in interest over which he acquired the property, have been in open, exclusive and
notorious possession of the same for some time. After acquisition, petitioner asserts exclusive
rights thereof for more than fifty (50) years.

In 1946, petitioner entered into a lease agreement with respondent Nasipit Lumber Co. Inc.
However, an Agreement for the Relinquishment of Rights was entered into by both parties in
1950. The respondent having complied all the requirements agreed upon, assumed ownership
and possession of the property since then. Respondent corporation likewise filed a sales
application in 1950 over the property to bolster his claim which the Bureau of Land otherwise
granted on the same year as proof of an Order of Award issued.

In 1974 or twenty four (24) years had passed, when petitioner, questioned and made several
collateral and extraneous claims against the respondent. However, the Bureau of Lands
dismissed the claim, arguing that petitioner no longer has any substantial rights to question the
validity of acquisition of the respondent and the subsequent issuance of free patent by the
Bureau of Lands.

Unperturbed, petitioner filed a motion for reconsideration at the Ministry of Natural Resources
which likewise dismissed the petition. On July 6, 1978, petitioner filed a complaint in the trial
court for "Declaration of Nullity of Contract (Deed of Relinquishment of Rights), Recovery of
Possession (of two parcels of land subject of the contract), and Damages" at about the same
time that he appealed the decision of the Minister of Natural Resources to the Office of the
President.

On January 28, 1983, petitioner died. Petitioners heir substituted in his behalf to pursue the
claim. The trial court in Butuan City who initially take cognizance of the case ordered the case
dismissed, on the grounds that: (1) petitioner admitted the due execution and genuineness of

the contract and was estopped from proving its nullity, (2) the verbal lease agreements were
unenforceable under Article 1403 (2) (e) of the Civil Code, and (3) his causes of action were
barred by extinctive prescription and/or laches. The heirs appealed to the CA which likewise
rendered judgment of dismissal by upholding the lower courts ruling.

Not satisfied, petitioner's heirs filed the instant petition for review which the court granted, hence
this petition.

ISSUES: a) Whether or not the petitioner still has cause of action to pursue claim of ownership
over the property since his rights thereon was already transferred and relinquished to the
respondent by virtue of the Deed executed thereon; and b) Whether or not the private
respondent corporation is qualified to acquire ownership over the land of public domain.

HELD: The petition is bereft of merit. The court ruled that the petitioner no longer has a cause of
action to demand declaration of nullity over the rights conferred to respondents since his
claimed thereof was merely based on speculations, surmises and conjectures. The petitioners
claim of ownership and rights over the property was negated by proof that he ceded the same to
the respondent by virtue of an Agreement on the Relinquishment of Rights which they have
executed. The petitioner insistence that the court erred in affirming his cause is misplaced. The
finding of the court and the agency which acquire primary jurisdiction over the petition, was
accorded great weight by the court.

As to the prohibition that xxxx corporation or association may not hold alienable land of public
domain except for lease not to exceed one thousand hectares, that court declared that xxx
where the applicant had, before the Constitution took effect, fully complied with all this
obligations under the Public Land Act in order to entitle him to a Sales patent, there would be no
legal or equitable justification for refusing to issue or release the sales patent. The
requirements for a sales application under the Public Land Act for a corporation to acquire
ownership of public domain, was essentially complied upon by the respondent, hence no
disqualification exist not to extend and validly issued the confirmation of title over the land in
question to the respondent corporation.
All told, the only disqualification that can be imputed to private respondent is the prohibition in
the 1973 Constitution against the holding of alienable lands of the public domain by
corporations. However, this Court settled the matter, declaring that said constitutional prohibition
had no retroactive effect and could not prevail over a vested right to the land. Application for

patent for and in behalf of Nasipit has clearly no impediment, for they have proven satisfactory
compliance of the requirements of the law. Petition is DISMISSED.

Restituto Ynot vs Intermediate Appellate Court

Police Power Not Validly Exercised

There had been an existing law which prohibited the slaughtering of carabaos (EO 626). To
strengthen the law, Marcos issued EO 626-A which not only banned the movement of
carabaos from interprovinces but as well as the movement of carabeef. On 13 Jan 1984,
Ynot was caught transporting 6 carabaos from Masbate to Iloilo. He was then charged in
violation of EO 626-A. Ynot averred EO 626-A as unconstitutional for it violated his right to
be heard or his right to due process. He said that the authority provided by EO 626-A to
outrightly confiscate carabaos even without being heard is unconstitutional. The lower court
ruled against Ynot ruling that the EO is a valid exercise of police power in order to promote
general welfare so as to curb down the indiscriminate slaughter of carabaos.
ISSUE: Whether or not the law is valid.
HELD: The SC ruled that the EO is not valid as it indeed violates due process. EO 626-A
created a presumption based on the judgment of the executive. The movement of carabaos
from one area to the other does not mean a subsequent slaughter of the same would
ensue. Ynot should be given to defend himself and explain why the carabaos are being
transferred before they can be confiscated. The SC found that the challenged measure is
an invalid exercise of the police power because the method employed to conserve the
carabaos is not reasonably necessary to the purpose of the law and, worse, is unduly
oppressive. Due process is violated because the owner of the property confiscated is
denied the right to be heard in his defense and is immediately condemned and punished.

The conferment on the administrative authorities of the power to adjudge the guilt of the
supposed offender is a clear encroachment on judicial functions and militates against the
doctrine of separation of powers. There is, finally, also an invalid delegation of legislative
powers to the officers mentioned therein who are granted unlimited discretion in the
distribution of the properties arbitrarily taken.

ZAMBALES CHROMITE MINING CO., et.al.vs.COURT OF APPEALS

G.R. No. L-49711 November 7, 1979

Due Process Administrative Due Process

FACTS:
ZCM filed an administrative case before the Director of Mines Gozon to have them be
declared the rightful and prior locators and possessors of 69 mining claims in Sta. Cruz,
Zambales. They are asserting their claim against the group of Martinez and Pabiloa.
Gozon decided in favor of Martinez et al. ZCM appealed the case before the Secretary of
Agriculture and Natural Resources. During pendency, Gozon was assigned as the Sec of
Agri. And Natural Resources. He did not inhibit himself from deciding on the appeal but he
instead affirmed his earlier decision when he was still the director of mines. ZCM then
appealed before the CFI of Zambales. The CFI affirmed the decision of Gozon. It held that
the disqualification of a judge to review his own decision or ruling (Sec. 1, Rule 137, Rules
of Court) does not apply to administrative bodies; that there is no provision in the Mining
Law, disqualifying the Secretary of Agriculture and Natural Resources from deciding an
appeal from a case which he had decided as Director of Mines; that delicadeza is not a
ground for disqualification; that the ZCM did not seasonably seek to disqualify Gozon from
deciding their appeal, and that there was no evidence that Gozon acted arbitrarily and with
bias, prejudice, animosity or hostility to ZCM. ZCM appealed the case to the CA. The CA

reversed Gozons finding and declared that ZCM had the rights earlier attributed to Martinez
et al by Gozon. Martinez et al appealed averring that the factual basis found by Gozon as
Director of Mines be given due weight. The CA reconsidered after realizing that Gozon
cannot affirm his own decision and the CA remanded the case to the Minister of Natural
Resources. Now both parties appealed urging their own contentions; ZCM wants the CAs
earlier decision to be reaffirmed while Martinez et al demanded that Gozons finding be
reinstated. The CA denied both petition.

ISSUE: Whether or not Gozon can validly affirm his earlier decision w/o disturbing due
process.

HELD: The SC annulled the decision of Gozon calling it as a mockery of justice. Gozon had
acted with grave abuse of discretion. In order that the review of the decision of a
subordinate officer might not turn out to be a farce, the reviewing officer must perforce be
other than the officer whose decision is under review; otherwise, there could be no different
view or there would be no real review of the case. The decision of the reviewing officer
would be a biased view; inevitably, it would be the same view since being human, he would
not admit that he was mistaken in his first view of the case. The SC affirmed the 2 nd decision
of the CA.