10. CARPIO V. EXEC.

SECRETARY
Topic: ADMINISTRATIVE AGENCIES
Petitioners: ANTONIO M. CARPIO
Respondents: EXECUTIVE SECRETARY
Summary: Petitioner Carpio assails the constitutionality of RA 6975 which established the PNP and placed it
under the DILG. Carpio mainly argues that the Act derogated the power of control of the NAPOLCOM over
the PNP by vesting different powers in the local officials. The SC upheld the constitutionality of the act and
clarified that there is no usurpation of the power of control as the local executives merely act as representatives
of the NAPOLCOM.
DOCTRINE: It is a fundamentally accepted principle in Constitutional Law that the President has control of
all executive departments, bureaus, and offices. Equally well accepted, as a corollary rule to the control
powers of the President, is the "Doctrine of Qualified Political Agency".
o administrative functions of the Chief Executive are performed by and through the executive
departments acts of the Secretaries of such departments, performed and promulgated in the
regular course of business, are, unless disapproved or reprobated by the Chief Executive
presumptively the acts of the Chief Executive.
FACTS:

1. Pursuant to Sec. 61, Art. XVI, 1987 Constitution, Congress passed RA 6975 entitled “An Act
Establishing the Philippine National Police under a Reorganized Department of the Interior and
Local Government, and for other purposes”.
o It was approved by President Corazon Aquino on December 13, 1990 and took effect 15 days
after publication (Jan. 1, 1991)
2. Carpio as citizen, taxpayer and member of the Bar sworn to defend the Constitution, filed the petition
now at bar on seeking this Court's declaration of unconstitutionality of RA 6975 with prayer
for temporary restraining order.
3. He advances the view that RA 6975
✓ weakened the National Police Commission by limiting its power “to administrative control” over
the PNP
✓ thus, “control” remained with the Department Secretary under whom both the NPC and the PNP
were placed;

1 Article 12 Sec 6 The State shall establish and maintain one police force, which shall be national in scope and civilian in character, to be administered
and controlled by a national police commission. The authority of local executives over the police units in their jurisdiction shall be provided by law.
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 ✓ That Sec. 122 of RA 6975 constitutes an encroachment upon, the President of, executive control and
commander-in-chief powers
ISSUE: W/N RA 6975 is unconstitutional?
HELD/RATIO: NO
On the Constitutionality of RA 6975
• Carpio’s contention cannot be accepted based on the accepted principle in Constitutional Law that the
President has control of all executive departments, bureaus, and offices.
o This presidential power means the power of the President to alter or modify or nullify or set
aside what a subordinate officer had done in the performance of his duties and to substitute
the judgment of the former with that of the latter
• Also, the Doctrine of Qualified Political Agency supports the constitutionality of the RA
o The said doctrine is based on the fact that as the president cannot be expected to exercise his
control powers all at the same time and in person, he will have to delegate some of them to his
Cabinet members.
o Under this doctrine, which recognizes the establishment of a single executive, all executive and
administrative organizations are adjuncts of the Executive Department, the heads of the
various executive departments are assistants and agents of the Chief Executive, and the
acts of the Secretaries of such departments, performed and prmomulgated in the regular
course of business, are, unless disapproved or reprobated by the Chief Executive presumptively
the acts of the Chief Executive. (General Rule)
o except in cases where the Chief Executive is required by the Constitution or law to act in
person on the exigencies of the situation demand that he act personally, the executive and
administrative functions of the Chief Executive are performed by and through the executive
departments (Exceptions)
o In short, the President’s power of control is directly exercised by him over the members of
the Cabinet who, in turn, and by his authority, control the bureaus and other offices under
their respective jurisdictions in the executive department
• Hence, the circumstance that the NAPOLCOM and the PNP are places under the reogranized
Department of Interior and Local Government is merely an administrative realignment that would
bolster a system of coordination and cooperation among the citizenry, local executives and the
integrated law enforcement agencies and public safety agencies created under the RA.
• Consequently, the set-up laid down in the RA does not detract from the Constitutional mandate that the
national police force shall be administered and controlled by a national police commission.
Disposition: Petition dismissed.

2 Section 12. Relationship of the Department with the Department of National Defense. – During a period of twenty-four (24) months from the effectivity of this Act, the Armed Forces of
the Philippines (AFP) shall continue its present role of preserving the internal and external security of the State: Provided, That said period may be extended by the President, if he finds it
justifiable, for another period not exceeding twenty-four (24) months, after which, the Department shall automatically take over from the AFP the primary role of preserving internal security,
leaving to the AFP its primary role of preserving external security. However, even after the Department has assumed primary responsibility on matters affecting internal security, including the
suppression of insurgency, and there are serious threats to national security and public order, such as where insurgents have gained considerable foothold in the community thereby necessitating
the employment of bigger tactical forces and the utilization of higher caliber armaments and better armored vehicles, the President may, upon recommendation of the peace and order council,
call upon the Armed Forces of the Philippines to assume the primary role and the Philippine National Police (PNP) to play the supportive role in the area concerned.
In times of national emergency, all elements of the PNP, the Bureau of Fire Protection, and the Bureau of Jail Management and Penology shall, upon direction of the President, assist the Armed
Forces of the Philippines in meeting the national emergency.
The complementary relationship between the Department of the Interior and Local Government and the Department of National Defense in any of the preceding eventualities
shall be jointly prescribed by their respective Secretaries in a memorandum of agreement that shall thereafter be published and implemented.
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 NOTES
• As regards Sec. 84, SC held that there can be no interference with the President’s power of control because the Special
Oversight Committee is simply an ad hoc or transitory body, established and tasked solely with planning and
overseeing the immediate trnsfer, merger, and/or absorption into the DILG of the involved agencies.
o As an ad hoc body, its creation and the functions it exercises, decidedly do not constitute an encroachment and
in diminution of the power of control which properly belongs to the President. What is more, no executive
dpartment, bureau or office is places under the control or authority of the committee.
• SC also pointed out that under the Constitution, there are independent Constitutional Commissions namely: The Civil
Service Commission, Commission on Audit, and the Commission on Elections. Further, there is also an independent
office called the Commission on Human Rights.
o These independent Commissions and office perform functions and must be protected from external influences
and political pressures. Hence, they were made independent and not under any department of the government.
Certainly, they are not under the control of the President.
o The NAPOLCOM is different from these independent Commissions/office. NAPOLCOM is not independent.
12. EASTERN SHIPPING VS. POEA
Topic: ADMIN LAW; DELEGATION OF POWER; Undue delegation of legislative authority.
Petitioners: EASTERN SHIPPING LINES, INC.
Respondents: PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF
LABOR AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO
DOCTRINE:
What can be delegated is the discretion to determine how the law may be enforced, not what the law shall be.
The ascertainment of the latter subject is a prerogative of the legislature. This prerogative cannot be abdicated
or surrendered by the legislature to the delegate.
FACTS:
1. Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in
Tokyo, Japan, March 15, 1985.

2. His widow sued for damages under EO No. 797 and Memorandum Circular No. 2 of the POEA.
3. The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the POEA
but by the Social Security System and SHOULD HAVE BEEN filed against the State Insurance
Fund.
4. The POEA nevertheless assumed jurisdiction and after considering the position papers of the parties
ruled in favor of the complainant.
5. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial expenses pursuant to its
Memorandum Circular No. 2, which became effective on February 1, 1984.

6. This circular prescribed a standard contract to be adopted by both foreign and domestic shipping
companies in the hiring of Filipino seamen for overseas employment.

7. Petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the
principle of non-delegation of legislative power.
8. It contends that no authority had been given the POEA to promulgate the said regulation; and even
with such authorization, the regulation represents an exercise of legislative discretion which, under
the principle, is not subject to delegation.
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ISSUE/S:
1. W/N the validity of Memorandum Circular No. 2 itself as violative of the principle of non-delegation
of legislative power. (more relevant issue)
2. W/N the POEA had jurisdiction over the case as the husband was not an overseas worker.
RULING:
1. No.
✓ Memorandum Circular No. 2 is an administrative regulation.
✓ The power of the POEA (and before it the National Seamen Board) in requiring the model contract
is not unlimited as there is a sufficient standard guiding the delegate in the exercise of the said
authority.
✓ That standard is discoverable in the executive order itself which, in creating the Philippine Overseas
Employment Administration, mandated it to protect the rights of overseas Filipino workers to
"fair and equitable employment practices."
GENERAL RULE: Non-delegation of powers; exception
It is true that legislative discretion as to the substantive contents of the law cannot be delegated. What can be
delegated is the discretion to determine how the law may be enforced, not what the law shall be. The
ascertainment of the latter subject is a prerogative of the legislature.
This prerogative cannot be abdicated or surrendered by the legislature to the delegate.
Two Tests of Valid Delegation of Legislative Power
✓ There are two accepted tests to determine whether or not there is a valid delegation of legislative power,
viz,
✓ Under the completeness test, the law must be complete in all its terms and conditions when it leaves the
legislature such that when it reaches the delegate the only thing he will have to do is to enforce it.
✓ Under the sufficient standard test., there must be adequate guidelines or stations in the law to map out
the boundaries of the delegate’s authority and prevent the delegation from running riot.
✓ Both tests are intended to prevent a total transference of legislative authority to the delegate, who is
not allowed to step into the shoes of the legislature and exercise a power essentially legislative.
✓ The delegation of legislative power has become the rule and its non-delegation the exception.
Rationale for Delegation of Legislative Power
✓ The reason is the increasing complexity of the task of government and the growing inability of the
legislature to cope directly with the myriad problems demanding its attention.
✓ The growth of society has ramified its activities and created peculiar and sophisticated problems that the
legislature cannot be expected to reasonably comprehend. Specialization even in legislation has become
necessary.
✓ Too many of the problems attendant upon present-day undertakings, the legislature may not have the
competence to provide the required direct and efficacious, not to say, specific solutions.

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 ✓ These solutions may, however, be expected from its delegates, who are supposed to be experts in the
particular fields.
Power of Subordinate Legislation
✓ The reasons given above for the delegation of legislative powers in general are particularly applicable to
administrative bodies.
✓ With the proliferation of specialized activities and their attendant peculiar problems, the national
legislature has found it more and more necessary to entrust to administrative agencies the authority to
issue rules to carry out the general provisions of the statute.
✓ This is called the “power of subordinate legislation.” With this power, administrative bodies may
implement the broad policies laid down in statute by “filling in” the details which the Congress may not
have the opportunity or competence to provide.
✓ Memorandum Circular No. 2 is one such administrative regulation. Administrative agencies are vested
with two basic powers, the quasi-legislative and quasi-judicial. The first enables them to promulgate
implementing rules and regulations, and the second enables them to interpret and apply such
regulations.
2. Yes.
✓ The Philippine Overseas Employment Administration was created under Executive Order No. 797,
promulgated on May 1, 1982, to promote and monitor the overseas employment of Filipinos and to
protect their rights.
✓ It replaced the National Seamen Board created earlier under Article 20 of the Labor Code in 1974.
Under Section 4(a) of the said executive order, the POEA is vested with "original and exclusive
jurisdiction over all cases, including money claims, involving employee-employer relations arising
out of or by virtue of any law or contract involving Filipino contract workers, including seamen."
✓ These cases, according to the 1985 Rules and Regulations on Overseas Employment issued by the
POEA, include, “claims for death, disability and other benefits” arising out of such employment.
✓ The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by the
POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1, 1984.
✓ This circular prescribed a standard contract to be adopted by both foreign and domestic shipping
companies in the hiring of Filipino seamen for overseas employment.
! WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining
order dated December 10, 1986 is hereby LIFTED. It is so ordered.
13. TATAD V. SECRETARY OF DEPT. OF ENERGY
Topic: DELEGATION OF POWER
Petitioners: FRANCISCO S. TATAD
Respondents: SECRETARY OF DEPT. OF ENERGY & SECRETARY OF DEPT. OF FINANCE
DOCTRINE: There is a valid delegation of legislative power when both the completeness test and the
sufficient standard test are present.
SUMMARY:

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The petitions challenge the constitutionality of RA No. 8180 entitled “An Act Deregulating the Downstream
Oil Industry and For Other Purposes.” The deregulation process has two phases: (a) the transition phase
(Aug. 12, 1996) and the (b) full deregulation phase (Feb. 8, 1997 through EO No. 372).
Sec. 15 of RA No. 8180 constitutes an undue delegation of legislative power to the President and the Sec. of
Energy because it does not provide a determinate or determinable standard to guide the Executive Branch in
determining when to implement the full deregulation of the downstream oil industry, and the law does not
provide any specific standard to determine when the prices of crude oil in the world market are
considered to be declining nor when the exchange rate of the peso to the US dollar is considered stable.
FACTS:
1. The petitions at bar challenge the constitutionality of Republic Act No. 8180 entitled "An Act
Deregulating the Downstream Oil Industry and For Other Purposes".
o R.A. No. 8180 ends (26) years of government regulation of the downstream oil industry.
o Under the deregulated environment, "any person or entity may import or purchase any quantity
of crude oil and petroleum products from a foreign or domestic source, lease or own and operate
refineries and other downstream oil facilities and market such crude oil or use the same for his own
requirement," subject only to monitoring by the Department of Energy.
2. The deregulation process has two phases: the transition phase and the full deregulation phase. On
February 8, 1997, the President implemented the full deregulation of the Downstream Oil Industry
through E.O. No. 372. The petitions at bar assail the constitutionality of various provisions of R.A No.
8180 and E.O. No. 372.
3. They submit that they do not provide the "determinate or determinable standards" w/c can
guide the President in his decision to fully deregulate the downstream oil industry.
4. In addition, they contend that E.O. No. 392 which advanced the date of full deregulation is void for it
illegally considered the depletion of the OPSF fund as a factor.
5. In assailing section 15 of R.A. No. 8180 and E.O. No. 392, petitioners offer the following submissions:
6. First, section 15 of R.A. No. 8180 constitutes an undue delegation of legislative power to the
President and the Secretary of Energy because it does not provide a determinate or determinable
standard to guide the Executive Branch in determining when to implement the full deregulation of the
downstream oil industry.
o Petitioners contend that the law does not define when it is practicable for the Secretary of
Energy to recommend to the President the full deregulation of the downstream oil industry or when
the President may consider it practicable to declare full deregulation.
o Also, the law does not provide any specific standard to determine when the prices of crude oil in
the world market are considered to be declining nor when the exchange rate of the peso to the US
dollar is considered stable.
7. Second, petitioners aver that E.O. No. 392 implementing the full deregulation of the downstream oil
industry is arbitrary and unreasonable because it was enacted due to the alleged depletion of the
OPSF fund (Oil Price Stabilization Fund)— a condition not found in R.A. No. 8180.
o Petitioners urge that the phrases "as far as practicable," "decline of crude oil prices in the world
market" and "stability of the peso exchange rate to the US dollar" are ambivalent, unclear and
inconcrete in meaning.
ISSUE: W/N Sec. 15 of RA 8180 constituted undue delegation of power thus unconstitutional
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RULING: NO
• There are 2 tests to determine whether or not there is a valid delegation of legislative power: 1)
completeness test & 2) sufficient standard test.
o Completeness – the law must be complete in all its terms and conditions when it leaves the
legislative such that when it reaches the delegate the only thing he will have to do is to enforce it.
o Sufficient standard – there must be adequate guidelines or limitations in the law to map out the
boundaries of the delegate’s authority and prevent the delegation from running riot.
• Congress expressly provided in RA 8180 that full deregulation will start at the end of March 1997,
regardless of the occurrence of any event. Full deregulation at the end of March 1997 is mandatory
and the Executive has no discretion to postpone it for any purported reason. Thus, the law is
complete on the question of the final date of full deregulation.
• The discretion given to the President is to advance the date of full deregulation before the end of March
1997. Section 15 lays down the standard to guide the judgment of the President — he
is to time it as far as practicable when the prices of crude oil and petroleum products in the world market
are declining and when the exchange rate of the peso in relation to the US dollar is stable.
• Petitioners contend that the words “as far as practicable”, “declining”, and “stable” should have
defined in RA 8081 as they do not set terminate or determinable standards.
• The dictionary meaning of these words are well settled and cannot confuse men of reasonable
intelligence.
• It ought to follow that the argument that E.O. No. 392 is null and void as it was based on indeterminate
standards set by R.A. 8180 must likewise fail.
IN VIEW WHEREOF, the petitions are granted. R.A. No. 8180 is declared unconstitutional and E.O. No.
372 void.
SO ORDERED.
NOTES: Why RA 8081 is unconstitutional
• R.A. No. 8180 contains a separability clause. Section 23 provides that "if for any reason, any section
or provision of this Act is declared unconstitutional or invalid, such parts not affected thereby shall
remain in full force and effect."
• This separability clause notwithstanding, we hold that the offending provisions of R.A. No. 8180 so
permeate its essence that the entire law has to be struck down.
• The provisions on tariff differential, inventory and predatory pricing are among the principal props of
R.A. No. 8180. Congress could not have deregulated the downstream oil industry without these
provisions.
• Unfortunately, contrary to their intent, these provisions on tariff differential, inventory and predatory
pricing inhibit fair competition, encourage monopolistic power and interfere with the free
interaction of market forces. R.A. No. 8180 needs provisions to vouchsafe free and fair competition.
Other issues not related to delegation of power
1) WON Sec 5(b) of R.A. 8180 on tariff differential violates the one title one subject requirement of the
Constitution. – NO

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 o The title need not mirror, fully index or catalogue all contents and minute details of a law. A
law having a single general subject indicated in the title may contain any number of
provisions, no matter how diverse they may be, so long as they are not inconsistent with or
foreign to the general subject, and may be considered in furtherance of such subject by
providing for the method and means of carrying out the general subject. The Court held that
Sec. 5 providing for tariff differential is germane to the subject of RA 8180 which is the
deregulation of the downstream oil industry.
2) WON RA 8081 violates the constitutional prohibition (Art. XII, Sec. 19) against monopolies,
combinations in restraint of trade and unfair competition – YES
• The SC declared the unconstitutionality of RA 8180 because it violated Sec 19 of Art 12 of the
Constitution. It violated that provision because it only strengthens oligopoly which is contrary to
free competition. It cannot be denied that our downstream oil industry is operated and controlled by an
oligopoly, a foreign oligopoly at that.
• Petron, Shell and Caltex stand as the only major league players in the oil market. All other players
belong to the lilliputian league. As the dominant players, Petron, Shell and Caltex boast of existing
refineries of various capacities.
• The tariff differential of 4% therefore works to their immense benefit. Yet, this is only one edge of
the tariff differential. The other edge cuts and cuts deep in the heart of their competitors. It erects a
high barrier to the entry of new players.
• New players that intend to equalize the market power of Petron, Shell and Caltex by building refineries
of their own will have to spend billions of pesos. Those who will not build refineries but compete
with them will suffer the huge disadvantage of increasing their product cost by 4%. They will be
competing on an uneven field. The argument that the 4% tariff differential is desirable because it will
induce prospective players to invest in refineries puts the cart before the horse.
• The first need is to attract new players and they cannot be attracted by burdening them with heavy
disincentives. Without new players belonging to the league of Petron, Shell and Caltex, competition in
our downstream oil industry is an idle dream.
• RA 8180 is unconstitutional on the ground inter alia that it discriminated against the “new players”
insofar as it placed them at a competitive disadvantage vis-à-vis the established oil companies by
requiring them to meet certain conditions already being observed by the latter.
OTHER NOTES: They aver that deregulation of the downstream oil industry is a policy decision made by
Congress and it cannot be reviewed, much less be reversed by this Court.
o Judicial power includes not only the duty of the courts to settle actual controversies involving rights
which are legally demandable and enforceable, but also the duty to determine whether or not there has
been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the government.
o The courts, as guardians of the Constitution, have the inherent authority to determine whether a statute
enacted by the legislature transcends the limit imposed by the fundamental law. Where a statute violates
the Constitution, it is not only the right but the duty of the judiciary to declare such act as
unconstitutional and void
14. PELAEZ v. AUDITOR GENERAL
Topic: DELEGATION OF POWER
Petitioners: EMMANUEL PELAEZ

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Respondent: THE AUDITOR GENERAL
DOCTRINE: Although Congress may delegate to another branch of the government the power to fill in the
details in the execution, enforcement or administration of a law, it is essential to forestall a violation of the
principle of separation of powers, that said law: (a) be complete in itself — it must set forth therein the
policy to be executed, carried out or implemented by the delegate — and (b) fix a standard — the limits of
which are sufficiently determinate or determinable — to which the delegate must conform in the performance
of his functions.
FACTS:
1. President Macapagal, pursuant to Section 68 of the Revised Administrative Code, issued EO Nos. 93
to 121, 124 and 126 to 129, creating 33 municipalities.
2. Vice-President Pelaez instituted the present special civil action, for a writ of prohibition with
preliminary injunction, against the Auditor General to restrain him, as well as his representatives
and agents from passing in audit any expenditure of public funds in implementation of said executive
orders and/or any disbursement by said municipalities
o alleges that said executive orders are null and void upon the ground that said Section 68 has
been impliedly repealed by Republic Act 2370 and constitutes an undue delegation of
legislative power
3. Auditor General avers that the present action is premature and that not all proper parties have been
impleaded.
o referring to the officials of the new political subdivisions in question
4. Pelaez argues, that if the President, under such new law, cannot even create a barrio, then how can he
create a municipality which is composed of several barrios (since barrios are units of municipalities)
o third paragraph of Section 3 of Republic Act No. 2370, reads: "Barrios shall not be created or
their boundaries altered nor their names changed except under the provisions of this Act or
by Act of Congress.
5. Auditor General answers that a new municipality can be created without creating new barrios, such
as, by placing old barrios under the jurisdiction of the new municipality.
o Sec. 68 of the Revised Administrative Code provides: “The President of the Philippines may
by executive order, define the boundary of any municipality… and may change the seat of
government within any subdivision to such place therein as the public welfare may
require.” (repealed daw by RA 2370)
o Auditor General alleges that the power of the President to create municipalities under this
section does not amount to an undue delegation of legislative power, relying upon
Municipality of Cardona vs. Municipality of Binangonan.
ISSUE: W/N Section 68 of Revised Administrative Code constitutes an undue delegation of legislative power
RULING: YES
! Auditor General’s claims are untenable.
o under Section 68, the phrase "as the public welfare may require" refers exclusively to the place
to which the seat of the government may be transferred.
o Municipality of Cardona vs. Municipality of Binañgonan involved not the creation of a new
municipality, but a mere transfer of territory — from an already existing municipality
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 (Cardona) to another municipality (Binañgonan)
! Although Congress may delegate to another branch of the government the power to fill in the
details in the execution, enforcement or administration of a law, it is essential to forestall a violation
of the principle of separation of powers, that said law: (EO’s by extension the Sec. 68 as basis)
✓ be complete in itself — it must set forth therein the policy to be executed, carried out or
implemented by the delegate and
✓ fix a standard — the limits of which are sufficiently determinate or determinable — to which
the delegate must conform in the performance of his functions.
o Section 68 of the Revised Administrative Code does not meet these well settled requirements
for a valid delegation of the power to fix the details in the enforcement of a law.
o It does not enunciate any policy to be carried out or implemented by the President.
o Neither does it give a standard sufficiently precise to avoid the evil effects above referred to.
! Section 10 (1) of Article VII of our Constitution ordains: "The President shall have control of all
executive departments, bureaus or offices…”
o the power of control of the President over executive departments, bureaus or offices implies
no more than the authority to assume directly the functions thereof or to interfere in the
exercise of discretion by its officials. Such control does not include the authority either to
abolish an executive department or bureau or to create a new one.
o As a consequence, the alleged power of the President to create municipal corporations would
necessarily connote the exercise by him of an authority even greater than that of control
which he has over the executive departments, bureaus or offices.
o In other words, Section 68 of the Revised Administrative Code does not merely fail to
comply with the constitutional mandate above quoted, but confers upon him more power
over municipal corporations than that which he has over said executive departments, bureaus
or offices.
DISPOSITIVE PORTION:
WHEREFORE the Executive Orders in question are hereby declared null and void ab initio and the
respondent permanently restrained from passing in audit any expenditure of public funds in implementation of
said Executive Orders or any disbursement by the municipalities above referred to.
15. ABELLA V. CIVIL SERVICE COMMISSION
Topic: Quasi-legislative power or Rule-Making Power
Petitioners: FRANCISCO ABELLA JR.
Respondents: CIVIL SERVICE COMMISSION
DOCTRINE:
Quasi-legislative power is exercised by administrative agencies through the promulgation of rules and
regulations within the confines of the granting statute and the doctrine of non-delegation of certain powers
flowing from the separation of the great branches of the government.
FACTS:
1. In 1996, Abella (lawyer) retired from the Philippine Economic Zone Authority (PEZA) as Department
Manager of the Legal Services Department.
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 o He completed the training program for Executive Leadership and Management pursuant to
CSC Reso. No. 850, which was the required eligibility for said position.
2. 1994: The Civil Service Commission (CSC) issued Memorandum Circular No. 21 --
o Sec. 4. Status of Appointment of Incumbents of Positions Included Under the Coverage of the
CES. Incumbents of positions which are declared to be Career Executive Service positions for
the first time pursuant to this Resolution who hold permanent appointments thereto shall
remain under permanent status in their respective positions.
o However, upon promotion or transfer to other Career Executive Service (CES) positions,
these incumbents shall be under temporary status in said other CES positions until they
qualify.
3. 1998: Abella was hired by the Subic Bay Metropolitan Authority (SBMA)
4. 1999: Abella was appointed as a permanent employee -- Department Manager III, Labor and
Employment Center.
5. The appointment was submitted to the CSC Regional Office No. III which disapproved the
appointment because Abella’s eligibility was not appropriate.
o Abella was issued a temporary appointment as Department Manager III, Labor and Employment
Center.
6. Abella appealed the disapproval of his permanent appointment. The CSC denied his MR through 2
resolutions.
7. Abella filed with the CA a petition for review seeking the reversal of the CSC Resolutions
o on the ground that CSC Memorandum Circular No. 21, is unconstitutional as it rendered his
earned civil service eligibility ineffective or inappropriate for the position of Department
Manager [III]
8. CA: Abella did not have legal standing to question the disapproval of his appointment.
o only the appointing officer may request reconsideration of the action taken by the CSC on
appointments
o Abella was not the real party in interest, as his appointment was dependent on the CSCs
approval.
o He had no vested right in the office, since his appointment was disapproved.
ISSUE: W/N the CSC has authority to issue rules and regulations (constitutionality of Memorandum Circular
No. 21, s. 1994)?
RULING: YES
● Abella argues that his eligibility could no longer be affected by a new eligibility requirement. He claims that
he was eligible for his previous position in PEZA; hence, he should retain his eligibility in SBMA,
notwithstanding the classification of the latter as a CES position.
○ As mandated by the Constitution, as the central personnel agency of the government, the CSC
should establish a career service and adopt measures to promote the morale, efficiency, integrity,
responsiveness, progressiveness, and courtesy in the Civil Service.

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 ○ In the exercise of its authority, the CSC deemed it appropriate to clearly define and identify
positions covered by the Career Executive Service. Logically, the CSC had to issue guidelines to
meet this objective, specifically through the issuance of the challenged Circular.
● Entrance to the different levels in the career service, which appointments require examinations, are grouped
into three major levels.
○ Those in the third level (CES positions -- ABELLA’S POSITION) require Career Service Executive
Eligibility (CSEE) as a requirement for permanent appointment.
○ The Circular did not revoke Abella’s ELM eligibility. He was appointed to a CES position; however, his
eligibility was inadequate.
○ Abella’s government service ended when he retired in 1996; thus, his right to remain in a CES position,
notwithstanding his lack of eligibility, also ceased. Upon his reemployment years later as department
manager III, it was necessary for him to comply with the eligibility prescribed at the time for that
position.
● Petitioner contends that his due process rights -- CSCs alleged failure to notify him of a hearing relating
to the issuance of the challenged Circular.
○ The classification of positions in career service was a quasi-legislative, NOT A QUASI-JUDICIAL,
ISSUANCE. This distinction determines whether prior notice and hearing are necessary.
○ In exercising its quasi-judicial function, an administrative body adjudicates the rights of persons
before it, in accordance with the standards laid down by the law.
○ quasi-legislative power is exercised by administrative agencies through the promulgation of rules and
regulations within the confines of the granting statute and the doctrine of non-delegation of certain
powers flowing from the separation of the great branches of the government.
○ Significantly, the challenged Circular was an internal matter addressed to heads of departments, bureaus
and agencies. It needed no prior publication, since it had been issued as an incident of the
administrative bodys power to issue guidelines for government officials to follow in performing
their duties.

NOTES:
● IF SHE ASKS ON LEGAL STANDING:
○ the question in standing is whether such parties have alleged such a personal stake in the outcome of
the controversy to assure that concrete adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination of difficult constitutional questions.
○ On the other hand, a real party in interest is one who would be benefited or injured by the judgment, or
one entitled to the avails of the suit.

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 ○ If legal standing is granted to challenge the constitutionality or validity of a law or governmental
act despite the lack of personal injury on the challengers part, then more so should Abella be
allowed to contest the CSC Order disapproving his appointment. Clearly, he was
prejudiced by the disapproval, since he could not continue his office.
○ Although Abella had no vested right to the position, it was his eligibility that was being
questioned. Corollary to this point, he should be granted the opportunity to prove his eligibility.
He had a personal stake in the outcome of the case, which justifies his challenge to the CSC act
that denied his permanent appointment.
DISPOSITIVE PORTION:
WHEREFORE, the Petition is GRANTED insofar as it seeks legal standing for petitioner, but DENIED
insofar as it prays for the reversal of the CSC Resolutions disapproving his appointment as department manager
III of the Labor and Employment Center, Subic Bay Metropolitan Authority. Costs against petitioner.

16. SMART COMMUNICATION VS. NTC

Topic: Quasi-legislative power or rule-making power
Consolidated case: smart & pitel v ntc
Petitioners: GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC. (ISLACOM)
Respondents: COURT OF APPEALS (The Former 6th Division) and the NATIONAL
TELECOMMUNICATIONS COMMISSION
DOCTRINE:
Administrative agencies possess quasilegislative or rulemaking powers and quasijudicial or administrative
adjudicatory powers. The rules and regulations that administrative agencies promulgate, which are the product
of a delegated legislative power to create new and additional legal provisions that have the effect of law, should
be within the scope of the statutory authority granted by the legislature to the administrative agency.
FACTS:
1. Pursuant to its rulemaking and regulatory powers, the NTC issued Memorandum Circular No. 136-
2000, promulgating rules and regulations on the billing of telecom services.
o Meanwhile, the provisions of the Memorandum Circular pertaining to the sale & use of
prepaid cards & the unit of billing for cellular mobile telephone service took effect 90 days
from the effectivity of the Memorandum Circular.
2. The NTC issued a Memorandum to all cellular mobile telephone service (CMTS) operators which
contained measures to minimize if not totally eliminate the incidence of stealing of cellular phone
units.
o This was followed by another Memorandum dated October 6, 2000 addressed to all public
telecommunications entities, which reads: “This is to remind you that the validity of all prepaid
cards sold on 07 October 2000 and beyond shall be valid for at least two (2) years from date
of first use pursuant to MC 1362000.”

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 3. Petitioners Isla Communications Co., Inc. & Pilipino Telephone Corporation filed an action for
declaration of nullity of NTC Memorandum Circular No. 1362000 (the Billing Circular) and the
NTC Memorandum dated October 6, 2000, with prayer for the issuance of a writ of preliminary
injunction and temporary restraining order.
o They alleged that the NTC has no jurisdiction to regulate the sale of consumer goods such as
the prepaid call cards since such jurisdiction belongs to the Department of Trade and Industry
under the Consumer Act of the Philippines;
o that the Billing Circular is oppressive, confiscatory and violative of the constitutional prohibition
against deprivation of property without due process of law;
o that the Circular will result in the impairment of the viability of the prepaid cellular service by
unduly prolonging the validity and expiration of the prepaid SIM and call cards;
o and that the requirements of identification of prepaid card buyers and call balance announcement
are unreasonable. Hence, they prayed that the Billing Circular be declared null and void ab initio.
o Petitioners Globe Telecom, Inc. and Smart Communications, Inc. filed a joint Motion for
Leave to Intervene and to Admit ComplaintinIntervention which was granted by the trial court.
4. The Trial Court issued a TRO enjoining the NTC from implementing Memorandum Circular No. 136-
2000 and the 7 Memorandum dated October 6, 2000.
5. NTC thus filed a SCA for certiorari and prohibition with the CA, which granted it. ! so petitioners
(globe & isla filed MR – denied. Thus this petition for review by smart and pitel)

ISSUE#1: W/N the Billing Circular issued by NTC is unconstitutional

RULING: NO
! In the case at bar, the issuance by the NTC of assailed memorandums was pursuant to its quasi-
legislative or rule-making power.
! Administrative agencies possess quasi-legislative or rulemaking power ! the power to make rules
and regulations which results in delegated legislation that is within the confines of the granting
statute and the doctrine of non-delegability and separability of powers.
! The rules and regulations that administrative agencies promulgate, which are the product of a delegated
legislative power to create new and additional legal provisions that have the effect of law, should be
within the scope of the statutory authority granted by the legislature to the administrative agency.
! It is required that the regulation be:
✓ germane to the objects and purposes of the law, and be
✓ not in contradiction to, but in conformity with, the standards prescribed by law.
✓ They must conform to and be consistent with the provisions of the enabling statute in order for
such rule or regulation to be valid.
ISSUE #2: W/N the respondent court erred in holding that respondents failed to exhaust administrative
remedies.
RULING: YES
! In questioning the validity or constitutionality of a rule or regulation issued by an administrative
agency, a party (petitioners) need not exhaust administrative remedies before going to court.

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 ! This principle applies only where the act of the administrative agency concerned was performed
pursuant to its quasi-judicial function (adjudicating issues, and not when the assailed act pertained to
its rule-making or quasi-legislative power.
! Even assuming that the principle of exhaustion of administrative remedies apply in this case, the records
reveal that petitioners sufficiently complied with this requirement.
! Petitioners were able to register their protests to the proposed billing guidelines. They submitted their
respective position papers setting forth their objections and submitting proposed schemes for the billing
circular. After the same was issued, petitioners wrote successive letters dated July 3, 2000 and July 5,
2000, asking for the suspension and reconsideration of the so-called Billing Circular. This was taken by
petitioners as a clear denial of the requests contained in their previous letters, thus prompting them to
seek judicial relief.
ISSUE#3: W/N NTC has jurisdiction over the case.
RULING: NO. RTC has jurisdiction.
! The objective of the doctrine of primary jurisdiction is to guide a court in determining whether it should
refrain from exercising its jurisdiction until after an administrative agency has determined some question
or some aspect of some question arising in the proceeding before the court.
! However, where what is assailed is the validity or constitutionality of a rule or regulation issued by
the administrative agency in the performance of its quasi-legislative function, the regular courts
have jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules
issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of
the regular courts.
! As such, petitioners were justified in invoking the judicial power of the Regional Trial Court to
assail the constitutionality and validity of the said issuances. Hence, the Regional Trial Court has
jurisdiction to hear and decide the case. The Court of Appeals erred in setting aside the orders of the trial
court and in dismissing the case.
RULING: REMANDED.
DISPOSITIVE PORTION:
WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The decision of the
Court of Appeals in CAG.R. SP No. 64274 dated October 9, 2001 and its Resolution dated January 10, 2002 are
REVERSED and SET ASIDE. The Order dated November 20, 2000 of the Regional Trial Court of Quezon City,
Branch 77, in Civil Case No. Q0042221 is REINSTATED. This case is REMANDED to the court a quo for
continuation of the proceedings.
NOTES:

Quasi-Legislative/Rule-Making Quasi-Judicial/Administrative
Powers Adjudicatory Powers

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The power to make rules and The power to hear and
regulations which results in determine questions of fact to
delegated legislation that is which the legislative policy is to
within the confines of the apply and to decide in
granting statute and the doctrine accordance with the standards
of nondelegability and laid down by the law itself in
separability of powers. enforcing and administering the
same law.
Question of fact def: Exercised when it performs in a
that must be answered by reference to facts and judicial manner an act which is
evidence as well as inferences arising from those
facts. essentially of an executive or
administrative nature, where the
power to act in such manner is
incidental to or reasonably
necessary for the performance of
the executive or administrative
duty entrusted to it.

17. EASTERN SHIPPING LINES V. CA

Topic: Nature of Quasi-Legislative Powers
Petitioners: Eastern Shipping Lines, Inc.
Respondents: Court of Appeals and Davao Pilots Association
DOCTRINE: What determines whether an act is a law or an administrative issuance is not its form but its
nature. Here as we have already said, the power to fix the rates of charges for services, including pilotage
service, has always been regarded as legislative in character.
FACTS:
1. Davao Pilots elevated a complaint against Eastern Shipping Lines for sum of money and attorney’s
fees alleging that the Davao Pilots rendered pilotage services to ESL who has unpaid fees for
pilotage services it rendered
2. Petitioner (Eastern Shipping) disputed the claims of respondent (Davao pilots)by assailing the
constitutionality of Executive Order 1088, from which Davao pilots based its claims.
3. ESL maintains that rates of pilotage fees should be based on circulars issued by the Philippine
Ports Authority (lower rate) since it has been given the power to set the rates by virtue of PD 857.
4. The RTC ruled in favor of Davao Pilots and this decision was affirmed in toto by the Court of
Appeals. Hence, this petition for certiorari.
5. Argument of Eastern Shipping Lines: EO 1088 is unconstitutional because
(1) its interpretation and application are left to private respondent, a private person, and
(2) it constitutes an undue delegation of powers.

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 o It insists that it should pay pilotage fees on the basis of the memorandum circulars issued by
the PPA, the administrative body vested under PD 857 12 with the power to regulate and
prescribe pilotage fees.
o Because PPA circulars are inconsistent with EO 1088, they are void and ineffective.
ISSUE: W/N EO 1088 is unconstitutional - NO
RULING:
• It is not an answer to say that E.O. No. 1088 should not be considered a statute because that would
imply the withdrawal of power from the PPA.
o What determines whether an act is a law or an administrative issuance is not its form but
its nature.
o Here as we have already said, the power to fix the rates of charges for services, including
pilotage service, has always been regarded as legislative in character.
• E.O. NO. 1088 provides for adjusted pilotage service rates w/o withdrawing the power of the PPA to
impose, prescribe, increase or decrease rates, charges or fees.
o E.O. No. 1088 is not meant simply to fix new pilotage rates. Its legislative purpose is the
"rationalization of pilotage service charges, through the imposition of uniform and adjusted
rates for foreign and coastwise vessels in all Philippine ports.
• "Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to
the laws or the Constitution."
• The conclusive effect of administrative construction is not absolute.
o Action of an administrative agency may be disturbed or set aside by the judicial department if
there is an error of law, a grave abuse of power or lack of jurisdiction, or grave abuse of
discretion clearly conflicting with either the letter or spirit of the law."
• An administrative agency, like the PPA, has no discretion whether to implement the law or not. Its duty is
to enforce it.
• Unarguably, therefore, if there is any conflict between the PPA circular and a law, such as EO 1088, the
latter (EO) prevails.
WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals is
AFFIRMED. Costs against petitioner.

18. ARANETA V GATMAITAN

Topic: Quasi-legislative power/Rule-making power
Petitioners: SALVADOR A. ARANETA, ETC., ET AL., Respondents: THE HON. MAGNO S.
GATMAITAN, ETC., ET AL
DOCTRINES:

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• One of the executive departments is that of Agriculture and Natural Resources which by law is placed
under the direction and control of the Secretary, who exercises its functions subject to the general
supervision and control of the President of the Philippines (Sec. 75, R. A. C.).
• Moreover, "executive orders, regulations, decrees and proclamations relative to matters under the
supervision or jurisdiction of a Department, the promulgation whereof is expressly assigned by law to the
President of the Philippines, shall as a general rule, be issued upon proposition and recommendation of
the respective Department
• The Legislature cannot delegate legislative power to enact any law. If Act No. 2868 is a law unto itself,
and it does nothing more than to authorize the Governor-General to make rules and regulations to carry it
into effect, then the Legislature created the law. There is no delegation of power and it is valid.
FACTS:
1. The President issued EO 22 - prohibiting the use of trawls in San Miguel Bay as a responses for the
general clamor among the majority of people living in the coastal towns of San Miguel Bay that the
said resources of the area are in danger of major depletion because of the effects of trawl fishing. 
2. the EO was amended by EO 66 apparently in answer to a resolution of the Provincial Board of
Camarines Sur recommending the allowance of trawl-fishing during the typhoon season only.
3. Subsequently, EO 80 was issued reviving EO 22
4. Thereafter a group of Otter trawl operators filed a complaint for injunction praying that the
Secretary of Agriculture and Natural Resources and director of Fisheries be enjoined from enforcing
said executive order and to declare the same null and void.
5. The CFI ruled in favor of the trawlers and against the government. Stating mainly that “Until the
trawling is outlawed by legislative enactment, it cannot be banned from San Miguel Bay by
executive proclamation.”
✓ Thus EO 22 was declared invalid.
6. The government then appealed to the SC arguing that the President has no authority to issue said
EOs (only depts. Heads) and
✓ That to uphold the validity of EO 80 & 22 would be to sanction the exercise of legislative power by
executive decrees
ISSUES:
1. W/N said EOs were valid, for the issuance thereof was NOT in the exercise of legislative powers
unduly delegated to the President
HELD/RATIO: YES, valid. Not legislation by Executive
• The Court holds that the EOs are valid. Congress provided under the Fisheries Act that

✓ It is unlawful to take or catch fry or fish eggs in the waters of the Phil and
✓ it authorizes Sec. of Agriculture and Nat. Resources to provide regulations/ restrictions as may be
deemed necessary.
• The Act was complete in itself and leaves it to the Sec. to carry into effect its legislative intent.
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 • The President did nothing but show an anxious regard for the welfare of the inhabitants and dispose of issues of
general concern w/c were in consonance and strict conformity with law (in issuing the EOs the president
exercised its quasi-legislative power)

NOTES:
As already held by this Court, the true distinction between delegation of the power to legislate and the
conferring of authority or discretion as to the execution of law consists in that the former(delegation)
necessary involves a discretion as to what the law shall be, while in the latter (discretion in execution) the
authority or discretion as to its execution has to be exercised under and in pursuance of the law. The first
(delegation )cannot be done; to the latter (discretion in execution) no valid objection can be made.


In the case of U. S. vs. Ang Tang Ho, 43 Phil. 1, We also held, the power to delegate - the Legislature cannot
delegate legislative power to enact any law. If Act No. 2868 is a law unto itself, and it does nothing more than to
authorize the Governor-General to make rules and regulations to carry it into effect, then the Legislature created
the law. There is no delegation of power and it is valid. On the other hand, if the act within itself does not define
a crime and is not complete, and some legislative act remains to be done to make it a law or a crime, the doing
of which is vested in the Governor-General, the act is delegation of legislative power, is unconstitutional and
void.
19. TAYUG RURAL BANK v CENTRAL BANK OF THE PHILIPPINES
Topic: ADMIN LAW; QUASI-LEGISLATIVE OR RULE-MAKING POWER; Administrative rule with penal
sanction.
Petitioners: Tayug Rural Bank
Respondents: Central Bank of the Philippines
DOCTRINE: An administrative agency cannot impose a penalty not so provided in the law authorizing the
promulgation of the rules and regulations, much less one that is applied retroactively.
FACTS:
1. From December 28, 1962 to July 30, 1963, Tayug Rural Bank, Inc. obtained 13 loans amounting to
P813,000 from the Central Bank (CB), by way of rediscounting and covered by promissory notes.
(As of July 15, 1969, the outstanding balance was P444,809.45)
2. On December 23, 1964, the CB, through the Director of the Department of Loans and Credits, issued
Memorandum Circular DLC-8, informing all rural banks that an additional penalty interest rate of
10% per annum would be assessed on all past due loans beginning January 4, 1965.
3. Tayug Rural Bank sued CB to recover the 10% penalty imposed by the CB as of September 27,
1968 and to restrain the CB from continuing the imposition of the penalty.
4. The lower court found that only a question of law had been raised in the pleadings (issue concerned
DLC-8) and ruled in favor of Tayug RB.
5. CB appealed to the CA

✓ which ruled that the resolution of the appeal will solely depend on the legal issue of whether or not the
Monetary Board had authority to authorize Appellant Central Bank to impose a penalty rate of 10%
per annum on past due loans of rural banks which had failed to pay their accounts on time and

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 ordered the certification of this case to this Court for proper determination. The entire record of the case
was thus forwarded to the SC.
ISSUE: W/N the CB can validly impose the 10% penalty on Tayug RB’s past overdue loans beginning July 4,
1965, by virtue of Memorandum Circular No. DLC-8.
RULING: NO.
● CB contends that Memorandum Circular No. DLC-8 was issued on the basis of SECs 147 & 148 of
the Rules and Regulations Governing Rural Banks of the Philippines, which in turn was adopted
from SEC 3 of RA 720, which reads:
○ "SEC. 3. In furtherance of this policy, the Monetary Board of the Central Bank of the Philippines
shall formulate the necessary rules and regulations governing the establishment and operatives of
Rural Banks for the purpose of providing adequate credit facilities to small farmers and
merchants, or to cooperatives of such farmers or merchants and to supervise the operation of
such banks."
● Nowhere in any of the above-quoted pertinent provisions of R.A. 720 nor in any other provision of
R.A. 720 for that matter, is the monetary Board authorized to mete out on rural banks an additional
penalty rate on their past due accounts with Appellant.
○ As correctly stated by the trial court, while the Monetary Board possesses broad supervisory
powers, nonetheless, the retroactive imposition of administrative penalties cannot be taken
as a measure supervisory in character.
● Administrative rules and regulations have the force and effect of law.
● There are, however, limitations to the rule-making power of administrative agencies.
○ A rule shaped out by jurisprudence is that when Congress authorizes promulgation of
administrative rules and regulations to implement given legislation, all that is required is
that the regulation conform to the standards that the law prescribes.
● The rule delineating the extent of the binding force to be given to administrative rules and
regulations was explained by the Court in Teoxon v. Member of the Board of Administrators, thus:
○ "A rule is binding on the courts so long as the procedure fixed for its promulgation is followed
and its scope is within the statute granted by the legislature, even if the courts are not in
agreement with the policy stated therein or its innate wisdom x x x."
○ On the other hand, "administrative interpretation of the law is at best merely advisory, for it is the
courts that finally determine what the law means."
● Indeed, it cannot be otherwise as the Constitution limits the authority of the President, in whom all
executive power resides, to take care that the laws be faithfully executed.
○ Necessarily, it is bound to observe the constitutional mandate.
○ There must be strict compliance with the legislative enactment.
● In case of discrepancy between the basic law and a rule or regulation issued to implement said law,
the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of the
basic law.
○ Hence an administrative agency cannot impose a penalty not so provided in the law
authorizing the promulgation of the rules and regulations, much less one that is applied
retroactively.

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 ● [GOING BACK TO THE TAYUG RB’S LOAN] Such clause was NOT a part of the promissory notes
executed by Tayug RB to secure its loans. The CB inserted the clause in the revised DLC Form No. 11
to make it a part of the contractual obligation of rural banks securing loans from the Central Bank, after
December 23, 1964.
○ Thus, while there is now a basis for the imposition of the 10% penalty rate on overdue accounts
of rural banks, there was none during the period that Tayug RB contracted its loans from the
CB, the last of which loan was on July 30, 1963.
○ Surely, the rule cannot be given retroactive effect.
DISPOSITIVE PORTION:
PREMISES CONSIDERED, the decision of the trial court is hereby AFFIRMED with modification that
Appellee Rural Bank is ordered to pay a sum equivalent to 10% of the outstanding balance of its past overdue
accounts, but not in any case less than P500.00 as attorney's fees and costs of suit and collection.

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