Subido Pagente Certeza Mendoza and Binay Law Offices vs.

Court of Appeals, et al. Case Digest

Subido Pagente Certeza Mendoza and Binay Law Offices vs. The Court of Appeals, et al.
G.R. No. 216914. December 6, 2016

Facts
Challenged in this petition for certiorari and prohibition under Rule 65 of the Rules of Court is the
constitutionality of Section 11 of R.A No. 9160, the Anti-Money Laundering Act, as amended, specifically
the Anti-Money Laundering Council's authority to file with the Court of Appeals (CA) in this case, an ex-
parte application for inquiry into certain bank deposits and investments, including related accounts based
on probable cause.

In 2015, a year before the 2016 presidential elections, reports abounded on the supposed
disproportionate wealth of then Vice President Jejomar Binay and the rest of his family, some of whom
were likewise elected public officers. The Office of the Ombudsman and the Senate conducted
investigations and inquiries thereon.

From various news reports announcing the inquiry into then Vice President Binay's bank accounts,
including accounts of members of his family, petitioner Subido Pagente Certeza Mendoza & Binay Law
Firm (SPCMB) was most concerned with the article published in the Manila Times on 25 February 2015
entitled "Inspect Binay Bank Accounts" which read, in pertinent part:

xxx The Anti-Money Laundering Council (AMLC) asked the Court of Appeals (CA) to allow the [C]ouncil to
peek into the bank accounts of the Binays, their corporations, and a law office where a family member
was once a partner.

xx xx
Also the bank accounts of the law office linked to the family, the Subido Pagente Certeza Mendoza &
Binay Law Firm, where the Vice President's daughter Abigail was a former partner.

By 8 March 2015, the Manila Times published another article entitled, "CA orders probe of Binay 's
assets" reporting that the appellate court had issued a Resolution granting the ex-parte application of the
AMLC to examine the bank accounts of SPCMB. Forestalled in the CA thus alleging that it had no
ordinary, plain, speedy, and adequate remedy to protect its rights and interests in the purported ongoing
unconstitutional examination of its bank accounts by public respondent Anti-Money Laundering Council
(AMLC), SPCMB undertook direct resort to this Court via this petition for certiorari and prohibition on the
following grounds that the he Anti-Money Laundering Act is unconstitutional insofar as it allows the
examination of a bank account without any notice to the affected party: (1) It violates the person's right to
due process; and (2) It violates the person's right to privacy.

Issues:
1. Whether Section 11 of R.A No. 9160 violates substantial due process.
2. Whether Section 11 of R.A No. 9160 violates procedural due process.
3. Whether Section 11 of R.A No. 9160 is violative of the constitutional right to privacy
enshrined in Section 2, Article III of the Constitution.

Rulings
1. No. We do not subscribe to SPCMB' s position. Succinctly, Section 11 of the AMLA providing for ex-
parte application and inquiry by the AMLC into certain bank deposits and investments does not violate
substantive due process, there being no physical seizure of property involved at that stage.
In fact, .Eugenio delineates a bank inquiry order under Section 11 from a freeze order under Section 10
on both remedies' effect on the direct objects, i.e. the bank deposits and investments:

On the other hand, a bank inquiry order under Section 11 does not necessitate any form of physical
seizure of property of the account holder. What the bank inquiry order authorizes is the examination of the
particular deposits or investments in banking institutions or non-bank financial institutions. The monetary
instruments or property deposited with such banks or financial institutions are not seized in a physical
sense, but are examined on particular details such as the account holder's record of deposits and
transactions. Unlike the assets subject of the freeze order, the records to be inspected under a bank
inquiry order cannot be physically seized or hidden by the account holder. Said records are in the
possession of the bank and therefore cannot be destroyed at the instance of the account holder alone as
that would require the extraordinary cooperation and devotion of the bank.

At the stage in which the petition was filed before us, the inquiry into certain bank deposits and
investments by the AMLC still does not contemplate any form of physical seizure of the targeted
corporeal property.

2. No. The AMLC functions solely as an investigative body in the instances mentioned in Rule 5.b.26
Thereafter, the next step is for the AMLC to file a Complaint with either the DOJ or the Ombudsman
pursuant to Rule 6b. Even in the case of Estrada v. Office of the Ombudsman, where the conflict arose at
the preliminary investigation stage by the Ombudsman, we ruled that the Ombudsman's denial of Senator
Estrada's Request to be furnished copies of the counter-affidavits of his co-respondents did not violate
Estrada's constitutional right to due process where the sole issue is the existence of probable cause for
the purpose of determining whether an information should be filed and does not prevent Estrada from
requesting a copy of the counter-affidavits of his co-respondents during the pre-trial or even during trial.

Plainly, the AMLC's investigation of money laundering offenses and its determination of possible money
laundering offenses, specifically its inquiry into certain bank accounts allowed by court order, does not
transform it into an investigative body exercising quasi-judicial powers. Hence, Section 11 of the AMLA,
authorizing a bank inquiry court order, cannot be said to violate SPCMB's constitutional right to due
process.

3. No. We now come to a determination of whether Section 11 is violative of the constitutional right to
privacy enshrined in Section 2, Article III of the Constitution. SPCMB is adamant that the CA's denial of its
request to be furnished copies of AMLC's ex-parte application for a bank inquiry order and all subsequent
pleadings, documents and orders filed and issued in relation thereto, constitutes grave abuse of
discretion where the purported blanket authority under Section 11: ( 1) partakes of a general warrant
intended to aid a mere fishing expedition; (2) violates the attorney-client privilege; (3) is not preceded by
predicate crime charging SPCMB of a money laundering offense; and ( 4) is a form of political
harassment [of SPCMB' s] clientele.

We thus subjected Section 11 of the AMLA to heightened scrutiny and found nothing arbitrary in the
allowance and authorization to AMLC to undertake an inquiry into certain bank accounts or deposits.
Instead, we found that it provides safeguards before a bank inquiry order is issued, ensuring adherence
to the general state policy of preserving the absolutely confidential nature of Philippine bank accounts:
1. The AMLC is required to establish probable cause as basis for its ex-parte application for
bank inquiry order;
2. The CA, independent of the AMLC's demonstration of probable cause, itself makes a
finding of probable cause that the deposits or investments are related to an unlawful activity
under Section 3(i) or a money laundering offense under Section 4 of the AMLA;
3. A bank inquiry court order ex-parte for related accounts is preceded by a bank inquiry
court order ex-parte for the principal account which court order ex-parte for related accounts is
separately based on probable cause that such related account is materially linked to the principal
account inquired into; and
 4. The authority to inquire into or examine the main or principal account and the related
accounts shall comply with the requirements of Article III, Sections 2 and 3 of the Constitution.
The foregoing demonstrates that the inquiry and examination into the bank account are not
undertaken whimsically and solely based on the investigative discretion of the AMLC. In
particular, the requirement of demonstration by the AMLC, and determination by the CA, of
probable cause emphasizes the limits of such governmental action. We will revert to these
safeguards under Section 11 as we specifically discuss the CA' s denial of SPCMB' s letter
request for information concerning the purported issuance of a bank inquiry order involving its
accounts.

All told, we affirm the constitutionality of Section 11 of the AMLA allowing the ex-parte application by the
AMLC for authority to inquire into, and examine, certain bank deposits and investments.

WHEREFORE, the petition is DENIED. Section 11 of Republic Act No. 9160, as amended, is
declared VALID and CONSTITUTIONAL

Yu Cong Eng vs. Trinidad

Yu Cong Eng et al vs. Trinidad

GR No. L-20479 | Feb. 6, 1925

History:

 The sales tax has been in force in the Philippines for a number of years. Our law provides for privilege taxes to be
levied on certain businesses and occupations. These percentage taxes on business are payable at the end of each
calendar quarter in the amount lawfully due on the business transacted during the past quarter. It is made the duty
of every person conducting a business subject to such tax, within the same period as is allowed for the payment of
the quarterly installments of the fixed taxes without penalty, to make a true and complete return of the amount of
the receipts or earnings of his business during the preceding quarter and pay the tax due thereon. All merchants not
specifically exempted must pay a tax of one and one-half per cent on the gross value in money of the commodities,
goods, wares, merchandise sold, bartered, exchanged, or consigned abroad by them, such tax to be based on the
actual selling price or value of the things in question at the time they are disposed of or consigned

 The income tax has also been established here for sometime, first pursuant to an Act of Congress and later pursuant
to an Act of the Philippine Legislature (Act No. 2833, as amended by Act No. 2926). The customary returns are
required from individuals and corporations. The tax is computed and the assessments are made by the Collector of
Internal Revenue and his agents.

 The Spanish Code of Commerce, which was in force at that time, requires that merchants shall keep: A book of
inventories and balances; (2) a daybook; (3) a ledger; (4) a copying book for letters and telegrams; and (5) the other
books required by special laws. However, it was silent as to the language which the books must be kept

 CIR issued a Circular Letter requiring that the record of sales of merchants subject to the merchant’s tax must either
be in English or Spanish

- Challenged in the case of Young vs. Rafferty

- SC: CIR is not empowered to designate the language which the entries in the books should be made. Such initiative
should not be taken by the CIR, arguing that it is to protect the govt against evasion
 Facts:

 On 1921, Act No. 2972 or the Chinese Bookkeeping Law was passed, regulating that the account books should not be
in any other language exc. English, Spanish or any dialect, otherwise a penalty of fine of not more than 10K or
imprisonment for not more than 2 years will be imposed

- fiscal measure intended to facilitate the work of the government agents and to prevent fraud in the returns of
merchants, in conformity with the sales tax and the income tax

 On March 1923, BIR inspected the books of account of Yu Cong Eng where it was found out that it is not in accordance
with Act 2972

 A criminal case was filed against Yu Cong Eng before the CFI Manila for keeping his books of account in Chinese

 Yu’s defense:

 Yu Cong Eng et al are Chinese merchants, claiming that they represent the other 12K filed a petition for prohibition
and injunction against the CIR, questioning the constitutionality of Act No. 2972 or the Chinese Bookkeeping Law

Issue: W/N Act No. 2972 is constitutional?

Ruling:

 As a general rule, the question of constitutionality must be raised in the lower court and that court must be given
an opportunity to pass upon the question before it may be presented to the appellate court for resolution

 Power of taxation

- strongest of all the powers of government, practically absolute and unlimited

- It is a legislative power. All its incidents are within the control of the legislature. It is the Legislature which must
questions of state necessarily involved in ordering a tax, which must make all the necessary rules and regulations
which are to be observed in order to produce the desired results, and which must decide upon the agencies by means
of which collections shall be made

 The power to tax is not judicial power and that a strong case is required for the judiciary to declare a law relating
to taxation invalid. If, of course, so great an abuse is manifest as to destroy natural and fundamental rights, it is the
duty of the judiciary to hold such an Act unconstitutional

 The Chinese petitioners are accorded treaty rights of the most favored nation

 Their constitutional rights are those accorded all aliens, which means that the life, liberty, or property of these
persons cannot be taken without due process of law, and that they are entitled to the equal protection of the laws,
without regard to their race

 Act No. 2972 is a fiscal measure which seeks to prohibit not only the Chinese but all merchants of whatever
nationality from making entries in the books of account or forms subject to inspection for taxation purposes in any
other language than either the English or Spanish language or a local dialect

 the law only intended to require the keeping of such books as were necessary in order to facilitate governmental
inspection for tax purposes

 The Chinese will not be singled out as a special subject for discriminating and hostile legislation since there are
other aliens doing business in the Phils. There will be no arbitrary deprivation of liberty or arbitrary spoliation of
property. There will be no unjust and illegal discrimination between persons in similar circumstances. The law will
prove oppressive to the extent that all tax laws are oppressive, but not oppressive to the extent of confiscation
 Act No. 2972 as meaning that any person, company, partnership, or corporation, engaged in commerce, industry, or
any other activity for the purpose of profit in the Philippine Islands, shall keep its account books, consisting of sales
books and other records and returns required for taxation purposes by regulations of the Bureau of Internal Revenue,
in effect when this action was begun, in English, Spanish, or a local dialect, thus valid and constitutional

Johns, J. Dissenting

 Both in the title and the body of the act, the legislature has said that it shall be unlawful for any person, firm or
corporation engaged in certain lines of business to keep its account books in any language other than English, Spanish
or any local dialect, and has expressly imposed a penalty for a violation of the act. There are no exceptions or
limitations in the language, and it is not confined or limited to any specific purpose. It is broad and general and
applies to any and all account books which may be kept or used in connection with the business.

Assuming, as the majority opinion does, that Act No. 2972 should read that account books, for taxation purposes, should be
kept in their English, Spanish or any local dialect, the act does not specify or define what books shall be kept or how and in what
manner they shall be kept. Neither does it delegate that power to anyone else

Yu Cong Eng v. Trinidad

Yu Cong Eng v. Trinidad
7 June 1926 | Taft | Certiorari to the Supreme Court of the Philippine Islands

Facts
Act No. 2972 (An act to provide in what languages account books shall be kept, and to establish penalties
for its violation), also known as the “Chinese Bookkeeping Act,” was passed by the Philippine Legislature
and approved in 1921. It provides:

 Section 1. It shall be unlawful for any person, company, or partnership or corporation engaged in
commerce, industry or any other activity for the purpose of profit in the Philippine Islands, in accordance
with existing law, to keep its account books in any language other than English, Spanish, or any local
dialect.
 Section 2. Any person violating the provisions of this act shall, upon conviction, be punished by
a fine of not more than ten thousand pesos, or by imprisonment for not more than two years, or both.

Yu Cong Eng, a Chinese merchant, keeps the books of account of his lumber business in Chinese, as he
cannot read, write nor understand English, Spanish, or any local dialect. He was arrested for violating Act
No. 2972, and his books were seized.

Trial was about to proceed when Yu Cong Eng and another petitioner Co Liam (on behalf of all other
Chinese merchants in the Philippines) filed a petition against the fiscal, the collector of internal revenue,
and the presiding judge.

Arguments

 By the petitioner
 Even if he would employ a bookkeeper who could keep his books in English or Spanish,
he would have no means of verifying the correctness of the books. If he would employ a translator or
interpreter, he might be at the mercy of his employees if they might cheat and defraud him. According to
the Act, he is prohibited from even keeping a duplicate set of accounts in his own language and he will
be compelled to remain in total ignorance of the status of his business.
 The enforcement of the Act would drive several Chinese merchants out of
business (They do 60% of the business in the country).
 The enforcement of the Act would deprive the Chinese merchants of their liberty and
property without due process of law, and deny them the equal protection of the laws.
 Under the treaty in force between US and China, petitioners are entitled to the same
rights, privileges, and immunities as the citizens and subjects of Great Britain and Spain.
 By the respondent
 The law is valid and necessary, and it is only the exercise of proper legislative power.
Due to the inability of internal revenue officials to check the books of the Chinese merchants, the treasury
loses large sums of money corresponding to taxes.
Pronouncements of the Philippine Court

 A literal translation of the Act makes it unlawful for any Chinese merchant to keep his account
books in languages other than those listed
 Another interpretation of the Act is that the Chinese merchant may keep his account books in
Chinese, but he has to keep another set of books in the prescribed languages
 A third construction is that the law only intended to require the keeping of such books to facilitate
governmental inspection of the same for tax purposes. However, the law does not specify what kinds of
books shall be kept.
 The Act is not unconstitutional under the Court’s construction of the law. A literal interpretation
would render it unconstitutional, so the Court made a reasonable construction to preserve the law.
A writ of certiorari was filed before the U.S. Supreme Court to review the Philippine Supreme Court’s
decision denying an original petition for prohibition against the enforcement of criminal prosecution of Act
No. 2972, on the ground of its invalidity.

Issues

 WON the PH SC made a valid construction of Act No. 2972. NO

 WON Act No. 2972 is unconstitutional. YES

Issue # 1
WON the PH SC made a valid construction of Act No. 2972. NO

It is the duty of a court in considering the validity of an act to give it such reasonable construction as can
be reached to bring it within the fundamental law. However, a court may not exercise legislative functions
to save the law from conflict with constitutional limitation.

What the court did was to change a penal prohibitive law to a mandatory law of great indefiniteness to
conform to what the court assumes was, or ought to have been, the purpose of the legislature, and which
in the change would avoid a conflict with constitutional restriction. Such strained construction, in order to
make a law conform to a constitutional limitation, cannot be sustained.

“It would certainly be dangerous if the legislature could set a net large enough to catch all possible
offenders, and leave it to the courts to step inside and say who could be rightfully detained and who
should be set at large. This would, to some extent, substitute the judicial for the legislative department of
the government.” (US v. Reese)

Issue # 2
WON Act No. 2972 is unconstitutional. YES
The law is invalid because it deprives Chinese persons of their liberty and property without due process of
law, and denies them the equal protection of the laws.

Guarantees equivalent to the due process and equal protection clauses of the 14 th Amendment were
extended to the PH; hence, said guarantees are to be interpreted as meaning what the provisions meant
at the time when Congress made them applicable to the PH. (Serra v. Mortiga, citing Kepner v. US)

PH government may make every reasonable requirement of its taxpayers to keep records of their
transactions. However, it is NOT within the police power of the legislature to prohibit Chinese merchants
from maintaining a set of books in Chinese.

To justify the state in interposing its authority in behalf of the public, 1) the interests of the publicrequire
such interference and 2) the means are necessary for the accomplishment of the purpose, and not
oppressive upon individuals. The determination as to what is a proper exercise of the legislature’s police
power is subject to the courts’ supervision. (Lawton v. Steel)

We are likely thus to trespass on the provision of the Bill of Rights that the accused is entitled to demand
the nature and cause of the accusation against him, and to violate the principle that a statute which
requires the doing of an act so indefinitely described that men must guess at its meaningviolates due
process of law.

Act No. 2972 deprives the Chinese merchants of something indispensable to the carrying on of their
business, and is obviously intended to affect them (as distinguished from the rest of the community) is
a denial of the equal protection of the laws.
JUDGMENT REVERSED. ACT NO. 2972 IS INVALID.

Ang Tibay vs CIR, 69 Phil 635

Posted by Pius Morados on November 13, 2011

(Admin Law, CIR)

Facts: Teodoro Toribio owns and operates Ang Tibay, a leather company which supplies the Philippine Army. Due to
alleged shortage of leather, Toribio caused the layoff of members of National Labor Union (NLU). NLU averred that
Toribio’s act is not valid. The CIR, decided the case and elevated it to the SC, but a motion for new trial was raised by
the NLU. But Ang Tibay filed a motion for opposing the said motion.

Issue: What is the function of CIR as a special court?

Held: To begin with the issue before us is to realize the functions of the CIR. The CIR is a special court whose
functions are specifically stated in the law of its creation which is the Commonwealth Act No. 103). It is more an
administrative board than a part of the integrated judicial system of the nation. It is not intended to be a mere
receptive organ of the government. Unlike a court of justice which is essentially passive, acting only when its
jurisdiction is invoked and deciding only cases that are presented to it by the parties litigant, the function of the CIR,
as will appear from perusal of its organic law is more active, affirmative and dynamic. It not only exercises judicial or
quasi-judicial functions in the determination of disputes between employers and employees but its functions are far
more comprehensive and extensive. It has jurisdiction over the entire Philippines, to consider, investigate, decide,
and settle any question, matter controversy or disputes arising between, and/ or affecting employers and employees
or laborers, and landlords and tenants or farm-laborers, and regulates the relations between them, subject to, and in
accordance with, the provisions of CA 103.
The CIR is free from rigidity of certain procedural requirements, but this not mean that it can in justiciable cases
coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and
investigations of an administrative character. There are cardinal primary rights which must be respected even
in proceedings of this character:

(1) the right to a hearing, which includes the right to present one’s cause and submit evidence in support thereof;
(2) The tribunal must consider the evidence presented;
(3) The decision must have something to support itself;
(4) The evidence must be substantial;
(5) The decision must be based on the evidence presented at the hearing; or at least contained in the record and
disclosed to the parties affected;
(6) The tribunal or body or any of its judges must act on its own independent consideration of the law and facts of the
controversy, and not simply accept the views of a subordinate;
(7) The Board or body should, in all controversial questions, render its decision in such manner that the parties to the
proceeding can know the various Issue involved, and the reason for the decision rendered.

The failure to grasp the fundamental issue involved is not entirely attributable to the parties adversely affected by the
result. Accordingly, the motion for a new trial should be, and the same is hereby granted, and the entire record of this
case shall be remanded to the CIR, with instruction that it reopen the case receive all such evidence as may be
relevant, and otherwise proceed in accordance with the requirements set forth.

Ang Tibay v CIR (1940) 69 Phil 635

J. Laurel

Facts:
Toribio claimed to have laid off workers due to the shortage of leather soles in the Ang Tibay factory.

The Court of industrial relations forwarded a motion for recon with the supreme court.
In pursuit of a retrial in the Court of Industrial Relations, the national labor union, the respondent,
averred:
1. The shortage of soles has no factual basis
2. The scheme was to prevent the forfeiture of his bond to cover the breach of obligation with the
Army
3. The letter he sent to the army was part of this scheme
4. The company union was an employer dominated one.
5. laborers rights to CBA is indispensable.

6. Civil code shouldn’t be used to interpret a legislation of American industrial origins.

7. Toribio was guilty of unfair labor practice for favoring his union.
8. Exhibits are inaccessible to respondents.
9. The exhibits can reverse the judgment.
Issue: Is the Court of Industrial Relations the proper venue for the trial?

Held: Yes. Case remanded to the CIR

Ratio:
There was no substantial evidence that the exclusion of the 89 laborers here was due to their union
affiliation or activity.
The nature of the CIR is that of an administrative court with judicial and quasi-judicial functions for
the purpose of settling disputes and relations between employers and employees. It can appeal to
voluntary arbitration for dispute. It can also examine the industries in a locality by order of the
president.
There is a mingling of executive and judicial functions, which constitutes a departure from the
0separation of powers.
The Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and is
not bound by technical rules of legal procedure. It may also include any matter necessary for solving
the dispute.

The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of
certain procedural requirements does not mean that it can, in justifiable cases before it, entirely
ignore or disregard the fundamental and essential requirements of due process in trials and
investigations of an administrative character.
Some examples that it must follow are:
1. right to a hearing
2. consideration of evidence by the court
3. duty to deliberate implies a necessity which cannot be disregarded, namely, that of having
something to support it is a nullity, a place when directly attached
4. substance of evidence and the non-binding aspect of judicial decisions in an admin court so as to
free them from technical rules
5. the decision must be rendered at the evidence presented at the hearing. The court may also
delegate some powers to other judicial bodies.
6. The court must act on its own decision at reaching a controversy. It mustn’t merely accept the
views of a subordinate.

7. The court must clearly state the issues and the rationale for the decision.
The record is barren and doesn’t satisfy a factual basis as to predicate a conclusion of law.
Evidence was still inaccessible.
The motion for a new trial should be granted and sent to the CIR.
BenjamPhilippine Judges Association vs
Pete Prado
in Victoriano vs Elizalde Rope Workers’
Union
59 SCRA 54 – Political Law – Primacy of the Constitution over Contractual Rights
Benjamin Victoriano, an Iglesia ni Cristo (INC) member, has been an employee of the Elizalde
Rope Factory (ERF) since 1958. He was also a member of the EPWU (Elizalde Rope
Workers’ Union). Under the collective bargaining agreement (CBA) between ERF and EPWU,
a close shop agreement is being enforced which means that employment in the factory relies
on the membership in the EPWU; that in order to retain employment in the said factory one
must be a member of the said Union. In 1962, Victoriano tendered his resignation from EPWU
claiming that as per RA 3350 he is an exemption to the close shop agreement by virtue of his
being a member of the INC because apparently in the INC, one is forbidden from being a
member of any labor union. It was only in 1974 that his resignation from the Union was acted
upon by EPWU which notified ERF about it. ERF then moved to terminate Victoriano due to
his non-membership from the EPWU. EPWU and ERF reiterated that he is not exempt from
the close shop agreement because RA 3350, which provides that close shop agreements
shall not cover members of any religious sects which prohibit affiliation of their members in
any such labor organization, is unconstitutional and that said law violates the EPWU’s and
ERF’s legal/contractual rights.
ISSUE: Whether or not RA 3350 is unconstitutional.
HELD: No. The right to religion prevails over contractual or legal rights. As such, an INC
member may refuse to join a labor union and despite the fact that there is a close shop
agreement in the factory where he was employed, his employment could not be validly
terminated for his non-membership in the majority therein. Further, the right to join a union
includes the right not to join a union. The law is not unconstitutional. It recognizes both the
rights of unions and employers to enforce terms of contracts and at the same time it
recognizes the workers’ right to join or not to join union. RA 3550 recognizes as well the
primacy of a constitutional right over a contractual right.
Philippine Judges Association vs Pete
Prado
227 SCRA 703 – Political Law – Constitutional Law – Bill of Rights – Equal Protection –
Franking Privilege of the Judiciary
Section 35 of Republic Act No. 7354 authorized the Philippine Postal Corporation (PPC) to
withdraw franking privileges from certain government agencies. Franking privilege is a
privilege granted to certain agencies to make use of the Philippine postal service free of
charge.
In 1992, a study came about where it was determined that the bulk of the expenditure of the
postal service comes from the judiciary’s use of the postal service (issuance of court
processes). Hence, the postal service recommended that the franking privilege be withdrawn
from the judiciary. AS a result, the PPC issued a circular withdrawing the said franking
privilege.
The Philippine Judges Association (PJA) assailed the circular and questioned the validity of
Section 35 of RA 7354. PJA claimed that the said provision is violative of the equal protection
clause.
ISSUE: Whether or not the withdrawal of the franking privilege from the judiciary is valid.
HELD: No. The Supreme Court ruled that there is a violation of the equal protection clause.
The judiciary needs the franking privilege so badly as it is vital to its operation. Evident to that
need is the high expense allotted to the judiciary’s franking needs. The Postmaster cannot
be sustained in contending that the removal of the franking privilege from the judiciary is in
order to cut expenditure. This is untenable for if the Postmaster would intend to cut
expenditure by removing the franking privilege of the judiciary, then they should have
removed the franking privilege all at once from all the other departments. If the problem is the
loss of revenues from the franking privilege, the remedy is to withdraw it altogether from all
agencies of the government, including those who do not need it. The problem is not solved
by retaining it for some and withdrawing it from others, especially where there is no substantial
distinction between those favored, which may or may not need it at all, and the Judiciary,
which definitely needs it. The problem is not solved by violating the Constitution.
The equal protection clause does not require the universal application of the laws on all
persons or things without distinction (it is true that the postmaster withdraw the franking
privileges from other agencies of the government but still, the judiciary is different because
its operation largely relies on the mailing of court processes). This might in fact sometimes
result in unequal protection, as where, for example, a law prohibiting mature books to all
persons, regardless of age, would benefit the morals of the youth but violate the liberty of
adults. What the clause requires is equality among equals as determined according to a valid
classification. By classification is meant the grouping of persons or things similar to each other
in certain particulars and different from all others in these same particulars.
In lumping the Judiciary with the other offices from which the franking privilege has been
withdrawn, Sec 35 has placed the courts of justice in a category to which it does not belong.
If it recognizes the need of the President of the Philippines and the members of Congress for
the franking privilege, there is no reason why it should not recognize a similar and in fact
greater need on the part of the Judiciary for such privilege.

Villegas vs Hiu Chiong Tsai Pao Ho

Political Law – Delegation of Powers – Administrative Bodies
Pao Ho is a Chinese national employed in the City of Manila. On 27 March 1968, then
Manila mayor Antonio Villegas signed Ordinance No. 6537. The said ordinance prohibits
foreign nationals to be employed within the City of Manila without first securing a permit
from the Mayor of Manila. The permit will cost them P50.00. Pao Ho, on 04 May 1968 filed a
petition for prohibition against the said Ordinance alleging that as a police power measure, it
makes no distinction between useful and non-useful occupations, imposing a fixed P50.00
employment permit, which is out of proportion to the cost of registration and that it fails to
prescribe’ any standard to guide and/or limit the action of the Mayor, thus, violating the
fundamental principle on illegal delegation of legislative powers. Judge Arca of Manila CFI
ruled in favor of Pao Ho and he declared the Ordinance as being null and void.
ISSUE: Whether or not there is undue delegation to the Mayor of Manila.
HELD: The decision of Judge Arca is affirmed. Ordinance No. 6537 does not lay down any
criterion or standard to guide the Mayor in the exercise of his discretion. It has been held that
where an ordinance of a municipality fails to state any policy or to set up any standard to
guide or limit the mayor’s action, expresses no purpose to be attained by requiring a permit,
enumerates no conditions for its grant or refusal, and entirely lacks standard, thus conferring
upon the Mayor arbitrary and unrestricted power to grant or deny the issuance of building
permits, such ordinance is invalid, being an undefined and unlimited delegation of power to
allow or prevent an activity per se lawful. Ordinance No. 6537 is void because it does not
contain or suggest any standard or criterion to guide the mayor in the exercise of the power
which has been granted to him by the ordinance. The ordinance in question violates the due
process of law and equal protection rule of the Constitution.