G.R. No.

151908

August 12, 2003

SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION (PILTEL), petitioners, vs. NATIONAL TELECOMMUNICATIONS COMMISSION (NTC), respondent. x---------------------------------------------------------x G.R. No. 152063 August 12, 2003 GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC. (ISLACOM), petitioners, vs. COURT OF APPEALS (The Former 6th Division) and the NATIONAL TELECOMMUNICATIONS COMMISSION, respondents. YNARES-SANTIAGO, J.: Pursuant to its rule-making and regulatory powers, the National Telecommunications Commission (NTC) issued on June 16, 2000 Memorandum Circular No. 13-6-2000, promulgating rules and regulations on the billing of telecommunications services. Among its pertinent provisions are the following: (1) The billing statements shall be received by the subscriber of the telephone service not later than 30 days from the end of each billing cycle. In case the statement is received beyond this period, the subscriber shall have a specified grace period within which to pay the bill and the public telecommunications entity (PTEs) shall not be allowed to disconnect the service within the grace period. (2) There shall be no charge for calls that are diverted to a voice mailbox, voice prompt, recorded message or similar facility excluding the customer's own equipment. (3) PTEs shall verify the identification and address of each purchaser of prepaid SIM cards. Prepaid call cards and SIM cards shall be valid for at least 2 years from the date of first use. Holders of prepaid SIM cards shall be given 45 days from the date the prepaid SIM card is fully consumed but not beyond 2 years and 45 days from date of first use to replenish the SIM card, otherwise the SIM card shall be rendered invalid. The validity of an invalid SIM card, however, shall be installed upon request of the customer at no additional charge except the presentation of a valid prepaid call card. (4) Subscribers shall be updated of the remaining value of their cards before the start of every call using the cards. (5) The unit of billing for the cellular mobile telephone service whether postpaid or prepaid shall be reduced from 1 minute per pulse to 6 seconds per pulse. The authorized rates per minute shall thus be divided by 10. 1 The Memorandum Circular provided that it shall take effect 15 days after its publication in a newspaper of general circulation and three certified true copies thereof furnished the UP Law Center. It was published in the newspaper, The Philippine Star, on June 22, 2000. 2 Meanwhile, the provisions of the Memorandum Circular pertaining to the sale and use of prepaid cards and the unit of billing for cellular mobile telephone service took effect 90 days from the effectivity of the Memorandum Circular. On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone service (CMTS) operators which contained measures to minimize if not totally eliminate the incidence of stealing of cellular phone units. The Memorandum directed CMTS operators to: a. strictly comply with Section B(1) of MC 13-6-2000 requiring the presentation and verification of the identity and addresses of prepaid SIM card customers; b. require all your respective prepaid SIM cards dealers to comply with Section B(1) of MC 13-6-2000;

c. deny acceptance to your respective networks prepaid and/or postpaid customers using stolen cellphone units or cellphone units registered to somebody other than the applicant when properly informed of all information relative to the stolen cellphone units; d. share all necessary information of stolen cellphone units to all other CMTS operators in order to prevent the use of stolen cellphone units; and e. require all your existing prepaid SIM card customers to register and present valid identification cards.3 This was followed by another Memorandum dated October 6, 2000 addressed to all public telecommunications entities, which reads: This is to remind you that the validity of all prepaid cards sold on 07 October 2000 and beyond shall be valid for at least two (2) years from date of first use pursuant to MC 13-6-2000. In addition, all CMTS operators are reminded that all SIM packs used by subscribers of prepaid cards sold on 07 October 2000 and beyond shall be valid for at least two (2) years from date of first use. Also, the billing unit shall be on a six (6) seconds pulse effective 07 October 2000. For strict compliance.4 On October 20, 2000, petitioners Isla Communications Co., Inc. and Pilipino Telephone Corporation filed against the National Telecommunications Commission, Commissioner Joseph A. Santiago, Deputy Commissioner Aurelio M. Umali and Deputy Commissioner Nestor C. Dacanay, an action for declaration of nullity of NTC Memorandum Circular No. 13-6-2000 (the Billing Circular) and the NTC Memorandum dated October 6, 2000, with prayer for the issuance of a writ of preliminary injunction and temporary restraining order. The complaint was docketed as Civil Case No. Q-00-42221 at the Regional Trial Court of Quezon City, Branch 77.5 Petitioners Islacom and Piltel alleged, inter alia, that the NTC has no jurisdiction to regulate the sale of consumer goods such as the prepaid call cards since such jurisdiction belongs to the Department of Trade and Industry under the Consumer Act of the Philippines; that the Billing Circular is oppressive, confiscatory and violative of the constitutional prohibition against deprivation of property without due process of law; that the Circular will result in the impairment of the viability of the prepaid cellular service by unduly prolonging the validity and expiration of the prepaid SIM and call cards; and that the requirements of identification of prepaid card buyers and call balance announcement are unreasonable. Hence, they prayed that the Billing Circular be declared null and void ab initio. Soon thereafter, petitioners Globe Telecom, Inc and Smart Communications, Inc. filed a joint Motion for Leave to Intervene and to Admit Complaint-in-Intervention.6 This was granted by the trial court. On October 27, 2000, the trial court issued a temporary restraining order enjoining the NTC from implementing Memorandum Circular No. 13-6-2000 and the Memorandum dated October 6, 2000.7 In the meantime, respondent NTC and its co-defendants filed a motion to dismiss the case on the ground of petitioners' failure to exhaust administrative remedies. Subsequently, after hearing petitioners' application for preliminary injunction as well as respondent's motion to dismiss, the trial court issued on November 20, 2000 an Order, the dispositive portion of which reads: WHEREFORE, premises considered, the defendants' motion to dismiss is hereby denied for lack of merit. The plaintiffs' application for the issuance of a writ of preliminary injunction is hereby granted. Accordingly, the defendants are hereby enjoined from implementing NTC Memorandum Circular 13-6-2000 and the NTC Memorandum, dated October 6, 2000, pending the issuance and finality of the decision in this case. The plaintiffs and intervenors are, however, required to file a bond in the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00), Philippine currency.

SO ORDERED.8 Defendants filed a motion for reconsideration, which was denied in an Order dated February 1, 2001.9 Respondent NTC thus filed a special civil action for certiorari and prohibition with the Court of Appeals, which was docketed as CA-G.R. SP. No. 64274. On October 9, 2001, a decision was rendered, the decretal portion of which reads: WHEREFORE, premises considered, the instant petition for certiorari and prohibition is GRANTED, in that, the order of the court a quo denying the petitioner's motion to dismiss as well as the order of the court a quogranting the private respondents' prayer for a writ of preliminary injunction, and the writ of preliminary injunction issued thereby, are hereby ANNULLED and SET ASIDE. The private respondents' complaint and complaint-inintervention below are hereby DISMISSED, without prejudice to the referral of the private respondents' grievances and disputes on the assailed issuances of the NTC with the said agency. SO ORDERED.
10

5. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED IN ISSUING ITS QUESTIONED RULINGS IN THIS CASE BECAUSE GLOBE AND ISLA HAVE A CLEAR RIGHT TO AN INJUNCTION.13 The two petitions were consolidated in a Resolution dated February 17, 2003.14 On March 24, 2003, the petitions were given due course and the parties were required to submit their respective memoranda.15 We find merit in the petitions. Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers.16 The rules and regulations that administrative agencies promulgate, which are the product of a delegated legislative power to create new and additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency. It is required that the regulation be germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the standards prescribed by law. 17 They must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation to be valid. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by an administrative body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. In case of conflict between a statute and an administrative order, the former must prevail.18 Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its quasi-judicial or administrative adjudicatory power. This is the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions, the administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature.19 In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need not exhaust administrative remedies before going to court. This principle applies only where the act of the administrative agency concerned was performed pursuant to its quasijudicial function, and not when the assailed act pertained to its rule-making or quasi-legislative power. In Association of Philippine Coconut Dessicators v. Philippine Coconut Authority,20 it was held: The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application here. The resolution in question was issued by the PCA in the exercise of its rule- making or legislative power. However, only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion doctrine. Even assuming arguendo that the principle of exhaustion of administrative remedies apply in this case, the records reveal that petitioners sufficiently complied with this requirement. Even during the drafting and deliberation stages leading to the issuance of Memorandum Circular No. 13-6-2000, petitioners were able to register their protests to the proposed billing guidelines. They submitted their respective position papers setting forth their objections and submitting proposed schemes for the billing circular.21 After the same was issued, petitioners wrote successive letters dated July 3, 200022 and July 5, 2000,23 asking for the suspension and reconsideration of the so-called Billing Circular. These letters were not

Petitioners' motions for reconsideration were denied in a Resolution dated January 10, 2002 for lack of merit.11 Hence, the instant petition for review filed by Smart and Piltel, which was docketed as G.R. No. 151908, anchored on the following grounds: THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) AND NOT THE REGULAR COURTS HAS JURISDICTION OVER THE CASE. THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED IN HOLDING THAT THE PRIVATE RESPONDENTS FAILED TO EXHAUST AN AVAILABLE ADMINISTRATIVE REMEDY. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BILLING CIRCULAR ISSUED BY THE RESPONDENT NTC IS UNCONSTITUTIONAL AND CONTRARY TO LAW AND PUBLIC POLICY. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PRIVATE RESPONDENTS FAILED TO SHOW THEIR CLEAR POSITIVE RIGHT TO WARRANT THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION.12 Likewise, Globe and Islacom filed a petition for review, docketed as G.R. No. 152063, assigning the following errors: 1. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE DOCTRINES OF PRIMARY JURISDICTION AND EXHAUSTION OF ADMINISTRATIVE REMEDIES DO NOT APPLY SINCE THE INSTANT CASE IS FOR LEGAL NULLIFICATION (BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS OF LAW) OF A PURELY ADMINISTRATIVE REGULATION PROMULGATED BY AN AGENCY IN THE EXERCISE OF ITS RULE MAKING POWERS AND INVOLVES ONLY QUESTIONS OF LAW. 2. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE DOCTRINE ON EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY WHEN THE QUESTIONS RAISED ARE PURELY LEGAL QUESTIONS. 3. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY WHERE THE ADMINISTRATIVE ACTION IS COMPLETE AND EFFECTIVE, WHEN THERE IS NO OTHER REMEDY, AND THE PETITIONER STANDS TO SUFFER GRAVE AND IRREPARABLE INJURY. 4. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE PETITIONERS IN FACT EXHAUSTED ALL ADMINISTRATIVE REMEDIES AVAILABLE TO THEM.

acted upon until October 6, 2000, when respondent NTC issued the second assailed Memorandum implementing certain provisions of the Billing Circular. This was taken by petitioners as a clear denial of the requests contained in their previous letters, thus prompting them to seek judicial relief. In like manner, the doctrine of primary jurisdiction applies only where the administrative agency exercises its quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has been to refer the same to an administrative agency of special competence pursuant to the doctrine of primary jurisdiction. The courts will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the regulatory statute administered. The objective of the doctrine of primary jurisdiction is to guide a court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court. It applies where the claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative body; in such case, the judicial process is suspended pending referral of such issues to the administrative body for its view. 24 However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts.25 This is within the scope of judicial power, which includes the authority of the courts to determine in an appropriate action the validity of the acts of the political departments.26 Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.27 In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and its Memorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power. As such, petitioners were justified in invoking the judicial power of the Regional Trial Court to assail the constitutionality and validity of the said issuances. In Drilon v. Lim,28 it was held: We stress at the outset that the lower court had jurisdiction to consider the constitutionality of Section 187, this authority being embraced in the general definition of the judicial power to determine what are the valid and binding laws by the criterion of their conformity to the fundamental law. Specifically, B.P. 129 vests in the regional trial courts jurisdiction over all civil cases in which the subject of the litigation is incapable of pecuniary estimation, even as the accused in a criminal action has the right to question in his defense the constitutionality of a law he is charged with violating and of the proceedings taken against him, particularly as they contravene the Bill of Rights. Moreover, Article X, Section 5(2), of the Constitution vests in the Supreme Court appellate jurisdiction over final judgments and orders of lower courts in all cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.29 In their complaint before the Regional Trial Court, petitioners averred that the Circular contravened Civil Code provisions on sales and violated the constitutional prohibition against the deprivation of property without due process of law. These are within the competence of the trial judge. Contrary to the finding of the Court of Appeals, the issues raised in the complaint do not entail highly technical matters. Rather, what is required of the judge who will resolve this issue is a basic familiarity with the workings of the cellular telephone service, including prepaid SIM and call cards and this is judicially known to be within the knowledge of a good percentage of our

population and expertise in fundamental principles of civil law and the Constitution. Hence, the Regional Trial Court has jurisdiction to hear and decide Civil Case No. Q-00-42221. The Court of Appeals erred in setting aside the orders of the trial court and in dismissing the case. WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 64274 dated October 9, 2001 and its Resolution dated January 10, 2002 are REVERSED and SET ASIDE. The Order dated November 20, 2000 of the Regional Trial Court of Quezon City, Branch 77, in Civil Case No. Q-0042221 is REINSTATED. This case is REMANDED to the court a quo for continuation of the proceedings. SO ORDERED.

SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION (PILTEL), petitioners, vs. NATIONAL TELECOMMUNICATIONS COMMISSION (NTC), respondent. x---------------------------------------------------------x G.R. No. 152063 August 12, 2003 GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC. (ISLACOM), petitioners, vs. COURT OF APPEALS (The Former 6th Division) and the NATIONAL TELECOMMUNICATIONS COMMISSION, respondents. Facts: The National Telecommunications Commission (NTC) issued on June 16, 2000 Memorandum Circular No. 13-6-2000, promulgating rules and regulations on the billing of telecommunications services. The Memorandum Circular provided that it shall take effect 15 days after its publication in a newspaper of general circulation and three certified true copies thereof furnished the UP Law Center. It was published in the newspaper, The Philippine Star, on June 22, 2000. Meanwhile, the provisions of the Memorandum Circular pertaining to the sale and use of prepaid cards and the unit of billing for cellular mobile telephone service took effect 90 days from the effectivity of the Memorandum Circular. On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone service (CMTS) operators which contained measures to minimize if not totally eliminate the incidence of stealing of cellular phone units. This was followed by another Memorandum dated October 6, 2000 addressed to all public telecommunications entities. Isla Communications Co., Inc. and Pilipino Telephone Corporation filed against the National Telecommunications Commission, Commissioner Joseph A. Santiago, Deputy Commissioner Aurelio M. Umali and Deputy Commissioner Nestor C. Dacanay, an action for declaration of nullity of NTC Memorandum Circular No. 13-62000 (the Billing Circular) and the NTC Memorandum dated October 6, 2000, with prayer for the issuance of a writ of preliminary injunction and temporary restraining order. Petitioners alleged that NTC has no jurisdiction to regulate the sale of consumer goods such as the prepaid call cards since such jurisdiction belongs to the Department of Trade and Industry under the Consumer Act of the Philippines; that the Billing Circular is oppressive, confiscatory and violative of the constitutional prohibition against deprivation of property without due process of

law; that the Circular will result in the impairment of the viability of the prepaid cellular service by unduly prolonging the validity and expiration of the prepaid SIM and call cards; and that the requirements of identification of prepaid card buyers and call balance announcement are unreasonable. Hence, they prayed that the Billing Circular be declared null and void ab initio. Globe Telecom, Inc and Smart Communications, Inc. filed a joint Motion for Leave to Intervene and to Admit Complaint-inIntervention and this was granted by the trial court. Respondent NTC and its co-defendants filed a motion to dismiss the case on the ground of petitioners' failure to exhaust administrative remedies. Likewise, Globe and Islacom filed a petition for review, docketed as G.R. No. 152063, assigning the following errors. Thus, two petitions were consolidated in a Resolution dated February 17, 2003. Issues: 1. Whether NTC has a jurisdiction and not the regular courts over the case; and 2. Whether Billing Circular issued by NTC is unconstitutional and contrary to law and public policy. Held: Jurisdiction: NTC vs. RTC Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of nondelegability and separability of powers. The doctrine of primary jurisdiction applies only where the administrative agency exercises its quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has been to refer the same to an administrative agency of special competence pursuant to the doctrine of primary jurisdiction. The courts will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the regulatory statute administered. Hence, the Regional Trial Court has jurisdiction to hear and decide Civil Case No. Q-00-42221. The Court of Appeals erred in setting aside the orders of the trial court and in dismissing the case. Constitutionality of the Circular In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need not exhaust administrative remedies before going to court. This principle applies only where the act of the administrative agency concerned was performed pursuant to its quasi-judicial function, and not when the assailed act pertained to its rule-making or quasi-legislative power. However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts.

In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and its Memorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power. Ruling: Contrary to the finding of the Court of Appeals, the issues raised in the complaint do not entail highly technical matters. Rather, what is required of the judge who will resolve this issue is a basic familiarity with the workings of the cellular telephone service, including prepaid SIM and call cards and this is judicially known to be within the knowledge of a good percentage of our population and expertise in fundamental principles of civil law and the Constitution. Hence, the consolidated petitions are granted but the decision of the Court of Appeals on the civil cases are reversed and set aside. Thus, it is remanded to the court a quo for continuation of the proceedings.
STA. ROSA REALTY DEVELOPMENT CORPORATION, petitioner, vs. JUAN B. AMANTE, AMENDED DECISION AUSTRIA-MARTINEZ, J.: By virtue of the En Banc Resolution issued on January 13, 2004, the Court authorized the Special First Division to suspend the Rules so as to allow it to consider and resolve the second Motion for Reconsideration of respondents,[1] after the motion was heard on oral arguments on August 13, 2003. On July 9, 2004,[2] the Court resolved to submit for resolution the second Motion for Reconsideration in G.R. No. 112526together with G.R. No. 118338 in view of the Resolution of the Court dated January 15, 2001 issued in G.R. No. 118838,[3] consolidating the latter case with G.R. No. 112526, the issues therein being interrelated.[4] Hence, the herein Amended Decision. The factual background of the two cases is as follows: The Canlubang Estate in Laguna is a vast landholding previously titled in the name of the late Speaker and Chief Justice Jose Yulo, Sr. Within this estate are two parcels of land (hereinafter referred to as the subject property) covered by TCT Nos. 81949 and 84891 measuring 254.766 hectares and part of Barangay Casile, subsequently titled in the name of Sta. Rosa Realty Development Corporation (SRRDC), the majority stockholder of which is C.J. Yulo and Sons, Inc. The subject property was involved in civil suits and administrative proceedings that led to the filing of G.R. Nos. 112526 and 118838, thus:

Injunction Case Filed by Amante, et al.

On December 6, 1985, Amante, et al., who are the private respondents in G.R. No. 112526 and petitioners in G.R. No. 118838, instituted an action for injunction with damages in the Regional Trial Court of Laguna (Branch 24) against Luis Yulo, SRRDC, and several SRRDC security personnel, docketed as Civil Case No. B-2333. Amante, et al. alleged that: they are residents of Barangay Casile, Cabuyao, Laguna, which covers an area of around 300 hectares; in 1910, their ancestors started occupying the area, built their houses and planted fruit-bearing trees thereon, and since then, have been peacefully occupying the land; some time in June 3, 1985, SRRDCs security people illegally entered Bgy. Casile and fenced the area; SRRDCs men also entered the barangay on November 4, 1985, cut down the trees, burned their huts, and barred the lone jeepney from entering the Canlubang Sugar Estate; as a result of these acts, Amante, et al. were deprived of possession and cultivation of their lands. Thus, they claimed damages, sought the issuance of permanent injunction and proposed that a right of way be declared.[5] In their Answer, the defendants denied the allegations and disclaimed any control and supervision over its security personnel. Defendant SRRDC also alleged that as the real owner of the property, it was the one that suffered damages due to the encroachment on the property. [6]

A writ of preliminary injunction was issued by the trial court on August 17, 1987,[7] but this was subsequently dissolved by the Court of Appeals (CA) on April 22, 1988 in its decision in CA-G.R. SP No. 13908.[8] After trial on the merits, the trial court, on January 20, 1992, rendered a decision ordering Amante, et al. to vacate the property, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of the defendants and against the plaintiffs hereby dismissing the complaint and amended complaint. The plaintiffs are hereby ordered to vacate the parcels of land belonging to the defendants Luis Yulo and Sta. Rosa Realty. They are likewise enjoined from entering the subject parcels of land.

ISSUE OF OWNERSHIP IN THIS CASE FOR INJUNCTION WITH DAMAGES, THE SAME TO BE VENTILATED IN A SEPARATE ACTION, NOT IN THIS CASE BROUGHT TO PREVENT RESPONDENTS FROM COMMITTING FURTHER ACTS OF DISPOSSESSION [BACAR V. DEL ROSARIO ET AL., 171 SCRA 451 (1989)]. 4.1.2 SECOND, PETITIONERS ARE ENTITLED TO MORAL, EXEMPLARY DAMAGES AND ATTORNEYS FEES, INSTEAD OF MERE NOMINAL DAMAGES, CONSIDERING THAT THE COURT OF APPEALS FOUND RESPONDENTS TO HAVE UNLAWFULLY AND ILLEGALLY DISTURBED PETITIONERS PEACEFUL AND CONTINUOUS POSSESSION.[15]

Ejectment Cases Filed by SRRDC Although attorneys fees and expenses of litigation are recoverable in case of a clearly unfounded civil action against the plaintiff (Enervida vs. De la Torre, 55 SCRA 339), this Court resolves not to award attorneys fees etc. in favor of the defendants because the plaintiffs appear to have acted in good faith in filing the present civil action (Salao vs. Salao, 70 SCRA 65) and that it would not be just and equitable to award the same in the case at bar. (Liwanag vs. Court of Appeals, 121 SCRA 354) Accordingly, the other reliefs prayed for by the defendants are hereby dismissed. SO ORDERED.[9] Amante, et al. appealed the aforesaid decision to the CA, docketed as CAG.R. CV No. 38182. On June 28, 1994, the CA affirmed with modification the decision of the trial court in the injunction case. The dispositive portion of the appellate courts decision[10] reads as follows: WHEREFORE, the judgment herein appealed from is hereby AFFIRMED, with the modification that the defendants-appellees are hereby ordered, jointly and severally, to pay the plaintiffs-appellants nominal damages in the amount of P5,000.00 per plaintiff. No pronouncement as to costs. SO ORDERED.[11] Nominal damages were awarded by the CA because it found that SRRDC violated Amante, et al.s rights as possessors of the subject property. [12] Amante, et al. filed a motion for reconsideration thereof, pointing out the DARABs decision placing the property under compulsory acquisition, and the CA decision in CA-G.R. SP No. 27234, affirming the same.[13] The CA, however, denied the motion, with the modification that only SRRDC and the defendants-security guards should be held jointly and severally liable for the nominal damages awarded. It also made the clarification that the decision should not preempt any judgment or prejudice the right of any party in the agrarian reform case pending before the Supreme Court (G.R. No. 112526).[14] Thus, Amante, et al. filed on March 2, 1995, herein petition, docketed as G.R. No. 118838 on the following grounds: 4.1. THE COURT OF APPEALS DECIDED THE CASE CONTRARY TO LAW OR APPLICABLE SUPREME COURT DECISIONS BECAUSE: 4.1.1 FIRST, PETITIONERS MAY NOT BE LAWFULLY EVICTED FROM THEIR LANDHOLDINGS CONSIDERING THAT: -- (A) PETITIONERS ARE ALREADY THE REGISTERED OWNERS UNDER THE TORRENS SYSTEM OF THE PROPERTIES IN QUESTION SINCE FEBRUARY 26, 1992 BY VIRTUE OF RA 6657 OR THE COMPREHENSIVE AGRARIAN REFORM LAW; -- (B) THE COURT OF APPEALS HAS AFFIRMED THE REGIONAL TRIAL COURT OF LAGUNAS DISMISSAL OF THE EJECTMENT CASES FILED BY RESPONDENT SRRDC AGAINST PETITIONERS; AND -- (C) ASSUMING FOR THE SAKE OF ARGUMENT ONLY THAT PETITIONERS ARE NOT YET THE REGISTERED OWNERS OF THE PROPERTIES IN QUESTION, RESPONDENTS MAY NOT RAISE THE

Between October 1986 and August 1987, after the injunction case was filed by Amante, et al., SRRDC filed with the Municipal Trial Court (MTC) of Cabuyao, Laguna, several complaints for forcible entry with preliminary injunction and damages against Amante, et al., docketed asCivil Cases Nos. 250, 258, 260, 262 and 266. SRRDC alleged that some time in July 1987, they learned that Amante, et al., without their authority and through stealth and strategy, were clearing, cultivating and planting on the subject property; and that despite requests from SRRDCs coun sel, Amante, et al. refused to vacate the property, prompting them to file the ejectment cases.[16] Amante, et al. denied that SRRDC are the absolute owners of the property, stating that they have been in peaceful possession thereof, through their predecessors-in-interest, since 1910.[17] On May 24, 1991, the MTC-Cabuyao rendered its decision in favor of SRRDC. Amante, et al. were ordered to surrender possession and vacate the subject property. The decision was appealed to the Regional Trial Court of Bian, Laguna (Assisting Court). On February 18, 1992, the RTC dismissed the ejectment cases on the ground that the subject property is an agricultural land being tilled by Amante, et al., hence it is the Department of Agrarian Reform (DAR), which has jurisdiction over the dispute.[18] The RTCs dismissal of the complaints was brought to the CA via a petition for review, docketed as CA-G.R. SP No. 33382.[19] In turn, the CA dismissed the petition per its Decision dated January 17, 1995 on the ground that SRRDC failed to show any prior physical possession of the subject property that would have justified the filing of the ejectment cases.[20] Also, the CA did not sustain the RTCs finding that the subject properties are agricultural lands and Amante, et al. are tenant/farmers thereof, as the evidence on record does not support such finding. The parties did not file any motion for reconsideration from the Court of Appeals dismissal, hence, it became final and executory. [21]

Administrative Proceedings

While the injunction and ejectment cases were still in process, it appears that in August, 1989, the Municipal Agrarian Reform Office (MARO) issued a Notice of Coverage to SRRDC, informing petitioners that the property covered by TCT Nos. T-81949, T-84891 and T-92014 is scheduled for compulsory acquisition under the Comprehensive Agrarian Reform Program (CARP).[22] SRRDC filed its Protest and Objection with the MARO on the grounds that the area was not appropriate for agricultural purposes, as it was rugged in terrain with slopes of 18% and above, and that the occupants of the land were squatters, who were not entitled to any land as beneficiaries.[23] Thereafter, as narrated in the Decision of the Court dated October 12, 2001 in G.R. No. 112526, the following proceedings ensued: On August 29, 1989, the farmer beneficiaries together with the BARC chairman answered the protest and objection stating that the slope of the land is not 18% but only 5-10% and that the land is suitable and economically viable for agricultural purposes, as evidenced by the Certification of the Department of Agriculture, municipality of Cabuyao, Laguna. On September 8, 1989, MARO Belen dela Torre made a summary investigation report and forwarded the Compulsory Acquisition Folder Indorsement (CAFI) to the Provincial Agrarian Reform Officer (hereafter, PARO).

On September 21, 1989, PARO Durante Ubeda forwarded his endorsement of the compulsory acquisition to the Secretary of Agrarian Reform. On November 23, 1989, Acting Director Eduardo C. Visperas of the Bureau of Land Acquisition and Development, DAR forwarded two (2) Compulsory Acquisition Claim Folders covering the landholding of SRRDC, covered by TCT Nos. T-81949 and T-84891 to the President, Land Bank of the Philippines for further review and evaluation. On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor Santiago sent two (2) notices of acquisition to petitioner, stating that petitioners landholdings covered by TCT Nos. T-81949 and T-84891, containing an area of 188.2858 and 58.5800 hectares, valued at P4,417,735.65 and P1,220,229.93, respectively, had been placed under the Comprehensive Agrarian Reform Program. On February 6, 1990, petitioner SRRDC in two letters separately addressed to Secretary Florencio B. Abad and the Director, Bureau of Land Acquisition and Distribution, sent its formal protest, protesting not only the amount of compensation offered by DAR for the property but also the two (2) notices of acquisition. On March 17, 1990, Secretary Abad referred the case to the DARAB for summary proceedings to determine just compensation under R.A. No. 6657, Section 16. On March 23, 1990, the LBP returned the two (2) claim folders previously referred for review and evaluation to the Director of BLAD mentioning its inability to value the SRRDC landholding due to some deficiencies. On March 28, 1990, Executive Director Emmanuel S. Galvez wrote the Land Bank President Deogracias Vistan to forward the two (2) claim folders involving the property of SRRDC to the DARAB for it to conduct summary proceedings to determine the just compensation for the land. On April 6, 1990, petitioner sent a letter to the Land Bank of the Philippines stating that its property under the aforesaid land titles were exempt from CARP coverage because they had been classified as watershed area and were the subject of a pending petition for land conversion. On May 10, 1990, Director Narciso Villapando of BLAD turned over the two (2) claim folders (CACFs) to the Executive Director of t he DAR Adjudication Board for proper administrative valuation. Acting on the CACFs, on September 10, 1990, the Board promulgated a resolution asking the office of the Secretary of Agrarian Reform (DAR) to first resolve two (2) issues before it proceeds with the summary land valuation proceedings. The issues that need to be threshed out were as follows: (1) whether the subject parcels of land fall within the coverage of the Compulsory Acquisition Program of the CARP; and (2) whether the petition for land conversion of the parcels of land may be granted. On December 7, 1990, the Office of the Secretary, DAR, through the Undersecretary for Operations (Assistant Secretary for Luzon Operations) and the Regional Director of Region IV, submitted a report answering the two issues raised. According to them, firstly, by virtue of the issuance of the notice of coverage on August 11, 1989, and notice of acquisition on December 12, 1989, the property is covered under compulsory acquisition. Secondly, Administrative Order No. 1, Series of 1990, Section IV D also supports the DAR position on the coverage of the said property. During the consideration of the case by the Board, there was no pending petition for land conversion specifically concerning the parcels of land in question. On February 19, 1991, the Board sent a notice of hearing to all the parties interested, setting the hearing for the administrative valuation of the subject parcels of land on March 6, 1991. However, on February 22, 1991, Atty. Ma. Elena P. Hernandez-Cueva, counsel for SRRDC, wrote the Board requesting for its assistance in the reconstruction of the records of the case because the records could not be found as her co-counsel, Atty. Ricardo Blancaflor, who originally handled the case for SRRDC and had possession

of all the records of the case was on indefinite leave and could not be contacted. The Board granted counsels request and moved the hearing on April 4, 1991. On March 18, 1991, SRRDC submitted a petition to the Board for the latter to resolve SRRDCs petition for exemption from CARP coverage before any administrative valuation of their landholding could be had by the Board. On April 4, 1991, the initial DARAB hearing of the case was held and subsequently, different dates of hearing were set without objection from counsel of SRRDC. During the April 15, 1991 hearing, the subdivision plan of subject property at Casile, Cabuyao, Laguna was submitted and marked as Exhibit 5 for SRRDC. At the hearing on April 23, 1991, the Land Bank asked for a period of one month to value the land in dispute. At the hearing on April 23, 1991, certification from Deputy Zoning Administrator Generoso B. Opina was presented. The certification issued on September 8, 1989, stated that the parcels of land subject of the case were classified as Industrial Park per Sangguniang Bayan Resolution No. 45-89 dated March 29, 1989. To avert any opportunity that the DARAB might distribute the lands to the farmer beneficiaries, on April 30, 1991, petitioner filed a petition with DARAB to disqualify private respondents as beneficiaries. However, DARAB refused to address the issue of beneficiaries.[24] ... On December 19, 1991, the DARAB promulgated a decision, affirming the dismissal of the protest of SRRDC against the compulsory coverage of the property covered by TCT Nos. 81949 and 84891. The decretal portion of the decision reads: WHEREFORE, based on the foregoing premises, the Board hereby orders: 1. The dismissal for lack of merit of the protest against the compulsory coverage of the landholdings of Sta. Rosa Realty Development Corporation (Transfer Certificates of Title Nos. 81949 and 84891 with an area of 254.766 hectares) in Barangay Casile, Municipality of Cabuyao, Province of Laguna under the Comprehensive Agrarian Reform Program is hereby affirmed; 2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa Realty Development Corporation the amount of Seven Million Eight Hundred Forty-One Thousand, Nine Hundred Ninety Seven Pesos and SixtyFour centavos (P7,841,997.64) for its landholdings covered by the two (2) Transfer Certificates of Title mentioned above. Should there be a rejection of the payment tendered, to open, if none has yet been made, a trust account for said amount in the name of Sta. Rosa Realty Development Corporation; 3. The Register of Deeds of the Province of Laguna to cancel with dispatch Transfer Certificate of Title Nos. 84891 and 81949 and new one be issued in the name of the Republic of the Philippines, free from liens and encumbrances; 4. The Department of Environment and Natural Resources either through its Provincial Office in Laguna or the Regional Office, Region IV, to conduct a final segregation survey on the lands covered by Transfer Certificate of Title Nos. 84891 and 81949 so the same can be transferred by the Register of Deeds to the name of the Republic of the Philippines; 5. The Regional Office of the Department of Agrarian Reform through its Municipal and Provincial Agrarian Reform Office to take immediate possession on the said landholding after Title shall have been transferred to the name of the Republic of the Philippines, and distribute the same to the immediate issuance of Emancipation Patents to the farmer-beneficiaries as determined by the Municipal Agrarian Reform Office of Cabuyao, Laguna.[25] On July 11, 1991, DAR Secretary Benjamin T. Leong issued a memorandum directing the Land Bank of the Philippines (LBP) to open a trust account in favor of SRRDC, for P5,637,965.55, as valuation for the SRRDC property.

The titles in the name of SRRDC were cancelled and corresponding TCTs were issued in the name of the Republic of the Philippines on February 11, 1992,[26] after which Certificates of Land Ownership Award (CLOA) were issued in the name of the farmersbeneficiaries on February 26, 1992.[27] In the meantime, SRRDC had filed with the CA a petition for review of the DARABs decision, docketed as CA-G.R. SP No. 27234. On November 5, 1993, the CA affirmed the decision of DARAB, to wit: WHEREFORE, premises considered, the DARAB decision dated December 19, 1991 is AFFIRMED, without prejudice to petitioner Sta. Rosa Realty Development Corporation ventilating its case with the Special Agrarian Court on the issue of just compensation.[28] Hence, SRRDC filed on November 24, 1993, herein petition, docketed as G.R. No. 112526 on the following grounds: THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS JURISDICTION IN RULING THAT THE SRRDC PROPERTIES, DESPITE THE UNDISPUTED FACT OF THEIR NON-AGRICULTURAL CLASSIFICATION PRIOR TO RA 6657, ARE COVERED BY THE CARP CONTRARY TO THE NATALIA REALTY DECISION OF THIS HONORABLE COURT. i. The SRRDC properties have been zoned and approved as PARK since 1979. ii. The SRRDC properties form part of a watershed area. THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS JURISDICTION IN DISREGARDING ECOLOGICAL CONSIDERATIONS AS MANDATED BY LAW. THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS JURISDICTION IN AFFIRMING THE DISTRIBUTION OF THE SRRDC PROPERTIES TO PRIVATE RESPONDENTS WHO HAVE BEEN JUDICIALLY DECLARED AS SQUATTERS AND THEREFORE ARE NOT QUALIFIED BENEFICIARIES PURSUANT TO THE CENTRAL MINDANAO UNIVERSITY DECISION OF THIS HONORABLE COURT. i. The acquisition of the SRRDC properties cannot be valid for future beneficiaries. ii. Section 22 of RA 6657 insofar as it expands the coverage of the CARP to landless residents is unconstitutional. THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS JURISDICTION IN HOLDING THAT THE DARAB HAS JURISDICTION TO PASS UPON THE ISSUE OF WHETHER THE SRRDC PROPERTIES ARE SUBJECT TO CARP COVERAGE.[29] On October 12, 2001, the Court rendered its Decision in G.R. No. 112526 only, setting aside the decision of the CA in CA-G.R. SP No. 27234 and ordering the remand of the case to the DARAB for re-evaluation and determination of the nature of the land. The dispositive portion of the Decision reads as follows: IN VIEW WHEREOF, the Court SETS ASIDE the decision of the Court of Appeals in CA-G.R. SP No. 27234. In lieu thereof, the Court REMANDS the case to the DARAB for reevaluation and determination of the nature of the parcels of land involved to resolve the issue of its coverage by the Comprehensive Land Reform Program. In the meantime, the effects of the CLOAs issued by the DAR to supposed farmer beneficiaries shall continue to be stayed by the temporary

restraining order issued on December 15, 1993, which shall remain in effect until final decision on the case. No costs. SO ORDERED.[30] It is the opinion of the Court in G.R. No. 112526, that the property is part of a watershed, and that during the hearing at the DARAB, there was proof that the land may be excluded from the coverage of the CARP because of its high slopes.[31] Thus, the Court concluded that a remand of the case to the DARAB for re-evaluation of the issue of coverage is appropriate in order to resolve the true nature of the subject property.[32] In their Memorandum, Amante, et al. argues that there exist compelling reasons to grant the second motion for reconsideration of the assailed decision of the Court, to wit: 2.1 Only QUESTIONS OF LAW are admittedly and undeniably at issue; yet the Honorable Court reviewed the findings of facts of the Court of Appeals and the DARAB although the case does not fall into any of the well-recognized exceptions to conduct a factual review. Worse, the 12 October 2001 Decision assumed facts not proven before any administrative, quasi-judicial or judicial bodies; 2.2 The DARAB and the Court of Appeals already found the land to be CARPable; yet the Honorable Court remanded the case to DARAB to reevaluate if the land is CARPable; 2.3 The Decision did not express clearly and distinctly the facts and the law on which it is based; 2.4 The Decision renewed the Temporary Restraining Order issued on 15 December 1993, issuance of which is barred by Sec. 55 of R.A. 6657; and 2.5 This Honorable Court denied private respondents Motion for Reconsideration although issues raised therein were never passed upon in the 12 October 2001 Decision or elsewhere.[33] The DAR and the DARAB, through the Office of the Solicitor General, did not interpose any objection to the second motion for reconsideration. It also maintained that if SRRDCs claim that the property is watershed is true, then it is the DENR that should exercise control and supervision in the disposition, utilization, management, renewal and conservation of the property.[34] SRRDC meanwhile insists that there are no compelling reasons to give due course to the second motion for reconsideration. [35] At the outset, the Court notes that petitioner designated its petition in G.R. No. 112526 as one for review on certiorari of the decision of the CA. In the same breath, it likewise averred that it was also being filed as a special civil action for certiorari as public respondents committed grave abuse of discretion.[36] Petitioner should not have been allowed, in the first place, to pursue such remedies simultaneously as these are mutually exclusive.[37] It is SRRDCs claim that the CA committed grave abuse of discretion in holding that the subject property is agricultural in nature. In support of its contention, it argued, among others, that the subject property had already been classified as park since 1979 under the Zoning Ordinance of Cabuyao, as approved by the Housing and Land Use Regulatory Board (HLURB); that it forms part of a watershed; and that the CA disregarded ecological considerations.[38] SRRDC also claimed that Amante, et al. are not qualified beneficiaries.[39] Clearly, these issues are factual in nature, which the Court, as a rule, should not have considered in this case. However, there are recognized exceptions, e.g., when the factual inferences of the appellate court are manifestly mistaken; the judgment is based on a misapprehension of facts; or the CA manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different legal conclusion. [40] The present cases fall under the above exceptions. Thus, in order to finally set these cases to rest, the Court shall resolve the substantive matters raised, which in effect comes down to the

issue of the validity of the acquisition of the subject property by the Government under Republic Act (R.A.) No. 6657, or the Comprehensive Agrarian Reform Law of 1988 (CARL). As noted earlier, the DARAB made its finding regarding the nature of the property in question, i.e., the parcels of land are agricultural and may be the subject of compulsory acquisition for distribution to farmer-beneficiaries, thus: Ocular inspections conducted by the Board show that the subject landholdings have been under the possession and tillage of the DAR identified potential beneficiaries which they inherited from their forebears (workers of the Yulo Estate). They are bonafide residents and registered voters (DARAB Exhibits C and J) of Barangay Casile, Cabuyao, Laguna. There is a barangay road leading toward the barangay school and sites and the settlement has a barangay hall, church, elementary school buildings (DARAB Exhibit Q), Comelec precincts (DARAB Exhibits J -1 and J-2), and other structures extant in progressive communities. The barangay progressive development agencies, like the DECS, DA, COMELEC, DAR and Support Services of Land Bank, DPWH, DTI and the Cooperative Development Authority have extended support services to the community (DARAB Exhibits I, K to K-3, L, M, N, O, P to P6). More importantly, subject landholdings are suitable for agriculture. Their topography is flat to undulating 3-15% slope. (Testimony of Rosalina Jumaquio, Agricultural Engineer, DAR, TSN, June 21, 1991, DARAB Exhibits F and H). Though some portions are over 18% slope, nevertheless, clearly visible thereat are fruitbearing trees, like coconut, coffee, and pineapple plantations, etc. (see Petitioners Exhibits A to YYY and DARAB Exhibits A to S, Records). In other words, they are already productive and fully developed. ... As the landholdings of SRRDC subject of the instant proceedings are already developed not only as a community but also as an agricultural farm capable of sustaining daily existence and growth, We find no infirmity in placing said parcels of land under compulsory coverage. They do not belong to the exempt class of lands. The claim that the landholding of SRRDC is a watershed; hence, belonging to the exempt class of lands is literally throwing punches at the moon because the DENR certified that the only declared watershed in Laguna Province and San Pablo City is the Caliraya-Lumot Rivers (Petitioners Exhibit A). A sensu contrario, the landholdings subject herein are not.[41] (Emphasis supplied) The evidence on record supports these findings, to wit: 1. Certification dated January 16, 1989 by the OIC Provincial Environment and Natural Resources Office of Laguna that the only declared watershed in the Laguna province and San Pablo City is the Caliraya-Lumot Rivers No. 1570 dated September 1, 1976;[42] 2. Map prepared by Agricultural Engineer Rosalina H. Jumaquio showing that: a) the topography of the property covered by TCT No. T-84891 topography is flat to undulating with a 5 to 10% slope; (b) it is suitable to agricultural crops; and (c) the land is presently planted with diversified crops;[43] 3. Certification dated August 28, 1989 by APT Felicito Buban of the Department of Agriculture of Laguna that, per his ocular inspection, the subject property is an agricultural area, and that the inhabitants main occupation is farming;[44] 4. Pictures taken by MARO Belen La Torre of Cabuyao, Laguna, showing that the property is cultivated and inhabited by the farmerbeneficiaries;[45] SRRDC however, insists that the property has already been classified as a municipal park and beyond the scope of CARP. To prove this, SRRDC submitted the following: 1. Certification dated March 1, 1991 by the Municipality of Cabuyao, Laguna that the entire barangay of Casile is delineated as Municipal Park;[46] 2. Certification dated March 11, 1991 by the Housing and Land Use Regulatory Board that the parcels of land located in Barangay Casile are within the Municipal Park, based on the municipalitys approved

General Land Use Plan ratified by the Housing and Land Use Regulatory Board as per Resolution No. 38-2 dated June 25, 1980;[47] 3. Photocopies of pictures taken by Mr. Ernesto Garcia, Officer-inCharge of the Special Project Section of CJ Yulo and Sons, Inc., of portions of Barangay Casile;[48] The Court recognizes the power of a local government to reclassify and convert lands through local ordinance, especially if said ordinance is approved by the HLURB.[49] Municipal Ordinance No. 110-54 dated November 3, 1979, enacted by the Municipality of Cabuyao, divided the municipality into residential, commercial, industrial, agricultural and institutional districts, and districts and parks for open spaces.[50] It did not convert, however, existing agricultural lands into residential, commercial, industrial, or institutional. While it classified Barangay Casile into a municipal park, as shown in its permitted uses of land map, the ordinance did not provide for the retroactivity of its classification. In Co vs. Intermediate Appellate Court,[51] it was held that an ordinance converting agricultural lands into residential or light industrial should be given prospective application only, and should not change the nature of existing agricultural lands in the area or the legal relationships existing over such lands. Thus, it was stated: A reading of Metro Manila Zoning Ordinance No. 81-01, series of 1981, does not disclose any provision converting existing agricultural lands in the covered area into residential or light industrial. While it declared that after the passage of the measure, the subject area shall be used only for residential or light industrial purposes, it is not provided therein that it shall have retroactive effect so as to discontinue all rights previously acquired over lands located within the zone which are neither residential nor light industrial in nature. This simply means that, if we apply the general rule, as we must, the ordinance should be given prospective operation only. The further implication is that it should not change the nature of existing agricultural lands in the area or the legal relationships existing over such lands [52] (Emphasis supplied) Under Section 3 (c) of R.A. No. 6657, agricultural land is defined as land devoted to agricultural activity and not classified as mineral, forest, residential, commercial or industrial land. Section 3 (b) meanwhile defines agricultural activity as the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such products, and other farm activities, and practices performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical. Before Barangay Casile was classified into a municipal park by the local government of Cabuyao, Laguna in November 1979, it was part of a vast property popularly known as the Canlubang Sugar Estate. SRRDC claimed that in May 1979, the late Miguel Yulo allowed the employees of the Yulo group of companies to cultivate a maximum area of one hectare each subject to the condition that they should not plant crops being grown by the Canlubang Sugar Estate, like coconuts and coffee, to avoid confusion as to ownership of crops.[53] The consolidation and subdivision plan surveyed for SRRDC on March 10-15, 1984[54] also show that the subject property is sugar land. Evidently, the subject property is already agricultural at the time the municipality of Cabuyao enacted the zoning ordinance, and such ordinance should not affect the nature of the land. More so since the municipality of Cabuyao did not even take any step to utilize the property as a park. SRRDC cites the case of Natalia Realty, Inc. vs. DAR,[55] wherein it was ruled that lands not devoted to agricultural activity and not classified as mineral or forest by the DENR and its predecessor agencies, and not classified in town plans and zoning ordinances as approved by the HLURB and its preceding competent authorities prior to the enactment of R.A. No. 6657 on June 15, 1988, are outside the coverage of the CARP. Said ruling, however, finds no application in the present case. As previously stated, Municipal Ordinance No. 110-54 of the Municipality of Cabuyao did not provide for any retroactive application nor did it convert existing agricultural lands into residential, commercial, industrial, or institutional. Consequently, the subject property remains agricultural in nature and therefore within the coverage of the CARP. Only on March 9, 2004, SRRDC filed with the Court a Manifestation pointing out DAR Order No. (E)4-03-507-309 dated February 17, 2004, exempting from CARP coverage two parcels of land owned by SRRDC and covered by TCT Nos. T-85573 and T-92014.[56] The DAR found that these properties have been re-classified into Municipal Parks by the Municipal Ordinance of Cabuyao, Laguna, and are part of the Kabangaan-Casile watershed, as certified by the DENR.[57]

The Court notes however that the said DAR Order has absolutely no bearing on these cases. The herein subject property is covered by TCT Nos. 81949 and 34891, totally different, although adjacent, from the property referred to in said DAR Order. SRRDC also contends that the property has an 18% slope and over and therefore exempt from acquisition and distribution under Section 10 of R.A. No. 6657. What SRRDC opted to ignore is that Section 10, as implemented by DAR Administrative Order No. 13 dated August 30, 1990, also provides that those with 18% slope and over but already developed for agricultural purposes as of June 15, 1988, may be allocated to qualified occupants.[58] Hence, even assuming that the property has an 18% slope and above, since it is already developed for agricultural purposes, then it cannot be exempt from acquisition and distribution. Moreover, the topography maps prepared by Agricultural Engineer Rosalina H. Jumaquio show that the property to be acquired has a 5-10% flat to undulating scope;[59] that it is suitable to agricultural crops;[60] and it is in fact already planted with diversified crops.[61] Also, the Certification dated July 1, 1991 by Geodetic Engineer Conrado R. Rigor that the top portion of Barangay Casile has a 0 to 18% slope while the side of the hill has a 19 to 75% slope, [62] was presented by SRRDC only during the proceedings before the CA which had no probative value in a petition for review proceedings. The Court notes that SRRDC had been given ample time and opportunity by the DARAB to prove the grounds for its protest and objection but miserably failed to take advantage of such time and opportunity[63] in the DARAB proceedings. SRRDC also contends that the property is part of a watershed, citing as evidence, the Certification dated June 26, 1991 by the Laguna Lake Development Authority that Barangay Casile is part of the watershed area of the Laguna Lake Basin,[64] and the Final Report for Watershed Area Assessment Study for the Canlubang Estate dated July 1991 undertaken by the Engineering & Development Corporation of the Philippines.[65] It must be noted, however, that these pieces of evidence were likewise brought to record only when petitioner filed its petition for review with the CA. The DARAB never had the opportunity to assess these pieces of evidence. The DARAB stated: Noting the absence of evidence which, in the nature of things, should have been submitted by landowner SRRDC and to avoid any claim of deprivation of its right to prove its claim to just compensation (Uy v. Genato, 57 SCRA 123). We practically directed its counsel in not only one instance, during the series of hearings conducted, to do so. We even granted continuances to give it enough time to prepare and be ready with the proof and documents. To Our dismay, none was submitted and this constrained Us to take the failure/refusal of SRRDC to present evidence as a waiver or, at least, an implied acceptance of the valuation made by the DAR.[66] The same goes with the CA, which did not have the discretion to consider evidence in a petition for certiorari or petition for review oncertiorari outside than that submitted before the DARAB. The CA noted petitioners failure to present evidence in behalf of its arguments, thus: . . . It must be recalled that petitioner Sta. Rosa Realty itself had asked the DARAB in a petition dated March 18, 1991 to allow it to adduce evidence in support of its position that the subject parcels of land are not covered by the CARP beginning on the scheduled hearing dated April 4, 1991. And DARAB obliged as in fact the petitioner commenced to introduce evidence. If petitioner failed to complete the presentation of evidence to support its claim of exemption from CARP coverage, it has only itself to blame for which DARAB cannot be accused of not being impartial.[67] Consequently, there is no need to order the remand of the case to the DARAB for re-evaluation and determination of the nature of the parcels of land involved. It runs contrary to orderly administration of justice and would give petitioner undue opportunity to present evidence in support of its stance, an opportunity it already had during the DARAB proceedings, and which opportunity it regrettably failed to take advantage of. More significantly however, it is the DAR Secretary that originally declared the subject property as falling under the coverage of the CARP. Moreover, DAR Administrative Order No. 13, Series of 1990 (Rules and Procedure Governing Exemption of Lands from CARP Coverage under Section 10, R.A. No. 6657) provides: I. LEGAL MANDATE

The general policy under CARP is to cover as much lands suitable for agriculture as possible. However, Section 10, RA 6657 excludes and exempts certain types of lands from the coverage of CARP, to wit: A. Lands actually, directly and exclusively used and found to be necessary for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves, national defense, school sites and campuses including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot production centers, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereof, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers; and II. POLICIES

In the application of the aforecited provision of law, the following guidelines shall be observed: A. For an area in I.A to be exempted from CARP coverage, it must be actually, directly and exclusively used and found to be necessary for the purpose so stated. C. Lands which have been classified or proclaimed, and/or actually directly and exclusively used and found to be necessary for parks, wildlife, forest reserves, fish sanctuaries and breeding grounds, and watersheds and mangroves shall be exempted from the coverage of CARP until Congress, taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of public domain, as provided for under Sec. 4(a) of RA 6657, and a reclassification of the said areas or portions thereof as alienable and disposable has been approved. (Emphasis supplied) In order to be exempt from coverage, the land must have been classified or proclaimed and actually, directly and exclusively used and found to be necessary for watershed purposes.[68] In this case, at the time the DAR issued the Notices of Coverage up to the time the DARAB rendered its decision on the dispute, the subject property is yet to be officially classified or proclaimed as a watershed and has in fact long been used for agricultural purposes. SRRDC relies on the case of Central Mindanao University (CMU) vs. DARAB,[69] wherein the Court ruled that CMU is in the best position to determine what property is found necessary for its use. SRRDC claims that it is in the best position to determine whether its properties are necessary for development as park and watershed area.[70] But SRRDCs reliance on the CMU case is flawed. In the CMU case, the subject property from the very beginning was not alienable and disposable because Proclamation No. 476 issued by the late President Carlos P. Garcia already reserved the property for the use of the school. Besides, the subject property in the CMU case was actually, directly and exclusively used and found to be necessary for educational purposes. In the present case, the property is agricultural and was not actually and exclusively used for watershed purposes. As records show, the subject property was first utilized for the purposes of the Canlubang Sugar Estate.[71] Later, petitioner claimed that the occupants were allowed to cultivate the area so long as they do not plant crops being grown by the Canlubang Sugar Estate in order to avoid confusion as to ownership thereof.[72] Thus, based on its own assertions, it appears that it had benefited from the fruits of the land as agricultural land. Now, in a complete turnaround, it is claiming that the property is part of a watershed. Furthermore, in a belated attempt to prove that the subject property is part of a watershed that must be environmentally protected, SRRDC submitted before the Court a Final Report dated February 1994 undertaken by the Ecosystems Research and Development Bureau (ERDB) of the DENR entitled, Environmental Assessment of the Casile and Kabanga-an River Watersheds.[73] The study, according to SRRDC, was made pursuant to a handwritten instruction issued by then President Fidel V. Ramos. The study noted that, the continuing threat of widespread deforestation and unwise land use practices have resulted in the deteriorating condition of the watersheds.[74] But the Court also notes the Memorandum for the President dated September 1993 by then DENR Secretary Angel C. Alcala that, after a field inspection conducted by the DENRs Regional Executive Director and the Provincial and Community Natural Resource Officers, it was found that:

... 2. Many bankal trees were found growing in the watershed/CARP areas, including some which have been coppiced, and that water conduits for domestic and industrial uses were found installed at the watershed area claimed by the Yulos. Records further show that in the 1970s, a Private Land Timber Permit was issued to Canlubang Sugar Estate thru its marketing arm, the Sta. Rosa Realty Devpt. Corp. 3. Resident farmers denied that they have been cutting bankal trees and volunteered the information that one of the Estates sec urity guards was dismissed for cutting and transporting bankal trees. The trees cut by the dismissed security guard were found stacked adjacent to the Canlubang Security Agencys headquarters.[75] Evidently, SRRDC had a hand in the degradation of the area, and now wants to put the entire blame on the farmer-beneficiaries. It is reasonable to conclude that SRRDC is merely using ecological considerations to avert any disposition of the property adverse to it. SRRDC also objects to the identification of Amante, et al. as beneficiaries of the subject property. Suffice it to say that under Section 15 of R.A. No. 6657, the identification of beneficiaries is a matter involving strictly the administrative implementation of the CARP, a matter which is exclusively vested in the Secretary of Agrarian Reform, through its authorized offices. Section 15 reads: SECTION 15. Registration of Beneficiaries. The DAR in coordination with the Barangay Agrarian Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and farmworkers who are qualified to be beneficiaries of the CARP. These potential beneficiaries with the assistance of the BARC and the DAR shall provide the following data: (a) names and members of their immediate farm household; (b) owners or administrators of the lands they work on and the length of tenurial relationship; (c) location and area of the land they work; (d) crops planted; and their share in the harvest or amount of rental paid or wages received.

SRRDC questions the constitutionality of Section 22 of R.A. No. 6657, which reads in part: SECTION 22. Qualified Beneficiaries. The lands covered by the CARP shall be distributed as much as possible to landless residents of the same barangay, or in the absence thereof, landless residents of the same municipality in the following order of priority. (a) agricultural lessees and share tenants; (b) regular farmworkers; (c) seasonal farmworkers; (d) other farmworkers; (e) actual tillers or occupants of public lands; (f) collectives or cooperatives of the above beneficiaries; and others directly working on the land.

(g) ...

SRRDC argues that Section 22 sweepingly declares landless residents as beneficiaries of the CARP (to mean also squatters), in violation of Article XIII, Section 4 of the Constitution, which aims to benefit only the landless farmers and regular farmworkers.[79] The Court cannot entertain such constitutional challenge. The requirements before a litigant can challenge the constitutionality of a law are well-delineated, viz.: (1) The existence of an actual and appropriate case; (2) A personal and substantial interest of the party raising the constitutional question; (3) The exercise of judicial review is pleaded at the earliest opportunity; and (4) The constitutional question is the lis mota of the case.[80] (Emphasis supplied) Earliest opportunity means that the question of unconstitutionality of the act in question should have been immediately raised in the proceedings in the court below,[81] in this case, the DAR Secretary. It must be pointed out that all controversies on the implementation of the CARP fall under the jurisdiction of the DAR, even though they raise questions that are also legal or constitutional in nature.[82] The earliest opportunity to raise a constitutional issue is to raise it in the pleadings before a competent court that can resolve the same, such that, if it is not raised in the pleadings, it cannot be considered at the trial, and, if not considered at the trial, it cannot be considered on appeal.[83]Records show that SRRDC raised such constitutional challenge only before this Court despite the fact that it had the opportunity to do so before the DAR Secretary. The DARAB correctly refused to deal on this issue as it is the DAR Secretary who, under the law, has the authority to determine the beneficiaries of the CARP. This Court will not entertain questions on the invalidity of a statute where that issue was not specifically raised, insisted upon, and adequately argued [84] in the DAR. Likewise, the constitutional question raised by SRRDC is not the very lis mota in the present case. Basic is the rule that every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of the Constitution, and not one that is doubtful, speculative or argumentative.[85] The controversy at hand is principally anchored on the coverage of the subject property under the CARP, an issue that can be determined without delving into the constitutionality of Section 22 of R.A. No. 6657. While the identification of Amante, et al. as farmer-beneficiaries is a corollary matter, yet, the same may be resolved by the DAR. SRRDC questions the DARABs jurisdiction to entertain the question of whether the subject property is subject to CARP coverage. According to SRRDC, such authority is vested with the DAR Secretary who has the exclusive prerogative to resolve matters involving the administrative implementation of the CARP and agrarian laws and regulations.[86] There is no question that the power to determine whether a property is subject to CARP coverage lies with the DAR Secretary. Section 50 of R.A. No. 6657 provides that:

(e)

A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the barangay hall, school or other public buildings in the barangay where it shall be open to inspection by the public at all reasonable hours. Meanwhile, Administrative Order No. 10 (Rules and Procedures Governing the Registration of Beneficiaries), Series of 1989, provides: SUBJECT: I. PREFATORY STATEMENT

Pursuant to Section 15, Chapter IV, of the Comprehensive Agrarian Reform Law of 1988, the DAR, in coordination with the Barangay Agrarian Reform Committee (BARC), as organized pursuant to RA 6657, shall register all agricultural lessees, tenants and farmworkers who are qualified beneficiaries of the CARP. This Administrative Order provides the Implementing Rules and Procedures for the said registration. B. Specific 1. Identify the actual and potential farmer-beneficiaries of the CARP. In Lercana vs. Jalandoni,[76] the Court categorically stated that: the identification and selection of CARP beneficiaries are matters involving strictly the administrative implementation of the CARP, a matter exclusively cognizable by the Secretary of the Department of Agrarian Reform, and beyond the jurisdiction of the DARAB.[77] The farmer-beneficiaries have already been identified in this case. Also, the DAR Secretary has already issued Notices of Coverage and Notices of Acquisition pertaining to the subject property. It behooves the courts to exercise great caution in substituting its own determination of the issue, unless there is grave abuse of discretion committed by the administrative agency,[78] which in these cases the Court finds none.

SEC. 50. Quasi-Judicial Powers of the DAR. - The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). The DARs jurisdiction under Section 50 of R.A. No. 6657 is two-fold. The first is essentially executive and pertains to the enforcement and administration of the laws, carrying them into practical operation and enforcing their due observance, while the second is judicial and involves the determination of rights and obligations of the parties.[87] Pursuant to its judicial mandate of achieving a just, expeditious and inexpensive determination of every action or proceeding before it,[88]the DAR adopted the DARAB Revised Rules, Rule II (Jurisdiction of the Adjudication Board) of which provides: SECTION 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations. Specifically, such jurisdiction shall extend over but not be limited to the following: a) Cases involving the rights and obligations of persons engaged in the cultivation and use of agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other agrarian laws; b) Cases involving the valuation of land, and determination and payment of just compensation, fixing and collection of lease rentals, disturbance compensation, amortization payments, and similar disputes concerning the functions of the Land Bank; c) Cases involving the annulment or cancellation of orders or decisions of DAR officials other than the Secretary, lease contracts or deeds of sale or their amendments under the administration and disposition of the DAR and LBP; d) Cases arising from, or connected with membership or representation in compact farms, farmers cooperatives and other registered farmers associations or organizations, related to land covered by the CARP and other agrarian laws; e) Cases involving the sale, alienation, mortgage, foreclosure, preemption and redemption of agricultural lands under the coverage of the CARP or other agrarian laws; f) Cases involving the issuance of Certificate of Land Transfer (CLT), Certificate of Land Ownership Award (CLOA) and Emancipation Patent (EP) and the administrative correction thereof; g) And such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR. Provided, however, that matters involving strictly the administrative implementation of the CARP and other agrarian laws and regulations, shall be the exclusive prerogative of and cognizable by the Secretary of the DAR. (Emphasis supplied) On the other hand, Administrative Order No. 06-00,[89] which provides for the Rules of Procedure for Agrarian Law Implementation (ALI) Cases, govern the administrative function of the DAR. Under said Rules of Procedure, the DAR Secretary has exclusive jurisdiction over classification and identification of landholdings for coverage under the CARP, including protests or oppositions thereto and petitions for lifting of coverage. Section 2 of the said Rules specifically provides, inter alia, that:

SECTION 2. Cases Covered. - These Rules shall govern cases falling within the exclusive jurisdiction of the DAR Secretary which shall include the following: (a) Classification and identification of landholdings for coverage under the Comprehensive Agrarian Reform Program (CARP), including protests or oppositions thereto and petitions for lifting of coverage; (b) Identification, qualification or disqualification of potential farmer-beneficiaries; (c) Subdivision surveys of lands under CARP;

(d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (PD) No. 816, including the issuance, recall or cancellation of Emancipation Patents (EPs) or Certificates of Land Ownership Awards (CLOAs) not yet registered with the Register of Deeds; (e) Exercise of the right of retention by landowner; . . . (Emphasis supplied) Thus, the power to determine whether a property is agricultural and subject to CARP coverage together with the identification, qualification or disqualification of farmer-beneficiaries lies with the DAR Secretary.[90] Significantly, the DAR had already determined that the properties are subject to expropriation under the CARP and has distributed the same to the farmer-beneficiaries. Initially, the LBP forwarded the two Compulsory Acquisition Claim Folders (CACF) covering the subject properties to the DARAB for summary proceedings for the sole purpose of determining just compensation. SRRDC then sent a letter to the LBP claiming that the subject properties were exempt from CARP coverage and subject of a pending petition for land conversion. As a consequence, the DARAB asked the DAR Secretary to first resolve the issues raised by SRRDC before it can proceed with the land valuation proceedings. In response, the DAR, through the Undersecretary for Operations and the Regional Director of Region IV, submitted its report stating that: (1) the property is subject to compulsory acquisition by virtue of the Notice of Coverage issued on August 11, 1989, and Notice of Acquisition issued on December 12, 1989, and that it was subject to CARP coverage per Section IV D of DAR Administrative Order No. 1, Series of 1990; and (2) there was no pending petition for land conversion involving the subject property. When SRRDC petitioned the DARAB to resolve the issue of exemption from coverage, it was only then that the DARAB took cognizance of said issue.[91] As the DARAB succinctly pointed out, it was SRRDC that initiated and invoked the DARABs jurisdiction to pass upon the question of CARP coverage. As stated by the DARAB: 4.5.2.2. The ISSUE ON CARP COVERAGE was initiated and incorporated in said proceeding, at the instance of petitioner itself, by filing a petition dated March 18, 1991, Prayed therein were that DARAB: 1. Take cognizance and assume jurisdiction over the question of CARP coverage of the subject parcels of land; 2. Defer or hold in abeyance the proceedings for administrative valuation of the subject properties pending determination of the question of CARP coverage; 3. Allow respondent SRRDC to adduce evidence in support of its position that the subject parcels of land are not covered by the CARP beginning on the scheduled hearing date of April 4, 1991 (p.3; emphasis and underscoring supplied). Upon persistent request of petitioner SRRDC, it was accommodated by DARAB and a counsel of SRRDC even took the witness stand. Its lawyers were always in attendance during the scheduled hearings until it was time for SRRDC to present its own evidence.

4.5.2.3. But, as earlier stated, despite the open session proddings by DARAB for SRRDC to submit evidence and the rescheduling for, allegedly, they are still collating the evidence, nay, the request that it be allowed to adduce evidence, none was adduced and this constrained public respondent to declare SRRDC as having waived its right to present evidence. And, after the remaining parties were heard, the hearing was formally terminated. 4.5.3. Needless to state, the jurisdictional objection (CARP coverage), now being raised herein was not one of the original matters in issue. Principally, DARAB was called upon under Section 16 of Republic Act No. 6657 to resolve a land valuation case. But SRRDC itself insisted that DARAB should take cognizance thereof in the same land valuation proceeding. And, SRRDC, through its lawyers, actively participated in the hearings conducted. 4.5.4. It was only when an adverse decision was rendered by DARAB that the jurisdictional issue was raised in the petition for review it filed with the Honorable Court of Appeals. It was also only then that petitioner presented proof/evidence. ... 4.5.6. Public respondents (DAR/DARAB) are not unmindful of the rule that matter of jurisdiction may be raised at any stage of the proceeding. But for two serious considerations, the applicability thereof in the case at bar should not be allowed. 4.5.6.1. The fact [part (municipal/industrial) and/or watershed] upon which the jurisdictional issue interchangeably hinges were not established during the hearing of the case. No proof was adduced. That the matter of CARP coverage is strictly administrative implementation of CARP and, therefore, beyond the competence of DARAB, belonging, as it does, to the DAR Secretary, was not even alleged, either before DARAB or the Honorable Court of Appeals, the numerous petitions/incidents filed notwithstanding. Be it that as it may, the records of the case show that initially DARAB refused to take cognizance thereof and, in fact, forwarded the issue of CARP coverage to the office of the DAR Secretary. It was only when it was returned to DARAB by said office that proceedings thereon commenced pursuant to Section 1(g) of Rule II of the DARAB Revised Rules of Procedure. 4.5.6.2. Petitioner is now estopped from assailing the jurisdiction of DARAB. First, it expressly acknowledged the same, in fact invoked it, when it filed its petition (Annex 4); and, second, during the scheduled hearings, SRRDC, through its counsel, actively participated, one of its counsel (sic) even testifying. It may not now be allowed to impugn the jurisdiction of public respondent [92] (Emphasis supplied) In CA-G.R. SP No. 27234, the CA likewise found that it was SRRDC that called upon the DARAB to determine the issue and it, in fact, actively participated in the proceedings before it.[93] It was SRRDCs own act of summoning the DARABs authority that cured whatever jurisdictional defect it now raises. It is elementary that the active participation of a party in a case pending against him before a court or a quasi-judicial body, is tantamount to a recognition of that courts or bodys jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the courts or bodys jurisdiction. [94] Moreover, the issue of jurisdiction was raised by SRRDC only before the CA. It was never presented or discussed before the DARAB for obvious reasons, i.e., it was SRRDC itself that invoked the latters jurisdiction. As a rule, when a party adopts a certain theory, and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal.[95] Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage.[96] To permit SRRDC to change its theory on appeal would not only be unfair to Amante, et al. but would also be offensive to the basic scales of fair play, justice and due process.[97] Finally, the Court notes that then DAR Secretary Benjamin T. Leong issued a Memorandum on July 11, 1991, ordering the opening of a trust account in favor of SRRDC. In Land Bank of the Philippines vs. Court of Appeals, this Court struck down as void DAR Administrative Circular No. 9,

Series of 1990, providing for the opening of trust accounts in lieu of the deposit in cash or in bonds contemplated in Section 16 (e) of R.A. No. 6657. As a result, the DAR issued Administrative Order No. 2, Series of 1996, converting trust accounts in the name of landowners into deposit accounts.[98] Thus, the trust account opened by the LBP per instructions of DAR Secretary Benjamin T. Leong should be converted to a deposit account, to be retroactive in application in order to rectify the error committed by the DAR in opening a trust account and to grant the landowners the benefits concomitant to payment in cash or LBP bonds prior to the ruling of the Court in Land Bank of the Philippines vs. Court of Appeals. The account shall earn a 12% interest per annum from the time the LBP opened a trust account up to the time said account was actually converted into cash and LBP bonds deposit accounts. Given the foregoing conclusions, the petition filed in G.R. No. 118838, which primarily rests on G.R. No. 112526, should be granted. The judgments of the trial court in the injunction case (Civil Case No. B-2333) and the CA in CA-G.R. SP No. 38182 were premised on SRRDCs transfer certificates of title over the subject property. The trial court and the CA cannot be faulted for denying the writ of injunction prayed for by Amante, et al. since at the time the trial court rendered its decision in the injunction case on January 20, 1992, SRRDC was still the holder of the titles covering the subject property. The titles in its name were cancelled and corresponding TCTs were issued in the name of the Republic of the Philippines on February 11, 1992, and CLOAs were issued to the farmerbeneficiaries on February 26, 1992. When Amante, et al., in their motion for reconsideration filed in CA-G.R. SP No. 38182, brought to the CAs attention the issuance of the CLOAs, the CA, per Resolution dated January 19, 1995, reiterated its ruling that whether or not the subject property is covered by the Comprehensive Agrarian Reform Law (R.A. No. 6657) is the subject matter of a separate case, and we cannot interfere with the same at the present time. The CA further stated that (O)ur present decision is, therefore, not intended to preempt any judgment or prejudice the right of any party in the said case.[99] It must be noted that at that juncture, the DARAB Decision and the CA decision in CA-G.R. SP No. 27234, finding the subject property covered by the CARP Law, is yet to be finally resolved by this Court in G.R. No. 112526 and in fact, a temporary restraining order was issued by the Court on December 15, 1993, enjoining the DARAB from enforcing the effects of the CLOAs. Amante, et al. was likewise restrained from further clearing the subject property.[100] Hence, the decision of the trial court and the CA denying the writ of injunction was warranted. Nevertheless, considering that the subject property is agricultural and may be acquired for distribution to farmer-beneficiaries identified by the DAR under the CARP, the transfer certificates of title issued in the name of the Republic of the Philippines and the CLOAs issued by the DAR in the names of Amante, et al.,[101] are valid titles and therefore must be upheld. By virtue thereof, Amante, et al. who have been issued CLOAs are now the owners of the subject property. Consequently, the decisions of the trial court in the injunction case and the CA in CA-G.R. SP No. 38182 must now be set aside, insofar as it orders Amante, et al. to vacate and/or enjoins them from entering the subject property. The Court, however, agrees with the CA that Amante, et al. is not entitled to actual, moral and exemplary damages, as well as attorneys fees. SRRDCs right of possession over the subject property was predicated on its claim of ownership, and it cannot be sanctioned in exercising its rights or protecting its interests thereon. As was ruled by the CA, Amante, et al. is merely entitled to nominal damages as a result of SRRDCs acts.[102] All is not lost in this case. In its Memorandum dated September 29, 1993, to the DAR Secretary, the DENR manifested that: . . . the farmers themselves could be tapped to undertake watershed management and protection. This community-based approach in natural resource management, is in fact, being used in numerous watershed management projects nationwide. Adopting the same approach in the area is deemed the best possible solution to the case since it will not prejudice the CLOAs issued to the farmer-beneficiaries. They should, however, be required to undertake the necessary reforestation and other watershed management/rehabilitation measures in the area. In view of the foregoing, we recommend that a watershed management plan for the area espousing the community-based approach be drawn-up jointly by the DAR and DENR. . . .[103]

If SRRDC sincerely wants to preserve the property for ecological considerations, it can be done regardless of who owns it. After all, we are all stewards of this earth, and it rests on all of us to tend to it. WHEREFORE, the Second Motion for Reconsideration is GRANTED. The Courts Decision dated October 12, 2001 in G.R. No. 112526 is SET ASIDE and the Decision of the Court of Appeals dated November 5, 1993 in CA-G.R. SP No. 27234 is AFFIRMED with MODIFICATION, in that the Land Bank of the Philippines is ordered to convert the trust account in the name of Sta. Rosa Realty Development Corporation to a deposit account, subject to a 12% interest per annum from the time the LBP opened a trust account up to the time said account was actually converted into cash and LBP bonds deposit accounts. The temporary restraining order issued by the Court on December 15, 1993, is LIFTED. The petition filed by Amante, et al. in G.R. No. 118838 is GRANTED in that Sta. Rosa Realty Development Corporation is herebyENJOINED from disturbing the peaceful possession of the farmerbeneficiaries with CLOAs. The Decision of the Court of Appeals dated June 28, 1994 in CA-G.R. CV No. 38182 is AFFIRMED insofar as the award of nominal damages is concerned. The Department of Environment and Natural Resources and the Department of Agrarian Reform, in coordination with the farmerbeneficiaries identified by the DAR, are URGED to formulate a communitybased watershed plan for the management and rehabilitation of Barangay Casile. SO ORDERED. G.R. No. 165299 December 18, 2009

Gentlemen: This refers to the findings of the inspection and result of laboratory analysis of the wastewater collected from your firm last 5 September 2001. Evaluation of the results of laboratory analysis showed that your plants effluent failed to conform with the 1990 Revised Effluent Standard for Inland Water Class "C" specifically in terms of TSS, BOD, Oil/Grease and Color. (Please see attached laboratory analysis) In view thereof, you are hereby directed to submit corrective measures to abate/control the water pollution caused by your firm, within fifteen (15) days from receipt of this letter. Furthermore, pursuant to Section 9 of Presidential Decree No. 984, PACIFIC STEAM LAUNDRY, INC. is hereby ordered to pay a penalty of One Thousand Pesos (P1,000.00) per day of discharging pollutive wastewater to be computed from 5 September 2001, the date of inspection until full cessation of discharging pollutive wastewater and a fine of Five Thousand Pesos (P5,000.00) per year for operating without the necessary clearance/permits from the Authority. Very truly yours, (signed) CALIXTO R. CATAQUIZ General Manager Petitioner submitted its application for LLDA Clearance and Discharge Permit and informed LLDA that it would undertake the necessary measures to abate the water pollution.8 On 1 March 2002, a compliance monitoring was conducted and the result of the laboratory analysis 9 still showed noncompliance with effluent standards in terms of TSS, BOD, Chemical Oxygen Demand (COD), and Oil/Grease Concentration. It was reported that petitioners wastewater treatment facility was under construction. Subsequently, another wastewater sampling was conducted on 25 April 2002 but the results10 still failed to conform with the effluent standards in terms of Oil/Grease Concentration. Meanwhile, on 15 April 2002, a Pollution Control and Abatement case was filed against petitioner before the LLDA. During the public hearing on 30 April 2002, LLDA informed petitioner of its continuous non-compliance with the effluent standards. Petitioner requested for another wastewater sampling which was conducted on 5 June 2002. The laboratory results 11 of the wastewater sampling finally showed compliance with the effluent standard in all parameters. On 9 August 2002, another public hearing was held to discuss the dismissal of the water pollution case and the payment of the accumulated daily penalty. According to LLDA, the penalty should be reckoned from 5 September 2001, the date of initial sampling, to 17 May 2002, the date LLDA received the request for re-sampling. Petitioner manifested that its wastewater discharge was not on a daily basis. In its position paper12dated 25 August 2002, petitioner prayed that the Notice of Violation dated 30 October 2001 be set aside and the penalty and fine imposed be reckoned from the date of actual hearing on 15 April 2002.1avvphil On 16 September 2002, LLDA issued an Order to Pay,13 the pertinent portion of which reads: Respondent prayed that the Notice of Violation issued on 30 October 2001 and its corresponding daily penalty be set aside and that the imposable penalty be reckoned from the date of actual hearing and not on 5 September 2001. It is respondents position that the Notice of Violation and the imposition of the penalty had no legal and factual basis because it had already installed the necessary wastewater treatment to abate the water pollution. This Public Hearing Committee finds respondents arguments devoid of merit. Presidential Decree No. 984 prohibits the discharge of pollutive wastewater and any person found in violation thereof shall pay a fine not exceeding five thousand pesos (PhP5,000.00) [sic] for every day during which such violation continues. The mere discharge of wastewater not conforming with the effluent standard is the violation referred to in PD No. 984. Sample of respondents effluent was collected on 5 September 2001 and the results of laboratory analysis confirmed the quality thereof. Thus, a notice of violation was issued against the respondent after it was

PACIFIC STEAM LAUNDRY, INC., Petitioner, vs. LAGUNA LAKE DEVELOPMENT AUTHORITY, Respondent. DECISION CARPIO, J.: The Case This is a petition for review1 of the Decision2 dated 30 June 2004 and the Resolution dated 8 September 2004 of the Court of Appeals in CA-G.R. SP No. 75238. The Facts Petitioner Pacific Steam Laundry, Inc. (petitioner) is a company engaged in the business of laundry services. On 6 June 2001, the Environmental Management Bureau of the Department of Environment and Natural Resources (DENR) endorsed to respondent Laguna Lake Development Authority (LLDA) the inspection report on the complaint of black smoke emission from petitioners plant located at 114 Roosevelt Avenue, Quezon City.3 On 22 June 2001, LLDA conducted an investigation and found that untreated wastewater generated from petitioners laundry washing activities was discharged directly to the San Francisco Del Monte River. Furthermore, the Investigation Report4 stated that petitioners plant was operating without LLDA clearance, AC/PO-ESI, and Discharge Permit from LLDA. On 5 September 2001, the Environmental Quality Management Division of LLDA conducted wastewater sampling of petitioners effluent.5 The result of the laboratory analysis showed non-compliance with effluent standards particularly Total Suspended Solids (TSS), Biochemical Oxygen Demand (BOD), Oil/Grease Concentration and Color Units.6 Consequently, LLDA issued to petitioner a Notice of Violation7dated 30 October 2001 which states: THE GENERAL MANAGER PACIFIC STEAM LAUNDRY, INC. 114 Roosevelt Avenue, Brgy. Paraiso Quezon City Subject: Notice of Violation PH-01-10-303

established that its discharge was pollutive. The fact that the subsequent re-sampling reported compliance with the effluent standard does not negate the 5 September 2001 initial sampling. Respondent passed the standard because it already implemented remedial measures to abate the water pollution. It is therefore but just and proper that the penalty should be imposed from the date of initial sampling, 5 September 2001, to 17 May 2002, the date the request for re-sampling was received by the Authority. The 5 June 2002 sampling confirmed that respondents effluent already complied with the standard showing that its water pollution has ceased. Respondent did not submit any proof of its actual operation hence, the penalty shall be computed for five (5) working days per week, excluding Saturdays and Sundays as well as legal holidays from 5 September 2001 to 17 May 2002, for a total of one hundred seventy-two (172) days. WHEREFORE, premises considered, respondent Pacific steam Laundry, Inc. is hereby ordered to pay the accumulated daily penalty amounting to ONE HUNDRED SEVENTY-TWO THOUSAND (PhP172,000.00) PESOS within fifteen(15) days from receipt hereof as a condition sine qua non for the dismissal of the above-captioned case. SO ORDERED.
14

Indeed, the express grant of power to impose administrative fines as couched in the language of P.D. 984 was not reproduced in E.O. 927, however, it can be logically implied from LLDAs authority to exercise the power to "make, alter or modify orders requiring the discontinuance of pollution." In addition, the clear intendment of E.O. 927 to clothe LLDA not only with the express powers granted to it, but also those implied, incidental and necessary for the exercise of its express powers can be easily discerned from the grant of the general power to "exercise (such) powers and perform such other functions as may be necessary to carry out its duties and responsibilities." This finds support in the wealth of authorities in American Jurisprudence, citing adherence of other courts to the principle that the authority given to an agency should be liberally construed in order to permit the agency to carry out its statutory responsibilities. This is especially true where the agency is concerned with protecting the public health and welfare, the delegation of authority to the agency is liberally construed. The LLDA, as an agency implementing pollution laws, rules and regulations, should be given some measures of flexibility in its operations in order not to hamper it unduly in the fulfillment of its objectives. How could it effectively perform its role if in every act of violation, it must resort to other venue for the appropriate remedy, because it is impotent by itself to punish or deal with it?16 (Emphasis in the original) The Issues Petitioner raises two issues: 1. Does the respondent LLDA have the implied power to impose fines as set forth in PD 984? 2. Does the grant of implied power to LLDA to impose penalties violate the rule on non-delegation of legislative powers?17 The Ruling of the Court We find the petition without merit.

Petitioner filed a motion for reconsideration, which the LLDA denied in its Order15 dated 27 November 2002. Petitioner then filed with the Court of Appeals a petition for review under Rule 43 of the Rules of Court. The Court of Appeals denied the petition, as well as the motion for reconsideration filed by petitioner. Hence, this petition. The Court of Appeals Ruling The Court of Appeals held that LLDA has the power to impose fines, thus: Concededly, the power to impose administrative fines in pollution abatement cases was expressly granted under Section 9 of P.D. 984 to the now defunct National Pollution Control Commission (NPCC), thus: "Section 9. Penalties. - (a) Any person found violating or failing to comply with any order, decision or regulation of the Commission for the control or abatement of pollution shall pay a fine not exceeding five thousand pesos per day for every day during which such violation or default continues; and the Commission is hereby authorized and empowered to impose the fine after due notice and hearing." Nonetheless, it may be well to recall that the LLDA was created under R.A. 4850 with the end view of promoting and accelerating the development and balanced growth of the Laguna Lake area and the surrounding provinces, and carrying out the development of the Laguna Lake Region with due regard and adequate provisions for environmental management and control, preservation of the quality of human life and ecological systems, and the preservation of undue ecological disturbances, deterioration and pollution. To correct deficiencies and clarify ambiguities that "impede the accomplishment of the Authorities goal," Former President Ferdinand E. Marcos promulgated P.D. 813. Finally, to enable the LLDA to effectively perform its role, Former President Marcos further issued E.O. 927, which granted the LLDA additional powers and functions, viz: "Section 4. Additional Powers and Functions. - The authority shall have the following powers and functions: xxx (d) Make, alter or modify orders requiring the discontinuance of pollution specifying the conditions and time within which such continuance must be accomplished. xxx (i) Exercise such powers and perform such other functions as may be necessary to carry out its duties and responsibilities under this Executive order."

Power of LLDA to Impose Fines Petitioner asserts that LLDA has no power to impose fines since such power to impose penal sanctions, which was once lodged with the National Pollution Control Commission (NPCC), is now assumed by the Pollution Adjudication Board pursuant to Executive Order No. 192 (EO 192). 18 We disagree with petitioner. Presidential Decree No. 984 (PD 984)19 created and established the NPCC under the Office of the President. EO 192, which reorganized the DENR, created the Pollution Adjudication Board under the Office of the DENR Secretary which assumed the powers and functions of the NPCC with respect to adjudication of pollution cases. Section 19 of EO 192 provides: SEC. 19. Pollution Adjudication Board. There is hereby created a Pollution Adjudication Board under the Office of the Secretary. The Board shall be composed of the Secretary as Chairman, two (2) Undersecretaries as may be designated by the Secretary, the Director of Environmental Management, and three (3) others to be designated by the Secretary as members. The Board shall assume the powers and functions of the Commission/Commissioners of the National Pollution Control Commission with respect to the adjudication of pollution cases under Republic Act 3931 and Presidential Decree 984, particularly with respect to Section 6 letters e, f, g, j, k, and p of P.D. 984. The Environmental Management Bureau shall serve as the Secretariat of the Board. These powers and functions may be delegated to the regional officers of the Department in accordance with rules and regulations to be promulgated by the Board. (Emphasis supplied) Section 6, paragraphs (e), (f), (g), (j), (k), and (p) of PD 984 referred to above states:

SEC. 6. Powers and Functions. The Commission shall have the following powers and functions: xxx (e) Issue orders or decisions to compel compliance with the provisions of this Decree and its implementing rules and regulations only after proper notice and hearing. (f) Make, alter or modify orders requiring the discontinuance of pollution specifying the conditions and the time within which such discontinuance must be accomplished. (g) 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: Provided, however, the Commission, by rules and regulations, may require subdivisions, condominium, hospitals, public buildings and other similar human settlements to put up appropriate central sewerage system and sewage treatment works, except that no permits shall be required of any new sewage works or changes to or extensions of existing works that discharge only domestic or sanitary wastes from a single residential building provided with septic tanks or their equivalent. The Commission may impose reasonable fees and charges for the issuance or renewal of all permits herein required. xxx (j) Serve as arbitrator for the determination of reparations, or restitution of the damages and losses resulting from pollution. (k) Deputize in writing or request assistance of appropriate government agencies or instrumentalities for the purpose of enforcing this Decree and its implementing rules and regulations and the orders and decisions of the Commission. xxx (p) Exercise such powers and perform such other functions as may be necessary to carry out its duties and responsibilities under this Decree. On the other hand, LLDA is a special agency created under Republic Act No. 4850 (RA 4850)20 to manage and develop the Laguna Lake region, comprising of the provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay, Quezon and Caloocan. RA 4850, as amended by Presidential Decree No. 813 (PD 813),21mandates LLDA to carry out the development of the Laguna Lake region, 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.22 Under Executive Order No. 927 (EO 927),23 LLDA is granted additional powers and functions to effectively perform its role and to enlarge its prerogatives of monitoring, licensing and enforcement, thus: SECTION 4. Additional Powers and Functions. The Authority [LLDA] shall have the following powers and functions: a) Issue standards, rules and regulations to govern the approval of plans and specifications for sewage works and industrial waste disposal systems and the issuance of permits in accordance with the provisions of this Executive Order; inspect the construction and maintenance of sewage works and industrial waste disposal systems for compliance to plans. b) Adopt, prescribe, and promulgate rules and regulations governing the Procedures of the Authority with respect to hearings, plans, specifications, designs, and other data for sewage works and industrial waste disposal system, the filing of reports, the issuance of permits, and other rules and regulations for the proper implementation and enforcement of this Executive Order.

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: Provided, however, that the Authority, by rules and regulations, may require subdivisions, condominiums, hospitals, public buildings and other similar human settlements to put up appropriate central sewerage system and sewage treatment works, except that no permits shall be required of any new sewage works or changes to or extensions of existing works that discharge only domestic or sanitary wastes from a single residential building provided with septic tanks or their equivalent. The Authority may impose reasonable fees and charges for the issuance or renewal of all permits herein required. 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 decision of the Authority. h) Authorize its representative to enter at all reasonable times any property of the public dominion and private property devoted to industrial, manufacturing processing or commercial use without doing damage, for the purpose of inspecting and investigating conditions relating to pollution or possible or imminent pollution. i) Exercise such powers and perform such other functions as may be necessary to carry out its duties and responsibilities under this Executive Order. (Emphasis supplied) A comparison of the powers and functions of the Pollution Adjudication Board and the LLDA reveals substantial similarity. Both the Pollution Adjudication Board and the LLDA are empowered, among others, to: (1) make, alter or modify orders requiring the discontinuance of pollution; (2) issue, renew, or deny permits 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; and (3) exercise such powers and perform such other functions necessary to carry out their duties and responsibilities. The difference is that while Section 19 of EO 192 vested the Pollution Adjudication Board with the specific power to adjudicate pollution cases in general,24 the scope of authority of LLDA to adjudicate pollution cases is limited to the Laguna Lake region as defined by RA 4850, as amended. Thus, in Laguna Lake Development Authority v. Court of Appeals,25 the Court held that the adjudication of pollution cases generally pertains to the Pollution Adjudication Board, except where a special law, such as the LLDA Charter, provides for another forum. Indeed, even PD 984 authorizes the LLDA to undertake pollution control activities within LLDAs development area. Section 10 of PD 984 provides: SEC. 10. Jurisdiction. The Commission [NPCC] shall have no jurisdiction over waterworks or sewage system operated by the Metropolitan Waterworks Sewerage System, but the rules and regulations issued by the Commission for the protection and prevention of pollution under the authority herein granted shall supersede and prevail over any rules or regulations as may heretofore have been issued by other government agencies or instrumentalities on the same subject. In case of development projects involving specific human settlement sites or integrated regional or subregional projects, such as the Tondo Foreshore Development Authority and the Laguna Lake Development Authority, the

Commission shall consult with the authorities charged with the planning and execution of such projects to ensure that their pollution control standards comply with those of the Commission. Once minimum pollution standards are established and agreed upon, the development authorities concerned may, by mutual agreement and prior consultation with the Commission, undertake the pollution control activities themselves. (Boldfacing and underscoring supplied)1avvphi1 In this case, the DENRs Environmental Management Bureau endorsed to LLDA the pollution complaint against petitioner. Under Section 16 of EO 192, the Environmental Management Bureau assumed the powers and functions of the NPCC except with respect to adjudication of pollution cases, thus: SEC. 16. Environmental Management Bureau. There is hereby created an Environmental Management Bureau. The National Environmental Protection Council (NEPC), the National Pollution Control Commission (NPCC) and the Environmental Center of the Philippines (ECP), are hereby abolished and their powers and functions are hereby integrated into the Environmental Management Bureau in accordance with Section 24(c) hereof, subject to Section 19 hereof. x x x (Emphasis supplied) The Environmental Management Bureau also serves as the Secretariat of the Pollution Adjudication Board, and its Director is one of the members of the Pollution Adjudication Board. Clearly, by endorsing to LLDA the pollution complaint against petitioner, the Environmental Management Bureau deferred to LLDAs jurisdiction over the pollution complaint against petitioner. Although the Pollution Adjudication Board assumed the powers and functions of the NPCC with respect to adjudication of pollution cases, this does not preclude LLDA from assuming jurisdiction of pollution cases within its area of responsibility and to impose fines as penalty. Thus, in the recent case of The Alexandra Condominium Corporation v. Laguna Lake Development Authority,26the Court affirmed the ruling of the Court of Appeals which sustained LLDAs Order, requiring petitioner therein to pay a fine of P1,062,000 representing penalty for pollutive wastewater discharge. Although petitioner in that case did not challenge LLDAs authority to impose fine, the Court acknowledged the power of LLDA to impose fines, holding that under Section 4-A of RA 4850, as amended, LLDA is entitled to compensation for damages resulting from failure to meet established water and effluent standards. Section 4-A of RA 4850, as amended, reads: SEC. 4-A. Compensation for damages to the water and aquatic resources of Laguna de Bay and its tributaries resulting from failure to meet established water and effluent quality standards or from such other wrongful act or omission of a person, private or public, juridical or otherwise, punishable under the law shall be awarded to the Authority to be earmarked for water quality control and management. Under Section 4(h) of EO 927, LLDA may "exercise such powers and perform such other functions as may be necessary to carry out its duties and responsibilities." In Laguna Lake Development Authority v. Court of Appeals,27 the Court upheld the power of LLDA to issue an ex-parte cease and desist order even if such power is not expressly conferred by law, holding that an administrative agency has also such powers as are necessarily implied in the exercise of its express powers. The Court ruled that LLDA, in the exercise of its express powers under its charter, as a regulatory and quasi-judicial body with respect to pollution cases in the Laguna Lake region, has the implied authority to issue a "cease and desist order." In the same manner, we hold that the LLDA has the power to impose fines in the exercise of its function as a regulatory and quasi-judicial body with respect to pollution cases in the Laguna Lake region. No Undue Delegation of Legislative Power Petitioner contends that if LLDA is deemed to have implied power to impose penalties, then LLDA will have unfettered discretion to determine for itself the penalties it may impose, which will amount to undue delegation of legislative power. We do not agree. Contrary to petitioners contention, LLDAs power to impose fines is not unrestricted. In this case, LLDA investigated the

pollution complaint against petitioner and conducted wastewater sampling of petitioners effluent. It was only after the investigation result showing petitioners failure to meet the established water and effluent quality standards that LLDA imposed a fine against petitioner. LLDA then imposed upon petitioner a penalty of P1,000 per day of discharging pollutive wastewater. The P1,000 penalty per day is in accordance with the amount of penalty prescribed under PD 984: SEC. 8. Prohibitions. No person shall throw, run, drain, or otherwise dispose into any of the water, air and/or land resources of the Philippines, or cause, permit, suffer to be thrown, run, drain, allow to seep or otherwise dispose thereto any organic or inorganic matter or any substance in gaseous or liquid form that shall cause pollution thereof. xxx SEC 9. Penalties. x x x (b) Any person who shall violate any of the previous provisions of Section Eight of this Decree or its implementing rules and regulations, or any Order or Decision of the Commission, shall be liable to a penalty of not to exceed one thousand pesos each day during which the violation continues, or by imprisonment of from two years to six years, or by both fine and imprisonment, and in addition such person may be required or enjoined from continuing such violation as hereinafter provided. x x x (Emphasis supplied) Clearly, there are adequate statutory limitations on LLDAs power to impose fines which obviates unbridled discretion in the exercise of such power. WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 30 June 2004 and the Resolution dated 8 September 2004 of the Court of Appeals in CA-G.R. SP No. 75238. SO ORDERED. A. TIO VS. VIDEOGRAM REGULATORY BOARD [151 SCRA 208; G.R.

No. L-75697; 18 Jun 1987] Friday, January 30, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law

Facts: The case is a petition filed by petitioner on behalf of videogram operators adversely affected by Presidential Decree No. 1987, An Act Creating the Videogram Regulatory Board" with broad powers to regulate and supervise the videogram industry.

A month after the promulgation of the said Presidential Decree, the amended the National Internal Revenue Code provided that:

"SEC. 134. Video Tapes. There shall be collected on each processed video-tape cassette, ready for playback, regardless of length, an annual tax of five pesos; Provided, That locally manufactured or imported blank video tapes shall be subject to sales tax."

"Section 10. Tax on Sale, Lease or Disposition of Videograms. Notwithstanding any provision of law to the contrary, the province shall

collect a tax of thirty percent (30%) of the purchase price or rental rate, as the case may be, for every sale, lease or disposition of a videogram containing a reproduction of any motion picture or audiovisual program.

valid imposition.

We find no clear violation of the Constitution which would justify us in pronouncing Presidential Decree No. 1987 as unconstitutional and void.

Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province, and the other fifty percent (50%) shall accrue to the municipality where the tax is collected; PROVIDED, That inMetropolitan Manila, the tax shall be shared equally by the City/Municipality and the Metropolitan Manila Commission.

While the underlying objective of the DECREE is to protect the moribund movie industry, there is no question that public welfare is at bottom of its enactment, considering "the unfair competition posed by rampant film piracy; the erosion of the moral fiber of the viewing public brought about by the availability of unclassified and unreviewed video tapes containing pornographic films and films with brutally violent sequences; and losses

The rationale behind the tax provision is to curb the proliferation and unregulated circulation of videograms including, among others, videotapes, discs, cassettes or any technical improvement or variation thereof, have greatly prejudiced the operations of movie houses andtheaters. Such unregulated circulation have caused a sharp decline in theatrical attendance by at least forty percent (40%) and a tremendous drop in the collection of sales, contractor's specific, amusement and other taxes, thereby resulting in substantial losses estimated at P450 Million annually in government revenues.

in government revenues due to the drop in theatrical attendance, not to mention the fact that the activities of video establishments are virtually untaxed since mere payment of Mayor's permit and municipal license fees are required to engage inbusiness."

WHEREFORE, the instant Petition is hereby dismissed. No costs. G.R. No. 17122 February 27, 1922

THE UNITED STATES, plaintiff-appellee, vs. ANG TANG HO, defendant-appellant. Williams & Ferrier for appellant. Acting Attorney-General Tuason for appellee. JOHNS, J.: At its special session of 1919, the Philippine Legislature passed Act No. 2868, entitled "An Act penalizing the monopoly and holding of, and speculation in, palay, rice, and corn under extraordinary circumstances, regulating the distribution and sale thereof, and authorizing the GovernorGeneral, with the consent of the Council of State, to issue the necessary rules and regulations therefor, and making an appropriation for this purpose," the material provisions of which are as follows: Section 1. The Governor-General is hereby authorized, whenever, for any cause, conditions arise resulting in an extraordinary rise in the price of palay, rice or corn, to issue and promulgate, with the consent of the Council of State, temporary rules and emergency measures for carrying out the purpose of this Act, to wit: (a) To prevent the monopoly and hoarding of, and speculation in, palay, rice or corn. (b) To establish and maintain a government control of the distribution or sale of the commodities referred to or have such distribution or sale made by the Government itself. (c) To fix, from time to time the quantities of palay rice, or corn that a company or individual may acquire, and the maximum sale price that the industrial or merchant may demand. (d) . . . SEC. 2. It shall be unlawful to destroy, limit, prevent or in any other manner obstruct the production or milling of palay, rice or corn for the purpose of

Videogram(s) establishments collectively earn around P600 Million per annum from rentals, sales and disposition of videograms, and theseearnings have not been subjected to tax, thereby depriving theGovernment of approximately P180 Million in taxes each year.

The unregulated activities of videogram establishments have also affected the viability of the movie industry. Issues:

(1) Whether or not tax imposed by the DECREE is a valid exercise of police power. (2) Whether or nor the DECREE is constitutional. Held: Taxation has been made the implement of the state's police power. The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights, and the proliferation of pornographic video tapes. And while it was also an objective of the DECREE to protect the movie industry, the tax remains a

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

discretion of the Governor-General. The Act also says that the GovernorGeneral, "with the consent of the Council of State," is authorized to issue and promulgate "temporary rules and emergency measures for carrying out the purposes of this Act." It does not specify or define what is a temporary rule or an emergency measure, or how long such temporary rules or emergency measures shall remain in force and effect, or when they shall take effect. That is to say, the Legislature itself has not in any manner specified or defined any basis for the order, but has left it to the sole judgement and discretion of the Governor-General to say what is or what is not "a cause," and what is or what is not "an extraordinary rise in the price of rice," and as to what is a temporary rule or an emergency measure for the carrying out the purposes of the Act. Under this state of facts, if the law is valid and the Governor-General issues a proclamation fixing the minimum price at which rice should be sold, any dealer who, with or without notice, sells rice at a higher price, is a criminal. There may not have been any cause, and the price may not have been extraordinary, and there may not have been an emergency, but, if the Governor-General found the existence of such facts and issued a proclamation, and rice is sold at any higher price, the seller commits a crime. By the organic law of the Philippine Islands and the Constitution of the United States all powers are vested in the Legislative, Executive and Judiciary. It is the duty of the Legislature to make the law; of the Executive to execute the law; and of the Judiciary to construe the law. The Legislature has no authority to execute or construe the law, the Executive has no authority to make or construe the law, and the Judiciary has no power to make or execute the law. Subject to the Constitution only, the power of each branch is supreme within its own jurisdiction, and it is for the Judiciary only to say when any Act of the Legislature is or is not constitutional. Assuming, without deciding, that the Legislature itself has the power to fix the price at which rice is to be sold, can it delegate that power to another, and, if so, was that power legally delegated by Act No. 2868? In other words, does the Act delegate legislative power to the Governor-General? By the Organic Law, all Legislative power is vested in the Legislature, and the power conferred upon the Legislature to make laws cannot be delegated to the Governor-General, or any one else. The Legislature cannot delegate the legislative power to enact any law. If Act no 2868 is a law unto itself and within itself, and it does nothing more than to authorize the Governor-General to make rules and regulations to carry the law into effect, then the Legislature itself created the law. There is no delegation of power and it is valid. On the other hand, if the Act within itself does not define crime, and is not a law, and some legislative act remains to be done to make it a law or a crime, the doing of which is vested in the GovernorGeneral, then the Act is a delegation of legislative power, is unconstitutional and void. The Supreme Court of the United States in what is known as the Granger Cases (94 U.S., 183-187; 24 L. ed., 94), first laid down the rule: Railroad companies are engaged in a public employment affecting the public interest and, under the decision in Munn vs. Ill., ante, 77, are subject to legislative control as to their rates of fare and freight unless protected by their charters. The Illinois statute of Mar. 23, 1874, to establish reasonable maximum rates of charges for the transportation of freights and passengers on the different railroads of the State is not void as being repugnant to the Constitution of the United States or to that of the State. It was there for the first time held in substance that a railroad was a public utility, and that, being a public utility, the State had power to establish reasonable maximum freight and passenger rates. This was followed by the State of Minnesota in enacting a similar law, providing for, and empowering, a railroad commission to hear and determine what was a just and reasonable rate. The constitutionality of this law was attacked and upheld by the Supreme Court of Minnesota in a learned and exhaustive opinion by Justice Mitchell, in the case of State vs. Chicago, Milwaukee & St. Paul ry. Co. (38 Minn., 281), in which the court held: Regulations of railway tariffs Conclusiveness of commission's tariffs. Under Laws 1887, c. 10, sec. 8, the determination of the railroad and warehouse commission as to what are equal and reasonable fares and rates for the transportation of persons and property by a railway company is conclusive, and, in proceedings by mandamus to compel compliance with the tariff of rates recommended and published by them, no issue can be raised or inquiry had on that question.

Same constitution Delegation of power to commission. The authority thus given to the commission to determine, in the exercise of their discretion and judgement, what are equal and reasonable rates, is not a delegation of legislative power. It will be noted that the law creating the railroad commission expressly provides That all charges by any common carrier for the transportation of passengers and property shall be equal and reasonable. With that as a basis for the law, power is then given to the railroad commission to investigate all the facts, to hear and determine what is a just and reasonable rate. Even then that law does not make the violation of the order of the commission a crime. The only remedy is a civil proceeding. It was there held That the legislative itself has the power to regulate railroad charges is now too well settled to require either argument or citation of authority. The difference between the power to say what the law shall be, and the power to adopt rules and regulations, or to investigate and determine the facts, in order to carry into effect a law already passed, is apparent. The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and the conferring an authority or discretion to be exercised under and in pursuance of the law. The legislature enacts that all freights rates and passenger fares should be just and reasonable. It had the undoubted power to fix these rates at whatever it deemed equal and reasonable. They have not delegated to the commission any authority or discretion as to what the law shall be, which would not be allowable, but have merely conferred upon it an authority and discretion, to be exercised in the execution of the law, and under and in pursuance of it, which is entirely permissible. The legislature itself has passed upon the expediency of the law, and what is shall be. The commission is intrusted with no authority or discretion upon these questions. It can neither make nor unmake a single provision of law. It is merely charged with the administration of the law, and with no other power. The delegation of legislative power was before the Supreme Court of Wisconsin in Dowling vs. Lancoshire Ins. Co. (92 Wis., 63). The opinion says: "The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made." The act, in our judgment, wholly fails to provide definitely and clearly what the standard policy should contain, so that it could be put in use as a uniform policy required to take the place of all others, without the determination of the insurance commissioner in respect to maters involving the exercise of a legislative discretion that could not be delegated, and without which the act could not possibly be put in use as an act in confirmity to which all fire insurance policies were required to be issued. The result of all the cases on this subject is that a law must be complete, in all its terms and provisions, when it leaves the legislative branch of the government, and nothing must be left to the judgement of the electors or other appointee or delegate of the legislature, so that, in form and substance, it is a law in all its details in presenti, but which may be left to take effect in futuro, if necessary, upon the ascertainment of any prescribed fact or event. The delegation of legislative power was before the Supreme Court in United States vs. Grimaud (220 U.S., 506; 55 L. ed., 563), where it was held that the rules and regulations of the Secretary of Agriculture as to a trespass on government land in a forest reserve were valid constitutional. The Act there provided that the Secretary of Agriculture ". . . may make such rules and regulations and establish such service as will insure the

object of such reservations; namely, to regulate their occupancy and use, and to preserve the forests thereon from destruction;and any violation of the provisions of this act or such rules and regulations shall be punished, . . ." The brief of the United States Solicitor-General says: In refusing permits to use a forest reservation for stock grazing, except upon stated terms or in stated ways, the Secretary of Agriculture merely assert and enforces the proprietary right of the United States over land which it owns. The regulation of the Secretary, therefore, is not an exercise of legislative, or even of administrative, power; but is an ordinary and legitimate refusal of the landowner's authorized agent to allow person having no right in the land to use it as they will. The right of proprietary control is altogether different from governmental authority. The opinion says: From the beginning of the government, various acts have been passed conferring upon executive officers power to make rules and regulations, not for the government of their departments, but for administering the laws which did govern. None of these statutes could confer legislative power. But when Congress had legislated power. But when Congress had legislated and indicated its will, it could give to those who were to act under such general provisions "power to fill up the details" by the establishment of administrative rules and regulations, the violation of which could be punished by fine or imprisonment fixed by Congress, or by penalties fixed by Congress, or measured by the injury done. That "Congress cannot delegate legislative power is a principle universally recognized as vital to the integrity and maintenance of the system of government ordained by the Constitution." If, after the passage of the act and the promulgation of the rule, the defendants drove and grazed their sheep upon the reserve, in violation of the regulations, they were making an unlawful use of the government's property. In doing so they thereby made themselves liable to the penalty imposed by Congress. The subjects as to which the Secretary can regulate are defined. The lands are set apart as a forest reserve. He is required to make provisions to protect them from depredations and from harmful uses. He is authorized 'to regulate the occupancy and use and to preserve the forests from destruction.' A violation of reasonable rules regulating the use and occupancy of the property is made a crime, not by the Secretary, but by Congress." The above are leading cases in the United States on the question of delegating legislative power. It will be noted that in the "Granger Cases," it was held that a railroad company was a public corporation, and that a railroad was a public utility, and that, for such reasons, the legislature had the power to fix and determine just and reasonable rates for freight and passengers. The Minnesota case held that, so long as the rates were just and reasonable, the legislature could delegate the power to ascertain the facts and determine from the facts what were just and reasonable rates,. and that in vesting the commission with such power was not a delegation of legislative power. The Wisconsin case was a civil action founded upon a "Wisconsin standard policy of fire insurance," and the court held that "the act, . . . wholly fails to provide definitely and clearly what the standard policy should contain, so that it could be put in use as a uniform policy required to take the place of all others, without the determination of the insurance commissioner in respect to matters involving the exercise of a legislative discretion that could not be delegated." The case of the United States Supreme Court, supra dealt with rules and regulations which were promulgated by the Secretary of Agriculture for Government land in the forest reserve. These decisions hold that the legislative only can enact a law, and that it cannot delegate it legislative authority.

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

In provinces, obtaining their supplies from Manila or other producing provinces, the maximum price shall be the authorized price at the place of supply or the Manila price as the case may be, plus the transportation cost, from the place of supply and the necessary handling expenses, to the place of sale, to be determined by the provincial treasurers or their deputies. (6) Provincial treasurers and their deputies are hereby directed to communicate with, and execute all instructions emanating from the Director of Commerce and Industry, for the most effective and proper enforcement of the above regulations in their respective localities. The law says that the Governor-General may fix "the maximum sale price that the industrial or merchant may demand." The law is a general law and not a local or special law. The proclamation undertakes to fix one price for rice in Manila and other and different prices in other and different provinces in the Philippine Islands, and delegates the power to determine the other and different prices to provincial treasurers and their deputies. Here, then, you would have a delegation of legislative power to the Governor-General, and a delegation by him of that power to provincial treasurers and their deputies, who "are hereby directed to communicate with, and execute all instructions emanating from the Director of Commerce and Industry, for the most effective and proper enforcement of the above regulations in their respective localities." The issuance of the proclamation by the GovernorGeneral was the exercise of the delegation of a delegated power, and was even a sub delegation of that power. Assuming that it is valid, Act No. 2868 is a general law and does not authorize the Governor-General to fix one price of rice in Manila and another price in Iloilo. It only purports to authorize him to fix the price of rice in the Philippine Islands under a law, which is General and uniform, and not local or special. Under the terms of the law, the price of rice fixed in the proclamation must be the same all over the Islands. There cannot be one price at Manila and another at Iloilo. Again, it is a mater of common knowledge, and of which this court will take judicial notice, that there are many kinds of rice with different and corresponding market values, and that there is a wide range in the price, which varies with the grade and quality. Act No. 2868 makes no distinction in price for the grade or quality of the rice, and the proclamation, upon which the defendant was tried and convicted, fixes the selling price of rice in Manila "at P15 per sack of 57 kilos, or 63 centavos per ganta," and is uniform as to all grades of rice, and says nothing about grade or quality. Again, it will be noted that the law is confined to palay, rice and corn. They are products of the Philippine Islands. Hemp, tobacco, coconut, chickens, eggs, and many other things are also products. Any law which single out palay, rice or corn from the numerous other products of the Islands is not general or uniform, but is a local or special law. If such a law is valid, then by the same principle, the Governor-General could be authorized by proclamation to fix the price of meat, eggs, chickens, coconut, hemp, and tobacco, or any other product of the Islands. In the very nature of things, all of that class of laws should be general and uniform. Otherwise, there would be an unjust discrimination of property rights, which, under the law, must be equal and inform. Act No. 2868 is nothing more than a floating law, which, in the discretion and by a proclamation of the Governor-General, makes it a floating crime to sell rice at a price in excess of the proclamation, without regard to grade or quality. When Act No. 2868 is analyzed, it is the violation of the proclamation of the Governor-General which constitutes the crime. Without that proclamation, it was no crime to sell rice at any price. In other words, the Legislature left it to the sole discretion of the Governor-General to say what was and what was not "any cause" for enforcing the act, and what was and what was not "an extraordinary rise in the price of palay, rice or corn," and under certain undefined conditions to fix the price at which rice should be sold, without regard to grade or quality, also to say whether a proclamation should be issued, if so, when, and whether or not the law should be enforced, how long it should be enforced, and when the law should be suspended. The Legislature did not specify or define what was "any cause," or what was "an extraordinary rise in the price of rice, palay or corn," Neither did it specify or define the conditions upon which the proclamation should be issued. In the absence of the proclamation no crime was committed. The alleged sale was made a crime, if at all, because the Governor-General issued the proclamation. The act or proclamation does not say anything about the different grades or qualities of rice, and the defendant is charged with the sale "of one ganta of rice at the price of eighty centavos (P0.80) which is a price greater than that fixed by Executive order No. 53."

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

Separate Opinions MALCOLM, J., concurring: I concur in the result for reasons which reach both the facts and the law. In the first place, as to the facts, one cannot be convicted ex post facto of a violation of a law and of an executive order issued pursuant to the law, when the alleged violation thereof occurred on August 6, 1919, while the Act of the Legislature in question was not published until August 13, 1919, and the order was not published until August 20, 1919. In the second place, as to the law, one cannot be convicted of a violation of a law or of an order issued pursuant to the law when both the law and the order fail to set up an ascertainable standard of guilt. (U.S. vs. Cohen Grocery Company [1921], 255 U.S., 81, holding section 4 of the Federal Food Control Act of August 10, 1917, as amended, invalid.) In order that there may not be any misunderstanding of our position, I would respectfully invite attention to the decision of the United States Supreme Court in German Alliance Ins. Co. vs. Lewis ([1914, 233 U.S., 389), concerning the legislative regulation of the prices charged by business affected with a public interest, and to another decision of the United States Supreme Court, that of Marshall Field & Co. vs. Clark ([1892], 143 U.S., 649), which adopts as its own the principles laid down in the case of Locke's Appeal ([1873], 72 Pa. St., 491), namely; "The Legislature cannot delegate its power to make a law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend which cannot be known to the law-making power, and must, therefore, be a subject of inquiry and determination outside of the halls of legislation." Avancea and Villamor, JJ., concur. G.R. No. L-17122: US vs Ang Tang Ho Delegation of Power Admin Bodies

On 30July 1919, the Philippine Legislature (during special session) passed and approved Act No. 2868 entitled An Act Penalizing the Monopoly and Hoarding of Rice, Palay and Corn. The said act under extraordinary circumstances authorizes the Governor General to issue the necessary Rules and Regulations in regulating the distribution of such products. Pursuant to this Act, On 01 August 1919, the GG issued EO 53 which was published on 20 August 1919. The said EO fixed the price at which rice should be sold. On the other hand, Ang Tang Ho, a rice dealer, voluntarily, criminally and illegally sold a ganta of rice to Pedro Trinidad at the price of eighty centavos. The said amount was way higher than that prescribed by the EO. The sale was done on the 6th of August 1919. On 08 August 1919, he was charged in violation of the said EO. He was found guilty as charged and was sentenced to 5 months imprisonment plus a P500.00 fine. He appealed the sentence countering that there is an undue delegation of power to the Governor General. ISSUE: Whether or not there is undue delegation to the Governor General. HELD: Fist of, Ang Tang Hos conviction must be reversed because he committed the act prior to the publication of the EO. Hence, he cannot be ex post facto charged of the crime. Further, one cannot be convicted of a violation of a law or of an order issued pursuant to the law when both the law and the order fail to set up an ascertainable standard of guilt. The said Act, as to the judgment of the SC, wholly fails to provide definitely and clearly what the standard policy should contain, so that it could be put in use as a uniform policy required to take the place of all others without the

determination of the insurance commissioner in respect to matters involving the exercise of a legislative discretion that could not be delegated, and without which the act could not possibly be put in use. The law must be complete in all its terms and provisions when it leaves the legislative branch of the government and nothing must be left to the judgment of the electors or other appointee or delegate of the legislature, so that, in form and substance, it is a law in all its details in presenti, but which may be left to take effect in future, if necessary, upon the ascertainment of any prescribed fact or event.

G.R. No. 74457 March 20, 1987 RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE COURT, THE STATION COMMANDER, INTEGRATED NATIONAL POLICE, BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY, respondents. Ramon A. Gonzales for petitioner. CRUZ, J.: The essence of due process is distilled in the immortal cry of Themistocles to Alcibiades "Strike but hear me first!" It is this cry that the petitioner in effect repeats here as he challenges the constitutionality of Executive Order No. 626-A. The said executive order reads in full as follows: WHEREAS, the President has given orders prohibiting the interprovincial movement of carabaos and the slaughtering of carabaos not complying with the requirements of Executive Order No. 626 particularly with respect to age; WHEREAS, it has been observed that despite such orders the violators still manage to circumvent the prohibition against inter-provincial movement of carabaos by transporting carabeef instead; and WHEREAS, in order to achieve the purposes and objectives of Executive Order No. 626 and the prohibition against interprovincial movement of carabaos, it is necessary to strengthen the said Executive Order and provide for the disposition of the carabaos and carabeef subject of the violation; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby promulgate the following: SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no carabao regardless of age, sex, physical condition or purpose and no carabeef shall be transported from one province to another. The carabao or carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and forfeiture by the government, to be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may ay see fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos. SECTION 2. This Executive Order shall take effect immediately.

Done in the City of Manila, this 25th day of October, in the year of Our Lord, nineteen hundred and eighty. SGD.) FERDINAND E. MARCOS

President Republic of the PhilippinesThe petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on January 13, 1984, when they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of the above measurThe petitioner appealed the decision to the Intermediate Appellate Court,* 3 which upheld the trial court, ** and he has now come before us in this petition for review on certiorari. The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes outright confiscation of the carabao or carabeef being transported across provincial boundaries. His claim is that the penalty is invalid because it is imposed without according the owner a right to be heard before a competent and impartial court as guaranteed by due process. He complains that the measure should not have been presumed, and so sustained, as constitutional. There is also a challenge to the improper exercise of the legislative power by the former President under Amendment No. 6 of the 1973 Constitution. 4 While also involving the same executive order, the case of Pesigan v. Angeles 5 is not applicable here. The question raised there was the necessity of the previous publication of the measure in the Official Gazette before it could be considered enforceable. We imposed the requirement then on the basis of due process of law. In doing so, however, this Court did not, as contended by the Solicitor General, impliedly affirm the constitutionality of Executive Order No. 626-A. That is an entirely different matter. This Court has declared that while lower courts should observe a becoming modesty in examining constitutional questions, they are nonetheless not prevented from resolving the same whenever warranted, subject only to review by the highest tribunal. 6 We have jurisdiction under the Constitution to "review, revise, reverse, modify or affirm on appeal or certiorari, as the law or rules of court may provide," final judgments and orders of lower courts in, among others, all cases involving the constitutionality of certain measures. 7 This simply means that the resolution of such cases may be made in the first instance by these lower courts. And while it is true that laws are presumed to be constitutional, that presumption is not by any means conclusive and in fact may be rebutted. Indeed, if there be a clear showing of their invalidity, and of the need to declare them so, then "will be the time to make the hammer fall, and heavily," 8 to recall Justice Laurel's trenchant warning. Stated otherwise, courts should not follow the path of least resistance by simply presuming the constitutionality of a law when it is questioned. On the contrary, they should probe the issue more deeply, to relieve the abscess, paraphrasing another distinguished jurist, 9 and so heal the wound or excise the affliction. Judicial power authorizes this; and when the exercise is demanded, there should be no shirking of the task for fear of retaliation, or loss of favor, or popular censure, or any other similar inhibition unworthy of the bench, especially this Court. The challenged measure is denominated an executive order but it is really presidential decree, promulgating a new rule instead of merely implementing an existing law. It was issued by President Marcos not for the purpose of taking care that the laws were faithfully executed but in the exercise of his legislative authority under Amendment No. 6.

It was provided thereunder that whenever in his judgment there existed a grave emergency or a threat or imminence thereof or whenever the legislature failed or was unable to act adequately on any matter that in his judgment required immediate action, he could, in order to meet the exigency, issue decrees, orders or letters of instruction that were to have the force and effect of law. As there is no showing of any exigency to justify the exercise of that extraordinary power then, the petitioner has reason, indeed, to question the validity of the executive order. Nevertheless, since the determination of the grounds was supposed to have been made by the President "in his judgment, " a phrase that will lead to protracted discussion not really necessary at this time, we reserve resolution of this matter until a more appropriate occasion. For the nonce, we confine ourselves to the more fundamental question of due process. It is part of the art of constitution-making that the provisions of the charter be cast in precise and unmistakable language to avoid controversies that might arise on their correct interpretation. That is the Ideal. In the case of the due process clause, however, this rule was deliberately not followed and the wording was purposely kept ambiguous. In fact, a proposal to delineate it more clearly was submitted in the Constitutional Convention of 1934, but it was rejected by Delegate Jose P. Laurel, Chairman of the Committee on the Bill of Rights, who forcefully argued against it. He was sustained by the body. 10 The due process clause was kept intentionally vague so it would remain also conveniently resilient. This was felt necessary because due process is not, like some provisions of the fundamental law, an "iron rule" laying down an implacable and immutable command for all seasons and all persons. Flexibility must be the best virtue of the guaranty. The very elasticity of the due process clause was meant to make it adapt easily to every situation, enlarging or constricting its protection as the changing times and circumstances may require.
Aware of this, the courts have also hesitated to adopt their own specific description of due process lest they confine themselves in a legal straitjacket that will deprive them of the elbow room they may need to vary the meaning of the clause whenever indicated. Instead, they have preferred to leave the import of the protection open-ended, as it were, to be "gradually ascertained by the process of inclusion and exclusion in the course of the decision of cases as they arise." 11 Thus, Justice Felix Frankfurter of the U.S. Supreme Court, for example, would go no farther than to define due process and in so doing sums it all up as nothing more and nothing less than "the embodiment of the sporting Idea of fair play." 12 When the barons of England extracted from their sovereign liege the reluctant promise that that Crown would thenceforth not proceed against the life liberty or property of any of its subjects except by the lawful judgment of his peers or the law of the land, they thereby won for themselves and their progeny that splendid guaranty of fairness that is now the hallmark of the free society. The solemn vow that King John made at Runnymede in 1215 has since then resounded through the ages, as a ringing reminder to all rulers, benevolent or base, that every person, when confronted by the stern visage of the law, is entitled to have his say in a fair and open hearing of his cause. The closed mind has no place in the open society. It is part of the sporting Idea of fair play to hear "the other side" before an opinion is formed or a decision is made by those who sit in judgment. Obviously, one side is only one-half of the question; the other half must also be considered if an impartial verdict is to be reached based on an informed appreciation of the issues in contention. It is indispensable that the two sides complement each other, as unto the bow the arrow, in leading to the correct ruling after examination of the problem not from one or the other perspective only but in its totality. A judgment based on less that this full appraisal, on the

pretext that a hearing is unnecessary or useless, is tainted with the vice of bias or intolerance or ignorance, or worst of all, in repressive regimes, the insolence of power. The minimum requirements of due process are notice and hearing 13 which, generally speaking, may not be dispensed with because they are intended as a safeguard against official arbitrariness. It is a gratifying commentary on our judicial system that the jurisprudence of this country is rich with applications of this guaranty as proof of our fealty to the rule of law and the ancient rudiments of fair play. We have consistently declared that every person, faced by the awesome power of the State, is entitled to "the law of the land," which Daniel Webster described almost two hundred years ago in the famous Dartmouth College Case, 14 as "the law which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial." It has to be so if the rights of every person are to be secured beyond the reach of officials who, out of mistaken zeal or plain arrogance, would degrade the due process clause into a worn and empty catchword. This is not to say that notice and hearing are imperative in every case for, to be sure, there are a number of admitted exceptions. The conclusive presumption, for example, bars the admission of contrary evidence as long as such presumption is based on human experience or there is a rational connection between the fact proved and the fact ultimately presumed therefrom. 15 There are instances when the need for expeditions action will justify omission of these requisites, as in the summary abatement of a nuisance per se, like a mad dog on the loose, which may be killed on sight because of the immediate danger it poses to the safety and lives of the people. Pornographic materials, contaminated meat and narcotic drugs are inherently pernicious and may be summarily destroyed. The passport of a person sought for a criminal offense may be cancelled without hearing, to compel his return to the country he has fled. 16 Filthy restaurants may be summarily padlocked in the interest of the public health and bawdy houses to protect the public morals. 17 In such instances, previous judicial hearing may be omitted without violation of due process in view of the nature of the property involved or the urgency of the need to protect the general welfare from a clear and present danger. The protection of the general welfare is the particular function of the police power which both restraints and is restrained by due process. The police power is simply defined as the power inherent in the State to regulate liberty and property for the promotion of the general welfare. 18 By reason of its function, it extends to all the great public needs and is described as the most pervasive, the least limitable and the most demanding of the three inherent powers of the State, far outpacing taxation and eminent domain. The individual, as a member of society, is hemmed in by the police power, which affects him even before he is born and follows him still after he is dead from the womb to beyond the tomb in practically everything he does or owns. Its reach is virtually limitless. It is a ubiquitous and often unwelcome intrusion. Even so, as long as the activity or the property has some relevance to the public welfare, its regulation under the police power is not only proper but necessary. And the justification is found in the venerable Latin maxims, Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which call for the subordination of individual interests to the benefit of the greater number. It is this power that is now invoked by the government to justify Executive Order No. 626-A, amending the basic rule in Executive Order No. 626, prohibiting the slaughter of carabaos except under certain conditions. The original measure was issued for the reason, as expressed in one of its Whereases, that "present conditions demand that the carabaos and the buffaloes be conserved for the benefit of the small farmers who rely on them for energy needs." We affirm at the outset the need for such a measure. In the face of the worsening energy crisis and the increased dependence of our farms on these traditional beasts of burden, the government would have been remiss, indeed, if it had not taken steps to protect and preserve them. A similar prohibition was challenged in United States v. Toribio, 19 where a law regulating the registration, branding and slaughter of large cattle was claimed to be a deprivation of property without due process of law. The defendant had been convicted thereunder for having slaughtered his own carabao without the required permit, and he appealed to the Supreme Court. The conviction was affirmed. The law was sustained as a valid police measure to prevent the indiscriminate killing of carabaos, which were then badly needed by farmers. An epidemic had stricken many of these animals and the reduction of their number had resulted in an acute decline in agricultural output, which in turn had caused an incipient famine.

Furthermore, because of the scarcity of the animals and the consequent increase in their price, cattle-rustling had spread alarmingly, necessitating more effective measures for the registration and branding of these animals. The Court held that the questioned statute was a valid exercise of the police power and declared in part as follows: To justify the State in thus interposing its authority in behalf of the public, it must appear, first, that the interests of the public generally, as distinguished from those of a particular class, require such interference; and second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. ... From what has been said, we think it is clear that the enactment of the provisions of the statute under consideration was required by "the interests of the public generally, as distinguished from those of a particular class" and that the prohibition of the slaughter of carabaos for human consumption, so long as these animals are fit for agricultural work or draft purposes was a "reasonably necessary" limitation on private ownership, to protect the community from the loss of the services of such animals by their slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy the luxury of animal food, even when by so doing the productive power of the community may be measurably and dangerously affected. In the light of the tests mentioned above, we hold with the Toribio Case that the carabao, as the poor man's tractor, so to speak, has a direct relevance to the public welfare and so is a lawful subject of Executive Order No. 626. The method chosen in the basic measure is also reasonably necessary for the purpose sought to be achieved and not unduly oppressive upon individuals, again following the above-cited doctrine. There is no doubt that by banning the slaughter of these animals except where they are at least seven years old if male and eleven years old if female upon issuance of the necessary permit, the executive order will be conserving those still fit for farm work or breeding and preventing their improvident depletion. But while conceding that the amendatory measure has the same lawful subject as the original executive order, we cannot say with equal certainty that it complies with the second requirement, viz., that there be a lawful method. We note that to strengthen the original measure, Executive Order No. 626-A imposes an absolute ban not on theslaughter of the carabaos but on their movement, providing that "no carabao regardless of age, sex, physical condition or purpose (sic) and no carabeef shall be transported from one province to another." The object of the prohibition escapes us. The reasonable connection between the means employed and the purpose sought to be achieved by the questioned measure is missing We do not see how the prohibition of the inter-provincial transport of carabaos can prevent their indiscriminate slaughter, considering that they can be killed anywhere, with no less difficulty in one province than in another. Obviously, retaining the carabaos in one province will not prevent their slaughter there, any more than moving them to another province will make it easier to kill them there. As for the carabeef, the prohibition is made to apply to it as otherwise, so says executive order, it could be easily circumvented by simply killing the animal. Perhaps so. However, if the movement of the live animals for the purpose of preventing their slaughter cannot be prohibited, it should follow that there is no reason either to prohibit their transfer as, not to be flippant dead meat. Even if a reasonable relation between the means and the end were to be assumed, we would still have to reckon with the sanction that the measure applies for violation of the prohibition. The penalty is outright confiscation of the carabao or carabeef being transported, to be meted out by the executive authorities, usually the police only. In the Toribio Case, the statute was sustained because the penalty prescribed was fine and imprisonment, to be imposed by the court after trial and conviction of the accused. Under the challenged measure, significantly, no such trial is prescribed, and the property being transported is immediately impounded by the police and declared, by the measure itself, as forfeited to the government. In the instant case, the carabaos were arbitrarily confiscated by the police station commander, were returned to the petitioner only after he had filed a complaint for recovery and given a supersedeas bond of P12,000.00, which was ordered confiscated upon his failure to produce the carabaos when ordered by the trial court. The executive order defined the prohibition, convicted the petitioner and immediately imposed punishment, which was carried out forthright. The measure struck at once and pounced upon the

petitioner without giving him a chance to be heard, thus denying him the centuries-old guaranty of elementary fair play. It has already been remarked that there are occasions when notice and hearing may be validly dispensed with notwithstanding the usual requirement for these minimum guarantees of due process. It is also conceded that summary action may be validly taken in administrative proceedings as procedural due process is not necessarily judicial only. 20 In the exceptional cases accepted, however. there is a justification for the omission of the right to a previous hearing, to wit, the immediacy of the problem sought to be corrected and the urgency of the need to correct it. In the case before us, there was no such pressure of time or action calling for the petitioner's peremptory treatment. The properties involved were not even inimical per se as to require their instant destruction. There certainly was no reason why the offense prohibited by the executive order should not have been proved first in a court of justice, with the accused being accorded all the rights safeguarded to him under the Constitution. Considering that, as we held in Pesigan v. Angeles, 21 Executive Order No. 626-A is penal in nature, the violation thereof should have been pronounced not by the police only but by a court of justice, which alone would have had the authority to impose the prescribed penalty, and only after trial and conviction of the accused. We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed in the questioned executive order. It is there authorized that the seized property shall "be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commissionmay see fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industrymay see fit, in the case of carabaos." (Emphasis supplied.) The phrase "may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the said officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a "roving commission," a wide and sweeping authority that is not "canalized within banks that keep it from overflowing," in short, a clearly profligate and therefore invalid delegation of legislative powers. To sum up then, we find that the challenged measure is an invalid exercise of the police power because the method employed to conserve the carabaos is not reasonably necessary to the purpose of the law and, worse, is unduly oppressive. Due process is violated because the owner of the property confiscated is denied the right to be heard in his defense and is immediately condemned and punished. The conferment on the administrative authorities of the power to adjudge the guilt of the supposed offender is a clear encroachment on judicial functions and militates against the doctrine of separation of powers. There is, finally, also an invalid delegation of legislative powers to the officers mentioned therein who are granted unlimited discretion in the distribution of the properties arbitrarily taken. For these reasons, we hereby declare Executive Order No. 626-A unconstitutional. We agree with the respondent court, however, that the police station commander who confiscated the petitioner's carabaos is not liable in damages for enforcing the executive order in accordance with its mandate. The law was at that time presumptively valid, and it was his obligation, as a member of the police, to enforce it. It would have been impertinent of him, being a mere subordinate of the President, to declare the executive order unconstitutional and, on his own responsibility alone, refuse to execute it. Even the trial court, in fact, and the Court of Appeals itself did not feel they had the competence, for all their superior authority, to question the order we now annul. The Court notes that if the petitioner had not seen fit to assert and protect his rights as he saw them, this case would never have reached us and the taking of his property under the challenged measure would have become afait accompli despite its invalidity. We commend him for his spirit. Without the present challenge, the matter would have ended in that pump boat in Masbate and another violation of the Constitution, for all its obviousness, would have been perpetrated, allowed without protest, and soon forgotten in the limbo of relinquished rights.

The strength of democracy lies not in the rights it guarantees but in the courage of the people to invoke them whenever they are ignored or violated. Rights are but weapons on the wall if, like expensive tapestry, all they do is embellish and impress. Rights, as weapons, must be a promise of protection. They become truly meaningful, and fulfill the role assigned to them in the free society, if they are kept bright and sharp with use by those who are not afraid to assert them. WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except as affirmed above, the decision of the Court of Appeals is reversed. The supersedeas bond is cancelled and the amount thereof is ordered restored to the petitioner. No costs. SO ORDERED. I. Restituto Ynot vs Intermediate Appellate Court 23112010 Police Power Not Validly Exercised There had been an existing law which prohibited the slaughtering of carabaos (EO 626). To strengthen the law, Marcos issued EO 626-A which not only banned the movement of carabaos from interprovinces but as well as the movement of carabeef. On 13 Jan 1984, Ynot was caught transporting 6 carabaos from Masbate to Iloilo. He was then charged in violation of EO 626-A. Ynot averred EO 626-A as unconstitutional for it violated his right to be heard or his right to due process. He said that the authority provided by EO 626-A to outrightly confiscate carabaos even without being heard is unconstitutional. The lower court ruled against Ynot ruling that the EO is a valid exercise of police power in order to promote general welfare so as to curb down the indiscriminate slaughter of carabaos. ISSUE: Whether or not the law is valid. HELD: The SC ruled that the EO is not valid as it indeed violates due process. EO 626-A ctreated a presumption based on the judgment of the executive. The movement of carabaos from one area to the other does not mean a subsequent slaughter of the same would ensue. Ynot should be given to defend himself and explain why the carabaos are being transferred before they can be confiscated. The SC found that the challenged measure is an invalid exercise of the police power because the method employed to conserve the carabaos is not reasonably necessary to the purpose of the law and, worse, is unduly oppressive. Due process is violated because the owner of the property confiscated is denied the right to be heard in his defense and is immediately condemned and punished. The conferment on the administrative authorities of the power to adjudge the guilt of the supposed offender is a clear encroachment on judicial functions and militates against the doctrine of separation of powers. There is, finally, also an invalid delegation of legislative powers to the officers mentioned therein who are granted unlimited discretion in the distribution of the properties arbitrarily taken. A. Calalang vs Williams, Constitutional Law Digest September 9, 2008 G.R. No. 47800. December 2, 1940 MAXIMO CALALANG, petitioner, vs. A. D. WILLIAMS, ET AL., respondents.Maximo Calalang in his own behalf. The case of Calalang vs Williams is known for the elegant exposition of the definition of social justice. In this case, Justice Laurel defined social justice as neither communism, nor despotism, nor atomism, nor anarchy but humanization of laws and equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. As I browse through the entire case, I found out that there is more to this case than the definition of social justice. In fact, another important issue raised here is whether there was a valid delegation of power by the National Assembly to the Director of Public Works. Let us begin with the facts of the case. Facts: In pursuance of Commonwealth Act 548 which mandates the the Director of Public Works, with the approval of the Secretary of Public Works and

Communications, shall promulgate the necessary rules and regulations to regulate and control the use of and traffic on such roads and streets to promote safe transit upon, and avoid obstructions on, roads and streets designated as national roads, the Director of Public Works adopted the resolution of the National Traffic Commission, prohibiting the passing of animal drawn vehicles in certain streets in Manila. Petitioner questioned this as it constitutes an undue delegation of legislative power. Issues: Whether or not there is a undue delegation of legislative power? Ruling: There is no undue deleagation of legislative power. Commonwealth Act 548 does not confer legislative powers to the Director of Public Works. The authority conferred upon them and under which they promulgated the rules and regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit, to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines and to close them temporarily to any or all classes of traffic whenever the condition of the road or the traffic makes such action necessary or advisable in the public convenience and interest. The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the application of said law is to be predicated. To promulgate rules and regulations on the use of national roads and to determine when and how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public convenience and interest, is an administrative function which cannot be directly discharged by the National Assembly. It must depend on the discretion of some other government official to whom is confided the duty of determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion is the making of the law. Calalang vs Williams (1940) G.R. 47800 Facts: The National Traffic Commission, in its resolution of 17 July 1940, resolved to recommend to the Director of Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante Bridge to traffic. The Chairman of the National Traffic Commission, on 18 July 1940, recommended to the Director of Public Works the adoption of the measure proposed in the resolution, in pursuance of the provisions of Commonwealth Act 548, which authorizes said Director of Public Works, with the approval of the Secretary of Public Works and Communications, to promulgate rules and regulations to regulate and control the use of and traffic on national roads. On 2 August 1940, the Director of Public Works, in his first endorsement to the Secretary of Public Works and Communications, recommended to the latter the

approval of the recommendation made by the Chairman of the National Traffic Commission, with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street. On 10 August 1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during the hours as indicated, for a period of 1 year from the date of the opening of the Colgante Bridge to traffic. The Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and regulations thus adopted. Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before the Supreme court the petition for a writ of prohibition against A. D. Williams, as Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila Issue: Whether or not there is a undue delegation of legislative power? Ruling: There is no undue delegation of legislative power. Commonwealth Act 548 does not confer legislative powers to the Director of Public Works. The authority conferred upon them and under which they promulgated the rules and regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit, to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines and to close them temporarily to any or all classes of traffic whenever the condition of the road or the traffic makes such action necessary or advisable in the public convenience and interest. The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the application of said law is to be predicated. To promulgate rules and regulations on the use of national roads and to determine when and how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public convenience and interest, is an administrative function which cannot be directly discharged by the National Assembly. It must depend on the discretion of some other government official to whom is confided the duty of determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion is the making of the law.

469 SCRA 1: September 1, 2005 Facts: RA 9337: VAT Reform Act enacted on May 24, 2005. Sec. 4 (sales of goods and properties), Sec. 5 (importation of goods) and Sec. 6 (services and lease of property) of RA 9337, in collective, granted the Secretary of Finance the authority to ascertain: (a) whether by 12/31/05, the VAT collection as a percentage of the 2004 GDP exceeds 2.8% or (b)the national government deficit as a percentage of the 2004 GDP exceeds 1.5%. If either condition is met, the Sec of Finance must inform the President who, in turn, must impose the 12% VAT rate (from 10%) effective January 1, 2006. ABAKADA maintained that Congress abandoned its exclusive authority to fix taxes and that RA 9337 contained a uniform proviso authorizing the President upon recommendation by the DOF Secretary to rasie VAT to 12%. Sen Pimentel maintained that RA 9337 constituted undue delegation of legislative powers and a violation of due process since the law was ambiguous and arbitrary. Same with Rep. Escudero. Pilipinas Shell dealers argued that the VAT reform was arbitrary, oppressive and confiscatory. Respondents countered that the law was complete, that it left no discretion to the President, and that it merely charged the President with carrying out the rate increase once any of the two conditions arise. Issue: WON there was undue delegation. Held: No delegation but mere implementation of the law. Constitution allows as under exempted delegation the delegation of tariffs, customs duties, and other tolls, levies on goods imported and exported. VAT is tax levied on sales of goods and services which could not fall under this exemption. Hence, its delegation if unqualified is unconstitutional. Legislative power is authority to make a complete law. Thus, to be valid, a law must be complete in itself, setting forth therein the policy and it must fix a standard, limits of which are sufficiently determinate and determinable. No undue delegation when congress describes what job must be done who must do it and the scope of the authority given. (Edu v Ericta) Sec of Finance was merely tasked to ascertain the existence of facts. All else was laid out. Mainly ministerial for the Secretary to ascertain the facts and for the president to carry out the implementation for the VAT. They were agents of the legislative dept

1. ABAKADA v. Ermita (Delegation to the President)

tantamount to deprivation of property without due process of law, a constitutional guarantee available to every individual.

B. Tadlip vs. SCRA 441

Borres,

Jr. 474
The actual review of the subject issuance of the respondent should be undertaken in the proper judicial proceedings, and not by this Court at this time via an administrative action. Nevertheless, respondent's culpability under the Code of Professional Responsibility is indubitable. As a lawyer, the IBP determined, and we subscribe to such determination, that respondent violated Canon 1 of the Code of Professional Responsibility which states: Canon 1A lawyer shall uphold the Constitution, obey the laws of the land and promote respect for law and for legal processes.

DOCTRINES: A lawyer assumes responsibilities well beyond the basic requirements of good citizenship as a servant of the law, a lawyer should moreover make himself an examplar of others to emulate. A member of the bar who assumes public office does not shed his professional obligations the Code of Professional Responsibility was not meant to govern the conduct of private practitioners alone, but of all lawyers including those in the government service.

FACTS: This case involves a parcel land of land situated in Mambajao, Camiguin which was issued OCT No. P-106, Emancipation Patent No. A-028380 by the MAR to Eusebio Arce. The land was formerly owned by Angel Madarieta.

While the duty to uphold the Constitution and obey the laws is an obligation imposed upon every citizen, a lawyer assumes responsibilities well beyond the basic requirements of good citizenship. As a servant of the law, a lawyer should moreover make himself an exemplar of others to emulate.

Subsequently, a Deed of Transfer under PD 27 was executed by Angel Madarieta, as represented by his wife, Pelagia Madarieta and Eusebio Arce.

Six years later Arce died and was succeeded by two minors and Tadlip, his nephew, assumed the responsibility of tilling the land. Tadlip caused the reallocation of the disputed land.

Respondent, as PARAD of DARAB issued an order dated 3 April 1998 granting the petition of complainant reallocating the land to him and heirs of Arce. However, the title was never transferred to the complainant and the heirs of Arce because unknown to them respondent rendered another Order dated 26 January 1999 cancelling the registration of the same OCT No. P-106 and ordering the issuance of a TCT ex parte in favor of Madarieta. He also approved the motion of execution filed by Madarieta.

A member of the bar who assumes public office does not shed his professional obligations. Hence the Code of Professional Responsibility, promulgated on 21 June 1988, was not meant to govern the conduct of private practitioners alone, but of all lawyers including those in government service. This is clear from Canon 6 of the said Code. Lawyers in government service are public servants who owe the utmost fidelity to the public service. Thus they should be more sensitive in the performance of their professional obligations, as their conduct is subject to the ever-constant scrutiny of the public.

ISSUE: Whether the respondent is guilty of gross ignorance of the law.

Respondent, as a Provincial Adjudicator of the DARAB, was reposed with a higher gravamen of responsibility than a lawyer in private practice. The recommended penalty of two months suspension is too light under the circumstances, and a penalty of six (6) months' suspension more appropriate.

HELD: Respondent's non-observance of the DARAB Rules on notice and hearing and his grant to Madarieta of her motion for execution pending appeal in effect deprived complainant of the land he tills and the source of his income. Complainant woke up one day not knowing that the emancipated land which he thought was already reallocated to him was lost by order of respondent. He was not given the chance to defend his claim over the property. This is

As held in recent cases, the penalty for a judge found to be guilty of gross ignorance of the law is six (6) months. In the case at bar, after due consideration of the facts involved, the Court believes and so holds that the same penalty should be imposed upon respondent as he disregarded pertinent rules of procedure of the DARAB that led to the unjust deprivation of complainant of his property. WHEREFORE, premises considered, respondent is hereby SUSPENDED from the practice of law for a period of six (6) months.

COMELEC V. ESPAOL [417 SCRA 554 (2003)] FACTS: Bautista executed an Affidavit-Complaint charging the Poblete, et.al. of vote buying and filed the same with the Law Department of the COMELEC which recommended that the resolution of the Office of the Cavite Provincial Prosecutor be nullified because the accused are exempt. HELD: The Court sustained the authority of the COMELEC to exempt from prosecution persons charged with vote-buying, vote-selling, and conspiracy to bribe voters who volunteer to give information and testify on any information under Section 28 of R.A. No. 6648. The immunity statute seeks a rational accommodation between the imperatives of the privilege against self-incrimination and the legitimate demands of government to encourage citizens, including law violators themselves, to testify against law violators. The statute operates as a complete pardon for the offenses to which the information was given.