ADMINISTRATION LAW

ATTY. MAURICIO ULEP

S.Y. 2018-2019

I. THE ADMINISTRATIVE PROCESS AND THE CONSTITUTION

A. Doctrine of Separation of Powers and the importance of administrative agencies

1. Antonio H. Noblejas (Petitioner)

-v-
Claudio Teehankee (SOJ) and Rafael Salas (ES) (Respondents)
G.R. No. L-28790
Promulgation: April 29, 1968

FACTS:
Petitioner is the duly appointed, confirmed, and qualified Commissioner of Land
Registration, a position created by R.A. No. 1151. By the terms of Section 2 of said act, the
commissioner is declared “entitled to the same compensation, emoluments and privileges as
those of the judges of the court of first instance. The appropriation laws in the item setting forth
the salary of said officer, use the following expression

“1. One Land Registration Commissioner with rank and privileges of district judge -
P19,000.00”

On March 17, 1968, respondent Secretary of Justice coursed to the petitioner requiring
him to explain in writing not later than March 9, 1968, why no disciplinary action should be
taken against the petitioner for “approving or recommending approval of the subdivision,
consolidation and consolidation-subdivision plans covering areas greatly in excess of the areas
covered by the original titles.” Noblejas answered and apprised the Secretary of Justice that,
as he enjoyed the rank, privileges, emoluments and compensation of a Judge of Court of First
Instance, and therefore, the papers relative to his case should be submitted to the Supreme
Court, for action thereon comformably to section 62 of the Judiciary Act and Revised Rule 140
of the Rules of Court. On March 17, Noblejas received a communication signed by the
Executive Secretary, “by authority of the President” whereby, based on ‘finding that a prima
facie case exists against you for gross negligence and conduct prejudicial to the public
interest”, petitioner was hereby suspended, upon receipt hereof, pending investigation of the
above charges.

On March 18, petitioner applied to this court, reiterating the contention advance in his
letter to the Secretary of Justice, claiming lack of jurisdiction and grave abuse of discretion and
praying for restraining writs. In their answer, respondents admits the facts but denied that
petitioner, as Land Registration Commissioner, exercises judicial functions, or that the
petitioner may be considered a Judge of First Instance within the purview of the Judiciary Act
and Revised Rule 140 of the Rules of Court; that the function of investigation of charges
against public officers is administrative and executive in nature; that the Legislature may not
charge the judiciary with non-judicial functions or duties except when reasonably incidental to
the fulfillment of judicial duties, as it would be in violation of the principle of separation of
powers.
ISSUES:
Whether or not the Land Office Commissioner may only be investigated by the
Supreme Court, in view of the conferment upon him by the statutes?
RULING:
Conformably to the well known principle of statutory construction that statutes
should be given, whenever possible, a meaning that will not bring them in conflict with
the Constitution. The Supreme Court is constrained to the rule that the grant by R.A. 1151
to the Commissioner of the Land Registration of the same “privileges as those of a judge
of a first instant court did not include, and was not intended to include, the right to
demand investigation by the Supreme Court, and to be suspended and removed only
upon the Court’s recommendation; for otherwise, the said grant of privileges would be
violative of the Constitution and be null and void.
RATIO:
1. There is no inherent power in the Executive or Legislative to charge the Judiciary with
administrative functions except when reasonably incidental to the fulfillment of judicial duties
(In Re: Richardson et al., Connolly -v- Scudder);

2. It has been held that the Supreme Court of the Philippines and its members should
not and cannot be required to exercise any power to perform any trust or to assume any duty
pertaining to or connected with the administration of judicial functions; and a law requiring the
Supreme Court to arbitrate on disputes between public utilities was pronounced void (Manila
Electric Co. -v- Pasay Transportation Co.)
3. Even granting that the resolution of consultas by the Register of Deeds should
constitute a judicial (or more properly quasi-judicial) function, analysis of the powers and duties
of the Land Registration Commissioner under R.A. No. 1151, sections 3 and 5, will show that
the resolution of Consultas are but a minimum portion of his administrative functions and
merely incidental to the latter.

2. Paz M. Garcia (Complainant)

-v-
Hon. Catalino Macaraig, Jr. (Respondent)
A.M. No. 198-J
Promulgation: May 31, 1971

FACTS:
An Administrative complaint filed by one Paz M. Garcia against Hon. Catalino Macaraig
Jr. formerly Judge of the court of first instance of Laguna, Branch IV, now Under Secretary of
Justice, in his former capacity as a judge, for alleged “dishonesty,violation of his oath as a
judge, goss incompetence, violation of R.A. No.296 otherwise known as the Judiciary Act of
1948 particularly, Section 5, 55 and 58 thereof, committed as follows:

1) as incumbent judge, respondent herein, has not submitted his monthly reports
containing the number of cases filed, disposed of, decided and/or resolved, the number of
cases pending decision for one, two, three months together with the title, number, number of
hours of court session held a day, etc.

2) That he has not submitted his certificate of service from July to December of 1970,
and January to February 1971

3) That as incumbent judge of Branch IV of court of first instance of Laguna and San
Pablo and knowing fully well that he has never performed his official duties or discharged his
duties appertaining to his office, he has collected and was paid his salaries from July to
December 1970 and January to February 1971 which is a blatant violation of section 5 of the
Judiciary Act of 1948 which provides as follows:

“ District Judges, judges of City Courts, and municipal Judges shall certify on their
application for leave, and upon salary vouchers, presented by them for payment, or upon the
payrolls upon which their salaries are paid, that all special proceedings, applications, petitions,
motions, and all civil and criminal cases which have been under submission for decision or
determination for a period of ninety days or more have been determined and decided on or
before the date of making the certificate no salary shall be paid without such certificate.

4) The his deliberate failure to submit the monthly reports from July to December 1970
and from January to February 1971, stating therein the number of hours of session that the
Courts holds daily, the accomplishments of the Court constitutes a clear violation of Sections
55 and 58 of the Judiciary Act of 1948.

5) That by his deliberate violation of his Oath of Office as a District Judge of the Court
of First Instance of Laguna and San PAblo, Branch VI, he has manifested such moral
bankruptcy as to deny his fitness to perform or discharge official duties in the administration of
justice.

6) That on June 29, 1970, respondent Judge wrote to the Honorable Secretary of
Justice informing him that he was entering upon the performance of his duties, which reads as
follows:

“ I have the honor to inform you that I am entering upon the performance of the duties
of the office of Judge of the Court of First Instance of Laguna and San Pablo City today, June
29, 1970.”

That such actuation of deliberately telling a deliberate falsehood aggravates his moral
bankruptcy incompatible to the requirements of the highest degree of honesty, integrity and
good moral character appertaining to holding the position of Judge in the administration of
Justice.

Respondent Version:

Respondent took his oath as Judge of the Court of First Instance of Laguna and San
Pablo City with station at Calamba on June 29, 1970. The court, being on the112 newly
created CFI branches, had to be organized from scratch. After the consultations with the
officials of the province of Laguna, the municipality of Calamba and the Department of Justice
respondent decided to accept the offer of the Calamba Municipality Government to supply the
space for the courtroom and offices of the court; to utilize the financial assistance promised by
the Laguna provincial government for the purchase of the necessary supplies and materials;
and to rely on the national government for the equipment needed by the court.

As to the space requirements of the court, the Municipal Mayor of Calamba assured the
respondent that the court could be accommodated in the west wing of the Calamba municipal
building as soon as the office of the municipal treasurer and his personnel are transferred to
another location. When the projected transfer of the municipal treasurer’s office was about to
be effected, the treasurer and several council objected. The municipal mayor then requested
the respondent to look over some of the office spaces for rent in Calamba, with the
commitment that the municipal government will shoulder the payment of the rentals.
Respondent’s first choice was the second floor of the Republic Bank branch in Calamba, but
the negotiations failed when the owned of the building refused to reduce the rent to P300 a
month. The next suitable space selected by respondent was the second floor of the Laguna
Development Bank branch in Calamba. After a month’s negotiations, the municipality finally
signed a lease agreement with the owner on October 26, 1970. Another month passed before
the municipal government could reales the amount necessary for the improvements to convert
the space that was rented, which was a big hall without partitions, into a courtroom and offices
for the personnel of the court and for the assistant provincial fiscal. Thereafter, upon
respondent’s representations, the provincial government appropriated the amount of P5,000
for the purchase of the supplies and materials needed by the court. Early in December 1970,
respondent also placed his order for the necessary equipment with the Property officers of the
Department of Justice but, unfortunately, the appropriation for the equipment of courts of frist
instance was released only on December 23, 1970 and the procurement of the equipment
chargeable against this allotment is still under way.

When respondent realized that it would be sometime he could actually preside over his
court, he applied for an extended leave The Secretary of Justice, however, prevailed upon
respondent to forego his leave and instead to assist him, without being extended a formal
detail, whenever respondent was not busy attending to the needs of his court.

ISSUE:
Whether or not respondent is guilty of violation of the Judiciary act of 1948
RULING:
According to the Supreme Court, the charges has no basis,
RATIO:

1) Respondent’s inability to perform his judicial duties under the circumstances

mentioned above does not constitute incompetence. Respondent was like every lawyer who
gets his first appointment to the bench, eager to assume his judicial duties and rid himself of
the stigma of being a judge without a sala but forces and circumstances beyond his control
prevented him from discharging his judicial duties.

2) Respondent’s collection of salaries as judge does not constitute dishonesty because

aside from the time, effort and money he spent in organizing the CFI at Calamba, he worked in
the Department of Justice. Indeed, even if respondent did no more that exert efforts to
organize his court, he could, as other judges have done, have collected his salaries as judge
without being guilty of dishonesty.

3) The Department of Justice has never required judges who have not actually started
to perform their judicial duties to comply with the above-mentioned statutory provision and
circular.

3. Eugenio J Puyat, et al (petitioners)

-v-
Hon Sixto T. J. De Guzman, et al (respondents)
G.R. No. L-51122
Promulgation: March 25, 1982

FACTS:
A question of novel import is in issue. For its resolution, the following dates and
allegations are being given and made:

1) May, 14, 1979 - An election for the eleven Directors of the International Pipe
Industries Corporation (IPI) a private corporation, was held. Those in charge ruled that the
following were elected as Directors: (1) Eugenio J Puyat; (2) Eustaquio T.C. Acero; (3) Erwin L.
Choingbian; (4) R.G. Vildzius; (5) Edgardo P. Reyes; (6) Enrique M. Belo; (7) Antonio G. Puyat;
(8) Servillano Dolina; (9) Jaime R. Blanco; (10) Juanito Mercado; (11) Rafael R. Recto. Where in
the Puyat Group (Eugenio J. Puyat, Erwin L. Chiongbian, Edgardo P. Reyes, Antonio G. Puyat,
Jaime R. Blanco, Rafael R. Recto) wuld be in control of the Board and the management of IPI.

2) On May 25, 1979, the Acero group (T.C. Acero, R.G. Vildzuis, Enrique M. Belo,
Servillano Dolina Juanito Mercado) instituted at the Securities and Exchange Commission
(SEC) quo warranto proceedings, questioning the election of May 14, 1979. The Acero group
claimed that the stockholders’ voters were not properly counted.

3) On May 25-31, 1979, the Puyat goup claims that at conferences of the parties with
respondent SEC Commissioner de Guzman, Justice Estanslao A.Fernandez then a member of
the Interim Batasang Pambansa, orally entered his appearance as counsel for respondent
Acero to which the Puyat Group objected on Constitutional grounds. Section 11, Artcie VII of
the 1973 Constitution, then in force, provided that no Assemblyman could “appear as counsel
before any administrative body”, and SEC was an administrative body. Incidentally, the same
prohibition was maintained by the April 7, 1981 plebiscite. The cited Constitutional prohibition
being clear, Assemblyman Fernandez did not continue his appearance for respondent Acero.

4) On May 31, 1979, when the SE case was called, it turned out that:

(i) On May 15, 1979, Assemblyman Fernandez had purchased from Augosto A.
Morales 10 shares of stock of IPI for P200 upon request of respondent Acero to qualify him to
run for election as director.

(ii) The deed of sale, however, was notarized only on May 30, 1979 and was
sought to be registered on said date.

 (iii) On May 31, 1979, the day following the notarization of Assemblyman
Fernandez’ purchase, the latter had filed an Urgent Motion for Intervention in the SEC case as
the owner of 10 IPI shares alleging legal interest in the matter in litigation.

5) July 17, 1979, the SEC granted leave to intervene on the basis of Atty. Fernandez’
ownership of the said 10 shares.

6) On July 3, 1979, Edgardo P. Reyes instituted a cse before the CFI of RIzal (Pasig)
against N.V. Verenigde Excelsior - De Maas and respondent Acero and others, to annul the sale
of Excelsior’s shares of the IPI to respondent Acero. In that case, Assemblyman Fernandez
appeared as counsel for defendant Excelsior, we ruled that Assemblyman Fernandez could not
appear as counsel in a case originally filed with a Court of First instance as in such situation the
Court would be one “without appellate jurisdiction.

On September 4, 1979, the Court en banc issued a TRO enjoining respondent SEC
Associate Commissioner from allowing the participation as an intervenor, of respondent
Assemblyman at the proceedings in the SEC Case. The SG, in his Comment for respondent
commissioner, supports the stand of the latter in allowing the intervention. The Court en banc,
in November 6, 1979, resolved to consider the Comment as an Answer to the petition.
ISSUE:
Whether or Not the Assemblyman Fernandez, as a then stockholder of IPI may
intervene in the SEC Case without violation Section 11, Article VII of the Constitution.
DECISION:
The Supreme Court ruled that the intervention of Assemblyman Fernandez in the SEC
case falls within the ambit of the prohibition contained in Section 11, Article VIII of the
Constitution.
RATIO:
1) A ruling upholding the “intervention” would make the constitution provision
ineffective. All an assemblyman need do, if he wants to influence an administrative body is to
acquire a minimal participation in the “interest” of the client and then “intervene” in the
proceedings. That which the Constitution directly prohibits may not be done by indirection or
by a general legislative act which is intended to accomplish the objects specifically or impliedly
prohibited.

2) Ordinarily, by virtue of the Motion for Intervention, Assemblyman Fernandez cannot

be said to be appearing as counsel. Ostensibly, he is not appearing on behalf of another
although he is joining the cause of the private respondents. His appearance could theoretically
be for the protection of his ownership of 10 shares of IPI in respect of the matter in litigation
and not for the protection of the petitioners nor respondents who have their respective capable
and respected counsel.

4. IN RE: Designation of Judge Rodolfo U. Manzano as member of the Ilocos Norte

Provincial Committee on Justice

FACTS:
An Executive Order RF6-04 issued on June 21, 1988 by the Honorable Provincial
Governor of Ilocos Norte, Hon.Rodolfo C. Farinas, designated as a member of the Ilocos Norte
Provincial Committee on Justice created pursuant to Presidential Executive Order No. 856 was
sent to the Supreme Court for the following before Hon. Judge Rodolfo accept such
appointment. Hon. Judge Manzano is requesting the Supreme Court to issue a resolution as
follows:

1) Autorizing him to accept the appointment and to as assume and discharge the
powers and duties attached to said position;

2) Considering the 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 RTC and as a member of the
Judiciary; and

3) Consider the membership in the said Committee as part of the primary functions of
an Executive Judge.

An examination of E.O. No. 856, as amended, reveals that Provincial/City Committees

on Justice are created to insure the speedy disposition of cases of detainees, particularly those
involving the poor and indigent ones, thus alleviating jail congestion and improving local jail
conditions. Among the functions of the Committee are the following:

1) Receive complaints against any apprehending officer, jail warden, final or judge who
may be found to have committed abuses in the discharge of his duties and refer the same to
proper authority for appropriate action;

2) 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 legislature or such as are devolved upon the
administrative agency by the organic law of its existence. Furthermore, under E.O. No. 326
amending E.O. No. 856 it is provided that -

SEC 6. Supervision - The provincial/City Committees on Justice shall be under the

supervision of the Secretary of Justice Quarterly accomplishment reports shall be submitted to
the Office of the Secretary of Justice.
ISSUES:
Whether or not the appointment is violative of the Constitution.
DECISION:
The Supreme Court Denied the request of Judge Rodolfo U. Manzano
RATIO:
1) Under the Constitution, the members of the Supreme Court and other courts
established by law shall not be designated to any agency performing quasi-judicial or
administrative functions and considering that membership of Judge Manzano in the Ilocos
Norte Provincial committee on Justice, which discharges a administrative functions, will be in
violation of the Constitution.

2) Former Chief Justice Enrique M. Fernando in his concurring opinion in the case of
Garcia v Macaraig states that

While the doctrine of separation of powers is a relative theory not to be enforced with
pedantic rigor, the practical demands of government precluding 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 is a plain departure
from its command. The essence of the trust reposed in him is to decide. Only a higher court, as
was emphasized by Justice Barredo, can pass on his actuation. He is not a subordinate of an
executive or legislative official, however eminent. It is indispensable that there be no exception
to the rigidity of such a norm if he is, as expected, 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.

3) As incumbent RTC judges, they form part of the structure of government. Their
integrity and performance in the adjudication of cases contribute to the solidity of such
structure of government. As public officials, they are trustees of an orderly society. Even as
non-members of Provincial/City Committees on Justice, RTC judges should render assistance
to said Committees to help promote the laudable purposes for which they exist, but only when
such assistance may be reasonably incidental to the fulfilment of their judicial duties

B. Administrative Code of 1987

5. Blas Ople (petitioner)

-v-
Ruben Torres, et al (respondents)
G.R. No. 127685
Promulgation: July 23, 1998

FACTS:
The petition at bar is an effort on the part of Senator Blas F. Ople to prevent the
shrinking of the right to privacy, which is revered as the “most comprehensive of rights and the
rights most valued by civilized men.” The petitioner prays that the Supreme Court validate
Administrative Order No. 308 entitled “Adoption of a National Computerized Identification
Reference System” on two important constitutional grounds, viz: (1) t is a usurpation of the
power of the Congress to legislate; and (2) it impermissibly intrudes on our citizenry’s protected
zone of privacy.
ISSUE:
Whether or not A.O. No. 308 is unconstitutional
DECISION:
The Supreme Court declare A.O. No. 308 null and void for being unconstitutional
RATION:
1) Administrative power is concerned with the work of applying policies and enforcing
orders as determined by proper governmental organs. It enables the President to fix a uniform
standard of administrative efficiency and check the official conduct of his agents. To this end,
he can issue administrative orders, rules and regulation.

2) An administrative order is an ordinance issued by the President which relates to

specific aspects in the administrative operation of government. It must be in harmony with the
law and should be for the sole purpose of implementing the law and carrying out the legislative
policy. The Supreme Court reject the argument that A.O. No. 308 implements the legislative
policy of the Administrative Code of 1987. The Code is a general law and “incorporates in a
unified document the major structural, functional and procedural principles of governance and
embodies changes in administrative structure and procedures designed to serve the people

3) The Code is divided into 7 Books: (1) Sovereignty and General Administration; (2)
Distribution of Powers of the three branches of Government; (3) Office of the President; (4)
Executive Branch; (5) Constitutional Commissions; (6) National Government Budgeting; and (7)
Administrative Procedure. This books contain provisions on the oranization, powers and
general administration of the executive, legislative and judicial branches of government, the
organization and functions of the Constitutional Commissions and other constitutional bodies,
the rules on the national budget as well as guideline for the exercise by administrative agencies
of quasi-legislative and quasi-judicial powers. The Code covers both the internal administration
of government and the effects of the functions performed by administrative officials on private
individuals or parties outside government.

C. Purpose of Administrative proceedings

6. Judge Abraham D. Cana (complainant)

-v-
Roberto Gebusion (respondent)
A.M. No. P-98-1284
Promulgation: March 20, 2000

FACTS:
A complaint filde by judge Abraham D.Cana of the RTC San Carlos City, charging
respondent Sheriff of the same court with violation of the Civil Service Law, the Firearms Law
and the Omnibus Election Code more specifically, respondent sheriff is accused of the
following:

1) Habitual drunkenness;

2) Misconduct ;

3) Going on indefinite leave of absence without prior approval of the immediate chief in
violation of existing Civil Service Law and Rules;

4) Conduct prejudicial to the best interest of the service;

5) Loafing or frequent or unauthorized absence during office hours (in connection with
his compulsive drinking habit);

6) Mental incapacity due to vicious (drinking) habit;

7) Being notoriously undesirable by

a) his habitual drunkenness which has become (worse) in the course of time,
which is of common and public knowledge;

b) hs picking needless quarrel with his co-employees when he is drunk;

c) by his not honoring his word:

- he tendered his irrevocable resignation in a letter dated Feb 16, 1996,

effective said date according to him in said letter but he did not actually resign;

- he requested in a letter dated August 05, 1996 addressed to the

undersigned complainant, to be allowed to complete 20 years of services as he told the
undersigned that he would retire upon having rendered 20 years of service to the government
to which the undersigned acceded but after having completed his 20 years of service, he did
not retire;

- In a letter, dated August 18, 1996 addressed to the undersigned

complainant, he requested to be allowed to reconstruct his life by giving him Christian blessing
to puck up his broken pieces and form into one Bebot Gebusion. The undersigned granted his
request by not pressing his administrative charge against him but he did not do what he
requested to be allowed to do, instead his drinking habit became [worse] so much so that his
health even deteriorated where he became very thin and emaciated as of this time;

- In a letter, dated November 27, 1995, written by respondent, with the

written conformity of his sister Remia and Rafaelita, he apologized for his having been drunk on
November 7, 1995. The undersigned pardoned him but he kept on repeating the shameful
habit again and again

- All under Sec. 46 (b), Civil Service Law

In addition, respondent is accused of carrying a cal .357 revolver without a license and
of threatening to kill complainant for having filed the above charges. Complainant prays that
respondent be placed under preventive suspension considering his violent nature and grave
danger he posed to the safety of other employees of the court, most of which was women.

After investigation the judge investigating the case recommended respondent

suspension from service for 6 months without pay after finding that the respondent is guilty of
all charges against him except those of grave threats, illegal possession of firearms, andvioltion
of the election gun ban. On the other hand, the Office of the Court Administrator, alothugh
concurring in the factual findings of the investigating judge, recommends that respondents be
dismissed from the service, with forfeiture of all retirement benefits and with prejudice to re-
employment in any branch of the government, including GOCC.

ISSUE:
Whether or not respondent should be dismissed from service
DECISION:
The Supreme Court dismissed the respondent from his services. The Supreme Court
takes the recommendation of the Court Administrator. On the grounds that on several
occasions, respondent went to work reeking of liquor. His drinking habit is, in fact, a matter of
public knowledge.
RATIO:
1) respondent failed to uphold the purpose of his job

2) the purpose of administrative proceeding is mainly to protect the public services

based on the time honored principle that a public office is a public trust.

3) All the stated circumstances lead the Supreme Court to conclude that because
respondent has a personal problem, he cannot discharge his duties with competence,
efficiency, and courtesy. While habitual drunkenness does not necessarily warrant dismissal
from service, we find that respondent has become, notoriously undesirable and that his
drinking problem has turned into a vicious habit which renders him physically and mentally
incapacitated to continue in his present position as a Sheriff. Not only has his habit hindred the
proper performance of his duties, it has also caused a strain in his relationship with his co-
employees.

4) Absence without leave for a prolonged period of time constitutes conduct prejudicial
to the best interest of public service and justifies the dismissal of an employee and the
forfeiture of benefits with prejudice to re-employment in the government.

5) At the grassroots of our judicial machinery, sheriffs and deputy sheriffs are
indispensably in close contact with the litigants, hence their conduct should be geared towards
maintaining the prestige and integrity of the court, for the image of a court of justice to the least
and lowest of its personnel; hence, it becomes the imperative sacred duty of each and
everyone in the court to maintain its good name and standing as a temple of justice.

D. Reason for growth of Administrative Agencies

7. Pangasinan Transport Co., Inc., (PANTRANCO) [petitioner]

-v-
Public Service Commission (PSC) [respondent]
G.R. No. 47065
Promulgation: June 26, 1940

FACTS:
Petitioner has been engaged or the past 20 years in the business of transporting
passengers in the Province of Pangasinan and Tarlac and, to a certain extent, in the province of
Nueva Ecija and Zambales, by means of motor vehicles commonly known as TPU buses, in
accordance with the terms and conditions of the certificates of public convenience issued in its
favor by the former Public Utility Commission. On August 26, 1939, the petitioenr filed with the
Public Service Commission an application for authorization to operate ten additional new
Brockway trucks, on the ground that they were needed to comply with the terms and
conditions of its existing certificates and as a result of the application of the eight hour labor
law. In the decision of September 26, 1939, granting the petitioners’ application for increase of
equipment.

Not being agreeable to the two new conditions thus incorporated in its existing
certificates, the petitioner filed on October 9, 1939 a motion for reconsideration which was
denied by the PSC. Whereupon, on November 20, 1939, the present petition for a writ of
certiorari was instituted in this court praying that an order be issued directing the secretary of
the PSC to certify forthwith to this court the records of all proceedings, that this court, after
hearing, render a decision declaring section 1 of Commonwealth Act No. 454 unconstitutional
and void; that, if this court should be of the opinion that section 1 of Commonwealth Act No.
454 is constitution, a decision be rendered declaring that the provisions thereof are not
applicable to valid and subsisting certificates issued prior to June 8, 1939. Stated in the
language of the petitioner, it is contended;

1) That the legislative powers granted to the PSC by section 1 of Commonwealth Act
No. 454, without limitation, guide or rule except the unfettered discretion and judgment of the
Commission, constitute a complete ad total abdication by the legislature of its functions in the
premises, and for that reason, the Act, in so far as those powers are concerned, is
unconstitutional and void

2)That even if it be assumed that section 1 of Commonwealth Act No. 454, is valid
delegation of legislative powers, the PSC has exceeded its authority because: (a) The Act
applies only to future certificates and not to valid and subsisting certificates issued prior to
June 8, 1939, when said act took effect and (b) the Act, as applied by the Commission, violates
constitutional guarantees.
ISSUE:
Whether or not Commonwealth Act No. 454 is constitutional?
DECISION:
The Supreme Court remanded back to the Public Service Commission the case for
further proceedings.
RATIO:
1) C.A. No. 146 and 454 are not only the organic acts of the Public Service Commission
but are “a part of the charter of every utility company operation or seeking to operate a
franchise” in the Philippines. The business of a common carrier holds such a peculiar relation
to the public interest that there is superinduced upon it the right of public regulation. When
private property is “affected with public interest it ceased to be juris privati only.” When,
therefore, one devotes his property to a use in which the public has an interest, he, in effect
grants to the public an interest in that use, and must submit to be controlled by the public for
the common good, to the extent of the interest he has thus created. he may withdraw his grant
by discounting the use, but so long as he maintains the use he must submit to control. This
right of regulation is so far beyond the question that it is well settled that the power of the state
to exercise legislative control over public utilities may be exercised through boards of
commissioner.

2) The right of the state to regulate public utilities is founded upon police power, and
statutes for the control and regulation of utilities are a legitimate exercise thereof, for the
protection of the public as well as of the utilities themselves.

3) Statutes enacted for the regulation of public utilities being a proper exercise by the
state of its police power, are applicable not only to those public utilities coming into existence
after its passage, but likewise to those already established and in operation.

4) The reason of the growth of administrative agencies is based on the ground of the
growing complexity of modern life, the multiplication of the subject governmental regulation
and the increased difficulty of administering the laws.
 II. POWER AND FUNCTIONS OF ADMINISTRATIVE AGENCIES

Exception to Non-Delegation of Powers

8. Rolando Sigre (petitioner)

-v-
Court of Appeals and Lilia Y. Gonzales (respondents)
G.R. No. 109568
Promulgation: August 8, 2002
&
Land Bank of the Philippines (petitioner)
-v-
Court of Appeals and Lilia Y. Gonzales (respondents)
G.R. No. 113454
Promulgation: August 8, 2002

FACTS:
In a not-so-novel attempt to challenge the long-settled constitutionality of P.D. No. 27,
private respondent, as co-administratix of the Estate of Matias Yusay, filed with the Court of
Appeals, a petitioner for prohibition and mandamus seeking to prohibit the Land Bank of the
Philippines from accepting the leasehold rentals from Ernesto Sigre (predecessor of petitioner
Rolando Sigre), and for LBP to turn over to private respondent the rentals previously remitted
to it by Sigre. It appears that Ernesto Sigre was a private respondent tenant in an irrigated rice
land located in Barangay Naga, Pototan, Iloilo. He was previously paying private respondent a
lease rental of 16 cavans per crop to 23 cavans per agricultural year. In the agricultural year of
1991-1992, Sigre stopped paying his rentals to private respondent and instead, remitted it to
the LBP pursuant to the Department of Agrarian Reforms Memorandum Circular No. 6, Series
of 1978, which set the guidelines in the payment of lease rental/partial payment by farmer-
beneficiaries under the land transfer program of P.D. No. 207

The pertinent provision of the DAR Memorandum Circular No.6 reads:

A. Where the value of the land has already been established

“Payment of lease rentals to landowners covered by OLT shall terminate on the date the value
of the land is established. Thereafter, the tenant-farmers shall pay their lease rentals/
amortizations to the LBP or its authorized agents; provided that in case where the value of the
land is established during the month the crop is to be harvested, the cut-off period shall take
effect on the next harvest season.”
According to private respondent, she had no notice that the DAR had already fixed the
3-year production prior to October 1972 at an average of 119.32 cavans per hectare, and the
value of the land was pegged at P13,405.67. Thus petitioner filed before the Court of Appeals
assailing, not only the validity of the Memorandum Circular No. 6, but also the constitutionality
of P.D. No. 27.

The appellate court, in its decision dated March 22, 1993, gave due course to the
petition and declared the M.C. No. 6 null and void. the LBP was directed to return to private
respondent the lease rentals paid by Sigre, while Sigre was directed to pay the rentals directly
to private respondent. In declaring M.C. No. 6 as null and void, the appellate court ruled that
there is nothing in P.D. 27 which sanctions the contested provision of the circular; that said
circular is in conflict with P.D. 816 which provides that payments of lease rentals shall be made
to the landowner, and the latter, being a statute, must prevail over the circular; that P.D. No 27
is unconstitutional in laying down the formula for determining the cost of the land as it sets
limitation on the judicial prerogative of determining the cost of the land as it sets limitations on
the judicial prerogative of determining just compensation; and that is no longer applicable with
the enactment of R.A. No. 6657.
ISSUES:
Whether or not the appellate court is correct in declaring the M.C. Null and void on
ground of its unconstitutionality
DECISION:
The Supreme Court nullified and set aside the decision of the Court of Appeals and
granted the petitions of Rolando Sigre and the Land Bank of the Philippines.
RATIO:
1) The power of subordinate legislation allows administrative bodies to implement the
broad policies laid down in a statute by “filling in” the details. All that is required is that the
regulation should be germane to the objects and purposes of the law; that e regulation be not
in contradiction to but in conformity with the standards prescribed by the law.

2) The rationale for the Circular was, in fact, explicitly recognized by the appellate court
when it stated that the main purpose of the circular is to make certain that the lease rental
payments of the tenant-farmer are applied to his amortizations on the purchase price of the
land. The circular was meant to remedy the situation where the tenant-farmers lease rentals to
landowner were not credited in his favor against the determined purchase price of the land,
thus making him perpetual obligor for said purchase price.