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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 47065

June 26, 1940

PANGASINAN TRANSPORTATION CO., INC., petitioner,


vs.
THE PUBLIC SERVICE COMMISSION, respondent.
C. de G. Alvear for petitioner.
Evaristo R. Sandoval for respondent.
LAUREL, J.:
The petitioner has been engaged for the past twenty years in the business of transporting passengers
in the Province of Pangasinan and Tarlac and, to a certain extent, in the Province of Nueva Ecija and
Zambales, by means of motor vehicles commonly known as TPU buses, in accordance with the terms
and conditions of the certificates of public convenience issued in its favor by the former Public Utility
Commission in cases Nos. 24948, 30973, 36830, 32014 and 53090. On August 26, 1939, the
petitioner filed with the Public Service Commission an application for authorization to operate ten
additional new Brockway trucks (case No. 56641), on the ground that they were needed to comply
with the terms and conditions of its existing certificates and as a result of the application of the Eight
Hour Labor Law. In the decision of September 26, 1939, granting the petitioner's application for
increase of equipment, the Public Service Commission ordered:
Y de acuerdo con que se provee por el articulo 15 de la ley No. 146 del Commonwealth, tal
como ha sido enmendada por el articulo 1 de la Ley No. 454, por la presente se enmienda las
condiciones de los certificados de convenciencia publica expedidos en los expedientes Nos.
24948, 30973, 36831, 32014 y la authorizacion el el expediente No. 53090, asi que se
consideran incorporadas en los mismos las dos siguientes condiciones:
Que los certificados de conveniencia publica y authorizacion arriba mencionados seran validos
y subsistentes solamente durante de veinticinco (25) anos, contados desde la fecha de la
promulgacion de esta decision.
Que la empresa de la solicitante porda ser adquirida por el Commonwealth de Filipinas o por
alguna dependencia del mismo en cualquier tiempo que lo deseare previo pago del precio d
costo de su equipo util, menos una depreciacion razonable que se ha fijar por la Comision al
tiempo de su adquisicion.
Not being agreeable to the two new conditions thus incorporated in its existing certificates, the
petitioner filed on October 9, 1939 a motion for reconsideration which was denied by the Public
Service Commission on November 14, 1939. Whereupon, on November 20, 1939, the present
petition for a writ of certiorari was instituted in this court praying that an order be issued directing the
secretary of the Public Service Commission to certify forthwith to this court the records of all
proceedings in case No. 56641; that this court, after hearing, render a decision declaring section 1 of
Commonwealth Act No. 454 unconstitutional and void; that, if this court should be of the opinion that
section 1 of Commonwealth Act No. 454 is constitutional, a decision be rendered declaring that the

provisions thereof are not applicable to valid and subsisting certificates issued prior to June 8, 1939.
Stated in the language of the petitioner, it is contended:
1. That the legislative powers granted to the Public Service Commission by section 1 of
Commonwealth Act No. 454, without limitation, guide or rule except the unfettered discretion
and judgment of the Commission, constitute a complete and total abdication by the Legislature
of its functions in the premises, and for that reason, the Act, in so far as those powers are
concerned, is unconstitutional and void.
2. That even if it be assumed that section 1 of Commonwealth Act No. 454, is valid delegation
of legislative powers, the Public Service Commission has exceeded its authority because: (a)
The Act applies only to future certificates and not to valid and subsisting certificates issued
prior to June 8, 1939, when said Act took effect, and (b) the Act, as applied by the
Commission, violates constitutional guarantees.
Section 15 of Commonwealth Act No. 146, as amended by section 1 of Commonwealth Act No. 454,
invoked by the respondent Public Service Commission in the decision complained of in the present
proceedings, reads as follows:
With the exception to those enumerated in the preceding section, no public service shall
operate in the Philippines without possessing a valid and subsisting certificate from the Public
Service Commission, known as "certificate of public convenience," or "certificate of
convenience and public necessity," as the case may be, to the effect that the operation of said
service and the authorization to do business will promote the public interests in a proper and
suitable manner.
The Commission may prescribed as a condition for the issuance of the certificate provided in
the preceding paragraph that the service can be acquired by the Commonwealth of the
Philippines or by any instrumentality thereof upon payment of the cost price of its useful
equipment, less reasonable depreciation; and likewise, that the certificate shall valid only for a
definite period of time; and that the violation of any of these conditions shall produce the
immediate cancellation of the certificate without the necessity of any express action on the part
of the Commission.
In estimating the depreciation, the effect of the use of the equipment, its actual condition, the
age of the model, or other circumstances affecting its value in the market shall be taken into
consideration.
The foregoing is likewise applicable to any extension or amendment of certificates actually
force and to those which may hereafter be issued, to permits to modify itineraries and time
schedules of public services and to authorization to renew and increase equipment and
properties.
Under the first paragraph of the aforequoted section 15 of Act No. 146, as amended, no public
service can operate without a certificate of public convenience or certificate of convenience and
public necessity to the effect that the operation of said service and the authorization to do business
will "public interests in a proper and suitable manner." Under the second paragraph, one of the
conditions which the Public Service Commission may prescribed the issuance of the certificate
provided for in the first paragraph is that "the service can be acquired by the Commonwealth of the
Philippines or by any instrumental thereof upon payment of the cost price of its useful equipment, less
reasonable depreciation," a condition which is virtually a restatement of the principle already
embodied in the Constitution, section 6 of Article XII, which provides that "the State may, in the

interest of national welfare and defense, establish and operate industries and means of transportation
and communication, and, upon payment of just compensation, transfer to public ownership utilities
and other private enterprises to be operated by the Government. "Another condition which the
Commission may prescribed, and which is assailed by the petitioner, is that the certificate "shall be
valid only for a definite period of time." As there is a relation between the first and second paragraphs
of said section 15, the two provisions must be read and interpreted together. That is to say, in issuing
a certificate, the Commission must necessarily be satisfied that the operation of the service under
said certificate during a definite period fixed therein "will promote the public interests in a proper and
suitable manner." Under section 16 (a) of Commonwealth Act. No. 146 which is a complement of
section 15, the Commission is empowered to issue certificates of public convenience whenever it
"finds that the operation of the public service proposed and the authorization to do business will
promote the public interests in a proper and suitable manner." Inasmuch as the period to be fixed by
the Commission under section 15 is inseparable from the certificate itself, said period cannot be
disregarded by the Commission in determining the question whether the issuance of the certificate
will promote the public interests in a proper and suitable manner. Conversely, in determining "a
definite period of time," the Commission will be guided by "public interests," the only limitation to its
power being that said period shall not exceed fifty years (sec. 16 (a), Commonwealth Act No. 146;
Constitution, Art. XIII, sec. 8.) We have already ruled that "public interest" furnishes a sufficient
standard. (People vs. Fernandez and Trinidad, G. R. No. 45655, promulgated June 15, 1938;
People vs. Rosenthal and Osmea, G. R. Nos. 46076 and 46077, promulgated June 12, 1939, citing
New York Central Securities Corporation vs. U.S.A., 287 U.S. 12, 24, 25, 77 Law. ed. 138, 145, 146;
Schenchter Poultry Corporation vs. I.S., 295, 540, 79 Law. ed. 1570, 1585; Ferrazzini vs. Gsell, 34
Phil., 697, 711-712.)
Section 8 of Article XIII of the Constitution provides, among other things, that no franchise, certificate,
or any other form of authorization for the operation of a public utility shall be "for a longer period than
fifty years," and when it was ordained, in section 15 of Commonwealth Act No. 146, as amended by
Commonwealth Act No. 454, that the Public Service Commission may prescribed as a condition for
the issuance of a certificate that it "shall be valid only for a definite period of time" and, in section 16
(a) that "no such certificates shall be issued for a period of more than fifty years," the National
Assembly meant to give effect to the aforesaid constitutional mandate. More than this, it has thereby
also declared its will that the period to be fixed by the Public Service Commission shall not be longer
than fifty years. All that has been delegated to the Commission, therefore, is the administrative
function, involving the use discretion, to carry out the will of the National Assembly having in view, in
addition, the promotion of "public interests in a proper and suitable manner." The fact that the
National Assembly may itself exercise the function and authority thus conferred upon the Public
Service Commission does not make the provision in question constitutionally objectionable.
The theory of the separation of powers is designed by its originators to secure action and at the same
time to forestall overaction which necessarily results from undue concentration of powers, and
thereby obtain efficiency and prevent deposition. Thereby, the "rule of law" was established which
narrows the range of governmental action and makes it subject to control by certain devices. As a
corollary, we find the rule prohibiting delegation of legislative authority, and from the earliest time
American legal authorities have proceeded on the theory that legislative power must be exercised by
the legislature alone. It is frankness, however, to confess that as one delves into the mass of judicial
pronouncement, he finds a great deal of confusion. One thing, however, is apparent in the
development of the principle of separation of powers and that is that the maxim of delegatus non
potest delegari or delegata potestas non potest delegari, attributed to Bracton (De Legius et
Consuetedinious Angliae, edited by G. E. Woodbine, Yale University Press, 1922, vol. 2, p. 167) but
which is also recognized in principle in the Roman Law (D. 17.18.3), has been made to adapt itself to
the complexities of modern governments, giving rise to the adoption, within certain limits, of the
principle of "subordinate legislation," not only in the United States and England but in practically all

modern governments. (People vs. Rosenthal and Osmea, G. R. Nos. 46076 and 46077,
promulgated June 12, 1939.) Accordingly, with the growing complexity of modern life, the
multiplication of the subjects of governmental regulation, and the increased difficulty of administering
the laws, there is a constantly growing tendency toward the delegation of greater powers by the
legislature, and toward the approval of the practice by the court. (Dillon Catfish Drainage Dist, v. Bank
of Dillon, 141 S. E. 274, 275, 143 S. Ct. 178; State vs. Knox County, 54 S. W. 2d. 973, 976, 165
Tenn. 319.) In harmony with such growing tendency, this Court, since the decision in the case
of Compaia General de Tabacos de Filipinas vs. Board of Public Utility Commissioner (34 Phil.,
136), relied upon by the petitioner, has, in instances, extended its seal of approval to the "delegation
of greater powers by the legislature." (Inchausti Steamship Co. vs. Public Utility Commissioner, 44
Phil., Autobus Co. vs. De Jesus, 56 Phil., 446; People vs. Fernandez & Trinidad, G. R. No. 45655,
promulgated June 15, 1938; People vs. Rosenthal & Osmea, G. R. Nos. 46076, 46077, promulgated
June 12, 1939; and Robb and Hilscher vs. People, G. R. No. 45866, promulgated June 12, 1939.).
Under the fourth paragraph of section 15 of Commonwealth Act No. 146, as amended by
Commonwealth Act No. 454, the power of the Public Service Commission to prescribed the
conditions "that the service can be acquired by the Commonwealth of the Philippines or by any
instrumentality thereof upon payment of the cost price of its useful equipment, less reasonable," and
"that the certificate shall be valid only for a definite period of time" is expressly made applicable "to
any extension or amendment of certificates actually in force" and "to authorizations to renew and
increase equipment and properties." We have examined the legislative proceedings on the subject
and have found that these conditions were purposely made applicable to existing certificates of public
convenience. The history of Commonwealth Act No. 454 reveals that there was an attempt to
suppress, by way of amendment, the sentence "and likewise, that the certificate shall be valid only for
a definite period of time," but the attempt failed:
xxx

xxx

xxx

Sr. CUENCO. Seor Presidente, para otra enmienda. En la misma pagina, lineas 23 y 24, pido
que se supriman las palabras 'and likewise, that the certificate shall be valid only for a definite
period time.' Esta disposicion del proyecto autoriza a la Comision de Servicios Publicos a fijar
un plazo de vigencia certificado de conveniencia publica. Todo el mundo sabe que bo se
puede determinar cuando los intereses del servicio publico requiren la explotacion de un
servicio publico y ha de saber la Comision de Servisios, si en un tiempo determinado, la
explotacion de algunos buses en cierta ruta ya no tiene de ser, sobre todo, si tiene en cuenta;
que la explotacion de los servicios publicos depende de condiciones flutuantes, asi como del
volumen como trafico y de otras condiciones. Ademas, el servicio publico se concede por la
Comision de Servicios Publicos el interes publico asi lo exige. El interes publico no tiene
duracion fija, no es permanente; es un proceso mas o menos indefinido en cuanto al tiempo.
Se ha acordado eso en el caucus de anoche.
EL PRESIDENTE PRO TEMPORE. Que dice el Comite?
Sr. ALANO. El Comite siente tener que rechazar esa enmienda, en vista de que esto
certificados de conveniencia publica es igual que la franquicia: sepuede extender. Si los
servicios presentados por la compaia durante el tiempo de su certificado lo require, puede
pedir la extension y se le extendera; pero no creo conveniente el que nosotros demos un
certificado de conveniencia publica de una manera que podria pasar de cincuenta anos,
porque seria anticonstitucional.
xxx

xxx

xxx

By a majority vote the proposed amendment was defeated. (Sesion de 17 de mayo de 1939,
Asamblea Nacional.)
The petitioner is mistaken in the suggestion that, simply because its existing certificates had been
granted before June 8, 1939, the date when Commonwealth Act No. 454, amendatory of section 15
of Commonwealth Act No. 146, was approved, it must be deemed to have the right of holding them in
perpetuity. Section 74 of the Philippine Bill provided that "no franchise, privilege, or concession shall
be granted to any corporation except under the conditions that it shall be subject to amendment,
alteration, or repeal by the Congress of the United States." The Jones Law, incorporating a similar
mandate, provided, in section 28, that "no franchise or right shall be granted to any individual, firm, or
corporation except under the conditions that it shall be subject to amendment, alteration, or repeal by
the Congress of the United States." Lastly, the Constitution of the Philippines provided, in section 8 of
Article XIII, that "no franchise or right shall be granted to any individual, firm, or corporation, except
under the condition that it shall be subject to amendment, alteration, or repeal by the National
Assembly when the public interest so requires." The National Assembly, by virtue of the Constitution,
logically succeeded to the Congress of the United States in the power to amend, alter or repeal any
franchise or right granted prior to or after the approval of the Constitution; and when Commonwealth
Acts Nos. 146 and 454 were enacted, the National Assembly, to the extent therein provided, has
declared its will and purpose to amend or alter existing certificates of public convenience.
Upon the other hand, statutes enacted for the regulation of public utilities, being a proper exercise by
the state of its police power, are applicable not only to those public utilities coming into existence after
its passage, but likewise to those already established and in operation.
Nor is there any merit in petitioner's contention, that, because of the establishment of
petitioner's operations prior to May 1, 1917, they are not subject to the regulations of the
Commission. Statutes for the regulation of public utilities are a proper exercise by the state of
its police power. As soon as the power is exercised, all phases of operation of established
utilities, become at once subject to the police power thus called into operation. Procedures'
Transportation Co. v. Railroad Commission, 251 U. S. 228, 40 Sup. Ct. 131, 64 Law. ed. 239,
Law v. Railroad Commission, 184 Cal. 737, 195 Pac. 423, 14 A. L. R. 249. The statute is
applicable not only to those public utilities coming into existence after its passage, but likewise
to those already established and in operation. The 'Auto Stage and Truck Transportation Act'
(Stats. 1917, c. 213) is a statute passed in pursuance of the police power. The only distinction
recognized in the statute between those established before and those established after the
passage of the act is in the method of the creation of their operative rights. A certificate of
public convenience and necessity it required for any new operation, but no such certificate is
required of any transportation company for the operation which was actually carried on in good
faith on May 1, 1917, This distinction in the creation of their operative rights in no way affects
the power of the Commission to supervise and regulate them. Obviously the power of the
Commission to hear and dispose of complaints is as effective against companies securing their
operative rights prior to May 1, 1917, as against those subsequently securing such right under
a certificate of public convenience and necessity. (Motor Transit Co. et al. v. Railroad
Commission of California et al., 209 Pac. 586.)
Moreover, Commonwealth Acts Nos. 146 and 454 are not only the organic acts of the Public Service
Commission but are "a part of the charter of every utility company operating or seeking to operate a
franchise" in the Philippines. (Streator Aqueduct Co. v. et al., 295 Fed. 385.) The business of a
common carrier holds such a peculiar relation to the public interest that there is superinduced upon it
the right of public regulation. When private property is "affected with a public interest it ceased to
be juris privati only." When, therefore, one devotes his property to a use in which the public has an
interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by

the public for the common good, to the extent of the interest he has thus created. He may withdraw
his grant by discounting the use, but so long as he maintains the use he must submit to control.
Indeed, this right of regulation is so far beyond question that it is well settled that the power of the
state to exercise legislative control over public utilities may be exercised through boards of
commissioners. (Fisher vs. Yangco Steamship Company, 31 Phil., 1, citing Munn vs. Illinois, 94 U.S.
113; Georgia R. & Bkg. Co. vs. Smith, 128 U.S. 174; Budd vs. New York, 143 U.S. 517; New York
etc. R. Co. vs. Bristol 151 U.S. 556, 571; Connecticut etc. R. Co. vs. Woodruff, 153 U.S. 689;
Louisville etc. Ry Co. vs. Kentucky, 161 U.S. 677, 695.) This right of the state to regulate public
utilities is founded upon the police power, and statutes for the control and regulation of utilities are a
legitimate exercise thereof, for the protection of the public as well as of the utilities themselves. Such
statutes are, therefore, not unconstitutional, either impairing the obligation of contracts, taking
property without due process, or denying the equal protection of the laws, especially inasmuch as the
question whether or not private property shall be devoted to a public and the consequent burdens
assumed is ordinarily for the owner to decide; and if he voluntarily places his property in public
service he cannot complain that it becomes subject to the regulatory powers of the state. (51 C. J.,
sec. 21, pp. 9-10.) in the light of authorities which hold that a certificate of public convenience
constitutes neither a franchise nor contract, confers no property right, and is mere license or privilege.
(Burgess vs. Mayor & Alderman of Brockton, 235 Mass. 95, 100, 126 N. E. 456;
Roberto vs. Commisioners of Department of Public Utilities, 262 Mass. 583, 160 N. E. 321;
Scheible vs. Hogan, 113 Ohio St. 83, 148 N. E. 581; Martz vs. Curtis [J. L.] Cartage Co. [1937], 132
Ohio St. 271, 7 N. E. [d] 220; Manila Yellow Taxicab Co. vs. Sabellano, 59 Phil., 773.)
Whilst the challenged provisions of Commonwealth Act No. 454 are valid and constitutional, we are,
however, of the opinion that the decision of the Public Service Commission should be reversed and
the case remanded thereto for further proceedings for the reason now to be stated. The Public
Service Commission has power, upon proper notice and hearing, "to amend, modify or revoke at any
time any certificate issued under the provisions of this Act, whenever the facts and circumstances on
the strength of which said certificate was issued have been misrepresented or materially changed."
(Section 16, par. [m], Commonwealth Act No. 146.) The petitioner's application here was for an
increase of its equipment to enable it to comply with the conditions of its certificates of public
convenience. On the matter of limitation to twenty five (25) years of the life of its certificates of public
convenience, there had been neither notice nor opportunity given the petitioner to be heard or present
evidence. The Commission appears to have taken advantage of the petitioner to augment petitioner's
equipment in imposing the limitation of twenty-five (25) years which might as well be twenty or fifteen
or any number of years. This is, to say the least, irregular and should not be sanctioned. There are
cardinal primary rights which must be respected even in proceedings of this character. The first of
these rights is the right to a hearing, which includes the right of the party interested or affected to
present his own case and submit evidence in support thereof. In the language of Chief Justice
Hughes, in Morgan v. U.S., (304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129), "the liberty and
property of the citizen shall be protected by the rudimentary requirements of fair play." Not only must
the party be given an opportunity to present his case and to adduce evidence tending to establish the
rights which he asserts but the tribunal must consider the evidence presented. (Chief Justice Hughes
in Morgan vs. U.S., 298 U.S. 468, 56 S. Ct. 906, 80 :Law. ed. 1288.) In the language of this Court
in Edwards vs. McCoy (22 Phil., 598), "the right to adduce evidence, without the corresponding duty
on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or
persons to whom the evidence is presented can thrust it aside without or consideration." While the
duty to deliberate does not impose the obligation to decide right, it does imply a necessity which
cannot be disregarded, namely, that of having something to support its decision. A decision with
absolutely nothing to support it is a nullity, at least when directly attacked.
(Edwards vs. McCoy, supra.) This principle emanates from the more fundamental principle that the
genius of constitutional government is contrary to the vesting of unlimited power anywhere. Law is
both a grant and a limitation upon power.

The decision appealed from is hereby reversed and the case remanded to the Public Service
Commission for further proceedings in accordance with law and this decision, without any
pronouncement regarding costs. So ordered.
Avancea, C.J., Imperial, Diaz, Concepcion and Moran, JJ., concur.

PANGASINAN TRANSPORTATION CO., INC. vs. THE PUBLIC SERVICE COMMISSION


G.R. No. 47065 June 26, 1940
FACTS: Pangasinan Transportation Company Inc. (PTI) has been engaged for 20 years in the
business of transporting passengers in Pangasinan, Tarlac and Nueva Ecija through TPU buses in
accordance with the terms and conditions of the certificates of public convenience issued by the
Public Utility Commission (later called Public Service Commission). The company applied for an
authorization to operate ten additional Brockway trucks on the ground that they were needed to
comply with the terms and conditions of its existing certificates and as a result of the application of
the Eight Hour Labor Law. PSC agreed to grant the authorization, but with two conditions as
provided for by section 1 of Commonwealth Act No. 454: First, that the certificates of authorization
issued to it would be valid only for a period of 25 years counted from the date of promulgation; and
second, that the company may be acquired by the Philippine Commonwealth with proper payment
of the cost price of its equipment, taking into account reasonable depreciation to be fixed by the
Commission at the time of it acquisition. PTI did not agree with the conditions, and instead asked
the Supreme Court to declare Commonwealth Act No. 454.
ISSUE: Whether or not Commonwealth Act No. 454 is unconstitutional for being undue delegation
of legislative power on the ground that without limitation, guide or rule except the unfettered
discretion and judgment of the Commission, constitute a complete and total abdication by the
Legislature of its functions in the premises, and for that reason, the Act, in so far as those powers
are concerned.
HELD: No, the law is not unconstitutional. The law is made subject to a sufficient standard that the
PSC must strictly follow. Inasmuch as the period to be fixed by the Commission under section 15 is
inseparable from the certificate itself, said period cannot be disregarded by the Commission in

determining the question whether the issuance of the certificate will promote the public interests in
a proper and suitable manner. Conversely, in determining "a definite period of time," the
Commission will be guided by "public interests," the only limitation to its power being that said
period shall not exceed fifty years (sec. 16 (a), Commonwealth Act No. 146; Constitution, Art. XIII,
sec. 8.) The Supreme Court had earlier ruled that "public interest" furnishes a sufficient standard.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 17122

February 27, 1922

THE UNITED STATES, plaintiff-appellee,


vs.
ANG TANG HO, defendant-appellant.
Williams & Ferrier for appellant.
Acting Attorney-General Tuason for appellee.
JOHNS, J.:
At its special session of 1919, the Philippine Legislature passed Act No. 2868, entitled "An Act
penalizing the monopoly and holding of, and speculation in, palay, rice, and corn under extraordinary
circumstances, regulating the distribution and sale thereof, and authorizing the Governor-General,
with the consent of the Council of State, to issue the necessary rules and regulations therefor, and
making an appropriation for this purpose," the material provisions of which are as follows:
Section 1. The Governor-General is hereby authorized, whenever, for any cause, conditions
arise resulting in an extraordinary rise in the price of palay, rice or corn, to issue and
promulgate, with the consent of the Council of State, temporary rules and emergency
measures for carrying out the purpose of this Act, to wit:
(a) To prevent the monopoly and hoarding of, and speculation in, palay, rice or corn.
(b) To establish and maintain a government control of the distribution or sale of the
commodities referred to or have such distribution or sale made by the Government itself.
(c) To fix, from time to time the quantities of palay rice, or corn that a company or individual
may acquire, and the maximum sale price that the industrial or merchant may demand.
(d) . . .

SEC. 2. It shall be unlawful to destroy, limit, prevent or in any other manner obstruct the
production or milling of palay, rice or corn for the purpose of raising the prices thereof; to
corner or hoard said products as defined in section three of this Act; . . .
Section 3 defines what shall constitute a monopoly or hoarding of palay, rice or corn within the
meaning of this Act, but does not specify the price of rice or define any basic for fixing the price.
SEC. 4. The violations of any of the provisions of this Act or of the regulations, orders and
decrees promulgated in accordance therewith shall be punished by a fine of not more than five
thousands pesos, or by imprisonment for not more than two years, or both, in the discretion of
the court: Provided, That in the case of companies or corporations the manager or
administrator shall be criminally liable.
SEC. 7. At any time that the Governor-General, with the consent of the Council of State, shall
consider that the public interest requires the application of the provisions of this Act, he shall
so declare by proclamation, and any provisions of other laws inconsistent herewith shall from
then on be temporarily suspended.
Upon the cessation of the reasons for which such proclamation was issued, the GovernorGeneral, with the consent of the Council of State, shall declare the application of this Act to
have likewise terminated, and all laws temporarily suspended by virtue of the same shall again
take effect, but such termination shall not prevent the prosecution of any proceedings or cause
begun prior to such termination, nor the filing of any proceedings for an offense committed
during the period covered by the Governor-General's proclamation.
August 1, 1919, the Governor-General issued a proclamation fixing the price at which rice should be
sold.
August 8, 1919, a complaint was filed against the defendant, Ang Tang Ho, charging him with the
sale of rice at an excessive price as follows:
The undersigned accuses Ang Tang Ho of a violation of Executive Order No. 53 of the
Governor-General of the Philippines, dated the 1st of August, 1919, in relation with the
provisions of sections 1, 2 and 4 of Act No. 2868, committed as follows:
That on or about the 6th day of August, 1919, in the city of Manila, Philippine Islands, the said
Ang Tang Ho, voluntarily, illegally and criminally sold to Pedro Trinidad, one ganta of rice at
the price of eighty centavos (P.80), which is a price greater than that fixed by Executive Order
No. 53 of the Governor-General of the Philippines, dated the 1st of August, 1919, under the
authority of section 1 of Act No. 2868. Contrary to law.
Upon this charge, he was tried, found guilty and sentenced to five months' imprisonment and to pay a
fine of P500, from which he appealed to this court, claiming that the lower court erred in finding
Executive Order No. 53 of 1919, to be of any force and effect, in finding the accused guilty of the
offense charged, and in imposing the sentence.
The official records show that the Act was to take effect on its approval; that it was approved July 30,
1919; that the Governor-General issued his proclamation on the 1st of August, 1919; and that the law
was first published on the 13th of August, 1919; and that the proclamation itself was first published on
the 20th of August, 1919.

The question here involves an analysis and construction of Act No. 2868, in so far as it authorizes the
Governor-General to fix the price at which rice should be sold. It will be noted that section 1
authorizes the Governor-General, with the consent of the Council of State, for any cause resulting in
an extraordinary rise in the price of palay, rice or corn, to issue and promulgate temporary rules and
emergency measures for carrying out the purposes of the Act. By its very terms, the promulgation of
temporary rules and emergency measures is left to the discretion of the Governor-General. The
Legislature does not undertake to specify or define under what conditions or for what reasons the
Governor-General shall issue the proclamation, but says that it may be issued "for any cause," and
leaves the question as to what is "any cause" to the discretion of the Governor-General. The Act also
says: "For any cause, conditions arise resulting in an extraordinary rise in the price of palay, rice or
corn." The Legislature does not specify or define what is "an extraordinary rise." That is also left to the
discretion of the Governor-General. The Act also says that the Governor-General, "with the consent
of the Council of State," is authorized to issue and promulgate "temporary rules and emergency
measures for carrying out the purposes of this Act." It does not specify or define what is a temporary
rule or an emergency measure, or how long such temporary rules or emergency measures shall
remain in force and effect, or when they shall take effect. That is to say, the Legislature itself has not
in any manner specified or defined any basis for the order, but has left it to the sole judgement and
discretion of the Governor-General to say what is or what is not "a cause," and what is or what is not
"an extraordinary rise in the price of rice," and as to what is a temporary rule or an emergency
measure for the carrying out the purposes of the Act. Under this state of facts, if the law is valid and
the Governor-General issues a proclamation fixing the minimum price at which rice should be sold,
any dealer who, with or without notice, sells rice at a higher price, is a criminal. There may not have
been any cause, and the price may not have been extraordinary, and there may not have been an
emergency, but, if the Governor-General found the existence of such facts and issued a
proclamation, and rice is sold at any higher price, the seller commits a crime.
By the organic law of the Philippine Islands and the Constitution of the United States all powers are
vested in the Legislative, Executive and Judiciary. It is the duty of the Legislature to make the law; of
the Executive to execute the law; and of the Judiciary to construe the law. The Legislature has no
authority to execute or construe the law, the Executive has no authority to make or construe the law,
and the Judiciary has no power to make or execute the law. Subject to the Constitution only, the
power of each branch is supreme within its own jurisdiction, and it is for the Judiciary only to say
when any Act of the Legislature is or is not constitutional. Assuming, without deciding, that the
Legislature itself has the power to fix the price at which rice is to be sold, can it delegate that power to
another, and, if so, was that power legally delegated by Act No. 2868? In other words, does the Act
delegate legislative power to the Governor-General? By the Organic Law, all Legislative power is
vested in the Legislature, and the power conferred upon the Legislature to make laws cannot be
delegated to the Governor-General, or any one else. The Legislature cannot delegate the legislative
power to enact any law. If Act no 2868 is a law unto itself and within itself, and it does nothing more
than to authorize the Governor-General to make rules and regulations to carry the law into effect,
then the Legislature itself 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 crime, and is not a law, 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, then the
Act is a delegation of legislative power, is unconstitutional and void.
The Supreme Court of the United States in what is known as the Granger Cases (94 U.S., 183-187;
24 L. ed., 94), first laid down the rule:
Railroad companies are engaged in a public employment affecting the public interest and,
under the decision in Munn vs. Ill., ante, 77, are subject to legislative control as to their rates of
fare and freight unless protected by their charters.

The Illinois statute of Mar. 23, 1874, to establish reasonable maximum rates of charges for the
transportation of freights and passengers on the different railroads of the State is not void as
being repugnant to the Constitution of the United States or to that of the State.
It was there for the first time held in substance that a railroad was a public utility, and that, being a
public utility, the State had power to establish reasonable maximum freight and passenger rates. This
was followed by the State of Minnesota in enacting a similar law, providing for, and empowering, a
railroad commission to hear and determine what was a just and reasonable rate. The constitutionality
of this law was attacked and upheld by the Supreme Court of Minnesota in a learned and exhaustive
opinion by Justice Mitchell, in the case of State vs. Chicago, Milwaukee & St. Paul ry. Co. (38 Minn.,
281), in which the court held:
Regulations of railway tariffs Conclusiveness of commission's tariffs. Under Laws 1887,
c. 10, sec. 8, the determination of the railroad and warehouse commission as to what are
equal and reasonable fares and rates for the transportation of persons and property by a
railway company is conclusive, and, in proceedings by mandamus to compel compliance with
the tariff of rates recommended and published by them, no issue can be raised or inquiry had
on that question.
Same constitution Delegation of power to commission. The authority thus given to the
commission to determine, in the exercise of their discretion and judgement, what are equal and
reasonable rates, is not a delegation of legislative power.
It will be noted that the law creating the railroad commission expressly provides
That all charges by any common carrier for the transportation of passengers and property shall
be equal and reasonable.
With that as a basis for the law, power is then given to the railroad commission to investigate all the
facts, to hear and determine what is a just and reasonable rate. Even then that law does not make the
violation of the order of the commission a crime. The only remedy is a civil proceeding. It was there
held
That the legislative itself has the power to regulate railroad charges is now too well settled to
require either argument or citation of authority.
The difference between the power to say what the law shall be, and the power to adopt rules
and regulations, or to investigate and determine the facts, in order to carry into effect a law
already passed, is apparent. The true distinction is between the delegation of power to make
the law, which necessarily involves a discretion as to what it shall be, and the conferring an
authority or discretion to be exercised under and in pursuance of the law.
The legislature enacts that all freights rates and passenger fares should be just and
reasonable. It had the undoubted power to fix these rates at whatever it deemed equal and
reasonable.
They have not delegated to the commission any authority or discretion as to what the law shall
be, which would not be allowable, but have merely conferred upon it an authority and
discretion, to be exercised in the execution of the law, and under and in pursuance of it, which
is entirely permissible. The legislature itself has passed upon the expediency of the law, and
what is shall be. The commission is intrusted with no authority or discretion upon these

questions. It can neither make nor unmake a single provision of law. It is merely charged with
the administration of the law, and with no other power.
The delegation of legislative power was before the Supreme Court of Wisconsin in
Dowling vs. Lancoshire Ins. Co. (92 Wis., 63). The opinion says:
"The true distinction is between the delegation of power to make the law, which necessarily
involves a discretion as to what it shall be, and conferring authority or discretion as to its
execution, to be exercised under and in pursuance of the law. The first cannot be done; to the
latter no valid objection can be made."
The act, in our judgment, wholly fails to provide definitely and clearly what the standard policy should
contain, so that it could be put in use as a uniform policy required to take the place of all others,
without the determination of the insurance commissioner in respect to maters involving the exercise
of a legislative discretion that could not be delegated, and without which the act could not possibly be
put in use as an act in confirmity to which all fire insurance policies were required to be issued.
The result of all the cases on this subject is that a law must be complete, in all its terms and
provisions, when it leaves the legislative branch of the government, and nothing must be left to the
judgement of the electors or other appointee or delegate of the legislature, so that, in form and
substance, it is a law in all its details in presenti, but which may be left to take effect in futuro, if
necessary, upon the ascertainment of any prescribed fact or event.
The delegation of legislative power was before the Supreme Court in United States vs. Grimaud (220
U.S., 506; 55 L. ed., 563), where it was held that the rules and regulations of the Secretary of
Agriculture as to a trespass on government land in a forest reserve were valid constitutional. The Act
there provided that the Secretary of Agriculture ". . . may make such rules and regulations and
establish such service as will insure the object of such reservations; namely, to regulate their
occupancy and use, and to preserve the forests thereon from destruction; and any violation of the
provisions of this act or such rules and regulations shall be punished, . . ."
The brief of the United States Solicitor-General says:
In refusing permits to use a forest reservation for stock grazing, except upon stated terms or in
stated ways, the Secretary of Agriculture merely assert and enforces the proprietary right of
the United States over land which it owns. The regulation of the Secretary, therefore, is not an
exercise of legislative, or even of administrative, power; but is an ordinary and legitimate
refusal of the landowner's authorized agent to allow person having no right in the land to use it
as they will. The right of proprietary control is altogether different from governmental authority.
The opinion says:
From the beginning of the government, various acts have been passed conferring upon
executive officers power to make rules and regulations, not for the government of their
departments, but for administering the laws which did govern. None of these statutes could
confer legislative power. But when Congress had legislated power. But when Congress had
legislated and indicated its will, it could give to those who were to act under such general
provisions "power to fill up the details" by the establishment of administrative rules and
regulations, the violation of which could be punished by fine or imprisonment fixed by
Congress, or by penalties fixed by Congress, or measured by the injury done.

That "Congress cannot delegate legislative power is a principle universally recognized as vital
to the integrity and maintenance of the system of government ordained by the Constitution."
If, after the passage of the act and the promulgation of the rule, the defendants drove and
grazed their sheep upon the reserve, in violation of the regulations, they were making an
unlawful use of the government's property. In doing so they thereby made themselves liable to
the penalty imposed by Congress.
The subjects as to which the Secretary can regulate are defined. The lands are set apart as a forest
reserve. He is required to make provisions to protect them from depredations and from harmful uses.
He is authorized 'to regulate the occupancy and use and to preserve the forests from destruction.' A
violation of reasonable rules regulating the use and occupancy of the property is made a crime, not
by the Secretary, but by Congress."
The above are leading cases in the United States on the question of delegating legislative power. It
will be noted that in the "Granger Cases," it was held that a railroad company was a public
corporation, and that a railroad was a public utility, and that, for such reasons, the legislature had the
power to fix and determine just and reasonable rates for freight and passengers.
The Minnesota case held that, so long as the rates were just and reasonable, the legislature could
delegate the power to ascertain the facts and determine from the facts what were just and reasonable
rates,. and that in vesting the commission with such power was not a delegation of legislative power.
The Wisconsin case was a civil action founded upon a "Wisconsin standard policy of fire insurance,"
and the court held that "the act, . . . wholly fails to provide definitely and clearly what the standard
policy should contain, so that it could be put in use as a uniform policy required to take the place of all
others, without the determination of the insurance commissioner in respect to matters involving the
exercise of a legislative discretion that could not be delegated."
The case of the United States Supreme Court, supra dealt with rules and regulations which were
promulgated by the Secretary of Agriculture for Government land in the forest reserve.
These decisions hold that the legislative only can enact a law, and that it cannot delegate it legislative
authority.
The line of cleavage between what is and what is not a delegation of legislative power is pointed out
and clearly defined. As the Supreme Court of Wisconsin says:
That no part of the legislative power can be delegated by the legislature to any other
department of the government, executive or judicial, is a fundamental principle in constitutional
law, essential to the integrity and maintenance of the system of government established by the
constitution.
Where an act is clothed with all the forms of law, and is complete in and of itself, it may be
provided that it shall become operative only upon some certain act or event, or, in like manner,
that its operation shall be suspended.
The legislature cannot delegate its power to make a law, but it can make a law to delegate a
power to determine some fact or state of things upon which the law makes, or intends to make,
its own action to depend.
The Village of Little Chute enacted an ordinance which provides:

All saloons in said village shall be closed at 11 o'clock P.M. each day and remain closed until 5
o'clock on the following morning, unless by special permission of the president.
Construing it in 136 Wis., 526; 128 A. S. R., 1100,1 the Supreme Court of that State says:
We regard the ordinance as void for two reasons; First, because it attempts to confer arbitrary
power upon an executive officer, and allows him, in executing the ordinance, to make unjust
and groundless discriminations among persons similarly situated; second, because the power
to regulate saloons is a law-making power vested in the village board, which cannot be
delegated. A legislative body cannot delegate to a mere administrative officer power to make a
law, but it can make a law with provisions that it shall go into effect or be suspended in its
operations upon the ascertainment of a fact or state of facts by an administrative officer or
board. In the present case the ordinance by its terms gives power to the president to decide
arbitrary, and in the exercise of his own discretion, when a saloon shall close. This is an
attempt to vest legislative discretion in him, and cannot be sustained.
The legal principle involved there is squarely in point here.
It must be conceded that, after the passage of act No. 2868, and before any rules and regulations
were promulgated by the Governor-General, a dealer in rice could sell it at any price, even at a peso
per "ganta," and that he would not commit a crime, because there would be no law fixing the price of
rice, and the sale of it at any price would not be a crime. That is to say, in the absence of a
proclamation, it was not a crime to sell rice at any price. Hence, it must follow that, if the defendant
committed a crime, it was because the Governor-General issued the proclamation. There was no act
of the Legislature making it a crime to sell rice at any price, and without the proclamation, the sale of
it at any price was to a crime.
The Executive order2 provides:
(5) The maximum selling price of palay, rice or corn is hereby fixed, for the time being as
follows:
In Manila
Palay at P6.75 per sack of 57 kilos, or 29 centavos per ganta.
Rice at P15 per sack of 57 kilos, or 63 centavos per ganta.
Corn at P8 per sack of 57 kilos, or 34 centavos per ganta.
In the provinces producing palay, rice and corn, the maximum price shall be the Manila price
less the cost of transportation from the source of supply and necessary handling expenses to
the place of sale, to be determined by the provincial treasurers or their deputies.
In provinces, obtaining their supplies from Manila or other producing provinces, the maximum
price shall be the authorized price at the place of supply or the Manila price as the case may
be, plus the transportation cost, from the place of supply and the necessary handling
expenses, to the place of sale, to be determined by the provincial treasurers or their deputies.

(6) Provincial treasurers and their deputies are hereby directed to communicate with, and
execute all instructions emanating from the Director of Commerce and Industry, for the most
effective and proper enforcement of the above regulations in their respective localities.
The law says that the Governor-General may fix "the maximum sale price that the industrial or
merchant may demand." The law is a general law and not a local or special law.
The proclamation undertakes to fix one price for rice in Manila and other and different prices in other
and different provinces in the Philippine Islands, and delegates the power to determine the other and
different prices to provincial treasurers and their deputies. Here, then, you would have a delegation of
legislative power to the Governor-General, and a delegation by him of that power to provincial
treasurers and their deputies, who "are hereby directed to communicate with, and execute all
instructions emanating from the Director of Commerce and Industry, for the most effective and proper
enforcement of the above regulations in their respective localities." The issuance of the proclamation
by the Governor-General was the exercise of the delegation of a delegated power, and was even a
sub delegation of that power.
Assuming that it is valid, Act No. 2868 is a general law and does not authorize the Governor-General
to fix one price of rice in Manila and another price in Iloilo. It only purports to authorize him to fix the
price of rice in the Philippine Islands under a law, which is General and uniform, and not local or
special. Under the terms of the law, the price of rice fixed in the proclamation must be the same all
over the Islands. There cannot be one price at Manila and another at Iloilo. Again, it is a mater of
common knowledge, and of which this court will take judicial notice, that there are many kinds of rice
with different and corresponding market values, and that there is a wide range in the price, which
varies with the grade and quality. Act No. 2868 makes no distinction in price for the grade or quality of
the rice, and the proclamation, upon which the defendant was tried and convicted, fixes the selling
price of rice in Manila "at P15 per sack of 57 kilos, or 63 centavos per ganta," and is uniform as to
all grades of rice, and says nothing about grade or quality. Again, it will be noted that the law is
confined to palay, rice and corn. They are products of the Philippine Islands. Hemp, tobacco, coconut,
chickens, eggs, and many other things are also products. Any law which single out palay, rice or corn
from the numerous other products of the Islands is not general or uniform, but is a local or special
law. If such a law is valid, then by the same principle, the Governor-General could be authorized by
proclamation to fix the price of meat, eggs, chickens, coconut, hemp, and tobacco, or any other
product of the Islands. In the very nature of things, all of that class of laws should be general and
uniform. Otherwise, there would be an unjust discrimination of property rights, which, under the law,
must be equal and inform. Act No. 2868 is nothing more than a floating law, which, in the discretion
and by a proclamation of the Governor-General, makes it a floating crime to sell rice at a price in
excess of the proclamation, without regard to grade or quality.
When Act No. 2868 is analyzed, it is the violation of the proclamation of the Governor-General which
constitutes the crime. Without that proclamation, it was no crime to sell rice at any price. In other
words, the Legislature left it to the sole discretion of the Governor-General to say what was and what
was not "any cause" for enforcing the act, and what was and what was not "an extraordinary rise in
the price of palay, rice or corn," and under certain undefined conditions to fix the price at which rice
should be sold, without regard to grade or quality, also to say whether a proclamation should be
issued, if so, when, and whether or not the law should be enforced, how long it should be enforced,
and when the law should be suspended. The Legislature did not specify or define what was "any
cause," or what was "an extraordinary rise in the price of rice, palay or corn," Neither did it specify or
define the conditions upon which the proclamation should be issued. In the absence of the
proclamation no crime was committed. The alleged sale was made a crime, if at all, because the
Governor-General issued the proclamation. The act or proclamation does not say anything about the
different grades or qualities of rice, and the defendant is charged with the sale "of one ganta of rice at

the price of eighty centavos (P0.80) which is a price greater than that fixed by Executive order No.
53."
We are clearly of the opinion and hold that Act No. 2868, in so far as it undertakes to authorized the
Governor-General in his discretion to issue a proclamation, fixing the price of rice, and to make the
sale of rice in violation of the price of rice, and to make the sale of rice in violation of the proclamation
a crime, is unconstitutional and void.
It may be urged that there was an extraordinary rise in the price of rice and profiteering, which worked
a severe hardship on the poorer classes, and that an emergency existed, but the question here
presented is the constitutionality of a particular portion of a statute, and none of such matters is an
argument for, or against, its constitutionality.
The Constitution is something solid, permanent an substantial. Its stability protects the life, liberty and
property rights of the rich and the poor alike, and that protection ought not to change with the wind or
any emergency condition. The fundamental question involved in this case is the right of the people of
the Philippine Islands to be and live under a republican form of government. We make the broad
statement that no state or nation, living under republican form of government, under the terms and
conditions specified in Act No. 2868, has ever enacted a law delegating the power to any one, to fix
the price at which rice should be sold. That power can never be delegated under a republican form of
government.
In the fixing of the price at which the defendant should sell his rice, the law was not dealing with
government property. It was dealing with private property and private rights, which are sacred under
the Constitution. If this law should be sustained, upon the same principle and for the same reason,
the Legislature could authorize the Governor-General to fix the price of every product or commodity in
the Philippine Islands, and empower him to make it a crime to sell any product at any other or
different price.
It may be said that this was a war measure, and that for such reason the provision of the Constitution
should be suspended. But the Stubborn fact remains that at all times the judicial power was in full
force and effect, and that while that power was in force and effect, such a provision of the Constitution
could not be, and was not, suspended even in times of war. It may be claimed that during the war, the
United States Government undertook to, and did, fix the price at which wheat and flour should be
bought and sold, and that is true. There, the United States had declared war, and at the time was at
war with other nations, and it was a war measure, but it is also true that in doing so, and as a part of
the same act, the United States commandeered all the wheat and flour, and took possession of it,
either actual or constructive, and the government itself became the owner of the wheat and flour, and
fixed the price to be paid for it. That is not this case. Here the rice sold was the personal and private
property of the defendant, who sold it to one of his customers. The government had not bought and
did not claim to own the rice, or have any interest in it, and at the time of the alleged sale, it was the
personal, private property of the defendant. It may be that the law was passed in the interest of the
public, but the members of this court have taken on solemn oath to uphold and defend the
Constitution, and it ought not to be construed to meet the changing winds or emergency conditions.
Again, we say that no state or nation under a republican form of government ever enacted a law
authorizing any executive, under the conditions states, to fix the price at which a price person would
sell his own rice, and make the broad statement that no decision of any court, on principle or by
analogy, will ever be found which sustains the constitutionality of the particular portion of Act No.
2868 here in question. By the terms of the Organic Act, subject only to constitutional limitations, the
power to legislate and enact laws is vested exclusively in the Legislative, which is elected by a direct
vote of the people of the Philippine Islands. As to the question here involved, the authority of the

Governor-General to fix the maximum price at which palay, rice and corn may be sold in the manner
power in violation of the organic law.
This opinion is confined to the particular question here involved, which is the right of the GovernorGeneral, upon the terms and conditions stated in the Act, to fix the price of rice and make it a crime to
sell it at a higher price, and which holds that portions of the Act unconstitutional. It does not decide or
undertake to construe the constitutionality of any of the remaining portions of the Act.
The judgment of the lower court is reversed, and the defendant discharged. So ordered.
Araullo, C.J., Johnson, Street and Ostrand, JJ., concur.
Romualdez, J., concurs in the result.

Separate Opinions
MALCOLM, J., concurring:
I concur in the result for reasons which reach both the facts and the law. In the first place, as to the
facts, one cannot be convicted ex post facto of a violation of a law and of an executive order
issued pursuant to the law, when the alleged violation thereof occurred on August 6, 1919, while the
Act of the Legislature in question was not published until August 13, 1919, and the order was not
published until August 20, 1919. In the second place, as to the law, one cannot be convicted of a
violation of a law or of an order issued pursuant to the law when both the law and the order fail to set
up an ascertainable standard of guilt. (U.S. vs. Cohen Grocery Company [1921], 255 U.S., 81,
holding section 4 of the Federal Food Control Act of August 10, 1917, as amended, invalid.)
In order that there may not be any misunderstanding of our position, I would respectfully invite
attention to the decision of the United States Supreme Court in German Alliance Ins. Co. vs. Lewis
([1914, 233 U.S., 389), concerning the legislative regulation of the prices charged by business
affected with a public interest, and to another decision of the United States Supreme Court, that of
Marshall Field & Co. vs. Clark ([1892], 143 U.S., 649), which adopts as its own the principles laid
down in the case of Locke's Appeal ([1873], 72 Pa. St., 491), namely; "The Legislature cannot
delegate its power to make a law; but it can make a law to delegate a power to determine some fact
or state of things upon which the law makes, or intends to make, its own action depend. To deny this
would be to stop the wheels of government. There are many things upon which wise and useful
legislation must depend which cannot be known to the law-making power, and must, therefore, be a
subject of inquiry and determination outside of the halls of legislation."
Avancea and Villamor, JJ., concur.
Footnotes
1

Village of Little Chute vs. Van Camp.

Executive Order No. 53, series of 1919.


US vs. Ang Tang Ho
43 Phil. 1 Political Law Delegation of Power Administrative Bodies

In July 1919, the Philippine Legislature (during special session) passed and approved Act No. 2868
entitled An Act Penalizing the Monopoly and Hoarding of Rice, Palay and Corn. The said act, under
extraordinary circumstances, authorizes the Governor General (GG) to issue the necessary Rules
and Regulations in regulating the distribution of such products. Pursuant to this Act, in August 1919,
the GG issued Executive Order No. 53 which was published on August 20, 1919. The said EO fixed
the price at which rice should be sold. On the other hand, Ang Tang Ho, a rice dealer, sold a ganta of
rice to Pedro Trinidad at the price of eighty centavos. The said amount was way higher than that
prescribed by the EO. The sale was done on the 6th of August 1919. On August 8, 1919, he was
charged for violation of the said EO. He was found guilty as charged and was sentenced to 5 months
imprisonment plus a P500.00 fine. He appealed the sentence countering that there is an undue
delegation of power to the Governor General.
ISSUE: Whether or not there is undue delegation to the Governor General.
HELD: First of, Ang Tang Hos conviction must be reversed because he committed the act prior to the
publication of the EO. Hence, he cannot be ex post facto charged of the crime. Further, one cannot
be convicted of a violation of a law or of an order issued pursuant to the law when both the law and
the order fail to set up an ascertainable standard of guilt.
Anent the issue of undue delegation, the said Act wholly fails to provide definitely and clearly what the
standard policy should contain, so that it could be put in use as a uniform policy required to take the
place of all others without the determination of the insurance commissioner in respect to matters
involving the exercise of a legislative discretion that could not be delegated, and without which the act
could not possibly be put in use. The law must be complete in all its terms and provisions when it
leaves the legislative branch of the government and nothing must be left to the judgment of the
electors or other appointee or delegate of the legislature, so that, in form and substance, it is a law in
all its details in presenti, but which may be left to take effect in future, if necessary, upon the
ascertainment of any prescribed fact or event.
COMPANIA GENERAL DE TABACOS DE FILIPINAS vs. THE BOARD OF PUBLIC UTILITY
COMMISSIONERS (1916) G.R. L-11216
Facts:
COMPANIA GENERAL DE TABACOS DE FILIPINAS is a foreign corporation organized under the
laws of Spain and engaged in business in the Philippine Islands as a common carrier of passengers
and merchandise by water: On June 7, 1915, the Board of Public Utility Commissioners issued and
caused to be served an order to show cause why they should not be required to present detailed
annual reports respecting its finances and operations respecting the vessels owned and operated by
it, in the form and containing the matters indicated by the model attached to the petition.
They are ordered to present annually on or before March first of each year a detailed report of
finances and operations of such vessels as are operated by it as a common carrier within the
Philippine Islands, in the form and containing the matters indicated in the model of annual report
which accompanied the order to show cause herein.

COMPANIA GENERAL DE TABACOS DE FILIPINAS denied the authority of the board to require
the report asked for on the ground that the provision of Act No. 2307 relied on by said board as
authority for such requirement was, if construed as conferring such power, invalid as constituting an
unlawful attempt on the part of the Legislature to delegate legislative power to the board. It is
cumbersome and unnecessarily prolix and that the preparation of the same would entail an immense
amount of clerical work.
ISSUE:
Whether or not it is constitutional to require COMPANIA GENERAL DE TABACOS DE FILIPINAS to
pass a detailed report to the Board of Public Utility Commissioners of the Philippine Islands?
Whether the power to require the detailed report is strictly legislative, or administrative, or merely
relates to the execution of the law?
RULING: The order appealed from is set aside and the cause is returned to the Board of Public
Utility Commissioners with instructions to dismiss the proceeding.
The section of Act No. 2307 under which the Board of Public Utility Commissioners relies for its
authority, so far as pertinent to the case at hand, reads as follows:
Sec. 16. The Board shall have power, after hearing, upon notice, by order in writing, to require every
public utility as herein defined: (e) To furnish annually a detailed report of finances and operations, in
such form and containing such matters as the Board may from time to time by order prescribe.
The statute which authorizes a Board of Public Utility Commissioners to require detailed reports from
public utilities, leaving the nature of the report, the contents thereof, the general lines which it shall
follow, the principle upon which it shall proceed, indeed, all other matters whatsoever, to the exclusive
discretion of the board, is not expressing its own will or the will of the State with respect to the public
utilities to which it refers.
Such a provision does not declare, or set out, or indicate what information the State requires, what is
valuable to it, what it needs in order to impose correct and just taxation, supervision or control, or the
facts which the State must have in order to deal justly and equitably with such public utilities and to
require them to deal justly and equitably with the State. The Legislature seems simply to have
authorized the Board of Public Utility Commissioners to require what information the board wants. It
would seem that the Legislature, by the provision in question, delegated to the Board of Public Utility
Commissioners all of its powers over a given subject-matter in a manner almost absolute, and without
laying down a rule or even making a suggestion by which that power is to be directed, guided or
applied.
The true distinction is between the delegation of power to make the law, which necessarily involves a
discretion as to what shall be, and conferring authority or discretion as to its execution, to be

exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection
can be made.
The Supreme Court held that there was no delegation of legislative power, it said:
The Congress may not delegate its purely legislative powers to a commission, but, having laid down
the general rules of action under which a commission shall proceed, it may require of that
commission the application of such rules to particular situations and the investigation of facts, with a
view to making orders in a particular matter within the rules laid down by the Congress.
In section 20 (of the Commerce Act), Congress has authorized the commission to require annual
reports. The act itself prescribes in detail what those reports shall contain. In other words, Congress
has laid down general rules for the guidance of the Commission, leaving to it merely the carrying out
of details in the exercise of the power so conferred. This, we think, is not a delegation of legislative
authority.
In the case at bar the provision complained of does not law down the general rules of action under
which the commission shall proceed. nor does it itself prescribe in detail what those reports shall
contain. Practically everything is left to the judgment and discretion of the Board of Public Utility
Commissioners, which is unrestrained as to when it shall act, why it shall act, how it shall act, to what
extent it shall act, or what it shall act upon.
The Legislature, by the provision in question, has abdicated its powers and functions in favor of the
Board of Public Utility Commissioners with respect to the matters therein referred to, and that such
Act is in violation of the Act of Congress of July 1, 1902. The Legislature, by the provision referred to,
has not asked for the information which the State wants but has authorized and board to obtain the
information which the board wants.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 9321

September 24, 1914

NORBERTO ASUNCION, ET AL., petitioners-appellants,


vs.
MANUEL DE YRIARTE, respondent-appellee.

Modesto Reyes for appellants.


Attorney-General Villamor for appellee.
MORELAND, J.:
This is an action to obtain a writ of mandamus to compel the chief of the division of achieves of the
Executive Bureau to file a certain articles of incorporation.
The chief of the division of archives, the respondent, refused to file the articles of incorporation,
hereinafter referred to, upon the ground that the object of the corporation, as stated in the articles,
was not lawful and that, in pursuance of section 6 of Act No. 1459, they were not registerable.
The proposed incorporators began an action in the Court of First Instance of the city of Manila to
compel the chief of the division of archives to receive and register said articles of incorporation and to
do any and all acts necessary for the complete incorporation of the persons named in the articles.
The court below found in favor of the defendant and refused to order the registration of the articles
mentioned, maintaining ad holding that the defendant, under the Corporation Law, had authority to
determine both the sufficiency of the form of the articles and the legality of the object of the proposed
corporation. This appeal is taken from that judgment.
The first question that arises is whether or not the chief of the division of archives has authority, under
the Corporation for registration, to decide not only as to the sufficiency of the form of the articles, but
also as to the lawfulness of the purpose of the proposed corporation.
It is strongly urged on the part of the appellants that the duties of the defendant are purely ministerial
and that he has no authority to pass upon the lawfulness of the object for which the incorporators
propose to organize. No authorities are cited to support this proposition and we are of the opinion that
it is not sound.
Section 6 of the Corporation Law reads in part as follows:
Five or more persons, not exceeding fifteen, a majority of whom are residents of the Philippine
Islands, may form a private corporation for any lawful purpose by filing with the division of
archives, patents, copyrights, and trademarks if the Executive Bureau articles of incorporation
duly executed and acknowledged before a notary public, . . . .
Simply because the duties of an official happens to be ministerial, it does not necessarily follow that
he may not, in the administration of his office, determine questions of law. We are of the opinion that
it is the duty of the division of archives, when articles of incorporation are presented for registration, to
determine whether the objects of the corporation as expressed in the articles are lawful. We do not
believe that, simply because articles of incorporation presented foe registration are perfect in form,
the division of archives must accept and register them and issue the corresponding certificate of
incorporation no matter what the purpose of the corporation may be as expressed in the articles. We
do not believe it was intended that the division of archives should issue a certificate of incorporation
to, and thereby put the seal of approval of the Government upon, a corporation which was organized
for base of immoral purposes. That such corporation might later, if it sought to carry out such
purposes, be dissolved, or its officials imprisoned or itself heavily fined furnished no reason why it
should have been created in the first instance. It seems to us to be not only the right but the duty of
the divisions of archives to determine the lawfulness of the objects and purposes of the corporation
before it issues a certificate of incorporation.

It having determined that the division of archives, through its officials, has authority to determine not
only the sufficiency as to form of the articles of incorporation offered for registration, but also the
lawfulness of the purposes of leads us to the determination of the question whether or not the chief of
the division of archives, who is the representative thereof and clothed by it with authority to deal
subject to mandamus in the performance of his duties.
We are of the opinion that he may be mandamused if he act in violation of law or if he refuses,
unduly, to comply with the law. While we have held that defendant has power to pass upon the
lawfulness of the purposes of the proposed corporation and that he may, in the fulfillment of his
duties, determine the question of law whether or not those purposes are lawful and embraced within
that class concerning which the law permits corporations to be formed, that does not necessarily
mean, as we have already intimated, that his duties are not ministerial. On the contrary, there is no
incompatibility in holding, as we do hold, that his duties are ministerial and that he has no authority to
exercise discretion in receiving and registering articles of incorporation. He may exercise judgment
that is, the judicial function in the determination of the question of law referred to, but he may not
use discretion. The question whether or not the objects of a proposed corporation are lawful is one
that can be decided one way only. If he err in the determination of that question and refuse to file
articles which should be filed under the law, the decision is subject to review and correction and, upon
proper showing, he will be ordered to file the articles. This is the same kind of determination which a
court makes when it decides a case upon the merits, the court makes when it decides a case upon
the merits. When a case is presented to a court upon the merits, the court can decide only one way
and be right. As a matter of law, there is only one way and be right. As a matter of law, there is only
one course to pursue. In a case where the court or other official has discretion in the resolution of a
question, then, within certain limitations, he may decide the question either way and still be right.
Discretion, it may be said generally, is a faculty conferred upon a court or other official by which he
may decide a question either way and still be right. The power conferred upon the division of archives
with respect to the registration of articles of incorporation is not of that character. It is of the same
character as the determination of a lawsuit by a court upon the merits. It can be decided only one way
correctly.
If, therefore, the defendant erred in determining the question presented when the articles were
offered for registration, then that error will be corrected by this court in this action and he will be
compelled to register the articles as offered. If, however, he did not commit an error, but decided that
question correctly, then, of course, his action will be affirmed to the extent that we will deny the relief
prayed for.
The next question leads us to the determination of whether or not the purposes of the corporation as
stated in the articles of incorporation are lawful within the meaning of the Corporation Law.
The purpose of the incorporation as stated in the articles is: "That the object of the corporation is (a)
to organize and regulate the management, disposition, administration and control which the barrio of
Pulo or San Miguel or its inhabitants or residents have over the common property of said residents or
inhabitants or property belonging to the whole barrio as such; and (b) to use the natural products of
the said property for institutions, foundations, and charitable works of common utility and advantage
to the barrio or its inhabitants."
The municipality of Pasig as recognized by law contains within its limits several barrios or small
settlements, like Pulo or San Miguel, which have no local government of their own but are governed
by the municipality of Pasig through its municipal president and council. The president and members
of the municipal council are elected by a general vote of the municipality, the qualified electors of all
the barrios having the right to participate.

The municipality of Pasig is a municipal corporation organized by law. It has the control of all property
of the municipality. The various barrios of the municipality have no right to own or hold property, they
not being recognized as legal entities by any law. The residents of the barrios participate in the
advantages which accrue to the municipality from public property and receive all the benefits incident
to residence in a municipality organized by law. If there is any public property situated in the barrio of
Pulo or San Miguel not belonging to the general government or the province, it belongs to the
municipality of Pasig and the sole authority to manage and administer the same resides in that
municipality. Until the present laws upon the subject are charged no other entity can be the owner of
such property or control or administer it.
The object of the proposed corporation, as appears from the articles offered for registration, is to
make of the barrio of Pulo or San Miguel a corporation which will become the owner of and have the
right to control and administer any property belonging to the municipality of Pasig found within the
limits of that barrio. This clearly cannot be permitted. Otherwise municipalities as now established by
law could be deprived of the property which they now own and administer. Each barrio of the
municipality would become under the scheme proposed, a separate corporation, would take over the
ownership, administration, and control of that portion of the municipal territory within its limits. This
would disrupt, in a sense, the municipalities of the Islands by dividing them into a series of smaller
municipalities entirely independent of the original municipality.
What the law does not permit cannot be obtained by indirection. The object of the proposed
corporation is clearly repugnant to the provisions of the Municipal Code and the governments of
municipalities as they have been organized thereunder. (Act No. 82, Philippine Commission.)
The judgment appealed from is affirmed, with costs against appellants.
Arellano, C.J., Torres, Johnson, Carson and Araullo, JJ., concur.
NORBERTO ASUNCION, ET AL. vs. MANUEL DE YRIARTE
[G.R. No. 9321. September 24, 1914.]
FACTS: The proposed incorporators began an action in the CFI to compel the chief of the division of
archives to receive and register said articles of incorporation and to do any and all acts necessary for
the complete incorporation of the persons named in the articles. The court below found in favor of the
defendant and refused to order the registration of the articles mentioned, maintaining and holding that
the defendant, under the Corporation Law, had authority to determine both the sufficiency of the form
of the articles and the legality of the object of the proposed corporation. This appeal is taken from that
judgment
The chief of the division of archives, the respondent, refused to file the articles of incorporation, upon
the ground that the object of the corporation, as stated in the articles, was not lawful and that, in
pursuance of section 6 of Act No. 1459, they were not registerable.
Hence, this action to obtain a writ of mandamus.
ISSUE: Whether or not the chief of the division of archives has authority, under the Corporation Law,
on being presented with articles of incorporation for registration, to decide not only as to the
sufficiency of the form of the articles, but also as to the lawfulness of the purposes of the proposed
corporation.

HELD: YES.
CORPORATION LAW; POWERS AND DUTIES OF CHIEF OF DIVISION OF ARCHIVES,
EXECUTIVE BUREAU. The chief of the division of archives, for and on behalf of the division, has
authority under the Corporation Law (Act No. 1459) to determine the sufficiency of the form of articles
of incorporation offered for registration with the division.
Section 6 of the Corporation Law reads in part as follows:
Five or more persons, not exceeding fifteen, a majority of whom are residents of the Philippine
Islands, may form a private corporation for any lawful purpose by filing with the division of archives,
patents, copyrights, and trademarks of the Executive Bureau articles of incorporation duly executed
and acknowledged before a notary public, . . .
Simply because the duties of an official happen to be ministerial, it does not necessarily
follow that he may not, in the administration of his office, determine questions of law. We are
of the opinion that it is the duty of the division of archives, when articles of incorporation are
presented for registration, to determine whether the objects of the corporation as expressed in the
articles are lawful. We do not believe that, simply because articles of incorporation presented for
registration are perfect in form, the division of archives must accept and register them and issue the
corresponding certificate of incorporation no matter what the purpose of the corporation may be as
expressed in the articles. The chief of the division of archives, on behalf of the division, has also the
power and duty to determine from the articles of incorporation presented for registration the
lawfulness of the purposes of the proposed corporation and whether or not those purposes bring the
proposed corporation within the purview of the law authorizing corporations for given purposes.
MANDAMUS TO COMPEL HIM TO PERFORM DUTIES. The duties of the chief of the division of
archives, so far as relates to the registration of articles of incorporation, are purely ministerial and not
discretional; and mandamus will lie to compel him to perform his duties under the Corporation Law if,
in violation of law, he refuse to perform them
On the contrary, there is no incompatibility in holding, as we do hold, that his duties are ministerial
and that he has no authority to exercise discretion in receiving and registering articles of
incorporation. He may exercise judgment that is, the judicial function in the determination of the
question of law referred to, but he may not use discretion. The question whether or not the objects of
a proposed corporation are lawful is one that can be decided one way only. If he err in the
determination of that question and refuse to file articles which should be filed under the law, that
decision is subject to review and correction and, upon proper showing, he will be ordered to file the
articles.
Discretion, it may be said generally, is a faculty conferred upon a court or other official by
which he may decide a question either way and still be right. The power conferred upon the
division of archives with respect to the registration of articles of incorporation is not of that
character. It is of the same character as the determination of a lawsuit by a court upon the
merits. It can be decided only one way correctly.

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