G.R. No.

L-33646 January 28, 1975
AMADO LACUESTA, petitioner, vs. A. MELENCIO
HERRERA in her capacity as Presiding Judge of Branch
XVII of the COURT OF FIRST INSTANCE OF MANILA, and
HEIRS OF ROBERTO DOROMAL Represented by Florita
Doromal, respondents.
Gregorio A. Palabrica for petitioner.
O. F. Santos, Nolasco and Caunca for private respondents.
instituted with the Philippine Fisheries Commission on April 1,
1965 3 the administrative protest against Doromal's fishpond
permit over the whole area and filed his application over one-
half of the area and asked for the partition thereof with
accounting.
The Commissioner of Fisheries denied petitioner's protest and
application. On timely appeal, however, then Secretary of
Agriculture and Natural Resources Fernando Lopez rendered
his decision of November 21, 1968 in favor of petitioner.

TEEHANKEE, J.:
The Court grants the petition for certiorari and sets aside the
challenged preliminary injunction issued by respondent court
restraining the enforcement of the administrative decision
rendered by the Secretary of Agriculture and Natural Resources
awarding one-half of the disputed fishpond area to petitioner and
sustained on appeal by the Office of the President. It is
established doctrine that where as in the case at bar there is no
showing of fraud, collusion, arbitrariness, illegality, imposition or
mistake on the part of the executive and administrative officials
in rendering their questioned decision or of a total lack of
evidence to support the same, such administrative decisions are
entitled to great weight and respect and will not be interfered
with by the courts.
By final and executory judgment of September 3, 1963 of the
Davao court of first instance, in an action 1 for specific
performance, partition and accounting of a 125.5-hectare
fishpond area, 2 the said court found that herein petitioner as
plaintiff therein was indeed a partner with defendants therein
(the spouses Roberto Doromal and Florita Lacuesta Doromal,
brother-in-law and sister of petitioner and subsequently
substituted after Doromal's death by respondents heirs of
Roberto Doromal, represented by Florita Doromal) in the said
fishpond, having contributed money, property and effort thereto
in pursuance of their partnership agreement. It accordingly
rendered judgment in favor of petitioner, as follows:
WHEREFORE, judgment is hereby entered sentencing the
defendants to pay the plaintiffs the sum of P14,945.10
representing plaintiffs' contribution in the development of the
fishpond in litigation; and additional sum of P8,889.87
representing the share of the plaintiffs in the income from the
fishpond from 1951 to 1959, and that defendants shall further
render an accounting of the income from the fishpond from 1960
up to the date when this decision becomes final and pay to the
plaintiffs one-half (½) of the amount of the total income for the
said period as plaintiffs' share in the income.
As the fishpond formed part of the public lands, however, the
Davao court declared itself without authority over the complaint's
prayer for partition, holding that "(T)he only difficulty in the case
is whether that portion of the agreement wherein the parties
should divide the fishpond after its development may be carried
out. A fishpond does not become the property of the applicant
after approval of the permit. The title is still in government. Since
it is the government that grants the permit, the plaintiffs may not
compel the defendants to have the fishpond divided between
them for before the plaintiffs may operate what might pertain to
them, it is necessary that they should secure a permit from the
government."
Armed with the explicit findings of the said court as to his right
as a partner to one-half of the fishpond in question, petitioner
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
The Secretary cited in his decision the Davao court's findings
which "conclusively proved that a partnership was established
between the parties" and noted that "this fact is also admitted by
appellees Doromal's in their reply memorandum." He then made
his own factual findings supporting his conclusion that
"indispensable aid both material or otherwise (was) extended by
spouses appellants [petitioner and his spouse] in securing
(Doromal's) permit" pursuant to their oral partnership
agreement. 4
The Secretary in his decision further ruled that "this office cannot
just simply ignore the equitable rights of [petitioner] over one-
half of the fishpond in question" as judicially determined by the
Davao court and rejected respondents Doromals' contention
that petitioner should be deemed as having abandoned the
partnership and barred from claiming in further interest in the
fishpond as a result of the judgment obtained by them in the
Davao court, holding that
... Suffice it to say that the amount of money ordered by the court
to be paid by appellees to appellants represent the latter's
contribution and share in the development of and income from
the fishpond in question. This cannot be taken to mean that
appellants have abandoned the partnership or that they are
barred from claiming interest in the fishpond. Precisely Civil
Case No. 3107 was brought to court for specific performance,
partition and accounting in view of the breach of contract by the
appellees. Specifically, the Court resolved only specific
performance and accounting, leaving the issue the on partition
to this Office for resolution. This being the case, and considering
the foregoing, findings of facts and the law applicable herein, we
cannot see our way clear why the whole area of 125.5 hectares
of the disputed fishpond should be held solely by the appellees
on lease.
The Secretary therefore ordered in his decision that
IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, the
letter-order of the Fisheries Commissioner dated January 4,
1968 is hereby declared without force and effect; that the area
of 125.5 hectares covered by FP No. F-1250-F in the name of
Roberto Doromal should be divided into two equal parts in such
a manner that the parties should share equally both the
developed and the undeveloped portions including the portions
leased to third parties which leases are hereby also declared
without force and effect. Appellees are hereby directed to render
an accounting of rentals paid by them and of all expenses
incurred as fees, surcharges and the like and in the development
or improvement of and all income received from the fishpond
from the date the last accounting per the decision in Civil Case
No. 3107 was complied with up to the date when the partition
herein ordered shall be actually effected and all such rentals,
expenses and income shall be divided and/or shared equally by
both parties. The District Fisheries Officer concerned is hereby
1
directed to effect the partition if the parties herein cannot come
to an agreement as to the manner thereof.
Not content therewith, respondents Doromals appealed the
Secretary's adverse decision to the Office of the President.
Under date of February 27, 1970, said Office thru Honorable
Ponciano G. A. Mathay as Acting Assistant Executive Secretary
and acting by authority of the President, rendered its decision
which "dismiss(ed) the instant appeal and affirm(ed) the
decision appealed from." 5
The Office of the President once again rejected as "untenable"
and "deserving of scant consideration" respondents' repetitious
contention of abandonment and loss by petitioner of his
partnership rights to the fishpond as a result of the Davao court
judgment, as follows:
In support of their appeal, the Heirs of Roberto Doromal contend
that the Secretary of Agriculture and Natural Resources erred in
ordering partition and accounting, since the court's decision in
Civil Case No. 3107 had settled and put to finality the rights of
the parties over the fishpond area. This contention is untenable.
It appears that what the court ordered was merely the specific
performance and accounting of profits because of the breach of
partnership agreement between Amado Lacuesta and Roberto
Doromal over the fishpond area. However, it did not touch on,
and in fact disclaimed jurisdiction over, the issue of partition of
the fishpond area, the reason therefor being that the same is still
government land.
Indeed, jurisdiction over public lands, including subject fishpond
area is vested in the Secretary of Agriculture and Natural
Resources the Public Land Act and the Fisheries Act (Director
of Lands vs. Abordo, 74 Phil. 44; Francisco vs. Rodriguez, 99
Phil. 1033), and over such lands the courts of justice have no
jurisdiction (Francisco vs. Verdadero, CA-G.R. No. 16421-R,
May 30, 1959). It is axiomatic that the court must have
jurisdiction over the subject matter or parties in order that its
decision may operate as a valid adjudication of the controversy
(2 Moran 321, citing Gotamco vs. Chan Seng, 46 Phil 523).
xxx xxx xxx
Finally, appellants maintain that the appealed decision would
honor and still recognize the partnership agreement which was
terminated by the decision of the court in Civil Case No. 3107.
In other words, then allege that with the return, as ordered by
the court, to the Lacuesta couple of the amount contributed by
them in the partnership, the latter have no more right over the
fishpond area and the former, by virtue of their fishpond permit,
are the only ones entitled thereto. This proposition deserves
scant consideration. The court, it is noted, recognized the
validity and enforceability of the agreement between Amado
Lacuesta and Roberto Doromal in fact, it decided the issues on
specific performance and accounting but left that on partition of
the fishpond area to the Department of Agriculture and Natural
Resources for resolution because the same was still a part of
the public domain. The appealed decision of the Secretary of
Agriculture and Natural Resources is a logical consequence of
the court decision that, while partition of the fishpond area is a
proper relief for Amado Lacuesta, only land authorities can grant
such relief. Hence, there is really no merit in the contention of
the Heirs of Roberto Doromal that the Secretary of Agriculture
and Natural Resources exceeded his jurisdiction or abused his
discretion in rendering the appealed decision. 6
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
Undaunted, respondents (as petitioners below) then filed on
December 8, 1970 a petition for certiorari and injunction
docketed as Civil Case No. 81623 of respondent judge's court 7
wherein they prayed that the decisions of the Office of the
President and of the Secretary of Agriculture and Natural
Resources in favor of petitioner be annulled "for having been
rendered without and/or in excess of jurisdiction and/or with
grave abuse of discretion and contrarily to law and public policy
and vitiated by mistake" and for a writ of preliminary injunction
against enforcement of said decisions.
Respondent court required petitioner to answer respondents'
petition and after a summary hearing and receiving the parties'
memoranda issued on March 7, and March 29, 1971 its order
and writ of preliminary injunction 8 against the enforcement of
the administrative decisions rendered in favor of petitioner, by
virtue of its inclination to respondents' oft-repeated view that the
Davao court judgment adjudicated the partnership as terminated
and petitioner thereby lost all right to claim his half of the
fishpond area.
Hence, the petition at bar for certiorari and prohibition. The Court
per its resolution of June 22, 1971 required respondents to
answer the petition and ordered the issuance of a preliminary
injunction against respondent court's questioned preliminary
injunction order and writ upon a P5,000-bond.
Petitioner filed his memorandum in lieu of oral argument and the
case was deemed submitted for decision on February 11, 1972,
after respondents without explanation of any sort failed to file
their memorandum notwithstanding seven extensions
requested by their counsel and granted by the Court.
The Court finds the petition to be meritorious. A mere reading of
the facts and findings of record which are undisputed by
respondent and of the legal basis of the Secretary's action and
decision in dividing the fishpond area into two equal parts (both
developed and undeveloped portions) and awarding one-half
thereof to petitioner as a recognized partner entitled thereto in
the exercise of his jurisdiction over lands of the public domain, 9
as sustained on appeal by the Office of the President which
expressly found no abuse of discretion on the Secretary's part
in rendering the decision, supra, 10 suffices to show that
respondent court exceeded its authority and acted with grave
abuse of discretion in issuing the questioned injunction in
derogation of the administrative authority legitimately exercised
by said officials.
As stressed in Deluao vs. Casteel, 11 "(I)n this jurisdiction, the
Secretary of Agriculture and Natural Resources possesses
executive and administrative powers with regard to the survey,
classification, lease, sale or any other form of concession or
disposition and management of the lands of the public domain,
and, more specifically, with regard to the grant or withholding of
licenses, permits, leases and contracts over portions of the
public domain to be utilized as fishponds. Thus, we held in Pajo,
et al., vs. Ago, et al. (L-15414, June 30, 1960), and reiterated in
Ganitanao vs. Secretary of Agriculture and Natural Resources,
et al., (L-21167, March 31, 1966), that
"... (T)he powers granted to the Secretary of Agriculture and
Commerce (Natural Resources) by law regarding the disposition
of public lands such as granting of licenses, permits, leases, and
contracts, or approving, rejecting, reinstating, or cancelling
applications, or deciding conflicting applications, are all
executive and administrative in nature. It is a well-recognized
2
principle that purely administrative and discretionary functions
may not be interfered with by the courts (Coloso v. Board of
Accountancy, G. R. No. L-5750, April 20, 1953). In general,
courts have no supervising power over the proceedings and
actions of the administrative departments of the government.
This is generally true with respect to acts involving the exercise
of judgment or discretion, and findings of fact. (54 Am. Jur. 558-
559). Findings of fact by an administrative board or official,
following a hearing, are binding upon the courts and will not be
disturbed except where the board or official has gone beyond
his statutory authority, exercised unconstitutional powers or
clearly acted arbitrarily and without regard to his duty or with
grave abuse of discretion ..."
The main prop of respondents' contention before respondent
court that the Davao court judgment adjudicated the partnership
between the principal parties as terminated and petitioner has
no more right to the fishpond area was succinctly correctly
disposed of by the Office of the President when it pointed out
that "the court ... recognized the validity and enforceability of the
partnership agreement between Amado Lacuesta and Roberto
Doromal in fact, it decided the issues on specific performance
and accounting but left that on partition of the fishpond area to
the Department of Agriculture and Natural Resources for
resolution because the same was still a part of the public
domain."
Even assuming arguendo that the Davao court's judgment
terminated the partnership between the parties, the DANR
Secretary administratively acted within the legitimate exercise of
his authority over public lands in considering in effect that
Doromal's original fishpond permit application, although
obtained solely in his name contrary to his agreement with
petitioner, was in fairness and equity deemed to be held in trust
for both of them, and in consequently granting petitioner's
protest and awarding him one-half of the fishpond area.
The petition must therefore be granted on the strength of the
established doctrine that where as in the case at bar there is no
showing that there was fraud, collusion, arbitrariness, illegality,
imposition or mistake on the part of the Office of the President
or a department head, (such as the Secretary of Agriculture and
Natural Resources in the present case), in rendering their
questioned decisions or of a total lack of substantial evidence to
support the same, such administrative decisions are entitled to
great weight and respect and will not be interfered with by the
courts. 12
With the disposition of the case on this decisive issue, the Court
deems it unnecessary to pass upon the other issue raised by
petitioner questioning the jurisdiction of respondent court to
issue the injunction writ to be enforced against acts to be
performed outside its territorial boundaries. 13
ACCORDINGLY, the petition for a writ of certiorari is granted
and the questioned injunction order and writ of respondent court
dated March 7, 1971 and March 29, 1971, respectively, are
hereby annulled and set aside; and respondent court is directed
to dispose of the case below in accordance with the settled
doctrine of non-interference by the courts with decisions of
executive and administrative officials as stated in the Court's
opinion. With costs against private respondents.
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
EVANGELISTA v. JARENCIO
G.R. No. L-29274 November 27, 1975
FACTS:
This is an original action for certiorari and prohibition with
preliminary injunction, under Rule 65 of the Rules of Court,
seeking to annul and set aside the order of respondent Judge,
the Honorable Hilarion J. Jarencio, Presiding Judge of the Court
of First Instance of Manila, dated July 1, 1968, in Civil Case No.
73305, entitled "Fernando Manalastas vs. Sec. Ramon D.
Bagatsing, etc
Pursuant to his special powers and duties under Section 64 of
the Revised Administrative Code, the President of the
Philippines created the Presidential Agency on Reforms and
Government Operations (PARGO) under Executive Order No. 4
of January 7, 1966. Purposedly, he charged the Agency with the
following functions and responsibilities:
 To investigate all activities involving or affecting
immoral practices, graft and corruptions, smuggling (physical or
technical), lawlessness, subversion, and all other activities
which are prejudicial to the government and the public interests,
and to submit proper recommendations to the President of the
Philippines.
 To investigate cases of graft and corruption and
violations of Republic Acts Nos. 1379 and 3019, and gather
necessary evidence to establish prima facie, acts of graft and
acquisition of unlawfully amassed wealth ... .
 To receive and evaluate, and to conduct fact-finding
investigations of sworn complaints against the acts, conduct or
behavior of any public official or employee and to file and
prosecute the proper charges with the appropriate agency.
For a realistic performance of these functions, the President
vested in the Agency all the powers of an investigating
committee under Sections 71 and 580 of the Revised
Administrative Code, including the power to summon witnesses
by subpoena or subpoena duces tecum, administer oaths, take
testimony or evidence relevant to the investigation.
Whereupon, on June 7, 1968, petitioner Quirico Evangelista, as
Undersecretary of the Agency, issued to respondent Fernando
Manalastas, then Acting City Public Service Officer of Manila, a
subpoena ad testificandum commanding him "to be and appear
as witness at the Office of the PRESIDENTIAL AGENCY ON
REFORMS AND GOVERNMENT OPERATIONS ... then and
there to declare and testify in a certain investigation pending
therein."
ISSUE: Whether the Agency, acting thru its officials, enjoys the
authority to issue subpoenas in its conduct of fact-finding
investigations.
HELD: YES. It has been essayed that the life blood of the
administrative process is the flow of fact, the gathering, the
organization and the analysis of evidence. Investigations are
useful for all administrative functions, not only for rule making,
adjudication, and licensing, but also for prosecuting, for
supervising and directing, for determining general policy, for
recommending, legislation, and for purposes no more specific
than illuminating obscure areas to find out what if anything
should be done. An administrative agency may be authorized to
make investigations, not only in proceedings of a legislative or
judicial nature, but also in proceedings whose sole purpose is to
obtain information upon which future action of a legislative or
judicial nature may be taken and may require the attendance of
3
witnesses in proceedings of a purely investigatory nature. It may
conduct general inquiries into evils calling for correction, and to
report findings to appropriate bodies and make
recommendations for actions.
We recognize that in the case before Us, petitioner Agency
draws its subpoena power from Executive Order No. 4, para. 5
which, in an effectuating mood, empowered it to "summon
witness, administer oaths, and take testimony relevant to the
investigation" with the authority "to require the production of
documents under a subpoena duces tecum or otherwise,
subject in all respects to the same restrictions and qualifications
as apply in judicial proceedings of a similar character." Such
subpoena power operates in extenso to all the functions of the
Agency as laid out in the aforequoted sub-paragraphs (b),(e),
and (h). It is not bordered by nor is it merely exercisable, as
respondents would have it, in quasi-judicial or adjudicatory
function under sub-paragraph (b). The functions enumerated in
all these sub-paragraphs (b), (e), and (h) interlink or intertwine
with one another with the principal aim of meeting the very
purpose of the creation of the Agency, which is to forestall and
erode nefarious activities and anomalies in the civil service. To
hold that the subpoena power of the Agency is confined to mere
quasi-judicial or adjudicatory functions would therefore imperil
or inactiviate the Agency in its investigatory functions under sub-
paragraphs (e) and (h). More than that, the enabling authority
itself (Executive Order No. 4, para. 5) fixes no distinction when
and in what function should the subpoena power be exercised.
Similarly, We see no reason to depart from the established rule
that forbids differentiation when the law itself makes none.
There is no doubt that the fact-finding investigations being
conducted by the Agency upon sworn statements implicating
certain public officials of the City Government of Manila in
anomalous transactions fall within the Agency's sphere of
authority and that the information sought to be.
G.R. No. L-41754 February 27, 1976
AUSTIN HARDWARE COMPANY, INC., and ALL STEEL
PRODUCTS, INC., petitioners,
vs.
THE COURT OF APPEALS, ELENITA H. MANZANO and
FRANCISCO INOCENCIO, respondents.
Antonio Gaw & Associates and Edit Barot for petitioners.
Vicente Raul Almacen for private respondents.
ANTONIO, J.:
The basic issue in this petition for certiorari and prohibition is
whether or not the respondent Court of Appeals acted in excess
of its jurisdiction in enjoining the respondent judge "from
continuing with the proceedings in Civil Case No. 19233",
(Austin Hardware Company, Inc., et al. vs. The Mayor of San
Juan, defendant, and Elenita H. Manzano, et al., intervenors)
and the private respondents (Austin Hardware Company, Inc.,
et al) "from continuing the construction of a commercial house
from maintaining a hardware business and a factory for the
manufacture of steel products at or in the vicinity of No. 115 L.K..
Santos St., San Juan, Rizal" and in declaring them in contempt
for disregarding such order.
The instant petition is premised upon the following allegations:
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
On September 9, 1969, the Mayor of San Juan, Rizal issued a
business license and/or permit authorizing petitioner Austin
Hardware Company, Inc. to engage in the business of general
hardware manufacture at No. 115 Lope K. Santos St., San Juan,
Rizal. On July 7, 1970, said Mayor issued a business license
indorse permit authorizing All Steel Products, Inc. to engage in
the business of manufacturing steel products, also at No. 115
Lope K. Santos St., San Juan, Rizal. In accordance with the
licenses thus issued, petitioners Austin Hardware Company,
and All Steel Products, Inc. have been engaged in the business
therein described, and to maintain the same they had, of the
year 1974, in good faith invested considerable amounts s
capital.
On September 19, 1973, the Parents-Teachers Association of
Pedro Cruz Elementary School addressed a letter to the Mayor
of San Juan, Rizal, alleging that the operations of the two
petitioners produce nuisance, by reason of the facts that (1)
Lope K. Santos being a very narrow street, the heavy trucks by
petitioners cause a traffic jam thereon and the blowing of horns
disturbs the classes going on in the school; (2) the unloading of
steel bars creates much noise detrimental to the pupils learning;
(3) the shop already in operation emits a foul odor, causing air
pollution dangerous to the pupils' health; and (4) it is possible
that chemicals and other combustible materials are stored inside
the factory, which materials constitute fire lizards to the school
and other nearby residential houses.
On September 20,1973, a number of residents of L.K.. Santos
Basa Streets and the Fernandez Compound likewise addressed
a letter of the same tenor to the Mayor, further stating therein
that the drainage system of petitioners' compound is faulty thus
causing seepage of liquid into the neighborhood, and that the
warehouse causes so much noise even at nightime, by reason
of the machineries therein installed, that restlessness is caused
in the community.
On September 26, 1973, private respondent Elenita H. Manzano
wrote a similar letter to the Mayor, also complaining of the
alleged nuisance.
The Mayor of San Juan, Rizal, acting upon the aforesmentioned
complaints, referred the matter to the Municipal Engineer and to
the Municipal Health Officer. The matter was likewise referred
by the Mayor to the Municipal Council for investigation, on the
basis of its power "to declare and abate nuisances" in
accordance with Section 2242(h) of the Revised Administrative
Code. In turn, the Council, by Resolution No. 228, dated October
25, 1973, referred the same to the National Pollution Control
Commission for verification. In their reports dated November 27
and 28, 1973, the senior mechanical engineer and another
mechanical engineer of the Commission stated that, with
respect to Austin Hardware, the "noise level created by the
loading and unloading of steel sheets was 56db's, which is
considered normal in a residential area", and that, with respect
to All Steel Products, Inc., "sampling the noise level conducted
at the complaint's house and located at the back of the firm's
residential area." They, however, remarked that "although at the
time of the inspection, the noise level was normal — it is
apparent that the noise created during actual construction would
be above normal. Added to this would be the noise resulting
from the operation of the machine shop, mainly coming out from
the building openings at the upper walls of the All Steel Products
Shop." They recommended that the "municipality should be very
careful in issuing building permits specially for structures that will
4
be used for industrial or manufacturing purposes, that will be
located in residential areas."
On February 13, 1974, the Municipal Council rendered its
decision on the matter, the dispositive portion of which decision
reads as follows:
IN VIEW OF ALL THE FOREGOING, this Council in Session
Assembled, holds;
1. That the license and/or permit to operate the Austin
Hardware Co., Inc. should be as it is hereby declared valid, legal
and subsiiisting; and
2. That the Municipal Mayor should cancel and/or revoke
the license and/or permit to operate the manufacturing activities
of the Austin Hardware Co., Inc. and the All Steel Products, Inc.
as the chief executive officer of the municipal government
pursuant to his duties under Section 2194 of the Revised
Administrative Code to see to it that the laws are faithfully
executed.
Accordingly, the Mayor addressed a letter to the petitioners,
advising them that:
By virtue of the Decision of the Municipal Council, dated
February 13, 1974, the licenses-permits issued in your favor to
establish and, operate manufacturing activities, at the premises
complained of, to wit:
(a) Application for Business License of Austin Hardware
Co., approved on September 8, 1969, as general hardware
manufacturer;
(b) Application for Business License of All Steel Products,
Inc., approved on July 7, 1970, as manufacturer of steel
products; and
(c) Permit to operate (No. JR-73-1145) issued to All Steel
Products, Inc., dated January 31, 1973, for steel manufacturing,
is/are hereby cancelled and/or revoked and, therefore, without
force and effect, after five (5) days from receipt hereof.
Please be guided accordingly.
Two motions for the reconsideration of the revocation having
been denied by the Mayor, petitioners filed an ordinary action
for injunction in the Court of First Instance of Rizal (Civil Case
No. 19233), alleging among others, that the revocation of their
licenses or permits violated the requirements of procedural due
process because the investigation which led to the revocation of
their licenses/permits was not to determine the presence of a
ground for revocation, namely, violation of a zonification
ordinance of San Juan, but an alleged nuisance produced by
their operations.
Upon application of petitioners, the Court of First Instance,
presided over by Judge Gregorio G. Pineda, issued a restraining
order enjoining the. Mayor of San Juan "and all municipal
officers, their agents, representatives and/or persons acting
upon their orders or in their place and stead from enforcing or
implementing the order of defendant Mayor revoking the
building permit and stopping the construction of Austin
Hardware's warehouse or bodega at No. 115 L.K.. Santos Street
... or in any manner or form interfering with the construction of
said hardware or bodega" The writ was subsequently amended
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
to further restrain the officials concerned "from enforcing or
implementing the order of defendant Mayor revoking their
business as hardware and steel products manufacturers."
Private respondents intervened in the above-named case and
filed therein a motion to lift the restraining order but the same
was denied by the court in an order dated September 5, 1974.
A motion for reconsideration of said order was likewise denied.
Thereupon, private respondents filed a petition for certiorari and
prohibition in the Court of Appeals, docketed as CA-G.R. No.
03932-SP, entitled "Elenita H. Manzano and Francisco
Inocencio, etc. vs. Hon. Gregorio G. Pineda, Austin Hardware
Company, Inc., and All Steel Products, Inc.", praying for a writ
of preliminary injunction restraining respondent judge from
continuing with the proceedings in Civil Case No. 19233, and,
after due hearing, declaring the writ of injunction permanent,
ordering the dismissal of Civil Case No. 19233, setting aside as
null and void all the proceedings thereon, and such other relief
as may be just and equitable under the premises.
On March 17, 1975, in accordance with its resolution issued on
the same day, the Court of Appeals issued the writ of preliminary
injunction complained of in this petition, which enjoined "the
respondent Judge from continuing with the proceedings in Civil
Case No. 19233, and the private respondents from continuing
the construction of a commercial house and from maintaining a
hardware business and a factory for the manufacture of steel
products at or in the vicinity of No. 115 L.K. Santos St., San
Juan, Rizal, until further orders."
On March 19, 1975, private respondents filed a petition in the
appellate, court citing petitioners for contempt. The petition for
prohibition and certiorari, as well as the petition to cite petitioners
for contempt, was orally argued on April 16, 1975. During the
hearing, petitioners raised the issue that the restraining order
should not have included the stopping of their hardware
business, since Austin Hardware's license to operate a
hardware store with storage facilities is not involved in Civil Case
No. 19233 because neither the Municipal Council nor the Mayor
of San Juan, Rizal, cancelled or revoked it.
The Appellate Court in its resolution of August 19, 1975, found
petitioners' contention devoid of merit, declared them guilty of
contempt and imposed upon them a fine of P500.00.
I
We find the petition without merit.
The Appellate Court's action is based on the following:
Careful examination of their pleadings and annexes do not
clearly bear private respondents' pretensions. The maintenance
of a hardware store is squarely dismissed by defendants in
intervention in the basic case (Par. 6, sub-par. 2, Answer in
Intervention, Page 31, Records), while the construction of a
bodega or warehouse or storage facilities was raised by no less
than private respondents themselves-in their 2nd cause of
action (page 150, Records) in Civil Case No. 19233, in their
petition for the reconsideration of Exhibit '13', to include the
construction of a warehouse (p. 154, Records). Similarly, the
Annexes '2' to '7' and '9' to their Additional Comment found on
pages 193-194 of Records refer to a Mayor's Permit but say
nothing about a limit to operate a hardware store. The Mayor's
Permit which the records yield is that found on page 87 of the
records introduced as Annex to Intervenor's Motion for
5
Reconsideration which bears Permit No. 309-5-69, dated
January 15, 1969, expiring on December 31, 1969.
On their part, the petitioners opposed any amendment to the
preliminary injunction alleging that private respondents' claim of
having a license to operate a hardware store with store facilities
from their interpretation of the decision of the Municipal council.
The fact, however, is that said decision merely mentioned
payment of a business permit from 1966, which was never
exhibited to the Municipal Council. Noteworthy also is the fact
that license fees for storage facilities began, as stated in same
decision, only in 1970, thereby supporting the petitioners'
contention that Austin Hardware was using just one permit —
that one approved on September 8, 1969 — which was for a
general hardware manufacturer.
As We have stated, the Deputy Clerk of Court of the Division,
Atty. Catalina C. Buena, accompanied by the lawyers of both
parties, was ordered to repair to the premises to verify whether
or not the steel production has been stopped and report her
findings to the Court. Here are the observations of the Deputy
Clerk of Court:
OBSERVATIONS —
1. More than twenty (20) machines still connected and
plugged to power source;
2. All fuse boxes of said machines on 'ON' position
indicating that machines were ready for use;
3. Some machines had steel rods mounted on them
indicating that machine work was going on before we arrived;
4. Steel filings and copper filings, new — (evidenced lack
of rust on steel and shiny sheen of be the copper and steel
filings;
5. One heavy drill had a piece of work mounted and the
manager admitted they had worked on that (in-Ride new
building);
6. Acetylene and oxygen tanks inside new warehouse
and inside the shop were all plugged to electrical connections;
7. The stripper machine inside new warehouse had a
steel plate mounted and a stripped plate beside it and metal was
still hot;
8. Steel bars on floor just Painted, smell of paint strong.
Questioned by undersigned were several laborers seated
resting outside the new warehouse, namely:
1. Adolfo Ehen Dionisio Ng, Gomer Abad, who limited
they were welding that morning,
2. Alejandro Cabasa, Crispulo Colomba and Leodegario
de los Reyes — helpers and machinists in shop who admitted
working on the shop in the morning,
3. Romeo de los Reyes — who claimed he was a the
delivery truck.
xxx xxx xxx
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
At two (2:00) p.m., after lunch and before returning to the court
the undersigned requested Mrs. Manzano to bring her back to
the premises. Upon arrival at the compound, even while in the
street yet, the undersigned heard a loud disturbing noise she
could feel a strong vibration coming from a machine i the new
warehouse.
Upon verification, she saw a forklift in operation, lifting the
painted metal rods and/or steel bars or metal bars and lowering
them at another place. While operating the forklift emanated a
loud disturbing noise while the movement of the forklift as well
of the falling of the long bars on the place where its transferred
caused strong vibrations.
Inside the machine shop — at the back portion thereof, three
laborers were operating a machine attached to a big ' acetylene
tank welding a big metal or steel part; three (3) others were
around another machine which was apparently to start work
thereon while a Chinese was tinkering with another machine
which was also plugged on.
The laborers in the middle bodega were just moving about to
start work but undersigned did not same the machine there
being operated.'
xxx xxx xxx
On these findings the representative of the Court made the
following remarks in her report:
REMARKS
1. Definitely there is evidence that the steel
manufacturing operations of private respondents were being
continued even up to the morning of the date of 'said hearing
and were in the afternoon of said date;
2. That even the hardware business and bodega of
private respondent cannot be carried out without causing too
much noise and disturbance AS the goods stored therein are so
huge that they cannot be moved without the use of big machines
like a forklift or enormous lifting chains (like those used by boats
for anchorage) which produces disturbing loud noises and
strong vibrations while in operation. The undersigned also notes
that said parts and metals cannot be taken in and out of the
compound except in big trucks — for besides being very heavy
they are either very long or very wide.
The foregoing facts prove that notwithstanding the restraining
order and the injunction issued by this Court, private
respondents did not stop altogether operating their
manufacturing business. The observations of Atty. Buena that
she found —
1. About twenty (20) big machines were plugged in to
electrical connections with their individual switches open;
2. The presence of scrap of iron on the flooring of the
cutting machines showing recent use of said machines;
3. The presence of another machine for cutting and/or for
boring holes in metals in the middle of the bodega or warehouse
and which was plugged into a long extension electrical wire;
4. The presence of steel plates cut into strips with the use
of acetylene and oxygen cutters by the side of a stripper
6
machine which was still connected with acetylene and oxygen
tanks nearby, and the steel strips still hot, showing that laborers
had just worked on them upon their arrival;
5. The fact that upon returning to the premises after lunch
the investigator heard a loud disturbing noise and could feel a
strong vibration coming from a machine inside the warehouse
even while they were yet in the street;
6. The fact that a forklift was in operation lifting newly
painted rods and/or steel bars and lowering them at another
place causing a loud disturbing noise with strong vibration in the
premises and inside the warehouse, a machine attached to the
acetylene tank welding a big metal was being operated by 3
laborers while 3 others around another while were about to start
working on it, and a Chinese was tinkering with another machine
that was also plugged in;
show beyond doubt that private respondents have not complied
with the injunction issued by this Court.
Moreover, it is admitted that respondents have continued to
operate a hardware store with storage facilities. But as found
out, machineries were also installed in that store and warehouse
which were undoubtedly in operating during the ocular
inspection. If in the operation of a hardware store private
respondents must also operate house machineries as found out,
then with greater reason, the order of injunction should apply to
the said business. It must be noted that the writ clearly enjoins
the respondents ... from continuing the construction of a
commercial house and from maintaining a hardware business
and a factory for the manufacture of steel products ... .' This
order is so worded specifically mentioning a hardware business
to be included in its restriction. The private respondents tried to
justify their continuing operation of a hardware store with
storage facilities with the excuse that the permit to run store was
never nullified by the decision of the Municipal Council of San
Juan, Rizal. The petitioners disagree and impute that private
respondents were probably misled by the wordings of the
decision of the Municipal Council. Considering that no separate
permit for the operation of a hardware store was exhibited by
private respondents, and that the various receipts of payments
presented by private respondents do not show that they were in
payment of a license or permit to run a hardware store, we are
inclined to agree with the petitioners. Moreover if private
respondents ever had a license to operate a hardware store, the
new zonification ordinance of the town of San Juan Rizal shall
have nullified said permit.
We therefore find that the petition to cite private respondents for
contempt is meritorious. They have not stopped running their
store in which machines were found in operation. They try to
justify their operations by saying that their right to operate a
hardware is not covered by the injunction. The injunction order
has been received them. If they failed to get the exact scope of
the injunction, they should have addressed themselves to this
Court for a clarification of the order, or for an amendment
thereof, as they subsequently did. Instead they have willfully
disobeyed a legal order of this Court.
The afore-mentioned findings are neither based on speculation
nor on a misapprehension of facts, but on substantial evidence.
This Court has consistently respected, with some few
exceptions, the findings of fact of the Court of Appeals. Such
exceptions do not obtain here. 1
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
II
The power to license necessarily carries with it the authority to
provide reasonable terms and conditions under which the
licensed business shall be conducted. The authority which
grants the license always retains the power to revoke it, "either
for cause of forfeiture or upon a change of policy and legislation
touching the subject. 2 In the case at bar, the permit to the Austin
Hardware Company, Inc. and the All Steel Products, Inc. was
granted subject to the provisions of existing ordinances.
Likewise, petitioners' permit to construct a warehouse at 115
L.K. Santos St., San Juan, Rizal was subject to the condition
that its construction or use will not conflict with the provisions of
the zoning ordinance, otherwise the construction will be
removed by the government at the expense of the permitee or
licensee.
It is not disputed that the business establishments of petitioners
were situated within the residential zone and, therefore, the
issuance of a license or permit in favor of the petitioners appears
violative of Section 2 of Municipal Ordinance No. 90, Series of
1968, of San Juan, which provides that "No building permit,
business license, or any other certificate of approval shall be
issued by the municipality for commercial or industrial
establishments which shall be erected, operated, and
maintained within any residential zone, unless the site has been
or so declared as commercial or industrial zone in the municipal
council." It is precisely for this reason that the Municipal Mayor
of San Juan cancelled or revoked (a) the business license of the
Austin Hardware Company, Inc. dated September 8, 1969 as
general hardware manufacturer; (b) the business license of the
All Steel Products, Inc. dated July 7, 1970 as manufacturer of
steel products; and (c) the permit to operate issued ' to All Steel
Products, Inc. dated January 31, 1973 for steel manufacturing.
Since the obvious purpose of zoning is the protection of public
safety, health, convenience and welfare, it would have been
inconsistent with such purpose to have allowed the operation of
petitioners' manufacturing business in a residential zone.
It is true that petitioners insist that they have a separate permit
to operate the business of hardware store, but as found by the
Court of Appeals, no separate permit for the operation of a
hardware store was shown by them and that the various receipts
of payments presented by petitioners do not show that they were
in payment of a license or permit to run a hardware store. On
the contrary, as shown by the joint manifestation of the
petitioners and the private respondents dated November 27,
1975, said parties admitted that in their conference with the
Municipal Mayor of San Juan, in the afternoon of November 22,
1975, "the Mayor informed them that he would maintain his act
of revoking the permits and/or licenses of the petitioners as
hardware and steel products manufacturers and that he had not
issued any Permit for the hardware store with storage facilities."
WHEREFORE, the petition for certiorari and prohibition is
hereby dismissed and, accordingly, the writs prayed for denied,
with costs against the petitioners.
7
COMPANIA GENERAL DE TABACOS DE FILIPINAS vs.
THE BOARD OF PUBLIC UTILITY COMMISSIONERS
Facts:
COMPANIA GENERAL DE TABACOS DEFILIPINAS is a
foreign corporation organized under the laws of Spain and
engaged in business in the Philippine Islands as a common
carrier of passengers and merchandise by water: On June 7,
1915, the Board of Public Utility Commissioners issued and
caused to be served an order to show cause why they should
not be required to present detailed annual reports respecting its
finances and operations respecting the vessels owned and
operated by it, in the form and containing the matters indicated
by the model attached to the petition. They are ordered to
present annually on or before March first of each year a detailed
report of finances and operations of such vessels as are
operated by it as a common carrier within the Philippine Islands,
in the form and containing the matters indicated in the model of
annual report which accompanied the order to show cause
herein.
COMPANIA GENERAL DE TABACOS DEFILIPINAS denied
the authority of the board to require the report asked for on the
ground that the provision of Act No.2307 relied on by said board
as authority for such requirement was, if construed as conferring
such power, invalid as constituting an unlawful attempt on the
part of the Legislature to delegate legislative power to the board.
It is cumbersome and unnecessarily prolix and that the
preparation of the same would entail an immense amount of
clerical work."
ISSUE:
(1) Whether or not it is constitutional to require COMPANIA
GENERAL DETABACOS DE FILIPINAS to pass a detailed
report to the Board of Public Utility Commissioners of the
Philippine Islands?
(2) Whether the power to require the detailed report is strictly
legislative, or administrative, or merely relates to the execution
of the law?
HELD:
The order appealed from is set aside and the cause is returned
to the Board of Public Utility Commissioners with instructions to
dismiss the proceeding.
RULING:
The section of Act No. 2307 under which the Board of Public
Utility Commissioners relies for its authority, so far as pertinent
to the case at hand, reads as follows:
Sec. 16. The Board shall have power, after hearing, upon notice,
by order in writing, to require every public utility as herein
defined: (e) To furnish annually a detailed report of finances and
operations, in such form and containing such matters as the
Board may from time to time by order prescribe. The statute
which authorizes a Board of Public Utility Commissioners to
require detailed reports from public utilities, leaving the nature
of the report, the contents thereof, the general lines which it shall
follow, the principle upon which it shall proceed, indeed, all other
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
matters whatsoever, to the exclusive discretion of the board, is
not expressing its own will or the will of the State with respect to
the public utilities to which it refers.
Such a provision does not declare, or set out, or indicate what
information the State requires, what is valuable to it, what it
needs in order to impose correct and just taxation, supervision
or control, or the facts which the State must have in order to deal
justly and equitably with such public utilities and to require them
to deal justly and equitably with the State. The Legislature
seems simply to have authorized the Board of Public Utility
Commissioners to require what information the board wants. It
would seem that the Legislature, by the provision in question,
delegated to the Board of Public Utility Commissioners all of its
powers over a given subject-matter in a manner almost
absolute, and without laying down a rule or even making a
suggestion by which that power is to be directed, guided or
applied. The true distinction is between the delegation of power
to make the law, which necessarily involves a discretion as to
what shall be, and conferring authority or discretion as to its
execution, to be exercised under and in pursuance of the law.
The first cannot be done; to the latter no valid objection can be
made. The Supreme Court held that there was no delegation of
legislative power, it said: The Congress may not delegate its
purely legislative powers to a commission, but, having laid down
the general rules of action under which a commission shall
proceed, it may require of that commission the application of
such rules to particular situations and the investigation of facts,
with a view to making orders in a particular matter within the
rules laid down by the Congress. In section 20 (of the Commerce
Act),Congress has authorized the commission to require annual
reports.
The act itself prescribes in detail what those reports shall
contain. In other words, Congress has laid down general rules
for the guidance of the Commission, leaving to it merely the
carrying out of details
in the exercise of the power so conferred. This, we think, is not
a delegation of legislative authority. In the case at bar the
provision complained of does not law "down the general rules of
action under which the commission shall proceed." nor does it
itself prescribe in detail what those reports shall contain.
Practically everything is left to the judgment and discretion of the
Board of Public Utility Commissioners, which is unrestrained as
to when it shall act, why it shall act, how it shall act, to what
extent it shall act, or what it shall act upon. The Legislature, by
the provision in question, has abdicated its powers and functions
in favor of the Board of Public Utility Commissioners with respect
to the matters therein referred to, and that such Act is in violation
of the Act of Congress of July 1, 1902. The Legislature, by the
provision referred to, has not asked for the information which the
State wants but has authorized and board to obtain the
information which the board wants.
8
US vs TANG HO (1922) G.R. 17122
Facts:
At its special session of 1919, thePhilippine Legislature passed
Act No.2868, entitled "An Act penalizing themonopoly and
holding of, andspeculation in, palay, rice, and cornunder
extraordinary circumstances,regulating the distribution and
salethereof, and authorizing the Governor-General, with the
consent of the Councilof State, to issue the necessary rules
andregulations therefor, and making anappropriation for this
purpose"
Section 3 defines what shall constitute amonopoly or hoarding
of palay, rice orcorn within the meaning of this Act, butdoes not
specify the price of rice ordefine any basic for fixing the
price.August 1, 1919, the Governor-Generalissued a
proclamation fixing the price atwhich rice should be sold. Then,
onAugust 8, 1919, a complaint was filedagainst the defendant,
Ang Tang Ho,charging him with the sale of rice at anexcessive
price. Upon this charge, hewas tried, found guilty and
sentenced. The official records show that the Act wasto take
effect on its approval; that it wasapproved July 30, 1919; that
theGovernor-General issued hisproclamation on the 1st of
August, 1919;and that the law was first published onthe 13th of
August, 1919; and that theproclamation itself was first published
onthe 20th of August, 1919.
Issue:
WON the delegation of legislative powerto the Governor
General was valid.
Held:
By the Organic Law, all Legislative poweris vested in the
Legislature, and thepower conferred upon the Legislature
tomake laws cannot be delegated to theGovernor-General, or
anyone else. TheLegislature cannot delegate thelegislative
power to enact any law. The case of the United States
SupremeCourt, supra dealt with rules andregulations which
were promulgated bythe Secretary of Agriculture forGovernment
land in the forest reserve. These decisions hold that the
legislativeonly can enact a law, and that it cannotdelegate it
legislative authority. The line of cleavage between what is
andwhat is not a delegation of legislativepower is pointed out
and clearly defined.As the Supreme Court of Wisconsin says:
That no part of the legislative powercan be delegated by the
legislature toany other department of thegovernment, executive
or judicial, is afundamental principle in constitutionallaw,
essential to the integrity andmaintenance of the system of
government established by theconstitution.Where an act is
clothed with all theforms of law, and is complete in andof itself,
it may be provided that itshall become operative only uponsome
certain act or event, or, in likemanner, that its operation shall
besuspended. The legislature cannot delegate itspower to make
a law, but it can makea law to delegate a power todetermine
some fact or state of thingsupon which the law makes, or
intendsto make, its own action to depend.It must be conceded
that, after thepassage of act No. 2868, and before anyrules and
regulations were promulgatedby the Governor-General, a dealer
in ricecould sell it at any price, even at a pesoper "ganta," and
that he would notcommit a crime, because there would beno law
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
fixing the price of rice, and thesale of it at any price would not be
acrime. That is to say, in the absence of aproclamation, it was
not a crime to sellrice at any price. Hence, it must followthat, if
the defendant committed a crime,it was because the Governor-
Generalissued the proclamation. There was noact of the
Legislature making it a crimeto sell rice at any price, and without
theproclamation, the sale of it at any pricewas to a crime.When
Act No. 2868 is analyzed, it is theviolation of the proclamation of
theGovernor-General which constitutes thecrime. Without that
proclamation, it was no crime to sell rice at any price. In
otherwords, the Legislature left it to the solediscretion of the
Governor-General to saywhat was and what was not "any
cause"for enforcing the act, and what was andwhat was not "an
extraordinary rise inthe price of palay, rice or corn," andunder
certain undefined conditions to fixthe price at which rice should
be sold,without regard to grade or quality, alsoto say whether a
proclamation should beissued, if so, when, and whether or
notthe law should be enforced, how long itshould be enforced,
and when the lawshould be suspended. The Legislature didnot
specify or define what was "anycause," or what was "an
extraordinaryrise in the price of rice, palay or corn,"Neither did it
specify or define theconditions upon which the
proclamationshould be issued. In the absence of
theproclamation no crime was committed. The alleged sale was
made a crime, if atall, because the Governor-General issuedthe
proclamation. The act orproclamation does not say
anythingabout the different grades or qualities of rice, and the
defendant is charged withthe sale "of one ganta of rice at the
priceof eighty centavos (P0.80) which is aprice greater than that
fixed by Executiveorder No. 53."We are clearly of the opinion
and holdthat Act No. 2868, in so far as itundertakes to
authorized the Governor-General in his discretion to issue
aproclamation, fixing the price of rice, andto make the sale of
rice in violation of theprice of rice, and to make the sale of ricein
violation of the proclamation a crime,is unconstitutional and
void.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC.
petitioner, vs. HON. RUBEN D. TORRES, as Secretary of the
Department of Labor & Employment, and JOSE N.
SARMIENTO, as Administrator of the PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION, respondents. [G.R. No.
101279. August 6, 1992.]
FACTS:
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”. As a result of the department order DOLE,
through the POEA took over the business of deploying Hong
Kong bound workers.
The petitioner, PASEI, the largest organization of private
employment and recruitment agencies duly licensed and
authorized by the POEA to engage in the business of obtaining
overseas employment for Filipino land-based workers filed a
petition for prohibition to annul the aforementioned order and to
prohibit implementation.
9
ISSUES:
(1) whether or not respondents acted with grave abuse of
discretion and/or in excess of their rule-making
authority in issuing said circulars;
(2) whether or not the assailed DOLE and POEA circulars
are contrary to the Constitution, are unreasonable,
unfair and oppressive; and
(3) whether or not the requirements of publication and
filing with the Office of the National Administrative
Register were not complied with.
HELD: FIRST, the respondents acted well within in their
authority and did not commit grave abuse of discretion. This is
because Article 36 (LC) clearly grants the Labor Secretary to
restrict and regulate recruitment and placement activities, to wit:
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.
SECOND, the vesture of quasi-legislative and quasi-judicial
powers in administrative bodies is constitutional. It is
necessitated by the growing complexities of the modern society.
THIRD, the orders and circulars issued are however, invalid and
unenforceable. The reason is the lack of proper publication and
filing in the Office of the National Administrative Registrar as
required in Article 2 of the Civil Code to wit:
Art. 2. Laws shall take effect after fifteen (15) days following the
completion of their publication in the Official Gazatte, unless it is
otherwise provided;
Article 5 of the Labor Code to wit:
Art. 5. Rules and Regulations. — The Department of Labor and
other government agencies charged with the administration and
enforcement of this Code or any of its parts shall promulgate the
necessary implementing rules and regulations. Such rules and
regulations shall become effective fifteen (15) days after
announcement of their adoption in newspapers of general
circulation; and Sections 3(1) and 4, Chapter 2, Book VII of the
Administrative Code of 1987 which provide:
Sec. 3. Filing. — (1) Every agency shall file with the University
of the Philippines Law Center, three (3) certified copies of every
rule adopted by it. Rules in force on the date of effectivity of this
Code which are not filed within three (3) months shall not
thereafter be the basis of any sanction against any party or
persons. (Chapter 2, Book VII of the Administrative Code of
1987.)
Sec. 4. Effectivity. — In addition to other rule-making
requirements provided by law not inconsistent with this Book,
each rule shall become effective fifteen (15) days from the date
of filing as above provided unless a different date is fixed by law,
or specified in the rule in cases of imminent danger to public
health, safety and welfare, the existence of which must be
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
expressed in a statement accompanying the rule. The agency
shall take appropriate measures to make emergency rules
known to persons who may be affected by them. (Chapter 2,
Book VII of the Administrative Code of 1987).
Prohibition granted.
PHILIPPINE INTERNATIONAL TRADING CORPORATION vs.
ANGELES
G.R. No. 108461. October 21, 1996
Facts:
The Philippine International Trading Corporation, a government
owned and controlled corporation issued Administrative Order
No. SOCPEC 89-08-01 under which application to the PITC for
importation from the People’s Republic of China (PROC) must
be accompanied by a viable and confirmed Export Program of
the Philippine Products to China carried out by the importer
himself or through a tie-up with a legitimate importer from PROC
in an amount equivalent to the value of importation from PRC
being applied for, or simply at one-to one ratio.
Two domestic corporations, Remington and Firestone, both
applied for authority to import from PROC, which were granted,
but later on were withheld for failure to comply with the require
one to one ratio of import and export.
They filed a complaint asserting that the administrative order is
unconstitutional. The RTC ruled that the order was a restraint of
trade in violation of Section 1 and 19 of Article XII of the 1987
Constitution. PITC elevated the case to the Supreme Court.
Issue:
Whether or not Administrative Order No. SOCPEC 89-08-01 is
valid.
Ruling:
The order was not valid. The PITC is a line agency of the
Department of Trade and Industry which was the primary
coordinative, promotive, facilitative and regulatory arm of the
government for the country’s trade. The PITC as an integral part
of the DTI was given the task of the implementing the
departments’ program. It has the authority to issue the
questioned order and may legally exercise that authority under
the supervision of the DTI. The grant t quasi-legislative powers
in administrative bodies are not unconstitutional. It has become
necessary to create more administrative bodies to help in the
regulation of its activities. Because hey specializes in the field
assigned to them, they can deal and dispatch problems with
more expertise than the legislature or the courts of justice.
In sum, the PITC was legally empowered to issue the
Administrative Orders as a valid exercise of a power ancillary to
legislation; however, it does not imply that the order was valid.
First, it was never published, thus it is not effective. Second, the
same is inconsistent with the declared policy of the government
to then effect that it will develop and strengthen trade relations
with the PROC. Since the order was a unnecessary barrier to
trade, the same is not a valid exercise of its authority.
10
CEBU OXYGEN & ACETYLENE CO., INC. vs. SEC. DRILON Issue:

GR No. 82849, August 2, 1989 Whether or not an Implementing Order of the Secretary of Labor
and Employment (DOLE) can provide for a prohibition not
Facts: contemplated by the law it seeks to implement.
•Petitioner Cebu Oxygen & Acetylene Co., Inc. (COACO) Held: NO.
entered into a collective bargaining agreement (CBA) with the
union of its rank and file employees, Cebu Oxygen, Acetylene The Implementing Order cannot provide such prohibition.
and Central Visayas Employees Association (COAVEA),
covering the years 1986-1988, which grants salary increases to Ratio:
all regular covered employees during the 3 year effectivity of the
•RA No. 6640 does not prohibit the crediting of CBA anniversary
agreement.
wage increases.
•Salaries for 1st year (to be paid on Jan. 14, 1986) —P200 to
•Implementing rules cannot add or detract from the provisions of
each covered employee.
law it is designed to implement.
•Salaries for 2nd year (to be paid on Jan. 16, 1987) — P200 to
•And so, the implementing rules cannot provide for such a
each covered employee.
prohibition not contemplated by the law.
•Salaries for 3rd year (to be paid on Jan. 16, 1988) — P300 to
•Administrative regulations adopted under legislative authority
each covered employee.
should be in harmony with the provisions of the law, and should
•But if any mandated government wage adjustment or allowance be for the sole purpose of carrying into effect its general
increase is issued by way of legislation, decree or presidential provisions. The law cannot be expanded by such regulations.
edict from the specified date of payment to the next increase,
•An administrative act cannot amend an act of Congress.
the provided salary increases shall be credited as payment.
Furthermore, if the wage adjustment in any particular year will B. Marginal Issue:
be any higher than the salary increases provided in that
particular year, then the company shall pay the difference. Whether or not petitioner should have first appealed to the
Secretary of Labor before going directly to the Court.
On Dec. 14, 1987, Republic Act No. 6640 was passed,
increasing the minimum wage by 10 pesos per day for private Held:
sector employees and 11 pesos per day for non-agricultural
NO. Failure to exhaust administrative remedies cannot be
workers outside Metro Manila (Sec. 2, RA No. 6640).
considered fatal to this petition.
•The Secretary of Labor issued an Implementing Order which
Ratio:
prohibits the employer from crediting CBA anniversary wage
increases for purposes of compliance with Section 8 of RA No. •It is fundamental that in a case where only pure questions of
6640. law are raised, The doctrine of exhaustion of administrative
remedies cannot apply because issues of law cannot be
•Accordingly, petitioner credited the first year increase of
resolved with finality by the administrative officer.
P200.00 under the CBA and added the difference of P62.00 and
P31.00 to the monthly salary and the 13th month pay, •Appeal to the administrative officer of orders involving
respectively, of its employees from the effectivity of RA No. 6640 questions of law would be an exercise in futility since
on Dec. 14 1987 to Feb. 15, 1988 (a period of 2 months). administrative officers cannot decide such issues with finality.
The questions raised in this petition are questions of law. Hence,
•From Feb. 22 - Mar. 10, 1988, a Labor and Employment
the failure to exhaust administrative remedies cannot be
Development Officer conducted a routine inspection of
considered fatal to this petition.
petitioner’s establishment and alleged that petitioner committed
violations of the law, constituting underpayment of both basic C. Conclusion
wage (for the mentioned period of 2 months) and 13th month
pay (for the year 1987), representing 208 employees in the •Petition is hereby GRANTED.
aggregate amount of P131,248.00. Soon after, on April 7, 1988,
respondent Assistant Regional Director issued an Order •Section 8 of the rules implementing RA No. 6640 is hereby
instructing petitioner to said amount to its 208 employees. declared null and void in so far as it excludes the anniversary
wage increases negotiated under CBA’s from being credited to
•Petitioner protested the Order, bringing the case immediately the wage increase provided for under RA No. 6640. Decision is
to this Court with the argument that Section 8 of the rules immediately executory.
implementing the provisions of RA No. 6640, particularly the its
provision excluding anniversary wage increases from being V. Notes
credited to the wage increase, is null and void on the ground that
•Section 2, Republic Act No. 6640:
it unduly expands the provisions of the said law.IV.Issue/s and
HeldA. Principal

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ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
“Sec. 2. The statutory minimum wage rates of workers and
employees in the private sector, whether agricultural or non-
agricultural shall be increased by ten pesos (P10.00) per day,
except non-agricultural workers and employees outside Metro
Manila who shall receive an increase of eleven pesos (P11.00)
per day: Provided, That those already receiving above the
minimum wage up to one hundred pesos (P100.00) shall receive
an increase of ten pesos (P10.00) per day. Excepted from the
provisions of this Act are domestic helpers and persons
employed in the personal service of another.”
•Section 8, Implementing Order of Secretary of Labor and
Employment:
“Sec. 8. Wage Increase Under Individual/Collective
Agreements.
— No wage increase shall be credited as compliance with the
increase prescribes herein unless expressly provided under
valid individual written/collective agreements; and provided
further, that such wage increase was granted in anticipation of
the legislative wage increase under the act. Such increases
shall not include anniversary wage increase provided on
collective agreements.”
The rule of exhaustion of all administrative remedies before
resorting to court is not absolute except where the questions
involved are essentially judicial.
•Administrative remedies need not be exhausted where issue is
a purely legal and constitutional one.
THE PEOPLE OF THE PHILIPPINE ISLANDS and the HONG
KONG & SHANGHAI BANKING CORPORATION(HSBC) v.
JOSE VERA, Judge ad interim of the Court of First Instance of
Manila, and MARIANO CUUNJIENG
(65 Phil 56) November 16, 1937
FACTS:
- The criminal case, People v. Cu Unjieng was filed in the Court
of First Instance (CFI) in Manila,with HSBC intervening in the
case as private prosecutor.
- The CFI rendered a judgment of conviction sentencing Cu
Unjieng to an indeterminate penaltyranging from four years and
two months of prision correccional to eight years of prison
mayor.
(Jan. 8, 1934)- Upon appeal, it was modified to an indeterminate
penalty of from five years and six months of prison correccional
to seven years, six months and twenty-seven days of prison
mayor, butaffirmed the judgments in all other respects.
- Cu Unjieng filed a Motion for Reconsideration and four
successive motions for new trial whichwere all denied on
December 17, 1935. Final judgment was entered on Dec. 18,
1935. He filedfor certiorari to the Supreme Court but got denied
on Nov 1936. The SC subsequently denied Cu Unjieng’s petition
for leave to file a second alternative motion for reconsideration
or new trial,then remanded the case to the court of origin for
execution of judgment.
ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS
- Cu Unjieng filed an application for probation before the trial
court, under the provisions of Act4221 of the defunct Philippine
Legislature. He states he is innocent of the crime; he has
nocriminal record; and that he would observe good conduct in
the future.
- CFI Manila Judge Jose Vera set the petition for hearing for
probation on April 5, 1937.
- HSBC questioned the authority of Vera to hold such hearings
and assailed the constitutionalityof the Probation Act since it
violates the equal protection of laws and gives unlawful
andimproper delegation to provincial boards.
- Section 11 of Art 4221 states that the act shall only be applied
in those provinces wherein theprobationary officer is granted
salary not lower than provincial fiscals by respective
provincialboards.
- The City Fiscal of Manila files a supplementary petition
affirming issues raised by HSBC, arguingthat probation is a form
of reprieve, hence Act 4221 bypasses this exclusive power of
the Chief Executive.
- Hence this petition in the Supreme Court.
ISSUES:
1. Whether or not the constitutionality of Act 4221 has been
properly raised in these proceedings;
2. If in the affirmative, whether or not Act 4221 is constitutional
based on these three grounds:
a. It encroaches upon the pardoning power of the executive
b. It constitutes an undue delegation of legislative power
c. It denies the equal protection of the laws
HELD/RATIO:
1. Yes. Constitutional questions will not be determined by the
courts unless properly raised andpresented in appropriate cases
and is necessary to a determination of the case, lis
mota.Constitutionality issues may be raised in prohibition and
certiorari proceedings, as they may alsobe raised in mandamus,
quo warranto, and habeas corpus proceedings. The general rule
states that constitutionality should be raised in the earliest
possible opportunity (during proceedings ininitial/inferior courts).
It may be said that the state can challenge the validity of its own
laws, asin this case. The well-settled rule is that the person
impugning validity must have personal andsubstantial interest in
the case (i.e. he has sustained, or will sustain direct injury as a
result of itsenforcement). If Act 4221 is unconstitutional, the
People of the Philippines have substantialinterest in having it set
aside.
2.a. No. There exists a distinction between pardon and
probation. Pardoning power is solelywithin the power of the
Executive. Probation has an effect of temporary suspension,and
the probationer is still not exempt from the entire punishment
which the law inflictsupon him as he remains to be in legal
custody for the time being.
12
b. Yes. The Probation Act does not lay down any definite
standards by which theadministrative boards may be guided in
the exercise of discretionary powers, hencethey have the power
to determine for themselves, whether or not to apply the law
ornot. This therefore becomes a surrender of legislative power
to the provincial boards. Itis unconstitutional.
c. Yes. Due to the unwarranted delegation of legislative power,
some provinces maychoose to adopt the law or not, thus
denying the equal protection of laws. It is unconstitutional.
EMMANUEL PELAEZ vs AUDITOR GENERAL
15 SCRA 569 – Political Law – Sufficient Standard Test and
Completeness Test
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:
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).

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
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ESCASINAS, PAULA JANE DG.
ADMINISTRATIVE LAW CASE DIGESTS