ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
1.) Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 17122 February 27, 1922
THE UNITED STATES, plaintiff-appellee,
vs.
ANG TANG HO, defendant-appellant.
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
Governor-General, 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 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.
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
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 Governor-General, 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 Governor-General. 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 Governor-General, "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 Governor-General, 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.
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
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.
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
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 57½ kilos, or 29 centavos per ganta.
Rice at P15 per sack of 57½ kilos, or 63 centavos per ganta.
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
Corn at P8 per sack of 57½ 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 Governor-General 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 57½ 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
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
form of government, under the terms and conditions specified in Act No. 2868, has ever unconstitutional. It does not decide or undertake to construe the constitutionality of any of the
enacted a law delegating the power to any one, to fix the price at which rice should be sold. remaining portions of the Act.
That power can never be delegated under a republican form of government.
The judgment of the lower court is reversed, and the defendant discharged. So ordered.
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
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
2. [G.R. No. 159357. April 28, 2004]
Brother MARIANO MIKE Z. VELARDE, petitioner, vs. SOCIAL JUSTICE
SOCIETY, respondent.
DECISION
PANGANIBAN, J.:
A decision that does not conform to the form and substance required by the Constitution and
the law is void and deemed legally inexistent. To be valid, decisions should comply with the
form, the procedure and the substantive requirements laid out in the Constitution, the Rules of
Court and relevant circulars/orders of the Supreme Court. For the guidance of the bench and
the bar, the Court hereby discusses these forms, procedures and requirements.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the June
12, 2003 Decision[2] and July 29, 2003 Order[3] of the Regional Trial Court (RTC) of Manila
(Branch 49).[4]
The challenged Decision was the offshoot of a Petition for Declaratory Relief[5] filed before
the RTC-Manila by herein Respondent Social Justice Society (SJS) against herein Petitioner
Mariano Mike Z. Velarde, together with His Eminence, Jaime Cardinal Sin, Executive
Minister Erao Manalo, Brother Eddie Villanueva and Brother Eliseo F. Soriano as co-
respondents. The Petition prayed for the resolution of the question whether or not the act of a
religious leader like any of herein respondents, in endorsing the candidacy of a candidate for
elective office or in urging or requiring the members of his flock to vote for a specified
candidate, is violative of the letter or spirit of the constitutional provisions x x x.[6]
Alleging that the questioned Decision did not contain a statement of facts and a dispositive
portion, herein petitioner filed a Clarificatory Motion and Motion for Reconsideration before
the trial court. Soriano, his co-respondent, similarly filed a separate Motion for
Reconsideration. In response, the trial court issued the assailed Order, which held as follows:
x x x [T]his Court cannot reconsider, because what it was asked to do, was only to clarify a
Constitutional provision and to declare whether acts are violative thereof. The Decision did
not make a dispositive portion because a dispositive portion is required only in coercive
reliefs, where a redress from wrong suffered and the benefit that the prevailing party wronged
should get. The step that these movants have to take, is direct appeal under Rule 45 of the
Rules of Court, for a conclusive interpretation of the Constitutional provision to the Supreme
Court.[7]
The Antecedent Proceedings
On January 28, 2003, SJS filed a Petition for Declaratory Relief (SJS Petition) before the
RTC-Manila against Velarde and his aforesaid co-respondents. SJS, a registered political
party, sought the interpretation of several constitutional provisions,[8] specifically on the
separation of church and state; and a declaratory judgment on the constitutionality of the acts
of religious leaders endorsing a candidate for an elective office, or urging or requiring the
members of their flock to vote for a specified candidate.
The subsequent proceedings were recounted in the challenged Decision in these words:
x x x. Bro. Eddie Villanueva submitted, within the original period [to file an Answer], a
Motion to Dismiss. Subsequently, Executive Minister Erao Manalo and Bro. Mike Velarde,
filed their Motions to Dismiss. While His Eminence Jaime Cardinal L. Sin, filed a Comment
and Bro. Eli Soriano, filed an Answer within the extended period and similarly prayed for the
dismissal of the Petition. All sought the dismissal of the Petition on the common grounds that
it does not state a cause of action and that there is no justiciable controversy. They were
ordered to submit a pleading by way of advisement, which was closely followed by another
Order denying all the Motions to Dismiss. Bro. Mike Velarde, Bro. Eddie Villanueva and
Executive Minister Erao Manalo moved to reconsider the denial. His Eminence Jaime
Cardinal L. Sin, asked for extension to file memorandum. Only Bro. Eli Soriano complied
with the first Order by submitting his Memorandum. x x x.
x x x the Court denied the Motions to Dismiss, and the Motions for Reconsideration filed by
Bro. Mike Velarde, Bro. Eddie Villanueva and Executive Minister Erao Manalo, which raised
no new arguments other than those already considered in the motions to dismiss x x x.[9]
After narrating the above incidents, the trial court said that it had jurisdiction over the
Petition, because in praying for a determination as to whether the actions imputed to the
respondents are violative of Article II, Section 6 of the Fundamental Law, [the Petition] has
raised only a question of law.[10] It then proceeded to a lengthy discussion of the issue raised
in the Petition the separation of church and state even tracing, to some extent, the historical
background of the principle. Through its discourse, the court a quo opined at some point that
the [e]ndorsement of specific candidates in an election to any public office is a clear violation
of the separation clause.[11]
After its essay on the legal issue, however, the trial court failed to include a dispositive
portion in its assailed Decision. Thus, Velarde and Soriano filed separate Motions for
Reconsideration which, as mentioned earlier, were denied by the lower court.
Hence, this Petition for Review.[12]
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This Court, in a Resolution[13] dated September 2, 2003, required SJS and the Office of the
Solicitor General (OSG) to submit their respective comments. In the same Resolution, the
Court gave the other parties -- impleaded as respondents in the original case below --the
opportunity to comment, if they so desired.
On April 13, 2004, the Court en banc conducted an Oral Argument.[14]
The Issues
In his Petition, Brother Mike Velarde submits the following issues for this Courts resolution:
1. Whether or not the Decision dated 12 June 2003 rendered by the court a quo was proper
and valid;
2. Whether or not there exists justiceable controversy in herein respondents Petition for
declaratory relief;
3. Whether or not herein respondent has legal interest in filing the Petition for declaratory
relief;
4. Whether or not the constitutional question sought to be resolved by herein respondent is
ripe for judicial determination;
5. Whether or not there is adequate remedy other than the declaratory relief; and,
6. Whether or not the court a quo has jurisdiction over the Petition for declaratory relief of
herein respondent.[15]
During the Oral Argument, the issues were narrowed down and classified as follows:
A. Procedural Issues
Did the Petition for Declaratory Relief raise a justiciable controversy? Did it state a cause of
action? Did respondent have any legal standing to file the Petition for Declaratory Relief?
B. Substantive Issues
1. Did the RTC Decision conform to the form and substance required by the Constitution, the
law and the Rules of Court?
2. May religious leaders like herein petitioner, Bro. Mike Velarde, be prohibited from
endorsing candidates for public office? Corollarily, may they be banned from campaigning
against said candidates?
The Courts Ruling
The Petition of Brother Mike Velarde is meritorious.
Procedural Issues:
Requisites of Petitions
for Declaratory Relief
Section 1 of Rule 63 of the Rules of Court, which deals with petitions for declaratory relief,
provides in part:
Section 1. Who may file petition.- Any person interested under a deed, will, contract or other
written instrument, whose rights are affected by a statute, executive order or regulation,
ordinance, or any other governmental regulation may, before breach or violation thereof,
bring an action in the appropriate Regional Trial Court to determine any question of
construction or validity arising, and for a declaration of his rights or duties thereunder.
Based on the foregoing, an action for declaratory relief should be filed by a person interested
under a deed, a will, a contract or other written instrument, and whose rights are affected by a
statute, an executive order, a regulation or an ordinance. The purpose of the remedy is to
interpret or to determine the validity of the written instrument and to seek a judicial
declaration of the parties rights or duties thereunder.[16] The essential requisites of the action
are as follows: (1) there is a justiciable controversy; (2) the controversy is between persons
whose interests are adverse; (3) the party seeking the relief has a legal interest in the
controversy; and (4) the issue is ripe for judicial determination.[17]
Justiciable Controversy
Brother Mike Velarde contends that the SJS Petition failed to allege, much less establish
before the trial court, that there existed a justiciable controversy or an adverse legal interest
between them; and that SJS had a legal right that was being violated or threatened to be
violated by petitioner. On the contrary, Velarde alleges that SJS premised its action on mere
speculations, contingent events, and hypothetical issues that had not yet ripened into an actual
controversy. Thus, its Petition for Declaratory Relief must fail.
A justiciable controversy refers to an existing case or controversy that is appropriate or ripe
for judicial determination, not one that is conjectural or merely anticipatory.[18] The SJS
Petition for Declaratory Relief fell short of this test. It miserably failed to allege an existing
controversy or dispute between the petitioner and the named respondents therein. Further, the
Petition did not sufficiently state what specific legal right of the petitioner was violated by the
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respondents therein; and what particular act or acts of the latter were in breach of its rights,
the law or the Constitution.
As pointed out by Brother Eliseo F. Soriano in his Comment,[19] what exactly has he done that
merited the attention of SJS? He confesses that he does not know the answer, because the SJS
Petition (as well as the assailed Decision of the RTC) yields nothing in this respect. His
Eminence, Jaime Cardinal Sin, adds that, at the time SJS filed its Petition on January 28,
2003, the election season had not even started yet; and that, in any event, he has not been
actively involved in partisan politics.
An initiatory complaint or petition filed with the trial court should contain a plain, concise
and direct statement of the ultimate facts on which the party pleading relies for his claim x x
x.[20] Yet, the SJS Petition stated no ultimate facts.
Indeed, SJS merely speculated or anticipated without factual moorings that, as religious
leaders, the petitioner and his co-respondents below had endorsed or threatened to endorse a
candidate or candidates for elective offices; and that such actual or threatened endorsement
will enable [them] to elect men to public office who [would] in turn be forever beholden to
their leaders, enabling them to control the government[;][21] and pos[ing] a clear and present
danger of serious erosion of the peoples faith in the electoral process[;] and reinforc[ing] their
belief that religious leaders determine the ultimate result of elections,[22] which would then be
violative of the separation clause.
Such premise is highly speculative and merely theoretical, to say the least. Clearly, it does not
suffice to constitute a justiciable controversy. The Petition does not even allege any
indication or manifest intent on the part of any of the respondents below to champion an
electoral candidate, or to urge their so-called flock to vote for, or not to vote for, a particular
candidate. It is a time-honored rule that sheer speculation does not give rise to an actionable
right.
Obviously, there is no factual allegation that SJS rights are being subjected to any threatened,
imminent and inevitable violation that should be prevented by the declaratory relief
sought. The judicial power and duty of the courts to settle actual controversies involving
rights that are legally demandable and enforceable[23] cannot be exercised when there is no
actual or threatened violation of a legal right.
All that the 5-page SJS Petition prayed for was that the question raised in paragraph 9 hereof
be resolved.[24] In other words, it merely sought an opinion of the trial court on whether the
speculated acts of religious leaders endorsing elective candidates for political offices violated
the constitutional principle on the separation of church and state. SJS did not ask for a
declaration of its rights and duties; neither did it pray for the stoppage of any threatened
violation of its declared rights. Courts, however, are proscribed from rendering an advisory
opinion.[25]
Cause of Action
Respondent SJS asserts that in order to maintain a petition for declaratory relief, a cause of
action need not be alleged or proven. Supposedly, for such petition to prosper, there need not
be any violation of a right, breach of duty or actual wrong committed by one party against the
other.
Petitioner, on the other hand, argues that the subject matter of an action for declaratory relief
should be a deed, a will, a contract (or other written instrument), a statute, an executive order,
a regulation or an ordinance. But the subject matter of the SJS Petition is the constitutionality
of an act of a religious leader to endorse the candidacy of a candidate for elective office or to
urge or require the members of the flock to vote for a specified candidate.[26] According to
petitioner, this subject matter is beyond the realm of an action for declaratory
relief.[27] Petitioner avers that in the absence of a valid subject matter, the Petition fails to
state a cause of action and, hence, should have been dismissed outright by the court a quo.
A cause of action is an act or an omission of one party in violation of the legal right or rights
of another, causing injury to the latter.[28] Its essential elements are the following: (1) a right
in favor of the plaintiff; (2) an obligation on the part of the named defendant to respect or not
to violate such right; and (3) such defendants act or omission that is violative of the right of
the plaintiff or constituting a breach of the obligation of the former to the latter.[29]
The failure of a complaint to state a cause of action is a ground for its outright
dismissal.[30] However, in special civil actions for declaratory relief, the concept of a cause of
action under ordinary civil actions does not strictly apply. The reason for this exception is
that an action for declaratory relief presupposes that there has been no actual breach of the
instruments involved or of rights arising thereunder.[31]Nevertheless, a breach or violation
should be impending, imminent or at least threatened.
A perusal of the Petition filed by SJS before the RTC discloses no explicit allegation that the
former had any legal right in its favor that it sought to protect. We can only infer the interest,
supposedly in its favor, from its bare allegation that it has thousands of members who are
citizens-taxpayers-registered voters and who are keenly interested in a judicial clarification of
the constitutionality of the partisan participation of religious leaders in Philippine politics and
in the process to insure adherence to the Constitution by everyone x x x.[32]
Such general averment does not, however, suffice to constitute a legal right or interest. Not
only is the presumed interest not personal in character; it is likewise too vague, highly
speculative and uncertain.[33]The Rules require that the interest must be material to the issue
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and affected by the questioned act or instrument, as distinguished from simple curiosity or
incidental interest in the question raised.[34]
To bolster its stance, SJS cites the Corpus Juris Secundum and submits that the [p]laintiff in a
declaratory judgment action does not seek to enforce a claim against [the] defendant, but
seeks a judicial declaration of [the] rights of the parties for the purpose of guiding [their]
future conduct, and the essential distinction between a declaratory judgment action and the
usual action is that no actual wrong need have been committed or loss have occurred in order
to sustain the declaratory judgment action, although there must be no uncertainty that the loss
will occur or that the asserted rights will be invaded.[35]
SJS has, however, ignored the crucial point of its own reference that there must be no
uncertainty that the loss will occur or that the asserted rights will be invaded. Precisely, as
discussed earlier, it merely conjectures that herein petitioner (and his co-respondents
below) might actively participate in partisan politics, use the awesome voting strength of its
faithful flock [to] enable it to elect men to public office x x x, enabling [it] to control the
government.[36]
During the Oral Argument, though, Petitioner Velarde and his co-respondents below all
strongly asserted that they had not in any way engaged or intended to participate in partisan
politics. They all firmly assured this Court that they had not done anything to trigger the issue
raised and to entitle SJS to the relief sought.
Indeed, the Court finds in the Petition for Declaratory Relief no single allegation of fact upon
which SJS could base a right of relief from the named respondents. In any event, even
granting that it sufficiently asserted a legal right it sought to protect, there was
nevertheless no certainty that such right would be invaded by the said respondents. Not even
the alleged proximity of the elections to the time the Petition was filed below (January 28,
2003) would have provided the certainty that it had a legal right that would be jeopardized or
violated by any of those respondents.
Legal Standing
Legal standing or locus standi has been defined as a personal and substantial interest in the
case, such that the party has sustained or will sustain direct injury as a result of the challenged
act.[37] Interestmeans a material interest in issue that is affected by the questioned act or
instrument, as distinguished from a mere incidental interest in the question involved.[38]
Petitioner alleges that [i]n seeking declaratory relief as to the constitutionality of an act of a
religious leader to endorse, or require the members of the religious flock to vote for a specific
candidate, herein Respondent SJS has no legal interest in the controversy;[39] it has failed to
establish how the resolution of the proffered question would benefit or injure it.
Parties bringing suits challenging the constitutionality of a law, an act or a statute must show
not only that the law [or act] is invalid, but also that [they have] sustained or [are] in
immediate or imminent danger of sustaining some direct injury as a result of its enforcement,
and not merely that [they] suffer thereby in some indefinite way.[40] They must demonstrate
that they have been, or are about to be, denied some right or privilege to which they are
lawfully entitled, or that they are about to be subjected to some burdens or penalties by reason
of the statute or act complained of.[41]
First, parties suing as taxpayers must specifically prove that they have sufficient interest in
preventing the illegal expenditure of money raised by taxation.[42] A taxpayers action may be
properly brought only when there is an exercise by Congress of its taxing or spending
power.[43] In the present case, there is no allegation, whether express or implied, that
taxpayers money is being illegally disbursed.
Second, there was no showing in the Petition for Declaratory Relief that SJS as a political
party or its members as registered voters would be adversely affected by the alleged acts of
the respondents below, if the question at issue was not resolved. There was no allegation that
SJS had suffered or would be deprived of votes due to the acts imputed to the said
respondents. Neither did it allege that any of its members would be denied the right of
suffrage or the privilege to be voted for a public office they are seeking.
Finally, the allegedly keen interest of its thousands of members who are citizens-taxpayers-
registered voters is too general[44] and beyond the contemplation of the standards set by our
jurisprudence. Not only is the presumed interest impersonal in character; it is likewise too
vague, highly speculative and uncertain to satisfy the requirement of standing.[45]
Transcendental Importance
In any event, SJS urges the Court to take cognizance of the Petition, even sans legal standing,
considering that the issues raised are of paramount public interest.
In not a few cases, the Court has liberalized the locus standi requirement when a petition
raises an issue of transcendental significance or paramount importance to the
people.[46] Recently, after holding that the IBP had no locus standi to bring the suit, the Court
in IBP v. Zamora[47] nevertheless entertained the Petition therein. It noted that the IBP has
advanced constitutional issues which deserve the attention of this Court in view of their
seriousness, novelty and weight as precedents.[48]
Similarly in the instant case, the Court deemed the constitutional issue raised in the SJS
Petition to be of paramount interest to the Filipino people. The issue did not simply concern a
delineation of the separation between church and state, but ran smack into the governance of
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our country. The issue was both transcendental in importance and novel in nature, since it had
never been decided before.
The Court, thus, called for Oral Argument to determine with certainty whether it could
resolve the constitutional issue despite the barren allegations in the SJS Petition as well as the
abbreviated proceedings in the court below. Much to its chagrin, however, counsels for the
parties -- particularly for Respondent SJS -- made no satisfactory allegations or clarifications
that would supply the deficiencies hereinabove discussed. Hence, even if the Court would
exempt this case from the stringent locus standi requirement, such heroic effort would be
futile because the transcendental issue cannot be resolved anyway.
Proper Proceedings Before
the Trial Court
To prevent a repetition of this waste of precious judicial time and effort, and for the guidance
of the bench and the bar, the Court reiterates the elementary procedure[49] that must be
followed by trial courts in the conduct of civil cases.[50]
Prefatorily, the trial court may -- motu proprio or upon motion of the defendant -- dismiss a
complaint[51] (or petition, in a special civil action) that does not allege the plaintiffs (or
petitioners) cause or causes of action.[52] A complaint or petition should contain a plain,
concise and direct statement of the ultimate facts on which the party pleading relies for his
claim or defense.[53] It should likewise clearly specify the relief sought.[54]
Upon the filing of the complaint/petition and the payment of the requisite legal fees, the clerk
of court shall forthwith issue the corresponding summons to the defendants or the
respondents, with a directive that the defendant answer[55] within 15 days, unless a different
period is fixed by the court.[56] The summons shall also contain a notice that if such answer is
not filed, the plaintiffs/petitioners shall take a judgment by default and may be granted the
relief applied for.[57] The court, however, may -- upon such terms as may be just -- allow an
answer to be filed after the time fixed by the Rules.[58]
If the answer sets forth a counterclaim or cross-claim, it must be answered within ten (10)
days from service.[59] A reply may be filed within ten (10) days from service of the pleading
responded to.[60]
When an answer fails to tender an issue or admits the material allegations of the adverse
partys pleading, the court may, on motion of that party, direct judgment on such pleading
(except in actions for declaration of nullity or annulment of marriage or for legal
separation).[61] Meanwhile, a party seeking to recover upon a claim, a counterclaim or
crossclaim -- or to obtain a declaratory relief -- may, at any time after the answer thereto has
been served, move for a summary judgment in its favor.[62] Similarly, a party against whom a
claim, a counterclaim or crossclaim is asserted -- or a declaratory relief sought -- may, at any
time, move for a summary judgment in its favor.[63] After the motion is heard, the judgment
sought shall be rendered forthwith if there is a showing that, except as to the amount of
damages, there is no genuine issue as to any material fact; and that the moving party is
entitled to a judgment as a matter of law.[64]
Within the time for -- but before -- filing the answer to the complaint or petition, the
defendant may file a motion to dismiss based on any of the grounds stated in Section 1 of
Rule 16 of the Rules of Court.During the hearing of the motion, the parties shall submit their
arguments on the questions of law, and their evidence on the questions of fact.[65] After the
hearing, the court may dismiss the action or claim, deny the motion, or order the amendment
of the pleadings. It shall not defer the resolution of the motion for the reason that the ground
relied upon is not indubitable. In every case, the resolution shall state clearly and distinctly
the reasons therefor.[66]
If the motion is denied, the movant may file an answer within the balance of the period
originally prescribed to file an answer, but not less than five (5) days in any event, computed
from the receipt of the notice of the denial. If the pleading is ordered to be amended, the
defendant shall file an answer within fifteen (15) days, counted from the service of the
amended pleading, unless the court provides a longer period.[67]
After the last pleading has been served and filed, the case shall be set for pretrial,[68] which is
a mandatory proceeding.[69] A plaintiffs/ petitioners (or its duly authorized representatives)
non-appearance at the pretrial, if without valid cause, shall result in the dismissal of the action
with prejudice, unless the court orders otherwise. A similar failure on the part of the
defendant shall be a cause for allowing the plaintiff/petitioner to present evidence ex
parte, and the court to render judgment on the basis thereof.[70]
The parties are required to file their pretrial briefs; failure to do so shall have the same effect
as failure to appear at the pretrial.[71] Upon the termination thereof, the court shall issue an
order reciting in detail the matters taken up at the conference; the action taken on them, the
amendments allowed to the pleadings; and the agreements or admissions, if any, made by the
parties regarding any of the matters considered.[72] The parties may further avail themselves
of any of the modes of discovery,[73] if they so wish.
Thereafter, the case shall be set for trial,[74] in which the parties shall adduce their respective
evidence in support of their claims and/or defenses. By their written consent or upon the
application of either party, or on its own motion, the court may also order any or all of the
issues to be referred to a commissioner, who is to be appointed by it or to be agreed upon by
the parties.[75] The trial or hearing before the commissioner shall proceed in all respects as it
would if held before the court.[76]
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Upon the completion of such proceedings, the commissioner shall file with the court a written
report on the matters referred by the parties.[77] The report shall be set for hearing, after which
the court shall issue an order adopting, modifying or rejecting it in whole or in part; or
recommitting it with instructions; or requiring the parties to present further evidence before
the commissioner or the court.[78]
Finally, a judgment or final order determining the merits of the case shall be rendered. The
decision shall be in writing, personally and directly prepared by the judge, stating clearly and
distinctly the facts and the law on which it is based, signed by the issuing magistrate, and
filed with the clerk of court.[79]
Based on these elementary guidelines, let us examine the proceedings before the trial court in
the instant case.
First, with respect to the initiatory pleading of the SJS. Even a cursory perusal of the Petition
immediately reveals its gross inadequacy. It contained no statement of ultimate facts upon
which the petitioner relied for its claim. Furthermore, it did not specify the relief it sought
from the court, but merely asked it to answer a hypothetical question.
Relief, as contemplated in a legal action, refers to a specific coercive measure prayed for as a
result of a violation of the rights of a plaintiff or a petitioner.[80] As already discussed earlier,
the Petition before the trial court had no allegations of fact[81] or of any specific violation of
the petitioners rights, which the respondents had a duty to respect. Such deficiency amounted
to a failure to state a cause of action; hence, no coercive relief could be sought and
adjudicated. The Petition evidently lacked substantive requirements and, we repeat, should
have been dismissed at the outset.
Second, with respect to the trial court proceedings. Within the period set to file their
respective answers to the SJS Petition, Velarde, Villanueva and Manalo filed Motions to
Dismiss; Cardinal Sin, a Comment; and Soriano, within a priorly granted extended period, an
Answer in which he likewise prayed for the dismissal of the Petition.[82] SJS filed a Rejoinder
to the Motion of Velarde, who subsequently filed a Sur-Rejoinder. Supposedly, there were
several scheduled settings, in which the [c]ourt was apprised of the respective positions of the
parties.[83] The nature of such settings -- whether pretrial or trial hearings -- was not disclosed
in the records. Before ruling on the Motions to Dismiss, the trial court issued an
Order[84] dated May 8, 2003, directing the parties to submit their memoranda. Issued shortly
thereafter was another Order[85] dated May 14, 2003, denying all the Motions to Dismiss.
In the latter Order, the trial court perfunctorily ruled:
The Court now resolves to deny the Motions to Dismiss, and after all the memoranda are
submitted, then, the case shall be deemed as submitted for resolution.[86]
Apparently, contrary to the requirement of Section 2 of Rule 16 of the Rules of Court, the
Motions were not heard. Worse, the Order purportedly resolving the Motions to Dismiss did
not state any reason at all for their denial, in contravention of Section 3 of the said Rule
16. There was not even any statement of the grounds relied upon by the Motions; much less,
of the legal findings and conclusions of the trial court.
Thus, Velarde, Villanueva and Manalo moved for reconsideration. Pending the resolution of
these Motions for Reconsideration, Villanueva filed a Motion to suspend the filing of the
parties memoranda. But instead of separately resolving the pending Motions fairly and
squarely, the trial court again transgressed the Rules of Court when it immediately proceeded
to issue its Decision, even before tackling the issues raised in those Motions.
Furthermore, the RTC issued its Decision without allowing the parties to file their
answers. For this reason, there was no joinder of the issues. If only it had allowed the filing of
those answers, the trial court would have known, as the Oral Argument revealed, that the
petitioner and his co-respondents below had not committed or threatened to commit the act
attributed to them (endorsing candidates) -- the act that was supposedly the factual basis of
the suit.
Parenthetically, the court a quo further failed to give a notice of the Petition to the OSG,
which was entitled to be heard upon questions involving the constitutionality or validity of
statutes and other measures.[87]
Moreover, as will be discussed in more detail, the questioned Decision of the trial court was
utterly wanting in the requirements prescribed by the Constitution and the Rules of Court.
All in all, during the loosely abbreviated proceedings of the case, the trial court indeed acted
with inexplicable haste, with total ignorance of the law -- or, worse, in cavalier disregard of
the rules of procedure -- and with grave abuse of discretion.
Contrary to the contentions of the trial judge and of SJS, proceedings for declaratory relief
must still follow the process described above -- the petition must state a cause of action; the
proceedings must undergo the procedure outlined in the Rules of Court; and the decision
must adhere to constitutional and legal requirements.
First Substantive Issue:
Fundamental Requirements
of a Decision
The Constitution commands that [n]o decision shall be rendered by any court without
expressing therein clearly and distinctly the facts and the law on which it is based. No petition
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for review or motion for reconsideration of a decision of the court shall be refused due course
or denied without stating the basis therefor.[88]
Consistent with this constitutional mandate, Section 1 of Rule 36 of the Rules on Civil
Procedure similarly provides:
Sec. 1. Rendition of judgments and final orders. A judgment or final order determining the
merits of the case shall be in writing personally and directly prepared by the judge, stating
clearly and distinctly the facts and the law on which it is based, signed by him and filed with
the clerk of court.
In the same vein, Section 2 of Rule 120 of the Rules of Court on Criminal Procedure reads as
follows:
Sec. 2. Form and contents of judgments. -- The judgment must be written in the official
language, personally and directly prepared by the judge and signed by him and shall contain
clearly and distinctly a statement of the facts proved or admitted by the accused and the law
upon which the judgment is based.
x x x x x x x x x.
Pursuant to the Constitution, this Court also issued on January 28, 1988, Administrative
Circular No. 1, prompting all judges to make complete findings of facts in their decisions,
and scrutinize closely the legal aspects of the case in the light of the evidence presented. They
should avoid the tendency to generalize and form conclusions without detailing the facts from
which such conclusions are deduced.
In many cases,[89] this Court has time and time again reminded magistrates to heed the
demand of Section 14, Article VIII of the Constitution. The Court, through Chief Justice
Hilario G. Davide Jr. in Yao v. Court of Appeals,[90] discussed at length the implications of
this provision and strongly exhorted thus:
Faithful adherence to the requirements of Section 14, Article VIII of the Constitution is
indisputably a paramount component of due process and fair play. It is likewise demanded by
the due process clause of the Constitution. The parties to a litigation should be informed of
how it was decided, with an explanation of the factual and legal reasons that led to the
conclusions of the court. The court cannot simply say that judgment is rendered in favor of X
and against Y and just leave it at that without any justification whatsoever for its action. The
losing party is entitled to know why he lost, so he may appeal to the higher court, if
permitted, should he believe that the decision should be reversed. A decision that does not
clearly and distinctly state the facts and the law on which it is based leaves the parties in the
dark as to how it was reached and is precisely prejudicial to the losing party, who is unable to
pinpoint the possible errors of the court for review by a higher tribunal. More than that, the
requirement is an assurance to the parties that, in reaching judgment, the judge did so through
the processes of legal reasoning. It is, thus, a safeguard against the impetuosity of the judge,
preventing him from deciding ipse dixit. Vouchsafed neither the sword nor the purse by the
Constitution but nonetheless vested with the sovereign prerogative of passing judgment on
the life, liberty or property of his fellowmen, the judge must ultimately depend on the power
of reason for sustained public confidence in the justness of his decision.
In People v. Bugarin,[91] the Court also explained:
The requirement that the decisions of courts must be in writing and that they must set forth
clearly and distinctly the facts and the law on which they are based serves many functions. It
is intended, among other things, to inform the parties of the reason or reasons for the decision
so that if any of them appeals, he can point out to the appellate court the finding of facts or
the rulings on points of law with which he disagrees. More than that, the requirement is an
assurance to the parties that, in reaching judgment, the judge did so through the processes of
legal reasoning. x x x.
Indeed, elementary due process demands that the parties to a litigation be given information
on how the case was decided, as well as an explanation of the factual and legal reasons that
led to the conclusions of the court.[92]
In Madrid v. Court of Appeals,[93] this Court had instructed magistrates to exert effort to
ensure that their decisions would present a comprehensive analysis or account of the factual
and legal findings that would substantially address the issues raised by the parties.
In the present case, it is starkly obvious that the assailed Decision contains no statement of
facts -- much less an assessment or analysis thereof -- or of the courts findings as to the
probable facts. The assailed Decision begins with a statement of the nature of the action and
the question or issue presented. Then follows a brief explanation of the constitutional
provisions involved, and what the Petition sought to achieve. Thereafter, the ensuing
procedural incidents before the trial court are tracked. The Decision proceeds to a full-length
opinion on the nature and the extent of the separation of church and state. Without expressly
stating the final conclusion she has reached or specifying the relief granted or denied, the trial
judge ends her Decision with the clause SO ORDERED.
What were the antecedents that necessitated the filing of the Petition? What exactly were the
distinct facts that gave rise to the question sought to be resolved by SJS? More important,
what were the factual findings and analysis on which the trial court based its legal findings
and conclusions? None were stated or implied. Indeed, the RTCs Decision cannot be upheld
for its failure to express clearly and distinctly the facts on which it was based. Thus, the trial
court clearly transgressed the constitutional directive.
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The significance of factual findings lies in the value of the decision as a precedent. How can
it be so if one cannot apply the ruling to similar circumstances, simply because such
circumstances are unknown?Otherwise stated, how will the ruling be applied in the future, if
there is no point of factual comparison?
Moreover, the court a quo did not include a resolutory or dispositive portion in its so-called
Decision. The importance of such portion was explained in the early case Manalang v.
Tuason de Rickards,[94] from which we quote:
The resolution of the Court on a given issue as embodied in the dispositive part of the
decision or order is the investitive or controlling factor that determines and settles the rights
of the parties and the questions presented therein, notwithstanding the existence of statements
or declaration in the body of said order that may be confusing.
The assailed Decision in the present case leaves us in the dark as to its final resolution of the
Petition. To recall, the original Petition was for declaratory relief. So, what relief did the trial
court grant or deny?What rights of the parties did it conclusively declare? Its final statement
says, SO ORDERED. But what exactly did the court order? It had the temerity to label its
issuance a Decision, when nothing was in fact decided.
Respondent SJS insists that the dispositive portion can be found in the body of the assailed
Decision. It claims that the issue is disposed of and the Petition finally resolved by the
statement of the trial court found on page 10 of its 14-page Decision, which reads:
Endorsement of specific candidates in an election to any public office is a clear violation of
the separation clause.[95]
We cannot agree.
In Magdalena Estate, Inc. v. Caluag,[96] the obligation of the party imposed by the Court was
allegedly contained in the text of the original Decision. The Court, however, held:
x x x The quoted finding of the lower court cannot supply deficiencies in the dispositive
portion. It is a mere opinion of the court and the rule is settled that where there is a conflict
between the dispositive part and the opinion, the former must prevail over the latter on the
theory that the dispositive portion is the final order while the opinion is merely a statement
ordering nothing. (Italics in the original)
Thus, the dispositive portion cannot be deemed to be the statement quoted by SJS and
embedded in the last paragraph of page 10 of the assailed 14-page Decision. If at all, that
statement is merely an answer to a hypothetical legal question and just a part of the opinion
of the trial court. It does not conclusively declare the rights (or obligations) of the parties to
the Petition. Neither does it grant any -- much less, the proper -- relief under the
circumstances, as required of a dispositive portion.
Failure to comply with the constitutional injunction is a grave abuse of discretion amounting
to lack or excess of jurisdiction. Decisions or orders issued in careless disregard of the
constitutional mandate are a patent nullity and must be struck down as void.[97]
Parts of a Decision
In general, the essential parts of a good decision consist of the following: (1) statement of the
case; (2) statement of facts; (3) issues or assignment of errors; (4) court ruling, in which each
issue is, as a rule, separately considered and resolved; and, finally, (5) dispositive
portion. The ponente may also opt to include an introduction or a prologue as well as an
epilogue, especially in cases in which controversial or novel issues are involved.[98]
An introduction may consist of a concise but comprehensive statement of the principal factual
or legal issue/s of the case. In some cases -- particularly those concerning public interest; or
involving complicated commercial, scientific, technical or otherwise rare subject matters -- a
longer introduction or prologue may serve to acquaint readers with the specific nature of the
controversy and the issues involved. An epilogue may be a summation of the important
principles applied to the resolution of the issues of paramount public interest or
significance. It may also lay down an enduring philosophy of law or guiding principle.
Let us now, again for the guidance of the bench and the bar, discuss the essential parts of a
good decision.
1. Statement of the Case
The Statement of the Case consists of a legal definition of the nature of the action. At the first
instance, this part states whether the action is a civil case for collection, ejectment, quieting of
title, foreclosure of mortgage, and so on; or, if it is a criminal case, this part describes the
specific charge -- quoted usually from the accusatory portion of the information -- and the
plea of the accused. Also mentioned here are whether the case is being decided on appeal or
on a petition for certiorari, the court of origin, the case number in the trial court, and the
dispositive portion of the assailed decision.
In a criminal case, the verbatim reproduction of the criminal information serves as a guide in
determining the nature and the gravity of the offense for which the accused may be found
culpable. As a rule, the accused cannot be convicted of a crime different from or graver than
that charged.
Also, quoting verbatim the text of the information is especially important when there is a
question on the sufficiency of the charge, or on whether qualifying and modifying
circumstances have been adequately alleged therein.
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To ensure that due process is accorded, it is important to give a short description of the
proceedings regarding the plea of the accused. Absence of an arraignment, or a serious
irregularity therein, may render the judgment void, and further consideration by the appellate
court would be futile. In some instances, especially in appealed cases, it would also be useful
to mention the fact of the appellants detention, in order to dispose of the preliminary query --
whether or not they have abandoned their appeal by absconding or jumping bail.
Mentioning the court of origin and the case number originally assigned helps in facilitating
the consolidation of the records of the case in both the trial and the appellate courts, after
entry of final judgment.
Finally, the reproduction of the decretal portion of the assailed decision informs the reader of
how the appealed case was decided by the court a quo.
2. Statement of Facts
There are different ways of relating the facts of the case. First, under the objective or
reportorial method, the judge summarizes -- without comment -- the testimony of each
witness and the contents of each exhibit. Second, under the synthesis method, the factual
theory of the plaintiff or prosecution and then that of the defendant or defense is summarized
according to the judges best light. Third, in the subjective method, the version of the facts
accepted by the judge is simply narrated without explaining what the parties versions
are. Finally, through a combination of objective and subjective means, the testimony of each
witness is reported and the judge then formulates his or her own version of the facts.
In criminal cases, it is better to present both the version of the prosecution and that of the
defense, in the interest of fairness and due process. A detailed evaluation of the contentions of
the parties must follow. The resolution of most criminal cases, unlike civil and other cases,
depends to a large extent on the factual issues and the appreciation of the evidence. The
plausibility or the implausibility of each version can sometimes be initially drawn from a
reading of the facts. Thereafter, the bases of the court in arriving at its findings and
conclusions should be explained.
On appeal, the fact that the assailed decision of the lower court fully, intelligently and
correctly resolved all factual and legal issues involved may partly explain why the reviewing
court finds no reason to reverse the findings and conclusions of the former. Conversely, the
lower courts patent misappreciation of the facts or misapplication of the law would aid in a
better understanding of why its ruling is reversed or modified.
In appealed civil cases, the opposing sets of facts no longer need to be presented. Issues for
resolution usually involve questions of law, grave abuse of discretion, or want of jurisdiction;
hence, the facts of the case are often undisputed by the parties. With few exceptions, factual
issues are not entertained in non-criminal cases. Consequently, the narration of facts by the
lower court, if exhaustive and clear, may be reproduced; otherwise, the material factual
antecedents should be restated in the words of the reviewing magistrate.
In addition, the reasoning of the lower court or body whose decision is under review should
be laid out, in order that the parties may clearly understand why the lower court ruled in a
certain way, and why the reviewing court either finds no reason to reverse it or concludes
otherwise.
3. Issues or Assignment of Errors
Both factual and legal issues should be stated. On appeal, the assignment of errors, as
mentioned in the appellants brief, may be reproduced in toto and tackled seriatim, so as to
avoid motions for reconsideration of the final decision on the ground that the court failed to
consider all assigned errors that could affect the outcome of the case. But when the appellant
presents repetitive issues or when the assigned errors do not strike at the main issue, these
may be restated in clearer and more coherent terms.
Though not specifically questioned by the parties, additional issues may also be included, if
deemed important for substantial justice to be rendered. Note that appealed criminal cases are
given de novoreview, in contrast to noncriminal cases in which the reviewing court is
generally limited to issues specifically raised in the appeal. The few exceptions are errors of
jurisdiction; questions not raised but necessary in arriving at a just decision on the case; or
unassigned errors that are closely related to those properly assigned, or upon which depends
the determination of the question properly raised.
4. The Courts Ruling
This part contains a full discussion of the specific errors or issues raised in the complaint,
petition or appeal, as the case may be; as well as of other issues the court deems essential to a
just disposition of the case. Where there are several issues, each one of them should be
separately addressed, as much as practicable. The respective contentions of the parties should
also be mentioned here. When procedural questions are raised in addition to substantive ones,
it is better to resolve the former preliminarily.
5. The Disposition or Dispositive Portion
In a criminal case, the disposition should include a finding of innocence or guilt, the specific
crime committed, the penalty imposed, the participation of the accused, the modifying
circumstances if any, and the civil liability and costs. In case an acquittal is decreed, the court
must order the immediate release of the accused, if detained, (unless they are being held for
another cause) and order the director of the Bureau of Corrections (or wherever the accused is
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detained) to report, within a maximum of ten (10) days from notice, the exact date when the question. In effect, it merely sought an advisory opinion, the rendition of which was beyond
accused were set free. the courts constitutional mandate and jurisdiction.[99]

In a civil case as well as in a special civil action, the disposition should state whether the
complaint or petition is granted or denied, the specific relief granted, and the costs. The
following test of completeness may be applied. First, the parties should know their rights and
obligations. Second, they should know how to execute the decision under alternative
contingencies. Third, there should be no need for further proceedings to dispose of the
issues. Fourth, the case should be terminated by according the proper relief. The proper relief
usually depends upon what the parties seek in their pleadings. It may declare their rights and
duties, command the performance of positive prestations, or order them to abstain from
specific acts. The disposition must also adjudicate costs.
The foregoing parts need not always be discussed in sequence. But they should all be present
and plainly identifiable in the decision. Depending on the writers character, genre and style,
the language should be fresh and free-flowing, not necessarily stereotyped or in a fixed form;
much less highfalutin, hackneyed and pretentious. At all times, however, the decision must
be clear, concise, complete and correct.
Second Substantive Issue:
Religious Leaders Endorsement
of Candidates for Public Office
The basic question posed in the SJS Petition -- WHETHER ENDORSEMENTS OF
CANDIDACIES BY RELIGIOUS LEADERS IS UNCONSTITUTIONAL -- undoubtedly
deserves serious consideration. As stated earlier, the Court deems this constitutional issue to
be of paramount interest to the Filipino citizenry, for it concerns the governance of our
country and its people. Thus, despite the obvious procedural transgressions by both SJS and
the trial court, this Court still called for Oral Argument, so as not to leave any doubt that there
might be room to entertain and dispose of the SJS Petition on the merits.
Indeed, the assailed Decision was rendered in clear violation of the Constitution, because it
made no findings of facts and final disposition. Hence, it is void and deemed legally
inexistent. Consequently, there is nothing for this Court to review, affirm, reverse or even just
modify.
Regrettably, it is not legally possible for the Court to take up, on the merits, the paramount
question involving a constitutional principle. It is a time-honored rule that the
constitutionality of a statute [or act] will be passed upon only if, and to the extent that, it is
directly and necessarily involved in a justiciable controversy and is essential to the protection
of the rights of the parties concerned.[100]
WHEREFORE, the Petition for Review of Brother Mike Velarde
is GRANTED. The assailed June 12, 2003 Decision and July 29, 2003 Order of the Regional
Trial Court of Manila (Branch 49) are hereby DECLARED NULL AND VOID and thus SET
ASIDE. The SJS Petition for Declaratory Relief is DISMISSED for failure to state a cause of
action.
Let a copy of this Decision be furnished the Office of the Court Administrator to evaluate and
recommend whether the trial judge may, after observing due process, be held administratively
liable for rendering a decision violative of the Constitution, the Rules of Court and relevant
circulars of this Court. No costs.
SO ORDERED.

Counsel for SJS has utterly failed, however, to convince the Court that there are enough
factual and legal bases to resolve the paramount issue. On the other hand, the Office of the
Solicitor General has sided with petitioner insofar as there are no facts supporting the SJS
Petition and the assailed Decision.

We reiterate that the said Petition failed to state directly the ultimate facts that it relied upon
for its claim. During the Oral Argument, counsel for SJS candidly admitted that there were no
factual allegations in its Petition for Declaratory Relief. Neither were there factual findings in
the assailed Decision. At best, SJS merely asked the trial court to answer a hypothetical
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3.) Beltran vs Sec of Health Petitioners comprise the majority of the Board of Directors of the Philippine Association of
Blood Banks, a duly registered non-stock and non-profit association composed of free
standing blood banks.

DECISION
Public respondent Secretary of Health is being sued in his capacity as the public official
directly involved and charged with the enforcement and implementation of the law in
question.
AZCUNA, J.:

The facts of the case are as follows:

Before this Court are petitions assailing primarily the constitutionality of Section 7 of
Republic Act No. 7719, otherwise known as the National Blood Services Act of 1994, and
the validity of Administrative Order (A.O.) No. 9, series of 1995 or the Rules and
Regulations Implementing Republic Act No. 7719. Republic Act No. 7719 or the National Blood Services Act of 1994 was enacted into law
on April 2, 1994. The Act seeks to provide

G.R. No. 133640,[1] entitled Rodolfo S. Beltran, doing business under the name and style, Our
Lady of Fatima Blood Bank, et al., vs. The Secretary of Health and G.R. No.
133661,[2]entitled Doctors Blood Bank Center vs. Department of Health are petitions for
certiorari and mandamus, respectively, seeking the annulment of the following: (1) Section 7
of Republic Act No. 7719; and, (2) Administrative Order (A.O.) No. 9, series of 1995. Both
petitions likewise pray for the issuance of a writ of prohibitory injunction enjoining the
Secretary of Health from implementing and enforcing the aforementioned law and its
Implementing Rules and Regulations; and, for a mandatory injunction ordering and
commanding the Secretary of Health to grant, issue or renew petitioners license to operate
free standing blood banks (FSBB).
an adequate supply of safe blood by promoting voluntary blood donation and by regulating
blood banks in the country. It was approved by then President Fidel V. Ramos on May 15,
1994 and was subsequently published in the Official Gazette on August 18, 1994. The law
took effect on August 23, 1994.
On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the
Implementing Rules and Regulations of said law was promulgated by respondent Secretary of
the Department of Health (DOH).[6]

Section 7 of R.A. 7719 [7] provides:

[3]
The above cases were consolidated in a resolution of the Court En Banc dated June 2, 1998.

G.R. No. 139147,[4] entitled Rodolfo S. Beltran, doing business under the name and style, Our
Lady of Fatima Blood Bank, et al., vs. The Secretary of Health, on the other hand, is a
petition to show cause why respondent Secretary of Health should not be held in contempt of
court.
Section 7. Phase-out of Commercial Blood Banks - All commercial blood banks shall be
phased-out over a period of two (2) years after the effectivity of this Act, extendable to a
maximum period of two (2) years by the Secretary.

This case was originally assigned to the Third Division of this Court and later consolidated
with G.R. Nos. 133640 and 133661 in a resolution dated August 4, 1999.[5]
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Section 23 of Administrative Order No. 9 provides:
Section 23. Process of Phasing Out. -- The Department shall effect the phasing-out of all
commercial blood banks over a period of two (2) years, extendible for a maximum period of
two (2) years after the effectivity of R.A. 7719. The decision to extend shall be based on the
result of a careful study and review of the blood supply and demand and public safety.[8]
Blood banking and blood transfusion services in the country have been arranged in four (4)
categories: blood centers run by the Philippine National Red Cross (PNRC), government-run
blood services, private hospital blood banks, and commercial blood services.
Years prior to the passage of the National Blood Services Act of 1994, petitioners have
already been operating commercial blood banks under Republic Act No. 1517, entitled An
Act Regulating the Collection, Processing and Sale of Human Blood, and the Establishment
and Operation of Blood Banks and Blood Processing Laboratories. The law, which was
enacted on June 16, 1956, allowed the establishment and operation by licensed physicians of
blood banks and blood processing laboratories. The Bureau of Research and Laboratories
(BRL) was created in 1958 and was given the power to regulate clinical laboratories in 1966
under Republic Act No. 4688. In 1971, the Licensure Section was created within the BRL. It
was given the duty to enforce the licensure requirements for blood banks as well as clinical
laboratories. Due to this development, Administrative Order No. 156, Series of 1971, was
issued. The new rules and regulations triggered a stricter enforcement of the Blood Banking
Law, which was characterized by frequent spot checks, immediate suspension and
communication of such suspensions to hospitals, a more systematic record-keeping and
frequent communication with blood banks through monthly information bulletins.
Unfortunately, by the 1980s, financial difficulties constrained the BRL to reduce the
frequency of its supervisory visits to the blood banks.[9]
Meanwhile, in the international scene, concern for the safety of blood and blood products
intensified when the dreaded disease Acute Immune Deficiency Syndrome (AIDS) was first
described in 1979. In 1980, the International Society of Blood Transfusion (ISBT) formulated
the Code of Ethics for Blood Donation and Transfusion. In 1982, the first case of transfusion-
associated AIDS was described in an infant. Hence, the ISBT drafted in 1984, a model for a
national blood policy outlining certain principles that should be taken into consideration. By
1985, the ISBT had disseminated guidelines requiring AIDS testing of blood and blood
products for transfusion.[10]
In 1989, another revision of the Blood Banking Guidelines was made. The DOH issued
Administrative Order No. 57, Series of 1989, which classified banks into primary, secondary
and tertiary depending on the services they provided. The standards were adjusted according
to this classification. For instance, floor area requirements varied according to classification
level. The new guidelines likewise required Hepatitis B and HIV testing, and that the blood
bank be headed by a pathologist or a hematologist.[11]
In 1992, the DOH issued Administrative Order No. 118-A institutionalizing the National
Blood Services Program (NBSP). The BRL was designated as the central office primarily
responsible for the NBSP. The program paved the way for the creation of a committee that
will implement the policies of the program and the formation of the Regional Blood Councils.
In August 1992, Senate Bill No. 1011, entitled An Act Promoting Voluntary Blood Donation,
Providing for an Adequate Supply of Safe Blood, Regulating Blood Banks and Providing
Penalties for Violations Thereof, and for other Purposes was introduced in the Senate.[12]
Meanwhile, in the House of Representatives, House Bills No. 384, 546, 780 and 1978 were
being deliberated to address the issue of safety of the Philippine blood bank system.
Subsequently, the Senate and House Bills were referred to the appropriate committees and
subsequently consolidated.[13]
In January of 1994, the New Tropical Medicine Foundation, with the assistance of the U.S.
Agency for International Development (USAID) released its final report of a study on the
Philippine blood banking system entitled Project to Evaluate the Safety of the Philippine
Blood Banking System. It was revealed that of the blood units collected in 1992, 64.4 % were
supplied by commercial blood banks, 14.5% by the PNRC, 13.7% by government hospital-
based blood banks, and 7.4% by private hospital-based blood banks. During the time the
study was made, there were only twenty-four (24) registered or licensed free-standing or
commercial blood banks in the country. Hence, with these numbers in mind, the study
deduced that each commercial blood bank produces five times more blood than the Red Cross
and fifteen times more than the government-run blood banks. The study, therefore, showed
that the Philippines heavily relied on commercial sources of blood. The study likewise
revealed that 99.6% of the donors of commercial blood banks and 77.0% of the donors of
private-hospital based blood banks are paid donors. Paid donors are those who receive
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remuneration for donating their blood. Blood donors of the PNRC and government-run
hospitals, on the other hand, are mostly voluntary.[14]
It was further found, among other things, that blood sold by persons to blood commercial
banks are three times more likely to have any of the four (4) tested infections or blood
transfusion transmissible diseases, namely, malaria, syphilis, Hepatitis B and Acquired
Immune Deficiency Syndrome (AIDS) than those donated to PNRC.[15]
Commercial blood banks give paid donors varying rates around P50 to P150, and because of
this arrangement, many of these donors are poor, and often they are students, who need cash
immediately. Since they need the money, these donors are not usually honest about their
medical or social history. Thus, blood from healthy, voluntary donors who give their true
medical and social history are about three times much safer than blood from paid donors.[16]
What the study also found alarming is that many Filipino doctors are not yet fully trained on
the specific indications for blood component transfusion. They are not aware of the lack of
blood supply and do not feel the need to adjust their practices and use of blood and blood
products. It also does not matter to them where the blood comes from.[17]
On August 23, 1994, the National Blood Services Act providing for the phase out of
commercial blood banks took effect. On April 28, 1995, Administrative Order No. 9, Series
of 1995, constituting the Implementing Rules and Regulations of said law was promulgated
by DOH.
The phase-out period was extended for two years by the DOH pursuant to Section 7 of
Republic Act No. 7719 and Section 23 of its Implementing Rules and Regulations. Pursuant
to said Act, all commercial blood banks should have been phased out by May 28, 1998.
Hence, petitioners were granted by the Secretary of Health their licenses to open and operate
a blood bank only until May 27, 1998.
On May 20, 1998, prior to the expiration of the licenses granted to petitioners, they filed a
petition for certiorari with application for the issuance of a writ of preliminary injunction or
temporary restraining order under Rule 65 of the Rules of Court assailing the constitutionality
and validity of the aforementioned Act and its Implementing Rules and Regulations. The case
was entitled Rodolfo S. Beltran, doing business under the name and style, Our Lady of
Fatima Blood Bank, docketed as G.R. No. 133640.
On June 1, 1998, petitioners filed an Amended Petition for Certiorari with Prayer for Issuance
of a Temporary Restraining Order, writ of preliminary mandatory injunction and/or status
quo ante order.[18]
In the aforementioned petition, petitioners assail the constitutionality of the questioned legal
provisions, namely, Section 7 of Republic Act No. 7719 and Section 23 of Administrative
Order No. 9, Series of 1995, on the following grounds: [19]
1. The questioned legal provisions of the National Blood Services Act and its
Implementing Rules violate the equal protection clause for irrationally discriminating against
free standing blood banks in a manner which is not germane to the purpose of the law;
2. The questioned provisions of the National Blood Services Act and its
Implementing Rules represent undue delegation if not outright abdication of the police power
of the state; and,
3. The questioned provisions of the National Blood Services Act and its
Implementing Rules are unwarranted deprivation of personal liberty.
On May 22, 1998, the Doctors Blood Center filed a similar petition for mandamus with a
prayer for the issuance of a temporary restraining order, preliminary prohibitory and
mandatory injunction before this Court entitled Doctors Blood Center vs. Department of
Health, docketed as G.R. No. 133661. [20] This was consolidated with G.R. No. 133640.[21]
Similarly, the petition attacked the constitutionality of Republic Act No. 7719 and its
implementing rules and regulations, thus, praying for the issuance of a license to operate
commercial blood banks beyond May 27, 1998. Specifically, with regard to Republic Act No.
7719, the petition submitted the following questions[22] for resolution:
1. Was it passed in the exercise of police power, and was it a valid
exercise of such power?
2. Does it not amount to deprivation of property without due
process?
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3. Does it not unlawfully impair the obligation of contracts?
4. With the commercial blood banks being abolished and with no ready machinery to deliver
the same supply and services, does R.A. 7719 truly serve the public welfare?
On June 2, 1998, this Court issued a Resolution directing respondent DOH to file a
consolidated comment. In the same Resolution, the Court issued a temporary restraining
order (TRO) for respondent to cease and desist from implementing and enforcing Section 7 of
Republic Act No. 7719 and its implementing rules and regulations until further orders from
the Court.[23]
On August 26, 1998, respondent Secretary of Health filed a Consolidated Comment on the
petitions for certiorari and mandamus in G.R. Nos. 133640 and 133661, with opposition to
the issuance of a temporary restraining order.[24]
In the Consolidated Comment, respondent Secretary of Health submitted that blood from
commercial blood banks is unsafe and therefore the State, in the exercise of its police power,
can close down commercial blood banks to protect the public. He cited the record of
deliberations on Senate Bill No. 1101 which later became Republic Act No. 7719, and the
sponsorship speech of Senator Orlando Mercado.
The rationale for the closure of these commercial blood banks can be found in the
deliberations of Senate Bill No. 1011, excerpts of which are quoted below:
Senator Mercado: I am providing over a period of two years to phase out all commercial
blood banks. So that in the end, the new section would have a provision that states:
ALL COMMERCIAL BLOOD BANKS SHALL BE PHASED OUT OVER A PERIOD OF
TWO YEARS AFTER THE EFFECTIVITY OF THIS ACT. BLOOD SHALL BE
COLLECTED FROM VOLUNTARY DONORS ONLY AND THE SERVICE FEE TO BE
CHARGED FOR EVERY BLOOD PRODUCT ISSUED SHALL BE LIMITED TO THE
NECESSARY EXPENSES ENTAILED IN COLLECTING AND PROCESSING OF
BLOOD. THE SERVICE FEE SHALL BE MADE UNIFORM THROUGH GUIDELINES
TO BE SET BY THE DEPARTMENTOF HEALTH.
I am supporting Mr. President, the finding of a study called Project to Evaluate the Safety of
the Philippine Blood Banking System. This has been taken note of. This is a study done with
the assistance of the USAID by doctors under the New Tropical Medicine Foundation in
Alabang.
Part of the long-term measures proposed by this particular study is to improve laws, outlaw
buying and selling of blood and legally define good manufacturing processes for blood. This
goes to the very heart of my amendment which seeks to put into law the principle that blood
should not be subject of commerce of man.
The Presiding Officer [Senator Aquino]: What does the sponsor say?
Senator Webb: Mr. President, just for clarity, I would like to find out how the Gentleman
defines a commercial blood bank. I am at a loss at times what a commercial blood bank really
is.
Senator Mercado: We have a definition, I believe, in the measure, Mr. President.
The Presiding Officer [Senator Aquino]: It is a business where profit is considered.
Senator Mercado: If the Chairman of the Committee would accept it, we can put a provision
on Section 3, a definition of a commercial blood bank, which, as defined in this law, exists
for profit and engages in the buying and selling of blood or its components.
Senator Webb: That is a good description, Mr. President.
Senator Mercado: I refer, Mr. President, to a letter written by Dr. Jaime Galvez-Tan, the
Chief of Staff, Undersecretary of Health, to the good Chairperson of the Committee on
Health.
In recommendation No. 4, he says:
The need to phase out all commercial blood banks within a two-year period will give the
Department of Health enough time to build up governments capability to provide an adequate
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supply of blood for the needs of the nation...the use of blood for transfusion is a medical
service and not a sale of commodity.
Taking into consideration the experience of the National Kidney Institute, which has
succeeded in making the hospital 100 percent dependent on voluntary blood donation, here is
a success story of a hospital that does not buy blood. All those who are operated on and need
blood have to convince their relatives or have to get volunteers who would donate blood
If we give the responsibility of the testing of blood to those commercial blood banks, they
will cut corners because it will protect their profit.
In the first place, the people who sell their blood are the people who are normally in the high-
risk category. So we should stop the system of selling and buying blood so that we can go
into a national voluntary blood program.
It has been said here in this report, and I quote:
Why is buying and selling of blood not safe? This is not safe because a donor who expects
payment for his blood will not tell the truth about his illnesses and will deny any risky social
behavior such as sexual promiscuity which increases the risk of having syphilis or AIDS or
abuse of intravenous addictive drugs. Laboratory tests are of limited value and will not detect
early infections. Laboratory tests are required only for four diseases in the Philippines. There
are other blood transmissible diseases we do not yet screen for and there could be others
where there are no tests available yet.
A blood bank owner expecting to gain profit from selling blood will also try his best to limit
his expenses. Usually he tries to increase his profit by buying cheaper reagents or test kits,
hiring cheaper manpower or skipping some tests altogether. He may also try to sell blood
even though these have infections in them. Because there is no existing system of
counterchecking these, the blood bank owner can usually get away with many unethical
practices.
The experience of Germany, Mr. President is illustrative of this issue. The reason why
contaminated blood was sold was that there were corners cut by commercial blood banks in
the testing process. They were protecting their profits.[25]
The sponsorship speech of Senator Mercado further elucidated his stand on the issue:
Senator Mercado: Today, across the country, hundreds of poverty-stricken, sickly and weak
Filipinos, who, unemployed, without hope and without money to buy the next meal, will walk
into a commercial blood bank, extend their arms and plead that their blood be bought. They
will lie about their age, their medical history. They will lie about when they last sold their
blood. For doing this, they will receive close to a hundred pesos. This may tide them over for
the next few days. Of course, until the next bloodletting.
This same blood will travel to the posh city hospitals and urbane medical centers. This same
blood will now be bought by the rich at a price over 500% of the value for which it was sold.
Between this buying and selling, obviously, someone has made a very fast buck.
Every doctor has handled at least one transfusion-related disease in an otherwise normal
patient. Patients come in for minor surgery of the hand or whatever and they leave with
hepatitis B. A patient comes in for an appendectomy and he leaves with malaria. The worst
nightmare: A patient comes in for a Caesarian section and leaves with AIDS.
We do not expect good blood from donors who sell their blood because of poverty. The
humane dimension of blood transfusion is not in the act of receiving blood, but in the act of
giving it
For years, our people have been at the mercy of commercial blood banks that lobby their
interests among medical technologists, hospital administrators and sometimes even
physicians so that a proactive system for collection of blood from healthy donors becomes
difficult, tedious and unrewarding.
The Department of Health has never institutionalized a comprehensive national program for
safe blood and for voluntary blood donation even if this is a serious public health concern and
has fallen for the linen of commercial blood bankers, hook, line and sinker because it is more
convenient to tell the patient to buy blood.
Commercial blood banks hold us hostage to their threat that if we are to close them down,
there will be no blood supply. This is true if the Government does not step in to ensure that
safe supply of blood. We cannot allow commercial interest groups to dictate policy on what is
and what should be a humanitarian effort. This cannot and will never work because their
interest in blood donation is merely monetary. We cannot expect commercial blood banks to
take the lead in voluntary blood donation. Only the Government can do it, and the
Government must do it.[26]
On May 5, 1999, petitioners filed a Motion for Issuance of Expanded Temporary Restraining
Order for the Court to order respondent Secretary of Health to cease and desist from
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announcing the closure of commercial blood banks, compelling the public to source the
needed blood from voluntary donors only, and committing similar acts that will ultimately
cause the shutdown of petitioners blood banks.[27]
On July 8, 1999, respondent Secretary filed his Comment and/or Opposition to the above
motion stating that he has not ordered the closure of commercial blood banks on account of
the Temporary Restraining Order (TRO) issued on June 2, 1998 by the Court. In compliance
with the TRO, DOH had likewise ceased to distribute the health advisory leaflets, posters and
flyers to the public which state that blood banks are closed or will be closed. According to
respondent Secretary, the same were printed and circulated in anticipation of the closure of
the commercial blood banks in accordance with R.A. No. 7719, and were printed and
circulated prior to the issuance of the TRO.[28]
On July 15, 1999, petitioners in G.R. No. 133640 filed a Petition to Show Cause Why Public
Respondent Should Not be Held in Contempt of Court, docketed as G.R. No. 139147, citing
public respondents willful disobedience of or resistance to the restraining order issued by the
Court in the said case. Petitioners alleged that respondents act constitutes circumvention of
the temporary restraining order and a mockery of the authority of the Court and the orderly
administration of justice.[29] Petitioners added that despite the issuance of the temporary
restraining order in G.R. No. 133640, respondent, in his effort to strike down the existence of
commercial blood banks, disseminated misleading information under the guise of health
advisories, press releases, leaflets, brochures and flyers stating, among others, that this year
[1998] all commercial blood banks will be closed by 27 May. Those who need blood will
have to rely on government blood banks.[30] Petitioners further claimed that respondent
Secretary of Health announced in a press conference during the Blood Donors Week that
commercial blood banks are illegal and dangerous and that they are at the moment protected
by a restraining order on the basis that their commercial interest is more important than the
lives of the people. These were all posted in bulletin boards and other conspicuous places in
all government hospitals as well as other medical and health centers.[31]
In respondent Secretarys Comment to the Petition to Show Cause Why Public Respondent
Should Not Be Held in Contempt of Court, dated January 3, 2000, it was explained that
nothing was issued by the department ordering the closure of commercial blood banks. The
subject health advisory leaflets pertaining to said closure pursuant to Republic Act No. 7719
were printed and circulated prior to the Courts issuance of a temporary restraining order on
June 21, 1998.[32]
Public respondent further claimed that the primary purpose of the information campaign was
to promote the importance and safety of voluntary blood donation and to educate the public
about the hazards of patronizing blood supplies from commercial blood banks.[33] In doing so,
he was merely performing his regular functions and duties as the Secretary of Health to
protect the health and welfare of the public. Moreover, the DOH is the main proponent of the
voluntary blood donation program espoused by Republic Act No. 7719, particularly Section 4
thereof which provides that, in order to ensure the adequate supply of human blood, voluntary
blood donation shall be promoted through public education, promotion in schools,
professional education, establishment of blood services network, and walking blood donors.
Hence, by authority of the law, respondent Secretary contends that he has the duty to promote
the program of voluntary blood donation. Certainly, his act of encouraging the public to
donate blood voluntarily and educating the people on the risks associated with blood coming
from a paid donor promotes general health and welfare and which should be given more
importance than the commercial businesses of petitioners.[34]
On July 29, 1999, interposing personal and substantial interest in the case as taxpayers and
citizens, a Petition-in-Intervention was filed interjecting the same arguments and issues as
laid down by petitioners in G.R. No. 133640 and 133661, namely, the unconstitutionality of
the Acts, and, the issuance of a writ of prohibitory injunction. The intervenors are the
immediate relatives of individuals who had died allegedly because of shortage of blood
supply at a critical time.[35]
The intervenors contended that Republic Act No. 7719 constitutes undue delegation of
legislative powers and unwarranted deprivation of personal liberty.[36]
In a resolution, dated September 7, 1999, and without giving due course to the
aforementioned petition, the Court granted the Motion for Intervention that was filed by the
above intervenors on August 9, 1999.
In his Comment to the petition-in-intervention, respondent Secretary of Health stated that the
sale of blood is contrary to the spirit and letter of the Act that blood donation is a
humanitarian act and blood transfusion is a professional medical service and not a sale of
commodity (Section 2[a] and [b] of Republic Act No. 7719). The act of selling blood or
charging fees other than those allowed by law is even penalized under Section 12.[37]
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Thus, in view of these, the Court is now tasked to pass upon the constitutionality of Section 7
of Republic Act No. 7719 or the National Blood Services Act of 1994 and its Implementing
Rules and Regulations.
In resolving the controversy, this Court deems it necessary to address the issues and/or
questions raised by petitioners concerning the constitutionality of the aforesaid Act in G.R.
No. 133640 and 133661 as summarized hereunder:
I
WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES UNDUE DELEGATION
OF LEGISLATIVE POWER;
II
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES
AND REGULATIONS VIOLATE THE EQUAL PROTECTION CLAUSE;
III
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES
AND REGULATIONS VIOLATE THE NON-IMPAIRMENT CLAUSE;
IV
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES
AND REGULATIONS CONSTITUTE DEPRIVATION OF PERSONAL LIBERTY AND
PROPERTY;
V
WHETHER OR NOT R.A. 7719 IS A VALID EXERCISE OF POLICE POWER; and,
VI
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES
AND REGULATIONS TRULY SERVE PUBLIC WELFARE.
As to the first ground upon which the constitutionality of the Act is being challenged, it is the
contention of petitioners that the phase out of commercial or free standing blood banks is
unconstitutional because it is an improper and unwarranted delegation of legislative power.
According to petitioners, the Act was incomplete when it was passed by the Legislature, and
the latter failed to fix a standard to which the Secretary of Health must conform in the
performance of his functions. Petitioners also contend that the two-year extension period that
may be granted by the Secretary of Health for the phasing out of commercial blood banks
pursuant to Section 7 of the Act constrained the Secretary to legislate, thus constituting undue
delegation of legislative power.
In testing whether a statute constitutes an undue delegation of legislative power or not, it is
usual to inquire whether the statute was complete in all its terms and provisions when it left
the hands of the Legislature so that nothing was left to the judgment of the administrative
body or any other appointee or delegate of the Legislature.[38] Except as to matters of detail
that may be left to be filled in by rules and regulations to be adopted or promulgated by
executive officers and administrative boards, an act of the Legislature, as a general rule, is
incomplete and hence invalid if it does not lay down any rule or definite standard by which
the administrative board may be guided in the exercise of the discretionary powers delegated
to it.[39]
Republic Act No. 7719 or the National Blood Services Act of 1994 is complete in itself. It is
clear from the provisions of the Act that the Legislature intended primarily to safeguard the
health of the people and has mandated several measures to attain this objective. One of these
is the phase out of commercial blood banks in the country. The law has sufficiently provided
a definite standard for the guidance of the Secretary of Health in carrying out its provisions,
that is, the promotion of public health by providing a safe and adequate supply of blood
through voluntary blood donation. By its provisions, it has conferred the power and authority
to the Secretary of Health as to its execution, to be exercised under and in pursuance of the
law.
Congress may validly delegate to administrative agencies the authority to promulgate rules
and regulations to implement a given legislation and effectuate its policies.[40]The Secretary
of Health has been given, under Republic Act No. 7719, broad powers to execute the
provisions of said Act. Section 11 of the Act states:
SEC. 11. Rules and Regulations. The implementation of the provisions of the Act shall be in
accordance with the rules and regulations to be promulgated by the Secretary, within sixty
(60) days from the approval hereof
This is what respondent Secretary exactly did when DOH, by virtue of the administrative
bodys authority and expertise in the matter, came out with Administrative Order No.9, series
of 1995 or the Rules and Regulations Implementing Republic Act No. 7719. Administrative
Order. No. 9 effectively filled in the details of the law for its proper implementation.
Specifically, Section 23 of Administrative Order No. 9 provides that the phase-out period for
commercial blood banks shall be extended for another two years until May 28, 1998 based on
the result of a careful study and review of the blood supply and demand and public safety.
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This power to ascertain the existence of facts and conditions upon which the Secretary may
effect a period of extension for said phase-out can be delegated by Congress. The true
distinction between the power to make laws and discretion as to its execution is illustrated by
the fact that the delegation of power to make the law, which necessarily involves a discretion
as to what it shall be, and conferring an authority or discretion as to its execution, to be
exercised under and in pursuance of the law. The first cannot be done; to the latter no valid
objection can be made.[41]
In this regard, the Secretary did not go beyond the powers granted to him by the Act when
said phase-out period was extended in accordance with the Act as laid out in Section 2
thereof:
SECTION 2. Declaration of Policy In order to promote public health, it is hereby declared the
policy of the state:
a) to promote and encourage voluntary blood donation by the citizenry and to
instill public consciousness of the principle that blood donation is a humanitarian act;
b) to lay down the legal principle that the provision of blood for transfusion is a
medical service and not a sale of commodity;
c) to provide for adequate, safe, affordable and equitable distribution of blood
supply and blood products;
d) to inform the public of the need for voluntary blood donation to curb the hazards
caused by the commercial sale of blood;
e) to teach the benefits and rationale of voluntary blood donation in the existing
health subjects of the formal education system in all public and private schools as well as the
non-formal system;
f) to mobilize all sectors of the community to participate in mechanisms for
voluntary and non-profit collection of blood;
g) to mandate the Department of Health to establish and organize a National Blood
Transfusion Service Network in order to rationalize and improve the provision of adequate
and safe supply of blood;
h) to provide for adequate assistance to institutions promoting voluntary blood
donation and providing non-profit blood services, either through a system of reimbursement
for costs from patients who can afford to pay, or donations from governmental and non-
governmental entities;
i) to require all blood collection units and blood banks/centers to operate on a
non-profit basis;
j) to establish scientific and professional standards for the operation of blood
collection units and blood banks/centers in the Philippines;
k) to regulate and ensure the safety of all activities related to the collection, storage
and banking of blood; and,
l) to require upgrading of blood banks/centers to include preventive services and
education to control spread of blood transfusion transmissible diseases.
Petitioners also assert that the law and its implementing rules and regulations violate the
equal protection clause enshrined in the Constitution because it unduly discriminates against
commercial or free standing blood banks in a manner that is not germane to the purpose of
the law.[42]
What may be regarded as a denial of the equal protection of the laws is a question not always
easily determined. No rule that will cover every case can be formulated. Class legislation,
discriminating against some and favoring others is prohibited but classification on a
reasonable basis and not made arbitrarily or capriciously is permitted. The classification,
however, to be reasonable: (a) must be based on substantial distinctions which make real
differences; (b) must be germane to the purpose of the law; (c) must not be limited to existing
conditions only; and, (d) must apply equally to each member of the class.[43]
Republic Act No. 7719 or The National Blood Services Act of 1994, was enacted for the
promotion of public health and welfare. In the aforementioned study conducted by the New
Tropical Medicine Foundation, it was revealed that the Philippine blood banking system is
disturbingly primitive and unsafe, and with its current condition, the spread of infectious
diseases such as malaria, AIDS, Hepatitis B and syphilis chiefly from blood transfusion is
unavoidable. The situation becomes more distressing as the study showed that almost 70% of
the blood supply in the country is sourced from paid blood donors who are three times riskier
than voluntary blood donors because they are unlikely to disclose their medical or social
history during the blood screening.[44]
The above study led to the passage of Republic Act No. 7719, to instill public consciousness
of the importance and benefits of voluntary blood donation, safe blood supply and proper
ADMIN LAW
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blood collection from healthy donors. To do this, the Legislature decided to order the phase
out of commercial blood banks to improve the Philippine blood banking system, to regulate
the supply and proper collection of safe blood, and so as not to derail the implementation of
the voluntary blood donation program of the government. In lieu of commercial blood banks,
non-profit blood banks or blood centers, in strict adherence to professional and scientific
standards to be established by the DOH, shall be set in place.[45]
Based on the foregoing, the Legislature never intended for the law to create a situation in
which unjustifiable discrimination and inequality shall be allowed. To effectuate its policy, a
classification was made between nonprofit blood banks/centers and commercial blood banks.
We deem the classification to be valid and reasonable for the following reasons:
One, it was based on substantial distinctions. The former operates for purely humanitarian
reasons and as a medical service while the latter is motivated by profit. Also, while the
former wholly encourages voluntary blood donation, the latter treats blood as a sale of
commodity.
Two, the classification, and the consequent phase out of commercial blood banks is germane
to the purpose of the law, that is, to provide the nation with an adequate supply of safe blood
by promoting voluntary blood donation and treating blood transfusion as a humanitarian or
medical service rather than a commodity. This necessarily involves the phase out of
commercial blood banks based on the fact that they operate as a business enterprise, and they
source their blood supply from paid blood donors who are considered unsafe compared to
voluntary blood donors as shown by the USAID-sponsored study on the Philippine blood
banking system.
Three, the Legislature intended for the general application of the law. Its enactment was not
solely to address the peculiar circumstances of the situation nor was it intended to apply only
to the existing conditions.
Lastly, the law applies equally to all commercial blood banks without exception.
Having said that, this Court comes to the inquiry as to whether or not Republic Act No. 7719
constitutes a valid exercise of police power.
The promotion of public health is a fundamental obligation of the State. The health of the
people is a primordial governmental concern. Basically, the National Blood Services Act was
enacted in the exercise of the States police power in order to promote and preserve public
health and safety.
Police power of the state is validly exercised if (a) the interest of the public generally, as
distinguished from those of a particular class, requires the interference of the State; and, (b)
the means employed are reasonably necessary to the attainment of the objective sought to be
accomplished and not unduly oppressive upon individuals.[46]
In the earlier discussion, the Court has mentioned of the avowed policy of the law for the
protection of public health by ensuring an adequate supply of safe blood in the country
through voluntary blood donation. Attaining this objective requires the interference of the
State given the disturbing condition of the Philippine blood banking system.
In serving the interest of the public, and to give meaning to the purpose of the law, the
Legislature deemed it necessary to phase out commercial blood banks. This action may
seriously affect the owners and operators, as well as the employees, of commercial blood
banks but their interests must give way to serve a higher end for the interest of the public.
The Court finds that the National Blood Services Act is a valid exercise of the States police
power. Therefore, the Legislature, under the circumstances, adopted a course of action that is
both necessary and reasonable for the common good. Police power is the State authority to
enact legislation that may interfere with personal liberty or property in order to promote the
general welfare.[47]
It is in this regard that the Court finds the related grounds and/or issues raised by petitioners,
namely, deprivation of personal liberty and property, and violation of the non-impairment
clause, to be unmeritorious.
Petitioners are of the opinion that the Act is unconstitutional and void because it infringes on
the freedom of choice of an individual in connection to what he wants to do with his blood
which should be outside the domain of State intervention. Additionally, and in relation to the
issue of classification, petitioners asseverate that, indeed, under the Civil Code, the human
body and its organs like the heart, the kidney and the liver are outside the commerce of man
but this cannot be made to apply to human blood because the latter can be replenished by the
body. To treat human blood equally as the human organs would constitute invalid
classification. [48]
Petitioners likewise claim that the phase out of the commercial blood banks will be
disadvantageous to them as it will affect their businesses and existing contracts with hospitals
and other health institutions, hence Section 7 of the Act should be struck down because it
violates the non-impairment clause provided by the Constitution.
As stated above, the State, in order to promote the general welfare, may interfere with
personal liberty, with property, and with business and occupations. Thus, persons may be
subjected to certain kinds of restraints and burdens in order to secure the general welfare of
ADMIN LAW
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the State and to this fundamental aim of government, the rights of the individual may be
subordinated.[49]
Moreover, in the case of Philippine Association of Service Exporters, Inc. v. Drilon,[50] settled
is the rule that the non-impairment clause of the Constitution must yield to the loftier
purposes targeted by the government. The right granted by this provision must submit to the
demands and necessities of the States power of regulation. While the Court understands the
grave implications of Section 7 of the law in question, the concern of the Government in this
case, however, is not necessarily to maintain profits of business firms. In the ordinary
sequence of events, it is profits that suffer as a result of government regulation.
Furthermore, the freedom to contract is not absolute; all contracts and all rights are subject to
the police power of the State and not only may regulations which affect them be established
by the State, but all such regulations must be subject to change from time to time, as the
general well-being of the community may require, or as the circumstances may change, or as
experience may demonstrate the necessity.[51] This doctrine was reiterated in the case of Vda.
de Genuino v. Court of Agrarian Relations[52] where the Court held that individual rights to
contract and to property have to give way to police power exercised for public welfare.
As for determining whether or not the shutdown of commercial blood banks will truly serve
the general public considering the shortage of blood supply in the country as proffered by
petitioners, we maintain that the wisdom of the Legislature in the lawful exercise of its power
to enact laws cannot be inquired into by the Court. Doing so would be in derogation of the
principle of separation of powers.[53]
That, under the circumstances, proper regulation of all blood banks without distinction in
order to achieve the objective of the law as contended by petitioners is, of course, possible;
but, this would be arguing on what the law may be or should be and not what the law is.
Between is and ought there is a far cry. The wisdom and propriety of legislation is not for this
Court to pass upon.[54]
Finally, with regard to the petition for contempt in G.R. No. 139147, on the other hand, the
Court finds respondent Secretary of Healths explanation satisfactory. The statements in the
flyers and posters were not aimed at influencing or threatening the Court in deciding in favor
of the constitutionality of the law.
Contempt of court presupposes a contumacious attitude, a flouting or arrogant belligerence in
defiance of the court.[55] There is nothing contemptuous about the statements and information
contained in the health advisory that were distributed by DOH before the TRO was issued by
this Court ordering the former to cease and desist from distributing the same.
In sum, the Court has been unable to find any constitutional infirmity in the questioned
provisions of the National Blood Services Act of 1994 and its Implementing Rules and
Regulations.
The fundamental criterion is that all reasonable doubts should be resolved in favor of the
constitutionality of a statute. Every law has in its favor the presumption of constitutionality.
For a law to be nullified, it must be shown that there is a clear and unequivocal breach of the
Constitution. The ground for nullity must be clear and beyond reasonable doubt.[56] Those
who petition this Court to declare a law, or parts thereof, unconstitutional must clearly
establish the basis therefor. Otherwise, the petition must fail.
Based on the grounds raised by petitioners to challenge the constitutionality of the National
Blood Services Act of 1994 and its Implementing Rules and Regulations, the Court finds that
petitioners have failed to overcome the presumption of constitutionality of the law. As to
whether the Act constitutes a wise legislation, considering the issues being raised by
petitioners, is for Congress to determine.[57]
WHEREFORE, premises considered, the Court renders judgment as follows:
1.In G.R. Nos. 133640 and 133661, the Court UPHOLDS THE VALIDITY of Section 7 of
Republic Act No. 7719, otherwise known as the National Blood Services Act of 1994, and
Administrative Order No. 9, Series of 1995 or the Rules and Regulations Implementing
Republic Act No. 7719. The petitions are DISMISSED. Consequently, the Temporary
Restraining Order issued by this Court on June 2, 1998, is LIFTED.
In G.R. No. 139147, the petition seeking to cite the Secretary of Health in contempt of
court is DENIED for lack of merit.
No costs. SO ORDERED
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4. Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 102782 December 11, 1991
THE SOLICITOR GENERAL, RODOLFO A. MALAPIRA, STEPHEN A.
MONSANTO, DAN R. CALDERON, and GRANDY N. TRIESTE, petitioners
vs.
THE METROPOLITAN MANILA AUTHORITY and the MUNICIPALITY OF
MANDALUYONG, respondents.
CRUZ, J.:p
In Metropolitan Traffic Command, West Traffic District vs. Hon. Arsenio M. Gonong, G.R.
No. 91023, promulgated on July 13, 1990, 1 the Court held that the confiscation of the license
plates of motor vehicles for traffic violations was not among the sanctions that could be
imposed by the Metro Manila Commission under PD 1605 and was permitted only under the
conditions laid dowm by LOI 43 in the case of stalled vehicles obstructing the public streets.
It was there also observed that even the confiscation of driver's licenses for traffic violations
was not directly prescribed by the decree nor was it allowed by the decree to be imposed by
the Commission. No motion for reconsideration of that decision was submitted. The
judgment became final and executory on August 6, 1990, and it was duly entered in the Book
of Entries of Judgments on July 13, 1990.
Subsequently, the following developments transpired:
In a letter dated October 17, 1990, Rodolfo A. Malapira complained to the Court that when he
was stopped for an alleged traffic violation, his driver's license was confiscated by Traffic
Enforcer Angel de los Reyes in Quezon City.
On December 18,1990, the Caloocan-Manila Drivers and Operators Association sent a letter
to the Court asking who should enforce the decision in the above-mentioned case, whether
they could seek damages for confiscation of their driver's licenses, and where they should file
their complaints.
Another letter was received by the Court on February 14, 1991, from Stephen L. Monsanto,
complaining against the confiscation of his driver's license by Traffic Enforcer A.D. Martinez
for an alleged traffic violation in Mandaluyong.
This was followed by a letter-complaint filed on March 7, 1991, from Dan R. Calderon, a
lawyer, also for confiscation of his driver's license by Pat. R.J. Tano-an of the Makati Police
Force.
Still another complaint was received by the Court dated April 29, 1991, this time from
Grandy N. Trieste, another lawyer, who also protested the removal of his front license plate
by E. Ramos of the Metropolitan Manila Authority-Traffic Operations Center and the
confiscation of his driver's license by Pat. A.V. Emmanuel of the Metropolitan Police
Command-Western Police District.
Required to submit a Comment on the complaint against him, Allan D. Martinez invoked
Ordinance No. 7, Series of 1988, of Mandaluyong, authorizing the confiscation of driver's
licenses and the removal of license plates of motor vehicles for traffic violations.
For his part, A.V. Emmanuel said he confiscated Trieste's driver's license pursuant to a
memorandum dated February 27, 1991, from the District Commander of the Western Traffic
District of the Philippine National Police, authorizing such sanction under certain conditions.
Director General Cesar P. Nazareno of the Philippine National Police assured the Court in his
own Comment that his office had never authorized the removal of the license plates of
illegally parked vehicles and that he had in fact directed full compliance with the above-
mentioned decision in a memorandum, copy of which he attached, entitled Removal of Motor
Vehicle License Plates and dated February 28, 1991.
Pat. R.J. Tano-an, on the other hand, argued that the Gonong decision prohibited only the
removal of license plates and not the confiscation of driver's licenses.
On May 24, 1990, the Metropolitan Manila Authority issued Ordinance No. 11, Series of
1991, authorizing itself "to detach the license plate/tow and impound attended/ unattended/
abandoned motor vehicles illegally parked or obstructing the flow of traffic in Metro Manila."
On July 2, 1991, the Court issued the following resolution:
The attention ofthe Court has been called to the enactment by the Metropolitan Manila
Authority of Ordinance No. 11, Series of 1991, providing inter alia that:
Section 2. Authority to Detach Plate/Tow and Impound. The Metropolitan Manila Authority,
thru the Traffic Operatiom Center, is authorized to detach the license plate/tow and impound
attended/unattended/abandoned motor vehicles illegally parked or obstructing the flow of
traffic in Metro Manila.
The provision appears to be in conflict with the decision of the Court in the case at bar (as
reported in 187 SCRA 432), where it was held that the license plates of motor vehicles may
not be detached except only under the conditions prescribed in LOI 43. Additionally, the
Court has received several complaints against the confiscation by police authorities of driver's
licenses for alleged traffic violations, which sanction is, according to the said decision, not
among those that may be imposed under PD 1605.
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
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To clarify these matters for the proper guidance of law-enforcement officers and motorists,
the Court resolved to require the Metropolitan Manila Authority and the Solicitor General to
submit, within ten (10) days from notice hereof, separate COMMENTS on such sanctions in
light of the said decision.
In its Comment, the Metropolitan Manila Authority defended the said ordinance on the
ground that it was adopted pursuant to the powers conferred upon it by EO 392. It particularly
cited Section 2 thereof vesting in the Council (its governing body) the responsibility among
others of:
1. Formulation of policies on the delivery of basic services requiring coordination or
consolidation for the Authority; and
2. Promulgation of resolutions and other issuances of metropolitan wide application, approval
of a code of basic services requiring coordination, and exercise of its rule-making powers.
(Emphasis supplied)
The Authority argued that there was no conflict between the decision and the ordinance
because the latter was meant to supplement and not supplant the latter. It stressed that the
decision itself said that the confiscation of license plates was invalid in the absence of a valid
law or ordinance, which was why Ordinance No. 11 was enacted. The Authority also pointed
out that the ordinance could not be attacked collaterally but only in a direct action challenging
its validity.
For his part, the Solicitor General expressed the view that the ordinance was null and void
because it represented an invalid exercise of a delegated legislative power. The flaw in the
measure was that it violated existing law, specifically PD 1605, which does not permit, and
so impliedly prohibits, the removal of license plates and the confiscation of driver's licenses
for traffic violations in Metropolitan Manila. He made no mention, however, of the alleged
impropriety of examining the said ordinance in the absence of a formal challenge to its
validity.
On October 24, 1991, the Office of the Solicitor General submitted a motion for the early
resolution of the questioned sanctions, to remove once and for all the uncertainty of their
vahdity. A similar motion was filed by the Metropolitan Manila Authority, which reiterated
its contention that the incidents in question should be dismissed because there was no actual
case or controversy before the Court.
The Metropolitan Manila Authority is correct in invoking the doctrine that the validity of a
law or act can be challenged only in a direct action and not collaterally. That is indeed the
settled principle. However, that rule is not inflexible and may be relaxed by the Court under
exceptional circumstances, such as those in the present controversy.
The Solicitor General notes that the practices complained of have created a great deal of
confusion among motorists about the state of the law on the questioned sanctions. More
importantly, he maintains that these sanctions are illegal, being violative of law and
the Gonong decision, and should therefore be stopped. We also note the disturbing report that
one policeman who confiscated a driver's license dismissed the Gonong decision as "wrong"
and said the police would not stop their "habit" unless they received orders "from the top."
Regrettably, not one of the complainants has filed a formal challenge to the ordinances,
including Monsanto and Trieste, who are lawyers and could have been more assertive of their
rights.
Given these considerations, the Court feels it must address the problem squarely presented to
it and decide it as categorically rather than dismiss the complaints on the basis of the
technical objection raised and thus, through its inaction, allow them to fester.
The step we now take is not without legal authority or judicial precedent. Unquestionably, the
Court has the power to suspend procedural rules in the exercise of its inherent power, as
expressly recognized in the Constitution, to promulgate rules concerning "pleading, practice
and procedure in all courts." 2 In proper cases, procedural rules may be relaxed or suspended
in the interest of substantial justice, which otherwise may be miscarried because of a rigid
and formalistic adherence to such rules.
The Court has taken this step in a number of such cases, notably Araneta vs.
Dinglasan, 3 where Justice Tuason justified the deviation on the ground that "the
transcendental importance to the public of these cases demands that they be settled promptly
and definitely, brushing aside, if we must, technicalities of procedure."
We have made similar rulings in other cases, thus:
Be it remembered that rules of procedure are but mere tools designed to facilitate the
attainment ofjustice. Their strict and rigid application, which would result in technicalities
that tend to frustrate rather than promote substantial justice, must always be avoided. (Aznar
III vs. Bernad, G.R. No. 81190, May 9, 1988, 161 SCRA 276.) Time and again, this Court
has suspended its own rules and excepted a particular case from their operation whenever the
higher interests of justice so require. In the instant petition, we forego a lengthy disquisition
of the proper procedure that should have been taken by the parties involved and proceed
directly to the merits of the case. (Piczon vs. Court of Appeals, 190 SCRA 31).
Three of the cases were consolidated for argument and the other two were argued separately
on other dates. Inasmuch as all of them present the same fundamental question which, in our
view, is decisive, they will be disposed of jointly. For the same reason we will pass up the
objection to the personality or sufficiency of interest of the petitioners in case G.R. No. L-
3054 and case G.R. No. L-3056 and the question whether prohibition lies in cases G.R. Nos.
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
L-2044 and L2756. No practical benefit can be gained from a discussion of these procedural
matters, since the decision in the cases wherein the petitioners'cause of action or the propriety
of the procedure followed is not in dispute, will be controlling authority on the others. Above
all, the transcendental importance to the public of these cases demands that they be settled
promptly and definitely, brushing aside, if we must, technicalities of procedure. (Avelino vs.
Cuenco, G.R. No. L-2821 cited in Araneta vs. Dinglasan, 84 Phil. 368.)
Accordingly, the Court will consider the motion to resolve filed by the Solicitor General a
petition for prohibition against the enforcement of Ordinance No. 11, Series of 1991, of the
Metropohtan Manila Authority, and Ordinance No. 7, Series of 1988, of the Municipality of
Mandaluyong. Stephen A. Monsanto, Rodolfo A. Malapira, Dan R. Calderon, and Grandy N.
Trieste are considered co-petitioners and the Metropolitan Manila Authority and the
Municipality of Mandaluyong are hereby impleaded as respondents. This petition is docketed
as G.R. No. 102782. The comments already submitted are duly noted and shall be taken into
account by the Court in the resolution of the substantive issues raised.
It is stressed that this action is not intended to disparage procedural rules, which the Court has
recognized often enough as necessary to the orderly administration of justice. If we are
relaxing them in this particular case, it is because of the failure of the proper parties to file the
appropriate proceeding against the acts complained of, and the necessity of resolving, in the
interest of the public, the important substantive issues raised.
Now to the merits.
The Metro Manila Authority sustains Ordinance No. 11, Series of 1991, under the specific
authority conferred upon it by EO 392, while Ordinance No. 7, Series of 1988, is justified on
the basis of the General Welfare Clause embodied in the Local Government Code. 4 It is not
disputed that both measures were enacted to promote the comfort and convenience of the
public and to alleviate the worsening traffic problems in Metropolitan Manila due in large
part to violations of traffic rules.
The Court holds that there is a valid delegation of legislative power to promulgate such
measures, it appearing that the requisites of such delegation are present. These requisites are.
1) the completeness of the statute making the delegation; and 2) the presence of a sufficient
standard. 5
Under the first requirement, the statute must leave the legislature complete in all its terms and
provisions such that all the delegate will have to do when the statute reaches it is to
implement it. What only can be delegated is not the discretion to determine what the law shall
be but the discretion to determine how the law shall be enforced. This has been done in the
case at bar.
As a second requirement, the enforcement may be effected only in accordance with a
sufficient standard, the function of which is to map out the boundaries of the delegate's
authority and thus "prevent the delegation from running riot." This requirement has also been
met. It is settled that the "convenience and welfare" of the public, particularly the motorists
and passengers in the case at bar, is an acceptable sufficient standard to delimit the delegate's
authority. 6
But the problem before us is not the validity of the delegation of legislative power. The
question we must resolve is the validity of the exercise of such delegated power.
The measures in question are enactments of local governments acting only as agents of the
national legislature. Necessarily, the acts of these agents must reflect and conform to the will
of their principal. To test the validity of such acts in the specific case now before us, we apply
the particular requisites of a valid ordinance as laid down by the accepted principles
governing municipal corporations.
According to Elliot, a municipal ordinance, to be valid: 1) must not contravene the
Constitution or any statute; 2) must not be unfair or oppressive; 3) must not be partial or
discriminatory; 4) must not prohibit but may regulate trade; 5) must not be unreasonable; and
6) must be general and consistent with public policy. 7
A careful study of the Gonong decision will show that the measures under consideration do
not pass the first criterion because they do not conform to existing law. The pertinent law is
PD 1605. PD 1605 does not allow either the removal of license plates or the confiscation of
driver's licenses for traffic violations committed in Metropolitan Manila. There is nothing in
the following provisions of the decree authorizing the Metropolitan Manila Commission (and
now the Metropolitan Manila Authority) to impose such sanctions:
Section 1. The Metropolitan Manila Commission shall have the power to impose fines and
otherwise discipline drivers and operators of motor vehicles for violations of traffic laws,
ordinances, rules and regulations in Metropolitan Manila in such amounts and under such
penalties as are herein prescribed. For this purpose, the powers of the Land Transportation
Commission and the Board of Transportation under existing laws over such violations and
punishment thereof are hereby transferred to the Metropolitan Manila Commission. When the
proper penalty to be imposed is suspension or revocation of driver's license or certificate of
public convenience, the Metropolitan Manila Commission or its representatives shall suspend
or revoke such license or certificate. The suspended or revoked driver's license or the report
of suspension or revocation of the certificate of public convenience shall be sent to the Land
Transportation Commission or the Board of Transportation, as the case may be, for their
records update.
xxx xxx xxx
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
Section 3.` Violations of traffic laws, ordinances, rules and regulations, committed within a
twelve-month period, reckoned from the date of birth of the licensee, shall subject the
violator to graduated fines as follows: P10.00 for the first offense, P20.00 for the and offense,
P50.00 for the third offense, a one-year suspension of driver's license for the fourth offense,
and a revocation of the driver's license for the fifth offense: Provided, That the Metropolitan
Manila Commission may impose higher penalties as it may deem proper for violations of its
ordinances prohibiting or regulating the use of certain public roads, streets and thoroughfares
in Metropolitan Manila.
xxx xxx xxx
Section 5. In case of traffic violations, the driver's license shall not be confiscated but the
erring driver shall be immediately issued a traffic citation ticket prescribed by the
Metropolitan Manila Commission which shall state the violation committed, the amount of
fine imposed for the violation and an advice that he can make payment to the city or
municipal treasurer where the violation was committed or to the Philippine National Bank or
Philippine Veterans Bank or their branches within seven days from the date of issuance of the
citation ticket.
If the offender fails to pay the fine imposed within the period herein prescribed, the
Metropolitan Manila Commission or the law-enforcement agency concerned shall endorse the
case to the proper fiscal for appropriate proceedings preparatory to the filing of the case with
the competent traffic court, city or municipal court.
If at the time a driver renews his driver's license and records show that he has an unpaid fine,
his driver's license shall not be renewed until he has paid the fine and corresponding
surcharges.
xxx xxx xxx
Section 8. Insofar as the Metropolitan Manila area is concerned, all laws, decrees, orders,
ordinances, rules and regulations, or parts thereof inconsistent herewith are hereby repealed
or modified accordingly. (Emphasis supplied).
In fact, the above provisions prohibit the imposition of such sanctions in Metropolitan
Manila. The Commission was allowed to "impose fines and otherwise discipline" traffic
violators only "in such amounts and under such penalties as are herein prescribed," that is, by
the decree itself. Nowhere is the removal of license plates directly imposed by the decree or
at least allowed by it to be imposed by the Commission. Notably, Section 5 thereof expressly
provides that "in case of traffic violations, the driver's license shall not be confiscated." These
restrictions are applicable to the Metropolitan Manila Authority and all other local political
subdivisions comprising Metropolitan Manila, including the Municipality of Mandaluyong.
The requirement that the municipal enactment must not violate existing law explains itself.
Local political subdivisions are able to legislate only by virtue of a valid delegation of
legislative power from the national legislature (except only that the power to create their own
sources of revenue and to levy taxes is conferred by the Constitution itself). 8 They are mere
agents vested with what is called the power of subordinate legislation. As delegates of the
Congress, the local government unit cannot contravene but must obey at all times the will of
their principal. In the case before us, the enactments in question, which are merely local in
origin, cannot prevail against the decree, which has the force and effect of a statute.
The self-serving language of Section 2 of the challenged ordinance is worth noting.
Curiously, it is the measure itself, which was enacted by the Metropolitan Manila Authority,
that authorizes the Metropolitan Manila Authority to impose the questioned sanction.
In Villacorta vs, Bemardo, 9 the Court nullified an ordinance enacted by the Municipal Board
of Dagupan City for being violative of the Land Registration Act. The decision held in part:
In declaring the said ordinance null and void, the court a quo declared:
From the above-recited requirements, there is no showing that would justify the enactment of
the questioned ordinance. Section 1 of said ordinance clearly conflicts with Section 44 of Act
496, because the latter law does not require subdivision plans to be submitted to the City
Engineer before the same is submitted for approval to and verification by the General Land
Registration Office or by the Director of Lands as provided for in Section 58 of said Act.
Section 2 of the same ordinance also contravenes the provisions of Section 44 of Act 496, the
latter being silent on a service fee of P0.03 per square meter of every lot subject of such
subdivision application; Section 3 of the ordinance in question also conflicts with Section 44
of Act 496, because the latter law does not mention of a certification to be made by the City
Engineer before the Register of Deeds allows registration of the subdivision plan; and the last
section of said ordinance impose a penalty for its violation, which Section 44 of Act 496 does
not impose. In other words, Ordinance 22 of the City of Dagupan imposes upon a subdivision
owner additional conditions.
xxx xxx xxx
The Court takes note of the laudable purpose of the ordinance in bringing to a halt the
surreptitious registration of lands belonging to the government. But as already intimated
above, the powers of the board in enacting such a laudable ordinance cannot be held valid
when it shall impede the exercise of rights granted in a general law and/or make a general law
subordinated to a local ordinance.
We affirm.
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
To sustain the ordinance would be to open the floodgates to other ordinances amending and (2) enjoining all law enforcement authorities in Metropolitan Manila from removing the
so violating national laws in the guise of implementing them. Thus, ordinances could be license plates of motor vehicles (except when authorized under LOI 43) and confiscating
passed imposing additional requirements for the issuance of marriage licenses, to prevent driver licenses for traffic violations within the said area.
bigamy; the registration of vehicles, to minimize carnapping; the execution of contracts, to
forestall fraud; the validation of parts, to deter imposture; the exercise of freedom of speech, SO ORDERED.
to reduce disorder; and so on. The list is endless, but the means, even if the end be valid,
would be ultra vires.

The measures in question do not merely add to the requirement of PD 1605 but, worse,
impose sanctions the decree does not allow and in fact actually prohibits. In so doing, the
ordinances disregard and violate and in effect partially repeal the law.

We here emphasize the ruling in the Gonong case that PD 1605 applies only to the
Metropolitan Manila area. It is an exception to the general authority conferred by R.A. No.
413 on the Commissioner of Land Transportation to punish violations of traffic rules
elsewhere in the country with the sanction therein prescribed, including those here
questioned.

The Court agrees that the challenged ordinances were enacted with the best of motives and
shares the concern of the rest of the public for the effective reduction of traffic problems in
Metropolitan Manila through the imposition and enforcement of more deterrent penalties
upon traffic violators. At the same time, it must also reiterate the public misgivings over the
abuses that may attend the enforcement of such sanction in eluding the illicit practices
described in detail in the Gonong decision. At any rate, the fact is that there is no statutory
authority for — and indeed there is a statutory prohibition against — the imposition of such
penalties in the Metropolitan Manila area. Hence, regardless of their merits, they cannot be
impose by the challenged enactments by virtue only of the delegated legislative powers.

It is for Congress to determine, in the exercise of its own discretion, whether or not to impose
such sanctions, either directly through a statute or by simply delegating authority to this effect
to the local governments in Metropolitan Manila. Without such action, PD 1605 remains
effective and continues prohibit the confiscation of license plates of motor vehicles (except
under the conditions prescribed in LOI 43) and of driver licenses as well for traffic violations
in Metropolitan Manila.

WHEREFORE, judgment is hereby rendered:

(1) declaring Ordinance No.11, Seriesof l991,of theMetropolitan Manila Authority and
Ordinance No. 7, Series of 1988 of the Municipality of Mandaluyong, NULL and VOID; and
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
5.) Republic of the Philippines the creation of a Rewards and Incentives Fund (Fund) and a Revenue Performance
SUPREME COURT Evaluation Board (Board). It covers all officials and employees of the BIR and the
Manila BOC with at least six months of service, regardless of employment status.
EN BANC
The Fund is sourced from the collection of the BIR and the BOC in excess of their
G.R. No. 181704 December 6, 2011
revenue targets for the year, as determined by the Development Budget and
BUREAU OF CUSTOMS EMPLOYEES ASSOCIATION (BOCEA),
Coordinating Committee (DBCC). Any incentive or reward is taken from the fund
represented by its National President (BOCEA National Executive Council) Mr.
Romulo A. Pagulayan, Petitioner, and allocated to the BIR and the BOC in proportion to their contribution in the excess
vs. collection of the targeted amount of tax revenue.
HON. MARGARITO B. TEVES, in his capacity as Secretary of the Department The Boards in the BIR and the BOC are composed of the Secretary of the Department
of Finance, HON. NAPOLEON L. MORALES, in his capacity as Commissioner of Finance (DOF) or his/her Undersecretary, the Secretary of the Department of
of the Bureau of Customs, HON. LILIAN B. HEFTI, in her capacity as Budget and Management (DBM) or his/her Undersecretary, the Director General of
Commissioner of the Bureau of Internal Revenue, Respondents. the National Economic Development Authority (NEDA) or his/her Deputy Director
General, the Commissioners of the BIR and the BOC or their Deputy Commissioners,
DECISION two representatives from the rank-and-file employees and a representative from the
VILLARAMA, JR., J.: officials nominated by their recognized organization.
Before this Court is a petition1 for certiorari and prohibition with prayer for injunctive Each Board has the duty to (1) prescribe the rules and guidelines for the allocation,
relief/s under Rule 65 of the 1997 Rules of Civil Procedure, as amended, to declare distribution and release of the Fund; (2) set criteria and procedures for removing from
Republic Act (R.A.) No. 9335,2 otherwise known as the Attrition Act of 2005, and its the service officials and employees whose revenue collection falls short of the target;
Implementing Rules and Regulations3 (IRR) unconstitutional, and the implementation (3) terminate personnel in accordance with the criteria adopted by the Board; (4)
thereof be enjoined permanently. prescribe a system for performance evaluation; (5) perform other functions, including
The Facts the issuance of rules and regulations and (6) submit an annual report to Congress.

On January 25, 2005, former President Gloria Macapagal-Arroyo signed into law The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were
R.A. No. 9335 which took effect on February 11, 2005. tasked to promulgate and issue the implementing rules and regulations of RA [No.]
9335, to be approved by a Joint Congressional Oversight Committee created for such
In Abakada Guro Party List v. Purisima4 (Abakada), we said of R.A. No. 9335: purpose.5

RA [No.] 9335 was enacted to optimize the revenue-generation capability and The Joint Congressional Oversight Committee approved the assailed IRR on May 22,
collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs 2006. Subsequently, the IRR was published on May 30, 2006 in two newspapers of
(BOC). The law intends to encourage BIR and BOC officials and employees to general circulation, the Philippine Star and the Manila Standard, and became effective
exceed their revenue targets by providing a system of rewards and sanctions through fifteen (15) days later.6
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
Contending that the enactment and implementation of R.A. No. 9335 are tainted with
constitutional infirmities in violation of the fundamental rights of its members,
petitioner Bureau of Customs Employees Association (BOCEA), an association of
rank-and-file employees of the Bureau of Customs (BOC), duly registered with the
Department of Labor and Employment (DOLE) and the Civil Service Commission
(CSC), and represented by its National President, Mr. Romulo A. Pagulayan
(Pagulayan), directly filed the present petition before this Court against respondents
Margarito B. Teves, in his capacity as Secretary of the Department of Finance (DOF),
Commissioner Napoleon L. Morales (Commissioner Morales), in his capacity as
BOC Commissioner, and Lilian B. Hefti, in her capacity as Commissioner of the
Bureau of Internal Revenue (BIR). In its petition, BOCEA made the following
averments:
Sometime in 2008, high-ranking officials of the BOC pursuant to the mandate of R.A.
No. 9335 and its IRR, and in order to comply with the stringent deadlines thereof,
started to disseminate Collection District Performance Contracts7 (Performance
Contracts) for the lower ranking officials and rank-and-file employees to sign. The
Performance Contract pertinently provided:
xxxx
WHEREAS, pursuant to the provisions of Sec. 25 (b) of the Implementing Rules and
Regulations (IRR) of the Attrition Act of 2005, that provides for the setting of criteria
and procedures for removing from the service Officials and Employees whose
revenue collection fall short of the target in accordance with Section 7 of Republic
Act 9335.
xxxx
NOW, THEREFORE, for and in consideration of the foregoing premises, parties unto
this Agreement hereby agree and so agreed to perform the following:
xxxx
2. The "Section 2, PA/PE" hereby accepts the allocated Revenue Collection Target
and further accepts/commits to meet the said target under the following conditions:
a.) That he/she will meet the allocated Revenue Collection Target and thereby
undertakes and binds himself/herself that in the event the revenue collection falls
short of the target with due consideration of all relevant factors affecting the level of
collection as provided in the rules and regulations promulgated under the Act and its
IRR, he/she will voluntarily submit to the provisions of Sec. 25 (b) of the IRR and
Sec. 7 of the Act; and
b.) That he/she will cascade and/or allocate to respective Appraisers/Examiners or
Employees under his/her section the said Revenue Collection Target and require them
to execute a Performance Contract, and direct them to accept their individual target.
The Performance Contract executed by the respective
Examiners/Appraisers/Employees shall be submitted to the Office of the
Commissioner through the LAIC on or before March 31, 2008.
x x x x8
BOCEA opined that the revenue target was impossible to meet due to the
Government’s own policies on reduced tariff rates and tax breaks to big businesses,
the occurrence of natural calamities and because of other economic factors. BOCEA
claimed that some BOC employees were coerced and forced to sign the Performance
Contract. The majority of them, however, did not sign. In particular, officers of
BOCEA were summoned and required to sign the Performance Contracts but they
also refused. To ease the brewing tension, BOCEA claimed that its officers sent
letters, and sought several dialogues with BOC officials but the latter refused to heed
them.
In addition, BOCEA alleged that Commissioner Morales exerted heavy pressure on
the District Collectors, Chiefs of Formal Entry Divisions, Principal Customs
Appraisers and Principal Customs Examiners of the BOC during command
conferences to make them sign their Performance Contracts. Likewise, BOC Deputy
Commissioner Reynaldo Umali (Deputy Commissioner Umali) individually spoke to
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
said personnel to convince them to sign said contracts. Said personnel were
threatened that if they do not sign their respective Performance Contracts, they would
face possible reassignment, reshuffling, or worse, be placed on floating status. Thus,
all the District Collectors, except a certain Atty. Carlos So of the Collection District
III of the Ninoy Aquino International Airport (NAIA), signed the Performance
Contracts.
BOCEA further claimed that Pagulayan was constantly harassed and threatened with
lawsuits. Pagulayan approached Deputy Commissioner Umali to ask the BOC
officials to stop all forms of harassment, but the latter merely said that he would look
into the matter. On February 5, 2008, BOCEA through counsel wrote the Revenue
Performance Evaluation Board (Board) to desist from implementing R.A. No. 9335
and its IRR and from requiring rank-and-file employees of the BOC and BIR to sign
Performance Contracts.9 In his letter-reply10 dated February 12, 2008, Deputy
Commissioner Umali denied having coerced any BOC employee to sign a
Performance Contract. He also defended the BOC, invoking its mandate of merely
implementing the law. Finally, Pagulayan and BOCEA’s counsel, on separate
occasions, requested for a certified true copy of the Performance Contract from
Deputy Commissioner Umali but the latter failed to furnish them a copy.11
This petition was filed directly with this Court on March 3, 2008. BOCEA asserted
that in view of the unconstitutionality of R.A. No. 9335 and its IRR, and their adverse
effects on the constitutional rights of BOC officials and employees, direct resort to
this Court is justified. BOCEA argued, among others, that its members and other
BOC employees are in great danger of losing their jobs should they fail to meet the
required quota provided under the law, in clear violation of their constitutional right
to security of tenure, and at their and their respective families’ prejudice.
In their Comment,12 respondents, through the Office of the Solicitor General (OSG),
countered that R.A. No. 9335 and its IRR do not violate the right to due process and
right to security of tenure of BIR and BOC employees. The OSG stressed that the
guarantee of security of tenure under the 1987 Constitution is not a guarantee of
perpetual employment. R.A. No. 9335 and its IRR provided a reasonable and valid
ground for the dismissal of an employee which is germane to the purpose of the law.
Likewise, R.A. No. 9335 and its IRR provided that an employee may only be
separated from the service upon compliance with substantive and procedural due
process. The OSG added that R.A. No. 9335 and its IRR must enjoy the presumption
of constitutionality.
In its Reply,13 BOCEA claimed that R.A. No. 9335 employs means that are
unreasonable to achieve its stated objectives; that the law is unduly oppressive of BIR
and BOC employees as it shifts the extreme burden upon their shoulders when the
Government itself has adopted measures that make collection difficult such as
reduced tariff rates to almost zero percent and tax exemption of big businesses; and
that the law is discriminatory of BIR and BOC employees. BOCEA manifested that
only the high-ranking officials of the BOC benefited largely from the reward system
under R.A. No. 9335 despite the fact that they were not the ones directly toiling to
collect revenue. Moreover, despite the BOCEA’s numerous requests,14 BOC
continually refused to provide BOCEA the Expenditure Plan on how such reward was
distributed.
Since BOCEA was seeking similar reliefs as that of the petitioners in Abakada Guro
Party List v. Purisima, BOCEA filed a Motion to Consolidate15 the present case with
Abakada on April 16, 2008. However, pending action on said motion, the Court
rendered its decision in Abakada on August 14, 2008. Thus, the consolidation of this
case with Abakada was rendered no longer possible.16
In Abakada, this Court, through then Associate Justice, now Chief Justice Renato C.
Corona, declared Section 1217of R.A. No. 9335 creating a Joint Congressional
Oversight Committee to approve the IRR as unconstitutional and violative of the
principle of separation of powers. However, the constitutionality of the remaining
provisions of R.A. No. 9335 was upheld pursuant to Section 1318 of R.A. No. 9335.
The Court also held that until the contrary is shown, the IRR of R.A. No. 9335 is
presumed valid and effective even without the approval of the Joint Congressional
Oversight Committee.19
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
Notwithstanding our ruling in Abakada, both parties complied with our
Resolution20 dated February 10, 2009, requiring them to submit their respective
Memoranda.
The Issues
BOCEA raises the following issues:
I.
WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.] 9335, AND
ITS IMPLEMENTING RULES AND REGULATIONS ARE
UNCONSTITUTIONAL AS THESE VIOLATE THE RIGHT TO DUE PROCESS
OF THE COVERED BIR AND BOC OFFICIALS AND EMPLOYEES[;]
II.
WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.] 9335, AND
ITS IMPLEMENTING RULES AND REGULATIONS ARE
UNCONSTITUTIONAL AS THESE VIOLATE THE RIGHT OF BIR AND BOC
OFFICIALS AND EMPLOYEES TO THE EQUAL PROTECTION OF THE
LAWS[;]
III.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS IMPLEMENTING
RULES AND REGULATIONS VIOLATE THE RIGHT TO SECURITY OF
TENURE OF BIR AND BOC OFFICIALS AND EMPLOYEES AS ENSHRINED
UNDER SECTION 2 (3), ARTICLE IX (B) OF THE CONSTITUTION[;]
IV.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS IMPLEMENTING
RULES AND REGULATIONS ARE UNCONSTITUTIONAL AS THEY
CONSTITUTE UNDUE DELEGATION OF LEGISLATIVE POWERS TO THE
REVENUE PERFORMANCE EVALUATION BOARD IN VIOLATION OF THE
PRINCIPLE OF SEPARATION OF POWERS ENSHRINED IN THE
CONSTITUTION[; AND]
V.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 IS A BILL OF ATTAINDER
AND HENCE[,] UNCONSTITUTIONAL BECAUSE IT INFLICTS PUNISHMENT
THROUGH LEGISLATIVE FIAT UPON A PARTICULAR GROUP OR CLASS
OF OFFICIALS AND EMPLOYEES WITHOUT TRIAL.21
BOCEA manifested that while waiting for the Court to give due course to its petition,
events unfolded showing the patent unconstitutionality of R.A. No. 9335. It narrated
that during the first year of the implementation of R.A. No. 9335, BOC employees
exerted commendable efforts to attain their revenue target of P196 billion which they
surpassed by as much as P2 billion for that year alone. However, this was attained
only because oil companies made advance tax payments to BOC. Moreover, BOC
employees were given their "reward" for surpassing said target only in 2008, the
distribution of which they described as unjust, unfair, dubious and fraudulent because
only top officials of BOC got the huge sum of reward while the employees, who did
the hard task of collecting, received a mere pittance of around P8,500.00. In the same
manner, the Bonds Division of BOC-NAIA collected 400+% of its designated target
but the higher management gave out to the employees a measly sum of P8,500.00
while the top level officials partook of millions of the excess collections. BOCEA
relies on a piece of information revealed by a newspaper showing the list of BOC
officials who apparently earned huge amounts of money by way of reward.22 It claims
that the recipients thereof included lawyers, support personnel and other employees,
including a dentist, who performed no collection functions at all. These alleged
anomalous selection, distribution and allocation of rewards was due to the failure of
R.A. No. 9335 to set out clear guidelines.23
In addition, BOCEA avers that the Board initiated the first few cases of attrition for
the Fiscal Year 2007 by subjecting five BOC officials from the Port of Manila to
attrition despite the fact that the Port of Manila substantially complied with the
provisions of R.A. No. 9335. It is thus submitted that the selection of these officials
for attrition without proper investigation was nothing less than arbitrary. Further, the
legislative and executive departments’ promulgation of issuances and the
Government’s accession to regional trade agreements have caused a significant
diminution of the tariff rates, thus, decreasing over-all collection. These unrealistic
settings of revenue targets seriously affect BIR and BOC employees tasked with the
burden of collection, and worse, subjected them to attrition.24
BOCEA assails the constitutionality of R.A. No. 9335 and its IRR on the following
grounds:
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
1. R.A. No. 9335 and its IRR violate the BIR and BOC employees’ right to due
process because the termination of employees who had not attained their revenue
targets for the year is peremptory and done without any form of hearing to allow said
employees to ventilate their side. Moreover, R.A. No. 9335 and its IRR do not
comply with the requirements under CSC rules and regulations as the dismissal in this
case is immediately executory. Such immediately executory nature of the Board’s
decision negates the remedies available to an employee as provided under the CSC
rules.
2. R.A. No. 9335 and its IRR violate the BIR and BOC employees’ right to equal
protection of the law because R.A. No. 9335 and its IRR unduly discriminates against
BIR and BOC employees as compared to employees of other revenue generating
government agencies like the Philippine Amusement and Gaming Corporation,
Department of Transportation and Communication, the Air Transportation Office, the
Land Transportation Office, and the Philippine Charity Sweepstakes Office, among
others, which are not subject to attrition.
3. R.A. No. 9335 and its IRR violate the BIR and BOC employees’ right to security
of tenure because R.A. No. 9335 and its IRR effectively removed remedies provided
in the ordinary course of administrative procedure afforded to government
employees. The law likewise created another ground for dismissal, i.e., non-
attainment of revenue collection target, which is not provided under CSC rules and
which is, by its nature, unpredictable and therefore arbitrary and unreasonable.
4. R.A. No. 9335 and its IRR violate the 1987 Constitution because Congress granted
to the Revenue Performance Evaluation Board (Board) the unbridled discretion of
formulating the criteria for termination, the manner of allocating targets, the
distribution of rewards and the determination of relevant factors affecting the targets
of collection, which is tantamount to undue delegation of legislative power.
5. R.A. No. 9335 is a bill of attainder because it inflicts punishment upon a particular
group or class of officials and employees without trial. This is evident from the fact
that the law confers upon the Board the power to impose the penalty of removal upon
employees who do not meet their revenue targets; that the same is without the benefit
of hearing; and that the removal from service is immediately executory. Lastly, it
disregards the presumption of regularity in the performance of the official functions
of a public officer.25
On the other hand, respondents through the OSG stress that except for Section 12 of
R.A. No. 9335, R.A. No. 9335 and its IRR are constitutional, as per our ruling in
Abakada. Nevertheless, the OSG argues that the classification of BIR and BOC
employees as public officers under R.A. No. 9335 is based on a valid and substantial
distinction since the revenue generated by the BIR and BOC is essentially in the form
of taxes, which is the lifeblood of the State, while the revenue produced by other
agencies is merely incidental or secondary to their governmental functions; that in
view of their mandate, and for purposes of tax collection, the BIR and BOC are sui
generis; that R.A. No. 9335 complies with the "completeness" and "sufficient
standard" tests for the permissive delegation of legislative power to the Board; that
the Board exercises its delegated power consistent with the policy laid down in the
law, that is, to optimize the revenue generation capability and collection of the BIR
and the BOC; that parameters were set in order that the Board may identify the
officials and employees subject to attrition, and the proper procedure for their
removal in case they fail to meet the targets set in the Performance Contract were
provided; and that the rights of BIR and BOC employees to due process of law and
security of tenure are duly accorded by R.A. No. 9335. The OSG likewise maintains
that there was no encroachment of judicial power in the enactment of R.A. No. 9335
amounting to a bill of attainder since R.A. No. 9335 and its IRR merely defined the
offense and provided for the penalty that may be imposed. Finally, the OSG reiterates
that the separation from the service of any BIR or BOC employee under R.A. No.
9335 and its IRR shall be done only upon due consideration of all relevant factors
affecting the level of collection, subject to Civil Service laws, rules and regulations,
and in compliance with substantive and procedural due process. The OSG opines that
the Performance Contract, far from violating the BIR and BOC employees’ right to
due process, actually serves as a notice of the revenue target they have to meet and
the possible consequences of failing to meet the same. More, there is nothing in the
law which prevents the aggrieved party from appealing the unfavorable decision of
dismissal.26
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
In essence, the issues for our resolution are:
1. Whether there is undue delegation of legislative power to the Board;
2. Whether R.A. No. 9335 and its IRR violate the rights of BOCEA’s members to: (a)
equal protection of laws, (b) security of tenure and (c) due process; and
3. Whether R.A. No. 9335 is a bill of attainder.
Our Ruling
Prefatorily, we note that it is clear, and in fact uncontroverted, that BOCEA has locus
standi. BOCEA impugns the constitutionality of R.A. No. 9335 and its IRR because
its members, who are rank-and-file employees of the BOC, are actually covered by
the law and its IRR. BOCEA’s members have a personal and substantial interest in
the case, such that they have sustained or will sustain, direct injury as a result of the
enforcement of R.A. No. 9335 and its IRR.27
However, we find no merit in the petition and perforce dismiss the same.
It must be noted that this is not the first time the constitutionality of R.A. No. 9335
and its IRR are being challenged. The Court already settled the majority of the same
issues raised by BOCEA in our decision in Abakada, which attained finality on
September 17, 2008. As such, our ruling therein is worthy of reiteration in this case.
We resolve the first issue in the negative.
The principle of separation of powers ordains that each of the three great branches of
government has exclusive cognizance of and is supreme in matters falling within its
own constitutionally allocated sphere.28 Necessarily imbedded in this doctrine is the
principle of non-delegation of powers, as expressed in the Latin maxim potestas
delegata non delegari potest, which means "what has been delegated, cannot be
delegated." This doctrine is based on the ethical principle that such delegated power
constitutes not only a right but a duty to be performed by the delegate through the
instrumentality of his own judgment and not through the intervening mind of
another.29However, this principle of non-delegation of powers admits of numerous
exceptions,30 one of which is the delegation of legislative power to various
specialized administrative agencies like the Board in this case.
The rationale for the aforementioned exception was clearly explained in our ruling in
Gerochi v. Department of Energy,31 to wit:
In the face of the increasing complexity of modern life, delegation of legislative
power to various specialized administrative agencies is allowed as an exception to
this principle. Given the volume and variety of interactions in today’s society, it is
doubtful if the legislature can promulgate laws that will deal adequately with and
respond promptly to the minutiae of everyday life. Hence, the need to delegate to
administrative bodies — the principal agencies tasked to execute laws in their
specialized fields — the authority to promulgate rules and regulations to implement a
given statute and effectuate its policies. All that is required for the valid exercise of
this power of subordinate legislation is that the regulation be germane to the objects
and purposes of the law and that the regulation be not in contradiction to, but in
conformity with, the standards prescribed by the law. These requirements are
denominated as the completeness test and the sufficient standard test.32
Thus, in Abakada, we held,
Two tests determine the validity of delegation of legislative power: (1) the
completeness test and (2) the sufficient standard test. A law is complete when it sets
forth therein the policy to be executed, carried out or implemented by the delegate. It
lays down a sufficient standard when it provides adequate guidelines or limitations in
the law to map out the boundaries of the delegate’s authority and prevent the
delegation from running riot. To be sufficient, the standard must specify the limits of
the delegate’s authority, announce the legislative policy and identify the conditions
under which it is to be implemented.
RA [No.] 9335 adequately states the policy and standards to guide the President in
fixing revenue targets and the implementing agencies in carrying out the provisions of
the law. Section 2 spells out the policy of the law:
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
"SEC. 2. Declaration of Policy. — It is the policy of the State to optimize the
revenue-generation capability and collection of the Bureau of Internal Revenue (BIR)
and the Bureau of Customs (BOC) by providing for a system of rewards and
sanctions through the creation of a Rewards and Incentives Fund and a Revenue
Performance Evaluation Board in the above agencies for the purpose of encouraging
their officials and employees to exceed their revenue targets."
Section 4 "canalized within banks that keep it from overflowing" the delegated power
to the President to fix revenue targets:
"SEC. 4. Rewards and Incentives Fund. — A Rewards and Incentives Fund,
hereinafter referred to as the Fund, is hereby created, to be sourced from the
collection of the BIR and the BOC in excess of their respective revenue targets of
the year, as determined by the Development Budget and Coordinating
Committee (DBCC), in the following percentages:
Excess of Collection [Over] Percent (%) of the Excess
the Revenue Targets Collection to Accrue to the
Fund
30% or below — 15%
More than 30% — 15% of the first 30% plus 20%
of the remaining excess
The Fund shall be deemed automatically appropriated the year immediately following
the year when the revenue collection target was exceeded and shall be released on the
same fiscal year.
Revenue targets shall refer to the original estimated revenue collection expected of
the BIR and the BOC for a given fiscal year as stated in the Budget of Expenditures
and Sources of Financing (BESF) submitted by the President to Congress. The BIR
and the BOC shall submit to the DBCC the distribution of the agencies’ revenue
targets as allocated among its revenue districts in the case of the BIR, and the
collection districts in the case of the BOC.
xxx xxx x x x"
Revenue targets are based on the original estimated revenue collection expected
respectively of the BIR and the BOC for a given fiscal year as approved by the DBCC
and stated in the BESF submitted by the President to Congress. Thus, the
determination of revenue targets does not rest solely on the President as it also
undergoes the scrutiny of the DBCC.
On the other hand, Section 7 specifies the limits of the Board’s authority and
identifies the conditions under which officials and employees whose revenue
collection falls short of the target by at least 7.5% may be removed from the service:
"SEC. 7. Powers and Functions of the Board. — The Board in the agency shall have
the following powers and functions:
xxx xxx xxx
(b) To set the criteria and procedures for removing from service officials and
employees whose revenue collection falls short of the target by at least seven and a
half percent (7.5%), with due consideration of all relevant factors affecting the level
of collection as provided in the rules and regulations promulgated under this Act,
subject to civil service laws, rules and regulations and compliance with substantive
and procedural due process: Provided, That the following exemptions shall apply:
1. Where the district or area of responsibility is newly-created, not exceeding two
years in operation, and has no historical record of collection performance that can be
used as basis for evaluation; and
2. Where the revenue or customs official or employee is a recent transferee in the
middle of the period under consideration unless the transfer was due to
nonperformance of revenue targets or potential nonperformance of revenue targets:
Provided, however, That when the district or area of responsibility covered by
revenue or customs officials or employees has suffered from economic difficulties
brought about by natural calamities or force majeure or economic causes as may be
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
determined by the Board, termination shall be considered only after careful and
proper review by the Board.
(c) To terminate personnel in accordance with the criteria adopted in the preceding
paragraph: Provided, That such decision shall be immediately executory: Provided,
further, That the application of the criteria for the separation of an official or
employee from service under this Act shall be without prejudice to the application of
other relevant laws on accountability of public officers and employees, such as the
Code of Conduct and Ethical Standards of Public Officers and Employees and the
Anti-Graft and Corrupt Practices Act;
xxx xxx x x x"
At any rate, this Court has recognized the following as sufficient standards: "public
interest", "justice and equity", "public convenience and welfare" and "simplicity,
economy and welfare". In this case, the declared policy of optimization of the
revenue-generation capability and collection of the BIR and the BOC is infused with
public interest.33
We could not but deduce that the completeness test and the sufficient standard test
were fully satisfied by R.A. No. 9335, as evident from the aforementioned Sections 2,
4 and 7 thereof. Moreover, Section 534 of R.A. No. 9335 also provides for the
incentives due to District Collection Offices. While it is apparent that the last
paragraph of Section 5 provides that "[t]he allocation, distribution and release of the
district reward shall likewise be prescribed by the rules and regulations of the
Revenue Performance and Evaluation Board," Section 7 (a)35 of R.A. No. 9335
clearly mandates and sets the parameters for the Board by providing that such rules
and guidelines for the allocation, distribution and release of the fund shall be in
accordance with Sections 4 and 5 of R.A. No. 9335. In sum, the Court finds that R.A.
No. 9335, read and appreciated in its entirety, is complete in all its essential terms and
conditions, and that it contains sufficient standards as to negate BOCEA’s supposition
of undue delegation of legislative power to the Board.
Similarly, we resolve the second issue in the negative.
Equal protection simply provides that all persons or things similarly situated should
be treated in a similar manner, both as to rights conferred and responsibilities
imposed. The purpose of the equal protection clause is to secure every person within
a state’s jurisdiction against intentional and arbitrary discrimination, whether
occasioned by the express terms of a statute or by its improper execution through the
state’s duly constituted authorities. In other words, the concept of equal justice under
the law requires the state to govern impartially, and it may not draw distinctions
between individuals solely on differences that are irrelevant to a legitimate
governmental objective.361awphil
Thus, on the issue on equal protection of the laws, we held in Abakada:
The equal protection clause recognizes a valid classification, that is, a classification
that has a reasonable foundation or rational basis and not arbitrary. With respect
to RA [No.] 9335, its expressed public policy is the optimization of the revenue-
generation capability and collection of the BIR and the BOC. Since the subject of the
law is the revenue-generation capability and collection of the BIR and the BOC, the
incentives and/or sanctions provided in the law should logically pertain to the said
agencies. Moreover, the law concerns only the BIR and the BOC because they have
the common distinct primary function of generating revenues for the national
government through the collection of taxes, customs duties, fees and charges.
The BIR performs the following functions:
"Sec. 18. The Bureau of Internal Revenue. — The Bureau of Internal Revenue, which
shall be headed by and subject to the supervision and control of the Commissioner of
Internal Revenue, who shall be appointed by the President upon the recommendation
of the Secretary [of the DOF], shall have the following functions:
(1) Assess and collect all taxes, fees and charges and account for all revenues
collected;
(2) Exercise duly delegated police powers for the proper performance of its functions
and duties;
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
(3) Prevent and prosecute tax evasions and all other illegal economic activities;
(4) Exercise supervision and control over its constituent and subordinate units; and
(5) Perform such other functions as may be provided by law.
xxx xxx x x x"
On the other hand, the BOC has the following functions:
"Sec. 23. The Bureau of Customs. — The Bureau of Customs which shall be headed
and subject to the management and control of the Commissioner of Customs, who
shall be appointed by the President upon the recommendation of the Secretary [of the
DOF] and hereinafter referred to as Commissioner, shall have the following
functions:
(1) Collect custom duties, taxes and the corresponding fees, charges and penalties;
(2) Account for all customs revenues collected;
(3) Exercise police authority for the enforcement of tariff and customs laws;
(4) Prevent and suppress smuggling, pilferage and all other economic frauds within
all ports of entry;
(5) Supervise and control exports, imports, foreign mails and the clearance of vessels
and aircrafts in all ports of entry;
(6) Administer all legal requirements that are appropriate;
(7) Prevent and prosecute smuggling and other illegal activities in all ports under its
jurisdiction;
(8) Exercise supervision and control over its constituent units;
(9) Perform such other functions as may be provided by law.
xxx xxx x x x"
Both the BIR and the BOC are bureaus under the DOF. They principally perform the
special function of being the instrumentalities through which the State exercises one
of its great inherent functions — taxation. Indubitably, such substantial distinction is
germane and intimately related to the purpose of the law. Hence, the classification
and treatment accorded to the BIR and the BOC under RA [No.] 9335 fully satisfy the
demands of equal protection.37
As it was imperatively correlated to the issue on equal protection, the issues on the
security of tenure of affected BIR and BOC officials and employees and their
entitlement to due process were also settled in Abakada:
Clearly, RA [No.] 9335 in no way violates the security of tenure of officials and
employees of the BIR and the BOC. The guarantee of security of tenure only means
that an employee cannot be dismissed from the service for causes other than those
provided by law and only after due process is accorded the employee. In the case of
RA [No.] 9335, it lays down a reasonable yardstick for removal (when the revenue
collection falls short of the target by at least 7.5%) with due consideration of all
relevant factors affecting the level of collection. This standard is analogous to
inefficiency and incompetence in the performance of official duties, a ground for
disciplinary action under civil service laws. The action for removal is also subject to
civil service laws, rules and regulations and compliance with substantive and
procedural due process.38
In addition, the essence of due process is simply an opportunity to be heard, or as
applied to administrative proceedings, a fair and reasonable opportunity to explain
one’s side.39 BOCEA’s apprehension of deprivation of due process finds its answer in
Section 7 (b) and (c) of R.A. No. 9335.40 The concerned BIR or BOC official or
employee is not simply given a target revenue collection and capriciously left without
any quarter. R.A. No. 9335 and its IRR clearly give due consideration to all relevant
factors41 that may affect the level of collection. In the same manner,
exemptions42 were set, contravening BOCEA’s claim that its members may be
removed for unattained target collection even due to causes which are beyond their
control. Moreover, an employee’s right to be heard is not at all prevented and his
right to appeal is not deprived of him.43 In fine, a BIR or BOC official or employee in
ADMIN LAW
III. POWERS OF ADMINISTRATIVE AGANCY
A. Quasi- Legislative Powers (Completeness test)
this case cannot be arbitrarily removed from the service without according him his
constitutional right to due process. No less than R.A. No. 9335 in accordance with
the 1987 Constitution guarantees this.
We have spoken, and these issues were finally laid to rest. Now, the Court proceeds
to resolve the last, but new issue raised by BOCEA, that is, whether R.A. No. 9335 is
a bill of attainder proscribed under Section 22,44 Article III of the 1987 Constitution.
On this score, we hold that R.A. No. 9335 is not a bill of attainder. A bill of attainder
is a legislative act which inflicts punishment on individuals or members of a
particular group without a judicial trial. Essential to a bill of attainder are a
specification of certain individuals or a group of individuals, the imposition of a
punishment, penal or otherwise, and the lack of judicial trial.451avvphi1
In his Concurring Opinion in Tuason v. Register of Deeds, Caloocan City,46 Justice
Florentino P. Feliciano traces the roots of a Bill of Attainder, to wit:
Bills of attainder are an ancient instrument of tyranny. In England a few centuries
back, Parliament would at times enact bills or statutes which declared certain persons
attainted and their blood corrupted so that it lost all heritable quality (Ex Parte
Garland, 4 Wall. 333, 18 L.Ed. 366 [1867]). In more modern terms, a bill of attainder
is essentially a usurpation of judicial power by a legislative body. It envisages and
effects the imposition of a penalty — the deprivation of life or liberty or property —
not by the ordinary processes of judicial trial, but by legislative fiat. While cast in the
form of special legislation, a bill of attainder (or bill of pains and penalties, if it
prescribed a penalty other than death) is in intent and effect a penal judgment visited
upon an identified person or group of persons (and not upon the general community)
without a prior charge or demand, without notice and hearing, without an opportunity
to defend, without any of the civilized forms and safeguards of the judicial process as
we know it (People v. Ferrer, 48 SCRA 382 [1972]; Cummings and Missouri, 4 Wall.
277, 18 L. Ed. 356 [1867]; U.S. v. Lovett, 328, U.S. 303, 90 L.Ed. 1252 [1945]; U.S.
v. Brown, 381 U.S. 437, 14 L.Ed. 2d. 484 [1965]. Such is the archetypal bill of
attainder wielded as a means of legislative oppression. x x x47
R.A. No. 9335 does not possess the elements of a bill of attainder. It does not seek to
inflict punishment without a judicial trial. R.A. No. 9335 merely lays down the
grounds for the termination of a BIR or BOC official or employee and provides for
the consequences thereof. The democratic processes are still followed and the
constitutional rights of the concerned employee are amply protected.
A final note.
We find that BOCEA’s petition is replete with allegations of defects and anomalies in
allocation, distribution and receipt of rewards. While BOCEA intimates that it intends
to curb graft and corruption in the BOC in particular and in the government in general
which is nothing but noble, these intentions do not actually pertain to the
constitutionality of R.A. No. 9335 and its IRR, but rather in the faithful
implementation thereof. R.A. No. 9335 itself does not tolerate these pernicious acts of
graft and corruption.48 As the Court is not a trier of facts, the investigation on the
veracity of, and the proper action on these anomalies are in the hands of the Executive
branch. Correlatively, the wisdom for the enactment of this law remains within the
domain of the Legislative branch. We merely interpret the law as it is. The Court has
no discretion to give statutes a meaning detached from the manifest intendment and
language thereof.49 Just like any other law, R.A. No. 9335 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.50 We have so declared in Abakada, and we now reiterate that R.A.
No. 9335 and its IRR are constitutional.
WHEREFORE, the present petition for certiorari and prohibition with prayer for
injunctive relief/s is DISMISSED.
No costs.
SO ORDERED.