Case Digests 9

8/13/2019 Case Digests 9

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THE PEOPLE OF THE PHILIPPINE ISLANDSand HONGKONG & SHANGHAI BANKINGCORPORATION Petitioners, vs. JOSE O. VERA,

Judge . of !e Cou" of F#"$ In$an%e ofan#'a, and ARIANO C( (NJIENG,Respondents.

Office of the Solicitor General Tuason and CityFiscal Diaz for the Government.

De Witt Per!ins and Ponce "nrile for the#on$!on$ and Shan$hai %an!in$ Corporation.&icente '. Francisco Feria and (a O Orense and%elmonte and Gi))s and *cDonou$h forrespondent Cu +n,ien$.-o appearance for respondent 'ud$e.

LA(REL, J.:chanrobles virtual law library

This is an original action instituted in this court onAugust 19, 1937, for the issuance of the writ ofcertiorari and of prohibition to the Court of Firstnstance of !anila so that this court "ay review

the actuations of the aforesaid Court of Firstnstance in cri"inal case #o. $%&$9 entitled 'The(eople of the (hilippine slands vs. !ariano Cu)n*ieng, et al.', "ore particularly the applicationof the defendant !ariano Cu )n*ieng therein forprobation under the provisions of Act #o. $%%1,and thereafter prohibit the said Court of Firstnstance fro" ta+ing any further action orentertaining further the afore"entionedapplication for probation, to the end that thedefendant !ariano Cu )n*ieng "ay be forthwithco""itted to prison in accordance with the final

*udg"ent of conviction rendered by this court in

said case -. . #o. $1%//0.) chanrobles virtuallaw library

(etitioners herein, the (eople of the (hilippineand the ong+ong and 2hanghai an+ingCorporation, are respectively the plaintiff and theoffended party, and the respondent herein!ariano Cu )n*ieng is one of the defendants, inthe cri"inal case entitled 'The (eople of the(hilippine slands vs. !ariano Cu )n*ieng, et al.',cri"inal case #o. $%&$9 of the Court of Firstnstance of !anila and -.. #o. $1%// of thiscourt. espondent herein, on. 4ose 5. 6era, is

the 4udge ad interimof the seventh branch of theCourt of First nstance of !anila, who heard theapplication of the defendant !ariano Cu )n*iengfor probation in the aforesaid cri"inalcase.chanroblesvirtualawlibrary chanroblesvirtual law library

The infor"ation in the aforesaid cri"inal casewas filed with the Court of First nstance of !anilaon 5ctober 1, 1931, petitioner herein ong+ongand 2hanghai an+ing Corporation intervening inthe case as private prosecutor. After a protractedtrial unparalleled in the annals of (hilippine

*urisprudence both in the length of ti"e spent bythe court as well as in the volu"e in thetesti"ony and the bul+ of the e8hibits presented,the Court of First nstance of !anila, on 4anuary ,193$, rendered a *udg"ent of convictionsentencing the defendant !ariano Cu )n*ieng toindeter"inate penalty ranging fro" four yearsand two "onths of prision correccional to eightyears of prision "ayor, to pay the costs and withreservation of civil action to the offended party,the ong+ong and 2hanghai an+ing Corporation.)pon appeal, the court, on !arch %&, 193,

"odified the sentence to an indeter"inatepenalty of fro" five years and si8 "onths of

prision correccional to seven years, si8 "onthsand twenty:seven days of prision mayor, butaffir"ed the *udg"ent in all other respects.!ariano Cu )n*ieng filed a "otion forreconsideration and four successive "otions fornew trial which were denied on ;ece"ber 17,193, and final *udg"ent was accordinglyentered on ;ece"ber 1, 193. The defendantthereupon sought to have the case elevated oncertiorari to the 2upre"e Court of the )nited2tates but the latter denied the petition forcertiorariin #ove"ber, 193&. This court,on #ove"ber %$, 193&, denied thepetition subse


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una"anera concluyente la culpabilidad delpeticionario y


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distinct fro" the (robation 5fficer provided for insection 11 of the sa"e Act.

. ecause even if the respondent *udge originallyhad *urisdiction to entertain the application forprobation of the respondent !ariano Cu )n*ieng,he nevertheless acted without *urisdiction or ine8cess thereof in continuing to entertain the"otion for reconsideration and by failing to

co""it !ariano Cu )n*ieng to prison after he hadpro"ulgated his resolution of 4une %, 1937,denying !ariano Cu )n*ieng?s application forprobation, for the reason that@

10 is *urisdiction and power in probationproceedings is li"ited by Act #o. $%%1 to thegranting or denying of applications forprobation.chanroblesvirtualawlibrary chanroblesvirtual law library

%0 After he had issued the order denying !arianoCu )n*ieng?s petition for probation on 4une %,

1937, it beca"e final and e8ecutory at the"o"ent of itsrendition.chanroblesvirtualawlibrary chanroblesvirtual law library

30 #o right on appeal e8ists in suchcases.chanroblesvirtualawlibrary chanroblesvirtual law library

$0 The respondent *udge lac+s the power togrant a rehearing of said order or to "odify orchange the sa"e.

. ecause the respondent *udge "ade a findingthat !ariano Cu )n*ieng is innocent of the cri"efor which he was convicted by final *udg"ent ofthis court, which finding is not only presu"ptuousbut without foundation in fact and in law, and isfurther"ore in conte"pt of this court and aviolation of the respondent?s oath of office as adinterim *udge of firstinstance.chanroblesvirtualawlibrary chanroblesvirtual law library

6. ecause the respondent *udge has violated

and continues to violate his duty, which beca"ei"perative when he issued his order of 4une %,1937, denying the application for probation, toco""it his co:respondent to

*ail.chanroblesvirtualawlibrary chanrobles virtuallaw library

(etitioners also avers that they have no otherplain, speedy and ade


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was filed with thiscourt.chanroblesvirtualawlibrary chanroblesvirtual law library

30 That the petitioners having the"selves raisedthe


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passing upon the culpability of the applicant,notwithstanding the final pronounce"ent of guiltby this court. -.. #o. $1%//.0 (robation i"pliesguilt be final *udg"ent. Dhile a probation case"ay loo+ into the circu"stances attending theco""ission of the offense, this does notauthorie it to reverse the findings and conclusiveof this court, either directly or indirectly,especially wherefro" its own ad"ission reliancewas "erely had on the printed briefs, aver"ents,and pleadings of the parties. As already observedby this court in Shio,i vs. #arveyE19%%, $3 (hil.,333, 3370, and reiterated in subse


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of preventing the inferior tribunal fro" usurping a*urisdiction with which it is not legally vested.igh, B8traordinary =egal e"edies, p. 7/.0 Thegeneral rule, although there is a conflict in thecases, is that the "erit of prohibition will not liewhether the inferior court has *urisdictionindependent of the statute the constitutionality ofwhich is


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general rule, only those who are parties to a suit"ay


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2olicitor:-eneral and the Fiscal of the City of!anila, is such a proper party in the presentproceedings. The unchallenged rule is that theperson who i"pugns the validity of a statute"ust have a personal and substantial interest inthe case such that he has sustained, or willsustain, direct in*ury as a result of itsenforce"ent. t goes without saying that if Act#o. $%%1 really violates the Constitution, the(eople of the (hilippines, in whose na"e thepresent action is brought, has a substantialinterest in having it set aside. 5f greater i"portthan the da"age caused by the illegale8penditure of public funds is the "ortal woundinflicted upon the funda"ental law by theenforce"ent of an invalid statute. ence, thewell:settled rule that the state can challenge thevalidity of its own laws. n -overn"ent of the(hilippine slands vs. 2pringer E19%70, / (hil.,%9 affir"ed in 2pringer vs. -overn"ent of the(hilippine slands E19%, %77 ).2., 19 7% =aw.ed., $0, this court declared an act of thelegislature unconstitutional in an action institutedin behalf of the -overn"ent of the (hilippines. nAttorney -eneral vs. (er+ingsE19, 73 !ich.,3/3, 311, 31% $1 #.D., $%&, $%, $%90, the 2tateof !ichigan, through its Attorney -eneral,instituted


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unconstitutional.chanroblesvirtualawlibrarychanrobles virtual law library

t is the duty of a district attorney to enforce thecri"inal laws of the state, and, above all, tosupport the Constitution of the state. f, in theperfor"ance of his duty he finds two statutes inconflict with each other, or one which repealsanother, and if, in his *udg"ent, one of the two

statutes is unconstitutional, it is his duty toenforce the other and, in order to do so, he isco"pelled to sub"it to the court, by way of aplea, that one of the statutes is unconstitutional.f it were not so, the power of the =egislaturewould be free fro" constitutional li"itations inthe enact"ent of cri"inal laws.

The respondents do not see" to doubt seriouslythe correctness of the general proposition thatthe state "ay i"pugn the validity of its laws.

They have not cited any authority running clearlyin the opposite direction. n fact, they appear to

have proceeded on the assu"ption that the ruleas stated is sound but that it has no application inthe present case, nor "ay it be invo+ed by theCity Fiscal in behalf of the (eople of the(hilippines, one of the petitioners herein, theprincipal reasons being that the validity beforethis court, that the City Fiscal is estopped fro"attac+ing the validity of the Act and, notauthoried challenge the validity of the Act in itsapplication outside said city. Additional"e"orandu" of respondents, 5ctober %3, 1937,pp. ,. 1/, 17 and %3.0 chanrobles virtual lawlibrary

The "ere fact that the (robation Act has beenrepeatedly relied upon the past and all that ti"ehas not been attac+ed as unconstitutional by theFiscal of !anila but, on the contrary, has beeni"pliedly regarded by hi" as constitutional, is noreason for considering the (eople of the(hilippines estopped fro" nor assailing itsvalidity. For courts will pass upon a constitutional


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is of the essence of *udicialduty.chanroblesvirtualawlibrary chanroblesvirtual law library

This court is not un"indful of the funda"entalcriteria in cases of this nature that all reasonabledoubts should be resolved in favor of theconstitutionality of a statute. An act of thelegislature approved by the e8ecutive, is

presu"ed to be within constitutional li"itations.The responsibility of upholding the Constitutionrests not on the courts alone but on thelegislature as well. 'The


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whole punish"ent attached by law to the offenseco""itted. The ouse of =ords, on a conviction"ay, by its sentence, inflict capital punish"ent,perpetual banish"ent, perpetual banish"ent,fine or i"prison"ent, depending upon the gravityof the offense co""itted, together with re"ovalfro" office and incapacity to hold office. Co".vs. =oc+wood, supra.0 5ur Constitution also"a+es specific "ention of 'co""utation' and ofthe power of the e8ecutive to i"pose, in thepardons he "ay grant, such conditions,restrictions and li"itations as he "ay dee"proper. A"nesty "ay be granted by the(resident under the Constitution but only with theconcurrence of the #ational Asse"bly. De neednot dwell at length on the significance of thesefunda"ental changes. t is sufficient for ourpurposes to state that the pardoning power hasre"ained essentially the sa"e. The


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2ince the passage of the (robation Act of !arch$, 19%, the


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a"ended by Act #o. $%%, establishing a syste"of parole secs. to 1// and granting the courtslarge discretion in i"posing the penalties of thelaw. 2ection 1 of the law as a"ended provides'hereafter, in i"posing a prison sentence for anoffenses punished by the evised (enal Code, orits a"end"ents, the court shall sentence theaccused to an indeter"inate sentence the"a8i"u" ter" of which shall be that which, inview of the attending circu"stances, could beproperly i"posed under the rules of the saidCode, and to a "ini"u" which shall be within therange of the penalty ne8t lower to that prescribedby the Code for the offense and if the offense ispunished by any other law, the court shallsentence the accused to an indeter"inatesentence, the "a8i"u" ter" of which shall note8ceed the "a8i"u" fi8ed by said law and the"ini"u" shall not be less than the "ini"u"ter" prescribed by the sa"e.' Certain classes ofconvicts are, by section % of the law, e8cludedfro" the operation thereof. The =egislature hasalso enacted the 4uvenile ;elin


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re"ains as full and co"plete as if the (robation=aw had never been enacted. The (resident "ayyet pardon the probationer and thus place itbeyond the power of the court to order hisrearrest and i"prison"ent. iggs vs. )nited2tates E19%&,1$ F. E%d, , 7.0 chanrobles virtual law library

%. %ut 0hile the Pro)ation (a0 does not encroach

upon the pardonin$ po0er of the e2ecutive and isnot for that reason void does section 33 thereofconstitute as contended an undue dele$ation ofle$islative po0erK chanrobles virtual law library

)nder the constitutional syste", the powers ofgovern"ent are distributed a"ong threecoordinate and substantially independent organs@the legislative, the e8ecutive and the *udicial.Bach of these depart"ents of the govern"entderives its authority fro" the Constitution which,in turn, is the highest e8pression of popular will.Bach has e8clusive cogniance of the "atters

within its *urisdiction, and is supre"e within itsown sphere.chanroblesvirtualawlibrarychanrobles virtual law library

The power to "a+e laws : the legislative power :is vested in a bica"eral =egislature by the 4ones=aw sec. 1%0 and in a unica"iral #ationalAsse"bly by the Constitution Act. 6, sec. 1,Constitution of the (hilippines0. The (hilippine=egislature or the #ational Asse"bly "ay notescape its duties and responsibilities bydelegating that power to any other body orauthority. Any atte"pt to abdicate the power is

unconstitutional and void, on the principle thatpotestas dele$ata non dele$are potest. Thisprinciple is said to have originated with theglossators, was introduced into Bnglish lawthrough a "isreading of racton, there developedas a principle of agency, was established by =ordCo+e in the Bnglish public law in decisionsforbidding the delegation of *udicial power, andfound its way into A"erica as an enlightenedprinciple of free govern"ent. t has since beco"ean accepted corollary of the principle ofseparation of powers. Bncyc. of the 2ocial2ciences, p. &&.0 The classic state"ent of the rule

is that of =oc+e, na"ely@ 'The legislative neither"ust nor can transfer the power of "a+ing lawsto anybody else, or place it anywhere but wherethe people have.' =oc+e on Civil -overn"ent,sec. 1$%.0 4udge Cooley enunciates the doctrinein the following oft:


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of war or other national e"ergency, the #ationalAsse"bly "ay by law authorie the (resident, fora li"ited period and sub*ect to such restrictionsas it "ay prescribed, to pro"ulgate rules andregulations to carry out a declared nationalpolicy.' t is beyond the scope of this decision todeter"ine whether or not, in the absence of theforegoing constitutional provisions, the (residentcould be authoried to e8ercise the powersthereby vested in hi". )pon the other hand,whatever doubt "ay have e8isted has beenre"oved by the Constitutionitself.chanroblesvirtualawlibrary chanroblesvirtual law library

The case before us does not fall under any of thee8ceptions hereinabove"entioned.chanroblesvirtualawlibrary chanroble

The challenged section of Act #o. $%%1 in section11 which reads as follows@

This 4ct shall apply only in those provinces in0hich the respective provincial )oards have

provided for the salary of a pro)ation officer atrates not lower than those now provided forprovincial fiscals. 2aid probation officer shall beappointed by the 2ecretary of 4ustice and shall besub*ect to the direction of the (robation 5ffice.B"phasis ours.0

n testing whether a statute constitute an unduedelegation of legislative power or not, it is usualto in


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i"portation of the foreign cattle, such prohibitionto be raised 'if the conditions of the country"a+e this advisable or if deceased a"ong foreigncattle has ceased to be a "enace to theagriculture and livestoc+ of the lands.'chanrobles virtual law library

t should be observed that in the case at bar weare not concerned with the si"ple transference of

details of e8ecution or the pro"ulgation bye8ecutive or ad"inistrative officials of rules andregulations to carry into effect the provisions of alaw. f we were, recurrence to our own decisionswould be sufficient. ). 2. vs. arrias E19/, 11(hil., 3%7 ).2. vs. !olina E191$, %9 (hil., 119Alegre vs. Collector of Custo"s E19%9, 3 (hil.,39$ Cebu Autobus Co. vs. ;e 4esus E1931, &(hil., $$& ). 2. vs. -o"e E191, 31 (hil., %1ubi vs. (rovincial oard of !indoro E1919, 39(hil., &&/.0 chanrobles virtual law library

t is connected, however, that a legislative act

"ay be "ade to the effect as law after it leavesthe hands of the legislature. t is true that laws"ay be "ade effective on certain contingencies,as by procla"ation of the e8ecutive or theadoption by the people of a particular co""unity& . C. =., 11&, 17/:17% Cooley, Constitutional=i"itations, th ed., 6ol. , p. %%70. n Day"an vs.2outhard E1%, 1/ Dheat. 1 & =aw. ed., %30,the 2upre"e Court of the )nited 2tate ruled thatthe legislature "ay delegate a power notlegislative which it "ay itself rightfully e8ercise.6ide, also, ;owling vs. =ancashire ns. Co.E19&, 9% Dis., &3 & #. D., 73 31 =. . A.,

11%.0 The power to ascertain facts is such apower which "ay be delegated. There is nothingessentially legislative in ascertaining thee8istence of facts or conditions as the basis of theta+ing into effect of a law. That is a "entalprocess co""on to all branches of thegovern"ent. ;owling vs. =ancashire ns. Co.,supra n re6illage of #orth !ilwau+ee E19&, 93Dis., &1& 97 #.D., 1/33 33 =..A., 93 #ash vs.Fries E19/&, 1%9 Dis., 1%/ 1/ #.D., %1/ Fieldvs. Clar+ E19%, 1$3 ).2., &$9 1% 2up. Ct., $93& =aw. ed., %9$.0 #otwithstanding the apparenttendency, however, to rela8 the rule prohibiting

delegation of legislative authority on account ofthe co"ple8ity arising fro" social and econo"icforces at wor+ in this "odern industrial age(fiffner, (ublic Ad"inistration E193& ch. >>=as+i, 'The !other of (arlia"ents', foreignAffairs, 4uly, 1931, 6ol. >, #o. $, pp. &9:79eard, '2


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#olden vs. 'ames E11$, 11 !ass., 39& & A".;ec., 17$, 177, 170, it was said@

y the twentieth article of the declaration ofrights in the constitution of this co""onwealth, itis declared that the power of suspending thelaws, or the e8ecution of the laws, ought never tobe e8ercised but by the legislature, or byauthority derived fro" it, to be e8ercised in such

particular cases only as the legislature shalle8pressly provide for. !any of the articles in thatdeclaration of rights were adopted fro" the!agna Charta of Bngland, and fro" the bill ofrights passed in the reign of Dillia" and !ary.

The bill of rights contains an enu"eration of theoppressive acts of 4a"es , tending to subvertand e8tirpate the protestant religion, and thelaws and liberties of the +ingdo" and the first ofthe" is the assu"ing and e8ercising a power ofdispensing with and suspending the laws, and thee8ecution of the laws without consent ofparlia"ent. The first article in the clai" or

declaration of rights contained in the statute is,that the e8ercise of such power, by legalauthority without consent of parlia"ent, is illegal.n the tenth section of the sa"e statute it isfurther declared and enacted, that '#odispensation by non o)stanteof or to any statute,or part thereof, should be allowed but the sa"eshould be held void and of no effect, e8cept adispensation be allowed of in such statute.' Thereis an i"plied reservation of authority in theparlia"ent to e8ercise the power here"entioned because, according to the theory ofthe Bnglish Constitution, 'that absolute despoticpower, which "ust in all govern"ents resideso"ewhere,' is intrusted to the parlia"ent@ 1 l.Co"., 1&/.chanroblesvirtualawlibrary chanroblesvirtual law library

The principles of our govern"ent are widelydifferent in this particular. ere the sovereignand absolute power resides in the people andthe legislature can only e8ercise what isdelegated to the" according to the constitution.t is obvious that the e8ercise of the power in


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class of public regulations, in respect to which itis proper that the local *udg"ent should control.'Cooley on Constitutional =i"itations, th ed., p.1$.0 2o that, while we do not deny the right oflocal self:govern"ent and the propriety of leaving"atters of purely local concern in the hands oflocal authorities or for the people of s"allco""unities to pass upon, we believe that in"atters of general of general legislation li+e thatwhich treats of cri"inals in general, and asregards the general sub*ect of probation,discretion "ay not be vested in a "anner soun


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substantially unaffected by the process. icciovs. obo+en, &9 #. 4. =aw., &$9, &&% &3 =. . A.,$ Atl., 11/9,


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"ay revo+e, continue or "odify the probation,and if revo+ed, the court shall order thee8ecution of the sentence originally i"posed.2ection & prescribes the duties of probationofficers@ 't shall be the duty of every probationofficer to furnish to all persons placed onprobation under his supervision a state"ent ofthe period and conditions of their probation, andto instruct the" concerning the sa"e to +eepinfor"ed concerning their conduct and conditionto aid and encourage the" by friendly advice andad"onition, and by such other "easures, notinconsistent with the conditions i"posed by courtas "ay see" "ost suitable, to bring abouti"prove"ent in their conduct and condition toreport in writing to the court having *urisdictionover said probationers at least once every two"onths concerning their conduct and conditionto +eep records of their wor+ "a+e such reportas are necessary for the infor"ation of the2ecretary of 4ustice and as the latter "ay re


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per"issible. The legislature itself haspassed upon the e8pediency of the law,and what is shall be. The co""ission isintrusted with no authority or discretionupon these


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The Disconsin case was a civil action foundedupon a 'Disconsin standard policy of fireinsurance,' and the court held that 'the act, . . .wholly fails to provide definitely and clearly whatthe standard policy should contain, so that itcould be put in use as a unifor" policy re


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and e8ecute all instructions e"anatingfro" the ;irector of Co""erce andndustry, for the "ost effective and properenforce"ent of the above regulations intheir respective localities.

The law says that the -overnor:-eneral "ay fi8'the "a8i"u" sale price that the industrial or"erchant "ay de"and.' The law is a general law

and not a local or special law.

The procla"ation underta+es to fi8 one price forrice in !anila and other and different prices inother and different provinces in the (hilippineslands, and delegates the power to deter"inethe other and different prices to provincialtreasurers and their deputies. ere, then, youwould have a delegation of legislative power tothe -overnor:-eneral, and a delegation by hi" ofthat power to provincial treasurers and theirdeputies, who 'are hereby directed toco""unicate with, and e8ecute all instructions

e"anating fro" the ;irector of Co""erce andndustry, for the "ost effective and properenforce"ent of the above regulations in theirrespective localities.' The issuance of theprocla"ation by the -overnor:-eneral was thee8ercise of the delegation of a delegated power,and was even a sub delegation of that power.

Assu"ing that it is valid, Act #o. %& is ageneral law and does not authorie the -overnor:-eneral to fi8 one price of rice in !anila andanother price in loilo. t only purports toauthorie hi" to fi8 the price of rice in the

(hilippine slands under a law, which is -eneraland unifor", and not local or special. )nder theter"s of the law, the price of rice fi8ed in theprocla"ation "ust be the sa"e all over theslands. There cannot be one price at !anila andanother at loilo. Again, it is a "ater of co""on+nowledge, and of which this court will ta+e

*udicial notice, that there are "any +inds of ricewith different and corresponding "ar+et values,and that there is a wide range in the price, whichvaries with the grade and


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under the Constitution. f this law should besustained, upon the sa"e principle and for thesa"e reason, the =egislature could authorie the-overnor:-eneral to fi8 the price of every productor co""odity in the (hilippine slands, ande"power hi" to "a+e it a cri"e to sell anyproduct at any other or different price.

t "ay be said that this was a war "easure, and

that for such reason the provision of theConstitution should be suspended. ut the2tubborn fact re"ains that at all ti"es the

*udicial power was in full force and effect, andthat while that power was in force and effect,such a provision of the Constitution could not be,and was not, suspended even in ti"es of war. t"ay be clai"ed that during the war, the )nited2tates -overn"ent undertoo+ to, and did, fi8 theprice at which wheat and flour should be boughtand sold, and that is true. There, the )nited2tates had declared war, and at the ti"e was atwar with other nations, and it was a war "easure,

but it is also true that in doing so, and as a part ofthe sa"e act, the )nited 2tates co""andeeredall the wheat and flour, and too+ possession of it,either actual or constructive, and the govern"entitself beca"e the owner of the wheat and flour,and fi8ed the price to be paid for it. That is notthis case. ere the rice sold was the personal andprivate property of the defendant, who sold it toone of his custo"ers. The govern"ent had notbought and did not clai" to own the rice, or haveany interest in it, and at the ti"e of the allegedsale, it was the personal, private property of thedefendant. t "ay be that the law was passed inthe interest of the public, but the "e"bers of thiscourt have ta+en on sole"n oath to uphold anddefend the Constitution, and it ought not to beconstrued to "eet the changing winds ore"ergency conditions. Again, we say that nostate or nation under a republican for" ofgovern"ent ever enacted a law authoriing anye8ecutive, under the conditions states, to fi8 theprice at which a price person would sell his ownrice, and "a+e the broad state"ent that nodecision of any court, on principle or by analogy,will ever be found which sustains theconstitutionality of the particular portion of Act#o. %& here in


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De also "ar+, on top of all this, the


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Dor+ers. These pay"ents will not precludeallowance of the private respondent?s clai"against the petitioner because it is specificallyreserved in the standard contract of e"ploy"entfor Filipino sea"en under !e"orandu" Circular#o. %, 2eries of 19$, thatO

2ection C. Compensation and%enefits.O

1. n case of death of the sea"enduring the ter" of his Contract, thee"ployer shall pay his beneficiariesthe a"ount of@

a. (%%/,///.// for"aster and chiefengineers

b. (1/,///.// forother officers,including radio

operators and"aster electrician

c. ( 13/,///.// forratings.

%. t is understood and agreed thatthe benefits "entioned above shallbe separate and distinct fro", andwill be in addition to whateverbenefits which the sea"an isentitled to under (hilippine laws. ...

3. ...

c. f the re"ains ofthe sea"an is buriedin the (hilippines,the owners shall paythe beneficiaries ofthe sea"an ana"ount note8ceeding(1,///.// for buriale8penses.

The underscored portion is "erely a reiteration of!e"orandu" Circular #o. %%, issued by the#ational 2ea"en oard on 4uly 1%,197&,providing an follows@

ncome %enefits under this RuleShall )e Considered 4dditional%enefits.7

All co"pensation benefits underTitle , oo+ Four of the =aborCode of the (hilippines B"ployees

Co"pensation and 2tate nsuranceFund0 shall be granted, in additionto whatever benefits, gratuities orallowances that the sea"an or hisbeneficiaries "ay be entitled tounder the e"ploy"ent contractapproved by the #2. f applicable,all benefits under the 2ocial2ecurity =aw and the (hilippine!edicare =aw shall be en*oyed by

the sea"an or his beneficiaries inaccordance with such laws.

The above provisions are "anifestations of theconcern of the 2tate for the wor+ing class,consistently with the social *ustice policy and thespecific provisions in the Constitution for theprotection of the wor+ing class and the pro"otionof its interest.

5ne last challenge of the petitioner "ust be dealtwith to close t case. ts argu"ent that it has beendenied due process because the sa"e (5BA thatissued !e"orandu" Circular #o. % has alsosustained and applied it is an uninfor"edcriticis" of ad"inistrative law itself.Ad"inistrative agencies are vested with twobasic powers, the


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9ulueta Gonzales Paculdo and 4ssociates forpetitioner.Office of the Solicitor General for respondent.

Con%e9%#on 3Ped"o4, J.:

;uring the period fro" 2epte"ber $ to 5ctober%9, 19&$ the (resident of the (hilippines,purporting to act pursuant to 2ection & of the

evised Ad"inistrative Code, issued B8ecutive5rders #os. 93 to 1%1, 1%$ and 1%& to 1%9creating thirty:three 330 "unicipalitiesenu"erated in the "argin.1 2oon after the datelast "entioned, or on #ove"ber 1/, 19&$petitioner B""anuel (elae, as 6ice (resident ofthe (hilippines and as ta8payer, instituted thepresent special civil action, for a writ ofprohibition with preli"inary in*unction, againstthe Auditor -eneral, to restrain hi", as well as hisrepresentatives and agents, fro" passing in auditany e8penditure of public funds ini"ple"entation of said e8ecutive orders andQor

any disburse"ent by said "unicipalities.

(etitioner alleges that said e8ecutive orders arenull and void, upon the ground that said 2ection& has been i"pliedly repealed by epublic Act#o. %37/ and constitutes an undue delegation oflegislative power. espondent "aintains thecontrary view and avers that the present action ispre"ature and that not all proper parties Rreferring to the officials of the new politicalsubdivisions in


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-eneral and approved by the -overnor:-eneral0(resident of the (hilippines.

espondent alleges that the power of the(resident to create "unicipalities under thissection does not a"ount to an undue delegationof legislative power, relying upon !unicipality ofCardona vs. !unicipality of inaMgonan 3& (hil.$70, which, he clai"s, has settled it. 2uch clai"

is untenable, for said case involved, not thecreation of a new "unicipality, but a "eretransfer of territory R fro" an already e8isting"unicipality Cardona0 to another "unicipalityinaMgonan0, li+ewise, e8isting at the ti"e ofand prior to said transfer 2ee -ovUt of the (.. e8rel. !unicipality of Cardona vs. !unicipality, ofinaMgonan E3$ (hil. 1, 19:%/10 : inconse


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)dall vs. 2evern, 79 (. %d. 3$7:3$90. As the2upre"e Court of Disconsin has aptlycharacteried it, 'the


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it that the corresponding provincial officials ta+eappropriate disciplinary action therefor. #either"ay he vote, set aside or annul an ordinancepassed by said council within the scope of its

*urisdiction, no "atter how patently unwise it"ay be. e "ay not even suspend an electiveofficial of a regular "unicipality or ta+e anydisciplinary action against hi", e8cept on appealfro" a decision of the corresponding provincialboard.

)pon the other hand if the (resident could createa "unicipality, he could, in effect, re"ove any ofits officials, by creating a new "unicipality andincluding therein the )arrio in which the officialconcerned resides, for his office would therebybeco"e vacant.& Thus, by "erely brandishingthe power to create a new "unicipality if he hadit0, without actually creating it, he could co"pellocal officials to sub"it to his dictation, thereby,in effect, e8ercising over the" the power ofcontrol denied to hi" by the Constitution.

Then, also, the power of control of the (residentover e8ecutive depart"ents, bureaus or officesi"plies no "ore than the authority to assu"edirectly the functions thereof or to interfere in thee8ercise of discretion by its officials. !anifestly,such control does not include the authority eitherto abolish an e8ecutive depart"ent or bureau, orto create a new one. As a conse


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general supervision over all local govern"ents as"ay be provided by law, and ta+e care that thelaws be faithfully e8ecuted.

n short, the power of control over localgovern"ents had now been ta+en away fro" theChief B8ecutive. Again, to fully understand thesignificance of this provision, one "ust trace itsdevelop"ent and growth.

As early as April 7, 19// (resident !cHinley ofthe )nited 2tates, in his nstructions to the2econd (hilippine Co""ission, laid down thepolicy that our "unicipal govern"ents should beSsub*ect to the least degree of supervision andcontrol on the part of the national govern"ent.2aid supervision and control was to be confinedwithin the Snarrowest li"its or so "uch only asS"ay be necessary to secure and enforce faithfuland efficient ad"inistration by local officers. Andthe national govern"ent Sshall have no directad"inistration e8cept of "atters of purely

general concern. 2ee ebron v. eyes, =:91,4uly %, 19.0

All this had one ai", to enable the Filipinos toac


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B25=)T5#

For resolution are the following "otions forreconsideration of the Court?s ;ecisiondated 2epte"ber 1, %// upholding theconstitutionality of epublic Act #o. 9337or the 6AT efor" ActE1@

10 !otion for econsideration filed bypetitioners in -.. #o. 1&$&3,Bscudero, et al., on the followinggrounds@

A. TB ;B=BT5# 5F TB ?#5(A22 5# (5625#2? F5 TB2A=B 5F (BT5=B)! (5;)CT2A#; (5DB -B#BAT5#2B6CB2 C5#2TT)TB; -A6BA)2B 5F ;2CBT5#A!5)#T#- T5 =ACH 5 B>CB225F 4)2;CT5# 5# TB (AT

5F TB CA!BA=C5#FBB#CB C5!!TTBB.. B()=C ACT #5. 9337-522=G 65=ATB2 TBC5#2TT)T5#A= !(BAT6B5# B>C=)26B 5-#AT5# 5FB6B#)B ==2 )#;B ?%$,ATC=B 6, 197 (=((#BC5#2TT)T5#.

C. B()=C ACT #5. 9337?2 2TA#;:GA)T5TG T5 TB B>BC)T6B T5#CBA2B TB 6AT ATB, B2(BCA==G5# ACC5)#T 5F TB BFFBCT6BBC5!!B#;AT5G (5DB -A#TB;

T5 TB 2BCBTAG 5F F#A#CB,C5#2TT)TB2 )#;)B ;B=B-AT5# 5F=B-2=AT6B A)T5TG.

%0 !otion for econsideration of petitioner

in -.. #o. 1&73/, ataan -overnorBnri


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2uch argu"ent is flawed. #ote that the rules ofboth houses of Congress provide that aconference co""ittee shall settle the?differences? in the respective bills of each house.6erily, the fact that a no pass6on provision ispresent in one version but absent in the other,and one version intends two industries, i.e.,power generation co"panies and petroleu"sellers, to bear the burden of the ta8, while theother version intended only the industry of powergeneration, trans"ission and distribution to besaddled with such burden, clearly shows thatthere are indeed differences between the billsco"ing fro" each house, which differencesshould be acted upon by the bica"eralconference co""ittee. t is incorrect to concludethat there is no clash between two opposingforces with regard to the no pass6onprovision for6AT on the sale of petroleu" products "erelybecause such provision e8ists in the ouseversion while it is absent in the 2enate version. tis precisely the absence of such provision in the2enate bill and the presence thereof in the ousebills that causes the conflict. The absence of theprovision in the 2enate bill shows the 2enate?sdisagree"ent to the intention of the ouse ofepresentatives "a+e the sellers of petroleu"bear the burden of the 6AT. Thus, there areindeed two opposing forces@ on one side, theouse of epresentatives which wants petroleu"dealers to be saddled with the burden of paying6AT and on the other, the 2enate which does notsee it proper to "a+e that particular industrybear said burden. Clearly, such conflicts anddifferences between the no pass6onprovisions inthe 2enate and ouse bills had to be acted upon

by the bica"eral conference co""ittee as"andated by the rules of both houses ofCongress.

!oreover, the deletion of the no pass6onprovision "ade the present 6AT law "ore inconsonance with the very nature of 6AT which, asstated in the ;ecision pro"ulgated on 2epte"ber1, %//, is a ta8 on spending or consu"ption,thus, the burden thereof is ulti"ately borne by

the end:consu"er.

Bscudero, et al., then clai" that there had beenchanges introduced in the ules of the ouse ofepresentatives regarding the conduct of theouse panel in a bica"eral conferenceco""ittee, since the ti"e of Tolentino vs.Secretary of Finance E% to act as safeguardsagainst possible abuse of authority by the ouse"e"bers of the bica"eral conferenceco""ittee. Bven assu"ing that the rule re


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for filing revenue, tariff, or ta8 bills,bills authoriing an increase of thepublic debt, private bills and bills oflocal application "ust co"e fro"the ouse of epresentatives onthe theory that, elected as they arefro" the districts, the "e"bers ofthe ouse can be e8pected to be"ore sensitive to the local needsand proble"s. 5n the other hand,the senators, who are elected atlarge, are e8pected to approachthe sa"e proble"s fro" thenational perspective. oth viewsare thereby "ade to bear on theenact"ent of such laws.E$

Clearly, after the ouse bills as approved on thirdreading are duly trans"itted to the 2enate, the

Constitution states that the latter can propose orconcur with a"end"ents. The Court finds thatthe sub*ect provisions found in the 2enate bill arewithin the purview of such constitutionalprovision as declared in the Tolentinocase.

The intent of the ouse of epresentatives ininitiating ouse ill #os. 3 and 37/ was tosolve the country?s serious financial proble"s. twas stated in the respective e8planatory notes

that there is a need for the govern"ent to "a+esignificant e8penditure savings and a crediblepac+age of revenue "easures. These "easuresinclude i"prove"ent of ta8 ad"inistration andcontrol and lea+ages in revenues fro" inco"eta8es and value added ta8. t is also stated thatone opportunity that could be beneficial to theoverall status of our econo"y is to reviewe8isting ta8 rates, evaluating the relevance givenour present conditions. Thus, with these purposesin "ind and to acco"plish these purposes forwhich the house bills were filed, i.e., to raiserevenues for the govern"ent, the 2enateintroduced a"end"ents on inco"e ta8es, whichas ad"itted by 2enator alph ecto, would yieldabout (1/. billion a year.

!oreover, since the ob*ective of these house bills

is to raise revenues, the increase in corporate

inco"e ta8es would be a great help and would

also soften the i"pact of 6AT "easure on the

consu"ers by distributing the burden across all

sectors instead of putting it entirely on the

shoulders of the consu"ers.

As to the other #ational nternal evenue Code#C0 provisions found in 2enate ill #o. 19/,i.e., percentage ta8es, franchise ta8es,a"use"ent and e8cise ta8es, these provisionsare needed so as to cushion the effects of 6AT onconsu"ers. As we said in our decision, certaingoods and services which were sub*ect to

percentage ta8 and e8cise ta8 would no longer be6AT e8e"pt, thus, the consu"er would beburdened "ore as they would be paying the 6ATin addition to these ta8es. Thus, there is a needto a"end these sections to soften the i"pact of6AT. The Court finds no reason to reverse theearlier ruling that the 2enate introduceda"end"ents that are ger"ane to the sub*ect"atter and purposes of the house bills.

(etitioners Bscudero, et al., also reiterate that.A. #o. 9337?s stand: by authority to theB8ecutive to increase the 6AT rate, especially onaccount of the reco""endatory power granted tothe 2ecretary of Finance, constitutes unduedelegation of legislative power. They sub"it thatthe reco""endatory power given to the2ecretary of Finance in regard to the occurrenceof either of two events using the -ross ;o"estic(roduct -;(0 as a bench"ar+ necessarily and

inherently re


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to deter"ine econo"ic growth is not within theprovince of the Court to in


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continuance of 2ection 11/ of the#ational nternal evenue Code of1997, prior to its a"end"ent byep. Act #o. 9337.

The elucidation of Associate 4ustice Arte"io 6.

(anganiban is li+ewise worthy of note, to wit@

!oreover, there is no vested right in generallyaccepted accounting principles. These refer toaccounting concepts, "easure"ent techni


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(etitioners, invo+ing their right as ta8payers filedthis petition challenging the constitutionality ofA 933, a ta8 refor" legislation. They contendthat, by establishing a syste" of rewards andincentives, the law 'transfor"Es the officials ande"ployees of the and the 5C into"ercenaries and bounty hunters' as they will dotheir best only in consideration of such rewards.

Thus, the syste" of rewards and incentivesinvites corruption and under"ines theconstitutionally "andated duty of these officialsand e"ployees to serve the people with ut"ostresponsibility, integrity, loyalty and efficiency.

(etitioners also clai" that li"iting the scope ofthe syste" of rewards and incentives only toofficials and e"ployees of the and the 5Cviolates the constitutional guarantee of e


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operates on the basis thereof and reinforces it byproviding a syste" of rewards and sanctions forthe purpose of encouraging the officials ande"ployees of the and the 5C to e8ceedtheir revenue targets and opti"ie their revenue:generation capability and collection.1

The presu"ption is disputable but proof to thecontrary is re


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n the e8ercise of its power to "a+eclassifications for the purpose of enactinglaws over "atters within its *urisdiction,the state is recognied as en*oying a widerange of discretion. t is not necessary thatthe classification be based on scientific or"ar+ed differences of things or in theirrelation. #either is it necessary that theclassification be "ade with "athe"aticalnicety. ence, legislative classification"ay in "any cases properly rest onnarrow distinctions, for the e


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targets and the i"ple"enting agencies incarrying out the provisions of the law. 2ection %spells out the policy of the law@

2BC. %. Declaration of Policy. R t is thepolicy of the 2tate to opti"ie therevenue:generation capability andcollection of the ureau of nternalevenue 0 and the ureau of Custo"s

5C0 by providing for a syste" ofrewards and sanctions through thecreation of a ewards and ncentives Fundand a evenue (erfor"ance Bvaluationoard in the above agencies for thepurpose of encouraging their officials ande"ployees to e8ceed their revenuetargets.

2ection $ 'canalied within ban+s that +eep itfro" overflowing'%9 the delegated power to the(resident to fi8 revenue targets@

2BC. $. Re0ards and ncentives Fund. R Aewards and ncentives Fund, hereinafterreferred to as the Fund, is hereby created,to be sourced fro" the collection of the and the 5C in e8cess of !e#""e$9e%#


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Clearly, A 933 in no way violates the securityof tenure of officials and e"ployees of the and the 5C. The guarantee of security of tenureonly "eans that an e"ployee cannot bedis"issed fro" the service for causes other thanthose provided by law and only after due processis accorded the e"ployee.31 n the case of A933, it lays down a reasonable yardstic+ forre"oval when the revenue collection falls shortof the target by at least 7.V0 with dueconsideration of all relevant factors affecting thelevel of collection. This standard is analogous toinefficiency and inco"petence in theperfor"ance of official duties, a ground fordisciplinary action under civil service laws.3%Theaction for re"oval is also sub*ect to civil servicelaws, rules and regulations and co"pliance withsubstantive and procedural due process.

At any rate, this Court has recognied thefollowing as sufficient standards@ 'publicinterest,' '*ustice and e


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Dhile congressional scrutiny isregarded as a passive process ofloo+ing at the facts that are readilyavailable, con$ressionalinvesti$ation involves a moreintense di$$in$ of facts. The powerof Congress to conductinvestigation is recognied by the197 Constitution under section%1, Article 6, 888 888 888

c. (e$islative supervision

The third and most encompassin$for" bywhich Congress e8ercises its oversightpower is thru legislative supervision.'2upervision' connotes a continuing andinfor"ed awareness on the part of acongressional co""ittee regardinge2ecutive operations in a givenad"inistrative area. Dhile bothcongressional scrutiny and investigation

involve in


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confor"ity with those standards.$& n the lattercase, the law "ust be co"plete in all its essentialter"s and conditions when it leaves the hands ofthe legislature.$7 Thus, what is left for thee8ecutive branch or the concerned ad"inistrativeagency when it for"ulates rules and regulationsi"ple"enting the law is to fill up detailssupple"entary rule:"a+ing0 or ascertain factsnecessary to bring the law into actual operationcontingent rule:"a+ing0.$

Ad"inistrative regulations enacted byad"inistrative agencies to i"ple"ent andinterpret the law which they are entrusted toenforce have the force of law and are entitled torespect.$92uch rules and regulations parta+e ofthe nature of a statute/and are *ust as bindingas if they have been written in the statute itself.As such, they have the force and effect of lawand en*oy the presu"ption of constitutionalityand legality until they are set aside with finality inan appropriate case by a co"petent court.1

Congress, in the guise of assu"ing the role of anoverseer, "ay not pass upon their legality bysub*ecting the" to its sta"p of approval withoutdisturbing the calculated balance of powersestablished by the Constitution. n e8ercisingdiscretion to approve or disapprove the basedon a deter"ination of whether or not theyconfor"ed with the provisions of A 933,Congress arrogated *udicial power unto itself, apower e8clusively vested in this Court by theConstitution.

Con$#de"ed O9#n#on of

". Ju$#%e Dane O. T#nga

!oreover, the re


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The bill as approved on second reading isprinted in its final for" and copies thereofare distributed at least three days beforethe third reading. 5n the third reading, the"e"bers "erely register their votes ande8plain the" if they are allowed by therules. #o further debate is allowed.

5nce the bill passes third reading, it is

sent to the other cha"ber, where it willalso undergo the three readings. f thereare differences between the versionsapproved by the two cha"bers, aconference co""itteerepresenting bothouses will draft a co"pro"ise "easurethat if ratified by the 2enate and theouse of epresentatives will then besub"itted to the (resident for hisconsideration.

The bill is enrolled when printed as finallyapproved by the Congress, thereafter

authenticated with the signatures of the2enate (resident, the 2pea+er, and the2ecretaries of their respective cha"bersX9

The President


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capability and collection of the and the 5Cby providing for a syste" of rewards andsanctions through the ewards and ncentivesFund and a evenue (erfor"ance Bvaluationoard.

To be effective, ad"inistrative rules andregulations "ust be published in full if theirpurpose is to enforce or i"ple"ent e8isting law

pursuant to a valid delegation. The of A933 were published on !ay 3/, %//& in twonewspapers of general circulation&& and beca"eeffective 1 days thereafter.&7 )ntil and unlessthe contrary is shown, the are presu"ed validand effective even without the approval of the

4oint Congressional 5versight Co""ittee.

HEREFORE, the petition is hereby PARTIALL2GRANTED. 2ection 1% of A 933 creating a 4ointCongressional 5versight Co""ittee to approvethe i"ple"enting rules and regulations of the lawis declared (NCONSTIT(TIONAL and therefore

N(LL and VOID. The constitutionality of there"aining provisions of A 933 is (PHELD.(ursuant to 2ection 13 of A 933, the rest of theprovisions re"ain in force and effect.
http://www.lawphil.net/judjuris/juri2008/aug2008/gr_166715_2008.html#fnt66http://www.lawphil.net/judjuris/juri2008/aug2008/gr_166715_2008.html#fnt67http://www.lawphil.net/judjuris/juri2008/aug2008/gr_166715_2008.html#fnt66http://www.lawphil.net/judjuris/juri2008/aug2008/gr_166715_2008.html#fnt67

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