Digests Non-Delegation of Powers

TAMPUS, MARY GRACE G.
CONSTITUTIONAL LAW 1
People v. Vera
Facts:
The instant proceedings have to do with the application for probation filed by the herein respondent Mariano Cu
Unjieng on November 27, 1936, before the trial court, under the provisions of Act No. 4221 of the defunct Philippine
Legislature. Herein respondent Mariano Cu Unjieng states in his petition, inter alia, that he is innocent of the crime of
which he was convicted, that he has no criminal record and that he would observe good conduct in the future. The
Court of First Instance of Manila, Judge Pedro Tuason presiding, referred the application for probation of the Insular
Probation Office which recommended denial of the same June 18, 1937. Thereafter, the Court of First Instance of
Manila, seventh branch, Judge Jose O. Vera presiding, set the petition for hearing on April 5, 1937.
On April 2, 1937, the Fiscal of the City of Manila filed an opposition to the granting of probation to the herein
respondent Mariano Cu Unjieng. The private prosecution also filed an opposition on April 5, 1937, alleging, among
other things, that Act No. 4221, assuming that it has not been repealed by section 2 of Article XV of the Constitution,
is nevertheless violative of section 1, subsection (1), Article III of the Constitution guaranteeing equal protection of the
laws for the reason that its applicability is not uniform throughout the Islands and because section 11 of the said Act
endows the provincial boards with the power to make said law effective or otherwise in their respective or otherwise
in their respective provinces. The private prosecution also filed a supplementary opposition on April 19, 1937,
elaborating on the alleged unconstitutionality on Act No. 4221, as an undue delegation of legislative power to the
provincial boards of several provinces (sec. 1, Art. VI, Constitution). The City Fiscal concurred in the opposition of the
private prosecution except with respect to the questions raised concerning the constitutionality of Act No. 4221.
ISSUE:
Whether Act No. 442 (Probation Law) is unconstitutional on the ground that it constitutes an undue delegation of
legislative power
HELD:
The power to make laws the legislative power is vested in a bicameral Legislature by the Jones Law and in
a unicamiral National Assembly by the Constitution. The Philippine Legislature or the National Assembly may not
escape its duties and responsibilities by delegating that power to any other body or authority. Any attempt to abdicate
the power is unconstitutional and void, on the principle that potestas delegata non delegare potest. The rule, however,
which forbids the delegation of legislative power is not absolute and inflexible. It admits of exceptions. An exceptions
sanctioned by immemorial practice permits the central legislative body to delegate legislative powers to local
authorities. On quite the same principle, Congress is powered to delegate legislative power to such agencies in the
territories of the United States as it may select. Courts have also sustained the delegation of legislative power to the
people at large. Doubtless, also, legislative power may be delegated by the Constitution itself. Section 14, paragraph
2, of article VI of the Constitution of the Philippines provides that The National Assembly may by law authorize the
President, subject to such limitations and restrictions as it may impose, to fix within specified limits, tariff rates, import
or export quotas, and tonnage and wharfage dues. And section 16 of the same article of the Constitution provides
that In times of war or other national emergency, the National Assembly may by law authorize the President, for a
limited period and subject to such restrictions as it may prescribed, to promulgate rules and regulations to carry out a
declared national policy.
TAMPUS, MARY GRACE G. CONSTITUTIONAL LAW 1
The case before us does not fall under any of the exceptions hereinabove mentioned. The challenged section of Act
No. 4221 in section 11 which reads as follows:
This Act shall apply only in those provinces in which the respective provincial boards have provided for the salary of a
probation officer at rates not lower than those now provided for provincial fiscals. Said probation officer shall be
appointed by the Secretary of Justice and shall be subject to the direction of the Probation Office. (Emphasis ours.)
In testing whether a statute constitute an undue delegation of legislative power or not, it is usual to inquire whether
the statute was complete in all its terms and provisions when it left the hands of the legislature so that nothing was
left to the judgment of any other appointee or delegate of the legislature.
The general rule, however, is limited by another rule that to a certain extent matters of detail may be left to be filled in
by rules and regulations to be adopted or promulgated by executive officers and administrative boards.
As a rule, an act of the legislature is incomplete and hence invalid if it does not lay down any rule or definite
standard by which the administrative officer or board may be guided in the exercise of the discretionary powers
delegated to it. In the case at bar, what rules are to guide the provincial boards in the exercise of their discretionary
power to determine whether or not the Probation Act shall apply in their respective provinces? What standards are
fixed by the Act? We do not find any and none has been pointed to us by the respondents. The probation Act does
not, by the force of any of its provisions, fix and impose upon the provincial boards any standard or guide in the
exercise of their discretionary power. What is granted is a roving commission which enables the provincial boards to
exercise arbitrary discretion. By section 11 if the Act, the legislature does not seemingly on its own authority extend
the benefits of the Probation Act to the provinces but in reality leaves the entire matter for the various provincial
boards to determine. In other words, the provincial boards of the various provinces are to determine for themselves,
whether the Probation Law shall apply to their provinces or not at all. The applicability and application of the
Probation Act are entirely placed in the hands of the provincial boards. If the provincial board does not wish to have
the Act applied in its province, all that it has to do is to decline to appropriate the needed amount for the salary of a
probation officer.
US v. Ang Tang Ho
FACTS
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:
WON Act 2868 as it unduly delegates power to the Governor General
HELD:
Yes. This question 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 judgment 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.
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 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 futuro, if
necessary, upon the ascertainment of any prescribed fact or event.
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.
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.
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.
Eastern Shipping v. POEA
FACTS:
A Chief Officer of a ship was killed in an accident in Japan. The widow filed a complaint for charges against the
Eastern Shipping Lines with POEA, based on a Memorandum Circular No. 2, issued by the POEA which stipulated
death benefits and burial for the family of overseas workers. ESL questioned the validity of the memorandum circular
as violative of the principle of non-delegation of legislative power. It contends that no authority had been given the
POEA to promulgate the said regulation; and even with such authorization, the regulation represents an exercise of
legislative discretion which, under the principle, is not subject to delegation. Nevertheless, POEA assumed
jurisdiction and decided the case.
ISSUES:
1. Whether or not the POEA had jurisdiction over the case as the husband was not an overseas worker.
2. Whether or not the validity of Memorandum Circular No. 2 itself as violative of the principle of non-delegation of
legislative power
HELD:
Yes. The Philippine Overseas Employment Administration was created under Executive Order No. 797, promulgated
on May 1, 1982, to promote and monitor the overseas employment of Filipinos and to protect their rights. It replaced
the National Seamen Board created earlier under Article 20 of the Labor Code in 1974. Under Section 4(a) of the
said executive order, the POEA is vested with "original and exclusive jurisdiction over all cases, including money
claims, involving employee-employer relations arising out of or by virtue of any law or contract involving Filipino
contract workers, including seamen." These cases, according to the 1985Rules and Regulations on Overseas
Employment issued by the POEA, include, claims for death, disability and other benefits arising out of such
employment.
The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made bythe POEA pursuant to
its Memorandum Circular No. 2, which became effective on February 1,1984. This circular prescribed a standard
contract to be adopted by both foreign and domestic shipping companies in the hiring of Filipino seamen for overseas
employment.
2. No. Memorandum Circular No. 2 is an administrative regulation. The model contract prescribed thereby has been
applied in a significant number of the cases without challenge by the employer. The power of the POEA (and before it
the National Seamen Board) in requiring the model contract is not unlimited as there is a sufficient standard guiding
the delegate in the exercise of the said authority. That standard is discoverable in the executive order itself which, in
creating the Philippine Overseas Employment Administration, mandated it to protect the rights of overseas Filipino
workers to "fair and equitable employment practices."
GENERAL RULE: Non-delegation of powers; exception It is true that legislative discretion as to the substantive
contents of the law cannot be delegated. What can be delegated is the discretion to determine how the law may be
enforced, not what the law shall be. The ascertainment of the latter subject is a prerogative of the legislature. This
prerogative cannot be abdicated or surrendered by the legislature to the delegate.
Two Tests of Valid Delegation of Legislative Power
There are two accepted tests to determine whether or not there is a valid delegation of legislative power, viz the
completeness test and the sufficient standard test. Under the first test, the law must be complete in all its terms and
conditions when it leaves the legislature such that when it reaches the delegate the only thing he will have to do is to
enforce it. Under the sufficient standard test, there must be adequate guidelines or stations in the law to map out the
boundaries of the delegates authority and prevent the delegation from running riot.
Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to
step into the shoes of the legislature and exercise a power essentially legislative. The delegation of legislative power
has become the rule and its non-delegation the exception.
Rationale for Delegation of Legislative Power
The reason is the increasing complexity of the task of government and the growing inability of the legislature to cope
directly with the myriad problems demanding its attention. The growth of society has ramified its activities and
created peculiar and sophisticated problems that the legislature cannot be expected to reasonably comprehend.
Specialization even in legislation has become necessary. Too many of the problems attendant upon present-day
undertakings, the legislature may not have the competence to provide the required direct and efficacious, not to say,
specific solutions. These solutions may, however, be expected from its delegates, who are supposed to be experts in
the particular fields. Power of Subordinate Legislation The reasons given above for the delegation of legislative
powers in general are particularly applicable to administrative bodies. With the proliferation of specialized activities
and their attendant peculiar problems, the national legislature has found it more and more necessary to entrust to
administrative agencies the authority to issue rules to carry out the general provisions of the statute. This is called the
power of subordinate legislation.
With this power, administrative bodies may implement the broad policies laid down in statute by filling in the details
which the Congress may not have the opportunity or competence to provide. Memorandum Circular No. 2 is one
such administrative regulation. Administrative agencies are vested with two basic powers, the quasi-legislative and
quasi- judicial. The first enables them to promulgate implementing rules and regulations, and the second enables
them to interpret and apply such regulations.
PELAEZ v. AUDITOR GENERAL
FACTS:
President Marcos issued executive orders creating 33 municipalities this was pursuant to Section 68 of the
Revised Administrative Code which provides in part:
The President may by executive order define the boundary of any municipality therein and may change seat
of government within any subdivision to such place therein as the public welfare may require
Then Vice President, Emmanuel Pelaez, filed a special civil action to prohibit the auditor general from disbursing
funds to be appropriated for the said municipalities. Pelaez claims that the EOs were unconstitutional. He said that
Section 68 of the RAC had been impliedly repealed by Section 3 of RA 2370 which provides that barrios may not be
created or their boundaries altered nor their names changed except by Act of Congress. Pelaez argues: If President,
under this new law, cannot even create a barrio, how can he create a municipality which is composed of several
barrios, since barrios are units of municipalities?
Auditor General countered that there was no repeal and that only barrios were barred from being created by the
President. Municipalities are exempt from the bar and that a municipality can be created without creating barrios. He
further maintains that through Sec. 68 of the RAC, Congress has delegated such power to create municipalities to
the President.
ISSUE: Whether or not Congress has delegated the power to create barrios to the President by virtue of Section 68
of the Revised Administrative Code
HELD:
No. There was no delegation here. Although Congress may delegate to another branch of the government the power
to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the
principle of separation of powers, that said law: (a) be complete in itself it must set forth therein the policy to be
executed, carried out or implemented by the delegate and (b) fix a standard the limits of which are sufficiently
determinate or determinable to which the delegate must conform in the performance of his functions. In this case,
Sec. 68 lacked any such standard. Indeed, without a statutory declaration of policy, the delegate would, in effect,
make or formulate such policy, which is the essence of every law; and, without the aforementioned standard, there
would be no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the
scope of his authority.
Further, although Sec. 68 provides the qualifying clause as the public welfare may require which would mean that
the President may exercise such power as the public welfare may require is present, still, such will not replace the
standard needed for a proper delegation of power. In the first place, what the phrase as the public welfare may
require qualifies is the text which immediately precedes hence, the proper interpretation is the President may
change the seat of government within any subdivision to such place therein as the public welfare may require. Only
the seat of government may be changed by the President when public welfare so requires and NOT the creation of
municipality.
The Supreme Court declared that the power to create municipalities is essentially and eminently legislative in
character not administrative (not executive).
*Section 10(1) of Article VII of the fundamental law ordains:
The President shall have control of all the executive departments, bureaus or offices, exercise
general supervision over all local governments as may be provided by law, and take care that the
laws be faithfully executed.
The power of control under this provision implies the right of the President to interfere in the exercise of such
discretion as may be vested by law in the officers of the executive departments, bureaus, or offices of the national
government, as well as to act in lieu of such officers. This power is denied by the Constitution to the Executive,
insofar as local governments are concerned. Such control does not include the authority to either abolish an
executive department or bureau, or to create a new one. Section 68 of the Revised Administrative Code does not
merely fail to comply with the constitutional mandate above quoted, it also gives the President more power than what
was vested in him by the Constitution.
The Executive Orders in question are hereby declared null and void ab initio and the respondent permanently
restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders or any
disbursement by the municipalities referred to.
TATAD v. DOE
FACTS:
The petitions challenge the constitutionality of RA No. 8180 entitled An Act Deregulating the Downstream Oil
Industry and For Other Purposes. The deregulation process has two phases: (a) the transition phase (Aug. 12, 1996)
and the (b) full deregulation phase (Feb. 8, 1997 through EO No. 372).
Sec. 15 of RA No. 8180 constitutes an undue delegation of legislative power to the President and the Sec. of Energy
because it does not provide a determinate or determinable standard to guide the Executive Branch in determining
when to implement the full deregulation of the downstream oil industry, and the law does not provide any specific
standard to determine when the prices of crude oil in the world market are considered to be declining nor when the
exchange rate of the peso to the US dollar is considered stable.
Issue:
w/n the provisions of RA No. 8180 and EO No. 372 is unconstitutional.
sub-issue: (a) w/n sec. 15 violates the constitutional prohibition on undue delegation of power, and (b) w/n the
Executive misapplied RA No. 8180 when it considered the depletion of the OPSF fund as factor in fully deregulating
the downstream oil industry in Feb. 1997.
HELD/RULING:
(a) NO. Sec. 15 can hurdle both the completeness test and the sufficient standard test. RA No. 8180 provided that
the full deregulation will start at the end of March 1997 regardless of the occurrence of any event. Thus, the law is
complete on the question of the final date of full deregulation.
Sec. 15 lays down the standard to guide the judgment of the Presidenthe is to time it as far as practicable when the
prices of crude oil and petroleum in the world market are declining and when the exchange rate of the peso to the US
dollar is considered stable.
Webster defines practicable as meaning possible to practice or perform, decline as meaning to take a downward
direction, and stable as meaning firmly established.
(b) YES. Sec. 15 did not mention the depletion of the OPSF fund as a factor to be given weight by the Executive
before ordering full deregulation. The Executive department failed to follow faithfully the standards set by RA No.
8180 when it co0nsidered the extraneous factor of depletion of the OPSF fund. The Executive is bereft of any right to
alter either by subtraction or addition the standards set in RA No. 8180 for it has no powers to make laws.
KILUSANG MAYO UNO v. GARCIA

FACTS:
Public utilities privately owned and operated businesses whose service are essential
tothe general public; enterprises which specially cater to the needs of the public andconducive to their comfort and
convenience
DOTC Sec. issued Memorandum Circular No. 90-395 to then LTFRB Chairman allowing provincial bus operators to
charge passengers rates within a range of 15% above and 15%below the LTFRB official rate for a period of 1 year
PBOAP pursuant to Memo. Cir. it filed an application for fare rate increase. An across-the-board increase
of eight and a half centavos (P0.085) per kilometer for all types of provincial buses with a minimum-maximum fare
range of fifteen (15%) percent over and below the proposed basic per kilometer fare rate, with the said minimum-
maximum fare range applying only to ordinary, first class and premium class buses and a fifty-centavo(P0.50)
minimum per kilometer fare for aircon buses, was sought
Respondent LTFRB rendered a decision granting the fare rate increase in accordance with a specified schedule of
fares on a straight computation method
DOTC Sec. issued Department Order No. 92-587 defining the policy framework on the regulation of transport
services. It provides inter alia that Passenger fares shall also
bederegulated, except for the lowest class of passenger service (normally third classpassenger transport) for which t
he government will fix indicative or reference fares. Operators of particular services may fix their own fares within a
range 15% above and below the indicative or reference rate.
LTFRB issued Memorandum Circular No. 92009 promulgating the guidelines for theimplementation of DOTC
Department Order No. 92-587, which provides, among others, that: The issuance of a Certificate of Public
Convenience is determined by public need. The presumption of public need for a service shall be deemed in favor of
the applicant, while burden of proving that there is no need for the proposed service shall be the oppositors. The
existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys shall be
widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicative or reference rate as
the basis for the expanded fare range
PBOAP - availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20%
and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a
public hearing, announced a fare increase of twenty (20%) percent of the existing fares
KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares.
ISSUE:
WON the above memoranda, circulars and/or orders of the DOTC and the LTFRB which, among others, (a)
authorize provincial bus and jeepney operators to increase or decrease the prescribed transportation fares without
application therefor with the LTFRB and without hearing and approval thereof by said agency is in violation of Sec.
16(c) of CA 146,and in derogation of LTFRBs duty to fix and determine just and reasonable fares by delegating that
function to bus operators, and (b) establish a presumption of public need in favor of applicants for certificates of
public convenience and place on the oppositor the burden of proving that there is no need for the proposed service,
in patent violation not onlyof Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act mandating
that fares should be just and reasonable.
HELD:
Yes.
Section 16(c) of the Public Service Act, as amended, reads: Sec. 16. Proceedings of the Commission, upon notice
and hearing. The Commission shall have power, upon proper notice and hearing in accordance with the rules and
provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to the contrary:xxx
xxx xxx(c) To fix and determine individual or joint rates, tolls, charges, classifications, orschedules thereof, as well as
commutation, mileage kilometrage, and other special rates which shall be imposed, observed, and followed
thereafter by any public service: Provided, That the Commission may, in its discretion, approve rates proposed by
public services provisionally and without necessity of any hearing; but it shall call a hearing thereon
withinthirty days thereafter, upon publication and notice to the concerns operating in theterritory affected: Provided,
further, That in case the public service equipment of an operator is used principally or secondarily for the promotion
of a private business, the net profits of said private business shall be considered in relation with the public service
of such operator for the purpose of fixing the rates.
LTFRB is authorized under EO 202, s. 1987 to determine, prescribe, approve andperiodically review and adjust,
reasonable fares, rates and other related charges, relative to the operation of public land transportation services
provided by motorized vehicles
LTFRB not authorized to delegate that power to a common carrier, a transport operator, or other public service
authority given by the LTFRB to the provincial bus operators to set a fare range over and above the authorized
existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislative authority.
Rate should not be confiscatory as would place an operator in a situation where he will continue to operate
at a loss; rate should enable public utilities to generate revenues sufficient to cover operational costs and provide
reasonable return on the investments.
LTFRB Memorandum Circular No. 92-009, Part IV is incompatible and inconsistent with Section 16(c)(iii) of the
Public Service Act which requires that before a CPC will be issued, the applicant must prove by proper notice and
hearing that the operation of the public service proposed will promote public interest in a proper and suitable manner.
On the contrary, the policy guideline states that the presumption of public need for a public service shall be deemed
in favor of the applicant.
Abakada Guro Partylist v. Executive Secretary
Facts:
Before R.A. No. 9337 took effect, petitioners ABAKADA GURO Party List, et al., filed a petition for prohibition on May
27, 2005. They question the constitutionality of Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107
and 108, respectively, of the National Internal Revenue Code (NIRC). Section 4 imposes a 10% VAT on sale of
goods and properties, Section 5 imposes a 10% VAT on importation of goods, and Section 6 imposes a 10% VAT on
sale of services and use or lease of properties. These questioned provisions contain a uniform proviso authorizing
the President, upon recommendation of the Secretary of Finance, to raise the VAT rate to 12%, effective January 1,
2006, after any of the following conditions have been satisfied, to wit:
. . . That the President, upon the recommendation of the Secretary of Finance, shall, effective January 1, 2006, raise
the rate of value-added tax to twelve percent (12%), after any of the following conditions has been satisfied:
(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year exceeds two
and four-fifth percent (2 4/5%); or
(ii) National government deficit as a percentage of GDP of the previous year exceeds one and one-half percent (1 %).
Petitioners argue that the law is unconstitutional, as it constitutes abandonment by Congress of its exclusive authority
to fix the rate of taxes under Article VI, Section 28(2) of the 1987 Philippine Constitution.
Mounting budget deficit, revenue generation, inadequate fiscal allocation for education, increased emoluments for
health workers, and wider coverage for full value-added tax benefits these are the reasons why Republic Act No.
9337 (R.A. No. 9337) was enacted.
R.A. No. 9337 is a consolidation of three legislative bills namely, House
Bill Nos. 3555 and 3705, and Senate Bill No. 1950.
Because of the conflicting provisions of the proposed bills the Senate agreed to the request of the House of
Representatives for a committee conference. The Conference Committee on the Disagreeing Provisions of House
Bill recommended the approval of its report, which the Senate and the House of the Representatives did.
The President signed into law the consolidated House and Senate versions as Republic Act 9337. Before the law
was to take effect on July 1, 2005, the Court issued a temporary restraining order enjoining government from
implementing the law in response to a slew of petitions for certiorari and prohibition questioning the constitutionality
of the new law.
Among others, Petitioners contend that Sections 4, 5, and 6 of R.A. No. 9337 constitute an undue delegation of
legislative power, in violation of Article VI, Section 28(2) of the Constitution.
ISSUE:
Whether or not there is an undue delegation of legislative power?
HELD:
In the present case, the challenged section of R.A. No. 9337 is the common proviso in Sections 4, 5 and 6 which
reads as follows: That the President, upon the recommendation of the Secretary of Finance, shall, effective January
1, 2006, raise the rate of value-added tax to twelve percent (12%), after any of the following conditions has been
satisfied:
(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year exceeds two
and four-fifth percent (2 4/5%); or
(ii) National government deficit as a percentage of GDP of the previous year exceeds one and one-half percent (1
%)
In every case of permissible delegation, there must be a showing that the delegation itself is valid. It is valid only if
the law (a) is complete in itself, setting forth therein the policy to be executed, carried out, or implemented by the
delegate;41 and (b) fixes a standard the limits of which are sufficiently determinate and determinable to which
the delegate must conform in the performance of his functions. A sufficient standard is one which defines legislative
policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It indicates the
circumstances under which the legislative command is to be effected. Both tests are intended to prevent a total
transference of legislative authority to the delegate, who is not allowed to step into the shoes of the legislature and
exercise a power essentially legislative.
A distinction has rightfully been made between delegation of power to make the laws which necessarily involves a
discretion as to what it shall be, which constitutionally may not be done, and delegation of authority or discretion as to
its execution to be exercised under and in pursuance of the law, to which no valid objection can be made.
The case before the Court is not a delegation of legislative power. It is simply a delegation of ascertainment of facts
upon which enforcement and administration of the increase rate under the law is contingent. The legislature has
made the operation of the 12% rate effective January 1, 2006, contingent upon a specified fact or condition. It leaves
the entire operation or non-operation of the 12% rate upon factual matters outside of the control of the executive. No
discretion would be exercised by the President. Highlighting the absence of discretion is the fact that the word shall is
used in the common proviso. The use of the word shall connote a mandatory order. Its use in a statute denotes an
imperative obligation and is inconsistent with the idea of discretion. Where the law is clear and unambiguous, it must
be taken to mean exactly what it says, and courts have no choice but to see to it that the mandate is obeyed.
There is no undue delegation of legislative power but only of the discretion as to the execution of a law. This is
constitutionally permissible. Congress does not abdicate its functions or unduly delegate power when it describes
what job must be done, who must do it, and what is the scope of his authority; in our complex economy that is
frequently the only way in which the legislative process can go forward.
Abakada Guro Partylist v. Purisima
FACTS:
This petition for prohibition seeks to prevent respondents from implementing and enforcing Republic Act (RA) 9335
(Attrition Act of 2005).
RA 9335 was enacted to optimize the revenue-generation capability and collection of the Bureau of Internal Revenue
(BIR) and the Bureau of Customs (BOC). The law intends to encourage BIR and BOC officials and employees to
exceed their revenue targets by providing a system of rewards and sanctions through the creation of a Rewards and
Incentives Fund (Fund) and a Revenue Performance Evaluation Board (Board). It covers all officials and employees
of the BIR and the BOC with at least six months of service, regardless of employment status.
The Fund is sourced from the collection of the BIR and the BOC in excess of their revenue targets for the year, as
determined by the Development Budget and Coordinating Committee (DBCC). Any incentive or reward is taken from
the fund and allocated to the BIR and the BOC in proportion to their contribution in the excess collection of the
targeted amount of tax revenue.
Petitioners, invoking their right as taxpayers filed this petition challenging the constitutionality of RA 9335, a tax
reform legislation. They contend that, by establishing a system of rewards and incentives, the law "transform[s] the
officials and employees of the BIR and the BOC into mercenaries and bounty hunters" as they will do their best only
in consideration of such rewards. Thus, the system of rewards and incentives invites corruption and undermines the
constitutionally mandated duty of these officials and employees to serve the people with utmost responsibility,
integrity, loyalty and efficiency.
Petitioners also claim that limiting the scope of the system of rewards and incentives only to officials and employees
of the BIR and the BOC violates the constitutional guarantee of equal protection. There is no valid basis for
classification or distinction as to why such a system should not apply to officials and employees of all other
government agencies.
In addition, petitioners assert that the law unduly delegates the power to fix revenue targets to the President as it
lacks a sufficient standard on that matter. While Section 7(b) and (c) of RA 9335 provides that BIR and BOC officials
may be dismissed from the service if their revenue collections fall short of the target by at least 7.5%, the law does
not, however, fix the revenue targets to be achieved. Instead, the fixing of revenue targets has been delegated to the
President without sufficient standards. It will therefore be easy for the President to fix an unrealistic and unattainable
target in order to dismiss BIR or BOC personnel.
Finally, petitioners assail the creation of a congressional oversight committee on the ground that it violates the
doctrine of separation of powers. While the legislative function is deemed accomplished and completed upon the
enactment and approval of the law, the creation of the congressional oversight committee permits legislative
participation in the implementation and enforcement of the law.
ISSUE:
Is R.A. No. 9335 constitutional?
HELD:
Yes. R.A. No. 9335 is constitutional, except for Section 12 of the law which creates a Joint Congressional Oversight
Committee to review the laws IRR.
That RA No. 9335 will turn BIR and BOC employees and officials into bounty hunters and mercenaries is purely
speculative as the law establishes safeguards by imposing liabilities on officers and employees who are guilty of
negligence, abuses, malfeasance, etc. Neither is the equal protection clause violated since the law recognizes a valid
classification as only the BIR and BOC have the common distinct primary function of revenue generation. There are
sufficient policy and standards to guide the President in fixing revenue targets as the revenue targets are based on
the original estimated revenue collection expected of the BIR and the BOC.
However, the creation of a Joint Congressional Oversight Committee for the purpose of reviewing the IRR formulated
by agencies of the executive branch (DOF, DBM, NEDA, etc.) is unconstitutional since it violates the doctrine of
separation of powers since Congress arrogated judicial power upon itself.
Equal Protection
Equality guaranteed under the equal protection clause is equality under the same conditions and among persons
similarly situated; it is equality among equals, not similarity of treatment of persons who are classified based on
substantial differences in relation to the object to be accomplished. When things or persons are different in fact or
circumstance, they may be treated in law differently.
The equal protection clause recognizes a valid classification, that is, a classification that has a reasonable foundation
or rational basis and not arbitrary. With respect to RA 9335, its expressed public policy is the optimization of the
revenue-generation capability and collection of the BIR and the BOC. Since the subject of the law is the revenue-
generation capability and collection of the BIR and the BOC, the incentives and/or sanctions provided in the law
should logically pertain to the said agencies. Moreover, the law concerns only the BIR and the BOC because they
have the common distinct primary function of generating revenues for the national government through the collection
of taxes, customs duties, fees and charges.
Undue Delegation
Two tests determine the validity of delegation of legislative power: (1) the completeness test and (2) the sufficient
standard test. A law is complete when it sets forth therein the policy to be executed, carried out or implemented by
the delegate. It lays down a sufficient standard when it provides adequate guidelines or limitations in the law to map
out the boundaries of the delegates authority and prevent the delegation from running riot. To be sufficient, the
standard must specify the limits of the delegates authority, announce the legislative policy and identify the conditions
under which it is to be implemented.
RA 9335 in no way violates the security of tenure of officials and employees of the BIR and the BOC. The guarantee
of security of tenure only means that an employee cannot be dismissed from the service for causes other than those
provided by law and only after due process is accorded the employee. In the case of RA 9335, it lays down a
reasonable yardstick for removal (when the revenue collection falls short of the target by at least 7.5%) with due
consideration of all relevant factors affecting the level of collection. This standard is analogous to inefficiency and
incompetence in the performance of official duties, a ground for disciplinary action under civil service laws.mThe
action for removal is also subject to civil service laws, rules and regulations and compliance with substantive and
procedural due process.
At any rate, this Court has recognized the following as sufficient standards: "public interest," "justice and equity,"
"public convenience and welfare" and "simplicity, economy and welfare." In this case, the declared policy of
optimization of the revenue-generation capability and collection of the BIR and the BOC is infused with public interest.
Separation of Power
Section 12 of RA 9335 provides:
SEC. 12. Joint Congressional Oversight Committee. There is hereby created a Joint Congressional Oversight
Committee composed of seven Members from the Senate and seven Members from the House of Representatives.
The Members from the Senate shall be appointed by the Senate President, with at least two senators representing
the minority. The Members from the House of Representatives shall be appointed by the Speaker with at least two
members representing the minority. After the Oversight Committee will have approved the implementing rules and
regulations (IRR) it shall thereafter become functus officio and therefore cease to exist.
WHEREFORE, the petition is hereby PARTIALLY GRANTED. Section 12 of RA 9335 creating a Joint Congressional
Oversight Committee to approve the implementing rules and regulations of the law is declared
UNCONSTITUTIONAL and therefore NULL and VOID. The constitutionality of the remaining provisions of RA 9335 is
UPHELD. Pursuant to Section 13 of RA 9335, the rest of the provisions remain in force and effect.
Lawyers Movement Against Monopoly and Poverty v. Secretary of Budget and Management
FACTS:
For consideration of the Court is an original action for certiorari assailing the constitutionality and legality of the
implementation of the Priority Development Assistance Fund (PDAF) as provided for in Republic Act (R.A.) 9206 or
the General Appropriations Act for 2004 (GAA of 2004).
Petitioner Lawyers Against Monopoly and Poverty(LAMP), a group of lawyers who have banded together with a
mission of dismantling all forms of political, economic or social monopoly in the country. According to LAMP, the
above provision is silent and, therefore, prohibits an automatic or direct allocation of lump sums to individual senators
and congressmen for the funding of projects. It does not empower individual Members of Congress to propose, select
and identify programs and projects to be funded out of PDAF.
For LAMP, this situation runs afoul against the principle of separation of powers because in receiving and, thereafter,
spending funds for their chosen projects, the Members of Congress in effect intrude into an executive function.
Further, the authority to propose and select projects does not pertain to legislation. It is, in fact, a non-legislative
function devoid of constitutional sanction,8 and, therefore, impermissible and must be considered nothing less than
malfeasance.
RESPONDENTS POSITION: the perceptions of LAMP on the implementation of PDAF must not be based on mere
speculations circulated in the news media preaching the evils of pork barrel.
ISSUES:
1) WON the mandatory requisites for the exercise of judicial review are met in this case
2) WON the implementation of PDAF by the Members of Congress is unconstitutional and illegal.
HELD:
I.
A question is ripe for adjudication when the act being challenged has had a direct adverse effect on the individual
challenging it. In this case, the petitioner contested the implementation of an alleged unconstitutional statute, as
citizens and taxpayers. The petition complains of illegal disbursement of public funds derived from taxation and this is
sufficient reason to say that there indeed exists a definite, concrete, real or substantial controversy before the Court.
LOCUS STANDI: The gist of the question of standing is whether a party alleges such a personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination of difficult constitutional questions. Here, the sufficient interest
preventing the illegal expenditure of money raised by taxation required in taxpayers suits is established. Thus, in the
claim that PDAF funds have been illegally disbursed and wasted through the enforcement of an invalid or
unconstitutional law, LAMP should be allowed to sue.
Lastly, the Court is of the view that the petition poses issues impressed with paramount public interest. The
ramification of issues involving the unconstitutional spending of PDAF deserves the consideration of the Court,
warranting the assumption of jurisdiction over the petition.
II.
The Court rules in the negative.
In determining whether or not a statute is unconstitutional, the Court does not lose sight of the presumption of validity
accorded to statutory acts of Congress. To justify the nullification of the law or its implementation, there must be a
clear and unequivocal, not a doubtful, breach of the Constitution. In case of doubt in the sufficiency of proof
establishing unconstitutionality, the Court must sustain legislation because to invalidate [a law] based on x x x
baseless supposition is an affront to the wisdom not only of the legislature that passed it but also of the executive
which approved it.
The petition is miserably wanting in this regard. No convincing proof was presented showing that, indeed, there were
direct releases of funds to the Members of Congress, who actually spend them according to their sole discretion.
Devoid of any pertinent evidentiary support that illegal misuse of PDAF in the form of kickbacks has become a
common exercise of unscrupulous Members of Congress, the Court cannot indulge the petitioners request for
rejection of a law which is outwardly legal and capable of lawful enforcement.
PORK BARREL:
The Members of Congress are then requested by the President to recommend projects and programs which may be
funded from the PDAF. The list submitted by the Members of Congress is endorsed by the Speaker of the House of
Representatives to the DBM, which reviews and determines whether such list of projects submitted are consistent
with the guidelines and the priorities set by the Executive.33 This demonstrates the power given to the President to
execute appropriation laws and therefore, to exercise the spending per se of the budget.
As applied to this case, the petition is seriously wanting in establishing that individual Members of Congress receive
and thereafter spend funds out of PDAF. So long as there is no showing of a direct participation of legislators in the
actual spending of the budget, the constitutional boundaries between the Executive and the Legislative in the
budgetary process remain intact.
Belgica v. Executive Secretary
Facts:
This case is consolidated with G.R. No. 208493 and G.R. No. 209251.
The so-called pork barrel system has been around in the Philippines since about 1922. Pork Barrel is commonly
known as the lump-sum, discretionary funds of the members of the Congress. It underwent several legal
designations from Congressional Pork Barrel to the latest Priority Development Assistance Fund or PDAF. The
allocation for the pork barrel is integrated in the annual General Appropriations Act (GAA).
Since 2011, the allocation of the PDAF has been done in the following manner:
a. P70 million: for each member of the lower house; broken down to P40 million for hard projects (infrastructure
projects like roads, buildings, schools, etc.), and P30 million for soft projects (scholarship grants, medical
assistance, livelihood programs, IT development, etc.);
b. P200 million: for each senator; broken down to P100 million for hard projects, P100 million for soft projects;
c. P200 million: for the Vice-President; broken down to P100 million for hard projects, P100 million for soft projects.
The PDAF articles in the GAA do provide for realignment of funds whereby certain cabinet members may request for
the realignment of funds into their department provided that the request for realignment is approved or concurred by
the legislator concerned.
Presidential Pork Barrel
The president does have his own source of fund albeit not included in the GAA. The so-called presidential pork barrel
comes from two sources: (a) the Malampaya Funds, from the Malampaya Gas Project this has been around since
1976, and (b) the Presidential Social Fund which is derived from the earnings of PAGCOR this has been around
since about 1983.
Pork Barrel Scam Controversy
Ever since, the pork barrel system has been besieged by allegations of corruption. In July 2013, six whistle blowers,
headed by Benhur Luy, exposed that for the last decade, the corruption in the pork barrel system had been facilitated
by Janet Lim Napoles. Napoles had been helping lawmakers in funneling their pork barrel funds into about 20 bogus
NGOs (non-government organizations) which would make it appear that government funds are being used in legit
existing projects but are in fact going to ghost projects. An audit was then conducted by the Commission on Audit
and the results thereof concurred with the exposes of Luy et al.
Motivated by the foregoing, Greco Belgica and several others, filed various petitions before the Supreme Court
questioning the constitutionality of the pork barrel system.
ISSUES:
I. Whether or not the congressional pork barrel system is constitutional.
II. Whether or not presidential pork barrel system is constitutional.
HELD:
I. No, the congressional pork barrel system is unconstitutional. It is unconstitutional because it violates the following
principles:
a. Separation of Powers
As a rule, the budgeting power lies in Congress. It regulates the release of funds (power of the purse). The executive,
on the other hand, implements the laws this includes the GAA to which the PDAF is a part of. Only the executive
may implement the law but under the pork barrel system, whats happening was that, after the GAA, itself a law, was
enacted, the legislators themselves dictate as to which projects their PDAF funds should be allocated to a clear act
of implementing the law they enacted a violation of the principle of separation of powers. (Note in the older case of
PHILCONSA vs Enriquez, it was ruled that pork barrel, then called as CDF or the Countrywide Development Fund,
was constitutional insofar as the legislators only recommend where their pork barrel funds go).
This is also highlighted by the fact that in realigning the PDAF, the executive will still have to get the concurrence of
the legislator concerned.
b. Non-delegability of Legislative Power
As a rule, the Constitution vests legislative power in Congress alone. (The Constitution does grant the people
legislative power but only insofar as the processes of referendum and initiative are concerned). That being, legislative
power cannot be delegated by Congress for it cannot delegate further that which was delegated to it by the
Constitution.
Exceptions to the rule are:
(i) delegated legislative power to local government units but this shall involve purely local matters;
(ii) authority of the President to, by law, exercise powers necessary and proper to carry out a declared national policy
in times of war or other national emergency, or fix within specified limits, and subject to such limitations and
restrictions as Congress may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other
duties or imposts within the framework of the national development program of the Government.
In this case, the PDAF articles which allow the individual legislator to identify the projects to which his PDAF money
should go to is a violation of the rule on non-delegability of legislative power. The power to appropriate funds is solely
lodged in Congress (in the two houses comprising it) collectively and not lodged in the individual members. Further,
nowhere in the exceptions does it state that the Congress can delegate the power to the individual member of
Congress.
c. Principle of Checks and Balances
One feature in the principle of checks and balances is the power of the president to veto items in the GAA which he
may deem to be inappropriate. But this power is already being undermined because of the fact that once the GAA is
approved, the legislator can now identify the project to which he will appropriate his PDAF. Under such system, how
can the president veto the appropriation made by the legislator if the appropriation is made after the approval of the
GAA again, Congress cannot choose a mode of budgeting which effectively renders the constitutionally-given
power of the President useless.
d. Local Autonomy
As a rule, the local governments have the power to manage their local affairs. Through their Local Development
Councils (LDCs), the LGUs can develop their own programs and policies concerning their localities. But with the
PDAF, particularly on the part of the members of the house of representatives, whats happening is that a
congressman can either bypass or duplicate a project by the LDC and later on claim it as his own. This is an instance
where the national government (note, a congressman is a national officer) meddles with the affairs of the local
government and this is contrary to the State policy embodied in the Constitution on local autonomy. Its good if
thats all that is happening under the pork barrel system but worse, the PDAF becomes more of a personal fund on
the part of legislators.
II. Yes, the presidential pork barrel is valid.
The main issue raised by Belgica et al against the presidential pork barrel is that it is unconstitutional because it
violates Section 29 (1), Article VI of the Constitution which provides that no money shall be paid out of the treasury
except in pursuance of an appropriation made by laws.
Belgica et al emphasized that the presidential pork comes from the earnings of the Malampaya and PAGCOR and
not from any appropriation from a particular legislation.
The Supreme Court disagrees as it ruled that PD 910, which created the Malampaya Fund, as well as PD 1869 (as
amended by PD 1993), which amended PAGCORs charter, provided for the appropriation, to wit:
(i) PD 910: Section 8 thereof provides that all fees, among others, collected from certain energy-related ventures
shall form part of a special fund (the Malampaya Fund) which shall be used to further finance energy resource
development and for other purposes which the President may direct;
(ii) PD 1869, as amended: Section 12 thereof provides that a part of PAGCORs earnings shall be allocated to a
General Fund (the Presidential Social Fund) which shall be used in government infrastructure projects.
These are sufficient laws which met the requirement of Section 29, Article VI of the Constitution. The appropriation
contemplated therein does not have to be a particular appropriation as it can be a general appropriation as in the
case of PD 910 and PD 1869.
Araullo v. Executive Secretary
Facts:
When President Benigno Aquino III took office, his administration noticed the sluggish growth of the economy. The
World Bank advised that the economy needed a stimulus plan. Budget Secretary Florencio Butch Abad then came
up with a program called the Disbursement Acceleration Program (DAP).
The DAP was seen as a remedy to speed up the funding of government projects. DAP enables the Executive to
realign funds from slow moving projects to priority projects instead of waiting for next years appropriation. So what
happens under the DAP was that if a certain government project is being undertaken slowly by a certain executive
agency, the funds allotted therefor will be withdrawn by the Executive. Once withdrawn, these funds are declared as
savings by the Executive and said funds will then be reallotted to other priority projects. The DAP program did work
to stimulate the economy as economic growth was in fact reported and portion of such growth was attributed to the
DAP (as noted by the Supreme Court).
Other sources of the DAP include the unprogrammed funds from the General Appropriations Act (GAA).
Unprogrammed funds are standby appropriations made by Congress in the GAA.
Meanwhile, in September 2013, Senator Jinggoy Estrada made an expos claiming that he, and other Senators,
received Php50M from the President as an incentive for voting in favor of the impeachment of then Chief Justice
Renato Corona. Secretary Abad claimed that the money was taken from the DAP but was disbursed upon the
request of the Senators.
This apparently opened a can of worms as it turns out that the DAP does not only realign funds within the Executive.
It turns out that some non-Executive projects were also funded; to name a few: Php1.5B for the CPLA (Cordillera
Peoples Liberation Army), Php1.8B for the MNLF (Moro National Liberation Front), P700M for the Quezon Province,
P50-P100M for certain Senators each, P10B for Relocation Projects, etc.
This prompted Maria Carolina Araullo, Chairperson of the Bagong Alyansang Makabayan, and several other
concerned citizens to file various petitions with the Supreme Court questioning the validity of the DAP. Among their
contentions was:
DAP is unconstitutional because it violates the constitutional rule which provides that no money shall be paid out of
the Treasury except in pursuance of an appropriation made by law.
Secretary Abad argued that the DAP is based on certain laws particularly the GAA (savings and augmentation
provisions thereof), Sec. 25(5), Art. VI of the Constitution (power of the President to augment), Secs. 38 and 49 of
Executive Order 292 (power of the President to suspend expenditures and authority to use savings, respectively).
Issues:
I. Whether or not the DAP violates the principle no money shall be paid out of the Treasury except in pursuance of
an appropriation made by law (Sec. 29(1), Art. VI, Constitution).
II. Whether or not the DAP realignments can be considered as impoundments by the executive.
III. Whether or not the DAP realignments/transfers are constitutional.
IV. Whether or not the sourcing of unprogrammed funds to the DAP is constitutional.
V. Whether or not the Doctrine of Operative Fact is applicable.
HELD:
I. No, the DAP did not violate Section 29(1), Art. VI of the Constitution. DAP was merely a program by the Executive
and is not a fund nor is it an appropriation. It is a program for prioritizing government spending. As such, it did not
violate the Constitutional provision cited in Section 29(1), Art. VI of the Constitution. In DAP no additional funds were
withdrawn from the Treasury otherwise, an appropriation made by law would have been required. Funds, which were
already appropriated for by the GAA, were merely being realigned via the DAP.
II. No, there is no executive impoundment in the DAP. Impoundment of funds refers to the Presidents power to
refuse to spend appropriations or to retain or deduct appropriations for whatever reason. Impoundment is actually
prohibited by the GAA unless there will be an unmanageable national government budget deficit (which did not
happen). Nevertheless, theres no impoundment in the case at bar because whats involved in the DAP was the
transfer of funds.
III. No, the transfers made through the DAP were unconstitutional. It is true that the President (and even the heads of
the other branches of the government) are allowed by the Constitution to make realignment of funds, however, such
transfer or realignment should only be made within their respective offices. Thus, no cross-border
transfers/augmentations may be allowed. But under the DAP, this was violated because funds appropriated by the
GAA for the Executive were being transferred to the Legislative and other non-Executive agencies.
Further, transfers within their respective offices also contemplate realignment of funds to an existing project in the
GAA. Under the DAP, even though some projects were within the Executive, these projects are non-existent insofar
as the GAA is concerned because no funds were appropriated to them in the GAA. Although some of these projects
may be legitimate, they are still non-existent under the GAA because they were not provided for by the GAA. As such,
transfer to such projects is unconstitutional and is without legal basis.
On the issue of what are savings
These DAP transfers are not savings contrary to what was being declared by the Executive. Under the definition of
savings in the GAA, savings only occur, among other instances, when there is an excess in the funding of a certain
project once it is completed, finally discontinued, or finally abandoned. The GAA does not refer to savings as funds
withdrawn from a slow moving project. Thus, since the statutory definition of savings was not complied with under the
DAP, there is no basis at all for the transfers. Further, savings should only be declared at the end of the fiscal year.
But under the DAP, funds are already being withdrawn from certain projects in the middle of the year and then being
declared as savings by the Executive particularly by the DBM.
IV. No. Unprogrammed funds from the GAA cannot be used as money source for the DAP because under the law,
such funds may only be used if there is a certification from the National Treasurer to the effect that the revenue
collections have exceeded the revenue targets. In this case, no such certification was secured before unprogrammed
funds were used.
V. Yes. The Doctrine of Operative Fact, which recognizes the legal effects of an act prior to it being declared as
unconstitutional by the Supreme Court, is applicable. The DAP has definitely helped stimulate the economy. It has
funded numerous projects. If the Executive is ordered to reverse all actions under the DAP, then it may cause more
harm than good. The DAP effects can no longer be undone. The beneficiaries of the DAP cannot be asked to return
what they received especially so that they relied on the validity of the DAP. However, the Doctrine of Operative Fact
may not be applicable to the authors, implementers, and proponents of the DAP if it is so found in the appropriate
tribunals (civil, criminal, or administrative) that they have not acted in good faith.
Demetria v. Alba
FACTS:
Assailed in this petition for prohibition with prayer for a writ of preliminary injunction is the constitutionality of the first
paragraph of Section 44 of Presidential Decree No. 1177, otherwise known as the "Budget Reform Decree of 1977."
Petitioners, who filed the instant petition as concerned citizens of this country, as members of the National
Assembly/Batasan Pambansa representing their millions of constituents, as parties with general interest common to
all the people of the Philippines, and as taxpayers whose vital interests may be affected by the outcome of the reliefs
prayed for" listed the grounds relied upon in this petition as follows:
A. SECTION 44 OF THE 'BUDGET REFORM DECREE OF 1977' INFRINGES UPON THE FUNDAMENTAL LAW
BY AUTHORIZING THE ILLEGAL TRANSFER OF PUBLIC MONEYS.
B. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 IS REPUGNANT TO THE CONSTITUTION AS IT FAILS

TO SPECIFY THE OBJECTIVES AND PURPOSES FOR WHICH THE PROPOSED TRANSFER OF FUNDS ARE
TO BE MADE.
C. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 ALLOWS THE PRESIDENT TO OVERRIDE THE
SAFEGUARDS, FORM AND PROCEDURE PRESCRIBED BY THE CONSTITUTION IN APPROVING
APPROPRIATIONS.
D. SECTION 44 OF THE SAME DECREE AMOUNTS TO AN UNDUE DELEGATION OF LEGISLATIVE POWERS

TO THE EXECUTIVE.
E. THE THREATENED AND CONTINUING TRANSFER OF FUNDS BY THE PRESIDENT AND THE
IMPLEMENTATION THEREOF BY THE BUDGET MINISTER AND THE TREASURER OF THE PHILIPPINES ARE
WITHOUT OR IN EXCESS OF THEIR AUTHORITY AND JURISDICTION.
Demetria averred that this is unconstitutional for it violates the 1973 Constitution.
ISSUE:
Whether or not Paragraph 1, Section 44, of PD 1177 is constitutional.
HELD:
No.
The conflict between paragraph 1 of Section 44 of Presidential Decree No. 1177 and Section 16[5], Article VIII of the
1973 Constitution is readily perceivable from a mere cursory reading thereof. Said paragraph 1 of Section 44
provides:
The President shall have the authority to transfer any fund, appropriated for the different departments, bureaus,
offices and agencies of the Executive Department, which are included in the General Appropriations Act, to any
program, project or activity of any department, bureau, or office included in the General Appropriations Act or
approved after its enactment.
On the other hand, the constitutional provision under consideration reads as follows:
Sec. 16[5]. No law shall be passed authorizing any transfer of appropriations, however, the President, the Prime
Minister, the Speaker, the Chief Justice of the Supreme Court, and the heads of constitutional commis ions may by
law be authorized to augment any item in the general appropriations law for their respective offices from savings in
other items of their respective appropriations.
The prohibition to transfer an appropriation for one item to another was explicit and categorical under the 1973
Constitution. However, to afford the heads of the different branches of the government and those of the constitutional
commissions considerable flexibility in the use of public funds and resources, the constitution allowed the enactment
of a law authorizing the transfer of funds for the purpose of augmenting an item from savings in another item in the
appropriation of the government branch or constitutional body concerned. The leeway granted was thus limited. The
purpose and conditions for which funds may be transferred were specified, i.e. transfer may be allowed for the
purpose of augmenting an item and such transfer may be made only if there are savings from another item in the
appropriation of the government branch or constitutional body.
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over extends the privilege granted under said Section 16[5]. It
empowers the President to indiscriminately transfer funds from one department, bureau, office or agency of the
Executive Department to any program, project or activity of any department, bureau or office included in the General
Appropriations Act or approved after its enactment, without regard as to whether or not the funds to be transferred
are actually savings in the item from which the same are to be taken, or whether or not the transfer is for the purpose
of augmenting the item to which said transfer is to be made. It does not only completely disregard the standards set
in the fundamental law, thereby amounting to an undue delegation of legislative powers, but likewise goes beyond
the tenor thereof. Indeed, such constitutional infirmities render the provision in question null and void.
But it should be noted, transfers of savings within one department from one item to another in the GAA may be
allowed by law in the interest of expediency and efficiency. There is no transfer from one department to another here.
Guingona v. Carague
FACTS:
The 1990 budget consists of P98.4 Billion in automatic appropriation (with P86.8 Billion for debt service) and P155.3
Billion appropriated under Republic Act No. 6831, otherwise known as the General Appropriations Act, or a total of
P233.5 Billion, while the appropriations for the Department of Education, Culture and Sports amount to
P27,017,813,000.00.
The said automatic appropriation for debt service is authorized by P.D. No. 81, entitled "Amending Certain Provisions
of Republic Act Numbered Four Thousand Eight Hundred Sixty, as Amended (Re: Foreign Borrowing Act)," by P.D.
No. 1177, entitled "Revising the Budget Process in Order to Institutionalize the Budgetary Innovations of the New
Society," and by P.D. No. 1967, entitled "An Act Strenghthening the Guarantee and Payment Positions of the
Republic of the Philippines on Its Contingent Liabilities Arising out of Relent and Guaranteed Loan by Appropriating
Funds For The Purpose.
There can be no question that petitioners as Senators of the Republic of the Philippines may bring this suit where a
constitutional issue is raised. Indeed, even a taxpayer has personality to restrain unlawful expenditure of public funds.
The petitioner seek the declaration of the unconstitutionality of P.D. No. 81, Sections 31 of P.D. 1177, and P.D. No.
1967. The petition also seeks to restrain the disbursement for debt service under the 1990 budget pursuant to said
decrees.
Respondents contend that the petition involves a pure political question which is the repeal or amendment of said
laws addressed to the judgment, wisdom and patriotism of the legislative body and not this Court.
ISSUE:
Whether or not the automatic appropriation for debt service is unconstitutional; it being higher than the budget for
education.
HELD:
No. The argument of petitioners that the said presidential decrees did not meet the requirement and are therefore
inconsistent with Sections 24 and 27 of Article VI of the Constitution which requires, among others, that:
"all appropriations, . . . bills authorizing increase of public debt" must be passed by Congress and approved by the
President is untenable.
Certainly, the framers of the Constitution did not contemplate that existing laws in the statute books including existing
presidential decrees appropriating public money are reduced to mere "bills" that must again go through the legislative
million The only reasonable interpretation of said provisions of the Constitution which refer to "bills" is that they mean
appropriation measures still to be passed by Congress. If the intention of the framers thereof were otherwise they
should have expressed their decision in a more direct or express manner.
Well-known is the rule that repeal or amendment by implication is frowned upon. Equally fundamental is the principle
that construction of the Constitution and law is generally applied prospectively and not retrospectively unless it is so
clearly stated.
While it is true that under Section 5(5), Article XIV of the Constitution Congress is mandated to assign the highest
budgetary priority to education, it does not thereby follow that the hands of Congress are so hamstrung as to deprive
it the power to respond to the imperatives of the national interest and for the attainment of other state policies or
objectives.
Congress is certainly not without any power, guided only by its good judgment, to provide an appropriation, that can
reasonably service our enormous debtIt is not only a matter of honor and to protect the credit standing of the
country. More especially, the very survival of our economy is at stake. Thus, if in the process Congress appropriated
an amount for debt service bigger than the share allocated to education, the Court finds and so holds that said
appropriation cannot be thereby assailed as unconstitutional.
Moreover, petitioners also argued that there is undue delegation. The SC said:
In People vs. Vera, this Court said "the true distinction is between the delegation of power to make the law, which
necessarily involves discretion as to what the law 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."
Ideally, the law must be complete in all its essential terms and conditions when it leaves the legislature so that there
will be nothing left for the delegate to do when it reaches him except enforce it. If there are gaps in the law that will
prevent its enforcement unless they are first filled, the delegate will then have been given the opportunity to step in
the shoes of the legislature and exercise a discretion essentially legislative in order to repair the omissions. This is
invalid delegation.16
The Court finds that in this case the questioned laws are complete in all their essential terms and conditions and
sufficient standards are indicated therein.
PCGG v. COCOFED
Facts:
Immediately after the 1986 EDSA Revolution, then President Corazon C. Aquino issued Executive Orders 1, 5 2 6
and 14. On the explicit premise that vast resources of the government have been amassed by former President
Ferdinand E. Marcos, his immediate family, relatives, and close associates both here and abroad, the Presidential
Commission on Good Government (PCGG) was created by Executive Order 1 to assist the President in the recovery
of the ill-gotten wealth thus accumulated whether located in the Philippines or abroad. Executive Order 2 stated that
the ill-gotten assets and properties are in the form of bank accounts, deposits, trust accounts, shares of stocks,
buildings, shopping centers, condominiums, mansions, residences, estates, and other kinds of real and personal
properties in the Philippines and in various countries of the world. Executive Order 14, on the other hand, empowered
the PCGG, with the assistance of the Office of the Solicitor General and other government agencies, inter alia, to file
and prosecute all cases investigated by it under EOs 1 and 2. Pursuant to these laws, the PCGG issued and
implemented numerous sequestrations, freeze orders and provisional takeovers of allegedly ill-gotten companies,
assets and properties, real or personal.
Among the properties sequestered by the Commission were shares of stock in the United Coconut Planters Bank
(UCPB) registered in the names of the alleged one million coconut farmers, the so-called Coconut Industry
Investment Fund companies (CIIF companies) and Eduardo Cojuangco Jr. In connection with the sequestration of
the said UCPB shares, the PCGG, on 31 July 1987, instituted an action for reconveyance, reversion, accounting,
restitution and damages (Case 0033) in the Sandiganbayan. On 15 November 1990, upon Motion of COCOFED, the
Sandiganbayan issued a Resolution lifting the sequestration of the subject UCPB shares on the ground that
COCOFED and the so-called CIIF companies had not been impleaded by the PCGG as parties-defendants in its 31
July 1987 Complaint for reconveyance, reversion, accounting, restitution and damages. The Sandiganbayan ruled
that the Writ of Sequestration issued by the Commission was automatically lifted for PCGGs failure to commence the
corresponding judicial action within the six-month period ending on 2 August 1987 provided under Section 26, Article
XVIII of the 1987 Constitution. The anti-graft court noted that though these entities were listed in an annex appended
to the Complaint, they had not been named as parties-respondents. The Sandiganbayan Resolution was challenged
by the PCGG in a Petition for Certiorari (GR 96073) in the Supreme Court. Meanwhile, upon motion of Cojuangco,
the anti-graft court ordered the holding of elections for the Board of Directors of UCPB. However, the PCGG applied
for and was granted by this Court a Restraining Order enjoining the holding of the election. Subsequently, the Court
lifted the Restraining Order and ordered the UCPB to proceed with the election of its board of directors. Furthermore,
it allowed the sequestered shares to be voted by their registered owners. The victory of the registered shareholders
was fleeting because the Court, acting on the solicitor generals Motion for Clarification/Manifestation, issued a
Resolution on 16 February 1993, declaring that the right of COCOFED, et. al. to vote stock in their names at the
meetings of the UCPB cannot be conceded at this time. That right still has to be established by them before the
Sandiganbayan. Until that is done, they cannot be deemed legitimate owners of UCPB stock and cannot be accorded
the right to vote them. On 23 January 1995, the Court rendered its final Decision in GR 96073, nullifying and setting
aside the 15 November 1990 Resolution of the Sandiganbayan which lifted the sequestration of the subject UCPB
shares.
A month thereafter, the PCGG pursuant to an Order of the Sandiganbayan subdivided Case 0033 into eight
Complaints (Cases 0033-A to 0033-H). Six years later, on 13 February 2001, the Board of Directors of UCPB
received from the ACCRA Law Office a letter written on behalf of the COCOFED and the alleged nameless one
million coconut farmers, demanding the holding of a stockholders meeting for the purpose of, among others, electing
the board of directors. In response, the board approved a Resolution calling for a stockholders meeting on 6 March
2001 at 3 p.m. On 23 February 2001, COCOFED, et al. and Ballares, et al. filed the Class Action Omnibus Motion
in Sandiganbayan Civil Cases 0033-A, 0033-B and 0033-F, asking the Sandiganbayan to enjoin the PCGG from
voting the UCPB shares of stock registered in the respective names of the more than one million coconut farmers;
and to enjoin the PCGG from voting the SMC shares registered in the names of the 14 CIIF holding companies
including those registered in the name of the PCGG. On 28 February 2001, the Sandiganbayan, after hearing the
parties on oral argument, issued the Order, authorizing COCOFED, et. al. and Ballares, et. al. as well as Cojuangco,
as are all other registered stockholders of the United Coconut Planters Bank, until further orders from the Court, to
exercise their rights to vote their shares of stock and themselves to be voted upon in the United Coconut Planters
Bank (UCPB) at the scheduled Stockholders Meeting on 6 March 2001 or on any subsequent continuation or
resetting thereof, and to perform such acts as will normally follow in the exercise of these rights as registered
stockholders. The Republic of the Philippines represented by the PCGG filed the petition for certiorari.
Issue:
Whether the PCGG can vote the sequestered UCPB shares.
Ruling:
The registered owner of the shares of a corporation exercises the right and the privilege of voting. This principle
applies even to shares that are sequestered by the government, over which the PCGG as a mere conservator cannot,
as a general rule, exercise acts of dominion. On the other hand, it is authorized to vote these sequestered shares
registered in the names of private persons and acquired with allegedly ill-gotten wealth, if it is able to satisfy the two-
tiered test devised by the Court in Cojuangco v. Calpo and PCGG v. Cojuangco Jr. Two clear public character
exceptions under which the government is granted the authority to vote the shares exist (1) Where government
shares are taken over by private persons or entities who/which registered them in their own names, and (2) Where
the capitalization or shares that were acquired with public funds somehow landed in private hands. The exceptions
are based on the common-sense principle that legal fiction must yield to truth; that public property registered in the
names of non-owners is affected with trust relations; and that the prima facie beneficial owner should be given the
privilege of enjoying the rights flowing from the prima facie fact of ownership. In short, when sequestered shares
registered in the names of private individuals or entities are alleged to have been acquired with ill-gotten wealth, then
the two-tiered test is applied. However, when the sequestered shares in the name of private individuals or entities are
shown, prima facie, to have been (1) originally government shares, or (2) purchased with public funds or those
affected with public interest, then the two-tiered test does not apply. Rather, the public character exceptions in
Baseco v. PCGG and Cojuangco Jr. v. Roxas prevail; that is, the government shall vote the shares. Herein, the
money used to purchase the sequestered UCPB shares came from the Coconut Consumer Stabilization Fund
(CCSF), otherwise known as the coconut levy funds. The sequestered UCPB shares are confirmed to have been
acquired with coco levies, not with alleged ill-gotten wealth. As the coconut levy funds are not only affected with
public interest, but are in fact prima facie public funds, the Court believes that the government should be allowed to
vote the questioned shares, because they belong to it as the prima facie beneficial and true owner. The
Sandiganbayan committed grave abuse of discretion in grossly contradicting and effectively reversing existing
jurisprudence, and in depriving the government of its right to vote the sequestered UCPB shares which are prima
facie public in character.
Pascual v. Secretary of Public Works
Facts:
On August 31, 1954, petitioner Wenceslao Pascual, as Provincial Governor of Rizal, instituted this action for
declaratory relief, with injunction, upon the ground that Republic Act No. 920, entitled "An Act Appropriating Funds for
Public Works", approved on June 20, 1953, contained, in section 1-C (a) thereof, an item (43[h]) of P85,000.00 "for
the construction, reconstruction, repair, extension and improvement" of Pasig feeder road terminals (Gen. Roxas
Gen. Araneta Gen. Lucban Gen. Capinpin Gen. Segundo Gen. Delgado Gen. Malvar Gen. Lim)";
that, at the time of the passage and approval of said Act, the aforementioned feeder roads were "nothing but
projected and planned subdivision roads, not yet constructed, . . . within the Antonio Subdivision . . . situated at . . .
Pasig, Rizal" (according to the tracings attached to the petition as Annexes A and B, near Shaw Boulevard, not far
away from the intersection between the latter and Highway 54), which projected feeder roads "do not connect any
government property or any important premises to the main highway"; that the aforementioned Antonio Subdivision
(as well as the lands on which said feeder roads were to be construed) were private properties of respondent Jose C.
Zulueta, who, at the time of the passage and approval of said Act, was a member of the Senate of the Philippines;
that on May, 1953, respondent Zulueta, addressed a letter to the Municipal Council of Pasig, Rizal, offering to donate
said projected feeder roads to the municipality of Pasig, Rizal; that, on June 13, 1953, the offer was accepted by the
council, subject to the condition "that the donor would submit a plan of the said roads and agree to change the
names of two of them"; that no deed of donation in favor of the municipality of Pasig was, however, executed; that on
July 10, 1953, respondent Zulueta wrote another letter to said council, calling attention to the approval of Republic
Act. No. 920, and the sum of P85,000.00 appropriated therein for the construction of the projected feeder roads in
question; that the municipal council of Pasig endorsed said letter of respondent Zulueta to the District Engineer of
Rizal, who, up to the present "has not made any endorsement thereon" that inasmuch as the projected feeder roads
in question were private property at the time of the passage and approval of Republic Act No. 920, the appropriation
of P85,000.00 therein made, for the construction, reconstruction, repair, extension and improvement of said projected
feeder roads, was illegal and, therefore, void ab initio"; that said appropriation of P85,000.00 was made by Congress
because its members were made to believe that the projected feeder roads in question were "public roads and not
private streets of a private subdivision"'; that, "in order to give a semblance of legality, when there is absolutely none,
to the aforementioned appropriation", respondents Zulueta executed on December 12, 1953, while he was a member
of the Senate of the Philippines, an alleged deed of donation copy of which is annexed to the petition of the four
(4) parcels of land constituting said projected feeder roads, in favor of the Government of the Republic of the
Philippines; that said alleged deed of donation was, on the same date, accepted by the then Executive Secretary;
that being subject to an onerous condition, said donation partook of the nature of a contract; that, such, said donation
violated the provision of our fundamental law prohibiting members of Congress from being directly or indirectly
financially interested in any contract with the Government, and, hence, is unconstitutional, as well as null and void ab
initio, for the construction of the projected feeder roads in question with public funds would greatly enhance or
increase the value of the aforementioned subdivision of respondent Zulueta, "aside from relieving him from the
burden of constructing his subdivision streets or roads at his own expense"; that the construction of said projected
feeder roads was then being undertaken by the Bureau of Public Highways; and that, unless restrained by the court,
the respondents would continue to execute, comply with, follow and implement the aforementioned illegal provision of
law, "to the irreparable damage, detriment and prejudice not only to the petitioner but to the Filipino nation."
Petitioner prayed, therefore, that the contested item of Republic Act No. 920 be declared null and void; that the
alleged deed of donation of the feeder roads in question be "declared unconstitutional and, therefor, illegal"; that a
writ of injunction be issued enjoining the Secretary of Public Works and Communications, the Director of the Bureau
of Public Works and Highways and Jose C. Zulueta from ordering or allowing the continuance of the above-
mentioned feeder roads project, and from making and securing any new and further releases on the aforementioned
item of Republic Act No. 920, and the disbursing officers of the Department of Public Works and Highways from
making any further payments out of said funds provided for in Republic Act No. 920; and that pending final hearing
on the merits, a writ of preliminary injunction be issued enjoining the aforementioned parties respondent from making
and securing any new and further releases on the aforesaid item of Republic Act No. 920 and from making any
further payments out of said illegally appropriated funds.
ISSUE:
Whether or not such RA 920 is unconstitutional?
HELD:
No.It is a general rule that the legislature is without power to appropriate public revenue for anything but a public
purpose. . . . It is the essential character of the direct object of the expenditure which must determine its validity as
justifying a tax, and not the magnitude of the interest to be affected nor the degree to which the general advantage of
the community, and thus the public welfare, may be ultimately benefited by their promotion. Incidental to the public or
to the state, which results from the promotion of private interest and the prosperity of private enterprises or business,
does not justify their aid by the use public money.
The rule is set forth in Corpus Juris Secundum in the following language:
In accordance with the rule that the taxing power must be exercised for public purposes only, discussed, money
raised by taxation can be expended only for public purposes and not for the advantage of private individuals. (85
C.J.S. pp. 645-646; emphasis supplied.)
Explaining the reason underlying said rule, Corpus Juris Secundum states:
Generally, under the express or implied provisions of the constitution, public funds may be used only for public
purpose. The right of the legislature to appropriate funds is correlative with its right to tax, and, under constitutional
provisions against taxation except for public purposes and prohibiting the collection of a tax for one purpose and the
devotion thereof to another purpose, no appropriation of state funds can be made for other than for a public purpose.
The test of the constitutionality of a statute requiring the use of public funds is whether the statute is designed to
promote the public interest, as opposed to the furtherance of the advantage of individuals, although each advantage
to individuals might incidentally serve the public.
Cruz v. Paras
FACTS:
Vicente De La Cruz, one of the petitioners, is an owner of clubs and cabarets in Bulacan.
Jointly, de la Cruz and the other club owner-petitioners assailed the constitutionality of Ordinance No. 84 (series of
1975) known as a prohibition and closure ordinance which was based on Republic Act No. 938 as amended (but was
originally enacted on June 20, 1953).
The said RA is entitled: "AN ACT GRANTINGMUNICIPAL OR CITY BOARDS AND COUNCILSTHE POWER TO
REGULATE THEESTABLISHMENT, MAINTENANCE ANDOPERATION OF CERTAIN PLACES OF AMUSEMENT
WITHIN THEIR RESPECTIVETERRITORIAL JURISDICTIONS."
Its first section reads: "The municipal or city board or council of each chartered city shall have the power to regulate
by ordinance the establishment, maintenance and operation of night clubs, cabaretsand other similar places of
amusement within its territorial jurisdiction.
Then on May 21, 1954, the first section was amended to include not merely the power to regulate, but likewise
"prohibit."
The title, however, remained the same. It is worded exactly as Republic Act No. 938.
On November 5, 1975, two cases for prohibition with preliminary injunction were filed on the grounds that (1)
Ordinance No. 84 is null and void as a municipality has no authority to prohibit a lawful business, occupation or
calling; (2)Ordinance No. 84 is violative of the petitioners' right to due process and the equal protection of the law, as
the license previously given to petitioners was in effect withdrawn without judicial hearing; and (3)That under
Presidential Decree No. 189 (as amended, by Presidential Decree No.259 the power to license and regulate tourist-
oriented businesses including night clubs, has been transferred to the Department of Tourism.
The respondent Judge issued a restraining order on November 7, 1975. Then came on January 15, 1976 the
decision upholding the constitutionality and validity of Ordinance No.84 and dismissing the cases. Hence, this petition
for certiorari by way of appeal.
ISSUE:
Whether or not a municipal corporation, can prohibit the exercise of a lawful trade, the operation of nightclubs, and
the pursuit of a lawful occupation, such clubs employing hostesses
HELD:
The SC held that municipal corporations cannot prohibit the operation of night clubs. They may be regulated, but not
prevented from carrying on their business.
The writ of certiorari is granted and the decision of the lower court dated January 15, 1976 reversed, set aside, and
nullified.
Ordinance No. 84, Series of 1975 of the Municipality of Bocaue is declared void and unconstitutional.
Since there is no dispute as the title limits the power to regulating, not prohibiting, it would result in the statute being
invalid if, as was done by the Municipality of Bocaue, the operation of a nightclub was prohibited.
A refusal to grant licenses, because no such businesses could legally open, would be subject to judicial correction.
That is to comply with the legislative will to allow the operation and continued existence of night clubs subject to
appropriate regulations.
It is to be admitted that as thus amended, if only the above portion of the Act were considered, a municipal council
may go as far as to prohibit the operation of night clubs. If that were all, then the appealed decision is not devoid of
support in law. Additionally, the title was not in any way altered, as the exact wording was followed. The power
granted remains that of regulation, not prohibition.
There is thus support for the view advanced by petitioners that to construe Republic Act No. 938as allowing the
prohibition of the operation of night clubs would give rise to a constitutional question. The Constitution mandates:
"Every bill shall embrace only one subject which shall be expressed in the title thereof."
Tio v. Videogram Regulatory Board
FACTS:
The case is a petition filed by petitioner on behalf of videogram operators adversely affected by Presidential Decree
No. 1987, An Act Creating the Videogram Regulatory Board with broad powers to regulate and supervise the
videogram industry.
A month after the promulgation of the said Presidential Decree, the amended the National Internal Revenue Code
provided that:
SEC. 134. Video Tapes. There shall be collected on each processed video-tape cassette, ready for playback,
regardless of length, an annual tax of five pesos; Provided, That locally manufactured or imported blank video tapes
shall be subject to sales tax.
Section 10. Tax on Sale, Lease or Disposition of Videograms. Notwithstanding any provision of law to the
contrary, the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate, as the case may
be, for every sale, lease or disposition of a videogram containing a reproduction of any motion picture or audiovisual
program.
Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province, and the other fifty percent (50%)
shall accrue to the municipality where the tax is collected; PROVIDED, that in Metropolitan Manila, the tax shall be
shared equally by the City/Municipality and the Metropolitan Manila Commission.
The rationale behind the tax provision is to curb the proliferation and unregulated circulation of videograms including,
among others, videotapes, discs, cassettes or any technical improvement or variation thereof, have greatly
prejudiced the operations of movie houses and theaters. Such unregulated circulation have caused a sharp decline in
theatrical attendance by at least forty percent (40%) and a tremendous drop in the collection of sales, contractors
specific, amusement and other taxes, thereby resulting in substantial losses estimated at P450 Million annually in
government revenues.
Videogram(s) establishments collectively earn around P600 Million per annum from rentals, sales and disposition of
videograms, and these earnings have not been subjected to tax, thereby depriving the Government of approximately
P180 Million in taxes each year.
The unregulated activities of videogram establishments have also affected the viability of the movie industry.
ISSUE:
Whether or not tax imposed by the DECREE is a valid exercise of police power.
Whether or not the DECREE is constitutional.
HELD:
Taxation has been made the implement of the states police power. The levy of the 30% tax is for a public purpose. It
was imposed primarily to answer the need for regulating the video industry, particularly because of the rampant film
piracy, the flagrant violation of intellectual property rights, and the proliferation of pornographic video tapes. And while
it was also an objective of the DECREE to protect the movie industry, the tax remains a valid imposition.
We find no clear violation of the Constitution which would justify us in pronouncing Presidential Decree No. 1987 as
unconstitutional and void. While the underlying objective of the DECREE is to protect the moribund movie industry,
there is no question that public welfare is at bottom of its enactment, considering the unfair competition posed by
rampant film piracy; the erosion of the moral fiber of the viewing public brought about by the availability of
unclassified and unreviewed video tapes containing pornographic films and films with brutally violent sequences; and
losses in government revenues due to the drop in theatrical attendance, not to mention the fact that the activities of
video establishments are virtually untaxed since mere payment of Mayors permit and municipal license fees are
required to engage in business.
Tobias v. Abalos
FACTS:
Invoking their rights as taxpayers and as residents of Mandaluyong, herein petitioners assail the
constitutionality of Republic Act No. 7675, otherwise known as "An Act Converting the Municipality of Mandaluyong
into a Highly Urbanized City to be known as the City of Mandaluyong."
Prior to the enactment of the assailed statute, the municipalities of Mandaluyong and San Juan belonged to only one
legislative district.
Petitioners now come before this Court, contending that R.A. No. 7675, specifically Article VIII, Section 49 thereof, is
unconstitutional for being violative of three specific provisions of the Constitution.
Petitioner's first objection to the aforequoted provision of R.A. No. 7675 is that it contravenes the "one subject-one
bill" rule, as enunciated in Article VI, Section 26(1) of the Constitution.
Petitioners allege that the inclusion of the assailed Section 49 in the subject law resulted in the latter embracing two
principal subjects, namely: (1) the conversion of Mandaluyong into a highly urbanized city; and (2) the division of the
congressional district of San Juan/Mandaluyong into two separate districts.
Petitioners argue that the division of San Juan and Mandaluyong into separate congressional districts under Section
49 of the assailed law has resulted in an increase in the composition of the House of Representatives beyond that
provided in Article VI, Sec. 5(1) of the Constitution. Furthermore, petitioners contend that said division was not made
pursuant to any census showing that the subject municipalities have attained the minimum population requirements.
And finally, petitioners assert that Section 49 has the effect of preempting the right of Congress to reapportion
legislative districts pursuant to Sec. 5(4) as aforecited.
ISSUE:
Whether or not RA 7675 is in violation of Article VI, Section 26(1) of the Constitution regarding one subject
one bill rule.
Whether or not RA 7675 is in violation of Article VI, Sections 5(1) and (4) as to the number of members of
the Congress to 250 and the appropriation the legislative districts.
HELD:
The petitioners contentions are devoid of merit
The Supreme Court agrees with the observation of the Solicitor General that the statutory conversion of
Mandaluyong city into a highly urbanized city with a population of not less than two hundred fifty thousand indubitably
ordains compliance with the one city-one representative proviso in the Constitution.
Contrary to petitioners' assertion, the creation of a separate congressional district for Mandaluyong is not a subject
separate and distinct from the subject of its conversion into a highly urbanized city but is a natural and logical
consequence of its conversion into a highly urbanized city. Verily, the title of R.A. No. 7675, "An Act Converting the
Municipality of Mandaluyong into a Highly Urbanized City of Mandaluyong" necessarily includes and contemplates
the subject treated under Section 49 regarding the creation of a separate congressional district for Mandaluyong.
Moreover, a liberal construction of the "one title-one subject" rule has been invariably adopted so as not to cripple or
impede legislation.
The said Act enjoys the presumption of having passed through the regular congressional processes, including due
consideration by the members of Congress of the minimum requirements for the establishment of separate legislative
districts. At any rate, it is not required that all laws emanating from the legislature must contain all relevant data
considered by Congress in the enactment of said laws.
As to the contention that the assailed law violates the present limit on the number of representatives as set forth in
the Constitution shows that the present limit of 250 members is not absolute. The Constitution clearly provides that
the House of Representatives shall be composed of not more than 250 members, "unless otherwise provided by
law." The inescapable import of the latter clause is that the present composition of Congress may be increased, if
Congress itself so mandates through a legislative enactment. Therefore, the increase in congressional representation
mandated by R.A. No. 7675 is not unconstitutional.
As to the contention that Section 49 of R.A. No. 7675 in effect preempts the right of Congress to reapportion
legislative districts, the said argument borders on the absurd since petitioners overlook the glaring fact that it was
Congress itself which drafted, deliberated upon and enacted the assailed law, including Section 49 thereof. Congress
cannot possibly preempt itself on a right which pertains to itself.

Digests Non-Delegation of Powers

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Digests Non-Delegation of Powers

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TAMPUS, MARY GRACE G.

WON Act 2868 as it unduly delegates power to the Governor General

Eastern Shipping v. POEA

Two Tests of Valid Delegation of Legislative Power

Rationale for Delegation of Legislative Power

PELAEZ v. AUDITOR GENERAL

*Section 10(1) of Article VII of the fundamental law ordains:

KILUSANG MAYO UNO v. GARCIA

Abakada Guro Partylist v. Executive Secretary

R.A. No. 9337 is a consolidation of three legislative bills namely, House

Whether or not there is an undue delegation of legislative power?

Abakada Guro Partylist v. Purisima

Is R.A. No. 9335 constitutional?

Section 12 of RA 9335 provides:

The Court rules in the negative.

Belgica v. Executive Secretary

Presidential Pork Barrel

Pork Barrel Scam Controversy

I. Whether or not the congressional pork barrel system is constitutional.

II. Whether or not presidential pork barrel system is constitutional.

b. Non-delegability of Legislative Power

Exceptions to the rule are:

c. Principle of Checks and Balances

II. Yes, the presidential pork barrel is valid.

Araullo v. Executive Secretary

III. Whether or not the DAP realignments/transfers are constitutional.

V. Whether or not the Doctrine of Operative Fact is applicable.

On the issue of what are savings

B. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 IS REPUGNANT TO THE CONSTITUTION AS IT FAILS

D. SECTION 44 OF THE SAME DECREE AMOUNTS TO AN UNDUE DELEGATION OF LEGISLATIVE POWERS

Whether or not Paragraph 1, Section 44, of PD 1177 is constitutional.

Whether the PCGG can vote the sequestered UCPB shares.

Pascual v. Secretary of Public Works

Whether or not such RA 920 is unconstitutional?

Tio v. Videogram Regulatory Board

Whether or not the DECREE is constitutional.

The petitioners contentions are devoid of merit

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