ANTIPOLO REALTY CORPORATION v.

NHA | 9

FIRST DIVISION
PEOPLE OF THE PHILIPPINES v. JACOB ROSENTHAL and NICASIO OSMEÑA
[G.R. Nos. 46076 & 46077. June 12, 1939.]
LAUREL, J 

TOPIC: Alleged undue delegation of legislative authority by Act No. 2581, resulting to its
unconstitutionality. Sufficient Standard Test is used to determine whether there is undue
delegation.

FACTS:
 Jacob Rosenthal and Nicasio Osmeña were founders and shareholders of the O.R.O. Oil
Company. They were charged and found guilty in the Court of First Instance of Manila for violation
of Act No. 2581 which provides that:
Section 2: “ every person… attempting to offer to sell in the Philippines speculative securities… is
under obligation to file previously with the Insular Treasurer the various documents and papers
enumerated therein and to pay the required tax of twenty-pesos”.
Section 5: “whatever the said Treasurer of the Philippine Islands is satisfied, either with or without
the examination herein provided, that any person… is entitled to the right to offer its securities as
above defined and provided for sale… he (Treasurer) shall issue to such person… a certificate or
permit reciting that such person… has complied with the provisions of this act, and that such
person… are entitled to order the securities named in said certificate or permit for sale”; the “
Treasurer shall furthermore have authority, whenever in his judgment it is in the public interest, to
cancel said certificate or permit”…
 Defendant-appellants argue that Act No. 2581 is unconstitutional because there is no standard or
fixed rule in the Act which can guide said official in determining the cases in which a certificate or
permit should be issued or cancelled, thereby making his opinion the sole criterion in the matter of
its issuance or cancellation, with the result that, legislative powers being unduly delegated to the
Insular Treasurer.

ISSUE:
Whether Act No. 2581 constitutes undue delegation of legislative authority to the Insular
Treasurer, thereby making the said Act unconstitutional.

RULING:
NO. There is no undue delegation because the Act, in itself, covers the “standards” that the
Insular Treasurer must follow when deciding whether to issue or cancel a permit.

Sufficient Standard Test, a test used to determine the proper delegation of legislative
authority to an administrative body, provides that “The law must offer a sufficient standard to specify
the limits of the delegate’s authority, announce the legislative policy and specify the conditions under
which it is to be implemented”.

Section 5 of Act No. 2581 specifies that the Treasurer will issue a certificate or permit if the
person… complied with the provisions of this act. It also states that the Treasurer shall
furthermore have authority, whenever in his judgment it is in the public interest, to cancel said
certificate or permit. The phrase “public interest” is supported by the intention of the Act to
protect the public against "speculative schemes which have no more basis than so many feet
of blue sky" and against the "sale of stock in fly-by-night concerns, visionary oil wells, distant
gold mines, and other like fraudulent exploitation's".

The above limitations of said Act are clear indicators that the Treasurer is bound by specific
standards when deciding whether to issue or cancel permits. Thus, it is not true that his opinion is the
sole criterion in creating a particular decision.

CONCLUSION:
Wherefore, the judgment of the Court of First Instance finding the defendants-appellants guilty
for violation of Act No. 2581 is hereby affirmed.

Act No. 2581 met the criteria for sufficient standard test, thus implying that the said Act DOES
NOT CONSTITUTE UNDUE DELEGATION and it is therefore CONSTITUTIONAL.