1. MARCOS VS.

MANGLAPUS [177 SCRA 668;1989]

Facts: This case involves a petition of mandamus and prohibition asking the court to order the respondents Secretary of
Foreign Affairs, etc. To issue a travel documents to former Pres. Marcos and the immediate members of his family and to enjoin
the implementation of the President's decision to bar their return to the Philippines. Petitioners assert that the right of the
Marcoses to return in the Philippines is guaranteed by the Bill of Rights, specifically Sections 1 and 6. They contended that Pres.
Aquino is without power to impair the liberty of abode of the Marcoses because only a court may do so within the limits
prescribed by law. Nor the President impair their right to travel because no law has authorized her to do so.
They further assert that under international law, their right to return to the Philippines is guaranteed particularly by the
Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights, which has been ratified by
the Philippines.
Issue: Whether or not, in the exercise of the powers granted by the constitution, the President (Aquino) may prohibit the
Marcoses from returning to the Philippines.
Held: "It must be emphasized that the individual right involved is not the right to travel from the Philippines to other countries
or within the Philippines. These are what the right to travel would normally connote. Essentially, the right involved in this case
at bar is the right to return to one's country, a distinct right under international law, independent from although related to the
right to travel. Thus, the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights treat
the right to freedom of movement and abode within the territory of a state, the right to leave the country, and the right to enter
one's country as separate and distinct rights. What the Declaration speaks of is the "right to freedom of movement and
residence within the borders of each state". On the other hand, the Covenant guarantees the right to liberty of movement and
freedom to choose his residence and the right to be free to leave any country, including his own. Such rights may only be
restricted by laws protecting the national security, public order, public health or morals or the separate rights of others.
However, right to enter one's country cannot be arbitrarily deprived. It would be therefore inappropriate to construe the
limitations to the right to return to ones country in the same context as those pertaining to the liberty of abode and the right to
travel.
The Bill of rights treats only the liberty of abode and the right to travel, but it is a well considered view that the right to
return may be considered, as a generally accepted principle of International Law and under our Constitution as part of the law
of the land.
The court held that President did not act arbitrarily or with grave abuse of discretion in determining that the return of
the Former Pres. Marcos and his family poses a serious threat to national interest and welfare. President Aquino has determined
that the destabilization caused by the return of the Marcoses would wipe away the gains achieved during the past few years
after the Marcos regime.
The return of the Marcoses poses a serious threat and therefore prohibiting their return to the Philippines, the instant
petition is hereby DISMISSED.
NOTE: The President, acting for the best interests of the state, may not be precluded from taking pre-emptive
action against threats to its existence if, though still nascent, they are perceived as apt to become serious and
direct. What the presidency is at any particular moment depends on important measures on who is President. We do not say
that the presidency is what Mrs. Aquino says it is or what she does but, rather, that the consideration of tradition and the
development of presidential power under the different constitutions are essential for a complete understanding of the extent of
and limitations to the President’s powers under the 1987 Constitution which gives executive power that is more than the sum of
specific powers so enumerated.

2. Tatad v. Secretary of Energy [Nov. 5, 1997]

FACTS: Petitioners assailed §5(b) and §15 of R.A. No. 8180, the Downstream Oil Industry Deregulation Act of 1996.
§5(b) of the law provided that “tariff duty shall be imposed . . . on imported crude oil at the rate of three percent (3%)
and imported refined petroleum products at the rate of seven percent (7%) . . .” On the other hand, §15 provided that “[t]he
DOE shall, upon approval of the President, implement the full deregulation of the downstream oil industry not later than March
1997. As far as practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum products in the
world market are declining and when the exchange rate of the peso in relation to the US dollar is stable . . .”
Petitioners argued that §5(b) on tariff differential violates the provision of the Constitution requiring every law to have
only one subject which should be expressed in its title.
They also contended that the phrases “as far as practicable,” “decline of crude oil prices in the world market” and
“stability of the peso exchange rate to the US dollar” are ambivalent, unclear and inconcrete since they do not provide
determinate or determinable standards that can guide the President in his decision to fully deregulate the downstream oil
industry.
Petitioners also assailed the President’s E.O. No. 392, which proclaimed the full deregulation of the downstream oil
industry in February 1997. They argued that the Executive misapplied R.A. No. 8180 when it considered the depletion of the
OPSF fund as a factor in the implementation of full deregulation.
Finally, they asserted that the law violated §19, Article XII of the Constitution prohibiting monopolies, combinations in
restraint of trade and unfair competition
ISSUES: 1. Did §5(b) violate the one title-one subject requirement of the Constitution? No
2. Did §15 violate the constitutional prohibition on undue delegation of power? No
3. Was E.O. No. 392 arbitrary and unreasonable? Yes
4. Did R.A. No. 8180 violate §19, Article XII of the Constitution prohibiting monopolies, combinations in restraint of trade and
unfair competition? Yes
RULING: [The Court GRANTED the petition. It DECLARED R.A. No. 8180 unconstitutional and E.O. No. 372 void.]
1. NO, §5(b) DID NOT violate the one title-one subject requirement of the Constitution.
As a policy, this Court has adopted a liberal construction of the one title-one subject rule. [T]he title need not mirror,
fully index or catalogue all contents and minute details of a law. A law having a single general subject indicated in the title may
contain any number of provisions, no matter how diverse they may be, so long as they are not inconsistent with or foreign to
the general subject, and may be considered in furtherance of such subject by providing for the method and means of carrying
out the general subject. [S]ection 5(b) providing for tariff differential is germane to the subject of R.A. No. 8180 which is the
deregulation of the downstream oil industry. The section is supposed to sway prospective investors to put up refineries in our
country and make them rely less on imported petroleum.
2. NO, §15 DID NOT violate the constitutional prohibition on undue delegation of power.
 Two tests have been developed to determine whether the delegation of the power to execute laws does not involve
the abdication of the power to make law itself. We delineated the metes and bounds of these tests in Eastern Shipping Lines,
Inc. VS. POEA, thus:
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 legislative 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
limitations in the law to map out the boundaries of the delegate's authority and prevent the delegation from
running riot. Both tests are intended to prevent a total transference of legislative authority to the delegate,
who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative.
xxx xxx xxx
Section 15 can hurdle both the completeness test and the sufficient standard test. It will be noted that Congress
expressly provided in R.A. No. 8180 that full deregulation will start at the end of March 1997, regardless of the occurrence of
any event. Full deregulation at the end of March 1997 is mandatory and the Executive has no discretion to postpone it for any
purported reason. Thus, the law is complete on the question of the final date of full deregulation. The discretion given to the
President is to advance the date of full deregulation before the end of March 1997. Section 15 lays down the standard to guide
the judgment of the President --- he is to time it as far as practicable when the prices of crude oil and petroleum products in the
world market are declining and when the exchange rate of the peso in relation to the US dollar is stable.
Petitioners contend that the words “as far as practicable,” “declining” and “stable” should have been defined in R.A.
No. 8180 as they do not set determinate or determinable standards. The stubborn submission deserves scant consideration.
The dictionary meanings of these words are well settled and cannot confuse men of reasonable intelligence. Webster defines
“practicable” as meaning possible to practice or perform, “decline” as meaning to take a downward direction, and “stable” as
meaning firmly established. The fear of petitioners that these words will result in the exercise of executive discretion that will
run riot is thus groundless. To be sure, the Court has sustained the validity of similar, if not more general standards in other
cases.
3. YES, E.O. No. 392 was arbitrary and unreasonable.
A perusal of section 15 of R.A. No. 8180 will readily reveal that it only enumerated two factors to be considered by the
Department of Energy and the Office of the President, viz.: (1) the time when the prices of crude oil and petroleum products in
the world market are declining, and (2) the time when the exchange rate of the peso in relation to the US dollar is stable.
Section 15 did not mention the depletion of the OPSF as a factor to be given weight by the Executive before ordering full
deregulation. On the contrary, the debates in Congress will show that some of our legislators wanted to impose as a pre-
condition to deregulation a showing that the OPSF fund must not be in deficit. We therefore hold that the Executive department
failed to follow faithfully the standards set by R.A. No. 8180 when it considered the extraneous factor of depletion of the OPSF
fund. The misappreciation of this extra factor cannot be justified on the ground that the Executive department considered
anyway the stability of the prices of crude oil in the world market and the stability of the exchange rate of the peso to the
dollar. By considering another factor to hasten full deregulation, the Executive department rewrote the standards set forth in
R.A. 8180. The Executive is bereft of any right to alter either by subtraction or addition the standards set in R.A. No. 8180 for it
has no power to make laws. To cede to the Executive the power to make law is to invite tyranny, indeed, to transgress the
principle of separation of powers. The exercise of delegated power is given a strict scrutiny by courts for the delegate is a mere
agent whose action cannot infringe the terms of agency. In the cases at bar, the Executive co-mingled the factor of depletion
of the OPSF fund with the factors of decline of the price of crude oil in the world market and the stability of the peso to the US
dollar. On the basis of the text of E.O. No. 392, it is impossible to determine the weight given by the Executive department to
the depletion of the OPSF fund. It could well be the principal consideration for the early deregulation. It could have been
accorded an equal significance. Or its importance could be nil. In light of this uncertainty, we rule that the early deregulation
under E.O. No. 392 constitutes a misapplication of R.A. No. 8180.
4. YES, R.A. No. 8180 violated §19, Article XII of the Constitution prohibiting monopolies, combinations in
restraint of trade and unfair competition.
[I]t cannot be denied that our downstream oil industry is operated and controlled by an oligopoly, a foreign oligopoly
at that. Petron, Shell and Caltex stand as the only major league players in the oil market. All other players belong to the
lilliputian league. As the dominant players, Petron, Shell and Caltex boast of existing refineries of various capacities. The tariff
differential of 4% therefore works to their immense benefit. Yet, this is only one edge of the tariff differential. The other edge
cuts and cuts deep in the heart of their competitors. It erects a high barrier to the entry of new players. New players that intend
to equalize the market power of Petron, Shell and Caltex by building refineries of their own will have to spend billions of pesos.
Those who will not build refineries but compete with them will suffer the huge disadvantage of increasing their product cost by
4%. They will be competing on an uneven field. The argument that the 4% tariff differential is desirable because it will induce
prospective players to invest in refineries puts the cart before the horse. The first need is to attract new players and they cannot
be attracted by burdening them with heavy disincentives. Without new players belonging to the league of Petron, Shell and
Caltex, competition in our downstream oil industry is an idle dream.
The provision on inventory widens the balance of advantage of Petron, Shell and Caltex against prospective new
players. Petron, Shell and Caltex can easily comply with the inventory requirement of R.A. No. 8180 in view of their existing
storage facilities. Prospective competitors again will find compliance with this requirement difficult as it will entail a prohibitive
cost. The construction cost of storage facilities and the cost of inventory can thus scare prospective players. Their net effect is
to further occlude the entry points of new players, dampen competition and enhance the control of the market by the three (3)
existing oil companies.
Finally, we come to the provision on predatory pricing which is defined as “. . . selling or offering to sell any product at
a price unreasonably below the industry average cost so as to attract customers to the detriment of competitors.” Respondents
contend that this provision works against Petron, Shell and Caltex and protects new entrants. The ban on predatory pricing
cannot be analyzed in isolation. Its validity is interlocked with the barriers imposed by R.A. No. 8180 on the entry of new
players. The inquiry should be to determine whether predatory pricing on the part of the dominant oil companies is encouraged
by the provisions in the law blocking the entry of new players. Text-writer Hovenkamp gives the authoritative answer and we
quote:
xxx xxx xxx
The rationale for predatory pricing is the sustaining of losses today that will give a firm monopoly profits in
the future. The monopoly profits will never materialize, however, if the market is flooded with new entrants as
soon as the successful predator attempts to raise its price. Predatory pricing will be profitable only if the
market contains significant barriers to new entry.
 As aforediscussed, the 4% tariff differential and the inventory requirement are significant barriers which discourage
new players to enter the market. Considering these significant barriers established by R.A. No. 8180 and the lack of players with
the comparable clout of PETRON, SHELL and CALTEX, the temptation for a dominant player to engage in predatory pricing and
succeed is a chilling reality. Petitioners’ charge that this provision on predatory pricing is anti-competitive is not without reason.
[R.A. No. 8180 contained a separability clause, but the High Tribunal held that the offending provisions of the law so
permeated its essence that it had to be struck down entirely. The provisions on tariff differential, inventory and predatory
pricing were among the principal props of R.A. No. 8180. Congress could not have deregulated the downstream oil industry
without these provisions.]
3. EASTERN SHIPPING LINES, INC. vs. COURT OF APPEALS and DAVAO PILOTSASSOCIATION G.R. No. 116356
June 29, 1998
Facts: On September 25, 1989, private respondent elevated a complaint against petitioner for sum of money and attorney's
fees alleging that private respondent had rendered pilotage services to petitioner between with total unpaid fees of
P703,290.18. Despite repeated demands, petitioner failed to pay and prays that the latter be directed to pay P703,290.18 with
legal rate of interest from the filing of the complaint.
On November 18, 1989 petitioner disputed the claims of private respondent assailing the constitutionality of EO 1088
upon which it bases its claims; that the subject of the complaint falls within the scope and authority of the Philippine Ports
Authority by virtue of PD No. 857 ; that Executive Order No. 1088 is an unwarranted repeal or modification of the Philippine
Ports Authority Charter, among others.
Petitioner argues that EO 1088 is not constitutional, because its interpretation and application are left to private
respondent, a private person, and it constitutes an undue delegation of power. Petitioner insists that it should pay pilotage fees
in accordance with and on the basis of the memorandum circulars issued by the PPA, the administrative body vested under PD
857 with the power to regulate and prescribe pilotage fees. It on paying pilotage fees prescribed under PPA circulars because
EO 1088 setsa higher rate.
Issues: Whether Executive Order 1088 is unconstitutional. Whether there is undue delegation of legislative power on private
respondent.
Held: Petition DENIED. Reiterating the pronouncement of the Court in Philippine Interisland Shipping Association of the
Philippines vs. Court of Appeals, the Court held that EO 1088 is valid. E.O. NO. 1088 provides for adjusted pilotage service rates
without withdrawing the power of the PPA to impose, prescribe, increase or decrease rates, charges or fees. The reason is
because E.O. No. 1088 is not meant simply to fix new pilotage rates. Its legislative purpose is the "rationalization of pilotage
service charges, through the imposition of uniform and adjusted rates for foreign and coastwise vessels in all Philippine ports.
´Petitioner cannot insist on paying pilotage fees based on the PPA circulars because the PPA circulars are inconsistent with EO
1088, they are void and ineffective. "Administrative or executive acts, orders and regulations shall be valid only when they are
not contrary to the laws or the Constitution." As stated by the Court in Land Bank of the Philippines vs. Court of Appeals, "the
conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed or set aside
by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction, or grave abuse of discretion
clearly conflicting with either the letter or spirit of the law." It is axiomatic that an administrative agency, like the PPA, has no
discretion whether to implement the law or not. Its duty is to enforce it. Therefore, if there is any conflict between the PPA
circular and a law, such as EO 1088, the latter prevails. In conclusion, the Court made it clear that E.O. No. 1088 is a valid
statute and that the PPA is duty bound to comply with its provisions. The PPA may increase the rates but it may not decrease
them below those mandated by E.O. No. 1088.
4. FIRST LEPANTO v. CA 231 SCRA 30 (NOT IN THE LIST for PRELIM BUT SOMEHOW RELATED)
FACTS: BOI granted petitioner’s application to amend its BOI certificate of registration by changing the scope of its registered
product from “glazed floor tiles” to “ceramic tiles”. Oppositor Mariwasa filed a petitioner for review with the CA. CA granted the
preliminary injunction. Petitioner says that the CA has no jurisdiction as it is vested exclusively with the SC within 30 days from
receipt of the decision pursuant to the Omnibus Investments Code and therefore, Mariwasa has lost its right to appeal.
Mariwasa counters that whatever inconsistencies that the Omnibus Investment Code and the Judiciary Reorganization Act have
been resolved by SC Circular 1-91.
ISSUE:W/n Mariwasa correctly filed its appeal with the CA.
RULING: YES. B.P. 129’s objective is providing a uniform procedure of appeal from decisions of all quasi-judicial agencies for
the benefit of the bench and the bar. The obvious lack of deliberation in the drafting of our laws could perhaps explain the
deviation of some of our laws from the goal of uniform procedure which B.P. 129 sought to promote. Although a circular is not
strictly a statute or law, it has, however, the force and effect of law according to settled jurisprudence
The argument that Article 82 of E.O. 226 cannot be validly repealed by Circular 1-91 because the former grants a
substantive right which is prohibited under the Constitution. These simply deal with procedural aspects which this Court has the
power to regulate by virtue of its constitutional rule-making powers. Circular 1-91 simply transferred the venue of appeals from
decisions of this agency to respondent Court of Appeals and provided a different period of appeal, i.e., fifteen (15) days from
notice. It did not make an incursion into the substantive right to appeal.
Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226 insofar as the manner and method of enforcing
the right to appeal from decisions of the BOI are concerned.
NOTE: The fact that BOI is not expressly included in the list of quasi-judicial agencies found in the third sentence of Section 1
of Circular 1-91 does not mean that said circular does not apply to appeals from final orders or decision of the BOI. The second
sentence of Section 1 thereof expressly states that "(T)hey shall also apply to appeals from final orders or decisions of any
quasi-judicial agency from which an appeal is now allowed by statute to the Court of Appeals or the Supreme Court." E.O. 266
is one such statute. Besides, the enumeration is preceded by the words "(A)mong these agencies are . . . ," strongly implying
that there are other quasi-judicial agencies which are covered by the Circular but which have not been expressly listed therein.

FIRST LEPANTO v. CA 237 SCRA 519 (INCLUDED IN THE LIST FOR PRELIM)
FACTS: This is a MR of the previous case. Petitioner's contention is that Circular No. 1-91 cannot be deemed to have
superseded art. 82 of the Omnibus Investments Code of 1987 (E.O.
No. 226) because the Code, which President Aquino promulgated in the exercise of legislative authority, is in the nature of a
substantive act of Congress defining the jurisdiction of courts pursuant to Art. VIII, § 2 of the Constitution.
ISSUE: W/n Mariwasa correctly filed its appeal with the CA.
RULING: YES (as in previous case). Art. 78 of the Omnibus Investment Code on Judicial Relief was thereafter amended by
B.P. Blg. 129, by granting in § 9 thereof exclusive appellate jurisdiction to the CA over the decisions and final orders of quasi-
judicial agencies. When the Omnibus Investments Code was promulgated on July 17, 1987, the right to appeal from the
decisions and final orders of the BOI to the Supreme Court was again granted. By then, however, the present Constitution had
taken effect. The Constitution now provides in Art. VI, § 30 that "No law shall be passed increasing the appellate jurisdiction of
the Supreme Court as provided in this Constitution without its advice and concurrence." This provision is intended to give the
Supreme Court a measure of control over cases placed under its appellate jurisdiction. For the indiscriminate enactment of
legislation enlarging its appellate jurisdiction can unnecessarily burden the Court and thereby undermine its essential function of
expounding the law in its most profound national aspects.
Now, art. 82 of the 1987 Omnibus Investments Code, by providing for direct appeals to the Supreme Court from the
decisions and final orders of the BOI, increases the appellate jurisdiction of this Court. Since it was enacted without the advice
and concurrence of this Court, this provision never became effective, with the result that it can never be deemed to have
amended BPBlg. 129, § 9.
5. DEFENSOR-SANTIAGO vs. COMELEC(G.R. No. 127325 - March 19, 1997)
Facts: Private respondent Atty. Jesus Delfin, president of People’s Initiative for Reforms, Modernization and Action (PIRMA),
filed with COMELEC a petition to amend the constitution to lift the term limits of elective officials, through People’s Initiative. He
based this petition on Article XVII, Sec. 2 of the 1987 Constitution, which provides for the right of the people to exercise the
power to directly propose amendments to the Constitution. Subsequently the COMELEC issued an order directing the publication
of the petition and of the notice of hearing and thereafter set the case for hearing. At the hearing, Senator Roco, the IBP,
Demokrasya-Ipagtanggol ang Konstitusyon, Public Interest Law Center, and Laban ng Demokratikong Pilipino appeared as
intervenors-oppositors. Senator Roco filed a motion to dismiss the Delfin petition on the ground that one which is cognizable by
the COMELEC. The petitioners herein Senator Santiago, Alexander Padilla, and Isabel Ongpin filed this civil action for prohibition
under Rule 65 of the Rules of Court against COMELEC and the Delfin petition rising the several arguments, such as the
following: (1) The constitutional provision on people’s initiative to amend the constitution can only be implemented by law to be
passed by Congress. No such law has been passed; (2) The people’s initiative is limited to amendments to the Constitution, not
to revision thereof. Lifting of the term limits constitutes a revision, therefore it is outside the power of people’s initiative. The
Supreme Court granted the Motions for Intervention.
Issues: (1) Whether or not Sec. 2, Art. XVII of the 1987 Constitution is a self-executing provision. (2) Whether or not
COMELEC Resolution No. 2300 regarding the conduct of initiative on amendments to the Constitution is valid, considering the
absence in the law of specific provisions on the conduct of such initiative. (3) Whether the lifting of term limits of elective
officials would constitute a revision or an amendment of the Constitution.
Held: Sec. 2, Art XVII of the Constitution is not self executory, thus, without implementing legislation the same cannot
operate. Although the Constitution has recognized or granted the right, the people cannot exercise it if Congress does not
provide for its implementation.
The portion of COMELEC Resolution No. 2300 which prescribes rules and regulations on the conduct of initiative on
amendments to the Constitution, is void. It has been an established rule that what has been delegated, cannot be delegated
(potestas delegata non delegari potest). The delegation of the power to the COMELEC being invalid, the latter cannot validly
promulgate rules and regulations to implement the exercise of the right to people’s initiative.
The lifting of the term limits was held to be that of a revision, as it would affect other provisions of the Constitution
such as the synchronization of elections, the constitutional guarantee of equal access to opportunities for public service, and
prohibiting political dynasties. A revision cannot be done by initiative. However, considering the Court’s decision in the above
Issue, the issue of whether or not the petition is a revision or amendment has become academic.
6. Emmanuel Pelaez vs Auditor General (Delegation of Powers to Administrative Agencies)
FACTS: In 1964, President Ferdinand Marcos issued executive orders creating 33 municipalities – this was purportedly pursuant
to Section 68 of the Revised Administrative Code which provides in part:
The President may by executive order define the boundary… of any… municipality… and may change the seat of
government within any subdivision to such place therein as the public welfare may require…
The then Vice President, Emmanuel Pelaez, as a taxpayer, filed a special civil action to prohibit the auditor general
from disbursing funds to be appropriated for the said municipalities. Pelaez claims that the EOs were unconstitutional. He said
that Section 68 of the RAC had been impliedly repealed by Section 3 of RA 2370 which provides that barrios may “not be
created or their boundaries altered nor their names changed” except by Act of Congress. Pelaez argues: “If the President, under
this new law, cannot even create a barrio, how can he create a municipality which is composed of several barrios, since barrios
are units of municipalities?”
The Auditor General countered that there was no repeal and that only barrios were barred from being created by the
President. Municipalities are exempt from the bar and that a municipality can be created without creating barrios. He further
maintains that through Sec. 68 of the RAC, Congress has delegated such power to create municipalities to the President.
ISSUE: Whether or not Congress has delegated the power to create barrios to the President by virtue of Sec. 68 of the RAC.
HELD: No. There was no delegation here. Although Congress may delegate to another branch of the government the power
to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle
of separation of powers, that said law: (a) be complete in itself — it must set forth therein the policy to be executed, carried out
or implemented by the delegate — and (b) fix a standard — the limits of which are sufficiently determinate or determinable —
to which the delegate must conform in the performance of his functions. In this case, Sec. 68 lacked any such standard.
Indeed, without a statutory declaration of policy, the delegate would, in effect, make or formulate such policy, which is the
essence of every law; and, without the aforementioned standard, there would be no means to determine, with 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).
7. AUGUSTO TOLEDO vs COMMISSION ON ELECTIONS G.R. No. 135864 November 24, 1999
Facts: Petitioner Atty. Augusto Toledo was appointed by the COMELEC Chairman as Manager of the Education and
Information Department of the COMELEC when he was more than 57 years old. This was his first time to join government
service.
 No prior request for exemption from the provisions of Section 22, Rule III of the Civil Service Rules on Personnel Action
and Policies (CSRPAP) was secured. Said provision prohibits the appointment of persons 57 years old or above into the
government service without prior approval by the CSC.
Atty. Toledo officially reported for work and assumed the functions of his office. COMELEC, upon
discovery of the lack of authority required under the CSRPAP issued Resolution No. 2066, which declared Toledo’s
appointment as void ab initio. Toledo appealed the foregoing Resolution to the CSC.
CSC Resolution No. 89-468 disposed of the appeal by declaring the appointment of Toledo as merely voidable and not
void ab initio and declaring Toledo as a de facto officer from the time he assumed office to the time of the issuance of
COMELEC Resolution No. 2066.
Issue: Whether or not Sec. 22, Rule III is valid.
Held: NO. The provision on 57-year old persons in the Revised Civil Service Rules implementing RA 2260 cannot be accorded
validity. It is entirely a creation of the Civil Service Commission, having no basis in the law itself which it was meant to
implement.
The statute itself (RA 2260) contained no provision prohibiting the appointment or reinstatement in the government
service of any person who was already 57 y/o. The provision at issue is an unauthorized act on the part of CSC – a
supererogation – since it has no relation or connection with any provision of the law supposed to be carried in effect.
The power vested on the CSC was to implement the law or put it into effect, not to add to it; to carry the law into
effect or execution, not to supply perceived omissions on it. Apart from this, the CSRPAP cannot be considered effective as of
the time of the application to Toledo of a provision thereof, for the reason that said rules were never published.
8. PHILCOMSAT VS. ALCUAZ 180 SCRA 218; GR NO 84818 18 DEC 1989
Facts: The petition before us seeks to annul and set aside an Order 1 issued by respondent Commissioner Jose Luis Alcuaz of
the National Telecommunications Commission
Herein petitioner is engaged in providing for services involving telecommunications. Charging rates for certain specified
lines that were reduced by order of herein respondent Jose Alcuaz Commissioner of the National Telecommunications
Commission. The rates were ordered to be reduced by fifteen percent (15%) due to Executive Order No. 546 which granted the
NTC the power to fix rates. Said order was issued without prior notice and hearing.
Under Section 5 of Republic Act No. 5514, petitioner was exempt from the jurisdiction of the then Public Service
Commission, now respondent NTC. However, pursuant to Executive Order No. 196 issued on June 17, 1987, petitioner was
placed under the jurisdiction, control and regulation of respondent NTC
Issue: Whether or Not E.O. 546 is unconstitutional.
Held: In Vigan Electric Light Co., Inc. vs. Public Service Commission the Supreme Court said that although the rule-making
power and even the power to fix rates- when such rules and/or rates are meant to apply to all enterprises of a given kind
throughout the Philippines-may partake of a legislative character. Respondent Alcuaz no doubt contains all the attributes of a
quasi-judicial adjudication. Foremost is the fact that said order pertains exclusively to petitioner and to no other

The respondent admits that the questioned order was issued pursuant to its quasi-judicial functions. It, however, insists that
notice and hearing are not necessary since the assailed order is merely incidental to the entire proceedings and, therefore,
temporary in nature but the supreme court said that While respondents may fix a temporary rate pending final determination of
the application of petitioner, such rate-fixing order, temporary though it may be, is not exempt from the statutory procedural
requirements of notice and hearing

The Supreme Court Said that it is clear that with regard to rate-fixing, respondent has no authority to make such order without
first giving petitioner a hearing, whether the order be temporary or permanent. In the Case at bar the NTC didn’t scheduled
hearing nor it did give any notice to the petitioner.
9. Lupangco vs Court of Appeals G.R. No. 77372 April 29, 1988 (Rule-making Power)
Facts: PRC issued Resolution No. 105 as parts of its "Additional Instructions to Examiness," to all those applying for admission
to take the licensure examinations in accountancy.
Petitioners, all reviewees preparing to take the licensure examinations in accountancy, filed with the RTC a complaint
for injunction with a prayer with the issuance of a writ of a preliminary injunction against respondent PRC to restrain the latter
from enforcing the above-mentioned resolution and to declare the same unconstitutional.

Issue: Can the Professional Regulation Commission lawfully prohibit the examiness from attending review classes, receiving
handout materials, tips, or the like 3 days before the date of the examination?

Ruling: We realize that the questioned resolution was adopted for a commendable purpose which is "to preserve the integrity
and purity of the licensure examinations." However, its good aim cannot be a cloak to conceal its constitutional infirmities. On
its face, it can be readily seen that it is unreasonable in that an examinee cannot even attend any review class, briefing,
conference or the like, or receive any hand-out, review material, or any tip from any school, college or university, or any review
center or the like or any reviewer, lecturer, instructor, official or employee of any of the aforementioned or similar institutions.
The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill
motives will be barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how
the Commission can manage to have a watchful eye on each and every examinee during the three days before the examination
period.
It is an aixiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the
issuance of rules and regulations. To be valid, such rules and regulations must be reasonable and fairly adapted to the end in
view. If shown to bear no reasonable relation to the purposes for which they are authorized to be issued, then they must be
held to be invalid.
Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees' right to liberty
guaranteed by the Constitution. Respondent PRC has no authority to dictate on the reviewees as to how they should prepare
themselves for the licensure examinations. They cannot be restrained from taking all the lawful steps needed to assure the
fulfilment of their ambition to become public accountants. They have every right to make use of their faculties in attaining
success in their endeavours.
 10. PEOPLE VS. MACEREN
Administrative regulations adopted under legislative authority by a particular department must be in harmony with the
provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By such regulations, the
law itself cannot be extended. An administrative agency cannot amend an act of Congress.

FACTS: The respondents were charged with violating Fisheries Administrative Order No. 84-1 which penalizes electro fishing in
fresh water fisheries. This was promulgated by the Secretary of Agriculture and Natural Resources and the Commissioner of
Fisheries under the old Fisheries Law and the law creating the Fisheries Commission. The municipal court quashed the
complaint and held that the law does not clearly prohibit electro fishing, hence the executive and judicial departments cannot
consider the same. On appeal, the CFI affirmed the dismissal. Hence, this appeal to the SC.

ISSUE: Whether the administrative order penalizing electro fishing is valid?

HELD: NO. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded their authority in
issuing the administrative order. The old Fisheries Law does not expressly prohibit electro fishing. As electro fishing is not
banned under that law, the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to
penalize it. Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have been easily
embodied in the old Fisheries Law. The lawmaking body cannot delegate to an executive official the power to declare what acts
should constitute an offense. It can authorize the issuance of regulations and the imposition of the penalty provided for in the
law itself. Where the legislature has delegated to executive or administrative officers and boards authority to promulgate rules
to carry out an express legislative purpose, the rules of administrative officers and boards, which have the effect of extending,
or which conflict with the authority granting statute, do not represent a valid precise of the rule-making power.
11. IN RE: DESIGNATION OF JUDGE RODOLFO U. MANZANO AS MEMBER OF THE ILOCOS NORTE PROVINCIAL
COMMITTEE ON JUSTICE. (A.M. No. 88-7-1861-RTC October 5, 1988)
Separation of Powers
Facts: Judge Manzano sent a letter to the SC stating that he was, through Executive Order RF6-04, designated by Gov. Farinas
as a member of the Ilocos Norte Provincial Committee on Justice, which was created pursuant to PresidentialExecutive Order
No. 856 and was appointed as a member of the Committee. With that, he was asking the Court to authorize him to discharge
the functions and duties of the office and to consider his membership in the Committee as part of the primary functions of an
Executive Judge. He alleged that his membership in the Committee as neither violative of the Independence of the Judiciary nor
a violation of Section 12, Article VIII, or of the second paragraph of Section .7, Article IX (B),both of the Constitution, and will
not in any way amount to an abandonment of his present position as Executive Judge of Branch XIX, Regional Trial Court, First
Judicial Region, and as a member of the Judiciary.
Issue: The issue involved in this case is where to draw the line insofar as administrative functions are concerned.
Held: An examination of Executive Order No. 856, as amended, reveals that Provincial/City Committees on Justice are created
to insure the speedydisposition of cases of detainees, particularly those involving the poor and indigentones, thus alleviating jail
congestion and improving local jail conditions. Among the functions of the Committee are—
3.3 Receive complaints against any apprehending officer, jail warden, final or judge who may be found to have committed
abuses in thedischarge of his duties and refer the same to proper authority for appropriate action;
3.5 Recommend revision of any law or regulation which is believed prejudicial to the proper administration of criminal
justice.
It is evident that such Provincial/City Committees on Justice perform administrative functions. Administrative functions are those
which involve the regulation and control over the conduct and affairs of individuals for; their own welfare and the promulgation
of rules and regulations to better carry out the policy of the legislatureor such as are devolved upon the administrative agency
by the organic law of itsexistence.

Furthermore, under Executive Order No. 326 amending Executive Order No. 856, itis provided that—
Section 6. Supervision.—The Provincial/City Committees on Justiceshall be under the supervision of the Secretary of justice
Quarterlyaccomplishment reports shall be submitted to the Office of theSecretary of Justice.
Under the Constitution, the members of the Supreme Court and other courtsestablished by law shall not be designated to any
agency performing quasi- judicialor administrative functions (Section 12, Art. VIII, Constitution).
Considering that membership of Judge Manzano in the Ilocos Norte ProvincialCommittee on Justice, which
discharges a administrative functions, will be inviolation of the Constitution, the Court is constrained to deny his request.
Former Chief Justice Enrique M. Fernando in his concurring opinion in the case of Garcia vs. Macaraig ably
sets forth:
2. While the doctrine of separation of powers is a relative theory not tobe enforced with pedantic rigor, the practical
demands of governmentprecluding its doctrinaire application, it cannot justify a member of the judiciary being required
to assume a position or perform a duty non- judicial in character. That is implicit in the principle. Otherwise there isa
plain departure from its command. The essence of the trust reposedin him is to decide. Only a higher court, as was
emphasized by JusticeBarredo, can pass on his actuation. He is not a subordinate of anexecutive or legislative official,
however eminent. It is indispensablethat there be no exception to the rigidity of such a norm if he is, asexpected, to be
confined to the task of adjudication. Fidelity to his sworn responsibility no less than the maintenance of respect for
the judiciary can be satisfied with nothing less.
This declaration does not mean that RTC Judges should adopt an attitude of monastic insensibility or
unbecoming indifference to Province/City Committee on Justice. As incumbent RTC Judges, they form part of the structure of
government. Their integrity and performance in the adjudication of cases contribute to thesolidity of such structure. As public
officials, they are trustees of an orderly society.Even as non-members of Provincial/City Committees on Justice, RTC judges
shouldrender assistance to said Committees to help promote the laudable purposes forwhich they exist, but only when such
assistance may be reasonably incidental tothe fulfillment of their judicial duties.
12. MAURICIO CRUZ vs.,STANTON YOUNGBERG G.R. No. L-34674 October 26, 1931
FACTS: Petitioner Mauricio Cruz brought a petition before the Court of First Instance of Manila for the issuance of a writ of
mandatory injunction against the respondent Director of the Bureau of Animal Industry, Stanton Youngberg, requiring him to
issue a permit for the landing of ten large cattle imported by the petitioner and for the slaughter thereof. Cruz attacked the
constitutionality of Act No. 3155, which at present prohibits the importation of cattle from foreign countries into the Philippine
Islands. He also asserted that the sole purpose of the enactment was to prevent the introduction of cattle diseases in the
country.
 The respondent asserted that the petition did not state facts sufficient to constitute a cause of action. The demurrer
was based on two reasons: (1) that if Act No. 3155 was declared unconstitutional and void, the petitioner would not be entitled
to the relief demanded because Act No. 3052 would automatically become effective and would prohibit the respondent from
giving the permit prayed for; and (2) that Act No. 3155 was constitutional and, therefore, valid. The CFI dismissed the
complaint because of petitioner’s failure to file another complaint. The petitioner appealed to the Supreme Court.
Youngberg contended that even if Act No. 3155 be declared unconstitutional by the fact alleged by the petitioner in
his complaint, still the petitioner cannot be allowed to import cattle from Australia for the reason that, while Act No. 3155 were
declared unconstitutional, Act No. 3052 would automatically become effective.
ISSUES:1.WON Act No. 3155 is unconstitutional
2.WON the lower court erred in not holding that the power given by Act No. 3155 to the Governor-General to suspend
or not, at his discretion, the prohibition provided in the act constitutes an unlawful delegation of the legislative powers
3.WON Act No. 3155 amended the Tariff Law
RULING: 1. No. An unconstitutional statute can have no effect to repeal former laws or parts of laws by implication. The court
will not pass upon the constitutionality of statutes unless it is necessary to do so. Aside from the provisions of Act No. 3052, Act
3155 is entirely valid. The latter was passed by the Legislature to protect the cattle industry of the country and to prevent the
introduction of cattle diseases through importation of foreign cattle. It is now generally recognized that the promotion of
industries affecting the public welfare and the development of the resources of the country are objects within the scope of the
police power. The Government of the Philippine Islands has the right to the exercise of the sovereign police power in the
promotion of the general welfare and the public interest. At the time the Act No. 3155 was promulgated there was reasonable
necessity therefore and it cannot be said that the Legislature exceeded its power in passing the Act.
2. No. The true distinction is between the delegation of power to make the law, which necessarily involves discretion
as to what it shall be, and conferring an 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. There is no unlawful delegation of legislative
power in the case at bar.
3. No. It is a complete statute in itself. It does not make any reference to the Tariff Law. It does not permit the
importation of articles, whose importation is prohibited by the Tariff Law. It is not an amendment but merely supplemental to
Tariff Law.

Cruz vs. Youngberg [GR 34674. 26 Oct. 1931] Supplement =)

Facts: Mauricio Cruz brought a petition for the issuance of a writ of mandatory injunction before the CFI Manila against the
Director of the Bureau of Animal Industry, Stanton Youngberg, requiring him to issue a permit for the landing of 10 large cattle
imported by him from Australia and for the slaughter thereof. Cruz attacked the constitutionality of Act 3155, which prohibits
the importation of cattle from foreign countries into the Philippine Islands. The Director demurred to the petition on the ground
that it did not state facts
sufficient to constitute a cause of action. The demurrer was based on two reasons, namely, (1) that if Act 3155 were declared
unconstitutional and void, Cruz would not be entitled to the relief demanded because Act 3052 would automatically become
effective and would prohibit the Director from giving the permit prayed for; and (2) that Act 3155 was constitutional and,
therefore, valid.
The court sustained the demurrer and the complaint was dismissed by reason of the failure of Cruz to file another
complaint. From that order of dismissal, Cruz appealed to the Supreme Court.
The Supreme Court affirmed the decision appealed from; with the costs against Cruz.
1. Nullity of Act 3052 would make it impossible for Director to grant permit for the importation of cattle
If Act 3155 is declared unconstitutional, still Cruz cannot be allowed to import cattle from Australia for the reason that, while Act
3155 were declared unconstitutional, Act 3052 would automatically become effective. Cruz does not present any allegation in
regard to Act 3052 to show its nullity or unconstitutionality though it appears clearly that in the absence of Act 3155 the former
act would make it impossible for the Director of the Bureau of Animal Industry to grant Cruz a permit for the importation of the
cattle without the approval of the head of the corresponding department.
2. Unconstitutional statute can have no effect to repeal former laws
An unconstitutional statute can have no effect to repeal former laws or parts of laws by implication, since, being void, it is not
inconsistent with such former laws.
3. Court does not pass upon constitutionality of statutes unless it is necessary
The Court will not pass upon the constitutionality of statutes unless it is necessary to do so (McGirr vs. Aldanese and Trinidad,
43 Phil., 259). In the present case, it is not necessary to pass upon the validity of the statute because even if it were declared
unconstitutional, the petitioner would not be entitled to relief inasmuch as Act 3052 is not in issue.
4. Provisions of Acts 3052 and 3155 entirely; Promotion of industries affecting the public welfare
are objects within scope of police power; Court not to determine if measure is wise or best
Aside from the provisions of Act 3052, Act 3155 is entirely valid. The Legislature passed Act 3155 to protect the cattle industry
of the country and to prevent the introduction of cattle diseases through the importation of foreign cattle. The promotion of
industries affecting the public welfare and the development of the resources of the country are objects within the scope of the
police power. Act 3155 was promulgated as there was reasonable necessity therefore when it was enacted and it cannot be said
that the Legislature exceeded its power in passing the Act. That being so, it is not for this court to avoid or vacate the Act upon
constitutional grounds nor will it assume to determine whether the measures are wise or the best that might have been
adopted.
5. Distinction between delegation of power to make law and conferring an authority or discretion
as to execution
The true distinction is between the delegation of power to make the law, which necessarily involves discretion as to what it shall
be, and conferring an 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 (Wilmington and Zanesville Railroad Co. vs. Commissioners of
Clinton County). In the present case, there is no unlawful delegation of legislative power.
6. Act 3155 is a complete statute; does not amend but merely supplemental to the Tariff Law
Act 3155 is a complete statute in itself. It does not make any reference to the Tariff Law. It does not permit the importation of
articles, whose importation is prohibited by the Tariff Law. It is not a tariff measure but a quarantine measure, a statute
adopted under the police power of the Philippine Government. It is at most a ‘supplement’ or an ‘addition’ to the Tariff Law.
(See MacLeary vs. Babcock, 82 N. E., 453, 455; 169 Ind., 228 for distinction between ‘supplemental’ and amendatory’ and
O’Pry vs. U. S., 249 U. S., 323; 63 Law. ed., 626, for distinction between ‘addition’ and ‘amendment.’)”
13. PHILCOMSAT V ALCUAZ (SAME WITH NUMBER 8, this is just a supplement =) ) PROMULGATION OF RULES
FACTS: By virtue of Republic Act 5514, the Philippine Communications Satellite Corporation (PHILCOMSAT) was granted “a
franchise to establish, construct, maintain and operate in the Philippines, at such places as the grantee may select, station or
stations and associated equipment and facilities for international satellite communications,” the authority to “construct and
operate such ground facilities as needed to deliver telecommunications services from the communications satellite system and
ground terminal or terminals.” By designation of the Republic of the Philippines, it is also the sole signatory for the Philippines in
the Agreement and the Operating Agreement relating to the International Telecommunications Satellite Organization
(INTELSAT), as well as in the Convention and the Operating Agreement of the International Maritime Satellite Organization
(INMARSAT), which two global commercial telecommunications satellite corporations were collectively established by various
states in line with the principles set forth in Resolution 1721 (XVI) of the United Nations’s General Assembly. Since 1968, It has
been leasing its satellite circuits to PLDT, Philippine Global Communications, Eastern Telecom, Globe Mackay Cable and Radio
Corp. ITT, and Capitol Wireless or their predecessors-in-interest. The satellite services thus provided by PHILCOMSAT enable
said international carriers to serve the public with indispensable communication services, such as overseas telephone, telex,
facsimile, telegrams, high speed data, live television in full color, and television standard conversion from European to American
or vice versa. It was exempt from the jurisdiction of the then Public Service Commission, now National Telecommunications
Commission (NTC).
However, pursuant to Executive Order (EO) 196 issued on 17 June 1987, it was placed under the jurisdiction, control
and regulation of NTC, including all its facilities and services and the fixing of rates. Implementing said executive order, NTC
required PHILCOMSAT to apply for the requisite certificate of public convenience and necessity covering its facilities and the
services it renders, as well as the corresponding authority to charge rates therefor. On 9 September 1987, PHILCOMSAT filed
with NTC an application for authority to continue operating and maintaining the same facilities it has been continuously
operating and maintaining since 1967, to continue providing the international satellite communications services it has likewise
been providing since 1967, and to charge the current rates applied for in rendering such services. Pending hearing, it also
applied for a provisional authority so that it can continue to operate and maintain the facilities, provide the services and charge
therefor the aforesaid rates therein applied for. On 16 September 1987, PHILCOMSAT was granted a provisional authority to
continue operating its existing facilities, to render the services it was then offering, and to charge the rates it was then charging.
This authority was valid for 6 months from the date of said order. When said provisional authority expired on 17 March 1988, it
was extended for another 6 months, or up to 16 September 1988.
Thereafter, the NTC further extended the provisional authority of PHILCOMSAT for another 6 months, counted from 16
September 1988, but it directed PHILCOMSAT to charge modified reduced rates through a reduction of 15% on the present
authorized rates. PHILCOMSAT assailed said order.
ISSUE: W/N the NTC is required to provide notice and hearing to PHILCOMSAT in its rate-fixing order, which fixed a temporary
rate pending final determination of PHILCOMSAT’s application.
HELD: YES. The NTC, in the exercise of its rate-fixing power, is limited by the requirements of public safety, public interest,
reasonable feasibility and reasonable rates, which conjointly more than satisfy the requirements of a valid delegation of
legislative power. The NTC order violates procedural due process because it was issued motu proprio, without notice to
PHILCOMSAT and without the benefit of a hearing. Said order was based merely on an “initial evaluation,” which is a unilateral
evaluation, but had PHILCOMSAT been given an opportunity to present its side before the order in question was issued, the
confiscatory nature of the rate reduction and the consequent deterioration of the public service could have been shown and
demonstrated to NTC. The order pertains exclusively to PHILCOMSAT and to no other. Reduction of rates was made without
affording PHILCOMSAT the benefit of an explanation as to what particular aspect or aspects of the financial statements
warranted a corresponding rate reduction. PHILCOMSAT was not even afforded the opportunity to cross-examine the inspector
who issued the report on which NTC based its questioned order. While the NTC may fix a temporary rate pending final
determination of the application of PHILCOMSAT, such rate-fixing order, temporary though it may be, is not exempt from the
statutory procedural requirements of notice and hearing, as well as the requirement of reasonableness.
Assuming that such power is vested in NTC, it may not exercise the same in an arbitrary and confiscatory manner.
Categorizing such an order as temporary in nature does not perforce entail the applicability of a different rule of statutory
procedure than would otherwise be applied to any other order on the same matter unless otherwise provided by the applicable
law. NTC has no authority to make such order without first giving PHILCOMSAT a hearing, whether the order be temporary or
permanent, and it is immaterial whether the same is made upon a complaint, a summary investigation, or upon the
commission’s own motion.

14. ABS-CBN Broadcasting Corp. vs. Court of Tax Appeals G.R. No. L-52306. October 12, 1981
Facts: During the period pertinent to this case, petitionercorporation was engaged in the business of telecasting local as well
as foreign films acquired from foreign corporations not engaged in trade or business within the Philippines. for which petitioner
paid rentals after withholding income tax of 30%of one-half of the film rentals. In implementing Section 4(b) of the Tax Code,
the Commissioner issued General Circular V-334. Pursuant thereto, ABS-CBN Broadcasting Corp. dutifully withheld and turned
over to the BIR 30% of ½ of the film rentals paid by it to foreign corporations not engaged in trade or business in the
Philippines. The last year that the company withheld taxes pursuant to the Circular was in 1968. On 27 June 1908, RA 5431
amended Section 24 (b) of the Tax Code increasing the tax rate from 30% to 35% and revising the tax basis from “such
amount” referring to rents, etc. to “gross income.” In 1971, the Commissioner issued a letter of assessment and demand for
deficiency withholding income tax for years 1965 to 1968. The company requested for reconsideration; where the Commissioner
did not act upon.
Issue: Whether Revenue Memorandum Circular 4-71, revoking General Circular V-334, may be retroactively applied.
Held: Rulings or circulars promulgated by the Commissioner have no retroactive application where to so apply them would be
prejudicial to taxpayers. Herein, the prejudice the company of the retroactive application of Memorandum Circular 4-71 is
beyond question. It was issued only in 1971, or three years after 1968, the last year that petitioner had withheld taxes under
General Circular No. V-334. The assessment and demand on petitioner to pay deficiency withholding income tax was also made
three years after 1968 for a period of time commencing in 1965. The company was no longer in a position to withhold taxes due
from foreign corporations because it had already remitted all film rentals and had no longer control over them when the new
circular was issued. Insofar as the enumerated exceptions are concerned, the company does not fall under any of them.