Makati Stock Exchange, Inc. vs.
Securities and Exchange Commission The Commission has not acted in pursuance of such authority, for the
and Manila Stock Exchange
G.R. No. L-23004, June 30, 1965
Nature of the case:
Petition for Review
Brief:
Makati Exchange Commission (MakEC) filed a review on the resolution
issued by the SEC denying them to operate a stock exchange on the
ground that the list of securities on its trading board is already listed in
the Manila Stock Exchange (ManEC).
Facts:
Makati Exchange Commission (MakEC) filed a review on the resolution
issued by the SEC denying them to operate a stock exchange because
the list of securities on its trading board is already listed in the Manila
Stock Exchange (ManEC). MakEC argued that the Commission has no
power to impose it because it is illegal, discriminatory and unjust.
Under the law, a stock exchange can only do a business in the Ph when
it is previously registered with the Commission by filing a statement
containing the information required by law (Sec. 17, Securities Act/
Commonwealth Act 83). It is assumed that the Commission may permit
registration if this is complied with; if not, it may refuse.
MakEC is challenging this particular requirement of the Commission
(rule against double listing) may deemed to have shown inability or
refusal to abide by its rules, and thereby given ground for denying
registration.
Rule against double listing:
Such rule provides: “… nor shall a security already listed in any
securities exchange be listed anew in any other securities exchange…”
Objection of the MakEC on the above rule:
The ManEC has been operating alone for 25years, and presumably, all
available securities for trading in the market are already listed there. In
effect, the Commission permits MakEC to deal only with other
securities, which tantamount to a monopoly. The Commission’s
order/resolution makes it impossible for the MakEC to operate, thus,
“permission is tantamount to prohibition.
Issue/s:
 Whether or not the Commission has authority to promulgate
and implement rules prohibiting another exchange to
operate on the ground that it is of the protection of “public
interest”
 Whether or not the establishment of another exchange
environs of Manila would be inimical to the public interest
 Whether or not the double or multiple listing of securities
should be prohibited for the “protection of the investors”
Action of the court:
The Court granted the petition.
Court rationale on the above case:
Authority of the Commission to promulgate and implement the rule in
question. It is fundamental that an administrative officer has only such
powers as are expressly granted to him by the statute, and those
necessarily implied in the exercise thereof. The test is not whether the
Act forbids the Commission from imposing a prohibition, but whether it
empowers the Commission to prohibit. No specific portion of the
statute has been cited to uphold this power. The general power to
“regulate” which the Commission has (Sec. 33) does not imply authority
to prohibit. ManEC contends that the power may be inferred from the
express power of the Commission to suspend trading in a security,
under said sec. 28: And if in its opinion, the public interest so requires,
summarily to suspend trading in any registered security on any
securities exchange … . (Sec. 28[3], Securities Act.)
simple reason that suspension under it may only be for ten days.
Besides, the suspension of trading in the security should not be on one
exchange only, but on all exchanges; bearing in mind that suspension
should be ordered “for the protection of investors” (first par., sec. 28)
in all exchanges, naturally, and if “the public interest so requires” [sec.
28(3)]. The law allows the operation of two or more exchanges
Wherever two or more exchanges exist, the Commission, by order, shall
require and enforce uniformity of trading regulations in and/or
between said exchanges. (Sec. 28b-13, Securities Act.)
The legislature has specified the conditions under which a stock
exchange may operate (Sec. 17, Securities Act); it is not for the
Commission to impose others. Until otherwise directed by law, the
operation of exchanges should not be so regulated as practically to
create a monopoly by preventing the establishment of other stock
exchanges and thereby contravening:
1. the organizers’ (Makati’s) Constitutional right to equality
before the law;
2. their guaranteed civil liberty to pursue any lawful
employment or trade; and
3. the investor’s right to choose where to buy or to sell, and his
privilege to select the brokers in his employment.
Where the licensing statute does not expressly or impliedly authorize
the officer in charge, he may not refuse to grant a license simply on the
ground that a sufficient number of licenses to serve the needs of the
public have already been issued.
Ruling:
Surely, this petition for review has suitably been coursed. And making
reasonable allowances for the presumption of regularity and validity of
administrative action, we feel constrained to reach the conclusion that
the respondent Commission possesses no power to impose the
condition of the rule, which, additionally, results in discrimination and
violation of constitutional rights.
ACCORDINGLY, the license of the petition to operate a stock exchange
is approved without such condition. Costs shall be paid by the Manila
Stock Exchange. So ordered.
KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG
BAGONG PAMILIHANG BAYAN NG MUNTINLUPA v. CARLOS G.
DOMINGUEZ, GR No. 85439, 1992-01-13
Facts:
The Kilusang Bayan case), questions the validity of the Order of 28
October 1988 of then Secretary of Agriculture Hon. Carlos G.
Dominguez which ordered: (1) the take-over by the Department of
Agriculture of the... management of the petitioner Kilusang Bayan sa
Paglilingkod Ng Mga Magtitinda Ng Bagong Pamilihang Bayan ng
Muntinlupa, Inc. (KBMBPM) pursuant to the Department's regulatory
and supervisory powers under Section 8 of P.D. No. 175, as amended,
and Section 4 of Executive Order No. 13,... (2) the creation of a
Management Committee which shall assume the management of
KBMBPM upon receipt of the order, (3) the disbandment of the Board
of Directors, and (4) the turnover of all assets, properties and records of
the KBMBPM to the Management Committee. The Bunye case, seeks
the nullification of the Resolution of 4 January 1990 of the
Sandiganbayan admitting the Amended Information against petitioners
in Criminal Case No. 13966 and denying their motion to order or...
direct preliminary investigation, and it’s Resolution of 1 February 1990
denying the motion to reconsider the former. Muntinlupa (hereinafter,
Municipality), Metro Manila, thru its then Mayor Santiago Carlos, Jr.,
entered into a contract with the KILUSANG BAYAN SA PAGLILINGKOD
NG MGA MAGTITINDA SA BAGONG PAMILIHANG BAYAN NG
MUNTINLUPA, INC. (KBMBPM)... operation of the new Muntinlupa
public market... twenty-five (25) year term commencing on 2
September 1985, renewable for a like period, unless sooner
terminated... and/or rescinded by mutual agreement of the parties, at a
monthly consideration of Thirty-Five Thousand Pesos (P35,000) to be
paid by the KBMBPM within the first five (5) days of each month which
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shall, however, be increased by ten percent (10%) each year during the
first five (5) years only. KBMBPM is a service cooperative organized by
and composed of vendors occupying the New Muntinlupa Public
Market in Alabang, Muntinlupa, Metro Manila pursuant to Presidential
Decree No. 175 and Letter of Implementation No. 23
Following his assumption into office as the new mayor succeeding
Santiago Carlos, Jr., petitioner Ignacio Bunye, claiming to be particularly
scandalized by the "virtual 50-year term of the agreement, contrary to
the provision of Section 143, paragraph 3 of Batas Pambansa Blg.
337," and the "patently inequitable rental," directed a review of the
aforesaid contract. The letter of Hon. Elfren Cruz of the MMC even
granted the Municipality authority "to take the necessary legal steps for
the cancellation/rescission of the above cited contract and make
representations with KBMBPM for the immediate transfer/takeover of
the possession, management and operation of the New Muntinlupa
Market to the Municipal Government of Muntinlupa."... Upon
representations made by Bunye with the Municipal Council, the latter
approved on 1 August 1988 Resolution No. 45 abrogating the contract.
Bunye, together with his co-petitioners and elements of the Capital
Command of the Philippine Constabulary, proceeded, on 19 August
1986, to the public market and announced to the general public and the
stallholders thereat that the Municipality was taking over the
management and operation of the facility, and that the stallholders
should thenceforth pay their... market fees to the Municipality, thru the
Market Commission, and no longer to the KBMBPM. KBMBPM filed
with Branch 13 of the Regional Trial Court of Makati a complaint for
breach of contract, specific performance and damages with prayer for a
writ of preliminary injunction against the Municipality and its officers,
which was docketed as Civil Case No. 88-1702. The writ applied for
having been denied,[7] the KBMBPM officers resisted the attempts of
Bunye and company to complete the take-over; they continued holding
office in the KBS building, under their respective official capacities
Amado Perez filed with the Office of the Ombudsman a letter-
complaint charging Bunye and his co-petitioners with oppression,
harassment, abuse of authority and violation of the Anti-Graft and
Corrupt Practices Act[10] for taking over... the management and
operation of the public market from KBMBPM.
Ombudsman issued a first indorsement on 4 April 1989 referring to
"Judge Gualberto J. de la Llana, Acting Director, IEO/RSSO, this Office,
the within records of OSP Case No. 88-02110 … for further preliminary
investigation..."... de la Llana recommended the filing of an information
for violation of section 3 (e) of the Anti-Graft and Corrupt Practices Act.
Bunye, et al. were served arrest warrants issued by the Sandiganbayan.
Detained at the NBI. Sandiganbayan issued an order on 18 October
1989 deferring arraignment and directing the parties to submit their
respective memoranda. Sandiganbayan handed down a Resolution[58]
denying for lack of merit the Omnibus Motion to Remand the Case To
The Office of the Ombudsman, to Defer Arraignment and to Suspend
Proceedings. Sandiganbayan handed down a Resolution[62] admitting
the Amended Information and denying the motion to direct preliminary
investigation. Petitioners claim that respondent Sandiganbayan acted
without or in excess of jurisdiction or with manifest grave abuse of
discretion amounting to lack of jurisdiction in denying petitioners their
right to preliminary investigation and in admitting the Amended
Information. Respondents challenge the personality of the petitioners
to bring this action, set up the defense of non-exhaustion of
administrative remedies, and assert that the Order was lawfully and
validly issued under the above decree and Executive Order.
Issues:
The present dispute revolves around the validity of the antecedent
proceedings which led to the filing of the original information on 18
January 1989 and the amended information afterwards.
Ruling:
We find merit in the petition and the defenses interposed do not
persuade the SC. Petitioners have the personality to file the instant
petition and ask, in effect, for their reinstatement as Section 3, Rule 65
of the Rules of Court, defining an action for mandamus, permits a
person who has been excluded from the use and enjoyment of a right
or office to... which he is entitled, to file suit.
As to failure to exhaust administrative remedies, the rule is well-settled
that this requirement does not apply where the respondent is a
department secretary whose acts, as an alter ego of the President, bear
the implied approval of the latter, unless actually disapproved by... him
This doctrine of qualified political agency ensures speedy access to the
courts when most needed. There was no need then to appeal the
decision to the office of the President; recourse to the courts could be
had immediately.
the doctrine... of exhaustion of administrative remedies also yields to
other exceptions, such as when the question involved is purely legal, as
in the instant case,[70] or where the questioned act is patently illegal,
arbitrary or oppressive... there is an established procedure for the
removal of directors and officers of cooperatives. It is likewise manifest
that the right to due process is respected by the express provision on
the opportunity to be heard. But even without said provision...
petitioners cannot be deprived of that right.
The procedure was not followed in this case. Respondent Secretary of
Agriculture arrogated unto himself the power of the members of the
KBMBPM who are authorized to vote to remove the petitioning
directors and officers. He cannot take refuge under Section 8 of P.D.
No. 175... Which grants him authority to supervise and regulate all
cooperatives. This section does not give him that right
An administrative officer has only such powers as are expressly granted
to him and those necessarily implied in the exercise thereof.[72] These
powers should not be extended by implication beyond what may be
necessary for their just and reasonable... execution.
Supervision and control include only the authority to: (a) act directly
whenever a specific function is entrusted by law or regulation to a
subordinate; (b) direct the performance of duty; restrain the
commission of acts; (c) review, approve, reverse or modify acts and...
Decisions of subordinate officials or units; (d) determine priorities in the
execution of plans and programs; and (e) prescribe standards,
guidelines, plans and programs
(3) take such action as may be necessary for the proper performance of
official functions, including rectification of violations, abuses and other
forms of... mal-administration; (4) review and pass upon budget
proposals of such agencies but may not increase or add to them.
The power to summarily disband the board of directors may not be
inferred from any of the foregoing as both P.D. No. 175 and the by-laws
of the KBMBPM explicitly mandate the manner by which directors and
officers are to be removed. The Secretary should have known better
than... to disregard these procedures and rely on a mere petition by the
general membership of the KBMBPM and an on-going audit by
Department of Agriculture auditors in exercising a power which he does
not have, expressly or impliedly... neither suspension nor cancellation
includes the take-over and ouster of incumbent directors and officers,
otherwise the law itself would have expressly so stated. Secondly, even
granting that the law intended such as postulated, there is the
requirement of a... hearing. None was conducted.
Even if we grant, for the sake of argument, that said power includes the
power to disband the board of directors and remove the officers of the
KBMBPM, and that a hearing was not expressly required in the law, still
the Order can be validly issued only after giving... due process to the
affected parties, herein petitioners.
Due process is guaranteed by the Constitution [75] and extends to
administrative proceedings. Nevertheless, a plea of a denial of
procedural due process does not lie where a defect consisting in an
absence of notice of hearing was thereafter cured by the aggrieved
party himself as... when he had the opportunity to be heard on a
subsequent motion for reconsideration. This is consistent with the
principle that what the law prohibits is not the absence of previous
notice but the absolute absence thereof and lack of an opportunity to
be heard In the instant case, there was no notice of a hearing on the
alleged petition of the general membership of the KBMBPM; there was,
as well, not even a semblance of a hearing. The Order was based solely
on an alleged petition by the general membership of the KBMBPM.
There was... then a clear denial of due process. If there were genuine
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grievances against petitioners, the affected members should have
timely raised these issues in the annual general assembly or in a special
general assembly. Or, if such a remedy would be futile for some reason
or another, judicial recourse was... available.
The right of an accused to a preliminary investigation is not among the
rights guaranteed him in the Bill of Rights... the preliminary
investigation in criminal cases is not a creation of the Constitution; its...
origin is statutory and it exists and the right thereto can be invoked
when so established and granted by law." It is so specifically granted by
procedural law. Independently of the foregoing, the absence of such
investigation [preliminary] did not impair the validity of the information
or otherwise render it defective In the instant case, even if it is to be
conceded for argument's sake that there was in fact no preliminary
investigation, the Sandiganbayan, per Doromal vs. Sandiganbayan,[85]
"should merely suspend or hold in abeyance proceedings upon the
questioned Amended Information and remand the case to the Office of
the Ombudsman for him to conduct a preliminary investigation."
It is Our view, however, that petitioners were not denied the right to
preliminary investigation Petitioners were provided a reasonable period
within which to submit their counter-affidavits; they did not avail of the
original period; they moved for an extension of at least fifteen (15) days
from 22 October 1988. Despite the urgency of its nature, the motion
was sent by... mail. It may not then be successfully asserted that the
counter-affidavits were not considered by the Ombudsman in
approving the information. It is indisputable that the respondents were
not remiss in their duty to afford the petitioners the opportunity to
contest the charges thrown their way. Due process does not require
that the accused actually file his counter-affidavits before the
preliminary investigation is... deemed completed. All that is required is
that he be given the opportunity to submit such if he is so minded
Respondent Sandiganbayan did not then commit any grave abuse of
discretion WHEREFORE, judgment is hereby rendered:
GRANTING the petition in G.R. No. 85439; declaring null and void the
challenged Order of 28 October 1988 of the respondent Secretary of
Agriculture; but denying, for having become moot and academic, the
prayer of petitioners that they be restored to their positions in the
KBMBPM.
DISMISSING, for lack of merit, the petition in G.R. No. 91927
Jaworski v. Pagcor
G.R. No. 144463, January 14, 2004
Facts:
On March 31, 1998, PAGCOR’s board of directors approved an
instrument denominated as “Grant of Authority and Agreement for the
Operation of Sports Betting and Internet Gaming”, which granted SAGE
the authority to operate and maintain Sports Betting station in
PAGCOR’s casino locations, and Internet Gaming facilities to service
local and international bettors, provided that to the satisfaction of
PAGCOR, appropriate safeguards and procedures are established to
ensure the integrity and fairness of the games. On September 1, 1998,
PAGCOR, represented by its Chairperson, Alicia Ll. Reyes, and SAGE,
represented by its Chairman of the Board, Henry Sy, Jr., and its
President, Antonio D. Lacdao, executed the above-named document.
Pursuant to the authority granted by PAGCOR, SAGE commenced its
operations by conducting gambling on the Internet on a trial-run basis,
making pre-paid cards and redemption of winnings available at various
Bingo Bonanza outlets. Petitioner Jaworski, in his capacity as member
of the Senate and Chairman of the Senate Committee on Games,
Amusement and Sports, files the instant petition, praying that the grant
of authority by PAGCOR in favor of SAGE be nullified. He maintains that
PAGCOR committed grave abuse of discretion amounting to lack or
excess of jurisdiction when it authorized SAGE to operate gambling on
the internet. He contends that PAGCOR is not authorized under its
legislative franchise, P.D. 1869, to operate gambling on the internet for
the simple reason that the said decree could not have possibly
contemplated internet gambling since at the time of its enactment on
July 11, 1983 the internet was yet inexistent and gambling activities
were confined exclusively to real-space. Further, he argues that the
internet, being an international network of computers, necessarily
transcends the territorial jurisdiction of the Philippines, and the grant to
SAGE of authority to operate internet gambling contravenes the
limitation in PAGCOR’s franchise, under Section 14 of P.D. No. 1869.
Moreover, according to petitioner, internet gambling does not fall
under any of the categories of the authorized gambling activities
enumerated under Section 10 of P.D. No. 1869 which grants PAGCOR
the “right, privilege and authority to operate and maintain gambling
casinos, clubs, and other recreation or amusement places, sports
gaming pools, within the territorial jurisdiction of the Republic of the
Philippines.” He contends that internet gambling could not have been
included within the commonly accepted definition of “gambling
casinos”, “clubs” or “other recreation or amusement places” as these
terms refer to a physical structure in real-space where people who
intend to bet or gamble go and play games of chance authorized by law.
Issues:
 Whether respondent Pagcor is authorized under PD No.
1869 to operate gambling activities on the internet?
 Whether Pagcor acted without or in excess of its jurisdiction,
or grave abuse of discretion amounting to lack or excess of
jurisdiction, when it authorized respondent Sage to operate
internet gambling on the basis of its right “to operate and
maintain gambling casinos, clubs, and other amusement
places” under Section 10 of PD 1869?
 Whether Pagcor acted without or in excess of its jurisdiction
or with grave abuse of discretion amounting to lack or
excess of jurisdiction when it granted authority to Sage to
operate gambling activities in the internet?
Held:
In their separate Comments, respondents PAGCOR and SAGE insist that
petitioner has no legal standing to file the instant petition as a
concerned citizen or as a member of the Philippine Senate on the
ground that he is not a real party-in-interest entitled to the avails of the
suit. In this light, they argue that petitioner does not have the requisite
personal and substantial interest to impugn the validity of PAGCOR’s
grant of authority to SAGE. Ordinarily, before a member of Congress
may properly challenge the validity of an official act of any department
of the government there must be an unmistakable showing that the
challenged official act affects or impairs his rights and prerogatives as
legislator. However in a number of cases, we clarified that where a case
involves an issue of utmost importance, or one of overreaching
significance to society, the Court, in its discretion, can brush aside
procedural technicalities and take cognizance of the petition.
Considering that the instant petition involves legal questions that may
have serious implications on public interests, we rule that petitioner
has the requisite legal standing to file this petition. Respondents
likewise urge the dismissal of the petition for certiorari and prohibition
because under Section 1, Rule 65 of the 1997 Rules of Civil Procedure,
these remedies should be directed to any tribunal, board, officer or
person whether exercising judicial, quasi-judicial, or ministerial
functions. They maintain that in exercising its legally-mandated
franchise to grant authority to certain entities to operate a gambling or
gaming activity, PAGCOR is not performing a judicial or quasi-judicial
act. Neither should the act of granting licenses or authority to operate
be construed as a purely ministerial act. According to them, in the event
that this Court takes cognizance of the instant petition, the same should
be dismissed for failure of petitioner to observe the hierarchy of courts.
In the case at bar, PAGCOR executed an agreement with SAGE whereby
the former grants the latter the authority to operate and maintain
sports betting stations and Internet gaming operations. The petition is
GRANTED. The “Grant of Authority and Agreement to Operate Sports
3
Betting and Internet gaming” executed by PAGCOR in favor of SAGE is
declared NULL and VOID.
Radio Communications v NTC G.R. No. L-68729 May 29, 1987
J. Gutierrez Jr.
Facts:
RCPI operated a radio communications system since 1957 under
legislative franchise granted by Republic Act No. 2036 (1957). The
petitioner established a radio telegraph service in Sorsogon, Sorsogon
(1968). in San Jose, Mindoro (1971), and Catarman, Samar (1983).
Kayumanggi Radio, on the other hand, was given the rights by the NTC
to operate radio networks in the same areas.
RCPI filed a complaint in the NTC and sought to prohibit Kayumanggi
Radio to operate in the same areas. The NTC ruled against the RTC’s
favor and commanded RCPI to desist in the operation of radio
telegraphs in the three areas. RTC filed a MFR in 1984. This was denied.
In the SC, Petitioner alleged that the Public Service Law had sections
that was still in effect even if the Public Service Commission was
abolished and the NTC was established.
These were S13- the Commission shall have jurisdiction, supervision,
and control over all public services and their franchises
S 14- Radio companies are exempt from the commission’s authority
except with respect to the fixing of rates And S 15-no public service
shall operate in the Philippines without possessing a valid and
subsisting certificate from the Public Service Commission, known as
"certificate of public convenience."
Issue:
Whether or not petitioner RCPI, a grantee of a legislative franchise to
operate a radio company, is required to secure a certificate of public
convenience and necessity before it can validly operate its radio
stations including radio telephone services in the aforementioned areas
Held:
Yes. Petition dismissed.
Ratio:
Presidential Decree No. 1- the Public Service Commission was abolished
and its functions were transferred to three specialized regulatory
boards, as follows: the Board of Transportation, the Board of
Communications and the Board of Power and Waterworks. The
functions so transferred were still subject to the limitations provided in
sections 14 and 15 of the Public Service Law, as amended.
The succeeding Executive Order No. 546- the Board of Communications
and the Telecommunications Control Bureau were abolished and their
functions were transferred to the National Telecommunications
Commission. Section 15- b. Establish, prescribe and regulate areas of
operation of particular operators of public service communications; and
determine and prescribe charges or rates pertinent to the operation of
such public utility facilities and services except in cases where charges
or rates are established by international bodies or associations of which
the Philippines is a participating member or by bodies recognized by
the Philippine Government as the proper arbiter of such charges or
rates; c. Grant permits for the use of radio frequencies for wireless
telephone and telegraph systems and radio communication
systems including amateur radio stations and radio and
television broadcasting systems; The exemption enjoyed by radio
companies from the jurisdiction of the Public Service Commission and
the Board of Communications no longer exists because of the changes
effected by the Reorganization Law and implementing executive orders.
The petitioner's claim that its franchise cannot be affected by Executive
Order No. 546 on the ground that it has long been in operation since
1957 cannot be sustained. Today, a franchise, being merely a privilege
emanating from the sovereign power of the state and owing its
existence to a grant, is subject to regulation by the state itself by virtue
of its police power through its administrative agencies. Pangasinan
transportation Co.- statutes enacted for the regulation of public
utilities, being a proper exercise by the State of its police power, are
applicable not only to those public utilities coming into existence after
its passage, but likewise to those already established and in operation.
Executive Order No. 546, being an implementing measure of P.D. No. I
insofar as it amends the Public Service Law (CA No. 146, as amended) is
applicable to the petitioner who must be bound by its provisions.
The position of the petitioner that by the mere grant of its franchise
under RA No. 2036 it can operate a radio communications system
anywhere within the Philippines is erroneous. Sec. 4(a). This franchise
shall not take effect nor shall any powers thereunder be exercised by
the grantee until the Secretary of Public works and Communications
shall have allotted to the grantee the frequencies and wave lengths to
be used, and issued to the grantee a license for such case.
Thus, in the words of R.A. No. 2036 itself, approval of the then
Secretary of Public Works and Communications was a precondition
before the petitioner could put up radio stations in areas where it
desires to operate. The records of the case do not show any grant of
authority from the then Secretary of Public Works and Communications
before the petitioner installed the questioned radio telephone services
in San Jose, Mindoro in 1971. The same is true as regards the radio
telephone services opened in Sorsogon, Sorsogon and Catarman, Samar
in 1983. No certificate of public convenience and necessity appears to
have been secured by the petitioner from the public respondent when
such certificate, was required by the applicable public utility
regulations. The Constitution mandates that a franchise cannot be
exclusive in nature nor can a franchise be granted except that it must
be subject to amendment, alteration, or even repeal by the legislature
when the common good so requires.
Cooperative Development Authority vs Dolefil Agrarian Beneficiaries
Coop Inc., 385 SCRA 552
FACTS:
Sometime in the later part of 1997, the CDA received from certain
members of the Dolefil Agrarian Reform Beneficiaries Cooperative, Inc.
(DARBCI for brevity), an agrarian reform cooperative that owns 8,860
hectares of land in Polomolok, South Cotabato, several complaints
alleging mismanagement and/or misappropriation of funds of DARBCI
by the then incumbent officers and members of the board of directors
of the cooperative, some of whom are herein private respondents.
The complaints led the CDA to act according to its function and issued a
freeze order on the DARBCI funds and creating management committee
to manage the affairs of the said cooperative.
ISSUE:
At the core of the instant petition for review on certiorari of the
Decision1 of the Court of Appeals, 13th Division, in CA-G.R. SP. No.
47933 promulgated on September 9, 1998 and its Resolution2 dated
February 9, 1999 is the issue of whether or not petitioner Cooperative
Development Authority (CDA for brevity) is vested with quasi-judicial
authority to adjudicate intra-cooperative disputes.
HELD:
WHEREFORE, judgment is hereby rendered as follows:
1. The petition for review on certiorari is hereby DENIED for lack of
merit. The orders, resolutions, memoranda and any other acts rendered
by petitioner Cooperative Development Authority in CDA-CO Case No.
97-011 are hereby declared null and void ab initio for lack of quasi-
judicial authority of petitioner to adjudicate intra-cooperative disputes;
and the petitioner is hereby ordered to cease and desist from taking
any further proceedings therein; and
2. In the interest of justice, the dispositive portion of the Resolution of
the Court of Appeals, dated February 9, 1999, in CA-G.R. SP No. 47933,
insofar as it nullified the elections of the members of the Board of
4
Directors and Officers of DARBCI held during the general assembly of
the DARBCI members on July 12, 1998, is hereby SET ASIDE.
***Matienza v. Abellera***
Laguna Lake Development Authority v CA
GR No. 110120, March 16, 1994
FACTS:
The LLDA Legal and Technical personnel found that the City
Government of Caloocan was maintaining an open dumpsite at the
Camarin area without first securing an Environmental Compliance
Certificate (ECC) from the Environmental Management Bureau (EMB) of
the Department of Environment and Natural Resources, as required
under Presidential Decree No. 1586, and clearance from LLDA as
required under Republic Act No. 4850 and issued a CEASE and DESIST
ORDER (CDO) for the City Government of Caloocan to stop the use of
the dumpsite.
ISSUES:
1. Whether the LLDA and its amendatory laws, have the
authority to entertain the complaint against the dumping of
garbage in the open dumpsite in Barangay Camarin
authorized by the City Government of Caloocan?
2. Whether the LLDA have the power and authority to issue a
"cease and desist" order?
APPLICABLE LAWS:
 Executive Order No. 927 series of 1983 which provides, thus:
Sec. 4. Additional Powers and Functions. The authority shall
have the following powers and functions: (d) Make, alter or
modify orders requiring the discontinuance of pollution
specifying the conditions and the time within which such
discontinuance must be accomplished
 As a general rule, the adjudication of pollution cases
generally pertains to the Pollution Adjudication Board (PAB),
except in cases w here the special law provides for another
forum
RULING:
1. YES, LLDA has authority. It must be recognized in this regard
that the LLDA, as a specialized administrative agency, is
specifically mandated under Republic Act No. 4850 and its
amendatory law s to carry out and make effective the
declared national policy of promoting and accelerating the
development and balanced growth of the Laguna Lake area
and the surrounding provinces of Rizal and Laguna and the
cities of San Pablo, Manila, Pasay, Quezon and Caloocan with
due regard and adequate provisions for environmental
management and control, preservation of the quality of
human life and ecological systems, and the prevention of
undue ecological disturbances, deterioration and pollution.
Under such a broad grant and power and authority, the
LLDA, by virtue of its special charter, obviously has the
responsibility to protect the inhabitants of the Laguna Lake
region from the deleterious effects of pollutants emanating
from the discharge of wastes from the surrounding areas.
2. YES, pursuant to EO 927 Section 4. While it is a fundamental
rule that an administrative agency has only such powers as
are expressly granted to it by law , it is likewise a settled rule
that an administrative agency has also such powers as are
necessarily implied in the exercise of its express powers. In
the exercise, therefore, of its express powers under its
charter as a regulatory and quasi-judicial body with respect
to pollution cases in the Laguna Lake region, the authority of
the LLDA to issue a "cease and desist order" is, perforce,
implied.
NOTE:
HOWEVER, writs of mandamus and injunction are beyond the power of
the LLDA to issue.
***US v. Barias, G.R. No. L-45685***
PEOPLE VS VERA
G.R. No. L-45685 65 Phil 56 November 16, 1937
THE PEOPLE OF THE PHILIPPINE ISLANDS and HONGKONG &
SHANGHAI BANKING CORPORATION, petitioners,
vs.
JOSE O. VERA, Judge . of the Court of First Instance of Manila, and
MARIANO CU UNJIENG, respondents.
Facts:
Mariano Cu Unjieng was convicted by the trial court in Manila. He filed
for reconsideration and four motions for new trial but all were denied.
He then elevated to the Supreme Court and the Supreme Court
remanded the appeal to the lower court for a new trial. While awaiting
new trial, he appealed for probation alleging that the he is innocent of
the crime he was convicted of. The Judge of the Manila CFI directed the
appeal to the Insular Probation Office. The IPO denied the application.
However, Judge Vera upon another request by petitioner allowed the
petition to be set for hearing. The City Prosecutor countered alleging
that Vera has no power to place Cu Unjieng under probation because it
is in violation of Sec. 11 Act No. 4221 which provides that the act of
Legislature granting provincial boards the power to provide a system of
probation to convicted person. Nowhere in the law is stated that the
law is applicable to a city like Manila because it is only indicated therein
that only provinces are covered. And even if Manila is covered by the
law it is unconstitutional because Sec 1 Art 3 of the Constitution
provides equal protection of laws. The said law provides absolute
discretion to provincial boards and this also constitutes undue
delegation of power. Further, the said probation law may be an
encroachment of the power of the executive to provide pardon
because providing probation, in effect, is granting freedom, as in
pardon.
Issues:
Whether or not Act No. 4221 constituted an undue delegation of
legislative power
Whether or not the said act denies the equal protection of the laws
Discussions:
An act of the legislature is incomplete and hence invalid if it does not
lay down any rule or definite standard by which the administrative
officer or board may be guided in the exercise of the discretionary
powers delegated to it. The probation Act does not, by the force of any
of its provisions, fix and impose upon the provincial boards any
standard or guide in the exercise of their discretionary power. What is
granted, as mentioned by Justice Cardozo in the recent case of
Schecter, supra, is a “roving commission” which enables the provincial
boards to exercise arbitrary discretion. By section 11 if the Act, the
legislature does not seemingly on its own authority extend the benefits
of the Probation Act to the provinces but in reality leaves the entire
matter for the various provincial boards to determine.
The equal protection of laws is a pledge of the protection of equal laws.
The classification of equal protection, to be reasonable, must be based
on substantial distinctions which make real differences; it must be
germane to the purposes of the law; it must not be limited to existing
conditions only, and must apply equally to each member of the class.
Ruling:
The Court concludes that section 11 of Act No. 4221 constitutes an
improper and unlawful delegation of legislative authority to the
provincial boards and is, for this reason, unconstitutional and void.
5
There is no set standard provided by Congress on how provincial boards
must act in carrying out a system of probation. The provincial boards
are given absolute discretion which is violative of the constitution and
the doctrine of the non-delegation of power. Further, it is a violation of
equity so protected by the constitution. The challenged section of Act
No. 4221 in section 11 which reads as follows: This Act shall apply only
in those provinces in which the respective provincial boards have
provided for the salary of a probation officer at rates not lower than
those now provided for provincial fiscals. Said probation officer shall be
appointed by the Secretary of Justice and shall be subject to the
direction of the Probation Office.
The provincial boards of the various provinces are to determine for
themselves, whether the Probation Law shall apply to their provinces or
not at all. The applicability and application of the Probation Act are
entirely placed in the hands of the provincial boards. If the provincial
board does not wish to have the Act applied in its province, all that it
has to do is to decline to appropriate the needed amount for the salary
of a probation officer.
It is also contended that the Probation Act violates the provisions of our
Bill of Rights which prohibits the denial to any person of the equal
protection of the laws. The resultant inequality may be said to flow
from the unwarranted delegation of legislative power, although
perhaps this is not necessarily the result in every case. Adopting the
example given by one of the counsel for the petitioners in the course of
his oral argument, one province may appropriate the necessary fund to
defray the salary of a probation officer, while another province may
refuse or fail to do so. In such a case, the Probation Act would be in
operation in the former province but not in the latter. This means that a
person otherwise coming within the purview of the law would be liable
to enjoy the benefits of probation in one province while another person
similarly situated in another province would be denied those same
benefits. This is obnoxious discrimination. Contrariwise, it is also
possible for all the provincial boards to appropriate the necessary funds
for the salaries of the probation officers in their respective provinces, in
which case no inequality would result for the obvious reason that
probation would be in operation in each and every province by the
affirmative action of appropriation by all the provincial boards.
Eastern Shipping Lines v. POEA
166 SCRA 533 (1988)
GENERAL RULE: Non-delegation of Legislative Power
EXCEPTION: Subordinate Legislation
Tests for Valid Delegation of Legislative Power
FACTS:
Vitaliano Saco, the Chief Officer of a ship, was killed in an accident in
Tokyo, Japan. The widow filed a complaint for damages against the
Eastern Shipping Lines with the POEA, based on Memorandum Circular
No. 2 issued by the latter which stipulated death benefits and burial
expenses for the family of an overseas worker. Eastern Shipping Lines
questioned the validity of the memorandum circular. Nevertheless, the
POEA assumed jurisdiction and decided the case.
ISSUE:
W/N the issuance of Memorandum Circular No. 2 is a violation of non-
delegation of powers
HELD:
SC held that there was valid delegation of powers.
In questioning the validity of the memorandum circular, Eastern
Shipping Lines contended that POEA was given no authority to
promulgate the regulation, and even with such authorization, the
regulation represents an exercise of legislative discretion which, under
the principle, is not subject to delegation.
GENERAL RULE: Non-delegation of powers; exception
It is true that legislative discretion as to the substantive contents of the
law cannot be delegated. What can be delegated is the discretion to
determine how the law may be enforced, not what the law shall be. The
ascertainment of the latter subject is a prerogative of the legislature.
This prerogative cannot be abdicated or surrendered by the legislature
to the delegate.
Two Tests of Valid Delegation of Legislative Power
There are two accepted tests to determine whether or not there is a
valid delegation of legislative power, viz, the completeness test and the
sufficient standard test. Under the first test, the law must be complete
in all its terms and conditions when it leaves the legislature such that
when it reaches the delegate the only thing he will have to do is to
enforce it. Under the sufficient standard test, there must be adequate
guidelines or stations in the law to map out the boundaries of the
delegate’s authority and prevent the delegation from running riot.
Both tests are intended to prevent a total transference of legislative
authority to the delegate, who is not allowed to step into the shoes of
the legislature and exercise a power essentially legislative.
Xxx The delegation of legislative power has become the rule and its
non-delegation the exception.
Rationale for Delegation of Legislative Power
The reason is the increasing complexity of the task of government and
the growing inability of the legislature to cope directly with the myriad
problems demanding its attention. The growth of society has ramified
its activities and created peculiar and sophisticated problems that the
legislature cannot be expected to reasonably comprehend.
Specialization even in legislation has become necessary. Too many of
the problems attendant upon present-day undertakings, the legislature
may not have the competence to provide the required direct and
efficacious, not to say, specific solutions. These solutions may, however,
be expected from its delegates, who are supposed to be experts in the
particular fields.
Power of Subordinate Legislation
The reasons given above for the delegation of legislative powers in
general are particularly applicable to administrative bodies. With the
proliferation of specialized activities and their attendant peculiar
problems, the national legislature has found it more and more
necessary to entrust to administrative agencies the authority to issue
rules to carry out the general provisions of the statute. This is called the
“power of subordinate legislation.”
With this power, administrative bodies may implement the broad
policies laid down in statute by “filling in” the details which the
Congress may not have the opportunity or competence to provide.
Memorandum Circular No. 2 is one such administrative regulation.
***Rabor v. CSC, G.R. No. 111812 ***
***Re: Entitlement to Hazard Pay of SC Medical and Dental Clinic
Personnel, A.M. No. 03-9-0-SC, Nov.27, 2008***