(Compilation) (4) Power of Administrative Agencies

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4. POWER OF ADMINISTRATIVE AGENCIES

Abakada v. Ermita
G.R. No. 168056 – September 1, 2005 G.R. No. 168207
J. Austria-Martinez  Sen. Pimentel et.al. filed a petition for certiorari likewise assailing said sections of RA
9337.
Topic: Organization of Administrative Agencies o The so-called stand-by authority of the President to increase the VAT rate to
Doctrine: The legislature may delegate to executive officers or bodies the power to determine 12% is unconstitutional as it amounts to undue delegation of legislative
certain facts or conditions, or the happening of contingencies, on which the operation of a power.
statute is, by its terms, made to depend, but the legislature must prescribe sufficient standard,  The President has ample powers to cause, influence or create the
policies or limitations on their authority. conditions provided by the law to bring about either or both the
conditions precedent.
G.R. No. 168056 o The VAT rate increase to 12% imposes an unfair and additional tax burden on
Petitioners: Abakada Guro Party List officers Samson S. Alcantara and Ed Vincent S. Albano the people.
Respondents: Exec. Sec. Eduardo Ermita, DOF Sec. Cesar Purisima, Commissioner of
Internal Revenue Guillermo Parayno, Jr. G.R. No. 168463
 Rep. Escudero filed a petition for certiorari assailing the same sections of RA 9337 as it
Case Summary: Petitioners assail the constitutionality of certain provisions of RA 9337 allegedly constitutes an undue delegation of legislative power, in violation of Art. VI,
amending the National Internal Revenue Code. They contend that the common proviso in Sec. 28(2) of the Consti.
the law constitutes undue delegation of legislative power to the President. The SC held that o They find it bizarre and revolting that the imposition of the 12% rate would be
there was no undue delegation because the legislature merely delegated the ascertainment subject to the whim of the Secretary of Finance, an unelected bureaucrat,
of facts upon which the operation of the law is contingent. contrary to the principle of no taxation without representation.
 The Sec. of Finance is not mandated to give a favorable
recommendation and he may not even give his recommendation.
Facts:  There are no guiding standards provided in the law on what basis and
 This is a consolidation of 5 cases assailing the constitutionality of RA 9337 (an act as to how he will make this recommendation.
amending specific sections of the National Internal Revenue Code of 1997 (NIRC)),  Nonetheless, any recommendation by the Sec. of Finance can be
which took effect on July 1, 2005. easily brushed aside by the President since the former is a mere alter
 Only the arguments relevant to the topic are listed below: ego of the latter. Ultimately, it is the President who decides whether
G.R. No. 168056 to impose the increased tax rate or not.
 Petitioners filed a petition for prohibition questioning the constitutionality of Secs. 4, 5
and 6 of RA 9337, amending Secs. 106, 107 and 108, respectively of the NIRC.  Respondents’ Comment (thru OSG): RA 9339 enjoys the presumption of constitutionality
o Sec. 4 imposes a 10% VAT on sale of goods and properties and petitioners failed to cast doubt on its validity.
o Sec. 5 imposes a 10% VAT on importation of goods o Relying on Tolentino v. Sec of Finance, respondents contend that the law is
o Sec. 6 imposes a 10% VAT on sale of services and use or lease of properties. complete and leaves no discretion to the President but to increase the rate to
o These provisions contain a uniform proviso authorizing the President, upon 12% once any of the two conditions provided therein arise.
recommendation of the Secretary of Finance , to raise the VAT rate to 12%,
effective Jan. 1, 2006, after any of the ff. conditions have been satisfied: Issues + Held:
(i) VAT collection as a percentage of GDP of the previous year exceeds 1. W/N Sections 4, 5 and 6 of RA 9337 violate the ff provisions of the Consti:
4 a) Art. VI, Sec. 28(1)1 - NO
2 %; or b) Art. VI, Sec. 28(2)2 - NO
5
(ii) National govt deficit as a percentage of GDP of the previous year exceeds No Undue Delegation of Legislative Power
1 o The SC briefly discussed the principle of non-delegation of powers.
1 %. o The principle of separation of powers states that each of the three branches of govt
2 has exclusive cognizance of and is supreme in matters falling within its own
 Petitioners argue that the law is unconstitutional, as it constitutes abandonment by constitutionally allocated sphere.
Congress of its exclusive authority to fix the rate of taxes under Art. VI, Sec. 28(2) of  Corollary to this is the principle of non-delegation of powers: “what
the 1987 Consti. has been delegated cannot be delegated” ( potestas delegate non
 They contend that the VAT is a tax levied on the sale, barter or exchange of goods and delegari potest).
properties as well as on the sale or exchange of services, which cannot be included within o Art. VI, Sec. 1 Consti provides that Legislative power shall be vested in the
the purview of tariffs under the exempted delegation as the latter refers to customs duties, Congress.
tolls or tribute payable upon merchandise to the government and usually imposed on  The powers which Congress is prohibited from delegating are those
goods or merchandise imported or exported. which are strictly, or inherently and exclusively, legislative.
o They further contend that delegating to the President the legislative power to
tax is contrary to republicanism. 1
o Accountability, responsibility and transparency should dictate the actions of SECTION 28. (1) The rule of taxation shall be uniform and equitable. The Congress shall
Congress and they should not pass to the President the decision to impose evolve a progressive system of taxation.
taxes.
o The law effectively nullified the President’s power of control, which includes 2
SECTION 28. (2) The Congress may, by law, authorize the President to fix within specified
the authority to set aside and nullify the acts of her subordinates like the limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and
Secretary of Finance, by mandating the fixing of the tax rate by the President export quotas, tonnage and wharfage dues, and other duties or imposts within the framework
upon the recommendation of the Sec. of Finance. of the national development program of the Government.
Admin (4. Power of Administrative Agencies)
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 Purely legislative power = the authority to make a complete law The 12% Increase VAT Rate Does Not Impose an Unfair and Unnecessary Additional Tax
(complete as to the time when it shall take effect and as to whom Burden
it shall be applicable) and to determine the expediency of its o The provisions of the law are clear. It does not provide for a return to the 10%
enactment. = cannot be delegated! rate nor does it empower the President to so revert if, after the rate is increased
o To hold a statute unconstitutional as a delegation of legislative power, it must to 12%, the VAT collection goes below the 2 4/5 of the GDP of the previous
appear that the power involved is purely legislative in nature. year or that the national government deficit as a percentage of GDP of the
o Nonetheless, there are exceptions to the general rule of non-delegation: [P E T previous year does not exceed 1½%.
A L]  Therefore, no statutory construction or interpretation is needed.
 Delegation of tariff powers to the President (Art. VI , Sec. 28(2)) Neither can conditions or limitations be introduced where none is
 Delegation of emergency powers to the President (Art. VI, Sec. provided for.
23(2))  Petitioners’ argument is, at best, purely speculative.
 Delegation to the people at large o The wisdom behind the rates is a policy matter not the concern of the Court.
 Delegation to local governments  The Court will not dawdle on the purpose of Congress or the
 Delegation to administrative bodies. executive policy, given that it is not for the judiciary to pass upon
o Delegation is valid only if the law: questions of wisdom, justice or expediency of legislation.
(a) is complete in itself, settling forth therein the policy to be executed,
carried out, or implemented by the delegate Ruling: Petitions DISMISSED.
(b) fixes a standard – the limits of which are sufficiently determinate and
determinable – to which the delegate must conform in the performance of
his functions. Concurring and Dissenting Opinion (J. Puno):
 Sufficient standard = defines the legislative policy, marks  The issue on Secs. 4 to 6 being violative of the principle of non-delegation of legislative
its limits, maps out its boundaries and specifies the public power is not ripe, and cannot hurdle the judicial review requirement of ripeness.
agency to apply it. It indicates the circumstances under o The power of judicial review is limited to the review of actual cases and
which the legislative command is to be effected. controversies.
o People v. Vera: The legislature, as it is its duty to do, determines that, under o Rationale: To prevent the courts, thru premature adjudication, from handling
given circumstances, certain executive or administrative action is to be taken, abstract disagreements.
and that, under other circumstances, different or no action at all is to be taken. o These sections deal with the satisfaction of certain fact-based conditions, and it
What is thus left to the administrative official is not the legislative is not even certain whether these conditions will happen. The Court cannot
determination of what public policy demands, but simply the ascertainment of rule based on hypothetical facts.
what the facts of the case require to be done according to the terms of the law
by which he is governed. Concurring and Dissenting Opinion (J. Sandoval-Gutierrez):
o Edu v. Ericta: The legislative does not abdicate its functions when it describes  RA 9337, in granting to the President the stand-by authority to increase the VAT rate,
what job must be done, who is to do it, and what is the scope of his authority. the legislature abdicated its power by delegating it to the President.
o Clearly, the legislature may delegate to executive officers or bodies the power  Judge Cooley: Where the sovereign power of the state has located the authority, there it
to determine certain facts or conditions, or the happening of contingencies, on must remain; and by the constitutional agency alone the laws must be made until the
which the operation of a statute is, by its terms, made to depend, but the Constitution itself is changed.
legislature must prescribe sufficient standard, policies or limitations on their  Exceptions to non-delegation of leg power: (1) delegation to local governments, (2)
authority. delegations allowed by the Consti, (3) delegations relating merely to administrative
 Rationale: Preliminary ascertainment of facts as basis for the implementations.
enactment of legislation is not of itself a legislative function, but is o Delegation of power to tax does not fall under any of the exceptions above.
simply ancillary to legislation.  It’s not delegating taxing power to local govt. It is delegation to the
o ITC, the common proviso is not a delegation of legislative power. President.
 It is simply a delegation of ascertainment of facts upon which  It is not allowed by the Consti “Tax rates” or “VAT rates” cannot be
enforcement and administration of the increase rate under the law is found in Art. VI, Sec. 28(2) enumeration. If the intent of the framers
contingent. is to permit such delegation, they should have inserted such terms.
 No discretion would be exercised by the President. The use of the Expressio unius est exclusio alterius.
word shall connotes a mandatory order. Its use in a statute denotes an  It does not relate merely to admin implementation of RA 9337. The
imperative obligation and is inconsistent with the idea of discretion two conditions appear to be definite standards but to J. Gutierrez’s
(ministerial duty!). mind, they are ineffectual and malleable. They give the President
 The Sec. of Finance is the alter ego of the President. He is his ample opportunity to exercise here authority in an arbitrary and
assistant and agent. He occupies a political position and holds office discretionary manner. The fulfillment of the conditions is entirely
in an advisory capacity. placed in her hands.
 He becomes the means or tool by which legislative policy
is determined and implemented, considering that he Concurring and Dissenting Opinion (J. Azcuna):
possesses all the facilities to gather data and  A scrutiny of the conditions shows that they are certain to happen.
information and has a much broader perspective to  There is here no abdication by Congress of its power to fix the tax rate since the rate
properly evaluate them. increase provided under the law, from 10% to 12%, is definite and certain to occur,
 His function is to gather and collate statistical data and effective January 1, 2006.
other pertinent information and verify if any of the two o All that the President will do is state which of the two conditions occurred and
conditions laid out by Congress is present. thereupon implement the rate increase.
o There is no undue delegation of legislative power but only of the discretion as Dissenting Opinion (J. Tinga):
to the execution of a law. This is constitutionally permissible.  He agrees that there was no delegation of legislative power but he said that the Congress
should be reprimanded for imperfect draftsmanship at least.

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 Much trouble would have been avoided had the provisos instead read: "that effective
January 1, 2006, the rate of value-added tax shall be raised to twelve percent (12%), after
any of the following conditions has been satisfied xxx." This, after all is the operative
effect of the provision as it stands.
 Although it is true that the Sec. of Finance can act on behalf of the President, to consider
him as an “agent” of the President is not the most suitable. Agency has a different legal
meaning.

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PELAEZ v. AUDITOR GENERAL o Subsequently, the mayors of several municipalities adversely affected by the
Power of Admin Agencies| December 24, 1965 | J. Concepcion aforementioned EOs intervened in the case.
Petitioner: EMMANUEL PELAEZ ISSUES:
Respondent: The Auditor General 1. Can the President create a municipality under RA 2370? NO.
o Since January 1, 1960, when RA. 2370 became effective, barrios may "not be created or
SUMMARY: The President, purporting to act pursuant to Section 68 of the Rev. Admin their boundaries altered nor their names changed" except by Act of Congress or of the
Code, issued several EOs creating 33 municipalities. Pelaez is assailing the EOs on the corresponding provincial board "upon petition of a majority of the voters in the areas
ground that the President has no authority to create municipalities. affected" and the "recommendation of the council of the municipality or municipalities in
which the proposed barrio is situated."
DOCTRINE: It is obvious, however, that, whereas the power to fix such common o Pelaez: If the President, under this new law, cannot even create a barrio, can he create a
boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipality which is composed of several barrios, since barrios are units of
municipalities, may partake of an administrative nature — involving, as it does, the municipalities?
adoption of means and ways to carry into effect the law creating said municipalities — the o Auditor General: Answers in the affirmative, upon the theory that a new municipality can
authority to create municipal corporations is essentially legislative in nature. In the be created without creating new barrios, such as, by placing old barrios under the
language of other courts, it is "strictly a legislative function" or "solely and exclusively the jurisdiction of the new municipality.
exercise of legislative power". As the Supreme Court of Washington has put it, "municipal o The Auditor General’s theory overlooks that the statutory denial of the presidential
corporations are purely the creatures of statutes." authority to create a new barrio implies a negation of the bigger power to create
municipalities, each of which consists of several barrios.
FACTS
o Sept. – Oct. 1964: The President, purporting to act pursuant to Section 68 3 of the Rev. 2. W/N Sec. 68 of the Rev. Admin Code constitutes an undue delegation of legislative
Admin Code, issued several EOs creating 33 municipalities. power? YES
o Pelaez, as Vice-President of the Philippines and as taxpayer, instituted the present special o The Auditor General alleges that the power of the President to create municipalities under
civil action against the Auditor General, to restrain him from passing in audit any Section 68 of the Revised Admin Code does not amount to an undue delegation of
expenditure of public funds in implementation of said executive orders and/or any legislative power, relying upon Municipality of Cardona vs. Municipality of Binangonan.
disbursement by said municipalities. o Such claim is untenable because the case involved not the creation of a new municipality ,
o He alleges that said executive orders are null and void because Section 68 has but a mere transfer of territory from an already existing municipality to another
been impliedly repealed by RA 2370 4 and constitutes an undue delegation of municipality likewise already existing.
legislative power. o While the power to fix a common boundary, in order to avoid or settle conflicts
o Auditor General: The action is premature and that not all proper parties (the officials of of jurisdiction between adjoining municipalities, may partake of
the new political subdivisions) have been impleaded. an administrative nature involving, as it does, the adoption of means and ways
to carry into effect the law creating said municipalities, the authority
to create municipal corporations is essentially legislative in nature.
3
"The (Governor-General) President of the Philippines may by executive order define the o In the language of other courts, it is "strictly a legislative function" or "solely
boundary, or boundaries, of any province, sub-province, municipality, [township] municipal and exclusively the exercise of legislative power"
district or other political subdivision, and increase or diminish the territory comprised therein, o Municipal corporations are purely the creatures of statutes.
may divide any province into one or more subprovinces, separate any political division other o Although Congress may delegate to another branch of the government the power to fill in
than a province, into such portions as may be required, merge any of such subdivisions or the details in the execution, said law must satisfy the completeness and sufficient
portions with another, name any new subdivision so created, and may change the seat of standards test.
government within any subdivision to such place therein as the public welfare may o Section 68 does not meet these well settled requirements. It does not enunciate
require: Provided, That the authorization of the (Philippine Legislature) Congress of the any policy to be carried out by the President. Neither does it give a standard
Philippines shall first be obtained whenever the boundary of any province or subprovince is to sufficiently precise.
be defined or any province is to be divided into one or more subprovinces. When action by the o Under the last clause of the first sentence of Section 68, the President "…may change the
(Governor-General) President of the Philippines in accordance herewith makes necessary a seat of the government within any subdivision to such place therein as the public welfare
change of the territory under the jurisdiction of any administrative officer or any judicial may require."
officer, the (Governor-General) President of the Philippines, with the recommendation and o The phrase "as the public welfare may require" qualifies, not the clauses
advice of the head of the Department having executive control of such officer, shall redistrict preceding the one just quoted, but only the place to which the seat of the
the territory of the several officers affected and assign such officers to the new districts so government may be transferred.
formed. o It is true that this Court had upheld "public welfare" and "public interest",
"Upon the changing of the limits of political divisions in pursuance of the foregoing authority, respectively, as sufficient standards for a valid delegation of the authority to
an equitable distribution of the funds, and obligations of the divisions thereby affected shall be execute the law. However, those cases involved grants
made in such manner as may be recommended by the (Insular Auditor) Auditor General and to administrative officers of powers related to the exercise of
approved by the (Governor-General) President of the Philippine their administrative functions, calling for the determination of questions of fact.
4
All barrios existing at the time of the passage of this Act shall come under the provisions  Such is not the nature of the powers dealt with in section 68. As
hereof. above indicated, the creation of municipalities,
Upon petition of a majority of the voters in the areas affected, a new barrio may be created or is not an administrative function, but one which is essentially
the name of an existing one may be changed by the provincial board of the province , upon and eminently legislative in character. The question whether or not
recommendation of the council of the municipality or municipalities in which the proposed, "public interest" demands the exercise of such power is not one of
barrio is situated. The recommendation of the municipal council shall be embodied in a fact. It is purely a legislative question or a political question
resolution approved by at least two-thirds of the entire membership of the said o If the validity of the delegation in Section 68 were upheld, there would no
council: Provided, however, That no new barrio may be created if its population is less than longer be any impediment to a grant of authority to the President to do anything
five hundred persons. which, in his opinion, is required by public welfare. Such grant of authority
Barrios shall not be created or their boundaries altered nor their names changed except under would be a virtual abdication of the powers of Congress in favor of the
the provisions of this Act or by Act of Congress. Executive.
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o It must be remembered that the power of control is denied by the Constitution to the consist of barrios, there is nothing in the statute that would preclude creation of new
Executive, insofar as local governments are concerned. With respect to the latter, the municipalities out of pre-existing barrios.
fundamental law permits him to wield no more authority than that of checking whether o It is not contrary, to the logic of local autonomy to be able to create larger
said local governments perform their duties as provided by statutory enactments. political units and unable to create smaller ones. Greater autonomy is to be
o He may not enact an ordinance which the municipal council has failed or imparted to the smaller of the two political units. The smaller the unit of local
refused to pass, even if it had thereby violated a duty imposed thereto by law, government, the lesser is the need for the national government's intervention in
although he may see to it that the corresponding provincial officials take its political affairs.
appropriate disciplinary action therefor. o Furthermore, for practical reasons, local autonomy cannot be given from the
o Neither may he veto, set aside or annul an ordinance passed by said council top downwards. The national government, in such a case, could still exercise
within the scope of its jurisdiction, no matter how patently unwise it may be. power over the supposedly autonomous unit, e.g., municipalities, by exercising
o He may not even suspend an elective official of a regular municipality or take it over the smaller units that comprise them, e.g., the barrios. A realistic
any disciplinary action against him, except on appeal from a decision of the program of decentralization therefore calls for autonomy from the bottom
corresponding provincial board. upwards, so that it is not surprising for Congress to deny the national
o If the President could create a municipality, he could, in effect, remove any of its government some power over barrios without denying it over municipalities.
officials, by creating a new municipality and including therein the barrio in which the
official concerned resides, for his office would thereby become vacant. Thus, by merely
brandishing the power to create a new municipality, without actually creating it, he could
compel local officials to submit to his dictation, thereby, in effect, exercising control over
them.
o Further, control does not even include the authority either to abolish an
executive department or bureaus, or to create a new one. As a consequence, the
alleged power of the President to create municipal corporations would
necessarily connote the exercise by him of an authority even greater than that of
control which he has over the executive departments, bureaus or offices.
o Instead of giving the President less power over local governments than that vested in him
over the executive departments, bureaus or offices, Section 68 reverses the process and
does the exact opposite, by conferring upon him more power over municipal corporations
than that which he has over said executive departments, bureaus or offices.
3. W/N all the proper parties (officers of the newly created municipalities) have been
impleaded in this case – NOT NECESSARY.
o The records do not show that the officers of any of said municipalities have been
appointed or elected and assumed office.
o At any rate, the Solicitor-General is the officer authorized by law "to act and represent the
Government of the Philippines.
4. W/N the present petition is premature – NO
o Auditor General alleges that he has not as yet acted on any of the EOs:.
o It is a matter of common, public knowledge, subject to judicial cognizance, that the
President has, for many years, issued EOs creating municipal corporations and that the
same have "been organized and in actual operation, thus indicating, without peradventure
of doubt, that the expenditures incidental thereto have been sanctioned, approved or
passed in audit by the General Auditing Office and its officials.
o There is no reason to believe, therefore, that a a different policy would be
adopted as regards the new municipalities involved.
DISPOSITIVE: Wherefore the Executive Orders in question are hereby declared null and
void Ab Initio and the respondent permanently restrained from passing in audit any
expenditure of public funds in implementation of said Executive Orders or any disbursement
by the municipalities above referred to.
J. Bengzon: Concurring and Dissenting
o EOs are null and void not because RA 2370 repealed Sec. 68 but because Art. 7, Sec.
10(1)5 of the Constitution repealed the latter.
o It is the evident decree of the Constitution, therefore, that the President shall
have no power of control over local governments. Accordingly, Congress
cannot by law grant him such power.
o The statutory prohibition on the President from creating a barrio does not warrant the
inference of statutory prohibition for creating a municipality. For although municipalities
5
The president shall have control of all the executive departments, bureaus, or offices,
exercise general supervision over all local governments as may be provided by law, and take
care that the laws be faithfully executed.

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Makati Stock Exchange vs. SEC ● Given this, SEC also has no legal authority to stifle free enterprise and
G.R. No. L-23004 – June 30, 1965 individual liberty. The legislature has specified the conditions under
C. J. Bengzon which an SE may legally obtain a permit. It is not for SEC to impose
others. If the existence of two competing exchanges jeopardizes public
Topic: Power of Administrative Agencies interest, let the Congress speak. But until otherwise directed by law, the
Petitioner: Makati Stock Exchange, Inc. (Makati SE) operation of exchanges should not be so regulated as to create a monopoly
Respondents: Securities and Exchange Commission (SEC), Manila Stock Exchange (Manila by preventing the establishment of other SEs. This would contravene:
SE) ○ Makati SE’s Constitutional right to equality before the law;
○ Their guaranteed civil liberty to pursue any lawful employment
or trade;
Summary: Petitioner Makati SE applied for permission to operate a stock exchange. SEC ○ The investor's right to choose where to buy/sell, and privilege to
denied it, unless Makati SE agreed not to list for trading on its board, securities that were select brokers to employ.
already listed in Manila SE. Makati SE objected, contending that SEC has no power to ● A licensing officer cannot deny license solely on the basis of what he
require such a condition, and that it is discriminatory. SEC claimed that it was allowed, as it believes is best for the economy of the country. This would constitute
was acting in the public interest. SC ruled in favor of Makati SE, holding that the SEC has exercise of undelegated legislative powers and discretion.
no power to issue rules and requirements other than those expressly granted by Congress, 2. W/N SEC public interest even calls for the prohibition of operation of two or more
and that in considering public interest, such a condition was not necessary for the protection exchanges – NO
of investors within the purview of the Securities Act. ● SEC argued in its resolution that a stock exchange is essentially
Doctrine: An administrative officer has only such powers as are expressly granted to him monopolistic. Double listing of a security divides the sellers and the
by statute, and those necessarily implied in the exercise thereof. buyers, destroying the essence of a stock exchange as a two-way auction
market for the securities, where all the buyers and sellers in one area
Facts: converge in one defined place, and the bidders compete to purchase the
● Petitioner Makati SE applied for permission to operate a stock exchange. SEC issued security at the lowest possible price and those seeking to sell it compete to
a resolution denying it, unless Makati SE agreed not to list for trading on its board, get the highest price therefor. AND YET, it later recalled the benefits to be
securities that were already listed in Manila SE. derived from the existence of 2+ exchanges, and the desirability of healthy
● Makati SE objected, contending that SEC has no power to require such a condition, competition in the market.
and that it is illegal, discriminatory and unjust. ● Even if this rule were beneficial to investors, it is doubted whether it is
○ Securities Act (CA 83, as amended): No stock exchange may do business necessary for their protection. CA 83’s purpose is to protect the investing
in the Philippines, unless it is previously registered with the SEC by filing public against fraudulent representations, false promises and worthless
a statement containing the info in Sec. 17 (see notes). ventures. It is hard to see how the rule helps prevent deceptive devices or
○ It is assumed that SEC may permit registration as long as Sec. 17 is unlawful practices.
complied with. ● SEC itself realizes that if there were 2+ exchanges, the same security may
● Meanwhile, SEC claimed that it was acting “in the public interest.” Makati SE, upon sell for more in one exchange and sell for less in the other, and there
challenging this requirement of SEC (rule against double listing) showed inability or would be variance in price of the same security, making brokerage rates
refusal to abide by its rules, which constitutes grounds for denying registration. On also differ. This only strengthens the objection to SEC’s resolution.
the legality of its rule, SEC’s argument is that: Difference in prices gives buyers alternative options, with the opportunity
a. It was approved by the Department Head before the War; to invest at lower expense; and sellers, to dispose at higher prices.
b. It is not in conflict with the provisions of the Securities Act. Consequently, for investors’ benefit, quality of listing should then be
● Manila SE, beneficiary of the disputed rule, also contended that SEC has the express encouraged, and other exchanges allowed to operate. If there was undue
power to suspend trading in a security, 6 so it should have the power to prohibit manipulation or unfair advantage in exchange trading, SEC should have
double listing as well. Lastly, it pointed out that when Makati SE presented its means, other than letting one exchange corner the market, to correct any
articles of incorporation to SEC, the latter issued an order certifying Makati SE’s abuses.
incorporation, and added that if Makati SE applied for registration, SEC would ● Furthermore, the law itself contemplates the operation of two or more
permit its establishment so long as the disputed condition is complied with. Makati exchanges. And as admitted by respondents, there were even 5 stock
SE did not appeal from that order, so it should be barred by res judicata. exchanges in Manila, when the Securities Act was approved, as dual
Issues + Held: listing was practiced then. So if the existence of more than one exchange
1. [TOPIC] W/N SEC is authorized by law to prohibit the establishment of were contrary to public interest, it is strange that the Congress, despite the
Makati SE by prescribing additional rules such as the double listing rule – NO many amendments, has not barred multiplicity of exchanges.
● Well-settled is the principle that an administrative officer has only such 3. W/N Makati SE is barred by res judicata – NO
powers as are expressly granted to him by statute, and those ● Why should Makati SE have appealed? It got the certificate of
necessarily implied in the exercise thereof. incorporation it wanted. The condition would only be relevant if it applied
● In the resolution now subject to review, SEC cites no provision expressly for registration as SE, and at the time it had not yet applied.
supporting its rule. It only suggests that the power is “necessary for the ● When Makati SE found that it could not operate with the condition, it
execution of the functions vested in it,” but it makes no explanation. The requested that it be dispensed with. Even if Makati SE may be held to have
approval of the Department, by itself, adds no weight in a judicial accepted the condition for having failed to appeal, it was still not
litigation; and the test is not whether the Act forbids SEC from imposing a precluded from afterwards contesting the validity of such, pursuant to Sec.
prohibition, but whether it empowers the SEC to prohibit. And according 17(a-1).
to many court precedents, the general power to “regulate” or “suspend,” Ruling: The license of the petition to operate a stock exchange is APPROVED without such
which SEC has, does not imply authority to prohibit. condition. Costs shall be paid by the Manila SE. So ordered.
Notes:
Sec. 17. Registration of Exchanges - (a) Any exchange may be registered with the
6
Sec. 28(a-3), CA 83. And if in its opinion the public interest so requires, summarily to Commission as a securities exchange under the terms and conditions hereinafter provided in
suspend trading in any registered security on any securities exchange for a period not this section, by filing a registration statement in such form as the Commission may prescribe,
exceeding ten days or, with the approval of the President, summarily to suspend all trading on containing the agreements, setting forth the information, and accompanied by the documents
any securities exchange for a period not exceeding ninety days. below specified:
PAGE 7
(1) An Agreement (which shall not be construed as a waiver of any constitutional Kilusang Bayan v. Dominguez7
right or any right to contest validity of any rule or regulation) to comply, and to G.R. No. 85439 & 91927 – January 13, 1992
enforce, so far as is within its powers, compliance by its members, with the J. Davide, Jr.
provisions of this Act, and any amendment thereto, and any rule or regulation made
or to be made thereunder; Topic: Power of Administrative Agencies
(2) Such data as to its organization, rules of procedure, and membership, and such Doctrine: An administrative officer has only such powers as are expressly granted to him and
other information as the Commission may by rules and regulations require as being those necessarily implied in the exercise thereof. These powers should not be extended by
necessary or appropriate in the public interest or for the protection of investors; implication beyond what may to necessary for their just and reasonable execution.
(3) Copies of its constitution, articles of incorporation with all amendments thereto,
and of its existing by-laws or rules or instruments corresponding thereto, whatever G.R. No. 85439
the name, which are hereinafter collectively referred to as the "rules of the Petitioners: Kilusang Bayan sa Baglilingkod ng mga Magtitinda ng Bagong Pamilihang
exchange"; and Bayan ng Muntinlupa, Inc., et al.
(4) An agreement to furnish to the Commission copies of any amendments to the Respondents: Sec. of Agriculture Carlos G. Dominguez, Regional Director Rogelio
rules of the exchange forthwith upon their adoption. Madriaga, et al.
(b) No registration of an exchange shall be granted or remain in force unless the rules thereof
include provision for the expulsion, suspension, or disciplining of a member for conduct or G.R. No. 91927
proceeding inconsistent with just and equitable principles of fair trade, and declare that the Petitioners: Ignacio R. Bunye, et al.
willful violation of any provision of this Act or any rule or regulation thereunder shall be Respondents: Sandiganbayan, Obmudsman, Special Prosecutor Roger C. Berbano
considered conduct or proceeding inconsistent with just and equitable principles of fair trade.
(c) Nothing in this Act shall be construed to prevent any exchange from adopting and Case Summary: The Municipality of Muntinlupa entered into a contract with Kilusang
enforcing any rule not inconsistent with this Act and with the rules and regulations thereunder, Bayan for the management and operation of the new Muntinlupa Public Market. The new
or with any other law. mayor Bunye directed a review of the contract and issued a resolution rescinding the same.
(d) If it appears to the Commission that the exchange applying for registration is so organized Bunye announced that the Municipality will be taking over the management and operation
as to be able to comply with the provisions of this Act and the rules and regulations of the public market from Kilusang Bayan. Because of this, Kilusang Bayan filed a
thereunder, and that the rules of the exchange are just and adequate to insure fair dealing and complaint for breach of contract and specific performance with damages. Subsequently, the
to protect investors, the Commission shall cause such exchange to be registered as a securities Secretary of Agriculture issued an Order, by virtue of its regulatory and supervisory
exchange. powers, creating a Management Committee which will assume the management of
(e) Within thirty days after the filing of the application, the Commission shall enter an order Kilusang Bayan, disbanding its current officers, and ordering it to turn over all assets,
either granting or, after appropriate notice and opportunity for hearing, denying registration as properties, and records to the Management Committee. The Court held that the Secretary
a securities exchange, unless the exchange applying for registration shall withdraw its acted with GAD in issuing said order because the regulatory and supervisory powers
application or shall consent to the Commission's deferring action on its application for a stated granted to him does not include the power to remove the directors or officers of a
period after the date of filing. The filing with the Commission of an application for registration cooperative.
by an exchange shall be deemed to have taken place upon the receipt thereof. Amendments to
an application may be made upon such terms as the Commission may prescribe. Facts:
(f) Upon the registration of a securities exchange pursuant to the provision of this Act, it shall Background
pay a registration fee of one thousand pesos.  September 1985: The Municipal Government of Muntinlupa through Mayor Santiago
(g) An exchange may, upon appropriate application in accordance with the rules and Carlos, Jr. entered into a contract with Kilusang Bayan, a service cooperative composed
regulations of the Commission and upon such terms as the Commission may deem necessary of vendors, for the latter’s management and operation of the new Muntinlupa Public
for the protection of investors, withdraw its registration. Market for a period of 25 years, renewable for the same period for a monthly
consideration of P35K to be increased by 10% each year for the first 5 years.
 Petitioner Ignacio Bunye assumed office as the new mayor and directed a review of the
contract with Kilusang Bayan for having a virtually 50-year term contrary to the
provision of Sec. 143, par. 3 of BP 337 and for having a “patently inequitable rental”.
o Commission on Audit and Metro Manila Commission recommended the
rescission thereof.
 Bunye and the Municipal Council approved Resolution 45 abrogating the contract. They,
along with the Philippine Constabulary, announced to the public market that the
Municipality was taking over the management and operation thereof and the stallholders
should pay market fees to the Municipality instead to Kilusang Bayan.
 Kilusang Bayan filed a complaint for breach of contract and specific performance with
damages in RTC Makati for the illegal takeover of the public market in excess of Mayor
Bunye’s alleged authority, constituting breach of contract and duty as a public official.
o The writ of preliminary injunction was denied but Kilusang Bayan still resisted
the takeover.
 August 1988: Amado Perez filed with the Ombudsman a letter-complaint charging Bunye
et al. with oppression, harassment, abuse of authority, and violation of the Anti-Graft and
Corrupt Practices Act.  Bunye Case
G.R. No. 85439 [Kilusang Bayan Case]
 October 1988: Respondents Madriaga and Coronado, accompanied by Mayor Bunye and
heavily armed men, allegedly through force, violence, and intimidation, forcibly broken
7
There are 2 consolidated cases but the only relevant case for Admin is the Kilusang Bayan
Case.
PAGE 8
open the doors of Kilusang Bayan’s office to serve the Order of respondent Secretary of o (a) act directly whenever a specific function is entrusted by law or regulation to
Agriculture [SOA]: a subordinate;
o “…it is ordered that the Department of Agriculture in the exercise of its o (b) direct the performance of duty; restrain the commission of acts;
regulatory and supervisory powers under Sec. 8 of PD 175, as amended, and o (c) review, approve, reverse or modify acts and decisions of subordinate
Sec. 4 of EO 113, take over the management of Kilusang Bayan…” officials or units;
 According to Kilusang Bayan, such Order was not written on the stationary of the o (d) determine priorities in the execution of plans and programs; and (e)
Department, does not bear its seal, and is a mere photocopy. prescribe standards, guidelines, plans and programs.
 Kilusang Bayan filed the instant petition alleging GADALEJ 8 on the part of SOA. They  Specifically, administrative supervision is limited to the authority of the department or its
prayed that the respondents be ordered to refrain, cease and desist from enforcing the equivalent to:
questioned Order. o (1) generally oversee the operations of such agencies and insure that they are
 This petition questions the validity of the SOA Order which ordered managed effectively, efficiently and economically but without interference with
o (1) the takeover of DOA of the management of the public market from day-to-day activities;
Kilusang Bayan pursuant to its regulatory and supervisory powers, o (2) require the submission of reports and cause the conduct of management
o (2) the creation of a Management Committee which shall assume the audit, performance evaluation and inspection to determine compliance with
management of the market, policies, standards and guidelines of the department;
o (3) the disbandment of the Kilusang Bayan Board of Directors, and o (3) take such action as may be necessary for the proper performance of official
o (4) the turnover of all assets, properties, and records of Kilusang Bayan to the functions, including rectification of violations, abuses and other forms of mal-
Management committee. administration;
o (4) review and pass upon budget proposals of such agencies but may not
G.R. No. 91927 [Bunye Case] = NOT relevant increase or add to them.
 From the letter-complaint, Special Prosecutor Onos promulgated a Resolution finding the  The power to summarily disband the board of directors may not be inferred from any of
evidence on hand sufficient to establish a prima facie case against Bunye et al. and the foregoing as both PD 175 and the by-laws of Kilusang Bayan explicitly mandate the
recommended the filing of the Information before the Sandiganbayan. manner by which directors and officers are to be removed.
 Bunye et al. moved for reconsideration of the above Resolution  Denied.  Even assuming that such authority to supervise and regulate grants the SOA to disband
 Information against them was submitted to the Ombudsman. The Ombudsman referred the board of directors and remove the officers of Kilusang Bayan, the due process
the records and Information to Judge de la Llana “for further preliminary investigation.” requirement of a hearing was not satisfied.
Eventually, Informations for violation of Sec. 3(e) of the Anti-Graft and Corrupt
Practices Act were filed against them. ISSUE 2: W/N petitioner officers of Kilusang Bayan should be restored to their positions –
 Bunye et al. were served arrest warrants issued by the Sandiganbayan. NO
 They filed before the Sandiganbayan an Omnibus Motion to Remand to the Office of the  Their terms expired in 1989, thereby rendering their prayer for reinstatement moot and
Ombudsman; to Defer Arraignment and to Suspend Proceedings  Denied. academic.
 They filed a motion to order a preliminary investigation on the basis of new, material and  Moreover, elections were already held in 1990 and 1991 and the affairs of Kilusang
substantive allegations  Denied. Bayan are presently being managed by a new board of directors duly elected in
 Bunye et al. now claim in this petition that respondent Sandiganbayan acted with accordance with their by-laws.
GADALEJ in denying their right to preliminary investigation.
Bunye Case [NOT IMPORTANT]
ISSUES ISSUE 3: W/N respondent Sandiganbayan committed GAD – NO
Kilusang Bayan Case  The right of an accused to a preliminary investigation is not a constitutional right but
ISSUE 1: W/N the Order of the Secretary of Agriculture is valid – NO merely a statutory right. If not waived, absence thereof may amount to a denial to due
 Regulation 34 of Letter of Implementation 23 (implementing PD 175) provides the process. However, the lack thereof is not a ground to quash or dismiss a complaint or
procedure for the removal of directors or officers of cooperatives: information, much less affect the court’s jurisdiction.
o “An elected officer, director or committee member may be removed by a vote  ITC, petitioners Bunye et al. were not denied the right to preliminary investigation.
of majority of the members entitled to vote at an annual or special general  They base their claim on the alleged failure of the Special Prosecutor to consider their
assembly. The person involved shall have an opportunity to be heard.” counter-affidavits before preliminary investigation.
 A substantially identical provision is found in Sec. 17, Art. III of Kilusang Bayan’s by-  This claim is negated by the fact that in the Order of Special Prosecutor Onos, there was
laws: ample discussion on the defenses raised by Bunye et al. in their counter-affidavits.
o “Any elected director or committee member may be removed from office for  Due process does not require that the accused actually file his counter-affidavits before
cause by a majority vote of the members in good standing present at the annual the preliminary investigation is deemed completed. All that is required is that he be given
or special general assembly called for the purpose after having been given the the opportunity to submit such if he is so minded.
opportunity to be heard at the assembly.”  As to the claim of lack of preliminary investigation prior to the filing of the Amended
 There is then an established procedure for the removal of directors and officers of Information, the prosecution may amend the information without leave of court before
cooperatives. ITC, the procedure was not followed. arraignment, and such does not prejudice the accused.
 Respondent SOA himself exercised the power to remove the directors and officers of  There is no rule or law requiring the Tanodbayan to conduct another preliminary
Kilusang Bayan even though such power is lodged only on the members of Kilusang investigation of a case under review by it. On the contrary, under PD 911, in relation to
Bayan through a vote. Rule 12, Admin Order No. VII, the Tanodbayan may, upon review, reverse the findings
 The authority to supervise and regulate all cooperatives granted him by Sec. 8 of PD 175 of the investigator and thereafter "where he finds a prima facie case, to cause the filing of
does not give him the right to remove directors and officers of cooperatives. an information in court against the respondent, based on the same sworn statements or
 An administrative officer has only such powers as are expressly granted to him and those evidence submitted, without the necessity of conducting another preliminary
necessarily implied in the exercise thereof. These powers should not be extended by investigation."
implication beyond what may to necessary for their just and reasonable execution.
 Supervision and control include only the authority to: RULING:
 The Kilusang Bayan petition is granted, declaring null and void the Order of the
8
Secretary of Agriculture; but denying the prayer for reinstatement for being moot
Non verbatim. and academic.
PAGE 9
 The Bunye petition is dismissed for lack of merit. Jaworski v. PAGCOR and SAGE
G.R. No. 144463 – 14 January 2004
Ynares-Snatiago, J.
Topic: Power of Administrative Agencies
Doctrine: The grant of franchise is a special privilege that constitutes a right and a duty to be
performed by the grantee. The special privilege and franchises it receives are subject to the
laws of the State and the limitations of its charter. . . . While PAGCOR is allowed under its
charter to enter into operators and/or management contracts, it is not allowed under the same
charter to relinquish or share its franchise. PAGCOR cannot delegate its power in view of the
legal principle of delegate potestas delegate non protest (what has been delegated cannot be
further delegated).
Petitioners: Senator Robert S. Jaworski

Respondents: Philippine Amusement and Gaming Corporation and Sports And Games
Entertainment Corporation
Case Summary: Petitioner assails the Grant of Authority and Agreement for the Operation
of Sports Betting and Internet Gaming which respondent PAGCOR granted to respondent
SAGE. Such Grant allowed SAGE to operate and maintain Sports Betting Stations in
PAGCOR’s casino locations, and Internet Gaming facilities to service local and
international bettors. The Court ruled that such Grant went beyond the legislative franchise
granted to PAGCOR. A legislative franchise is governed by the conditions Congress set
forth for it; thus, while PAGCOR is allowed under its charter to enter into operator’s and/or
management contracts, it is not allowed under the same charter to relinquish or share its
franchise to another entity such as SAGE. Delegata pteostas delegare non potest; what has
been delegated cannot be further delegated.
Facts:
· Respondent PAGCOR is a GOCC established under PD No. 1869.
o Section 1 states the policy of the State to “centralise and integrate all
games of chance not heretofore authorized by existing franchises or
permitted by law . . . to establish and operate club and casinos . . .
including games of chance, which ay be allowed by law within the
territorial jurisdiction of the Philippines . . .”
o Section 10 details the nature and term of the franchise, subject to certain
terms and conditions.
· In 1998, the board of PAGCOR approved the Grant of Authority and Agreement for
the Operation of Sports Betting and Internet Gaming.
o This granted SAGE the authority to operate and maintain Sports Betting
stations in PAGCOR casinos as well as Internet Gaming facilities for local
and international bettors.
o This is subject to the satisfaction of PAGCOR that appropriate safeguards
and procedures are established to ensure the integrity and fairness of the
games.
· Pursuant to the above Grant, SAGE conducted gambling operations on the Internet
on a trial-run basis.
o It made pre-paid cards and redemption of winnings available at various
Bingo Bonanza outlets.
[ARGUMENTS OF PETITIONER]
· Petitioner filed the instant petition praying for the nullification of the grant of
authority by PAGCOR to SAGE.
o His standing is based on being a member of the Senate and as Chairman of
the Senate Committee on Games, Amusement, and Sports.
o [1] Petitioner argues that PAGCOR committed GADALEJ in issuing the
Grant, as PD 1869 does not authorize PAGCOR to operate gambling on
the internet.

PAGE 10
o [2] Petitioner argues that the decree “could not have possibly o PAGCOR cannot delegate its power in view of the legal principle of
contemplated internet gambling since at the time of its enactment . . . the delegata potestas delegata non potest (what has been delegated cannot be
internet was yet to be invented. further delegated).
o [3] Petitioner also argues that the internet transcends the territorial o Lim v. Pacquing: “since ADC has no franchise from Congress to operate
jurisdiction of the Philippines, contravening the limitation in PAGCOR’s jai-alai, it may not so operate even if it has license or permit from the City
franchise. Mayor to operate the jai-alai in the City of Manila.
▪ PAGCOR is only allowed to conduct gambling activities or ▪ In the same vein, SAGE has to obtain a separate legislative
games of chance on “land or water within the territorial franchise and not “ride on” PAGCOR’s franchise if it were to
jurisdiction” of the Philippines. legally operate online internet gambling.
o [4] Lastly, petitioner argues that internet gambling does not fall under any
of the categories of authorized gambling activities under PD No. 1869 9. [PROCEDURAL]
▪ Internet gambling are not contemplated by the provision as the 1. Whether petitioner has standing — YES, due to the legal questions herein having
law refers to a physical structure in real-space. serious implications on public interest.
[ARGUMENTS OF RESPONDENT] • Ordinarily, a member of Congress can only challenge the validity of an official act
· [1] Respondents first assail the standing of petitioner to file the instant petition as a of any department of the government by showing that the challenged act affects or
concerned citizen or as a member of the Senate. impairs his rights and prerogatives as a legislator.
o Respondent argues that petitioner is not a real party-in-interest and as such o However, the Court has in numerous occasions brushed aside such
does not have the requisite personal and substantial interest to assail the procedural technicalities when a case involves an issue of utmost
Grant. importance, or one of overreaching significance to society.
· [2] Respondent also argues that the instant petition should be dismissed due to the 2. Whether the petition for certiorari and prohibition filed directly before the Supreme
failure to observe the hierarchy of courts. Court was proper — NO, BUT the Court observes that the averments in the
o The instant petition was filed under Sec. 1, Rule 65 of the Rules of Civil complaint shows that the petition is actually that of Prohibition under Sec. 2 of Rule
Procedure10. 65, which is another remedy sought by petitioner
o However, respondent argues that PAGCOR is not exercising any of the • Well-settled is the rule that the averments in the complaint, and not the
acts contemplated by the Rule. nomenclature given by the parties, determines the nature of the action.
o While the petition alleges GADALEJ on the part of PAGCOR, petitioner
Issues + Held: actually seeks to prevent the enforcement of the GRANT.
[MAIN] • Even if the present action cannot be treated as petition for prohibition, the
1. Whether PD No. 1869 authorizes PAGCOR to contract any part of its franchise transcendental importance of the issues involved warrants the bending of procedural
to SAGE by authorizing the latter to operate internet gambling — NO, as rules.
legislative franchises—being in itself a delegation—cannot be further delegated.
• A legislative franchise cannot be exercised at will and pleasure but should be Ruling: The Court GRANTS the petition. The Grant executed by PAGCOR in favor of SAGE
reserved for public control and administration either by the government directly is NULL AND VOID.
or by public agents under certain conditions and regulations.
o It is a special privilege granted by the State to corporations.
o Congress prescribes the conditions on which the grant of franchise may be
made.
▪ Congress prescribes the manner of granting the franchise, to
whom granted, the mode of conducting business, the charter,
the quality of the service, and the duty of the grantee to the
public in exercising the franchise.
▪ The above is almost always defined in clear and unequivocal
language.
• In the instant case, PAGCOR acted beyond the limits of its authority when it passed
on or shared its franchise to SAGE.
o Del Mar case: PAGCOR has a valid franchise, but only by itself and not in
association with any other person or entity.
o The Grant given to SAGE gave it the privilege to actively participate,
partake, and share PAGCOR’s franchise to operate a gambling activity.
o However, the grant of franchise is a special privilege that constitutes a
right and a duty to be performed by the grantee.
▪ The special privilege and franchises it receives are subject to the
laws of the State and the limitations of its charter.
• While PAGCOR is allowed under its charter to enter into operators and/or
management contracts, it is not allowed under the same charter to relinquish or share
its franchise.
9
Section 10 grants PAGCOR the “right, privilege, and authority to operate and maintain
gamboling casinos, clubs, and other recreation or amusement places, sports gaming pools,
within the territorial jurisdiction of the Philippines.
10
Such remedy should be directed towards any tribunal, board, officer, or person whether
exercising judicial, quasi-judicial, or ministerial functions.
PAGE 11
RCPI v. NTC  There is no basis in law for the filing of Alegre’s complaint in the NTC.
G.R. No. 03237 – November 6, 1992 o EO 546 is not basis. It is couched in general terms and did not make any
J. Padilla substantial change to the jurisdiction of the NTC.
 There was no explicit grant of power to impose
Topic: Power of Administrative Agencies administrative fines on public service utilities, such as
Doctrine: The jurisdiction and powers of administrative agencies are limited to those telegraphic agencies, which failed to render adequate services to
expressly granted or necessarily implied from those granted in the legislation creating such customers.
agency. Any order without or beyond such jurisdiction is void and ineffective.  It did not expand the coverage of the NTC’s supervisory and
regulatory power.
Petitioner: Radio Communications of the Philippines, Inc. (“RCPI”)  The applicable law is still the Santiago ruling:
Respondents: National Telecommunications Commission (“NTC”) and Juan A. Alegre o The BOC did not have the power to impose administrative fines on public
services rendering deficient service to customers.
Case Summary: Alegre’s wife sent two telegrams through RCPI, however, they never o Thus, its successor (NTC) cannot give itself such power in the absence of
reached their destinations. Thus, Alegre filed a complaint with the NTC against RCPI for legislation.
poor service. As a result, NTC imposed an administrative fine of Php 1,000 on RCPI. RCPI  Indeed, a subsequent case (RCPI vs. BOC) modified the Santiago ruling by adding
filed a petition for review alleging that NTC did not have jurisdiction to impose fines an instance when BOC (now NTC) could impose a fine:
because it could only fix rates, and its power of control and supervision over public o BOC could impose fines if the public service utility violated or failed
communication utilities did not include the power to impose fines. The SC agreed with to comply with terms and conditions of any certificate, order, decision
RCPI. (See doctrine) or regulation of the BOC.
o This is not the same as a fine imposed due to a private individual’s
Facts: complaint.
 March 17, 1989 – Jimena (wife of respondent Alegre) sent two RUSH telegrams  It was already previously ruled in Globe Wireless Ltd. v. PSC
through RCPI to her siblings about the death of Manong Poling and his interment. that a private individual’s complaint regarding services could
Both telegrams did not reach their destinations (Bohol and Ilocos Norte). not be a ground to impose fines:
 Alegre filed a letter-complaint with NTC against RCPI for poor service, with a  A private individual complained because the company
request for the imposition of the appropriate sanction. failed to deliver his telegram to Spain. SC ruled that
o RCPI moved to dismiss on the grounds that Alegre was not the real party PSC (now NTC) had nothing to do with the subject
in interest (it was his wife), NTC had no jurisdiction and the case matter of that complaint due to its limited jurisdiction.
violated their right to due process.  Furthermore, the company operated under a legislative
 NTC Ruling – In favor of Alegre franchise, so there were no PSC orders, decisions or
o Alegre had legal interest in the case being the husband of the sender of the regulations to be violated.
telegrams.  Given all of this, the NTC had no jurisdiction over Alegre’s complaint.
o NTC has jurisdiction. Its authority to hear and decide this case stems o The jurisdiction and powers of administrative agencies are limited to those
from its power of control and supervision over the operation of public expressly granted or necessarily implied from those granted in the
communication utilities. legislation creating such body. Any order without or beyond such
o RCPI is administratively liable for deficient and inadequate service; fined jurisdiction is void and ineffective
Php 1,000.
 RCPI filed a petition for review citing the ff: Ruling:
o Note: RCPI used laws and jurisprudence that pertained to the Public NTC decision REVERSED and SET ASIDE without prejudice to the filing by the aggrieved
Service Commission (“PSC”) and Board of Communications (“BOC”). party of the proper action in the proper forum.
Before the agency involved here was called NTC, it was BOC, and before
BOC, it was PSC. (PSC  BOC  NTC)
o Sec. 19(a), CA 146 – limits jurisdiction of PSC to the fixing of rates.
o RCPI v. Francisco Santiago – BOC’s only power is to fix rates. It cannot
sanction a radio company for negligence or misfeasance. Even if it
supervises to insure adequate public service, it cannot fine a company.
 In response to RCPI, the OSG and NTC claimed that:
o Jurisprudence cited was no longer applicable, as they were superseded by
EO 546.
o NTC’s power to impose fines was incidental to its power to regulate
public service utilities and to supervise telecommunications facilities, as
defined in Sec. 15, EO 54611.
o Furthermore, regulatory administrative agencies necessarily impose
sanctions.
Issue + Held: W/N NTC has the jurisdiction to administratively impose fines on a
telegraph company which fails to render adequate service to a customer – NO
11
Sec. 15, EO 546. Functions of the Commission. The Commission shall exercise the ff.
functions:
b. Establish, prescribe and regulate the areas of operation of particular operators of
the public service communications;
h. Supervise and inspect the operation of radio stations and telecommunications
facilities.
PAGE 12
Matienzo v. Abellera 3. W/N BOT has the power to legalize, at this time, clandestine and unlawful
G.R. L45839 – June 1, 1988 taxicab operations under Sec 1, PD 101? YES
J. Gutierrez Jr.  Board of Transpo: in view of the fixed policy of the state enshrined in PD101, the
Board may continue to grant to “colorum” operators the benefits of legalization
Topic: Power of Administrative Agencies despite the lapse of 6 months
Doctrine: In determining whether a board/commission has certain power, the authority given  Indeed, a reading of Sec 1, PD101 shows a grant of powers to the BOT to issue
shall be liberally construed in the light of the purposes for which it was created, and that which provisional permits without the alleged time limitation. Nothing suggests the
is incidentally necessary to a full implementation of the legislative intent should be upheld as expiration of the powers 6 months after the promulgation of the law.
being germane to the law. o The cited section only declares when the period of moratorium suspending
the relentless drive to eliminate illegal operators shall end. No impediment
Petitioners: Rufino Matienzo, Godofredo Espiritu, Dioscorro Franco and La Suerte for BOT to issue permits/certificates for the purpose of PD.
Transportation Corp  In determining whether a board/commission has certain power, the authority given
Respondents: Hon. Leopoldo Abbelera (Acting Chairman of the Board of Transpo), shall be liberally construed in the light of the purposes for which it was created, and
Godofredo Asuncion (Member), Arturo Dela Cruz, MS Transpo Co., New Familia Transpo that which is incidentally necessary to a full implementation of the legislative intent
Co, Roberto Mojares should be upheld as being germane to the law.
 Anent the petitioners’ reliance on the BOT Rules and Regulations implementing PD
Case Summary: Respondents operate “colorum/kabit” taxicab units. They filed their 101 and Memo Circ 76-25, BOT has declared that “in line with its duty to
petition for legalization with the Board of Transportation pursuant to PD 101 that seeks to rationalize the transport industry, the Board shall, from time to time, re-study the
eradicate the unlawful trade of clandestine operators by legitimizing them. The petitioners public need for public utilities in any area in the PH for the purpose of re-evaluating
however oppose this, arguing that the power of BOT ceases 6 months after the policies.
promulgation of the PD (Sec 4). The SC favored the respondents ruling that there is nothing o BOT is not supposed to ‘tie its hands’ on its issued Memo Orders should
in Sec 1 that sets an expiration of the BOT powers to issue special/provisional permits. PUBLIC INTEREST demand otherwise.
BOT is not supposed to ‘tie its hands’ on its issued Memo Orders should PUBLIC  Acceptance of the respondents’ applications appears to be within the discretion of
INTEREST demand otherwise and to effect the intent of the law. BOT. Where JD of BOT is settled, the court enjoins the exercise thereof only when
there is fraud, abuse of discretion or error of law. It is only after the administrative
action’s completion or finality can judicial review be done.
Facts:
 The parties are all authorized taxicab operators in Metro Manila. Respondents, Ruling: Petition is DISMISSED. Questioned orders of BOT are AFFIRMED.
however, operate “colorum” or “kabit” taxicab units.
 Feb 1977: respondents filed their petitions with the Board of Transportation for the
legalization of their unauthorized “excess” taxicab units citing PD No. 101 “to
eradicate the harmful and unlawful trade of clandestine operators by allowing them
to become legitimate operators” (Sec 1)
 Board granted the applicants provisional authority to operate the excess taxicab units
pending application.
 Petitioners oppose these applications and seek to restrain the grant of provisional
alleging that BOT acted without JD in taking cognizance of the petitions.
o PD 101 vests the BOT the power to grant special permits of limited term
to replace them into legitimate and responsible operators. HOWEVER!
Sec 4 says, 6 months after the promulgation of the decree (Jan 1973), there
shall be total elimination of all clandestine & unlawful operators.
 It was already 1977 when the respondents applied, hence the
power of the BOT has already lapsed and become functus
officio.
o Citing PD 101, LOI 379 and BOT MC 76-25(A), in summary (relevant to
this case):
 Only applications for special permits for “kabit” operators filed
before July 1973 shall be accepted and processed
 Every provisional authority shall be cancelled immediately and
no provisional authority thereafter be issued
Issues + Held:
2. W/N12 BOT can grant provisional permits to operate despite the ban under LOI
379 ? Moot
 Effectivity of provisional permits issued to respondents was expressly limited to
June 1977 as evidenced by the BOT orders granting the same.
 Memo Circ 77-4 implementing par 6 of LOI 379: after June 30, 1977, all provisional
authorities are deemed cancelled even if the hearings on the main application have
not been terminated.
12
Ordering immediate cancellation of all provisional authorities issued to taxicab operators
PAGE 13
Cooperative Development Authority v. DOLEFIL  Sec. 3 RA 693913 enumerates all the powers, functions and responsibilities of the
G.R. 137489 – May 29, 2002 CDA
J. De Leon, Jr. o It is a fundamental rule in statutory construction that when the law speaks
in clear and categorical language, there is no room for interpretation
Topic: Power of Administrative Agencies o From Sec. 3, it is clear that the authority of the CDA is to discharge purely
Doctrine: It is a fundamental rule in statutory construction that when the law speaks in clear administrative functions which consist of policy-making, registration,
and categorical language, there is no room for interpretation. Since the law which gave life to fiscal and technical assistance to cooperatives and implementation of
the CDA does not give it quasi-judicial authority, then the judiciary should breathe life to this. cooperative laws
 Nowhere in the law does it say they have the authority to
adjudicate cooperative disputes
Petitioners: Cooperative Development Authority  At most, Sec. 8 of the same law provides that “upon request of
Respondents: DOLEFIL Agrarian Reform Beneficiaries Cooperative Inc., Esmeraldo Dublin, either or both parties, the Authority shall mediate and conciliate
Alicia Salvarez, Edna Ureta et al. disputes with a cooperative or between cooperatives”  this is
however, further restricted: “That if no mediation or conciliation
Case Summary: Some members of the DARBCI filed a complaint to the CDA regarding succeeds within 3 months, a certificate of non-resolution shall
some of their directors. The CDA released certain orders in its supposed quasi-judicial be issued by the commission prior to the filing of appropriate
authority such as preventively suspending the directors and releasing “freeze orders”. The action before the proper courts.”
directors filed a petition for certiorari assailing the authority of the CDA, stating that the
CDA does not have the authority to decide upon intra-cooperative disputes. The Supreme 13
Section 3. Powers, Functions and Responsibilities. - The Authority shall have the
Court looked into the law which gave life to the CDA, and they stated that It is a following powers, functions and responsibilities:
fundamental rule in statutory construction that when the law speaks in clear and categorical (a) Formulate, adopt and implement integrated and comprehensive plans and programs on
language, there is no room for interpretation. Since the law which gave life to the CDA cooperative development consistent with the national policy on cooperatives and the overall
does not give it quasi-judicial authority, then the judiciary should breathe life to this. They socioeconomic development plans of the Government;
have certain specific administrative functions and powers, but none of which is quasi- (b) Develop and conduct management and training programs upon request of cooperatives that
judicial authority to take cognizance of intra-cooperative disputes. will provide members of cooperatives with the entrepreneurial capabilities, managerial
expertise, and technical skills required for the efficient operation of their cooperatives and
inculcate in them the true spirit of cooperativism and provide, when necessary, technical and
Facts: professional assistance to ensure the viability and growth of cooperatives with special concern
 In the later part of 1997: Dolefil Cooperative filed several complaints with the CDA for agrarian reform, fishery and economically depressed sectors;
regarding alleged mismanagement of funds of DARBCI by then incumbent officers (c) Support the voluntary organization and consensual development of activities that promote
and members of the board of directors of the cooperative  some of which were cooperative movements and provide assistance towards upgrading managerial and technical
named as the private respondents in this case expertise upon request of the cooperatives concerned;
o The CDA acted on the complaints; then CDA Executive Director Verzosa (d) Coordinate the efforts of the local government units and the private sector in promotion,
Jr. issued an Order directing the private respondents to file their answer organization, and development of cooperatives;
o The private respondents then filed a Petition for Certiorari in the RTC of (e) Register all cooperatives and their federations and unions, including their division, merger,
Polomolok South Cotabato against the CDA and its officers questioning consolidation, dissolution or liquidation. It shall also register the transfer of all or substantially
their jurisdiction all of their assets and liabilities and such other matters as may be required by the Authority;
 The Private Respondents contend that the CDA does not have (f) Require all cooperatives, their federations and unions to submit their annual financial
the jurisdiction or authority to issue “freeze orders” or statements, duly audited by certified public accountants, and general information sheets;
management committees that would run the affairs of the (g) Order the cancellation after due notice and hearing of the cooperative's certificate of
DARBCI registration for non-compliance with administrative requirements and in cases of voluntary
dissolution;
 February 24, 1998: CDA Chairman Medina Jr. issued another Order, this time (h) Assist cooperatives in arranging for financial and other forms of assistance under such
placing the private respondents under preventive suspension terms and conditions as are calculated to strengthen their viability and autonomy;
o The same Order paved the way for the newly-created management (i) Establish extension offices as may be necessary and financially viable to implement this
committee which was to assume office on March 10, 1998 Act. Initially, there shall be extension offices in the Cities of Dagupan, Manila, Naga, Iloilo,
 March 24, 1998: the RTC of Polomolok issued a TRO against the parties – the Order Cebu, Cagayan de Oro and Davao;
directed the parties to restore status quo ante (j) Impose and collect reasonable fees and charges in connection with the registration of
o The private respondents reassumed the management of DARBCI cooperatives;
o The CDA then question the TRO through a petition brought straight to the (k) Administer all grants and donations coursed through the Government for cooperative
CA development, without prejudice to the right of cooperatives to directly receive and administer
 CA: The CA issued a TRO enjoining the RTC of Polomolok from enforcing the such grants and donations upon agreement with the grantors and donors thereof;
TRO it released on March 24 (l) Formulate and adopt continuing policy initiatives consultation with the cooperative sector
o The CA thereafter declared that the CDA Orders previously released such through public hearing;
as the preventive suspension and the freeze orders were null and void – no (m) Adopt rules and regulations for the conduct of its internal operations;
legal force or effect (n) Submit an annual report to the President and Congress on the state of the cooperative
o The CDA was also ordered to cease and desist from taking any further movement; and
proceedings (o) Exercise such other functions as may be necessary to implement the provisions of
 CDA claims: cooperative laws and, in the performance thereof, the Authority may summarily punish for
o The CDA claims that they are vested with quasi-judicial authority to direct contempt any person guilty of misconduct in the presence of the Authority which
adjudicate cooperative disputes in view of its powers, functions and seriously interrupts any hearing or inquiry with a fine of not more than Five hundred pesos
responsibilities under Sec. 3, RA 6939 (P500.00) or imprisonment of not more than ten (10) days, or both. Acts constituting indirect
contempt as defined under Rule 71 of the Rules of Court shall be punished in accordance with
Issues + Held: the said Rule.
4. W/N the CDA has quasi-judicial authority over disputes of cooperatives? – NO
PAGE 14
 As an administrative agency, the CDA has only such powers as Laguna Lake Development Authority v. CA
are expressly granted to it by law G.R. 110120– March 16, 1994
 The SC further bolsters its point by adding some quoted parts of the deliberations of J. Romero
both chambers of Congress prior to the enactment of RA 6939
o Mr. Aquino: “So, is the sponsor telling us that the adjudication will have Topic: Power of Administrative Agencies
to be left ot he courts of law?”
 Mr. Romualdo: “To the courts, Mr. Speaker.” Doctrine: While it is a fundamental rule that an administrative agency has only such powers
o Sen. Aquino: “… conceptually, we do not like the agency to have quasi- as are expressly granted to it by law, it is likewise a settled rule that an administrative agency
judicial powers. And, we are afraid that if we empower the agency to has also such powers as are necessarily implied in the exercise of its express powers.
conduct inquiries, studies, hearings and investigations, it might interfere
in the autonomous character of cooperatives. So, I am sorry Mr.
President, we don’t accept the amendment.”  This was in reply to the Petitioner: Laguna Lake Development Authority
President wanting to add quasi-judicial powers to the CDA Respondents: Court of Appeals, Hon. Manuel Jn. Serapio (Presiding Judge, RTC, Branch
o The decision to withhold quasi-judicial powers from the CDA is in 127, Caloocan City), Hon. Macario A. Asistio, Jr. (City Mayor of Caloocan), and/or The City
accordance with the policy of the government of granting autonomy to Government Of Caloocan,
cooperatives
 It was noted that in the past 75 years, cooperativism failed to flourish in the Case Summary: LLDA filed a Cease and Desist Order [CaDO] against the Caloocan
Philippines Government for the halting of garbage disposal at the dumpsite in Brgy. Camarin,
Caloocan. The LLDA said that the dumping of garbage polluted the nearby waters in the
o Of the 23,000 cooperatives organized under PD 175, only 10 to 15 percent area. Caloocan now is arguing that the LLDA has no power to issue such CaDO, and that
remained operational while the others have become dormant the Caloocan government, as empowered by the Local Government Code, has the task and
o This failure was attributed to the stifling attitude of the government toward authority to protect the general welfare of its constituents. The Supreme Court ruled in
cooperatives favor of the LLDA. LLDA’s charter and its amendatory laws provide that it has the power
o Another factor is the smothering control that the government has put upon to “make orders” for the enforcement of its mandate of protecting Laguna Lake from
cooperatives pollution. Although it is not explicitly stated that it has the power to issue “Cease and
 After ascertaining the clear legislative intent underlying RA 6939, effect should be Desist Orders,” it is well-settled in Jurisprudence that an administrative agency has also
given to it by the judiciary such powers as are necessarily implied in the exercise of its express powers. [See doctrine]
o The SC holds and rules that the CDA is devoid of any quasi-judicial
authority to adjudicate intra-cooperative disputes  more particularly Facts:
disputes as regard the election of the members of the Board and officers  March 1991: The Task Force Camarin Dumpsite [TFCD] in Brgy. Camarin,
o The authority to conduct hearings or inquiries and the power to hold Caloocan City filed a letter-complaint with the Laguna Lake Development Authority
a person in contempt may be exercised by the CDA only in the [LLDA] seeking to stop the operation of an open garbage dumpsite in Tala Estate,
performance of its administrative functions Caloocan City due to its harmful effects on the health of the residents and the
possibility of pollution of the water.
Ruling: Petition for review on certiorari is hereby DENIED for lack of merit. The orders,  November 1991: The LLDA conducted an on-site investigation and found that the
resolutions, memoranda and any other acts rendered by the CDA are null and void for lack of City Government of Caloocan [Caloocan] was maintaining an open dumpsite at the
quasi-judicial authority of petitioner to adjudicate intra-cooperative disputes… Camarin area without (1) securing an Environmental Compliance Certificate [ECC]
from the DENR, and (2) clearance from the LLDA.
 The LLDA subsequently found that the water collected could considerably affect the
quality of the receiving waters [including Laguna Lake] due to the presence of
bacteria in the samples. Thus, the LLDA issued a Cease and Desist Order [CaDO]
ordering Caloocan and other relevant entities to completely halt, stop and desist
from dumping any form of garbage at the dumpsite.
o The LLDA also issued an Alias CaDO enjoining the dumping operations
at the Camarin area. With the assistance of the PNP, the Alias CaDO was
enforced by prohibiting the entry of all garbage dump trucks.
 Thus, Caloocan filed an action for the declaration of nullity of the CaDO with the
prayer for the issuance of a writ of injunction. Caloocan is arguing that it is the
agency, not the LLDA, that is empowered to promote the health and safety of the
Caloocan people, not the LLDA.
 RTC Proceedings: First, the RTC issued a TRO enjoining the LLDA from
enforcing the CaDO.
o LLDA filed a MTD citing the Pollution Control Law14, which stated that
the CaDO is only reviewable by the CA, not the RTC. RTC does not have
JD daw.
o RTC Ruling: The RTC denied the MTD, ultimately ruling in favor of
Caloocan. The RTC issued a Writ of Preliminary Injunction enjoining
LLDA from enforcing and implementing its CaDO.
 LLDA filed a petition for certiorari, prohibition and injunction directly with the SC,
but the SC referred it back to the CA. #ConcurrentJurisdiction
 CA Ruling: The CA ruled that (1) The RTC does not have JD on appeal to try, hear,
and decide the action for annulment of LLDA’s CaDO; (2) The LLDA has no power
14
RA3931, as amended by PD984
PAGE 15
or authority to issue the CaDO under its enabling law (RA4850, as amended by  The issuance, therefore, of the CaDO by the LLDA, as a practical matter of
PD813 & EO927-1983) procedure under the circumstances of the case, is a proper exercise of its power and
o The CA set aside LLDA’s CaDO. Caloocan on the other hand was ordered authority under its charter and its amendatory laws. Had the cease and desist order
to follow and adopt their proposed technical plan with respect to the issued by the LLDA been complied with by the City Government of Caloocan as it
dumping of its garbage. [NOT IMPT: CA actually asked them to draft did in the first instance, no further legal steps would have been necessary.
such plan before the Court rendered its decision.]
o Hence, unsatisfied, LLDA filed a petition for review on certiorari with the Ruling: WHEREFORE, the petition is GRANTED. The temporary restraining order issued by
SC the Court on July 19, 1993 enjoining the City Mayor of Caloocan and/or the City Government
of Caloocan from dumping their garbage at the Tala Estate, Barangay Camarin, Caloocan City
Issues + Held: is hereby made permanent.
5. Which of the agencies, Caloocan City government or the LLDA, can lawfully
exercise JD over the matter at hand [LLDA]
 Caloocan is arguing that it’s actually the one with the JD pursuant to the “general
welfare provision of the Local Government Code.” -> This is actually what the CA
adopted!
 On the other hand, LLDA is contending that its enabling law [RA4850, as amended
by E0927-1983] invested the agency with the power and authority to issue a cease
and desist order pursuant to Section 4 15, of EO927. Thus, the sub-issue is W/N the
LLDA under its Charter and amendatory laws have the authority to entertain the
complaint against the dumping of garbage in Bargy. Camarin.
 As a general rule, the adjudication of pollution cases generally pertains to the
Pollution Adjudication Board [PAB] of the DENR, except in cases where the
special law provides for another forum. In this case, RA4850 is that “special law”
specifically mandating the LLDA to carry out and make effective the development
and balanced growth of the Laguna Lake16.
 Thus, when the complaint was filed by the complainant before the LLDA, the
LLDA’s JD was validly invoked on the basis of its allegation that the open
dumpsite project of Caloocan in Brgy. Camarin was undertaken without a clearance
from the LLDA, as required RA4850, as amended.
6. W/N the LLDA has the power and authority to issue a “Cease and Desist
Order” under RA4850, as amended [YES]
 RA4850, as amended, authorizes the LLDA to “make, alter, or modify orders
requiring the discontinuance of pollution.”
 It is true that there was no “express” conferment of the power “to issue an ex-parte
CaDO” but it would be a mistake to draw therefrom the conclusion that there is a
denial of such power when the power “to make… orders” is expressly and clearly
bestowed upon the LLDA.
 While it is a fundamental rule that an administrative agency has only such powers as
are expressly granted to it by law, it is likewise a settled rule that an administrative
agency has also such powers as are necessarily implied in the exercise of its express
powers. In the exercise, therefore, of its express powers under its charter as a
regulatory and quasi-judicial body with respect to pollution cases in the Laguna
Lake region, the authority of the LLDA to issue a "cease and desist order" is
implied.
15
SECTION 4. Additional Powers and Functions. The Authority shall have the following
powers and functions:
xxx xxx xxx (c) Issue orders or decisions to compel compliance with the provisions of this
Executive Order and its implementing rules and regulations only after proper notice and
hearing.; (d) Make, alter or modify orders requiring the discontinuance of pollution specifying
the conditions and the time within which such discontinuance must be accomplished.; (e)
Issue, renew, or deny permits, under such conditions as it may determine to be reasonable, for
the prevention and abatement of pollution, for the discharge of sewage, industrial waste, or for
the installation or operation of sewage works and industrial disposal system or parts thereof. . .
.; (f) After due notice and hearing, the Authority may also revoke, suspend or modify any
permit issued under this Order whenever the same is necessary to prevent or abate pollution.;
(g) Deputize in writing or request assistance of appropriate government agencies or
instrumentalities for the purpose of enforcing this Executive Order and its implementing rules
and regulations and the orders and decisions of the Authority.
16
“…with due regard and adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and the prevention of undue
ecological disturbances, deterioration and pollution.”

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4. POWER OF ADMINISTRATIVE AGENCIES

Admin (4. Power of Administrative Agencies)

Admin (4. Power of Administrative Agencies)

Admin (4. Power of Administrative Agencies)

Petitioners: Senator Robert S. Jaworski

Admin (4. Power of Administrative Agencies)

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