Malaga vs.

Penachos
FACTS:
The Iloilo State College of Fisheries (ISCOF) through its Pre-qualifications, Bids
and Awards Committee (PBAC) caused the publication in the November 25, 26 and 28,
1988 issues of the Western Visayas Daily an Invitation to Bid for the construction of a
Micro Laboratory Building at ISCOF. The notice announced that the last day for the
submission of pre-qualification requirements was on December 2, 1988, and that the
bids would be received and opened on December 12, 1988 at 3 o'clock in the afternoon.
Petitioners Malaga and Najarro, doing business under the name of BE
Construction and Best Built Construction, respectively, submitted their pre-qualification
documents at two o'clock in the afternoon of December 2, 1988. Petitioner Occeana
submitted his own PRE-C1 on December 5, 1988. All three of them were not allowed to
participate in the bidding as their documents were considered late.
On December 12, 1988, the petitioners filed a complaint with the Iloilo RTC
against the officers of PBAC for their refusal without just cause to accept them resulting
to their non-inclusion in the list of pre-qualified bidders. They sought to the resetting of
the December 12, 1988 bidding and the acceptance of their documents. They also
asked that if the bidding had already been conducted, the defendants be directed not to
award the project pending resolution of their complaint.
On the same date, Judge Lebaquin issued a restraining order prohibiting PBAC
from conducting the bidding and award the project. The defendants filed a motion to lift
the restraining order on the ground that the court is prohibited from issuing such order,
preliminary injunction and preliminary mandatory injunction in government infrastructure
project under Sec. 1 of P.D. 1818. They also contended that the preliminary injunction
had become moot and academic as it was served after the bidding had been awarded
and closed.
On January 2, 1989, the trial court lifted the restraining order and denied the
petition for preliminary injunction. It declared that the building sought to be constructed
at the ISCOF was an infrastructure project of the government falling within the coverage
of the subject law.
ISSUE:
Whether or not ISCOF is a government instrumentality subject to the provisions of PD
1818?
RULING:
The 1987 Administrative Code defines a government instrumentality as follows:
Instrumentality refers to any agency of the National Government, not integrated within
the department framework, vested with special functions or jurisdiction by law, endowed
with some if not all corporate powers, administering special funds, and enjoying
operational autonomy, usually through a charter. This term includes regulatory agencies,
chartered institutions, and government-owned or controlled corporations. (Sec. 2 (5)
Introductory Provisions).
The
same
Code
describes
a
chartered
institution
thus:
Chartered institution - refers to any agency organized or operating under a special
charter, and vested by law with functions relating to specific constitutional policies or
objectives. This term includes the state universities and colleges, and the monetary
authority of the state. (Sec. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered institution and is
therefore covered by P.D. 1818.
There are also indications in its charter that ISCOF is a government
instrumentality. First, it was created in pursuance of the integrated fisheries
development policy of the State, a priority program of the government to effect the
socio-economic life of the nation. Second, the Treasurer of the Republic of the
Philippines shall also be the ex-officio Treasurer of the state college with its accounts
and expenses to be audited by the Commission on Audit or its duly authorized
representative. Third, heads of bureaus and offices of the National Government are
authorized to loan or transfer to it, upon request of the president of the state college,
such apparatus, equipment, or supplies and even the services of such employees as
can be spared without serious detriment to public service. Lastly, an additional amount
of P1.5M had been appropriated out of the funds of the National Treasury and it was
also decreed in its charter that the funds and maintenance of the state college would
henceforth be included in the General Appropriations Law.
Nevertheless, it does not automatically follow that ISCOF is covered by the
prohibition in the said decree as there are irregularities present surrounding the
transaction that justified the injunction issued as regards to the bidding and the award of
the project (citing the case of Datiles vs. Sucaldito).
G.R. No. L-5279
October 31, 1955
PHILIPPINE ASSOCIATION OF COLLEGES AND UNIVERSITIES, ETC
vs.
SECRETARY OF EDUCATION and the BOARD OF TEXTBOOKS
FACTS:
The Philippine Association of Colleges and Universities made a petition that Acts
No. 2706 otherwise known as the Act making the Inspection and Recognition of private
schools and colleges obligatory for the Secretary of Public Instruction and was
amended by Act No. 3075 and Commonwealth Act No. 180 be declared unconstitutional
on the grounds that 1) the act deprives the owner of the school and colleges as well as
teachers and parents of liberty and property without due process of Law; 2) it will also
deprive the parents of their Natural Rights and duty to rear their children for civic
efficiency and 3) its provisions conferred on the Secretary of Education unlimited
powers and discretion to prescribe rules and standards constitute towards unlawful
delegation of Legislative powers.
Section 1 of Act No. 2706
It shall be the duty of the Secretary of Public Instruction to maintain a general standard of efficiency in all private
schools and colleges of the Philippines so that the same shall furnish adequate instruction to the public, in
accordance with the class and grade of instruction given in them, and for this purpose said Secretary or his duly
authorized representative shall have authority to advise, inspect, and regulate said schools and colleges in order to
determine the efficiency of instruction given in the same,

The petitioner also complain that securing a permit to the Secretary of Education
before opening a school is not originally included in the original Act 2706. And in
support to the first proposition of the petitioners they contended that the Constitution
guaranteed the right of a citizen to own and operate a school and any law requiring
previous governmental approval or permit before such person could exercise the said

right On the other hand, the defendant Legal Representative submitted a memorandum
contending that 1) the matters presented no justiciable controversy exhibiting
unavoidable necessity of deciding the constitutional question; 2) Petitioners are in
estoppels to challenge the validity of the said act and 3) the Act is constitutionally valid.
Thus, the petition for prohibition was dismissed by the court.
ISSUE:
Whether or not Act No. 2706 as amended by Act no. 3075 and Commonwealth
Act no. 180 may be declared void and unconstitutional?
RATIO DECIDENTI:
The Petitioner suffered no wrong under the terms of law and needs no relief in
the form they seek to obtain. Moreover, there is no justiciable controversy presented
before the court. It is an established principle that to entitle a private individual
immediately in danger of sustaining a direct injury and it is not sufficient that he has
merely invoke the judicial power to determined the validity of executive and legislative
action he must show that he has sustained common interest to all members of the
public. Furthermore, the power of the courts to declare a law unconstitutional arises only
when the interest of litigant require the use of judicial authority for their protection
against actual interference. As such, Judicial Power is limited to the decision of actual
cases and controversies and the authority to pass on the validity of statutes is incidental
to the decisions of such cases where conflicting claims under the constitution and under
the legislative act assailed as contrary to the constitution but it is legitimate only in the
last resort and it must be necessary to determined a real and vital controversy between
litigants. Thus, actions like this are brought for a positive purpose to obtain actual
positive relief and the court does not sit to adjudicate a mere academic question to
satisfy scholarly interest therein. The court however, finds the defendant position to be
sufficiently sustained and state that the petitioner remedy is to challenge the regulation
not to invalidate the law because it needs no argument to show that abuse by officials
entrusted with the execution of the statute does not per se demonstrate the
unconstitutionality of such statute. On this phase of the litigation the court conclude that
there has been no undue delegation of legislative power even if the petitioners
appended a list of circulars and memoranda issued by the Department of Education
they fail to indicate which of such official documents was constitutionally objectionable
for being capricious or pain nuisance. Therefore, the court denied the petition for
prohibition.