Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 82849 August 2, 1989

CEBU OXYGEN & ACETYLENE CO., INC. (COACO) petitioner,

vs.
SECRETARY FRANKLIN M. DRILON OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, ASSISTANT REGIONAL
DIRECTOR CANDIDO CUMBA OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7 AND CEBU
OXYGEN-ACETYLENE & CENTRAL VISAYAS EMPLOYEES ASSOCIATION (COACVEA) respondents.

Michael L. Rama for petitioner.

Armando M. Alforque for private respondent.

GANCAYCO, J.;

The principal issue raised in this petition is whether or not an Implementing Order of the Secretary of Labor and Employment (DOLE)
can provide for a prohibition not contemplated by the law it seeks to implement.

The undisputed facts are as follows:

Petitioner and the union of its rank and file employees, Cebu Oxygen, Acetylene and Central Visayas Employees Association
(COAVEA) entered into a collective bargaining agreement (CBA) covering the years 1986 to 1988. Pursuant thereto, the management
gave salary increases as follows:

ARTICLE IV SALARIES/RICE RATION

Section 1. The COMPANY agrees that for and during the three (3) year effectivity of this AGREEMENT, it will grant to
all regular covered employees the following salary increases:

Salaries:

1) For the first year which will be paid on January 14, 1986 P200 to each covered employee.

IT IS HEREBY EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PAY INCREASE SHALL BE CREDITED AS
PAYMENT TO ANY MANDATED GOVERNMENT WAGE ADJUSTMENT OR ALLOWANCE INCREASES WHICH
MAY BE ISSUED BY WAY OF LEGISLATION, DECREE OR PRESIDENT

2) For the second year which will be paid on January 16, 1987-P 200 to each covered employee.

IT IS HEREBY EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PAY INCREASE SHALL BE CREDITED AS
PAYMENT TO ANY DATED GOVERNMENT WAGE ADJUSTMENT OR ALLOWANCE INCREASES WHICH MAY BE
ISSUED BY WAY OF LEGISLATION, DECREE OR PRESIDENTIAL EDICT COUNTED FROM THE ABOVE DATE
TO THE NEXT INCREASE.

3) For the third year which will be paid on January 16, 1988 P300 to each covered employee.

IT IS HEREBY EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PAY INCREASE SHALL BE CREDITED AS
PAYMENT TO ANY MANDATED GOVERNMENT WAGE ADJUSTMENT OR ALLOWANCE INCREASES WHICH
MAY BE ISSUED BY WAY OF LEGISLATION, DECREE OR PRESIDENTIAL EDICT COUNTED FROM THE ABOVE
DATE TO THE NEXT INCREASE.

IF THE WAGE ADJUSTMENT OF ALLOWANCE INCREASES DECREED BY LAW, LEGISLATION OR

PRESIDENTIAL qqqEDICT IN ANY PARTICULAR YEAR SHALL BE HIGHER THAN THE FOREGOING
INCREASES IN THAT PARTICULAR YEAR, THEN THE COMPANY SHALL PAY THE DIFFERENCE.

On December 14, 1987, Republic Act No. 6640 was passed increasing the minimum wage, as follows:

Sec. 2. The statutory minimum wage rates of workers and employees in the private sector, whether agricultural or
non-agricultural, shall be increased by ten pesos (P10.00) per day, except non-agricultural workers and employees
outside Metro Manila who shall receive an increase of eleven pesos (P11.00) per day: Provided, that those already
receiving above the minimum wage up to one hundred pesos (Pl 00.00 shall receive an increase of ten pesos (Pl
0.00) per day. Excepted from the provisions of this Act are domestic helpers and persons employed in the personal
service of another.

The Secretary of Labor issued the pertinent rules implementing the provisions of Republic Act No. 6640. Section 8 thereof provides:

1
 Section 8. Wage Increase Under Individual/Collective Agreements. No wage increase shall be credited as
compliance with the increase prescribed herein unless expressly provided under valid individual written/collective
agreements; and, provided further, that such wage increase was granted in anticipation of the legislated wage
increase under the act. Such increases shall not include anniversary wage increases provided on collective
agreements.

In sum, Section 8 of the implementing rules prohibits the employer from crediting anniversary wage increases negotiated under a
collective bargaining agreement against such wage increases mandated by Republic Act No. 6640.

Accordingly, petitioner credited the first year increase of P200.00 under the CBA and added the difference of P61.66 (rounded to
P62.00) and P31.00 to the monthly salary and the 13th month pay, respectively, of its employees from the effectivity of Republic Act No.
6640 on December 14,1987 to February 15, 1988.

On February 22, 1988, a Labor and Employment Development Officer, pursuant to Inspection Authority No. 058-88, commenced a
routine inspection of petitioner's establishment. Upon completion of the inspection on March 10, 1988, and based on payrolls and other
records, he found that petitioner committed violations of the law as follows:

1. Under payment of Basic Wage per R.A. No. 6640 covering the period of two (2) months representing 208
employees who are not receiving wages above P100/day prior to the effectivity of R.A. No. 6640 in the aggregate
amount of EIGHTY THREE THOUSAND AND TWO HUNDRED PESOS (P83,200.00); and

2. Under payment of 13th month pay for the year 1987, representing 208 employees who are not receiving wages
above P 100/day prior to the effectivity of R.A. No. 6640 in the aggregate amount of FORTY EIGHT THOUSAND
AND FORTY EIGHT PESOS (P48,048.00).

On April 7, 1988, respondent Assistant Regional Director, issued an Order instructing petitioner to pay its 208 employees the aggregate
amount of P 131,248.00, computed as follows:

Computation sheet of differentials due to COACO-Cebu Workers.

Salary Differentials:

a) From December 14/87 to February 15/88

= P200.00/mo x 2 months

= P400.00

= P400 x 208 employees (who are not receiving above P100/day as wages before the effectivity of R.A. No. 6640)

=P 83,200.00

b) 13th month pay differentials of the year 1987:

= P231.00 x 208 employees (who are not receiving above P100/day as wages before the effectivity of RA. No. 6640)

=P48,048.00

Total = P131,248.00

In sum, the Assistant Regional Director ordered petitioner to pay the deficiency of P200.00 in the monthly salary and P 231.00 in the
13th month pay of its employees for the period stated. Petitioner protested the Order of the Regional Director on the ground that the
anniversary wage increases under the CBA can be credited against the wage increase mandated by Republic Act No. 6640. Hence,
petitioner contended that inasmuch as it had credited the first year increase negotiated under the CBA, it was liable only for a salary
differential of P 62.00 and a 13th month pay differential of P31.00. Petitioner argued that the payment of the differentials constitutes full
compliance with Republic Act No. 6640. Apparently, the protest was not entertained. Petitioner brought the case immediately to this
Court without appealing the matter to the Secretary of Labor and Employment. On May 9,1988, this Court issued a temporary
restraining order enjoining the Assistant Regional Director from enforcing his Order dated April 7, 1988. 1The thrust of the argument of
petitioner is that Section 8 of the rules implementing the provisions of Republic Act No. 6640 particularly the provision excluding
anniversary wage increases from being credited to the wage increase provided by said law is null and void on the ground that the same
unduly expands the provisions of the said law.

This petition is impressed with merit.

Public respondents aver that petitioner should have first appealed to the Secretary of Labor before going to court. It is fundamental that
in a case where only pure questions of law are raised, the doctrine of exhaustion of administrative remedies cannot apply because
issues of law cannot be resolved with finality by the administrative officer. Appeal to the administrative officer of orders involving
questions of law would be an exercise in futility since administrative officers cannot decide such issues with finality. 2 The questions
raised in this petition are questions of law. Hence, the failure to exhaust administrative remedies cannot be considered fatal to this
petition.

As to the issue of the validity of Section 8 of the rules implementing Republic Act No. 6640, which prohibits the employer from crediting
the anniversary wage increases provided in collective bargaining agreements, it is a fundamental rule that implementing rules cannot
2
add or detract from the provisions of law it is designed to implement. The provisions of Republic Act No. 6640, do not prohibit the
crediting of CBA anniversary wage increases for purposes of compliance with Republic Act No. 6640. The implementing rules cannot
provide for such a prohibition not contemplated by the law. Administrative regulations adopted under legislative authority by a particular
department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general
provisions. The law itself cannot be expanded by such regulations. An administrative agency cannot amend an act of Congress. 3 Thus
petitioner's contention that the salary increases granted by it pursuant to the existing CBA including anniversary wage increases should
be considered in determining compliance with the wage increase mandated by Republic Act No. 6640, is correct. However, the amount
that should only be credited to petitioner is the wage increase for 1987 under the CBA when the law took effect. The wage increase for
1986 had already accrued in favor of the employees even before the said law was enacted.

Petitioner therefor correctly credited its employees P62.00 for the differential of two (2) months increase and P31.00 each for the
differential in 13th month pay, after deducting the P200.00 anniversary wage increase for 1987 under the CBA. Indeed, it is stipulated in
the CBA that in case any wage adjustment or allowance increase decreed by law, legislation or presidential edict in any particular year
shall be higher than the foregoing increase in that particular year, then the company (petitioner) shall pay the difference.

WHEREFORE, the petition is hereby GRANTED. The Order of the respondent Assistant Regional Director dated April 7, 1988 is
modified in that petitioner is directed to pay its 208 employees so entitled the amount of P62.00 each as salary differential for two (2)
months and P31.00 as 13th month pay differential in full compliance with the provisions of Republic Act No. 6640. Section 8 of the rules
implementing Republic 6640, is hereby declared null and void in so far as it excludes the anniversary wage increases negotiated under
collective bargaining agreements from being credited to the wage increase provided for under Republic Act No. 6440. This decision is
immediately executory.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 115381 December 23, 1994

KILUSANG MAYO UNO LABOR CENTER, petitioner,

vs.
HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD, and the PROVINCIAL
BUS OPERATORS ASSOCIATION OF THE PHILIPPINES, respondents.

Potenciano A. Flores for petitioner.

Robert Anthony C. Sison, Cesar B. Brillantes and Jose Z. Galsim for private respondent.

Jose F. Miravite for movants.

KAPUNAN, J.:

Public utilities are privately owned and operated businesses whose service are essential to the general public. They are enterprises
which specially cater to the needs of the public and conduce to their comfort and convenience. As such, public utility services are
impressed with public interest and concern. The same is true with respect to the business of common carrier which holds such a
peculiar relation to the public interest that there is superinduced upon it the right of public regulation when private properties are
affected with public interest, hence, they cease to be juris privati only. When, therefore, one devotes his property to a use in which the
public has an interest, he, in effect grants to the public an interest in that use, and must submit to the control by the public for the
common good, to the extent of the interest he has thus created. 1

An abdication of the licensing and regulatory government agencies of their functions as the instant petition seeks to show, is indeed
lamentable. Not only is it an unsound administrative policy but it is inimical to public trust and public interest as well.

The instant petition for certiorari assails the constitutionality and validity of certain memoranda, circulars and/or orders of the
Department of Transportation and Communications (DOTC) and the Land Transportation Franchising and Regulatory Board
LTFRB) 2 which, among others, (a) authorize provincial bus and jeepney operators to increase or decrease the prescribed transportation
fares without application therefor with the LTFRB and without hearing and approval thereof by said agency in violation of Sec. 16(c) of
Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act, and in derogation of LTFRB's duty to fix and
determine just and reasonable fares by delegating that function to bus operators, and (b) establish a presumption of public need in
favor of applicants for certificates of public convenience (CPC) and place on the oppositor the burden of proving that there is no need
for the proposed service, in patent violation not only of Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act
mandating that fares should be "just and reasonable." It is, likewise, violative of the Rules of Court which places upon each party the
burden to prove his own affirmative allegations. 3 The offending provisions contained in the questioned issuances pointed out by
petitioner, have resulted in the introduction into our highways and thoroughfares thousands of old and smoke-belching buses, many of
which are right-hand driven, and have exposed our consumers to the burden of spiraling costs of public transportation without hearing
and due process.

3
The following memoranda, circulars and/or orders are sought to be nullified by the instant petition, viz: (a) DOTC Memorandum Order
90-395, dated June 26, 1990 relative to the implementation of a fare range scheme for provincial bus services in the country; (b) DOTC
Department Order No.
92-587, dated March 30, 1992, defining the policy framework on the regulation of transport services; (c) DOTC Memorandum dated
October 8, 1992, laying down rules and procedures to implement Department Order No. 92-587; (d) LTFRB Memorandum Circular No.
92-009, providing implementing guidelines on the DOTC Department Order No. 92-587; and (e) LTFRB Order dated March 24, 1994 in
Case No. 94-3112.

The relevant antecedents are as follows:

On June 26, 1990; then Secretary of DOTC, Oscar M. Orbos, issued Memorandum Circular No. 90-395 to then LTFRB Chairman,
Remedios A.S. Fernando allowing provincial bus operators to charge passengers rates within a range of 15% above and 15% below
the LTFRB official rate for a period of one (1) year. The text of the memorandum order reads in full:

One of the policy reforms and measures that is in line with the thrusts and the priorities set out in the Medium-Term
Philippine Development Plan (MTPDP) 1987 1992) is the liberalization of regulations in the transport sector. Along
this line, the Government intends to move away gradually from regulatory policies and make progress towards
greater reliance on free market forces.

Based on several surveys and observations, bus companies are already charging passenger rates above and below
the official fare declared by LTFRB on many provincial routes. It is in this context that some form of liberalization on
public transport fares is to be tested on a pilot basis.

In view thereof, the LTFRB is hereby directed to immediately publicize a fare range scheme for all provincial bus
routes in country (except those operating within Metro Manila). Transport Operators shall be allowed to charge
passengers within a range of fifteen percent (15%) above and fifteen percent (15%) below the LTFRB official rate for
a period of one year.

Guidelines and procedures for the said scheme shall be prepared by LTFRB in coordination with the DOTC Planning
Service.

The implementation of the said fare range scheme shall start on 6 August 1990.

For compliance. (Emphasis ours.)

Finding the implementation of the fare range scheme "not legally feasible," Remedios A.S. Fernando submitted the following
memorandum to Oscar M. Orbos on July 24, 1990, to wit:

With reference to DOTC Memorandum Order No. 90-395 dated 26 June 1990 which the LTFRB received on 19 July
1990, directing the Board "to immediately publicize a fare range scheme for all provincial bus routes in the country
(except those operating within Metro Manila)" that will allow operators "to charge passengers within a range of fifteen
percent (15%) above and fifteen percent (15%) below the LTFRB official rate for a period of one year" the
undersigned is respectfully adverting the Secretary's attention to the following for his consideration:

1. Section 16(c) of the Public Service Act prescribes the following for the fixing and determination of
rates (a) the rates to be approved should be proposed by public service operators; (b) there
should be a publication and notice to concerned or affected parties in the territory affected; (c) a
public hearing should be held for the fixing of the rates; hence, implementation of the proposed fare
range scheme on August 6 without complying with the requirements of the Public Service Act may
not be legally feasible.

2. To allow bus operators in the country to charge fares fifteen (15%) above the present LTFRB
fares in the wake of the devastation, death and suffering caused by the July 16 earthquake will not
be socially warranted and will be politically unsound; most likely public criticism against the DOTC
and the LTFRB will be triggered by the untimely motu propioimplementation of the proposal by the
mere expedient of publicizing the fare range scheme without calling a public hearing, which
scheme many as early as during the Secretary's predecessor know through newspaper reports and
columnists' comments to be Asian Development Bank and World Bank inspired.

3. More than inducing a reduction in bus fares by fifteen percent (15%) the implementation of the
proposal will instead trigger an upward adjustment in bus fares by fifteen percent (15%) at a time
when hundreds of thousands of people in Central and Northern Luzon, particularly in Central
Pangasinan, La Union, Baguio City, Nueva Ecija, and the Cagayan Valley are suffering from the
devastation and havoc caused by the recent earthquake.

4. In lieu of the said proposal, the DOTC with its agencies involved in public transportation can
consider measures and reforms in the industry that will be socially uplifting, especially for the
people in the areas devastated by the recent earthquake.

In view of the foregoing considerations, the undersigned respectfully suggests that the implementation of the
proposed fare range scheme this year be further studied and evaluated.

On December 5, 1990, private respondent Provincial Bus Operators Association of the Philippines, Inc. (PBOAP) filed an application for
fare rate increase. An across-the-board increase of eight and a half centavos (P0.085) per kilometer for all types of provincial buses
with a minimum-maximum fare range of fifteen (15%) percent over and below the proposed basic per kilometer fare rate, with the said
4
minimum-maximum fare range applying only to ordinary, first class and premium class buses and a fifty-centavo (P0.50) minimum per
kilometer fare for aircon buses, was sought.

On December 6, 1990, private respondent PBOAP reduced its applied proposed fare to an across-the-board increase of six and a half
(P0.065) centavos per kilometer for ordinary buses. The decrease was due to the drop in the expected price of diesel.

The application was opposed by the Philippine Consumers Foundation, Inc. and Perla C. Bautista alleging that the proposed rates were
exorbitant and unreasonable and that the application contained no allegation on the rate of return of the proposed increase in rates.

On December 14, 1990, public respondent LTFRB rendered a decision granting the fare rate increase in accordance with the following
schedule of fares on a straight computation method, viz:

AUTHORIZED FARES

LUZON
MIN. OF 5 KMS. SUCCEEDING KM.

REGULAR P1.50 P0.37

STUDENT P1.15 P0.28

VISAYAS/MINDANAO

REGULAR P1.60 P0.375

STUDENT P1.20 P0.285
FIRST CLASS (PER KM.)
LUZON P0.385
VISAYAS/
MINDANAO P0.395
PREMIERE CLASS (PER KM.)
LUZON P0.395
VISAYAS/
MINDANAO P0.405

AIRCON (PER KM.) P0.415. 4

On March 30, 1992, then Secretary of the Department of Transportation and Communications Pete Nicomedes Prado issued
Department Order No.
92-587 defining the policy framework on the regulation of transport services. The full text of the said order is reproduced below in view
of the importance of the provisions contained therein:

WHEREAS, Executive Order No. 125 as amended, designates the Department of Transportation and
Communications (DOTC) as the primary policy, planning, regulating and implementing agency on transportation;

WHEREAS, to achieve the objective of a viable, efficient, and dependable transportation system, the transportation
regulatory agencies under or attached to the DOTC have to harmonize their decisions and adopt a common
philosophy and direction;

WHEREAS, the government proposes to build on the successful liberalization measures pursued over the last five
years and bring the transport sector nearer to a balanced longer term regulatory framework;

NOW, THEREFORE, pursuant to the powers granted by laws to the DOTC, the following policies and principles in the
economic regulation of land, air, and water transportation services are hereby adopted:

1. Entry into and exit out of the industry. Following the Constitutional dictum against monopoly, no franchise holder
shall be permitted to maintain a monopoly on any route. A minimum of two franchise holders shall be permitted to
operate on any route.

The requirements to grant a certificate to operate, or certificate of public convenience, shall be: proof of Filipino
citizenship, financial capability, public need, and sufficient insurance cover to protect the riding public.

In determining public need, the presumption of need for a service shall be deemed in favor of the applicant. The
burden of proving that there is no need for a proposed service shall be with the oppositor(s).

In the interest of providing efficient public transport services, the use of the "prior operator" and the "priority of filing"
rules shall be discontinued. The route measured capacity test or other similar tests of demand for vehicle/vessel fleet
on any route shall be used only as a guide in weighing the merits of each franchise application and not as a limit to
the services offered.

Where there are limitations in facilities, such as congested road space in urban areas, or at airports and ports, the
use of demand management measures in conformity with market principles may be considered.

The right of an operator to leave the industry is recognized as a business decision, subject only to the filing of
appropriate notice and following a phase-out period, to inform the public and to minimize disruption of services.

5
 2. Rate and Fare Setting. Freight rates shall be freed gradually from government controls. Passenger fares shall also
be deregulated, except for the lowest class of passenger service (normally third class passenger transport) for which
the government will fix indicative or reference fares. Operators of particular services may fix their own fares within a
range 15% above and below the indicative or reference rate.

Where there is lack of effective competition for services, or on specific routes, or for the transport of particular
commodities, maximum mandatory freight rates or passenger fares shall be set temporarily by the government
pending actions to increase the level of competition.

For unserved or single operator routes, the government shall contract such services in the most advantageous terms
to the public and the government, following public bids for the services. The advisability of bidding out the services or
using other kinds of incentives on such routes shall be studied by the government.

3. Special Incentives and Financing for Fleet Acquisition. As a matter of policy, the government shall not engage in
special financing and incentive programs, including direct subsidies for fleet acquisition and expansion. Only when
the market situation warrants government intervention shall programs of this type be considered. Existing programs
shall be phased out gradually.

The Land Transportation Franchising and Regulatory Board, the Civil Aeronautics Board, the Maritime Industry
Authority are hereby directed to submit to the Office of the Secretary, within forty-five (45) days of this Order, the
detailed rules and procedures for the Implementation of the policies herein set forth. In the formulation of such rules,
the concerned agencies shall be guided by the most recent studies on the subjects, such as the Provincial Road
Passenger Transport Study, the Civil Aviation Master Plan, the Presidential Task Force on the Inter-island Shipping
Industry, and the Inter-island Liner Shipping Rate Rationalization Study.

For the compliance of all concerned. (Emphasis ours)

On October 8, 1992, public respondent Secretary of the Department of Transportation and Communications Jesus B. Garcia, Jr. issued
a memorandum to the Acting Chairman of the LTFRB suggesting swift action on the adoption of rules and procedures to implement
above-quoted Department Order No. 92-587 that laid down deregulation and other liberalization policies for the transport sector.
Attached to the said memorandum was a revised draft of the required rules and procedures covering (i) Entry Into and Exit Out of the
Industry and (ii) Rate and Fare Setting, with comments and suggestions from the World Bank incorporated therein. Likewise,
resplendent from the said memorandum is the statement of the DOTC Secretary that the adoption of the rules and procedures is a pre-
requisite to the approval of the Economic Integration Loan from the World Bank. 5

On February 17, 1993, the LTFRB issued Memorandum Circular

No. 92-009 promulgating the guidelines for the implementation of DOTC Department Order No. 92-587. The Circular provides, among
others, the following challenged portions:

xxx xxx xxx

IV. Policy Guidelines on the Issuance of Certificate of Public Convenience.

The issuance of a Certificate of Public Convenience is determined by public need. The presumption of public need
for a service shall be deemed in favor of the applicant, while burden of proving that there is no need for the proposed
service shall be the oppositor'(s).

xxx xxx xxx

V. Rate and Fare Setting

The control in pricing shall be liberalized to introduce price competition complementary with the quality of service,
subject to prior notice and public hearing. Fares shall not be provisionally authorized without public hearing.

A. On the General Structure of Rates

1. The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys shall be
widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicative or reference rate as
the basis for the expanded fare range.

2. Fare systems for aircon buses are liberalized to cover first class and premier services.

xxx xxx xxx

(Emphasis ours).

Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowing provincial bus
operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the
benefit of a public hearing, announced a fare increase of twenty (20%) percent of the existing fares. Said increased fares were to be
made effective on March 16, 1994.

On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares.

6
On March 24, 1994, the LTFRB issued one of the assailed orders dismissing the petition for lack of merit. The dispositive portion reads:

PREMISES CONSIDERED, this Board after considering the arguments of the parties, hereby DISMISSES FOR
LACK OF MERIT the petition filed in the above-entitled case. This petition in this case was resolved with dispatch at
the request of petitioner to enable it to immediately avail of the legal remedies or options it is entitled under existing
laws.

SO ORDERED. 6

Hence, the instant petition for certiorari with an urgent prayer for issuance of a temporary restraining order.

The Court, on June 20, 1994, issued a temporary restraining order enjoining, prohibiting and preventing respondents from
implementing the bus fare rate increase as well as the questioned orders and memorandum circulars. This meant that provincial bus
fares were rolled back to the levels duly authorized by the LTFRB prior to March 16, 1994. A moratorium was likewise enforced on the
issuance of franchises for the operation of buses, jeepneys, and taxicabs.

Petitioner KMU anchors its claim on two (2) grounds. First, the authority given by respondent LTFRB to provincial bus operators to set a
fare range of plus or minus fifteen (15%) percent, later increased to plus twenty (20%) and minus twenty-five (-25%) percent, over and
above the existing authorized fare without having to file a petition for the purpose, is unconstitutional, invalid and illegal. Second, the
establishment of a presumption of public need in favor of an applicant for a proposed transport service without having to prove public
necessity, is illegal for being violative of the Public Service Act and the Rules of Court.

In its Comment, private respondent PBOAP, while not actually touching upon the issues raised by the petitioner, questions the wisdom
and the manner by which the instant petition was filed. It asserts that the petitioner has no legal standing to sue or has no real interest
in the case at bench and in obtaining the reliefs prayed for.

In their Comment filed by the Office of the Solicitor General, public respondents DOTC Secretary Jesus B. Garcia, Jr. and the LTFRB
asseverate that the petitioner does not have the standing to maintain the instant suit. They further claim that it is within DOTC and
LTFRB's authority to set a fare range scheme and establish a presumption of public need in applications for certificates of public
convenience.

We find the instant petition impressed with merit.

At the outset, the threshold issue of locus standi must be struck. Petitioner KMU has the standing to sue.

The requirement of locus standi inheres from the definition of judicial power. Section 1 of Article VIII of the Constitution provides:

xxx xxx xxx

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

In Lamb v. Phipps, 7 we ruled that judicial power is the power to hear and decide causes pending between parties who have the right to
sue in the courts of law and equity. Corollary to this provision is the principle of locus standi of a party litigant. One who is directly
affected by and whose interest is immediate and substantial in the controversy has the standing to sue. The rule therefore requires that
a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision so
as to warrant an invocation of the court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. 8

In the case at bench, petitioner, whose members had suffered and continue to suffer grave and irreparable injury and damage from the
implementation of the questioned memoranda, circulars and/or orders, has shown that it has a clear legal right that was violated and
continues to be violated with the enforcement of the challenged memoranda, circulars and/or orders. KMU members, who avail of the
use of buses, trains and jeepneys everyday, are directly affected by the burdensome cost of arbitrary increase in passenger fares. They
are part of the millions of commuters who comprise the riding public. Certainly, their rights must be protected, not neglected nor
ignored.

Assuming arguendo that petitioner is not possessed of the standing to sue, this court is ready to brush aside this barren procedural
infirmity and recognize the legal standing of the petitioner in view of the transcendental importance of the issues raised. And this act of
liberality is not without judicial precedent. As early as the Emergency Powers Cases, this Court had exercised its discretion and waived
the requirement of proper party. In the recent case of Kilosbayan, Inc., et al. v. Teofisto Guingona, Jr., et al., 9 we ruled in the same lines
and enumerated some of the cases where the same policy was adopted, viz:

. . . A party's standing before this Court is a procedural technicality which it may, in the exercise of its discretion, set
aside in view of the importance of the issues raised. In the landmark Emergency Powers Cases, [G.R. No. L-2044
(Araneta v. Dinglasan); G.R. No. L-2756 (Araneta
v. Angeles); G.R. No. L-3054 (Rodriguez v. Tesorero de Filipinas); G.R. No. L-3055 (Guerrero v. Commissioner of
Customs); and G.R. No. L-3056 (Barredo v. Commission on Elections), 84 Phil. 368 (1949)], this Court brushed aside
this technicality because "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-
2621)." Insofar as taxpayers' suits are concerned, this Court had declared that it "is not devoid of discretion as to
whether or not it should be entertained," (Tan v. Macapagal, 43 SCRA 677, 680 [1972]) or that it "enjoys an open
discretion to entertain the same or not." [Sanidad v. COMELEC, 73 SCRA 333 (1976)].

xxx xxx xxx

7
 In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and even
association of planters, and
non-profit civic organizations were allowed to initiate and prosecute actions before this court to question the
constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies or
instrumentalities. Among such cases were those assailing the constitutionality of (a) R.A. No. 3836 insofar as it allows
retirement gratuity and commutation of vacation and sick leave to Senators and Representatives and to elective
officials of both Houses of Congress (Philippine Constitution Association, Inc. v. Gimenez, 15 SCRA 479 [1965]); (b)
Executive Order No. 284, issued by President Corazon C. Aquino on 25 July 1987, which allowed members of the
cabinet, their undersecretaries, and assistant secretaries to hold other government offices or positions (Civil Liberties
Union v. Executive Secretary, 194 SCRA 317 [1991]); (c) the automatic appropriation for debt service in the General
Appropriations Act (Guingona v. Carague, 196 SCRA 221 [1991]; (d) R.A. No. 7056 on the holding of desynchronized
elections (Osmea v. Commission on Elections, 199 SCRA 750 [1991]); (e) P.D. No. 1869 (the charter of the
Philippine Amusement and Gaming Corporation) on the ground that it is contrary to morals, public policy, and order
(Basco v. Philippine Amusement and Gaming Corp., 197 SCRA 52 [1991]); and (f) R.A. No. 6975, establishing the
Philippine National Police. (Carpio v. Executive Secretary, 206 SCRA 290 [1992]).

Other cases where we have followed a liberal policy regarding locus standi include those attacking the validity or
legality of (a) an order allowing the importation of rice in the light of the prohibition imposed by R.A. No. 3452 (Iloilo
Palay and Corn Planters Association, Inc. v. Feliciano, 13 SCRA 377 [1965]; (b) P.D. Nos. 991 and 1033 insofar as
they proposed amendments to the Constitution and P.D. No. 1031 insofar as it directed the COMELEC to supervise,
control, hold, and conduct the referendum-plebiscite on 16 October 1976 (Sanidad v. Commission on
Elections, supra); (c) the bidding for the sale of the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo,
Japan (Laurel v. Garcia, 187 SCRA 797 [1990]); (d) the approval without hearing by the Board of Investments of the
amended application of the Bataan Petrochemical Corporation to transfer the site of its plant from Bataan to
Batangas and the validity of such transfer and the shift of feedstock from naphtha only to naphtha and/or liquefied
petroleum gas (Garcia v. Board of Investments, 177 SCRA 374 [1989]; Garcia v. Board of Investments, 191 SCRA
288 [1990]); (e) the decisions, orders, rulings, and resolutions of the Executive Secretary, Secretary of Finance,
Commissioner of Internal Revenue, Commissioner of Customs, and the Fiscal Incentives Review Board exempting
the National Power Corporation from indirect tax and duties (Maceda v. Macaraig, 197 SCRA 771 [1991]); (f) the
orders of the Energy Regulatory Board of 5 and 6 December 1990 on the ground that the hearings conducted on the
second provisional increase in oil prices did not allow the petitioner substantial cross-examination; (Maceda v. Energy
Regulatory Board, 199 SCRA 454 [1991]); (g) Executive Order No. 478 which levied a special duty of P0.95 per liter
of imported oil products (Garcia v. Executive Secretary, 211 SCRA 219 [1992]); (h) resolutions of the Commission on
Elections concerning the apportionment, by district, of the number of elective members of Sanggunians (De Guia vs.
Commission on Elections, 208 SCRA 420 [1992]); and (i) memorandum orders issued by a Mayor affecting the Chief
of Police of Pasay City (Pasay Law and Conscience Union, Inc. v. Cuneta, 101 SCRA 662 [1980]).

In the 1975 case of Aquino v. Commission on Elections (62 SCRA 275 [1975]), this Court, despite its unequivocal
ruling that the petitioners therein had no personality to file the petition, resolved nevertheless to pass upon the issues
raised because of the far-reaching implications of the petition. We did no less in De Guia v. COMELEC
(Supra) where, although we declared that De Guia "does not appear to have locus standi, a standing in law, a
personal or substantial interest," we brushed aside the procedural infirmity "considering the importance of the issue
involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner
alleging abuse of discretion and violation of the Constitution by respondent."

Now on the merits of the case.

On the fare range scheme.

Section 16(c) of the Public Service Act, as amended, reads:

Sec. 16. Proceedings of the Commission, upon notice and hearing. The Commission shall have power, upon
proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and
exceptions mentioned and saving provisions to the contrary:

xxx xxx xxx

(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as well as
commutation, mileage kilometrage, and other special rates which shall be imposed, observed, and followed thereafter
by any public service: Provided, That the Commission may, in its discretion, approve rates proposed by public
services provisionally and without necessity of any hearing; but it shall call a hearing thereon within thirty days
thereafter, upon publication and notice to the concerns operating in the territory affected: Provided, further, That in
case the public service equipment of an operator is used principally or secondarily for the promotion of a private
business, the net profits of said private business shall be considered in relation with the public service of such
operator for the purpose of fixing the rates. (Emphasis ours).

xxx xxx xxx

Under the foregoing provision, the Legislature delegated to the defunct Public Service Commission the power of fixing the
rates of public services. Respondent LTFRB, the existing regulatory body today, is likewise vested with the same under
Executive Order No. 202 dated June 19, 1987. Section 5(c) of the said executive order authorizes LTFRB "to determine,
prescribe, approve and periodically review and adjust, reasonable fares, rates and other related charges, relative to the
operation of public land transportation services provided by motorized vehicles."

Such delegation of legislative power to an administrative agency is permitted in order to adapt to the increasing complexity of modern
life. As subjects for governmental regulation multiply, so does the difficulty of administering the laws. Hence, specialization even in
legislation has become necessary. Given the task of determining sensitive and delicate matters as
8
route-fixing and rate-making for the transport sector, the responsible regulatory body is entrusted with the power of subordinate
legislation. With this authority, an administrative body and in this case, the LTFRB, may implement broad policies laid down in a statute
by "filling in" the details which the Legislature may neither have time or competence to provide. However, nowhere under the aforesaid
provisions of law are the regulatory bodies, the PSC and LTFRB alike, authorized to delegate that power to a common carrier, a
transport operator, or other public service.

In the case at bench, the authority given by the LTFRB to the provincial bus operators to set a fare range over and above the authorized
existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislative authority. Potestas delegata non delegari
potest. What has been delegated cannot be delegated. This doctrine is based on the ethical principle that such a 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. 10 A further delegation of such power would indeed constitute a negation of the duty in violation of the
trust reposed in the delegate mandated to discharge it directly. 11 The policy of allowing the provincial bus operators to change and
increase their fares at will would result not only to a chaotic situation but to an anarchic state of affairs. This would leave the riding
public at the mercy of transport operators who may increase fares every hour, every day, every month or every year, whenever it
pleases them or whenever they deem it "necessary" to do so. In Panay Autobus Co. v. Philippine Railway Co., 12 where respondent
Philippine Railway Co. was granted by the Public Service Commission the authority to change its freight rates at will, this Court
categorically declared that:

In our opinion, the Public Service Commission was not authorized by law to delegate to the Philippine Railway Co.
the power of altering its freight rates whenever it should find it necessary to do so in order to meet the competition of
road trucks and autobuses, or to change its freight rates at will, or to regard its present rates as maximum rates, and
to fix lower rates whenever in the opinion of the Philippine Railway Co. it would be to its advantage to do so.

The mere recital of the language of the application of the Philippine Railway Co. is enough to show that it is
untenable. The Legislature has delegated to the Public Service Commission the power of fixing the rates of public
services, but it has not authorized the Public Service Commission to delegate that power to a common carrier or
other public service. The rates of public services like the Philippine Railway Co. have been approved or fixed by the
Public Service Commission, and any change in such rates must be authorized or approved by the Public Service
Commission after they have been shown to be just and reasonable. The public service may, of course, propose new
rates, as the Philippine Railway Co. did in case No. 31827, but it cannot lawfully make said new rates effective
without the approval of the Public Service Commission, and the Public Service Commission itself cannot authorize a
public service to enforce new rates without the prior approval of said rates by the commission. The commission must
approve new rates when they are submitted to it, if the evidence shows them to be just and reasonable, otherwise it
must disapprove them. Clearly, the commission cannot determine in advance whether or not the new rates of the
Philippine Railway Co. will be just and reasonable, because it does not know what those rates will be.

In the present case the Philippine Railway Co. in effect asked for permission to change its freight rates at will. It may
change them every day or every hour, whenever it deems it necessary to do so in order to meet competition or
whenever in its opinion it would be to its advantage. Such a procedure would create a most unsatisfactory state of
affairs and largely defeat the purposes of the public service law. 13(Emphasis ours).

One veritable consequence of the deregulation of transport fares is a compounded fare. If transport operators will be authorized to
impose and collect an additional amount equivalent to 20% over and above the authorized fare over a period of time, this will unduly
prejudice a commuter who will be made to pay a fare that has been computed in a manner similar to those of compounded bank
interest rates.

Picture this situation. On December 14, 1990, the LTFRB authorized provincial bus operators to collect a thirty-seven (P0.37) centavo
per kilometer fare for ordinary buses. At the same time, they were allowed to impose and collect a fare range of plus or minus 15% over
the authorized rate. Thus P0.37 centavo per kilometer authorized fare plus P0.05 centavos (which is 15% of P0.37 centavos) is
equivalent to P0.42 centavos, the allowed rate in 1990. Supposing the LTFRB grants another five (P0.05) centavo increase per
kilometer in 1994, then, the base or reference for computation would have to be P0.47 centavos (which is P0.42 + P0.05 centavos). If
bus operators will exercise their authority to impose an additional 20% over and above the authorized fare, then the fare to be collected
shall amount to P0.56 (that is, P0.47 authorized LTFRB rate plus 20% of P0.47 which is P0.29). In effect, commuters will be
continuously subjected, not only to a double fare adjustment but to a compounding fare as well. On their part, transport operators shall
enjoy a bigger chunk of the pie. Aside from fare increase applied for, they can still collect an additional amount by virtue of the
authorized fare range. Mathematically, the situation translates into the following:

Year** LTFRB authorized Fare Range Fare to be

rate*** collected per
kilometer

1990 P0.37 15% (P0.05) P0.42

1994 P0.42 + 0.05 = 0.47 20% (P0.09) P0.56
1998 P0.56 + 0.05 = 0.61 20% (P0.12) P0.73
2002 P0.73 + 0.05 = 0.78 20% (P0.16) P0.94

Moreover, rate making or rate fixing is not an easy task. It is a delicate and sensitive government function that requires dexterity of
judgment and sound discretion with the settled goal of arriving at a just and reasonable rate acceptable to both the public utility and the
public. Several factors, in fact, have to be taken into consideration before a balance could be achieved. A rate should not be
confiscatory as would place an operator in a situation where he will continue to operate at a loss. Hence, the rate should enable public
utilities to generate revenues sufficient to cover operational costs and provide reasonable return on the investments. On the other hand,
a rate which is too high becomes discriminatory. It is contrary to public interest. A rate, therefore, must be reasonable and fair and must
be affordable to the end user who will utilize the services.

Given the complexity of the nature of the function of rate-fixing and its far-reaching effects on millions of commuters, government must
not relinquish this important function in favor of those who would benefit and profit from the industry. Neither should the requisite notice

9
and hearing be done away with. The people, represented by reputable oppositors, deserve to be given full opportunity to be heard in
their opposition to any fare increase.

The present administrative procedure, 14 to our mind, already mirrors an orderly and satisfactory arrangement for all parties involved. To
do away with such a procedure and allow just one party, an interested party at that, to determine what the rate should be, will
undermine the right of the other parties to due process. The purpose of a hearing is precisely to determine what a just and reasonable
rate is. 15 Discarding such procedural and constitutional right is certainly inimical to our fundamental law and to public interest.

On the presumption of public need.

A certificate of public convenience (CPC) is an authorization granted by the LTFRB for the operation of land transportation services for
public use as required by law. Pursuant to Section 16(a) of the Public Service Act, as amended, the following requirements must be met
before a CPC may be granted, to wit: (i) the applicant must be a citizen of the Philippines, or a corporation or co-partnership,
association or joint-stock company constituted and organized under the laws of the Philippines, at least 60 per centum of its stock or
paid-up capital must belong entirely to citizens of the Philippines; (ii) the applicant must be financially capable of undertaking the
proposed service and meeting the responsibilities incident to its operation; and (iii) the applicant must prove that the operation of the
public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. It is
understood that there must be proper notice and hearing before the PSC can exercise its power to issue a CPC.

While adopting in toto the foregoing requisites for the issuance of a CPC, LTFRB Memorandum Circular No. 92-009, Part IV, provides
for yet incongruous and contradictory policy guideline on the issuance of a CPC. The guidelines states:

The issuance of a Certificate of Public Convenience is determined by public need. The presumption of public need
for a service shall be deemed in favor of the applicant, while the burden of proving that there is no need for the
proposed service shall be the oppositor's. (Emphasis ours).

The above-quoted provision is entirely incompatible and inconsistent with Section 16(c)(iii) of the Public Service Act which requires that
before a CPC will be issued, the applicant must prove by proper notice and hearing that the operation of the public service proposed
will promote public interest in a proper and suitable manner. On the contrary, the policy guideline states that the presumption of public
need for a public service shall be deemed in favor of the applicant. In case of conflict between a statute and an administrative order, the
former must prevail.

By its terms, public convenience or necessity generally means something fitting or suited to the public need. 16 As one of the basic
requirements for the grant of a CPC, public convenience and necessity exists when the proposed facility or service meets a reasonable
want of the public and supply a need which the existing facilities do not adequately supply. The existence or
non-existence of public convenience and necessity is therefore a question of fact that must be established by evidence, real and/or
testimonial; empirical data; statistics and such other means necessary, in a public hearing conducted for that purpose. The object and
purpose of such procedure, among other things, is to look out for, and protect, the interests of both the public and the existing transport
operators.

Verily, the power of a regulatory body to issue a CPC is founded on the condition that after full-dress hearing and investigation, it shall
find, as a fact, that the proposed operation is for the convenience of the public. 17 Basic convenience is the primary consideration for
which a CPC is issued, and that fact alone must be consistently borne in mind. Also, existing operators in subject routes must be given
an opportunity to offer proof and oppose the application. Therefore, an applicant must, at all times, be required to prove his capacity
and capability to furnish the service which he has undertaken to
render. 18 And all this will be possible only if a public hearing were conducted for that purpose.

Otherwise stated, the establishment of public need in favor of an applicant reverses well-settled and institutionalized judicial, quasi-
judicial and administrative procedures. It allows the party who initiates the proceedings to prove, by mere application, his affirmative
allegations. Moreover, the offending provisions of the LTFRB memorandum circular in question would in effect amend the Rules of
Court by adding another disputable presumption in the enumeration of 37 presumptions under Rule 131, Section 5 of the Rules of
Court. Such usurpation of this Court's authority cannot be countenanced as only this Court is mandated by law to promulgate rules
concerning pleading, practice and procedure. 19

Deregulation, while it may be ideal in certain situations, may not be ideal at all in our country given the present circumstances.
Advocacy of liberalized franchising and regulatory process is tantamount to an abdication by the government of its inherent right to
exercise police power, that is, the right of government to regulate public utilities for protection of the public and the utilities themselves.

While we recognize the authority of the DOTC and the LTFRB to issue administrative orders to regulate the transport sector, we find
that they committed grave abuse of discretion in issuing DOTC Department Order
No. 92-587 defining the policy framework on the regulation of transport services and LTFRB Memorandum Circular No. 92-009
promulgating the implementing guidelines on DOTC Department Order No. 92-587, the said administrative issuances being
amendatory and violative of the Public Service Act and the Rules of Court. Consequently, we rule that the twenty (20%) per centum fare
increase imposed by respondent PBOAP on March 16, 1994 without the benefit of a petition and a public hearing is null and void and of
no force and effect. No grave abuse of discretion however was committed in the issuance of DOTC Memorandum Order No. 90-395
and DOTC Memorandum dated October 8, 1992, the same being merely internal communications between administrative officers.

WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED and the challenged administrative issuances and
orders, namely: DOTC Department Order No. 92-587, LTFRB Memorandum Circular
No. 92-009, and the order dated March 24, 1994 issued by respondent LTFRB are hereby DECLARED contrary to law and invalid
insofar as they affect provisions therein (a) delegating to provincial bus and jeepney operators the authority to increase or decrease the
duly prescribed transportation fares; and (b) creating a presumption of public need for a service in favor of the applicant for a certificate
of public convenience and placing the burden of proving that there is no need for the proposed service to the oppositor.

The Temporary Restraining Order issued on June 20, 1994 is hereby MADE PERMANENT insofar as it enjoined the bus fare rate
increase granted under the provisions of the aforementioned administrative circulars, memoranda and/or orders declared invalid.
10
No pronouncement as to costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 76633 October 18, 1988

EASTERN SHIPPING LINES, INC., petitioner,

vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND EMPLOYMENT, HEARING
OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.

Jimenea, Dala & Zaragoza Law Office for petitioner.

The Solicitor General for public respondent.

Dizon Law Office for respondent Kathleen D. Saco.

CRUZ, J.:

The private respondent in this case was awarded the sum of P192,000.00 by the Philippine Overseas Employment Administration
(POEA) for the death of her husband. The decision is challenged by the petitioner on the principal ground that the POEA had no
jurisdiction over the case as the husband was not an overseas worker.

Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo, Japan, March 15, 1985. His
widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the
vessel, argued that the complaint was cognizable not by the POEA but by the Social Security System and should have been filed
against the State Insurance Fund. The POEA nevertheless assumed jurisdiction and after considering the position papers of the parties
ruled in favor of the complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial expenses.

The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissal on the ground of non-exhaustion of
administrative remedies.

Ordinarily, the decisions of the POEA should first be appealed to the National Labor Relations Commission, on the theory inter alia that
the agency should be given an opportunity to correct the errors, if any, of its subordinates. This case comes under one of the
exceptions, however, as the questions the petitioner is raising are essentially questions of law. 1 Moreover, the private respondent
himself has not objected to the petitioner's direct resort to this Court, observing that the usual procedure would delay the disposition of
the case to her prejudice.

The Philippine Overseas Employment Administration was created under Executive Order No. 797, promulgated on May 1, 1982, to
promote and monitor the overseas employment of Filipinos and to protect their rights. It replaced the National Seamen Board created
earlier under Article 20 of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA is vested with "original and
exclusive jurisdiction over all cases, including money claims, involving employee-employer relations arising out of or by virtue of any law
or contract involving Filipino contract workers, including seamen." These cases, according to the 1985 Rules and Regulations on
Overseas Employment issued by the POEA, include "claims for death, disability and other benefits" arising out of such employment. 2

The petitioner does not contend that Saco was not its employee or that the claim of his widow is not compensable. What it does urge is
that he was not an overseas worker but a 'domestic employee and consequently his widow's claim should have been filed with Social
Security System, subject to appeal to the Employees Compensation Commission.

We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas employee of the petitioner at the time
he met with the fatal accident in Japan in 1985.

Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as "employment of a worker
outside the Philippines, including employment on board vessels plying international waters, covered by a valid contract. 3 A contract
worker is described as "any person working or who has worked overseas under a valid employment contract and shall include
seamen" 4 or "any person working overseas or who has been employed by another which may be a local employer, foreign employer,
principal or partner under a valid employment contract and shall include seamen." 5 These definitions clearly apply to Vitaliano Saco for
it is not disputed that he died while under a contract of employment with the petitioner and alongside the petitioner's vessel, the M/V
Eastern Polaris, while berthed in a foreign country. 6

11
It is worth observing that the petitioner performed at least two acts which constitute implied or tacit recognition of the nature of Saco's
employment at the time of his death in 1985. The first is its submission of its shipping articles to the POEA for processing, formalization
and approval in the exercise of its regulatory power over overseas employment under Executive Order NO. 797. 7 The second is its
payment 8 of the contributions mandated by law and regulations to the Welfare Fund for Overseas Workers, which was created by P.D.
No. 1694 "for the purpose of providing social and welfare services to Filipino overseas workers."

Significantly, the office administering this fund, in the receipt it prepared for the private respondent's signature, described the subject of
the burial benefits as "overseas contract worker Vitaliano Saco." 9 While this receipt is certainly not controlling, it does indicate, in the
light of the petitioner's own previous acts, that the petitioner and the Fund to which it had made contributions considered Saco to be an
overseas employee.

The petitioner argues that the deceased employee should be likened to the employees of the Philippine Air Lines who, although
working abroad in its international flights, are not considered overseas workers. If this be so, the petitioner should not have found it
necessary to submit its shipping articles to the POEA for processing, formalization and approval or to contribute to the Welfare Fund
which is available only to overseas workers. Moreover, the analogy is hardly appropriate as the employees of the PAL cannot under the
definitions given be considered seamen nor are their appointments coursed through the POEA.

The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by the POEA pursuant to its Memorandum
Circular No. 2, which became effective on February 1, 1984. This circular prescribed a standard contract to be adopted by both foreign
and domestic shipping companies in the hiring of Filipino seamen for overseas employment. A similar contract had earlier been required
by the National Seamen Board and had been sustained in a number of cases by this Court. 10 The petitioner claims that it had never
entered into such a contract with the deceased Saco, but that is hardly a serious argument. In the first place, it should have done so as
required by the circular, which specifically declared that "all parties to the employment of any Filipino seamen on board any ocean-
going vessel are advised to adopt and use this employment contract effective 01 February 1984 and to desist from using any other
format of employment contract effective that date." In the second place, even if it had not done so, the provisions of the said circular are
nevertheless deemed written into the contract with Saco as a postulate of the police power of the State. 11

But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the principle of non-delegation of legislative
power. It contends that no authority had been given the POEA to promulgate the said regulation; and even with such authorization, the
regulation represents an exercise of legislative discretion which, under the principle, is not subject to delegation.

The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order No. 797, reading as follows:

... The governing Board of the Administration (POEA), as hereunder provided shall promulgate the necessary rules
and regulations to govern the exercise of the adjudicatory functions of the Administration (POEA).

Similar authorization had been granted the National Seamen Board, which, as earlier observed, had itself prescribed a standard
shipping contract substantially the same as the format adopted by the POEA.

The second challenge is more serious as 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 whatthe 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. Thus, in Ynot v. Intermediate Apellate Court 12 which annulled Executive Order No. 626, this Court held:

We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed
in the questioned executive order. It is there authorized that the seized property shall be distributed to charitable
institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in
the case of carabaos.' (Italics supplied.) The phrase "may see fit" is an extremely generous and dangerous condition,
if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in
vain for the usual standard and the reasonable guidelines, or better still, the limitations that the officers must observe
when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the
answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely,
there is here a 'roving commission a wide and sweeping authority that is not canalized within banks that keep it from
overflowing,' in short a clearly profligate and therefore invalid delegation of legislative powers.

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 enforce it. 13 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. 14

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.

The principle of non-delegation of powers is applicable to all the three major powers of the Government but is especially important in
the case of the legislative power because of the many instances when its delegation is permitted. The occasions are rare when
executive or judicial powers have to be delegated by the authorities to which they legally certain. In the case of the legislative power,
however, such occasions have become more and more frequent, if not necessary. This had led to the observation that the delegation of
legislative power has become the rule and its non-delegation the exception.

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 reasonably to comprehend. Specialization even in legislation has become necessary.
To many of the problems attendant upon present-day undertakings, the legislature may not have the competence to provide the

12
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 assigned to them.

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 a statute by "filling in' the details which the
Congress may not have the opportunity or competence to provide. This is effected by their promulgation of what are known as
supplementary regulations, such as the implementing rules issued by the Department of Labor on the new Labor Code. These
regulations have the force and effect of law.

Memorandum Circular No. 2 is one such administrative regulation. The model contract prescribed thereby has been applied in a
significant number of the cases without challenge by the employer. The power of the POEA (and before it the National Seamen Board)
in requiring the model contract is not unlimited as there is a sufficient standard guiding the delegate in the exercise of the said authority.
That standard is discoverable in the executive order itself which, in creating the Philippine Overseas Employment Administration,
mandated it to protect the rights of overseas Filipino workers to "fair and equitable employment practices."

Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public interest" in People v. Rosenthal 15 "justice and
equity" in Antamok Gold Fields v. CIR 16 "public convenience and welfare" in Calalang v. Williams 17 and "simplicity, economy and
efficiency" in Cervantes v. Auditor General, 18 to mention only a few cases. In the United States, the "sense and experience of men" was
accepted in Mutual Film Corp. v. Industrial Commission, 19 and "national security" in Hirabayashi v. United States. 20

It is not denied that the private respondent has been receiving a monthly death benefit pension of P514.42 since March 1985 and that
she was also paid a P1,000.00 funeral benefit by the Social Security System. In addition, as already observed, she also received a
P5,000.00 burial gratuity from the Welfare Fund for Overseas Workers. These payments will not preclude allowance of the private
respondent's claim against the petitioner because it is specifically reserved in the standard contract of employment for Filipino seamen
under Memorandum Circular No. 2, Series of 1984, that

Section C. Compensation and Benefits.

1. In case of death of the seamen during the term of his Contract, the employer shall pay his beneficiaries the amount
of:

a. P220,000.00 for master and chief engineers

b. P180,000.00 for other officers, including radio operators and master electrician

c. P 130,000.00 for ratings.

2. It is understood and agreed that the benefits mentioned above shall be separate and distinct from, and will be in
addition to whatever benefits which the seaman is entitled to under Philippine laws. ...

3. ...

c. If the remains of the seaman is buried in the Philippines, the owners shall pay the beneficiaries of
the seaman an amount not exceeding P18,000.00 for burial expenses.

The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by the National Seamen Board on July
12,1976, providing an follows:

Income Benefits under this Rule Shall be Considered Additional Benefits.

All compensation benefits under Title II, Book Four of the Labor Code of the Philippines (Employees Compensation
and State Insurance Fund) shall be granted, in addition to whatever benefits, gratuities or allowances that the
seaman or his beneficiaries may be entitled to under the employment contract approved by the NSB. If applicable, all
benefits under the Social Security Law and the Philippine Medicare Law shall be enjoyed by the seaman or his
beneficiaries in accordance with such laws.

The above provisions are manifestations of the concern of the State for the working class, consistently with the social justice policy and
the specific provisions in the Constitution for the protection of the working class and the promotion of its interest.

One last challenge of the petitioner must be dealt with to close t case. Its argument that it has been denied due process because the
same POEA that issued Memorandum Circular No. 2 has also sustained and applied it is an uninformed criticism of administrative law
itself. Administrative agencies are vested with two basic powers, the quasi-legislative and the quasi-judicial. The first enables them to
promulgate implementing rules and regulations, and the second enables them to interpret and apply such regulations. Examples
abound: the Bureau of Internal Revenue adjudicates on its own revenue regulations, the Central Bank on its own circulars, the
Securities and Exchange Commission on its own rules, as so too do the Philippine Patent Office and the Videogram Regulatory Board
and the Civil Aeronautics Administration and the Department of Natural Resources and so on ad infinitum on their respective
administrative regulations. Such an arrangement has been accepted as a fact of life of modern governments and cannot be considered
violative of due process as long as the cardinal rights laid down by Justice Laurel in the landmark case of Ang Tibay v. Court of
Industrial Relations 21 are observed.

13
Whatever doubts may still remain regarding the rights of the parties in this case are resolved in favor of the private respondent, in line
with the express mandate of the Labor Code and the principle that those with less in life should have more in law.

When the conflicting interests of labor and capital are weighed on the scales of social justice, the heavier influence of the latter must be
counter-balanced by the sympathy and compassion the law must accord the underprivileged worker. This is only fair if he is to be given
the opportunity and the right to assert and defend his cause not as a subordinate but as a peer of management, with which he can
negotiate on even plane. Labor is not a mere employee of capital but its active and equal partner.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining order dated December 10, 1986
is hereby LIFTED. It is so ordered.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-45685 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.

Office of the Solicitor General Tuason and City Fiscal Diaz for the Government.
De Witt, Perkins and Ponce Enrile for the Hongkong and Shanghai Banking Corporation.
Vicente J. Francisco, Feria and La O, Orense and Belmonte, and Gibbs and McDonough for respondent Cu Unjieng.
No appearance for respondent Judge.

LAUREL, J.:

This is an original action instituted in this court on August 19, 1937, for the issuance of the writ of certiorari and of prohibition to the
Court of First Instance of Manila so that this court may review the actuations of the aforesaid Court of First Instance in criminal case No.
42649 entitled "The People of the Philippine Islands vs. Mariano Cu Unjieng, et al.", more particularly the application of the defendant
Mariano Cu Unjieng therein for probation under the provisions of Act No. 4221, and thereafter prohibit the said Court of First Instance
from taking any further action or entertaining further the aforementioned application for probation, to the end that the defendant Mariano
Cu Unjieng may be forthwith committed to prison in accordance with the final judgment of conviction rendered by this court in said case
(G. R. No. 41200). 1

Petitioners herein, the People of the Philippine and the Hongkong and Shanghai Banking Corporation, are respectively the plaintiff and
the offended party, and the respondent herein Mariano Cu Unjieng is one of the defendants, in the criminal case entitled "The People of
the Philippine Islands vs. Mariano Cu Unjieng, et al.", criminal case No. 42649 of the Court of First Instance of Manila and G.R. No.
41200 of this court. Respondent herein, Hon. Jose O. Vera, is the Judge ad interim of the seventh branch of the Court of First Instance
of Manila, who heard the application of the defendant Mariano Cu Unjieng for probation in the aforesaid criminal case.

The information in the aforesaid criminal case was filed with the Court of First Instance of Manila on October 15, 1931, petitioner herein
Hongkong and Shanghai Banking Corporation intervening in the case as private prosecutor. After a protracted trial unparalleled in the
annals of Philippine jurisprudence both in the length of time spent by the court as well as in the volume in the testimony and the bulk of
the exhibits presented, the Court of First Instance of Manila, on January 8, 1934, rendered a judgment of conviction sentencing the
defendant Mariano Cu Unjieng to indeterminate penalty ranging from four years and two months of prision correccional to eight years of
prision mayor, to pay the costs and with reservation of civil action to the offended party, the Hongkong and Shanghai Banking
Corporation. Upon appeal, the court, on March 26, 1935, modified the sentence to an indeterminate penalty of from five years and six
months of prision correccional to seven years, six months and twenty-seven days of prision mayor, but affirmed the judgment in all
other respects. Mariano Cu Unjieng filed a motion for reconsideration and four successive motions for new trial which were denied on
December 17, 1935, and final judgment was accordingly entered on December 18, 1935. The defendant thereupon sought to have the
case elevated on certiorari to the Supreme Court of the United States but the latter denied the petition for certiorari in
November, 1936. This court, on November 24, 1936, denied the petition subsequently filed by the defendant for leave to file a
second alternative motion for reconsideration or new trial and thereafter remanded the case to the court of origin for execution of the
judgment.

The instant proceedings have to do with the application for probation filed by the herein respondent Mariano Cu Unjieng on
November 27, 1936, before the trial court, under the provisions of Act No. 4221 of the defunct Philippine Legislature. Herein respondent
Mariano Cu Unjieng states in his petition, inter alia, that he is innocent of the crime of which he was convicted, that he has no criminal
record and that he would observe good conduct in the future. The Court of First Instance of Manila, Judge Pedro Tuason presiding,
referred the application for probation of the Insular Probation Office which recommended denial of the same June 18, 1937. Thereafter,
the Court of First Instance of Manila, seventh branch, Judge Jose O. Vera presiding, set the petition for hearing on April 5, 1937.

On April 2, 1937, the Fiscal of the City of Manila filed an opposition to the granting of probation to the herein respondent Mariano Cu
Unjieng. The private prosecution also filed an opposition on April 5, 1937, alleging, among other things, that Act No. 4221, assuming
that it has not been repealed by section 2 of Article XV of the Constitution, is nevertheless violative of section 1, subsection (1), Article
III of the Constitution guaranteeing equal protection of the laws for the reason that its applicability is not uniform throughout the Islands
and because section 11 of the said Act endows the provincial boards with the power to make said law effective or otherwise in their
14
respective or otherwise in their respective provinces. The private prosecution also filed a supplementary opposition on April 19, 1937,
elaborating on the alleged unconstitutionality on Act No. 4221, as an undue delegation of legislative power to the provincial boards of
several provinces (sec. 1, Art. VI, Constitution). The City Fiscal concurred in the opposition of the private prosecution except with
respect to the questions raised concerning the constitutionality of Act No. 4221.

On June 28, 1937, herein respondent Judge Jose O. Vera promulgated a resolution with a finding that "las pruebas no han establecido
de unamanera concluyente la culpabilidad del peticionario y que todos los hechos probados no son inconsistentes o incongrentes con
su inocencia" and concludes that the herein respondent Mariano Cu Unjieng "es inocente por duda racional" of the crime of which he
stands convicted by this court in G.R. No. 41200, but denying the latter's petition for probation for the reason that:

. . . Si este Juzgado concediera la poblacion solicitada por las circunstancias y la historia social que se han expuesto en el
cuerpo de esta resolucion, que hacen al peticionario acreedor de la misma, una parte de la opinion publica, atizada por los
recelos y las suspicacias, podria levantarse indignada contra un sistema de probacion que permite atisbar en los
procedimientos ordinarios de una causa criminal perturbando la quietud y la eficacia de las decisiones ya recaidas al traer a la
superficie conclusiones enteramente differentes, en menoscabo del interes publico que demanda el respeto de las leyes y del
veredicto judicial.

On July 3, 1937, counsel for the herein respondent Mariano Cu Unjieng filed an exception to the resolution denying probation and a
notice of intention to file a motion for reconsideration. An alternative motion for reconsideration or new trial was filed by counsel on July
13, 1937. This was supplemented by an additional motion for reconsideration submitted on July 14, 1937. The aforesaid motions were
set for hearing on July 31, 1937, but said hearing was postponed at the petition of counsel for the respondent Mariano Cu Unjieng
because a motion for leave to intervene in the case as amici curiae signed by thirty-three (thirty-four) attorneys had just been filed with
the trial court. Attorney Eulalio Chaves whose signature appears in the aforesaid motion subsequently filed a petition for leave to
withdraw his appearance as amicus curiae on the ground that the motion for leave to intervene as amici curiae was circulated at a
banquet given by counsel for Mariano Cu Unjieng on the evening of July 30, 1937, and that he signed the same "without mature
deliberation and purely as a matter of courtesy to the person who invited me (him)."

On August 6, 1937, the Fiscal of the City of Manila filed a motion with the trial court for the issuance of an order of execution of the
judgment of this court in said case and forthwith to commit the herein respondent Mariano Cu Unjieng to jail in obedience to said
judgment.

On August 7, 1937, the private prosecution filed its opposition to the motion for leave to intervene as amici curiae aforementioned,
asking that a date be set for a hearing of the same and that, at all events, said motion should be denied with respect to certain
attorneys signing the same who were members of the legal staff of the several counsel for Mariano Cu Unjieng. On August 10, 1937,
herein respondent Judge Jose O. Vera issued an order requiring all parties including the movants for intervention as amici curiae to
appear before the court on August 14, 1937. On the last-mentioned date, the Fiscal of the City of Manila moved for the hearing of his
motion for execution of judgment in preference to the motion for leave to intervene as amici curiae but, upon objection of counsel for
Mariano Cu Unjieng, he moved for the postponement of the hearing of both motions. The respondent judge thereupon set the hearing
of the motion for execution on August 21, 1937, but proceeded to consider the motion for leave to intervene as amici curiae as in order.
Evidence as to the circumstances under which said motion for leave to intervene as amici curiae was signed and submitted to court
was to have been heard on August 19, 1937. But at this juncture, herein petitioners came to this court on extraordinary legal process to
put an end to what they alleged was an interminable proceeding in the Court of First Instance of Manila which fostered "the campaign of
the defendant Mariano Cu Unjieng for delay in the execution of the sentence imposed by this Honorable Court on him, exposing the
courts to criticism and ridicule because of the apparent inability of the judicial machinery to make effective a final judgment of this court
imposed on the defendant Mariano Cu Unjieng."

The scheduled hearing before the trial court was accordingly suspended upon the issuance of a temporary restraining order by this
court on August 21, 1937.

To support their petition for the issuance of the extraordinary writs of certiorari and prohibition, herein petitioners allege that the
respondent judge has acted without jurisdiction or in excess of his jurisdiction:

I. Because said respondent judge lacks the power to place respondent Mariano Cu Unjieng under probation for the following reason:

(1) Under section 11 of Act No. 4221, the said of the Philippine Legislature is made to apply only to the provinces of the
Philippines; it nowhere states that it is to be made applicable to chartered cities like the City of Manila.

(2) While section 37 of the Administrative Code contains a proviso to the effect that in the absence of a special provision, the
term "province" may be construed to include the City of Manila for the purpose of giving effect to laws of general application, it
is also true that Act No. 4221 is not a law of general application because it is made to apply only to those provinces in which
the respective provincial boards shall have provided for the salary of a probation officer.

(3) Even if the City of Manila were considered to be a province, still, Act No. 4221 would not be applicable to it because it has
provided for the salary of a probation officer as required by section 11 thereof; it being immaterial that there is an Insular
Probation Officer willing to act for the City of Manila, said Probation Officer provided for in section 10 of Act No. 4221 being
different and distinct from the Probation Officer provided for in section 11 of the same Act.

II. Because even if the respondent judge originally had jurisdiction to entertain the application for probation of the respondent Mariano
Cu Unjieng, he nevertheless acted without jurisdiction or in excess thereof in continuing to entertain the motion for reconsideration and
by failing to commit Mariano Cu Unjieng to prison after he had promulgated his resolution of June 28, 1937, denying Mariano Cu
Unjieng's application for probation, for the reason that:

(1) His jurisdiction and power in probation proceedings is limited by Act No. 4221 to the granting or denying of applications for
probation.

15
 (2) After he had issued the order denying Mariano Cu Unjieng's petition for probation on June 28, 1937, it became final and
executory at the moment of its rendition.

(3) No right on appeal exists in such cases.

(4) The respondent judge lacks the power to grant a rehearing of said order or to modify or change the same.

III. Because the respondent judge made a finding that Mariano Cu Unjieng is innocent of the crime for which he was convicted by final
judgment of this court, which finding is not only presumptuous but without foundation in fact and in law, and is furthermore in contempt
of this court and a violation of the respondent's oath of office as ad interim judge of first instance.

IV. Because the respondent judge has violated and continues to violate his duty, which became imperative when he issued his order of
June 28, 1937, denying the application for probation, to commit his co-respondent to jail.

Petitioners also avers that they have no other plain, speedy and adequate remedy in the ordinary course of law.

In a supplementary petition filed on September 9, 1937, the petitioner Hongkong and Shanghai Banking Corporation further contends
that Act No. 4221 of the Philippine Legislature providing for a system of probation for persons eighteen years of age or over who are
convicted of crime, is unconstitutional because it is violative of section 1, subsection (1), Article III, of the Constitution of the Philippines
guaranteeing equal protection of the laws because it confers upon the provincial board of its province the absolute discretion to make
said law operative or otherwise in their respective provinces, because it constitutes an unlawful and improper delegation to the
provincial boards of the several provinces of the legislative power lodged by the Jones Law (section 8) in the Philippine Legislature and
by the Constitution (section 1, Art. VI) in the National Assembly; and for the further reason that it gives the provincial boards, in
contravention of the Constitution (section 2, Art. VIII) and the Jones Law (section 28), the authority to enlarge the powers of the Court of
First Instance of different provinces without uniformity. In another supplementary petition dated September 14, 1937, the Fiscal of the
City of Manila, in behalf of one of the petitioners, the People of the Philippine Islands, concurs for the first time with the issues raised by
other petitioner regarding the constitutionality of Act No. 4221, and on the oral argument held on October 6, 1937, further elaborated on
the theory that probation is a form of reprieve and therefore Act. No. 4221 is an encroachment on the exclusive power of the Chief
Executive to grant pardons and reprieves. On October 7, 1937, the City Fiscal filed two memorandums in which he contended that Act
No. 4221 not only encroaches upon the pardoning power to the executive, but also constitute an unwarranted delegation of legislative
power and a denial of the equal protection of the laws. On October 9, 1937, two memorandums, signed jointly by the City Fiscal and the
Solicitor-General, acting in behalf of the People of the Philippine Islands, and by counsel for the petitioner, the Hongkong and Shanghai
Banking Corporation, one sustaining the power of the state to impugn the validity of its own laws and the other contending that Act No.
4221 constitutes an unwarranted delegation of legislative power, were presented. Another joint memorandum was filed by the same
persons on the same day, October 9, 1937, alleging that Act No. 4221 is unconstitutional because it denies the equal protection of the
laws and constitutes an unlawful delegation of legislative power and, further, that the whole Act is void: that the Commonwealth is not
estopped from questioning the validity of its laws; that the private prosecution may intervene in probation proceedings and may attack
the probation law as unconstitutional; and that this court may pass upon the constitutional question in prohibition proceedings.

Respondents in their answer dated August 31, 1937, as well as in their oral argument and memorandums, challenge each and every
one of the foregoing proposition raised by the petitioners.

As special defenses, respondents allege:

(1) That the present petition does not state facts sufficient in law to warrant the issuance of the writ of certiorari or of
prohibition.

(2) That the aforesaid petition is premature because the remedy sought by the petitioners is the very same remedy prayed for
by them before the trial court and was still pending resolution before the trial court when the present petition was filed with this
court.

(3) That the petitioners having themselves raised the question as to the execution of judgment before the trial court, said trial
court has acquired exclusive jurisdiction to resolve the same under the theory that its resolution denying probation is
unappealable.

(4) That upon the hypothesis that this court has concurrent jurisdiction with the Court of First Instance to decide the question
as to whether or not the execution will lie, this court nevertheless cannot exercise said jurisdiction while the Court of First
Instance has assumed jurisdiction over the same upon motion of herein petitioners themselves.

(5) That upon the procedure followed by the herein petitioners in seeking to deprive the trial court of its jurisdiction over the
case and elevate the proceedings to this court, should not be tolerated because it impairs the authority and dignity of the trial
court which court while sitting in the probation cases is "a court of limited jurisdiction but of great dignity."

(6) That under the supposition that this court has jurisdiction to resolve the question submitted to and pending resolution by the
trial court, the present action would not lie because the resolution of the trial court denying probation is appealable; for
although the Probation Law does not specifically provide that an applicant for probation may appeal from a resolution of the
Court of First Instance denying probation, still it is a general rule in this jurisdiction that a final order, resolution or decision of
an inferior court is appealable to the superior court.

(7) That the resolution of the trial court denying probation of herein respondent Mariano Cu Unjieng being appealable, the
same had not become final and executory for the reason that the said respondent had filed an alternative motion for
reconsideration and new trial within the requisite period of fifteen days, which motion the trial court was able to resolve in view
of the restraining order improvidently and erroneously issued by this court.lawphi1.net

16
 (8) That the Fiscal of the City of Manila had by implication admitted that the resolution of the trial court denying probation is not
final and unappealable when he presented his answer to the motion for reconsideration and agreed to the postponement of
the hearing of the said motion.

(9) That under the supposition that the order of the trial court denying probation is not appealable, it is incumbent upon the
accused to file an action for the issuance of the writ of certiorari with mandamus, it appearing that the trial court, although it
believed that the accused was entitled to probation, nevertheless denied probation for fear of criticism because the accused is
a rich man; and that, before a petition for certiorari grounded on an irregular exercise of jurisdiction by the trial court could lie, it
is incumbent upon the petitioner to file a motion for reconsideration specifying the error committed so that the trial court could
have an opportunity to correct or cure the same.

(10) That on hypothesis that the resolution of this court is not appealable, the trial court retains its jurisdiction within a
reasonable time to correct or modify it in accordance with law and justice; that this power to alter or modify an order or
resolution is inherent in the courts and may be exercise either motu proprio or upon petition of the proper party, the petition in
the latter case taking the form of a motion for reconsideration.

(11) That on the hypothesis that the resolution of the trial court is appealable as respondent allege, said court cannot order
execution of the same while it is on appeal, for then the appeal would not be availing because the doors of probation will be
closed from the moment the accused commences to serve his sentence (Act No. 4221, sec. 1; U.S. vs. Cook, 19 Fed. [2d],
827).

In their memorandums filed on October 23, 1937, counsel for the respondents maintain that Act No. 4221 is constitutional because,
contrary to the allegations of the petitioners, it does not constitute an undue delegation of legislative power, does not infringe the equal
protection clause of the Constitution, and does not encroach upon the pardoning power of the Executive. In an additional memorandum
filed on the same date, counsel for the respondents reiterate the view that section 11 of Act No. 4221 is free from constitutional
objections and contend, in addition, that the private prosecution may not intervene in probation proceedings, much less question the
validity of Act No. 4221; that both the City Fiscal and the Solicitor-General are estopped from questioning the validity of the Act; that the
validity of Act cannot be attacked for the first time before this court; that probation in unavailable; and that, in any event, section 11 of
the Act No. 4221 is separable from the rest of the Act. The last memorandum for the respondent Mariano Cu Unjieng was denied for
having been filed out of time but was admitted by resolution of this court and filed anew on November 5, 1937. This
memorandum elaborates on some of the points raised by the respondents and refutes those brought up by the petitioners.

In the scrutiny of the pleadings and examination of the various aspects of the present case, we noted that the court below, in passing
upon the merits of the application of the respondent Mariano Cu Unjieng and in denying said application assumed the task not only of
considering the merits of the application, but of passing upon the culpability of the applicant, notwithstanding the final pronouncement of
guilt by this court. (G.R. No. 41200.) Probation implies guilt be final judgment. While a probation case may look into the circumstances
attending the commission of the offense, this does not authorize it to reverse the findings and conclusive of this court, either directly or
indirectly, especially wherefrom its own admission reliance was merely had on the printed briefs, averments, and pleadings of the
parties. As already observed by this court in Shioji vs. Harvey ([1922], 43 Phil., 333, 337), and reiterated in subsequent cases, "if each
and every Court of First Instance could enjoy the privilege of overruling decisions of the Supreme Court, there would be no end to
litigation, and judicial chaos would result." A becoming modesty of inferior courts demands conscious realization of the position that they
occupy in the interrelation and operation of the intergrated judicial system of the nation.

After threshing carefully the multifarious issues raised by both counsel for the petitioners and the respondents, this court prefers to cut
the Gordian knot and take up at once the two fundamental questions presented, namely, (1) whether or not the constitutionality of Act
No. 4221 has been properly raised in these proceedings; and (2) in the affirmative, whether or not said Act is constitutional.
Considerations of these issues will involve a discussion of certain incidental questions raised by the parties.

To arrive at a correct conclusion on the first question, resort to certain guiding principles is necessary. It is a well-settled rule that the
constitutionality of an act of the legislature will not be determined by the courts unless that question is properly raised and presented
inappropriate cases and is necessary to a determination of the case; i.e., the issue of constitutionality must be the very lis
mota presented. (McGirr vs. Hamilton and Abreu [1915], 30 Phil., 563, 568; 6 R. C. L., pp. 76, 77; 12 C. J., pp. 780-782, 783.)

The question of the constitutionality of an act of the legislature is frequently raised in ordinary actions. Nevertheless, resort may be
made to extraordinary legal remedies, particularly where the remedies in the ordinary course of law even if available, are not plain,
speedy and adequate. Thus, in Cu Unjieng vs. Patstone ([1922]), 42 Phil., 818), this court held that the question of the constitutionality
of a statute may be raised by the petitioner in mandamus proceedings (see, also, 12 C. J., p. 783); and in Government of the Philippine
Islands vs. Springer ([1927], 50 Phil., 259 [affirmed in Springer vs. Government of the Philippine Islands (1928), 277 U. S., 189; 72 Law.
ed., 845]), this court declared an act of the legislature unconstitutional in an action of quo warranto brought in the name of the
Government of the Philippines. It has also been held that the constitutionality of a statute may be questioned in habeas
corpus proceedings (12 C. J., p. 783; Bailey on Habeas Corpus, Vol. I, pp. 97, 117), although there are authorities to the contrary; on an
application for injunction to restrain action under the challenged statute (mandatory, see Cruz vs. Youngberg [1931], 56 Phil., 234); and
even on an application for preliminary injunction where the determination of the constitutional question is necessary to a decision of the
case. (12 C. J., p. 783.) The same may be said as regards prohibition and certiorari.(Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385;
[1926], 271 U. S., 500; 70 Law. ed., 1059; Bell vs. First Judicial District Court [1905], 28 Nev., 280; 81 Pac., 875; 113 A. S. R., 854; 6
Ann. Cas., 982; 1 L. R. A. [N. S], 843, and cases cited). The case of Yu Cong Eng vs. Trinidad, supra, decided by this court twelve
years ago was, like the present one, an original action for certiorari and prohibition. The constitutionality of Act No. 2972, popularly
known as the Chinese Bookkeeping Law, was there challenged by the petitioners, and the constitutional issue was not met squarely by
the respondent in a demurrer. A point was raised "relating to the propriety of the constitutional question being decided in original
proceedings in prohibition." This court decided to take up the constitutional question and, with two justices dissenting, held that Act No.
2972 was constitutional. The case was elevated on writ of certiorari to the Supreme Court of the United States which reversed the
judgment of this court and held that the Act was invalid. (271 U. S., 500; 70 Law. ed., 1059.) On the question of jurisdiction, however,
the Federal Supreme Court, though its Chief Justice, said:

By the Code of Civil Procedure of the Philippine Islands, section 516, the Philippine supreme court is granted concurrent
jurisdiction in prohibition with courts of first instance over inferior tribunals or persons, and original jurisdiction over courts of
first instance, when such courts are exercising functions without or in excess of their jurisdiction. It has been held by that court

17
 that the question of the validity of the criminal statute must usually be raised by a defendant in the trial court and be carried
regularly in review to the Supreme Court. (Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192). But in this case
where a new act seriously affected numerous persons and extensive property rights, and was likely to cause a multiplicity of
actions, the Supreme Court exercised its discretion to bring the issue to the act's validity promptly before it and decide in the
interest of the orderly administration of justice. The court relied by analogy upon the cases of Ex parte Young (209 U. S.,
123;52 Law ed., 714; 13 L. R. A. [N. S.] 932; 28 Sup. Ct. Rep., 441; 14 Ann. Ca., 764; Traux vs. Raich, 239 U. S., 33; 60 Law.
ed., 131; L. R. A. 1916D, 545; 36 Sup. Ct. Rep., 7; Ann. Cas., 1917B, 283; and Wilson vs. New, 243 U. S., 332; 61 Law. ed.,
755; L. R. A. 1917E, 938; 37 Sup. Ct. Rep., 298; Ann. Cas. 1918A, 1024). Although objection to the jurisdiction was raise by
demurrer to the petition, this is now disclaimed on behalf of the respondents, and both parties ask a decision on the merits. In
view of the broad powers in prohibition granted to that court under the Island Code, we acquiesce in the desire of the parties.

The writ of prohibition is an extraordinary judicial writ issuing out of a court of superior jurisdiction and directed to an inferior court, for
the purpose of preventing the inferior tribunal from usurping a jurisdiction with which it is not legally vested. (High, Extraordinary Legal
Remedies, p. 705.) The general rule, although there is a conflict in the cases, is that the merit of prohibition will not lie whether the
inferior court has jurisdiction independent of the statute the constitutionality of which is questioned, because in such cases the interior
court having jurisdiction may itself determine the constitutionality of the statute, and its decision may be subject to review, and
consequently the complainant in such cases ordinarily has adequate remedy by appeal without resort to the writ of prohibition. But
where the inferior court or tribunal derives its jurisdiction exclusively from an unconstitutional statute, it may be prevented by the writ of
prohibition from enforcing that statute. (50 C. J., 670; Ex parte Round tree [1874, 51 Ala., 42; In re Macfarland, 30 App. [D. C.], 365;
Curtis vs. Cornish [1912], 109 Me., 384; 84 A., 799; Pennington vs. Woolfolk [1880], 79 Ky., 13; State vs. Godfrey [1903], 54 W. Va., 54;
46 S. E., 185; Arnold vs. Shields [1837], 5 Dana, 19; 30 Am. Dec., 669.)

Courts of First Instance sitting in probation proceedings derived their jurisdiction solely from Act No. 4221 which prescribes in detailed
manner the procedure for granting probation to accused persons after their conviction has become final and before they have served
their sentence. It is true that at common law the authority of the courts to suspend temporarily the execution of the sentence is
recognized and, according to a number of state courts, including those of Massachusetts, Michigan, New York, and Ohio, the power is
inherent in the courts (Commonwealth vs. Dowdican's Bail [1874], 115 Mass., 133; People vs. Stickel [1909], 156 Mich., 557; 121 N. W.,
497; People ex rel. Forsyth vs. Court of Session [1894], 141 N. Y., 288; Weber vs. State [1898], 58 Ohio St., 616). But, in the leading
case of Ex parte United States ([1916], 242 U. S., 27; 61 Law. ed., 129; L. R. A., 1917E, 1178; 37 Sup. Ct. Rep., 72; Ann. Cas. 1917B,
355), the Supreme Court of the United States expressed the opinion that under the common law the power of the court was limited to
temporary suspension, and brushed aside the contention as to inherent judicial power saying, through Chief Justice White:

Indisputably under our constitutional system the right to try offenses against the criminal laws and upon conviction to impose
the punishment provided by law is judicial, and it is equally to be conceded that, in exerting the powers vested in them on such
subject, courts inherently possess ample right to exercise reasonable, that is, judicial, discretion to enable them to wisely exert
their authority. But these concessions afford no ground for the contention as to power here made, since it must rest upon the
proposition that the power to enforce begets inherently a discretion to permanently refuse to do so. And the effect of the
proposition urged upon the distribution of powers made by the Constitution will become apparent when it is observed that
indisputable also is it that the authority to define and fix the punishment for crime is legislative and includes the right in
advance to bring within judicial discretion, for the purpose of executing the statute, elements of consideration which would be
otherwise beyond the scope of judicial authority, and that the right to relieve from the punishment, fixed by law and ascertained
according to the methods by it provided belongs to the executive department.

Justice Carson, in his illuminating concurring opinion in the case of Director of Prisons vs. Judge of First Instance of Cavite (29 Phil.,
265), decided by this court in 1915, also reached the conclusion that the power to suspend the execution of sentences pronounced in
criminal cases is not inherent in the judicial function. "All are agreed", he said, "that in the absence of statutory authority, it does not lie
within the power of the courts to grant such suspensions." (at p. 278.) Both petitioner and respondents are correct, therefore, when they
argue that a Court of First Instance sitting in probation proceedings is a court of limited jurisdiction. Its jurisdiction in such proceedings is
conferred exclusively by Act No. 4221 of the Philippine Legislature.

It is, of course, true that the constitutionality of a statute will not be considered on application for prohibition where the question has not
been properly brought to the attention of the court by objection of some kind (Hill vs. Tarver [1901], 130 Ala., 592; 30 S., 499; State ex
rel. Kelly vs. Kirby [1914], 260 Mo., 120; 168 S. W., 746). In the case at bar, it is unquestionable that the constitutional issue has been
squarely presented not only before this court by the petitioners but also before the trial court by the private prosecution. The
respondent, Hon. Jose O Vera, however, acting as judge of the court below, declined to pass upon the question on the ground that the
private prosecutor, not being a party whose rights are affected by the statute, may not raise said question. The respondent judge cited
Cooley on Constitutional Limitations (Vol. I, p. 339; 12 C. J., sec. 177, pp. 760 and 762), and McGlue vs. Essex County ([1916], 225
Mass., 59; 113 N. E., 742, 743), as authority for the proposition that a court will not consider any attack made on the constitutionality of
a statute by one who has no interest in defeating it because his rights are not affected by its operation. The respondent judge further
stated that it may not motu proprio take up the constitutional question and, agreeing with Cooley that "the power to declare a legislative
enactment void is one which the judge, conscious of the fallibility of the human judgment, will shrink from exercising in any case where
he can conscientiously and with due regard to duty and official oath decline the responsibility" (Constitutional Limitations, 8th ed., Vol. I,
p. 332), proceeded on the assumption that Act No. 4221 is constitutional. While therefore, the court a quo admits that the constitutional
question was raised before it, it refused to consider the question solely because it was not raised by a proper party. Respondents herein
reiterates this view. The argument is advanced that the private prosecution has no personality to appear in the hearing of the
application for probation of defendant Mariano Cu Unjieng in criminal case No. 42648 of the Court of First Instance of Manila, and
hence the issue of constitutionality was not properly raised in the lower court. Although, as a general rule, only those who are parties to
a suit may question the constitutionality of a statute involved in a judicial decision, it has been held that since the decree pronounced by
a court without jurisdiction is void, where the jurisdiction of the court depends on the validity of the statute in question, the issue of the
constitutionality will be considered on its being brought to the attention of the court by persons interested in the effect to be given the
statute.(12 C. J., sec. 184, p. 766.) And, even if we were to concede that the issue was not properly raised in the court below by the
proper party, it does not follow that the issue may not be here raised in an original action of certiorari and prohibitions. It is true that, as
a general rule, the question of constitutionality must be raised at the earliest opportunity, so that if not raised by the pleadings, ordinarily
it may not be raised at the trial, and if not raised in the trial court, it will not considered on appeal. (12 C. J., p. 786. See,
also, Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192, 193-195.) But we must state that the general rule admits of
exceptions. Courts, in the exercise of sounds discretion, may determine the time when a question affecting the constitutionality of a
statute should be presented. (In re Woolsey [1884], 95 N. Y., 135, 144.) Thus, in criminal cases, although there is a very sharp conflict
of authorities, it is said that the question may be raised for the first time at any stage of the proceedings, either in the trial court or on
appeal. (12 C. J., p. 786.) Even in civil cases, it has been held that it is the duty of a court to pass on the constitutional question, though
18
raised for the first time on appeal, if it appears that a determination of the question is necessary to a decision of the case. (McCabe's
Adm'x vs. Maysville & B. S. R. Co., [1910], 136 ky., 674; 124 S. W., 892; Lohmeyer vs. St. Louis Cordage Co. [1908], 214 Mo., 685; 113
S. W. 1108; Carmody vs. St. Louis Transit Co., [1905], 188 Mo., 572; 87 S. W., 913.) And it has been held that a constitutional question
will be considered by an appellate court at any time, where it involves the jurisdiction of the court below (State vs. Burke [1911], 175
Ala., 561; 57 S., 870.) As to the power of this court to consider the constitutional question raised for the first time before this court in
these proceedings, we turn again and point with emphasis to the case of Yu Cong Eng vs. Trinidad, supra. And on the hypotheses that
the Hongkong & Shanghai Banking Corporation, represented by the private prosecution, is not the proper party to raise the
constitutional question here a point we do not now have to decide we are of the opinion that the People of the Philippines,
represented by the Solicitor-General and the Fiscal of the City of Manila, is such a proper party in the present proceedings. The
unchallenged rule is that the person who impugns the validity of a statute must have a personal and substantial interest in the case
such that he has sustained, or will sustained, direct injury as a result of its enforcement. It goes without saying that if Act No. 4221 really
violates the constitution, the People of the Philippines, in whose name the present action is brought, has a substantial interest in having
it set aside. Of grater import than the damage caused by the illegal expenditure of public funds is the mortal wound inflicted upon the
fundamental law by the enforcement of an invalid statute. Hence, the well-settled rule that the state can challenge the validity of its own
laws. In Government of the Philippine Islands vs. Springer ([1927]), 50 Phil., 259 (affirmed in Springer vs. Government of the Philippine
Islands [1928], 277 U.S., 189; 72 Law. ed., 845), this court declared an act of the legislature unconstitutional in an action instituted in
behalf of the Government of the Philippines. In Attorney General vs. Perkins ([1889], 73 Mich., 303, 311, 312; 41 N. W. 426, 428, 429),
the State of Michigan, through its Attorney General, instituted quo warranto proceedings to test the right of the respondents to renew a
mining corporation, alleging that the statute under which the respondents base their right was unconstitutional because it impaired the
obligation of contracts. The capacity of the chief law officer of the state to question the constitutionality of the statute was though, as a
general rule, only those who are parties to a suit may question the constitutionality of a statute involved in a judicial decision, it has
been held that since the decree pronounced by a court without jurisdiction in void, where the jurisdiction of the court depends on the
validity of the statute in question, the issue of constitutionality will be considered on its being brought to the attention of the court by
persons interested in the effect to begin the statute. (12 C.J., sec. 184, p. 766.) And, even if we were to concede that the issue was not
properly raised in the court below by the proper party, it does not follow that the issue may not be here raised in an original action of
certiorari and prohibition. It is true that, as a general rule, the question of constitutionality must be raised at the earliest opportunity, so
that if not raised by the pleadings, ordinarily it may not be raised a the trial, and if not raised in the trial court, it will not be considered on
appeal. (12 C.J., p. 786. See, also, Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192, 193-195.) But we must state that
the general rule admits of exceptions. Courts, in the exercise of sound discretion, may determine the time when a question affecting the
constitutionality of a statute should be presented. (In re Woolsey [19884], 95 N.Y., 135, 144.) Thus, in criminal cases, although there is
a very sharp conflict of authorities, it is said that the question may be raised for the first time at any state of the proceedings, either in
the trial court or on appeal. (12 C.J., p. 786.) Even in civil cases, it has been held that it is the duty of a court to pass on the
constitutional question, though raised for first time on appeal, if it appears that a determination of the question is necessary to a
decision of the case. (McCabe's Adm'x vs. Maysville & B. S. R. Co. [1910], 136 Ky., 674; 124 S. W., 892; Lohmeyer vs. St. Louis,
Cordage Co. [1908], 214 Mo. 685; 113 S. W., 1108; Carmody vs. St. Louis Transit Co. [1905], 188 Mo., 572; 87 S. W., 913.) And it has
been held that a constitutional question will be considered by an appellate court at any time, where it involves the jurisdiction of the
court below (State vs. Burke [1911], 175 Ala., 561; 57 S., 870.) As to the power of this court to consider the constitutional question
raised for the first time before this court in these proceedings, we turn again and point with emphasis to the case of Yu Cong Eng. vs.
Trinidad, supra. And on the hypothesis that the Hongkong & Shanghai Banking Corporation, represented by the private prosecution, is
not the proper party to raise the constitutional question here a point we do not now have to decide we are of the opinion that the
People of the Philippines, represented by the Solicitor-General and the Fiscal of the City of Manila, is such a proper party in the present
proceedings. The unchallenged rule is that the person who impugns the validity of a statute must have a personal and substantial
interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement. It goes without saying that if
Act No. 4221 really violates the Constitution, the People of the Philippines, in whose name the present action is brought, has a
substantial interest in having it set aside. Of greater import than the damage caused by the illegal expenditure of public funds is the
mortal wound inflicted upon the fundamental law by the enforcement of an invalid statute. Hence, the well-settled rule that the state can
challenge the validity of its own laws. In Government of the Philippine Islands vs. Springer ([1927]), 50 Phil., 259 (affirmed in Springer
vs. Government of the Philippine Islands [1928], 277 U.S., 189; 72 Law. ed., 845), this court declared an act of the legislature
unconstitutional in an action instituted in behalf of the Government of the Philippines. In Attorney General vs. Perkings([1889], 73 Mich.,
303, 311, 312; 41 N.W., 426, 428, 429), the State of Michigan, through its Attorney General, instituted quo warranto proceedings to test
the right of the respondents to renew a mining corporation, alleging that the statute under which the respondents base their right was
unconstitutional because it impaired the obligation of contracts. The capacity of the chief law officer of the state to question the
constitutionality of the statute was itself questioned. Said the Supreme Court of Michigan, through Champlin, J.:

. . . The idea seems to be that the people are estopped from questioning the validity of a law enacted by their representatives;
that to an accusation by the people of Michigan of usurpation their government, a statute enacted by the people of Michigan is
an adequate answer. The last proposition is true, but, if the statute relied on in justification is unconstitutional, it is statute only
in form, and lacks the force of law, and is of no more saving effect to justify action under it than if it had never been enacted.
The constitution is the supreme law, and to its behests the courts, the legislature, and the people must bow . . . The legislature
and the respondents are not the only parties in interest upon such constitutional questions. As was remarked by Mr. Justice
Story, in speaking of an acquiescence by a party affected by an unconstitutional act of the legislature: "The people have a
deep and vested interest in maintaining all the constitutional limitations upon the exercise of legislative powers." (Allen vs.
Mckeen, 1 Sum., 314.)

In State vs. Doane ([1916], 98 Kan., 435; 158 Pac., 38, 40), an original action (mandamus) was brought by the Attorney-General of
Kansas to test the constitutionality of a statute of the state. In disposing of the question whether or not the state may bring the action,
the Supreme Court of Kansas said:

. . . the state is a proper party indeed, the proper party to bring this action. The state is always interested where the
integrity of its Constitution or statutes is involved.

"It has an interest in seeing that the will of the Legislature is not disregarded, and need not, as an individual
plaintiff must, show grounds of fearing more specific injury. (State vs. Kansas City 60 Kan., 518 [57 Pac.,
118])." (State vs. Lawrence, 80 Kan., 707; 103 Pac., 839.)

Where the constitutionality of a statute is in doubt the state's law officer, its Attorney-General, or county attorney, may exercise
his bet judgment as to what sort of action he will bring to have the matter determined, either by quo warranto to challenge its
validity (State vs. Johnson, 61 Kan., 803; 60 Pac., 1068; 49 L.R.A., 662), by mandamus to compel obedience to its terms

19
 (State vs. Dolley, 82 Kan., 533; 108 Pac., 846), or by injunction to restrain proceedings under its questionable provisions
(State ex rel. vs. City of Neodesha, 3 Kan. App., 319; 45 Pac., 122).

Other courts have reached the same conclusion (See State vs. St. Louis S. W. Ry. Co. [1917], 197 S. W., 1006; State vs. S.H. Kress &
Co. [1934], 155 S., 823; State vs. Walmsley [1935], 181 La., 597; 160 S., 91; State vs. Board of County Comr's [1934], 39 Pac. [2d],
286; First Const. Co. of Brooklyn vs. State [1917], 211 N.Y., 295; 116 N.E., 1020; Bush vs. State {1918], 187 Ind., 339; 119 N.E., 417;
State vs. Watkins [1933], 176 La., 837; 147 S., 8, 10, 11). In the case last cited, the Supreme Court of Luisiana said:

It is contended by counsel for Herbert Watkins that a district attorney, being charged with the duty of enforcing the laws, has no
right to plead that a law is unconstitutional. In support of the argument three decisions are cited, viz.: State ex rel. Hall, District
Attorney, vs. Judge of Tenth Judicial District (33 La. Ann., 1222); State ex rel. Nicholls, Governor vs. Shakespeare, Mayor of
New Orleans (41 Ann., 156; 6 So., 592); and State ex rel., Banking Co., etc. vs. Heard, Auditor (47 La. Ann., 1679; 18 So.,
746; 47 L. R. A., 512). These decisions do not forbid a district attorney to plead that a statute is unconstitutional if he finds if in
conflict with one which it is his duty to enforce. In State ex rel. Hall, District Attorney, vs. Judge, etc., the ruling was the judge
should not, merely because he believed a certain statute to be unconstitutional forbid the district attorney to file a bill of
information charging a person with a violation of the statute. In other words, a judge should not judicially declare a statute
unconstitutional until the question of constitutionality is tendered for decision, and unless it must be decided in order to
determine the right of a party litigant. State ex rel. Nicholls, Governor, etc., is authority for the proposition merely that an officer
on whom a statute imposes the duty of enforcing its provisions cannot avoid the duty upon the ground that he considers the
statute unconstitutional, and hence in enforcing the statute he is immune from responsibility if the statute be unconstitutional.
State ex rel. Banking Co., etc., is authority for the proposition merely that executive officers, e.g., the state auditor and state
treasurer, should not decline to perform ministerial duties imposed upon them by a statute, on the ground that they believe the
statute is unconstitutional.

It is the duty of a district attorney to enforce the criminal laws of the state, and, above all, to support the Constitution of the
state. If, in the performance of his duty he finds two statutes in conflict with each other, or one which repeals another, and if, in
his judgment, one of the two statutes is unconstitutional, it is his duty to enforce the other; and, in order to do so, he is
compelled to submit to the court, by way of a plea, that one of the statutes is unconstitutional. If it were not so, the power of the
Legislature would be free from constitutional limitations in the enactment of criminal laws.

The respondents do not seem to doubt seriously the correctness of the general proposition that the state may impugn the validity of its
laws. They have not cited any authority running clearly in the opposite direction. In fact, they appear to have proceeded on the
assumption that the rule as stated is sound but that it has no application in the present case, nor may it be invoked by the City Fiscal in
behalf of the People of the Philippines, one of the petitioners herein, the principal reasons being that the validity before this court, that
the City Fiscal is estopped from attacking the validity of the Act and, not authorized challenge the validity of the Act in its application
outside said city. (Additional memorandum of respondents, October 23, 1937, pp. 8,. 10, 17 and 23.)

The mere fact that the Probation Act has been repeatedly relied upon the past and all that time has not been attacked as
unconstitutional by the Fiscal of Manila but, on the contrary, has been impliedly regarded by him as constitutional, is no reason for
considering the People of the Philippines estopped from nor assailing its validity. For courts will pass upon a constitutional questions
only when presented before it in bona fide cases for determination, and the fact that the question has not been raised before is not a
valid reason for refusing to allow it to be raised later. The fiscal and all others are justified in relying upon the statute and treating it as
valid until it is held void by the courts in proper cases.

It remains to consider whether the determination of the constitutionality of Act No. 4221 is necessary to the resolution of the instant
case. For, ". . . while the court will meet the question with firmness, where its decision is indispensable, it is the part of wisdom, and just
respect for the legislature, renders it proper, to waive it, if the case in which it arises, can be decided on other points." (Ex
parte Randolph [1833], 20 F. Cas. No. 11, 558; 2 Brock., 447. Vide, also Hoover vs. wood [1857], 9 Ind., 286, 287.) It has been held that
the determination of a constitutional question is necessary whenever it is essential to the decision of the case (12 C. J., p. 782, citing
Long Sault Dev. Co. vs. Kennedy [1913], 158 App. Div., 398; 143 N. Y. Supp., 454 [aff. 212 N.Y., 1: 105 N. E., 849; Ann. Cas. 1915D,
56; and app dism 242 U.S., 272]; Hesse vs. Ledesma, 7 Porto Rico Fed., 520; Cowan vs. Doddridge, 22 Gratt [63 Va.], 458; Union Line
Co., vs. Wisconsin R. Commn., 146 Wis., 523; 129 N. W., 605), as where the right of a party is founded solely on a statute the validity
of which is attacked. (12 C.J., p. 782, citing Central Glass Co. vs. Niagrara F. Ins. Co., 131 La., 513; 59 S., 972; Cheney vs. Beverly,
188 Mass., 81; 74 N.E., 306). There is no doubt that the respondent Cu Unjieng draws his privilege to probation solely from Act No.
4221 now being assailed.

Apart from the foregoing considerations, that court will also take cognizance of the fact that the Probation Act is a new addition to our
statute books and its validity has never before been passed upon by the courts; that may persons accused and convicted of crime in
the City of Manila have applied for probation; that some of them are already on probation; that more people will likely take advantage of
the Probation Act in the future; and that the respondent Mariano Cu Unjieng has been at large for a period of about four years since his
first conviction. All wait the decision of this court on the constitutional question. Considering, therefore, the importance which the instant
case has assumed and to prevent multiplicity of suits, strong reasons of public policy demand that the constitutionality of Act No. 4221
be now resolved. (Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385; [1926], 271 U.S., 500; 70 Law. ed., 1059. See 6 R.C.L., pp. 77, 78;
People vs. Kennedy [1913], 207 N.Y., 533; 101 N.E., 442, 444; Ann. Cas. 1914C, 616; Borginis vs. Falk Co. [1911], 147 Wis., 327; 133
N.W., 209, 211; 37 L.R.A. [N.S.] 489; Dimayuga and Fajardo vs. Fernandez [1922], 43 Phil., 304.) In Yu Cong Eng vs. Trinidad, supra,
an analogous situation confronted us. We said: "Inasmuch as the property and personal rights of nearly twelve thousand merchants are
affected by these proceedings, and inasmuch as Act No. 2972 is a new law not yet interpreted by the courts, in the interest of the public
welfare and for the advancement of public policy, we have determined to overrule the defense of want of jurisdiction in order that we
may decide the main issue. We have here an extraordinary situation which calls for a relaxation of the general rule." Our ruling on this
point was sustained by the Supreme Court of the United States. A more binding authority in support of the view we have taken can not
be found.

We have reached the conclusion that the question of the constitutionality of Act No. 4221 has been properly raised. Now for the main
inquiry: Is the Act unconstitutional?

Under a doctrine peculiarly American, it is the office and duty of the judiciary to enforce the Constitution. This court, by clear implication
from the provisions of section 2, subsection 1, and section 10, of Article VIII of the Constitution, may declare an act of the national

20
legislature invalid because in conflict with the fundamental lay. It will not shirk from its sworn duty to enforce the Constitution. And, in
clear cases, it will not hesitate to give effect to the supreme law by setting aside a statute in conflict therewith. This is of the essence of
judicial duty.

This court is not unmindful of the fundamental criteria in cases of this nature that all reasonable doubts should be resolved in favor of
the constitutionality of a statute. An act of the legislature approved by the executive, is presumed to be within constitutional limitations.
The responsibility of upholding the Constitution rests not on the courts alone but on the legislature as well. "The question of the validity
of every statute is first determined by the legislative department of the government itself." (U.S. vs. Ten Yu [1912], 24 Phil., 1, 10; Case
vs. Board of Health and Heiser [1913], 24 Phil., 250, 276; U.S. vs. Joson [1913], 26 Phil., 1.) And a statute finally comes before the
courts sustained by the sanction of the executive. The members of the Legislature and the Chief Executive have taken an oath to
support the Constitution and it must be presumed that they have been true to this oath and that in enacting and sanctioning a particular
law they did not intend to violate the Constitution. The courts cannot but cautiously exercise its power to overturn the solemn
declarations of two of the three grand departments of the governments. (6 R.C.L., p. 101.) Then, there is that peculiar political
philosophy which bids the judiciary to reflect the wisdom of the people as expressed through an elective Legislature and an elective
Chief Executive. It follows, therefore, that the courts will not set aside a law as violative of the Constitution except in a clear case. This
is a proposition too plain to require a citation of authorities.

One of the counsel for respondents, in the course of his impassioned argument, called attention to the fact that the President of the
Philippines had already expressed his opinion against the constitutionality of the Probation Act, adverting that as to the Executive the
resolution of this question was a foregone conclusion. Counsel, however, reiterated his confidence in the integrity and independence of
this court. We take notice of the fact that the President in his message dated September 1, 1937, recommended to the National
Assembly the immediate repeal of the Probation Act (No. 4221); that this message resulted in the approval of Bill No. 2417 of the
Nationality Assembly repealing the probation Act, subject to certain conditions therein mentioned; but that said bill was vetoed by the
President on September 13, 1937, much against his wish, "to have stricken out from the statute books of the Commonwealth a law . . .
unfair and very likely unconstitutional." It is sufficient to observe in this connection that, in vetoing the bill referred to, the President
exercised his constitutional prerogative. He may express the reasons which he may deem proper for taking such a step, but his reasons
are not binding upon us in the determination of actual controversies submitted for our determination. Whether or not the Executive
should express or in any manner insinuate his opinion on a matter encompassed within his broad constitutional power of veto but which
happens to be at the same time pending determination in this court is a question of propriety for him exclusively to decide or determine.
Whatever opinion is expressed by him under these circumstances, however, cannot sway our judgment on way or another and prevent
us from taking what in our opinion is the proper course of action to take in a given case. It if is ever necessary for us to make any
vehement affirmance during this formative period of our political history, it is that we are independent of the Executive no less than of
the Legislative department of our government independent in the performance of our functions, undeterred by any consideration,
free from politics, indifferent to popularity, and unafraid of criticism in the accomplishment of our sworn duty as we see it and as we
understand it.

The constitutionality of Act No. 4221 is challenged on three principal grounds: (1) That said Act encroaches upon the pardoning power
of the Executive; (2) that its constitutes an undue delegation of legislative power and (3) that it denies the equal protection of the laws.

1. Section 21 of the Act of Congress of August 29, 1916, commonly known as the Jones Law, in force at the time of the approval of Act
No. 4221, otherwise known as the Probation Act, vests in the Governor-General of the Philippines "the exclusive power to grant
pardons and reprieves and remit fines and forfeitures". This power is now vested in the President of the Philippines. (Art. VII, sec. 11,
subsec. 6.) The provisions of the Jones Law and the Constitution differ in some respects. The adjective "exclusive" found in the Jones
Law has been omitted from the Constitution. Under the Jones Law, as at common law, pardon could be granted any time after the
commission of the offense, either before or after conviction (Vide Constitution of the United States, Art. II, sec. 2; In re Lontok [1922], 43
Phil., 293). The Governor-General of the Philippines was thus empowered, like the President of the United States, to pardon a person
before the facts of the case were fully brought to light. The framers of our Constitution thought this undesirable and, following most of
the state constitutions, provided that the pardoning power can only be exercised "after conviction". So, too, under the new Constitution,
the pardoning power does not extend to "cases of impeachment". This is also the rule generally followed in the United States
(Vide Constitution of the United States, Art. II, sec. 2). The rule in England is different. There, a royal pardon can not be pleaded in bar
of an impeachment; "but," says Blackstone, "after the impeachment has been solemnly heard and determined, it is not understood that
the king's royal grace is further restrained or abridged." (Vide, Ex parte Wells [1856], 18 How., 307; 15 Law. ed., 421; Com. vs.
Lockwood [1872], 109 Mass., 323; 12 Am. Rep., 699; Sterling vs. Drake [1876], 29 Ohio St., 457; 23 am. Rep., 762.) The reason for the
distinction is obvious. In England, Judgment on impeachment is not confined to mere "removal from office and disqualification to hold
and enjoy any office of honor, trust, or profit under the Government" (Art. IX, sec. 4, Constitution of the Philippines) but extends to the
whole punishment attached by law to the offense committed. The House of Lords, on a conviction may, by its sentence, inflict capital
punishment, perpetual banishment, perpetual banishment, fine or imprisonment, depending upon the gravity of the offense committed,
together with removal from office and incapacity to hold office. (Com. vs. Lockwood, supra.) Our Constitution also makes specific
mention of "commutation" and of the power of the executive to impose, in the pardons he may grant, such conditions, restrictions and
limitations as he may deem proper. Amnesty may be granted by the President under the Constitution but only with the concurrence of
the National Assembly. We need not dwell at length on the significance of these fundamental changes. It is sufficient for our purposes to
state that the pardoning power has remained essentially the same. The question is: Has the pardoning power of the Chief Executive
under the Jones Law been impaired by the Probation Act?

As already stated, the Jones Law vests the pardoning power exclusively in the Chief Executive. The exercise of the power may not,
therefore, be vested in anyone else.
". . . The benign prerogative of mercy reposed in the executive cannot be taken away nor fettered by any legislative restrictions, nor can
like power be given by the legislature to any other officer or authority. The coordinate departments of government have nothing to do
with the pardoning power, since no person properly belonging to one of the departments can exercise any powers appertaining to either
of the others except in cases expressly provided for by the constitution." (20 R.C.L., pp., , and cases cited.) " . . . where the pardoning
power is conferred on the executive without express or implied limitations, the grant is exclusive, and the legislature can neither
exercise such power itself nor delegate it elsewhere, nor interfere with or control the proper exercise thereof, . . ." (12 C.J., pp. 838,
839, and cases cited.) If Act No. 4221, then, confers any pardoning power upon the courts it is for that reason unconstitutional and void.
But does it?

In the famous Killitts decision involving an embezzlement case, the Supreme Court of the United States ruled in 1916 that an order
indefinitely suspending sentenced was void. (Ex parte United States [1916], 242 U.S., 27; 61 Law. ed., 129; L.R.A. 1917E, 1178; 37
Sup. Ct. Rep., 72; Ann. Cas. 1917B, 355.) Chief Justice White, after an exhaustive review of the authorities, expressed the opinion of

21
the court that under the common law the power of the court was limited to temporary suspension and that the right to suspend
sentenced absolutely and permanently was vested in the executive branch of the government and not in the judiciary. But, the right of
Congress to establish probation by statute was conceded. Said the court through its Chief Justice: ". . . and so far as the future is
concerned, that is, the causing of the imposition of penalties as fixed to be subject, by probation legislation or such other means as the
legislative mind may devise, to such judicial discretion as may be adequate to enable courts to meet by the exercise of an enlarged but
wise discretion the infinite variations which may be presented to them for judgment, recourse must be had Congress whose legislative
power on the subject is in the very nature of things adequately complete." (Quoted in Riggs vs. United States [1926], 14 F. [2d], 5, 6.)
This decision led the National Probation Association and others to agitate for the enactment by Congress of a federal probation law.
Such action was finally taken on March 4, 1925 (chap. 521, 43 Stat. L. 159, U.S.C. title 18, sec. 724). This was followed by an
appropriation to defray the salaries and expenses of a certain number of probation officers chosen by civil service. (Johnson, Probation
for Juveniles and Adults, p. 14.)

In United States vs. Murray ([1925], 275 U.S., 347; 48 Sup. Ct. Rep., 146; 72 Law. ed., 309), the Supreme Court of the United States,
through Chief Justice Taft, held that when a person sentenced to imprisonment by a district court has begun to serve his sentence, that
court has no power under the Probation Act of March 4, 1925 to grant him probation even though the term at which sentence was
imposed had not yet expired. In this case of Murray, the constitutionality of the probation Act was not considered but was assumed. The
court traced the history of the Act and quoted from the report of the Committee on the Judiciary of the United States House of
Representatives (Report No. 1377, 68th Congress, 2 Session) the following statement:

Prior to the so-called Killitts case, rendered in December, 1916, the district courts exercised a form of probation either, by
suspending sentence or by placing the defendants under state probation officers or volunteers. In this case, however (Ex parte
United States, 242 U.S., 27; 61 L. Ed., 129; L.R.A., 1917E, 1178; 37 Sup. Ct. Rep., 72 Ann. Cas. 1917B, 355), the Supreme
Court denied the right of the district courts to suspend sentenced. In the same opinion the court pointed out the necessity for
action by Congress if the courts were to exercise probation powers in the future . . .

Since this decision was rendered, two attempts have been made to enact probation legislation. In 1917, a bill was favorably
reported by the Judiciary Committee and passed the House. In 1920, the judiciary Committee again favorably reported a
probation bill to the House, but it was never reached for definite action.

If this bill is enacted into law, it will bring the policy of the Federal government with reference to its treatment of those convicted
of violations of its criminal laws in harmony with that of the states of the Union. At the present time every state has a probation
law, and in all but twelve states the law applies both to adult and juvenile offenders. (see, also, Johnson, Probation for
Juveniles and Adults [1928], Chap. I.)

The constitutionality of the federal probation law has been sustained by inferior federal courts. In Riggs vs. United States supra, the
Circuit Court of Appeals of the Fourth Circuit said:

Since the passage of the Probation Act of March 4, 1925, the questions under consideration have been reviewed by the Circuit
Court of Appeals of the Ninth Circuit (7 F. [2d], 590), and the constitutionality of the act fully sustained, and the same held in no
manner to encroach upon the pardoning power of the President. This case will be found to contain an able and comprehensive
review of the law applicable here. It arose under the act we have to consider, and to it and the authorities cited therein special
reference is made (Nix vs. James, 7 F. [2d], 590, 594), as is also to a decision of the Circuit Court of Appeals of the Seventh
Circuit (Kriebel vs. U.S., 10 F. [2d], 762), likewise construing the Probation Act.

We have seen that in 1916 the Supreme Court of the United States; in plain and unequivocal language, pointed to Congress as
possessing the requisite power to enact probation laws, that a federal probation law as actually enacted in 1925, and that the
constitutionality of the Act has been assumed by the Supreme Court of the United States in 1928 and consistently sustained by the
inferior federal courts in a number of earlier cases.

We are fully convinced that the Philippine Legislature, like the Congress of the United States, may legally enact a probation law under
its broad power to fix the punishment of any and all penal offenses. This conclusion is supported by other authorities. In Ex parte Bates
([1915], 20 N. M., 542; L.R.A. 1916A, 1285; 151 Pac., 698, the court said: "It is clearly within the province of the Legislature to
denominate and define all classes of crime, and to prescribe for each a minimum and maximum punishment." And in State vs. Abbott
([1910], 87 S.C., 466; 33 L.R.A. [N. S.], 112; 70 S. E., 6; Ann. Cas. 1912B, 1189), the court said: "The legislative power to set
punishment for crime is very broad, and in the exercise of this power the general assembly may confer on trial judges, if it sees fit, the
largest discretion as to the sentence to be imposed, as to the beginning and end of the punishment and whether it should be certain or
indeterminate or conditional." (Quoted in State vs. Teal [1918], 108 S. C., 455; 95 S. E., 69.) Indeed, the Philippine Legislature has
defined all crimes and fixed the penalties for their violation. Invariably, the legislature has demonstrated the desire to vest in the courts
particularly the trial courts large discretion in imposing the penalties which the law prescribes in particular cases. It is believed that
justice can best be served by vesting this power in the courts, they being in a position to best determine the penalties which an
individual convict, peculiarly circumstanced, should suffer. Thus, while courts are not allowed to refrain from imposing a sentence
merely because, taking into consideration the degree of malice and the injury caused by the offense, the penalty provided by law is
clearly excessive, the courts being allowed in such case to submit to the Chief Executive, through the Department of Justice, such
statement as it may deem proper (see art. 5, Revised Penal Code), in cases where both mitigating and aggravating circumstances are
attendant in the commission of a crime and the law provides for a penalty composed of two indivisible penalties, the courts may allow
such circumstances to offset one another in consideration of their number and importance, and to apply the penalty according to the
result of such compensation. (Art. 63, rule 4, Revised Penal Code; U.S. vs. Reguera and Asuategui [1921], 41 Phil., 506.) Again, article
64, paragraph 7, of the Revised Penal Code empowers the courts to determine, within the limits of each periods, in case the penalty
prescribed by law contains three periods, the extent of the evil produced by the crime. In the imposition of fines, the courts are allowed
to fix any amount within the limits established by law, considering not only the mitigating and aggravating circumstances, but more
particularly the wealth or means of the culprit. (Art. 66, Revised Penal Code.) Article 68, paragraph 1, of the same Code provides that "a
discretionary penalty shall be imposed" upon a person under fifteen but over nine years of age, who has not acted without discernment,
but always lower by two degrees at least than that prescribed by law for the crime which he has committed. Article 69 of the same Code
provides that in case of "incomplete self-defense", i.e., when the crime committed is not wholly excusable by reason of the lack of some
of the conditions required to justify the same or to exempt from criminal liability in the several cases mentioned in article 11 and 12 of
the Code, "the courts shall impose the penalty in the period which may be deemed proper, in view of the number and nature of the
conditions of exemption present or lacking." And, in case the commission of what are known as "impossible" crimes, "the court, having

22
in mind the social danger and the degree of criminality shown by the offender," shall impose upon him either arresto mayor or a fine
ranging from 200 to 500 pesos. (Art. 59, Revised Penal Code.)

Under our Revised Penal Code, also, one-half of the period of preventive imprisonment is deducted form the entire term of
imprisonment, except in certain cases expressly mentioned (art. 29); the death penalty is not imposed when the guilty person is more
than seventy years of age, or where upon appeal or revision of the case by the Supreme Court, all the members thereof are not
unanimous in their voting as to the propriety of the imposition of the death penalty (art. 47, see also, sec. 133, Revised Administrative
Code, as amended by Commonwealth Act No. 3); the death sentence is not to be inflicted upon a woman within the three years next
following the date of the sentence or while she is pregnant, or upon any person over seventy years of age (art. 83); and when a convict
shall become insane or an imbecile after final sentence has been pronounced, or while he is serving his sentenced, the execution of
said sentence shall be suspended with regard to the personal penalty during the period of such insanity or imbecility (art. 79).

But the desire of the legislature to relax what might result in the undue harshness of the penal laws is more clearly demonstrated in
various other enactments, including the probation Act. There is the Indeterminate Sentence Law enacted in 1933 as Act No. 4103 and
subsequently amended by Act No. 4225, establishing a system of parole (secs. 5 to 100 and granting the courts large discretion in
imposing the penalties of the law. Section 1 of the law as amended provides; "hereafter, in imposing a prison sentence for an offenses
punished by the Revised Penal Code, or its amendments, the court shall sentence the accused to an indeterminate sentence the
maximum term of which shall be that which, in view of the attending circumstances, could be properly imposed under the rules of the
said Code, and to a minimum which shall be within the range of the penalty next lower to that prescribed by the Code for the offense;
and if the offense is punished by any other law, the court shall sentence the accused to an indeterminate sentence, the maximum term
of which shall not exceed the maximum fixed by said law and the minimum shall not be less than the minimum term prescribed by the
same." Certain classes of convicts are, by section 2 of the law, excluded from the operation thereof. The Legislature has also enacted
the Juvenile Delinquency Law (Act No. 3203) which was subsequently amended by Act No. 3559. Section 7 of the original Act and
section 1 of the amendatory Act have become article 80 of the Revised Penal Code, amended by Act No. 4117 of the Philippine
Legislature and recently reamended by Commonwealth Act No. 99 of the National Assembly. In this Act is again manifested the
intention of the legislature to "humanize" the penal laws. It allows, in effect, the modification in particular cases of the penalties
prescribed by law by permitting the suspension of the execution of the judgment in the discretion of the trial court, after due hearing and
after investigation of the particular circumstances of the offenses, the criminal record, if any, of the convict, and his social history. The
Legislature has in reality decreed that in certain cases no punishment at all shall be suffered by the convict as long as the conditions of
probation are faithfully observed. It this be so, then, it cannot be said that the Probation Act comes in conflict with the power of the Chief
Executive to grant pardons and reprieves, because, to use the language of the Supreme Court of New Mexico, "the element of
punishment or the penalty for the commission of a wrong, while to be declared by the courts as a judicial function under and within the
limits of law as announced by legislative acts, concerns solely the procedure and conduct of criminal causes, with which the executive
can have nothing to do." (Ex parteBates, supra.) In Williams vs. State ([1926], 162 Ga., 327; 133 S.E., 843), the court upheld the
constitutionality of the Georgia probation statute against the contention that it attempted to delegate to the courts the pardoning power
lodged by the constitution in the governor alone is vested with the power to pardon after final sentence has been imposed by the courts,
the power of the courts to imposed any penalty which may be from time to time prescribed by law and in such manner as may be
defined cannot be questioned."

We realize, of course, the conflict which the American cases disclose. Some cases hold it unlawful for the legislature to vest in the
courts the power to suspend the operation of a sentenced, by probation or otherwise, as to do so would encroach upon the pardoning
power of the executive. (In re Webb [1895], 89 Wis., 354; 27 L.R.A., 356; 46 Am. St. Rep., 846; 62 N.W., 177; 9 Am. Crim., Rep., 702;
State ex rel. Summerfield vs. Moran [1919], 43 Nev., 150; 182 Pac., 927; Ex parte Clendenning [1908], 22 Okla., 108; 1 Okla. Crim.
Rep., 227; 19 L.R.A. [N.S.], 1041; 132 Am. St. Rep., 628; 97 Pac., 650; People vs. Barrett [1903], 202 Ill, 287; 67 N.E., 23; 63 L.R.A.,
82; 95 Am. St. Rep., 230; Snodgrass vs. State [1912], 67 Tex. Crim. Rep., 615; 41 L. R. A. [N. S.], 1144; 150 S. W., 162; Ex
parte Shelor [1910], 33 Nev., 361;111 Pac., 291; Neal vs. State [1898], 104 Ga., 509; 42 L. R. A., 190; 69 Am. St. Rep., 175; 30 S. E.
858; State ex rel. Payne vs. Anderson [1921], 43 S. D., 630; 181 N. W., 839; People vs. Brown, 54 Mich., 15; 19 N. W., 571; States vs.
Dalton [1903], 109 Tenn., 544; 72 S. W., 456.)

Other cases, however, hold contra. (Nix vs. James [1925; C. C. A., 9th], 7 F. [2d], 590; Archer vs. Snook [1926; D. C.], 10 F. [2d], 567;
Riggs. vs. United States [1926; C. C. A. 4th], 14]) [2d], 5; Murphy vs. States [1926], 171 Ark., 620; 286 S. W., 871; 48 A. L. R., 1189; Re
Giannini [1912], 18 Cal. App., 166; 122 Pac., 831; Re Nachnaber [1928], 89 Cal. App., 530; 265 Pac., 392; Ex parte De Voe [1931], 114
Cal. App., 730; 300 Pac., 874; People vs. Patrick [1897], 118 Cal., 332; 50 Pac., 425; Martin vs. People [1917], 69 Colo., 60; 168 Pac.,
1171; Belden vs. Hugo [1914], 88 Conn., 50; 91 A., 369, 370, 371; Williams vs. State [1926], 162 Ga., 327; 133 S. E., 843; People vs.
Heise [1913], 257 Ill., 443; 100 N. E., 1000; Parker vs. State [1893], 135 Ind., 534; 35 N. E., 179; 23 L. R. A., 859; St. Hillarie, Petitioner
[1906], 101 Me., 522; 64 Atl., 882; People vs. Stickle [1909], 156 Mich., 557; 121 N. W., 497; State vs. Fjolander [1914], 125 Minn., 529;
State ex rel. Bottomnly vs. District Court [1925], 73 Mont., 541; 237 Pac., 525; State vs. Everitt [1913], 164 N. C., 399; 79 S. E., 274; 47
L. R. A. [N. S.], 848; State ex rel. Buckley vs. Drew [1909], 75 N. H., 402; 74 Atl., 875; State vs. Osborne [1911], 79 N. J. Eq., 430; 82
Atl. 424; Ex parte Bates [1915], 20 N. M., 542; L. R. A., 1916 A. 1285; 151 Pac., 698; People vs. ex rel. Forsyth vs. Court of Session
[1894], 141 N. Y., 288; 23 L. R. A., 856; 36 N. E., 386; 15 Am. Crim. Rep., 675; People ex rel. Sullivan vs. Flynn [1907], 55 Misc., 639;
106 N. Y. Supp., 928; People vs. Goodrich [1914], 149 N. Y. Supp., 406; Moore vs. Thorn [1935], 245 App. Div., 180; 281 N. Y. Supp.,
49; Re Hart [1914], 29 N. D., 38; L. R. A., 1915C, 1169; 149 N. W., 568; Ex parte Eaton [1925], 29 Okla., Crim. Rep., 275; 233 P., 781;
State vs. Teal [1918], 108 S. C., 455; 95 S. E., 69; State vs. Abbot [1910], 87 S. C., 466; 33 L.R.A., [N. S.], 112; 70 S. E., 6; Ann. Cas.,
1912B, 1189; Fults vs. States [1854],34 Tenn., 232; Woods vs. State [1814], 130 Tenn., 100; 169 S. W., 558; Baker vs. State [1814],
130 Tenn., 100; 169 S. W., 558; Baker vs. State [1913],70 Tex., Crim. Rep., 618; 158 S. W., 998; Cook vs. State [1914], 73 Tex. Crim.
Rep., 548; 165 S. W., 573; King vs. State [1914], 72 Tex. Crim. Rep., 394; 162 S. W., 890; Clare vs. State [1932], 122 Tex. Crim. Rep.,
394; 162 S. W., 890; Clare vs. State [1932], 122 Tex. Crim. Rep., 211; 54 S. W. [2d], 127; Re Hall [1927], 100 Vt., 197; 136 A., 24;
Richardson vs. Com. [1921], 131 Va., 802; 109 S.E., 460; State vs. Mallahan [1911], 65 Wash., 287; 118 Pac., 42; State ex rel.
Tingstand vs. Starwich [1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R., 393; 396.) We elect to follow this long catena of authorities
holding that the courts may be legally authorized by the legislature to suspend sentence by the establishment of a system of probation
however characterized. State ex rel. Tingstand vs. Starwich ([1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R., 393), deserved
particular mention. In that case, a statute enacted in 1921 which provided for the suspension of the execution of a sentence until
otherwise ordered by the court, and required that the convicted person be placed under the charge of a parole or peace officer during
the term of such suspension, on such terms as the court may determine, was held constitutional and as not giving the court a power in
violation of the constitutional provision vesting the pardoning power in the chief executive of the state. (Vide, also, Re Giannini [1912],
18 Cal App., 166; 122 Pac., 831.)

23
Probation and pardon are not coterminous; nor are they the same. They are actually district and different from each other, both in origin
and in nature. In People ex rel. Forsyth vs. Court of Sessions ([1894], 141 N. Y., 288, 294; 36 N. E., 386, 388; 23 L. R. A., 856; 15 Am.
Crim. Rep., 675), the Court of Appeals of New York said:

. . . The power to suspend sentence and the power to grant reprieves and pardons, as understood when the constitution was
adopted, are totally distinct and different in their nature. The former was always a part of the judicial power; the latter was
always a part of the executive power. The suspension of the sentence simply postpones the judgment of the court temporarily
or indefinitely, but the conviction and liability following it, and the civil disabilities, remain and become operative when judgment
is rendered. A pardon reaches both the punishment prescribed for the offense and the guilt of the offender. It releases the
punishment, and blots out of existence the guilt, so that in the eye of the law, the offender is as innocent as if he had never
committed the offense. It removes the penalties and disabilities, and restores him to all his civil rights. It makes him, as it were,
a new man, and gives him a new credit and capacity. (Ex parte Garland, 71 U. S., 4 Wall., 333; 18 Law. ed., 366; U. S. vs.
Klein, 80 U. S., 13 Wall., 128; 20 Law. ed., 519; Knote vs. U. S., 95 U. S., 149; 24 Law. ed., 442.)

The framers of the federal and the state constitutions were perfectly familiar with the principles governing the power to grant
pardons, and it was conferred by these instruments upon the executive with full knowledge of the law upon the subject, and
the words of the constitution were used to express the authority formerly exercised by the English crown, or by its
representatives in the colonies. (Ex parte Wells, 59 U. S., 18 How., 307; 15 Law. ed., 421.) As this power was understood, it
did not comprehend any part of the judicial functions to suspend sentence, and it was never intended that the authority to
grant reprieves and pardons should abrogate, or in any degree restrict, the exercise of that power in regard to its own
judgments, that criminal courts has so long maintained. The two powers, so distinct and different in their nature and character,
were still left separate and distinct, the one to be exercised by the executive, and the other by the judicial department. We
therefore conclude that a statute which, in terms, authorizes courts of criminal jurisdiction to suspend sentence in certain
cases after conviction, a power inherent in such courts at common law, which was understood when the constitution was
adopted to be an ordinary judicial function, and which, ever since its adoption, has been exercised of legislative power under
the constitution. It does not encroach, in any just sense, upon the powers of the executive, as they have been understood and
practiced from the earliest times. (Quoted with approval in Directors of Prisons vs. Judge of First Instance of Cavite [1915], 29
Phil., 265, Carson, J., concurring, at pp. 294, 295.)

In probation, the probationer is in no true sense, as in pardon, a free man. He is not finally and completely exonerated. He is not
exempt from the entire punishment which the law inflicts. Under the Probation Act, the probationer's case is not terminated by the mere
fact that he is placed on probation. Section 4 of the Act provides that the probation may be definitely terminated and the probationer
finally discharged from supervision only after the period of probation shall have been terminated and the probation officer shall have
submitted a report, and the court shall have found that the probationer has complied with the conditions of probation. The probationer,
then, during the period of probation, remains in legal custody subject to the control of the probation officer and of the court; and, he
may be rearrested upon the non-fulfillment of the conditions of probation and, when rearrested, may be committed to prison to serve
the sentence originally imposed upon him. (Secs. 2, 3, 5 and 6, Act No. 4221.)

The probation described in the act is not pardon. It is not complete liberty, and may be far from it. It is really a new mode of
punishment, to be applied by the judge in a proper case, in substitution of the imprisonment and find prescribed by the criminal
laws. For this reason its application is as purely a judicial act as any other sentence carrying out the law deemed applicable to
the offense. The executive act of pardon, on the contrary, is against the criminal law, which binds and directs the judges, or
rather is outside of and above it. There is thus no conflict with the pardoning power, and no possible unconstitutionality of the
Probation Act for this cause. (Archer vs. Snook [1926], 10 F. [2d], 567, 569.)

Probation should also be distinguished from reprieve and from commutation of the sentence. Snodgrass vs. State ([1912], 67 Tex. Crim.
Rep., 615;41 L. R. A. [N. S.], 1144; 150 S. W., 162), is relied upon most strongly by the petitioners as authority in support of their
contention that the power to grant pardons and reprieves, having been vested exclusively upon the Chief Executive by the Jones Law,
may not be conferred by the legislature upon the courts by means of probation law authorizing the indefinite judicial suspension of
sentence. We have examined that case and found that although the Court of Criminal Appeals of Texas held that the probation statute
of the state in terms conferred on the district courts the power to grant pardons to persons convicted of crime, it also distinguished
between suspensions sentence on the one hand, and reprieve and commutation of sentence on the other. Said the court, through
Harper, J.:

That the power to suspend the sentence does not conflict with the power of the Governor to grant reprieves is settled by the
decisions of the various courts; it being held that the distinction between a "reprieve" and a suspension of sentence is that a
reprieve postpones the execution of the sentence to a day certain, whereas a suspension is for an indefinite time. (Carnal vs.
People, 1 Parker, Cr. R., 262; In re Buchanan, 146 N. Y., 264; 40 N. E., 883), and cases cited in 7 Words & Phrases, pp. 6115,
6116. This law cannot be hold in conflict with the power confiding in the Governor to grant commutations of punishment, for a
commutations is not but to change the punishment assessed to a less punishment.

In State ex rel. Bottomnly vs. District Court ([1925], 73 Mont., 541; 237 Pac., 525), the Supreme Court of Montana had under
consideration the validity of the adult probation law of the state enacted in 1913, now found in sections 12078-12086, Revised Codes of
1921. The court held the law valid as not impinging upon the pardoning power of the executive. In a unanimous decision penned by
Justice Holloway, the court said:

. . . . the term "pardon", "commutation", and "respite" each had a well understood meaning at the time our Constitution was
adopted, and no one of them was intended to comprehend the suspension of the execution of the judgment as that phrase is
employed in sections 12078-12086. A "pardon" is an act of grace, proceeding from the power intrusted with the execution of
the laws which exempts the individual on whom it is bestowed from the punishment the law inflicts for a crime he has
committed (United States vs. Wilson, 7 Pet., 150; 8 Law. ed., 640); It is a remission of guilt (State vs. Lewis, 111 La., 693; 35
So., 816), a forgiveness of the offense (Cook vs. Middlesex County, 26 N. J. Law, 326; Ex parte Powell, 73 Ala., 517; 49 Am.
Rep., 71). "Commutation" is a remission of a part of the punishment; a substitution of a less penalty for the one originally
imposed (Lee vs. Murphy, 22 Grat. [Va.] 789; 12 Am. Rep., 563; Rich vs. Chamberlain, 107 Mich., 381; 65 N. W., 235). A
"reprieve" or "respite" is the withholding of the sentence for an interval of time (4 Blackstone's Commentaries, 394), a
postponement of execution (Carnal vs. People, 1 Parker, Cr. R. [N. Y.], 272), a temporary suspension of execution (Butler vs.
State, 97 Ind., 373).

24
 Few adjudicated cases are to be found in which the validity of a statute similar to our section 12078 has been determined; but
the same objections have been urged against parole statutes which vest the power to parole in persons other than those to
whom the power of pardon is granted, and these statutes have been upheld quite uniformly, as a reference to the numerous
cases cited in the notes to Woods vs. State (130 Tenn., 100; 169 S. W.,558, reported in L. R. A., 1915F, 531), will disclose.
(See, also, 20 R. C. L., 524.)

We conclude that the Probation Act does not conflict with the pardoning power of the Executive. The pardoning power, in respect to
those serving their probationary sentences, remains as full and complete as if the Probation Law had never been enacted. The
President may yet pardon the probationer and thus place it beyond the power of the court to order his rearrest and imprisonment.
(Riggs vs. United States [1926],
14 F. [2d], 5, 7.)

2. But while the Probation Law does not encroach upon the pardoning power of the executive and is not for that reason void, does
section 11 thereof constitute, as contended, an undue delegation of legislative power?

Under the constitutional system, the powers of government are distributed among three coordinate and substantially independent
organs: the legislative, the executive and the judicial. Each of these departments of the government derives its authority from the
Constitution which, in turn, is the highest expression of popular will. Each has exclusive cognizance of the matters within its jurisdiction,
and is supreme within its own sphere.

The power to make laws the legislative power is vested in a bicameral Legislature by the Jones Law (sec. 12) and in a unicamiral
National Assembly by the Constitution (Act. VI, sec. 1, Constitution of the Philippines). The Philippine Legislature or the National
Assembly may not escape its duties and responsibilities by delegating that power to any other body or authority. Any attempt to
abdicate the power is unconstitutional and void, on the principle that potestas delegata non delegare potest. This principle is said to
have originated with the glossators, was introduced into English law through a misreading of Bracton, there developed as a principle of
agency, was established by Lord Coke in the English public law in decisions forbidding the delegation of judicial power, and found its
way into America as an enlightened principle of free government. It has since become an accepted corollary of the principle of
separation of powers. (5 Encyc. of the Social Sciences, p. 66.) The classic statement of the rule is that of Locke, namely: "The
legislative neither must nor can transfer the power of making laws to anybody else, or place it anywhere but where the people have."
(Locke on Civil Government, sec. 142.) Judge Cooley enunciates the doctrine in the following oft-quoted language: "One of the settled
maxims in constitutional law is, that the power conferred upon the legislature to make laws cannot be delegated by that department to
any other body or authority. Where the sovereign power of the state has located the authority, there it must remain; and by the
constitutional agency alone the laws must be made until the Constitution itself is charged. The power to whose judgment, wisdom, and
patriotism this high prerogative has been intrusted cannot relieve itself of the responsibilities by choosing other agencies upon which
the power shall be devolved, nor can it substitute the judgment, wisdom, and patriotism of any other body for those to which alone the
people have seen fit to confide this sovereign trust." (Cooley on Constitutional Limitations, 8th ed., Vol. I, p. 224. Quoted with approval
in U. S. vs. Barrias [1908], 11 Phil., 327.) This court posits the doctrine "on the ethical principle that such a delegated power constitutes
not only a right but a duty to be performed by the delegate by the instrumentality of his own judgment acting immediately upon the
matter of legislation and not through the intervening mind of another. (U. S. vs. Barrias, supra, at p. 330.)

The rule, however, which forbids the delegation of legislative power is not absolute and inflexible. It admits of exceptions. An exceptions
sanctioned by immemorial practice permits the central legislative body to delegate legislative powers to local authorities. (Rubi vs.
Provincial Board of Mindoro [1919], 39 Phil., 660; U. S. vs. Salaveria [1918], 39 Phil., 102; Stoutenburgh vs. Hennick [1889], 129 U. S.,
141; 32 Law. ed., 637; 9 Sup. Ct. Rep., 256; State vs. Noyes [1855], 30 N. H., 279.) "It is a cardinal principle of our system of
government, that local affairs shall be managed by local authorities, and general affairs by the central authorities; and hence while the
rule is also fundamental that the power to make laws cannot be delegated, the creation of the municipalities exercising local self
government has never been held to trench upon that rule. Such legislation is not regarded as a transfer of general legislative power, but
rather as the grant of the authority to prescribed local regulations, according to immemorial practice, subject of course to the
interposition of the superior in cases of necessity." (Stoutenburgh vs. Hennick, supra.) On quite the same principle, Congress is
powered to delegate legislative power to such agencies in the territories of the United States as it may select. A territory stands in the
same relation to Congress as a municipality or city to the state government. (United States vs. Heinszen [1907], 206 U. S., 370; 27 Sup.
Ct. Rep., 742; 51 L. ed., 1098; 11 Ann. Cas., 688; Dorr vs. United States [1904], 195 U.S., 138; 24 Sup. Ct. Rep., 808; 49 Law. ed., 128;
1 Ann. Cas., 697.) Courts have also sustained the delegation of legislative power to the people at large. Some authorities maintain that
this may not be done (12 C. J., pp. 841, 842; 6 R. C. L., p. 164, citing People vs. Kennedy [1913], 207 N. Y., 533; 101 N. E., 442; Ann.
Cas., 1914C, 616). However, the question of whether or not a state has ceased to be republican in form because of its adoption of the
initiative and referendum has been held not to be a judicial but a political question (Pacific States Tel. & Tel. Co. vs. Oregon [1912], 223
U. S., 118; 56 Law. ed., 377; 32 Sup. Cet. Rep., 224), and as the constitutionality of such laws has been looked upon with favor by
certain progressive courts, the sting of the decisions of the more conservative courts has been pretty well drawn. (Opinions of the
Justices [1894], 160 Mass., 586; 36 N. E., 488; 23 L. R. A., 113; Kiernan vs. Portland [1910], 57 Ore., 454; 111 Pac., 379; 1132 Pac.,
402; 37 L. R. A. [N. S.], 332; Pacific States Tel. & Tel. Co. vs. Oregon, supra.) Doubtless, also, legislative power may be delegated by
the Constitution itself. Section 14, paragraph 2, of article VI of the Constitution of the Philippines provides that "The National Assembly
may by law authorize the President, subject to such limitations and restrictions as it may impose, to fix within specified limits, tariff rates,
import or export quotas, and tonnage and wharfage dues." And section 16 of the same article of the Constitution provides that "In times
of war or other national emergency, the National Assembly may by law authorize the President, for a limited period and subject to such
restrictions as it may prescribed, to promulgate rules and regulations to carry out a declared national policy." It is beyond the scope of
this decision to determine whether or not, in the absence of the foregoing constitutional provisions, the President could be authorized to
exercise the powers thereby vested in him. Upon the other hand, whatever doubt may have existed has been removed by the
Constitution itself.

The case before us does not fall under any of the exceptions hereinabove mentioned.

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. (Emphasis ours.)

25
In testing whether a statute constitute 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 any other
appointee or delegate of the legislature. (6 R. C. L., p. 165.) In the United States vs. Ang Tang Ho ([1922], 43 Phil., 1), this court
adhered to the foregoing rule when it held an act of the legislature void in so far as it undertook to authorize the Governor-General, in
his discretion, to issue a proclamation fixing the price of rice and to make the sale of it in violation of the proclamation a crime. (See and
cf. Compaia General de Tabacos vs. Board of Public Utility Commissioners [1916], 34 Phil., 136.) The general rule, however, is limited
by another rule that to a certain extent matters of detail may be left to be filled in by rules and regulations to be adopted or promulgated
by executive officers and administrative boards. (6 R. C. L., pp. 177-179.)

For the purpose of Probation Act, the provincial boards may be regarded as administrative bodies endowed with power to determine
when the Act should take effect in their respective provinces. They are the agents or delegates of the legislature in this respect. The
rules governing delegation of legislative power to administrative and executive officers are applicable or are at least indicative of the
rule which should be here adopted. An examination of a variety of cases on delegation of power to administrative bodies will show that
the ratio decidendi is at variance but, it can be broadly asserted that the rationale revolves around the presence or absence of a
standard or rule of action or the sufficiency thereof in the statute, to aid the delegate in exercising the granted discretion. In some
cases, it is held that the standard is sufficient; in others that is insufficient; and in still others that it is entirely lacking. As a rule, 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. (See Schecter vs. United States [1925], 295 U. S., 495;
79 L. ed., 1570; 55 Sup. Ct. Rep., 837; 97 A.L.R., 947; People ex rel. Rice vs. Wilson Oil Co. [1936], 364 Ill., 406; 4 N. E. [2d], 847; 107
A.L.R., 1500 and cases cited. See also R. C. L., title "Constitutional Law", sec 174.) In the case at bar, what rules are to guide the
provincial boards in the exercise of their discretionary power to determine whether or not the Probation Act shall apply in their
respective provinces? What standards are fixed by the Act? We do not find any and none has been pointed to us by the respondents.
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, if we may use the language of 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. In other words, 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. The plain language of
the Act is not susceptible of any other interpretation. This, to our minds, is a virtual surrender of legislative power to the provincial
boards.

"The true distinction", says Judge Ranney, "is between 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." (Cincinnati, W. & Z. R. Co. vs. Clinton County Comrs. [1852]; 1
Ohio St., 77, 88. See also, Sutherland on Statutory Construction, sec 68.) To the same effect are the decision of this court
in Municipality of Cardona vs. Municipality of Binangonan ([1917], 36 Phil., 547); Rubi vs. Provincial Board of Mindoro ([1919],39 Phil.,
660) and Cruz vs. Youngberg ([1931], 56 Phil., 234). In the first of these cases, this court sustained the validity of the law conferring
upon the Governor-General authority to adjust provincial and municipal boundaries. In the second case, this court held it lawful for the
legislature to direct non-Christian inhabitants to take up their habitation on unoccupied lands to be selected by the provincial governor
and approved by the provincial board. In the third case, it was held proper for the legislature to vest in the Governor-General authority
to suspend or not, at his discretion, the prohibition of the importation of the foreign cattle, such prohibition to be raised "if the conditions
of the country make this advisable or if deceased among foreign cattle has ceased to be a menace to the agriculture and livestock of
the lands."

It should be observed that in the case at bar we are not concerned with the simple transference of details of execution or the
promulgation by executive or administrative officials of rules and regulations to carry into effect the provisions of a law. If we were,
recurrence to our own decisions would be sufficient. (U. S. vs. Barrias [1908], 11 Phil., 327; U.S. vs. Molina [1914], 29 Phil., 119; Alegre
vs. Collector of Customs [1929], 53 Phil., 394; Cebu Autobus Co. vs. De Jesus [1931], 56 Phil., 446; U. S. vs. Gomez [1915], 31 Phil.,
218; Rubi vs. Provincial Board of Mindoro [1919], 39 Phil., 660.)

It is connected, however, that a legislative act may be made to the effect as law after it leaves the hands of the legislature. It is true that
laws may be made effective on certain contingencies, as by proclamation of the executive or the adoption by the people of a particular
community (6 R. C. L., 116, 170-172; Cooley, Constitutional Limitations, 8th ed., Vol. I, p. 227). In Wayman vs. Southard ([1825], 10
Wheat. 1; 6 Law. ed., 253), the Supreme Court of the United State ruled that the legislature may delegate a power not legislative which
it may itself rightfully exercise.(Vide, also, Dowling vs. Lancashire Ins. Co. [1896], 92 Wis., 63; 65 N. W., 738; 31 L. R. A., 112.) The
power to ascertain facts is such a power which may be delegated. There is nothing essentially legislative in ascertaining the existence
of facts or conditions as the basis of the taking into effect of a law. That is a mental process common to all branches of the government.
(Dowling vs. Lancashire Ins. Co., supra; In re Village of North Milwaukee [1896], 93 Wis., 616; 97 N.W., 1033; 33 L.R.A., 938; Nash vs.
Fries [1906], 129 Wis., 120; 108 N.W., 210; Field vs. Clark [1892], 143 U.S., 649; 12 Sup. Ct., 495; 36 Law. ed., 294.) Notwithstanding
the apparent tendency, however, to relax the rule prohibiting delegation of legislative authority on account of the complexity arising from
social and economic forces at work in this modern industrial age (Pfiffner, Public Administration [1936] ch. XX; Laski, "The Mother of
Parliaments", foreign Affairs, July, 1931, Vol. IX, No. 4, pp. 569-579; Beard, "Squirt-Gun Politics", in Harper's Monthly Magazine, July,
1930, Vol. CLXI, pp. 147, 152), the orthodox pronouncement of Judge Cooley in his work on Constitutional Limitations finds restatement
in Prof. Willoughby's treatise on the Constitution of the United States in the following language speaking of declaration of legislative
power to administrative agencies: "The principle which permits the legislature to provide that the administrative agent may determine
when the circumstances are such as require the application of a law is defended upon the ground that at the time this authority is
granted, the rule of public policy, which is the essence of the legislative act, is determined by the legislature. In other words, the
legislature, as it its duty to do, determines that, under given circumstances, certain executive or administrative action is to be taken, and
that, under other circumstances, different of no action at all is to be taken. What is thus left to the administrative official is not the
legislative determination of what public policy demands, but simply the ascertainment of what the facts of the case require to be done
according to the terms of the law by which he is governed." (Willoughby on the Constitution of the United States, 2nd ed., Vol. II, p.
1637.) In Miller vs. Mayer, etc., of New York [1883], 109 U.S., 3 Sup. Ct. Rep., 228; 27 Law. ed., 971, 974), it was said: "The efficiency
of an Act as a declaration of legislative will must, of course, come from Congress, but the ascertainment of the contingency upon which
the Act shall take effect may be left to such agencies as it may designate." (See, also, 12 C.J., p. 864; State vs. Parker [1854], 26 Vt.,
357; Blanding vs. Burr [1859], 13 Cal., 343, 258.) The legislature, then may provide that a contingencies leaving to some other person
or body the power to determine when the specified contingencies has arisen. But, in the case at bar, the legislature has not made the
operation of the Prohibition Act contingent upon specified facts or conditions to be ascertained by the provincial board. It leaves, as we
26
have already said, the entire operation or non-operation of the law upon the provincial board. the discretion vested is arbitrary because
it is absolute and unlimited. A provincial board need not investigate conditions or find any fact, or await the happening of any specified
contingency. It is bound by no rule, limited by no principle of expendiency announced by the legislature. It may take into
consideration certain facts or conditions; and, again, it may not. It may have any purpose or no purpose at all. It need not give any
reason whatsoever for refusing or failing to appropriate any funds for the salary of a probation officer. This is a matter which rest entirely
at its pleasure. The fact that at some future time we cannot say when the provincial boards may appropriate funds for the salaries
of probation officers and thus put the law into operation in the various provinces will not save the statute. The time of its taking into
effect, we reiterate, would yet be based solely upon the will of the provincial boards and not upon the happening of a certain specified
contingency, or upon the ascertainment of certain facts or conditions by a person or body other than legislature itself.

The various provincial boards are, in practical effect, endowed with the power of suspending the operation of the Probation Law in their
respective provinces. In some jurisdiction, constitutions provided that laws may be suspended only by the legislature or by its authority.
Thus, section 28, article I of the Constitution of Texas provides that "No power of suspending laws in this state shall be exercised except
by the legislature"; and section 26, article I of the Constitution of Indiana provides "That the operation of the laws shall never be
suspended, except by authority of the General Assembly." Yet, even provisions of this sort do not confer absolute power of suspension
upon the legislature. While it may be undoubted that the legislature may suspend a law, or the execution or operation of a law, a law
may not be suspended as to certain individuals only, leaving the law to be enjoyed by others. The suspension must be general, and
cannot be made for individual cases or for particular localities. In Holden vs. James ([1814], 11 Mass., 396; 6 Am. Dec., 174, 177, 178),
it was said:

By the twentieth article of the declaration of rights in the constitution of this commonwealth, it is declared that the power of
suspending the laws, or the execution of the laws, ought never to be exercised but by the legislature, or by authority derived
from it, to be exercised in such particular cases only as the legislature shall expressly provide for. Many of the articles in that
declaration of rights were adopted from the Magna Charta of England, and from the bill of rights passed in the reign of William
and Mary. The bill of rights contains an enumeration of the oppressive acts of James II, tending to subvert and extirpate the
protestant religion, and the laws and liberties of the kingdom; and the first of them is the assuming and exercising a power of
dispensing with and suspending the laws, and the execution of the laws without consent of parliament. The first article in the
claim or declaration of rights contained in the statute is, that the exercise of such power, by legal authority without consent of
parliament, is illegal. In the tenth section of the same statute it is further declared and enacted, that "No dispensation by non
obstante of or to any statute, or part thereof, should be allowed; but the same should be held void and of no effect, except a
dispensation be allowed of in such statute." There is an implied reservation of authority in the parliament to exercise the power
here mentioned; because, according to the theory of the English Constitution, "that absolute despotic power, which must in all
governments reside somewhere," is intrusted to the parliament: 1 Bl. Com., 160.

The principles of our government are widely different in this particular. Here the sovereign and absolute power resides in the
people; and the legislature can only exercise what is delegated to them according to the constitution. It is obvious that the
exercise of the power in question would be equally oppressive to the subject, and subversive of his right to protection,
"according to standing laws," whether exercised by one man or by a number of men. It cannot be supposed that the people
when adopting this general principle from the English bill of rights and inserting it in our constitution, intended to bestow by
implication on the general court one of the most odious and oppressive prerogatives of the ancient kings of England. It is
manifestly contrary to the first principles of civil liberty and natural justice, and to the spirit of our constitution and laws, that any
one citizen should enjoy privileges and advantages which are denied to all others under like circumstances; or that ant one
should be subject to losses, damages, suits, or actions from which all others under like circumstances are exempted.

To illustrate the principle: A section of a statute relative to dogs made the owner of any dog liable to the owner of domestic animals
wounded by it for the damages without proving a knowledge of it vicious disposition. By a provision of the act, power was given to the
board of supervisors to determine whether or not during the current year their county should be governed by the provisions of the act of
which that section constituted a part. It was held that the legislature could not confer that power. The court observed that it could no
more confer such a power than to authorize the board of supervisors of a county to abolish in such county the days of grace on
commercial paper, or to suspend the statute of limitations. (Slinger vs. Henneman [1875], 38 Wis., 504.) A similar statute in Missouri
was held void for the same reason in State vs. Field ([1853, 17 Mo., 529;59 Am. Dec., 275.) In that case a general statute formulating a
road system contained a provision that "if the county court of any county should be of opinion that the provisions of the act should not
be enforced, they might, in their discretion, suspend the operation of the same for any specified length of time, and thereupon the act
should become inoperative in such county for the period specified in such order; and thereupon order the roads to be opened and kept
in good repair, under the laws theretofore in force." Said the court: ". . . this act, by its own provisions, repeals the inconsistent
provisions of a former act, and yet it is left to the county court to say which act shall be enforce in their county. The act does not submit
the question to the county court as an original question, to be decided by that tribunal, whether the act shall commence its operation
within the county; but it became by its own terms a law in every county not excepted by name in the act. It did not, then, require the
county court to do any act in order to give it effect. But being the law in the county, and having by its provisions superseded and
abrogated the inconsistent provisions of previous laws, the county court is . . . empowered, to suspend this act and revive the repealed
provisions of the former act. When the question is before the county court for that tribunal to determine which law shall be in force, it is
urge before us that the power then to be exercised by the court is strictly legislative power, which under our constitution, cannot be
delegated to that tribunal or to any other body of men in the state. In the present case, the question is not presented in the abstract; for
the county court of Saline county, after the act had been for several months in force in that county, did by order suspend its operation;
and during that suspension the offense was committed which is the subject of the present indictment . . . ." (See Mitchell vs. State
[1901], 134 Ala., 392; 32 S., 687.)

True, the legislature may enact laws for a particular locality different from those applicable to other localities and, while recognizing the
force of the principle hereinabove expressed, courts in may jurisdiction have sustained the constitutionality of the submission of option
laws to the vote of the people. (6 R.C.L., p. 171.) But option laws thus sustained treat of subjects purely local in character which should
receive different treatment in different localities placed under different circumstances. "They relate to subjects which, like the retailing of
intoxicating drinks, or the running at large of cattle in the highways, may be differently regarded in different localities, and they are
sustained on what seems to us the impregnable ground, that the subject, though not embraced within the ordinary powers of
municipalities to make by-laws and ordinances, is nevertheless within the class of public regulations, in respect to which it is proper that
the local judgment should control." (Cooley on Constitutional Limitations, 5th ed., p. 148.) So that, while we do not deny the right of
local self-government and the propriety of leaving matters of purely local concern in the hands of local authorities or for the people of
small communities to pass upon, we believe that in matters of general of general legislation like that which treats of criminals in general,
and as regards the general subject of probation, discretion may not be vested in a manner so unqualified and absolute as provided in
Act No. 4221. True, the statute does not expressly state that the provincial boards may suspend the operation of the Probation Act in
27
particular provinces but, considering that, in being vested with the authority to appropriate or not the necessary funds for the salaries of
probation officers, they thereby are given absolute discretion to determine whether or not the law should take effect or operate in their
respective provinces, the provincial boards are in reality empowered by the legislature to suspend the operation of the Probation Act in
particular provinces, the Act to be held in abeyance until the provincial boards should decide otherwise by appropriating the necessary
funds. The validity of a law is not tested by what has been done but by what may be done under its provisions. (Walter E. Olsen & Co.
vs. Aldanese and Trinidad [1922], 43 Phil., 259; 12 C. J., p. 786.)

It in conceded that a great deal of latitude should be granted to the legislature not only in the expression of what may be termed
legislative policy but in the elaboration and execution thereof. "Without this power, legislation would become oppressive and yet
imbecile." (People vs. Reynolds, 5 Gilman, 1.) It has been said that popular government lives because of the inexhaustible reservoir of
power behind it. It is unquestionable that the mass of powers of government is vested in the representatives of the people and that
these representatives are no further restrained under our system than by the express language of the instrument imposing the restraint,
or by particular provisions which by clear intendment, have that effect. (Angara vs. Electoral Commission [1936], 35 Off. Ga., 23;
Schneckenburger vs. Moran [1936], 35 Off. Gaz., 1317.) But, it should be borne in mind that a constitution is both a grant and a
limitation of power and one of these time-honored limitations is that, subject to certain exceptions, legislative power shall not be
delegated.

We conclude 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.

3. 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 (Act. III, sec. 1 subsec. 1. Constitution of the Philippines.)

This basic individual right sheltered by the Constitution is a restraint on all the tree grand departments of our government and on the
subordinate instrumentalities and subdivision thereof, and on many constitutional power, like the police power, taxation and eminent
domain. The equal protection of laws, sententiously observes the Supreme Court of the United States, "is a pledge of the protection of
equal laws." (Yick Wo vs. Hopkins [1886], 118 U. S., 356; 30 Law. ed., 220; 6 Sup. Ct. Rep., 10464; Perley vs. North Carolina, 249 U.
S., 510; 39 Sup. Ct. Rep., 357; 63 Law. ed., 735.) Of course, what may be regarded as a denial of the equal protection of the laws in a
question not always easily determined. No rule that will cover every case can be formulated. (Connolly vs. Union Sewer Pipe Co.
[1902], 184, U. S., 540; 22 Sup. Ct., Rep., 431; 46 Law. ed., 679.) Class legislation discriminating against some and favoring others in
prohibited. But classification on a reasonable basis, and nor made arbitrarily or capriciously, is permitted. (Finely vs. California [1911],
222 U. S., 28; 56 Law. ed., 75; 32 Sup. Ct. Rep., 13; Gulf. C. & S. F. Ry Co. vs. Ellis [1897], 165 U. S., 150; 41 Law. ed., 666; 17 Sup.
Ct. Rep., 255; Smith, Bell & Co. vs. Natividad [1919], 40 Phil., 136.) The classification, however, 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. (Borgnis vs. Falk. Co. [1911], 147 Wis., 327, 353; 133 N. W., 209;
3 N. C. C. A., 649; 37 L. R. A. [N. S.], 489; State vs. Cooley, 56 Minn., 540; 530-552; 58 N. W., 150; Lindsley vs. Natural Carbonic Gas
Co.[1911], 220 U. S., 61, 79, 55 Law. ed., 369, 377; 31 Sup. Ct. Rep., 337; Ann. Cas., 1912C, 160; Lake Shore & M. S. R. Co. vs.
Clough [1917], 242 U.S., 375; 37 Sup. Ct. Rep., 144; 61 Law. ed., 374; Southern Ry. Co. vs. Greene [1910], 216 U. S., 400; 30 Sup. Ct.
Rep., 287; 54 Law. ed., 536; 17 Ann. Cas., 1247; Truax vs. Corrigan [1921], 257 U. S., 312; 12 C. J., pp. 1148, 1149.)

In the case at bar, however, 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. On that hypothesis, every
person coming within the purview of the Probation Act would be entitled to avail of the benefits of the Act. Neither will there be any
resulting inequality if no province, through its provincial board, should appropriate any amount for the salary of the probation officer
which is the situation now and, also, if we accept the contention that, for the purpose of the Probation Act, the City of Manila should
be considered as a province and that the municipal board of said city has not made any appropriation for the salary of the probation
officer. These different situations suggested show, indeed, that while inequality may result in the application of the law and in the
conferment of the benefits therein provided, inequality is not in all cases the necessary result. But whatever may be the case, it is clear
that in section 11 of the Probation Act creates a situation in which discrimination and inequality are permitted or allowed. There are, to
be sure, abundant authorities requiring actual denial of the equal protection of the law before court should assume the task of setting
aside a law vulnerable on that score, but premises and circumstances considered, we are of the opinion that section 11 of Act No. 4221
permits of the denial of the equal protection of the law and is on that account bad. We see no difference between a law which permits of
such denial. A law may appear to be fair on its face and impartial in appearance, yet, if it permits of unjust and illegal discrimination, it is
within the constitutional prohibitions. (By analogy, Chy Lung vs. Freeman [1876], 292 U. S., 275; 23 Law. ed., 550; Henderson vs.
Mayor [1876], 92 U. S., 259; 23 Law. ed., 543; Ex parte Virginia [1880], 100 U. S., 339; 25 Law. ed., 676; Neal vs. Delaware [1881], 103
U. S., 370; 26 Law. ed., 567; Soon Hing vs. Crowley [1885], 113 U. S., 703; 28 Law. ed., 1145, Yick Wo vs. Hopkins [1886],118 U. S.,
356; 30 Law. ed., 220; Williams vs. Mississippi [1897], 170 U. S., 218; 18 Sup. Ct. Rep., 583; 42 Law. ed., 1012; Bailey vs. Alabama
[1911], 219 U. S., 219; 31 Sup. Ct. Rep. 145; 55 Law. ed., Sunday Lake Iron Co. vs. Wakefield [1918], 247 U. S., 450; 38 Sup. Ct. Rep.,
495; 62 Law. ed., 1154.) In other words, statutes may be adjudged unconstitutional because of their effect in operation (General Oil Co.
vs. Clain [1907], 209 U. S., 211; 28 Sup. Ct. Rep., 475; 52 Law. ed., 754; State vs. Clement Nat. Bank [1911], 84 Vt., 167; 78 Atl., 944;
Ann. Cas., 1912D, 22). If the law has the effect of denying the equal protection of the law it is unconstitutional. (6 R. C. L. p. 372; Civil
Rights Cases, 109 U. S., 3; 3 Sup. Ct. Rep., 18; 27 Law. ed., 835; Yick Wo vs. Hopkins, supra; State vs. Montgomery, 94 Me., 192; 47
Atl., 165; 80 A. S. R., 386; State vs. Dering, 84 Wis., 585; 54 N. W., 1104; 36 A. S. R., 948; 19 L. R. A., 858.) Under section 11 of the
Probation Act, not only may said Act be in force in one or several provinces and not be in force in other provinces, but one province may
appropriate for the salary of the probation officer of a given year and have probation during that year and thereafter decline to
make further appropriation, and have no probation is subsequent years. While this situation goes rather to the abuse of discretion which
delegation implies, it is here indicated to show that the Probation Act sanctions a situation which is intolerable in a government of laws,
and to prove how easy it is, under the Act, to make the guaranty of the equality clause but "a rope of sand". (Brewer, J. Gulf C. & S. F.
Ry. Co. vs. Ellis [1897], 165 U. S., 150 154; 41 Law. ed., 666; 17 Sup. Ct. Rep., 255.)lawph!1.net

28
Great reliance is placed by counsel for the respondents on the case of Ocampo vs. United States ([1914], 234 U. S., 91; 58 Law. ed.,
1231). In that case, the Supreme Court of the United States affirmed the decision of this court (18 Phil., 1) by declining to uphold the
contention that there was a denial of the equal protection of the laws because, as held in Missouri vs. Lewis (Bowman vs. Lewis)
decided in 1880 (101 U. S., 220; 25 Law. ed., 991), the guaranty of the equality clause does not require territorial uniformity. It should
be observed, however, that this case concerns the right to preliminary investigations in criminal cases originally granted by General
Orders No. 58. No question of legislative authority was involved and the alleged denial of the equal protection of the laws was the result
of the subsequent enactment of Act No. 612, amending the charter of the City of Manila (Act No. 813) and providing in section 2 thereof
that "in cases triable only in the court of first instance of the City of Manila, the defendant . . . shall not be entitled as of right to a
preliminary examination in any case where the prosecuting attorney, after a due investigation of the facts . . . shall have presented an
information against him in proper form . . . ." Upon the other hand, an analysis of the arguments and the decision indicates that the
investigation by the prosecuting attorney although not in the form had in the provinces was considered a reasonable substitute for
the City of Manila, considering the peculiar conditions of the city as found and taken into account by the legislature itself.

Reliance is also placed on the case of Missouri vs. Lewis, supra. That case has reference to a situation where the constitution of
Missouri permits appeals to the Supreme Court of the state from final judgments of any circuit court, except those in certain counties for
which counties the constitution establishes a separate court of appeals called St. Louis Court of Appeals. The provision complained of,
then, is found in the constitution itself and it is the constitution that makes the apportionment of territorial jurisdiction.

We are of the opinion that section 11 of the Probation Act is unconstitutional and void because it is also repugnant to equal-protection
clause of our Constitution.

Section 11 of the Probation Act being unconstitutional and void for the reasons already stated, the next inquiry is whether or not the
entire Act should be avoided.

In seeking the legislative intent, the presumption is against any mutilation of a statute, and the courts will resort to elimination
only where an unconstitutional provision is interjected into a statute otherwise valid, and is so independent and separable that
its removal will leave the constitutional features and purposes of the act substantially unaffected by the process. (Riccio vs.
Hoboken, 69 N. J. Law., 649, 662; 63 L. R. A., 485; 55 Atl., 1109, quoted in Williams vs. Standard Oil Co. [1929], 278 U.S.,
235, 240; 73 Law. ed., 287, 309; 49 Sup. Ct. Rep., 115; 60 A. L. R., 596.) In Barrameda vs. Moir ([1913], 25 Phil., 44, 47), this
court stated the well-established rule concerning partial invalidity of statutes in the following language:

. . . where part of the a statute is void, as repugnant to the Organic Law, while another part is valid, the valid portion, if
separable from the valid, may stand and be enforced. But in order to do this, the valid portion must be in so far independent of
the invalid portion that it is fair to presume that the Legislative would have enacted it by itself if they had supposed that they
could not constitutionally enact the other. (Mutual Loan Co. vs. Martell, 200 Mass., 482; 86 N. E., 916; 128 A. S. R., 446;
Supervisors of Holmes Co. vs. Black Creek Drainage District, 99 Miss., 739; 55 Sou., 963.) Enough must remain to make a
complete, intelligible, and valid statute, which carries out the legislative intent. (Pearson vs. Bass. 132 Ga., 117; 63 S. E., 798.)
The void provisions must be eliminated without causing results affecting the main purpose of the Act, in a manner contrary to
the intention of the Legislature. (State vs. A. C. L. R., Co., 56 Fla., 617, 642; 47 Sou., 969; Harper vs. Galloway, 58 Fla., 255;
51 Sou., 226; 26 L. R. A., N. S., 794; Connolly vs. Union Sewer Pipe Co., 184 U. S., 540, 565; People vs. Strassheim, 240 Ill.,
279, 300; 88 N. E., 821; 22 L. R. A., N. S., 1135; State vs. Cognevich, 124 La., 414; 50 Sou., 439.) The language used in the
invalid part of a statute can have no legal force or efficacy for any purpose whatever, and what remains must express the
legislative will, independently of the void part, since the court has no power to legislate. (State vs. Junkin, 85 Neb., 1; 122 N.
W., 473; 23 L. R. A., N. S., 839; Vide, also,. U. S., vs. Rodriguez [1918], 38 Phil., 759; Pollock vs. Farmers' Loan and Trust Co.
[1895], 158 U. S., 601, 635; 39 Law. ed., 1108, 1125; 15 Sup. Ct. Rep., 912; 6 R.C.L., 121.)

It is contended that even if section 11, which makes the Probation Act applicable only in those provinces in which the respective
provincial boards provided for the salaries of probation officers were inoperative on constitutional grounds, the remainder of the Act
would still be valid and may be enforced. We should be inclined to accept the suggestions but for the fact that said section is, in our
opinion, is inseparably linked with the other portions of the Act that with the elimination of the section what would be left is the bare
idealism of the system, devoid of any practical benefit to a large number of people who may be deserving of the intended beneficial
result of that system. The clear policy of the law, as may be gleaned from a careful examination of the whole context, is to make the
application of the system dependent entirely upon the affirmative action of the different provincial boards through appropriation of the
salaries for probation officers at rates not lower than those provided for provincial fiscals. Without such action on the part of the various
boards, no probation officers would be appointed by the Secretary of Justice to act in the provinces. The Philippines is divided or
subdivided into provinces and it needs no argument to show that if not one of the provinces and this is the actual situation now
appropriate the necessary fund for the salary of a probation officer, probation under Act No. 4221 would be illusory. There can be no
probation without a probation officer. Neither can there be a probation officer without the probation system.

Section 2 of the Acts provides that the probation officer shall supervise and visit the probationer. Every probation officer is given, as to
the person placed in probation under his care, the powers of the police officer. It is the duty of the probation officer to see that the
conditions which are imposed by the court upon the probationer under his care are complied with. Among those conditions, the
following are enumerated in section 3 of the Act:

That the probationer (a) shall indulge in no injurious or vicious habits;

(b) Shall avoid places or persons of disreputable or harmful character;

(c) Shall report to the probation officer as directed by the court or probation officers;

(d) Shall permit the probation officer to visit him at reasonable times at his place of abode or elsewhere;

(e) Shall truthfully answer any reasonable inquiries on the part of the probation officer concerning his conduct or condition; "(f)
Shall endeavor to be employed regularly; "(g) Shall remain or reside within a specified place or locality;

(f) Shall make reparation or restitution to the aggrieved parties for actual damages or losses caused by his offense;
29
 (g) Shall comply with such orders as the court may from time to time make; and

(h) Shall refrain from violating any law, statute, ordinance, or any by-law or regulation, promulgated in accordance with law.

The court is required to notify the probation officer in writing of the period and terms of probation. Under section 4, it is only after the
period of probation, the submission of a report of the probation officer and appropriate finding of the court that the probationer has
complied with the conditions of probation that probation may be definitely terminated and the probationer finally discharged from
supervision. Under section 5, if the court finds that there is non-compliance with said conditions, as reported by the probation officer, it
may issue a warrant for the arrest of the probationer and said probationer may be committed with or without bail. Upon arraignment and
after an opportunity to be heard, the court may revoke, continue or modify the probation, and if revoked, the court shall order the
execution of the sentence originally imposed. Section 6 prescribes the duties of probation officers: "It shall be the duty of every
probation officer to furnish to all persons placed on probation under his supervision a statement of the period and conditions of their
probation, and to instruct them concerning the same; to keep informed concerning their conduct and condition; to aid and encourage
them by friendly advice and admonition, and by such other measures, not inconsistent with the conditions imposed by court as may
seem most suitable, to bring about improvement in their conduct and condition; to report in writing to the court having jurisdiction over
said probationers at least once every two months concerning their conduct and condition; to keep records of their work; make such
report as are necessary for the information of the Secretary of Justice and as the latter may require; and to perform such other duties as
are consistent with the functions of the probation officer and as the court or judge may direct. The probation officers provided for in this
Act may act as parole officers for any penal or reformatory institution for adults when so requested by the authorities thereof, and, when
designated by the Secretary of Justice shall act as parole officer of persons released on parole under Act Number Forty-one Hundred
and Three, without additional compensation."

It is argued, however, that even without section 11 probation officers maybe appointed in the provinces under section 10 of Act which
provides as follows:

There is hereby created in the Department of Justice and subject to its supervision and control, a Probation Office under the
direction of a Chief Probation Officer to be appointed by the Governor-General with the advise and consent of the Senate who
shall receive a salary of four eight hundred pesos per annum. To carry out this Act there is hereby appropriated out of any
funds in the Insular Treasury not otherwise appropriated, the sum of fifty thousand pesos to be disbursed by the Secretary of
Justice, who is hereby authorized to appoint probation officers and the administrative personnel of the probation officer under
civil service regulations from among those who possess the qualifications, training and experience prescribed by the Bureau of
Civil Service, and shall fix the compensation of such probation officers and administrative personnel until such positions shall
have been included in the Appropriation Act.

But the probation officers and the administrative personnel referred to in the foregoing section are clearly not those probation officers
required to be appointed for the provinces under section 11. It may be said, reddendo singula singulis, that the probation officers
referred to in section 10 above-quoted are to act as such, not in the various provinces, but in the central office known as the Probation
Office established in the Department of Justice, under the supervision of the Chief Probation Officer. When the law provides that "the
probation officer" shall investigate and make reports to the court (secs. 1 and 4); that "the probation officer" shall supervise and visit the
probationer (sec. 2; sec. 6, par. d); that the probationer shall report to the "probationer officer" (sec. 3, par. c.), shall allow "the
probationer officer" to visit him (sec. 3, par. d), shall truthfully answer any reasonable inquiries on the part of "the probation officer"
concerning his conduct or condition (sec. 3, par. 4); that the court shall notify "the probation officer" in writing of the period and terms of
probation (sec. 3, last par.), it means the probation officer who is in charge of a particular probationer in a particular province. It never
could have been intention of the legislature, for instance, to require the probationer in Batanes, to report to a probationer officer in the
City of Manila, or to require a probation officer in Manila to visit the probationer in the said province of Batanes, to place him under his
care, to supervise his conduct, to instruct him concerning the conditions of his probation or to perform such other functions as are
assigned to him by law.

That under section 10 the Secretary of Justice may appoint as many probation officers as there are provinces or groups of provinces is,
of course possible. But this would be arguing on what the law may be or should be and not on what the law is. Between is and ought
there is a far cry. The wisdom and propriety of legislation is not for us to pass upon. We may think a law better otherwise than it is. But
much as has been said regarding progressive interpretation and judicial legislation we decline to amend the law. We are not permitted
to read into the law matters and provisions which are not there. Not for any purpose not even to save a statute from the doom of
invalidity.

Upon the other hand, the clear intention and policy of the law is not to make the Insular Government defray the salaries of probation
officers in the provinces but to make the provinces defray them should they desire to have the Probation Act apply thereto. The sum of
P50,000, appropriated "to carry out the purposes of this Act", is to be applied, among other things, for the salaries of probation officers
in the central office at Manila. These probation officers are to receive such compensations as the Secretary of Justice may fix "until
such positions shall have been included in the Appropriation Act". It was the intention of the legislature to empower the Secretary of
Justice to fix the salaries of the probation officers in the provinces or later on to include said salaries in an appropriation act.
Considering, further, that the sum of P50,000 appropriated in section 10 is to cover, among other things, the salaries of the
administrative personnel of the Probation Office, what would be left of the amount can hardly be said to be sufficient to pay even
nominal salaries to probation officers in the provinces. We take judicial notice of the fact that there are 48 provinces in the Philippines
and we do not think it is seriously contended that, with the fifty thousand pesos appropriated for the central office, there can be in each
province, as intended, a probation officer with a salary not lower than that of a provincial fiscal. If this a correct, the contention that
without section 11 of Act No. 4221 said act is complete is an impracticable thing under the remainder of the Act, unless it is conceded
that in our case there can be a system of probation in the provinces without probation officers.

Probation as a development of a modern penology is a commendable system. Probation laws have been enacted, here and in other
countries, to permit what modern criminologist call the "individualization of the punishment", the adjustment of the penalty to the
character of the criminal and the circumstances of his particular case. It provides a period of grace in order to aid in the rehabilitation of
a penitent offender. It is believed that, in any cases, convicts may be reformed and their development into hardened criminals aborted.
It, therefore, takes advantage of an opportunity for reformation and avoids imprisonment so long as the convicts gives promise of
reform. (United States vs. Murray [1925], 275 U. S., 347 357, 358; 72 Law. ed., 309; 312, 313; 48 Sup. Ct. Rep., 146; Kaplan vs. Hecht,
24 F. [2d], 664, 665.) The Welfare of society is its chief end and aim. The benefit to the individual convict is merely incidental. But while
we believe that probation is commendable as a system and its implantation into the Philippines should be welcomed, we are forced by
our inescapable duty to set the law aside because of the repugnancy to our fundamental law.
30
In arriving at this conclusion, we have endeavored to consider the different aspects presented by able counsel for both parties, as well
in their memorandums as in their oral argument. We have examined the cases brought to our attention, and others we have been able
to reach in the short time at our command for the study and deliberation of this case. In the examination of the cases and in then
analysis of the legal principles involved we have inclined to adopt the line of action which in our opinion, is supported better reasoned
authorities and is more conducive to the general welfare. (Smith, Bell & Co. vs. Natividad [1919], 40 Phil., 136.) Realizing the conflict of
authorities, we have declined to be bound by certain adjudicated cases brought to our attention, except where the point or principle is
settled directly or by clear implication by the more authoritative pronouncements of the Supreme Court of the United States. This line of
approach is justified because:

(a) The constitutional relations between the Federal and the State governments of the United States and the dual character of
the American Government is a situation which does not obtain in the Philippines;

(b) The situation of s state of the American Union of the District of Columbia with reference to the Federal Government of the
United States is not the situation of the province with respect to the Insular Government (Art. I, sec. 8 cl. 17 and 10th
Amendment, Constitution of the United States; Sims vs. Rives, 84 Fed. [2d], 871),

(c) The distinct federal and the state judicial organizations of the United States do not embrace the integrated judicial system
of the Philippines (Schneckenburger vs. Moran [1936], 35 Off. Gaz., p. 1317);

(d) "General propositions do not decide concrete cases" (Justice Holmes in Lochner vs. New York [1904], 198 U. S., 45, 76; 49
Law. ed., 937, 949) and, "to keep pace with . . . new developments of times and circumstances" (Chief Justice Waite in
Pensacola Tel. Co. vs. Western Union Tel. Co. [1899], 96 U. S., 1, 9; 24 Law. ed., 708; Yale Law Journal, Vol. XXIX, No. 2,
Dec. 1919, 141, 142), fundamental principles should be interpreted having in view existing local conditions and environment.

Act No. 4221 is hereby declared unconstitutional and void and the writ of prohibition is, accordingly, granted. Without any
pronouncement regarding costs. So ordered.

Avancea, C.J., Imperial, Diaz and Concepcion, JJ., concur.

Villa-real and Abad Santos, JJ., concur in the result.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 88404 October 18, 1990

PHILIPPINE LONG DISTANCE TELEPHONE CO. [PLDT], petitioner,

vs.
THE NATIONAL TELECOMMUNICATIONS COMMISSION AND CELLCOM, INC., (EXPRESS TELECOMMUNICATIONS CO., INC.
[ETCI]), respondents.

Alampan & Manhit Law Offices for petitioner.

Gozon, Fernandez, Defensor & Parel for private respondent.

MELENCIO-HERRERA, J.:

Petitioner Philippine Long Distance Telephone Company (PLDT) assails, by way of certiorari and Prohibition under Rule 65, two (2)
Orders of public respondent National Telecommunications Commission (NTC), namely, the Order of 12 December 1988 granting private
respondent Express Telecommunications Co., Inc. (ETCI) provisional authority to install, operate and maintain a Cellular Mobile
Telephone System in Metro-Manila (Phase A) in accordance with specified conditions, and the Order, dated 8 May 1988, denying
reconsideration.

On 22 June 1958, Rep. Act No. 2090, was enacted, otherwise known as "An Act Granting Felix Alberto and Company, Incorporated, a
Franchise to Establish Radio Stations for Domestic and Transoceanic Telecommunications." Felix Alberto & Co., Inc. (FACI) was the
original corporate name, which was changed to ETCI with the amendment of the Articles of Incorporation in 1964. Much later,
"CELLCOM, Inc." was the name sought to be adopted before the Securities and Exchange Commission, but this was withdrawn and
abandoned.

On 13 May 1987, alleging urgent public need, ETCI filed an application with public respondent NTC (docketed as NTC Case No. 87-89)
for the issuance of a Certificate of Public Convenience and Necessity (CPCN) to construct, install, establish, operate and maintain a
Cellular Mobile Telephone System and an Alpha Numeric Paging System in Metro Manila and in the Southern Luzon regions, with a
prayer for provisional authority to operate Phase A of its proposal within Metro Manila.

PLDT filed an Opposition with a Motion to Dismiss, based primarily on the following grounds: (1) ETCI is not capacitated or qualified
under its legislative franchise to operate a systemwide telephone or network of telephone service such as the one proposed in its
application; (2) ETCI lacks the facilities needed and indispensable to the successful operation of the proposed cellular mobile telephone

31
system; (3) PLDT has itself a pending application with NTC, Case No. 86-86, to install and operate a Cellular Mobile Telephone System
for domestic and international service not only in Manila but also in the provinces and that under the "prior operator" or "protection of
investment" doctrine, PLDT has the priority or preference in the operation of such service; and (4) the provisional authority, if granted,
will result in needless, uneconomical and harmful duplication, among others.

In an Order, dated 12 November 1987, NTC overruled PLDT's Opposition and declared that Rep. Act No. 2090 (1958) should be
liberally construed as to include among the services under said franchise the operation of a cellular mobile telephone service.

In the same Order, ETCI was required to submit the certificate of registration of its Articles of Incorporation with the Securities and
Exchange Commission, the present capital and ownership structure of the company and such other evidence, oral or documentary, as
may be necessary to prove its legal, financial and technical capabilities as well as the economic justifications to warrant the setting up
of cellular mobile telephone and paging systems. The continuance of the hearings was also directed.

After evaluating the reconsideration sought by PLDT, the NTC, in October 1988, maintained its ruling that liberally construed,
applicant's franchise carries with it the privilege to operate and maintain a cellular mobile telephone service.

On 12 December 1988, NTC issued the first challenged Order. Opining that "public interest, convenience and necessity further demand
a second cellular mobile telephone service provider and finds PRIMA FACIE evidence showing applicant's legal, financial and technical
capabilities to provide a cellular mobile service using the AMPS system," NTC granted ETCI provisional authority to install, operate and
maintain a cellular mobile telephone system initially in Metro Manila, Phase A only, subject to the terms and conditions set forth in the
same Order. One of the conditions prescribed (Condition No. 5) was that, within ninety (90) days from date of the acceptance by ETCI
of the terms and conditions of the provisional authority, ETCI and PLDT "shall enter into an interconnection agreement for the provision
of adequate interconnection facilities between applicant's cellular mobile telephone switch and the public switched telephone network
and shall jointly submit such interconnection agreement to the Commission for approval."

In a "Motion to Set Aside the Order" granting provisional authority, PLDT alleged essentially that the interconnection ordered was in
violation of due process and that the grant of provisional authority was jurisdictionally and procedurally infirm. On 8 May 1989, NTC
denied reconsideration and set the date for continuation of the hearings on the main proceedings. This is the second questioned Order.

PLDT urges us now to annul the NTC Orders of 12 December 1988 and 8 May 1989 and to order ETCI to desist from, suspend, and/or
discontinue any and all acts intended for its implementation.

On 15 June 1989, we resolved to dismiss the petition for its failure to comply fully with the requirements of Circular No. 1-88. Upon
satisfactory showing, however, that there was, in fact, such compliance, we reconsidered the order, reinstated the Petition, and required
the respondents NTC and ETCI to submit their respective Comments.

On 27 February 1990, we issued a Temporary Restraining Order enjoining NTC to "Cease and Desist from all or any of its on-going
proceedings and ETCI from continuing any and all acts intended or related to or which will amount to the implementation/execution of
its provisional authority." This was upon PLDT's urgent manifestation that it had been served an NTC Order, dated 14 February 1990,
directing immediate compliance with its Order of 12 December 1988, "otherwise the Commission shall be constrained to take the
necessary measures and bring to bear upon PLDT the full sanctions provided by law."

We required PLDT to post a bond of P 5M. It has complied, with the statement that it was "post(ing) the same on its agreement and/or
consent to have the same forfeited in favor of Private Respondent ETCI/CELLCOM should the instant Petition be dismissed for lack of
merit." ETCI took exception to the sufficiency of the bond considering its initial investment of approximately P 225M, but accepted the
forfeiture proferred.

ETCI moved to have the TRO lifted, which we denied on 6 March 1990. We stated, however, that the inaugural ceremony ETCI had
scheduled for that day could proceed, as the same was not covered by the TRO.

PLDT relies on the following grounds for the issuance of the Writs prayed for:

1. Respondent NTC's subject order effectively licensed and/or authorized a corporate entity without any franchise to
operate a public utility, legislative or otherwise, to establish and operate a telecommunications system.

2. The same order validated stock transactions of a public service enterprise contrary to and/or in direct violation of
Section 20(h) of the Public Service Act.

3. Respondent NTC adjudicated in the same order a controverted matter that was not heard at all in the proceedings
under which it was promulgated.

As correctly pointed out by respondents, this being a special civil action for certiorari and Prohibition, we only need determine if NTC
acted without jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in granting provisional authority to
ETCI under the NTC questioned Orders of 12 December 1988 and 8 May 1989.

The case was set for oral argument on 21 August 1990 with the parties directed to address, but not limited to, the following issues: (1)
the status and coverage of Rep. Act No. 2090 as a franchise; (2) the transfer of shares of stock of a corporation holding a CPCN; and
(3) the principle and procedure of interconnection. The parties were thereafter required to submit their respective Memoranda, with
which they have complied.

We find no grave abuse of discretion on the part of NTC, upon the following considerations:

1. NTC Jurisdiction

32
There can be no question that the NTC is the regulatory agency of the national government with jurisdiction over all telecommunications
entities. It is legally clothed with authority and given ample discretion to grant a provisional permit or authority. In fact, NTC may, on its
own initiative, grant such relief even in the absence of a motion from an applicant.

Sec. 3. Provisional Relief. Upon the filing of an application, complaint or petition or at any stage thereafter, the
Board may grant on motion of the pleaders or on its own initiative, the relief prayed for, based on the pleading,
together with the affidavits and supporting documents attached thereto, without prejudice to a final decision after
completion of the hearing which shall be called within thirty (30) days from grant of authority asked for. (Rule 15,
Rules of Practice and Procedure Before the Board of Communications (now NTC).

What the NTC granted was such a provisional authority, with a definite expiry period of eighteen (18) months unless sooner renewed,
and which may be revoked, amended or revised by the NTC. It is also limited to Metro Manila only. What is more, the main proceedings
are clearly to continue as stated in the NTC Order of 8 May 1989.

The provisional authority was issued after due hearing, reception of evidence and evaluation thereof, with the hearings attended by
various oppositors, including PLDT. It was granted only after a prima facie showing that ETCI has the necessary legal, financial and
technical capabilities and that public interest, convenience and necessity so demanded.

PLDT argues, however, that a provisional authority is nothing short of a Certificate of Public Convenience and Necessity (CPCN) and
that it is merely a "distinction without a difference." That is not so. Basic differences do exist, which need not be elaborated on. What
should be borne in mind is that provisional authority would be meaningless if the grantee were not allowed to operate. Moreover, it is
clear from the very Order of 12 December 1988 itself that its scope is limited only to the first phase, out of four, of the proposed
nationwide telephone system. The installation and operation of an alpha numeric paging system was not authorized. The provisional
authority is not exclusive. Its lifetime is limited and may be revoked by the NTC at any time in accordance with law. The initial
expenditure of P130M more or less, is rendered necessary even under a provisional authority to enable ETCI to prove its capability.
And as pointed out by the Solicitor General, on behalf of the NTC, if what had been granted were a CPCN, it would constitute a final
order or award reviewable only by ordinary appeal to the Court of Appeals pursuant to Section 9(3) of BP Blg. 129, and not by certiorari
before this Court.

The final outcome of the application rests within the exclusive prerogative of the NTC. Whether or not a CPCN would eventually issue
would depend on the evidence to be presented during the hearings still to be conducted, and only after a full evaluation of the proof
thus presented.

2. The Coverage of ETCI's Franchise

Rep. Act No. 2090 grants ETCI (formerly FACI) "the right and privilege of constructing, installing, establishing and operating in the entire
Philippines radio stations for reception and transmission of messages on radio stations in the foreign and domestic public fixed point-to-
point and public base, aeronautical and land mobile stations, ... with the corresponding relay stations for the reception and transmission
of wireless messages on radiotelegraphy and/or radiotelephony ...." PLDT maintains that the scope of the franchise is limited to "radio
stations" and excludes telephone services such as the establishment of the proposed Cellular Mobile Telephone System (CMTS).
However, in its Order of 12 November 1987, the NTC construed the technical term "radiotelephony" liberally as to include the operation
of a cellular mobile telephone system. It said:

In resolving the said issue, the Commission takes into consideration the different definitions of the term
"radiotelephony." As defined by the New International Webster Dictionary the term "radiotelephony" is defined as a
telephone carried on by aid of radiowaves without connecting wires. The International Telecommunications Union
(ITU) defines a "radiotelephone call" as a "telephone call, originating in or intended on all or part of its route over the
radio communications channels of the mobile service or of the mobile satellite service." From the above definitions,
while under Republic Act 2090 a system-wide telephone or network of telephone service by means of connecting
wires may not have been contemplated, it can be construed liberally that the operation of a cellular mobile telephone
service which carries messages, either voice or record, with the aid of radiowaves or a part of its route carried over
radio communication channels, is one included among the services under said franchise for which a certificate of
public convenience and necessity may be applied for.

The foregoing is the construction given by an administrative agency possessed of the necessary special knowledge, expertise and
experience and deserves great weight and respect (Asturias Sugar Central, Inc. v. Commissioner of Customs, et al., L-19337,
September 30, 1969, 29 SCRA 617). It can only be set aside on proof of gross abuse of discretion, fraud, or error of law (Tupas Local
Chapter No. 979 v. NLRC, et al., L-60532-33, November 5, 1985, 139 SCRA 478). We discern none of those considerations sufficient to
warrant judicial intervention.

3. The Status of ETCI Franchise

PLDT alleges that the ETCI franchise had lapsed into nonexistence for failure of the franchise holder to begin and complete
construction of the radio system authorized under the franchise as explicitly required in Section 4 of its franchise, Rep. Act No.
2090. 1 PLDT also invokes Pres. Decree No. 36, enacted on 2 November 1972, which legislates the mandatory cancellation or
invalidation of all franchises for the operation of communications services, which have not been availed of or used by the party or
parties in whose name they were issued.

However, whether or not ETCI, and before it FACI, in contravention of its franchise, started the first of its radio telecommunication
stations within (2) years from the grant of its franchise and completed the construction within ten (10) years from said date; and whether
or not its franchise had remained unused from the time of its issuance, are questions of fact beyond the province of this Court, besides
the well-settled procedural consideration that factual issues are not subjects of a special civil action for certiorari (Central Bank of the
Philippines vs. Court of Appeals, G.R. No. 41859, 8 March 1989, 171 SCRA 49; Ygay vs. Escareal, G.R. No. 44189, 8 February 1985,
135 SCRA 78; Filipino Merchant's Insurance Co., Inc. vs. Intermediate Appellate Court, G.R. No. 71640, 27 June 1988, 162 SCRA
669). Moreover, neither Section 4, Rep. Act No. 2090 nor Pres. Decree No. 36 should be construed as self-executing in working a
forfeiture. Franchise holders should be given an opportunity to be heard, particularly so, where, as in this case, ETCI does not admit

33
any breach, in consonance with the rudiments of fair play. Thus, the factual situation of this case differs from that in Angeles Ry Co. vs.
City of Los Angeles (92 Pacific Reporter 490) cited by PLDT, where the grantee therein admitted its failure to complete the conditions of
its franchise and yet insisted on a decree of forfeiture.

More importantly, PLDT's allegation partakes of a Collateral attack on a franchise Rep. Act No. 2090), which is not allowed. A franchise
is a property right and cannot be revoked or forfeited without due process of law. The determination of the right to the exercise of a
franchise, or whether the right to enjoy such privilege has been forfeited by non-user, is more properly the subject of the prerogative writ
of quo warranto, the right to assert which, as a rule, belongs to the State "upon complaint or otherwise" (Sections 1, 2 and 3, Rule 66,
Rules of Court), 2 the reason being that the abuse of a franchise is a public wrong and not a private injury. A forfeiture of a franchise will
have to be declared in a direct proceeding for the purpose brought by the State because a franchise is granted by law and its unlawful
exercise is primarily a concern of Government.

A ... franchise is ... granted by law, and its ... unlawful exercise is the concern primarily of the Government. Hence, the
latter as a rule is the party called upon to bring the action for such ... unlawful exercise of franchise. (IV-B V.
FRANCISCO, 298 [1963 ed.], citing Cruz vs. Ramos, 84 Phil. 226).

4. ETCI's Stock Transactions

ETCI admits that in 1964, the Albertos, as original owners of more than 40% of the outstanding capital stock sold their holdings to the
Orbes. In 1968, the Albertos re-acquired the shares they had sold to the Orbes. In 1987, the Albertos sold more than 40% of their
shares to Horacio Yalung. Thereafter, the present stockholders acquired their ETCI shares. Moreover, in 1964, ETCI had increased its
capital stock from P40,000.00 to P360,000.00; and in 1987, from P360,000.00 to P40M.

PLDT contends that the transfers in 1987 of the shares of stock to the new stockholders amount to a transfer of
ETCI's franchise, which needs Congressional approval pursuant to Rep. Act No. 2090, and since such approval had
not been obtained, ETCI's franchise had been invalidated. The provision relied on reads, in part, as follows:

SECTION 10. The grantee shall not lease, transfer, grant the usufruct of, sell or assign this franchise nor the rights
and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity nor
merge with any other person, company or corporation organized for the same purpose, without the approval of the
Congress of the Philippines first had. ...

It should be noted, however, that the foregoing provision is, directed to the "grantee" of the franchise, which is the corporation itself and
refers to a sale, lease, or assignment of that franchise. It does not include the transfer or sale of shares of stock of a corporation by the
latter's stockholders.

The sale of shares of stock of a public utility is governed by another law, i.e., Section 20(h) of the Public Service Act (Commonwealth
Act No. 146). Pursuant thereto, the Public Service Commission (now the NTC) is the government agency vested with the authority to
approve the transfer of more than 40% of the subscribed capital stock of a telecommunications company to a single transferee, thus:

SEC. 20. Acts requiring the approval of the Commission. Subject to established stations and exceptions and saving
provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof,
without the approval and authorization of the Commission previously had

xxx xxx xxx

(h) To sell or register in its books the transfer or sale of shares of its capital stock, if the result of that sale in itself or in
connection with another previous sale, shall be to vest in the transferee more than forty per centum of the subscribed
capital of said public service. Any transfer made in violation of this provision shall be void and of no effect and shall
not be registered in the books of the public service corporation. Nothing herein contained shall be construed to
prevent the holding of shares lawfully acquired. (As amended by Com. Act No. 454).

In other words, transfers of shares of a public utility corporation need only NTC approval, not Congressional authorization. What
transpired in ETCI were a series of transfers of shares starting in 1964 until 1987. The approval of the NTC may be deemed to have
been met when it authorized the issuance of the provisional authority to ETCI. There was full disclosure before the NTC of the transfers.
In fact, the NTC Order of 12 November 1987 required ETCI to submit its "present capital and ownership structure." Further, ETCI even
filed a Motion before the NTC, dated 8 December 1987, or more than a year prior to the grant of provisional authority, seeking approval
of the increase in its capital stock from P360,000.00 to P40M, and the stock transfers made by its stockholders.

A distinction should be made between shares of stock, which are owned by stockholders, the sale of which requires only NTC approval,
and the franchise itself which is owned by the corporation as the grantee thereof, the sale or transfer of which requires Congressional
sanction. Since stockholders own the shares of stock, they may dispose of the same as they see fit. They may not, however, transfer or
assign the property of a corporation, like its franchise. In other words, even if the original stockholders had transferred their shares to
another group of shareholders, the franchise granted to the corporation subsists as long as the corporation, as an entity, continues to
exist The franchise is not thereby invalidated by the transfer of the shares. A corporation has a personality separate and distinct from
that of each stockholder. It has the right of continuity or perpetual succession (Corporation Code, Sec. 2).

To all appearances, the stock transfers were not just for the purpose of acquiring the ETCI franchise, considering that, as heretofore
stated, a series of transfers was involved from 1964 to 1987. And, contrary to PLDT's assertion, the franchise was not the only property
of ETCI of meaningful value. The "zero" book value of ETCI assets, as reflected in its balance sheet, was plausibly explained as due to
the accumulated depreciation over the years entered for accounting purposes and was not reflective of the actual value that those
assets would command in the market.

34
But again, whether ETCI has offended against a provision of its franchise, or has subjected it to misuse or abuse, may more properly be
inquired into in quo warranto proceedings instituted by the State. It is the condition of every franchise that it is subject to amendment,
alteration, or repeal when the common good so requires (1987 Constitution, Article XII, Section 11).

5. The NTC Interconnection Order

In the provisional authority granted by NTC to ETCI, one of the conditions imposed was that the latter and PLDT were to enter into an
interconnection agreement to be jointly submitted to NTC for approval.

PLDT vehemently opposes interconnection with its own public switched telephone network. It contends: that while PLDT welcomes
interconnections in the furtherance of public interest, only parties who can establish that they have valid and subsisting legislative
franchises are entitled to apply for a CPCN or provisional authority, absent which, NTC has no jurisdiction to grant them the CPCN or
interconnection with PLDT; that the 73 telephone systems operating all over the Philippines have a viability and feasibility independent
of any interconnection with PLDT; that "the NTC is not empowered to compel such a private raid on PLDT's legitimate income arising
out of its gigantic investment;" that "it is not public interest, but purely a private and selfish interest which will be served by an
interconnection under ETCI's terms;" and that "to compel PLDT to interconnect merely to give viability to a prospective competitor,
which cannot stand on its own feet, cannot be justified in the name of a non-existent public need" (PLDT Memorandum, pp. 48 and 50).

PLDT cannot justifiably refuse to interconnect.

Rep. Act No. 6849, or the Municipal Telephone Act of 1989, approved on 8 February 1990, mandates interconnection providing as it
does that "all domestic telecommunications carriers or utilities ... shall be interconnected to the public switch telephone network." Such
regulation of the use and ownership of telecommunications systems is in the exercise of the plenary police power of the State for the
promotion of the general welfare. The 1987 Constitution recognizes the existence of that power when it provides.

SEC. 6. The use of property bears a social function, and all economic agents shall contribute to the common good.
Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have
the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive
justice and to intervene when the common good so demands (Article XII).

The interconnection which has been required of PLDT is a form of "intervention" with property rights dictated by "the objective of
government to promote the rapid expansion of telecommunications services in all areas of the Philippines, ... to maximize the use of
telecommunications facilities available, ... in recognition of the vital role of communications in nation building ... and to ensure that all
users of the public telecommunications service have access to all other users of the service wherever they may be within the
Philippines at an acceptable standard of service and at reasonable cost" (DOTC Circular No. 90-248). Undoubtedly, the encompassing
objective is the common good. The NTC, as the regulatory agency of the State, merely exercised its delegated authority to regulate the
use of telecommunications networks when it decreed interconnection.

The importance and emphasis given to interconnection dates back to Ministry Circular No. 82-81, dated 6 December 1982, providing:

Sec. 1. That the government encourages the provision and operation of public mobile telephone service within local
sub-base stations, particularly, in the highly commercialized areas;

Sec. 5. That, in the event the authority to operate said service be granted to other applicants, other than the franchise
holder, the franchise operator shall be under obligation to enter into an agreement with the domestic telephone
network, under an interconnection agreement;

Department of Transportation and Communication (DOTC) Circular No. 87-188, issued in 1987, also decrees:

12. All public communications carriers shall interconnect their facilities pursuant to comparatively efficient
interconnection (CEI) as defined by the NTC in the interest of economic efficiency.

The sharing of revenue was an additional feature considered in DOTC Circular No. 90-248, dated 14 June 1990, laying down the
"Policy on Interconnection and Revenue Sharing by Public Communications Carriers," thus:

WHEREAS, it is the objective of government to promote the rapid expansion of telecommunications services in all
areas of the Philippines;

WHEREAS, there is a need to maximize the use of telecommunications facilities available and encourage investment
in telecommunications infrastructure by suitably qualified service providers;

WHEREAS, in recognition of the vital role of communications in nation building, there is a need to ensure that all
users of the public telecommunications service have access to all other users of the service wherever they may be
within the Philippines at an acceptable standard of service and at reasonable cost.

WHEREFORE, ... the following Department policies on interconnection and revenue sharing are hereby promulgated:

1. All facilities offering public telecommunication services shall be interconnected into the
nationwide telecommunications network/s.

xxx xxx xxx

35
 4. The interconnection of networks shall be effected in a fair and non-discriminatory manner and
within the shortest time-frame practicable.

5. The precise points of interface between service operators shall be as defined by the NTC; and
the apportionment of costs and division of revenues resulting from interconnection of
telecommunications networks shall be as approved and/or prescribed by the NTC.

xxx xxx xxx

Since then, the NTC, on 12 July 1990, issued Memorandum Circular No. 7-13-90 prescribing the "Rules and Regulations Governing the
Interconnection of Local Telephone Exchanges and Public Calling Offices with the Nationwide Telecommunications Network/s, the
Sharing of Revenue Derived Therefrom, and for Other Purposes."

The NTC order to interconnect allows the parties themselves to discuss and agree upon the specific terms and conditions of the
interconnection agreement instead of the NTC itself laying down the standards of interconnection which it can very well impose. Thus it
is that PLDT cannot justifiably claim denial of clue process. It has been heard. It will continue to be heard in the main proceedings. It will
surely heard in the negotiations concerning the interconnection agreement.

As disclosed during the hearing, the interconnection sought by ETCI is by no means a "parasitic dependence" on PLDT. The ETCI
system can operate on its own even without interconnection, but it will be limited to its own subscribers. What interconnection seeks to
accomplish is to enable the system to reach out to the greatest number of people possible in line with governmental policies laid down.
Cellular phones can access PLDT units and vice versa in as wide an area as attainable. With the broader reach, public interest and
convenience will be better served. To be sure, ETCI could provide no mean competition (although PLDT maintains that it has nothing to
fear from the "innocuous interconnection"), and eat into PLDT's own toll revenue cream PLDT revenue," in its own words), but all for the
eventual benefit of all that the system can reach.

6. Ultimate Considerations

The decisive consideration are public need, public interest, and the common good. Those were the overriding factors which motivated
NTC in granting provisional authority to ETCI. Article II, Section 24 of the 1987 Constitution, recognizes the vital role of communication
and information in nation building. It is likewise a State policy to provide the environment for the emergence of communications
structures suitable to the balanced flow of information into, out of, and across the country (Article XVI, Section 10, Ibid.). A modern and
dependable communications network rendering efficient and reasonably priced services is also indispensable for accelerated economic
recovery and development. To these public and national interests, public utility companies must bow and yield.

Despite the fact that there is a virtual monopoly of the telephone system in the country at present. service is sadly inadequate.
Customer demands are hardly met, whether fixed or mobile. There is a unanimous cry to hasten the development of a modern,
efficient, satisfactory and continuous telecommunications service not only in Metro Manila but throughout the archipelago. The need
therefor was dramatically emphasized by the destructive earthquake of 16 July 1990. It may be that users of the cellular mobile
telephone would initially be limited to a few and to highly commercialized areas. However, it is a step in the right direction towards the
enhancement of the telecommunications infrastructure, the expansion of telecommunications services in, hopefully, all areas of the
country, with chances of complete disruption of communications minimized. It will thus impact on, the total development of the country's
telecommunications systems and redound to the benefit of even those who may not be able to subscribe to ETCI.

Free competition in the industry may also provide the answer to a much-desired improvement in the quality and delivery of this type of
public utility, to improved technology, fast and handy mobile service, and reduced user dissatisfaction. After all, neither PLDT nor any
other public utility has a constitutional right to a monopoly position in view of the Constitutional proscription that no franchise certificate
or authorization shall be exclusive in character or shall last longer than fifty (50) years (ibid., Section 11; Article XIV Section 5, 1973
Constitution; Article XIV, Section 8, 1935 Constitution). Additionally, the State is empowered to decide whether public interest demands
that monopolies be regulated or prohibited (1987 Constitution. Article XII, Section 19).

WHEREFORE, finding no grave abuse of discretion, tantamount to lack of or excess of jurisdiction, on the part of the National
Telecommunications Commission in issuing its challenged Orders of 12 December 1988 and 8 May 1989 in NTC Case No. 87-39, this
Petition is DISMISSED for lack of merit. The Temporary Restraining Order heretofore issued is LIFTED. The bond issued as a condition
for the issuance of said restraining Order is declared forfeited in favor of private respondent Express Telecommunications Co., Inc.
Costs against petitioner.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-54305 February 14, 1990

ATLAS CONSOLIDATED MINING & DEVELOPMENT CORPORATION, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, MALAYAN INTEGRATED INDUSTRIES CORPORATION, BIGA COPPER MINES
EXPLORATION COMPANY, PABLO B. GOROSIN, FRANCISCO B. GOROSIN, HEIRS OF PEDRO B. GOROSIN and VICENTE T.
GARAYGAY, respondents.

36
Belo, Ermitao, Abiera & Associates for petitioner.

Jose T. Sumcad for respondent Malayan Integrated Industries, et al.

Ramon B. Ceniza for intervenor.

GANCAYCO, J.:

Can a person who is not a party to a contract file a petition for declaratory relief and seek a judicial intepretation of such contract? Can
a trial court which had already taken cognizance of an action involving a mining controversy be divested of jurisdiction to hear and
decide the case upon the promulgation of Presidential Decree No. 1281? 1 These are the threshold issues brought about by the long
drawn legal battle between the conflicting parties in this case.

The facts are undisputed.

On June 5, 1973, Atlas Consolidated Mining & Development Corporation (ATLAS) entered into an operating agreement with the heirs of
Manuel Cuenco and Jose P. Velez (collectively referred to herein as CUENCO-VELEZ) whereby in consideration of royalties to be paid
by ATLAS to CUENCO-VELEZ, the former was granted the right to explore, develop and operate twelve (12) mining claims belonging to
the latter located at Toledo City, Cebu.

On June 17, 1973, ATLAS entered into a similar agreement with the Biga Copper Mines Exploration Company (BIGA COPPER), a
partnership composed of Pablo B. Gorosin, Francisco B. Gorosin, Pedro B. Gorosin and Vicente T. Garaygay (collectively referred to
herein as the BIGA PARTNERS). Subject of this Operating Agreement are thirty-one (31) mining claims of BIGA-COPPER likewise
located at Toledo City, Cebu.

It appears, however, that of the total mining claims "leased" by ATLAS from both the CUENCO-VELEZ and BIGA COPPER, nine (9)
mining claims overlap. These nine (9) overlapping mining claims became the subject of Mines Administrative Cases Nos. V-727 and V-
750 whereby under date of February 12, 1974, the Director of Mines resolved the same in favor of CUENCO-VELEZ. BIGA COPPER
appealed this decision to the Secretary of Agriculture and Natural Resources who, in a decision dated April 14, 1974, in DANR Cases
Nos. 3936 and 3936-A, affirmed the decision of the Director of Mines. This later decision was appealed to the Office of the President
under O.P. Case No. 0435.

During the pendency of this appeal in the Office of the President, the parties, namely, CUENCO-VELEZ and BIGA COPPER, entered
into a compromise agreement. 2 This compromise agreement enabled BIGA-COPPER to eventually lay claim over the nine (9)
overlapping mining claims.

Earlier, ATLAS alleged that when it started the operation of its Carmen Project, which includes some of the mining claims subject of the
aforestated Operating Agreements with BIGA COPPER and CUENCO-VELEZ ATLAS received numerous letters from third- parties
claiming that they were assignees of BIGA COPPER and the BIGA PARTNERS over the mining claims. These third-parties claim that
as such assignees, they are legally entitled to receive the corresponding royalties from the mining operation. In effect, they ask ATLAS
that they be substituted to the rights of BIGA COPPER and the BIGA PARTNERS under the operating agreement.

ATLAS allegedly conducted a verification of the said demands and later on confirmed that before the registration of the Articles of
Partnership of BIGA COPPER, the BIGA PARTNERS sold and/or assigned some of their respective shares, rights, interests and
participations over the mining claims to third parties 3 and that BIGA COPPER, acting separately from the BIGA PARTNERS, likewise
sold and/or assigned its undivided shares, interests and participations over the mining claims to third parties. 4

On the other hand, a certain Alejandro T. Escano wrote ATLAS informing the latter that he is an assignee of CUENCO-VELEZ with
respect to the three (3) mining claims which CUENCO-VELEZ retained under the compromise agreement with BIGA COPPER. Escano,
alleged that CUENCO-VELEZ had assigned to him fifty percent (50%) of their rights, interests and participations in the said mining
claims. 5 In turn, CUENCO-VELEZ advised ATLAS that their assignment to Alejandro T. Escano was already revoked or rescinded for
failure of the said assignee to fulfill the conditions contained in their deed of assignment. 6

In the light of the foregoing situation, ATLAS instituted a petition for declaratory relief with the then Court of First Instance of Cebu,
Branch 8, and which was docketed as Civil Case No. 16669-R. Cited as respondents therein were BIGA COPPER, BIGA PARTNERS,
CUENCO-VELEZ and some thirty-one (31) assignees. 7

In their amended petition filed with the trial court, ATLAS raised the following issues for resolution, to wit:

1. Since ATLAS is now in the process of developing and exploring the Carmen project which includes the mining
claims of the BIGA COPPER and CUENCO-VELEZ, should it extract and sipose (sic) of ores from the BIGA
COPPER and CUENCO-VELEZ claims, to whom shall ATLAS pay the royalties due thereon?

2. Considering that a Compromise Agreement has been entered into by and between BIGA COPPER and CUENCO-
VELEZ on some claims contested by them, which compromise agreement was already submitted to the President for
his final approval, should ATLAS respect the same before the final approval of the President in paying royalties under
the operating agreements with BIGA COPPER and CUENCO-VELEZ, respectively?

3. Considering further that before the compromise agreement was entered into, BIGA COPPER had already assigned
a large part of its interest to third parties, does the compromise agreement entered into by BIGA COPPER bind these
assignees? Can BIGA COPPER enter into a compromise agreement with the CUENCO-VELEZ insofar as the shares
of these assignees are concerned?

37
 4. Considering finally that before and after the compromise agreement was entered into, BIGA COPPER and/or its
partners as signed and/or sold various rights to royalties over the mining claims covered by its Operating Agreement
with ATLAS; on the other hand, CUENCO-VELEZ made assignments after the compromise agreement was entered
into, should ATLAS recognize these assignments and pay royalties to the assignees?

5. Since the assignments made by BIGA COPPER and/or its PARTNERS exceeded the participation and/or shares of
the PARTNERS in the partnership, which assignment or who of the assignees are entitled to royalties?

6. Considering that the PARTNERS made individual assignments of their respective shares, rights, interests and/or
participations in the so-called partnership, the total of which together with the assignments made directly by the said
partnership itself, aggregated 37.5% of the interest therein as of the date the PARTNERS registered the Articles of
Partnership of BIGA COPPER, wherein the PARTNERS represented that they own 25% each in the partnership, with
the Securities and Exchange Commission, is ATLAS, by law, bound to respect the assignments by the PARTNERS
and/or by the partnership itself prior to and/or subsequent to said registration?

7. Considering that the PARTNERS have also made assignments of their respective shares, rights, interests and/or
participations after the registration of the said partnership, are those assignments valid and binding upon ATLAS? 8

To this petition for declaratory relief, respondents filed a motion to dismiss dated January 18, 1978 stating as grounds therefor the
following:

1. The Honorable Court has no jurisdiction over the subject of the action or suit;

2. The complaint states no cause of action;

3. The court has no jurisdiction over the nature of the suit. 9

ATLAS filed a written opposition thereto dated February 4, 1978. 10

Meanwhile, due to the promulgation of Presidential Decree No. 1281, effective January 16, 1978, a number of the defendants in the
court below filed a supplemental motion to dismiss dated February 17, 1978. 11 They alleged in their supplemental motion that the
operating agreement which BIGA COPPER signed with ATLAS had already been revoked by a letter dated February 11, 1978, 12 and
that by reason of this rescission, the trial court is deemed to have lost jurisdiction pursuant to Section 7, paragraphs A and C and
Section 12 of Presidential Decree No. 1281.

Section 7, paragraphs A and C and Section 12 of the Decree provide:

SECTION 7. In addition to its regulatory and adjudicative functions over companies, partnerships or persons engaged
in mining explorations, development and exploitation, the Bureau of Mines shall have original and exclusive
jurisdiction to hear and decide cases involving:

(a) a mining property subject of different agreements entered into by the claim holder thereof with several mining
operators;

xxx xxx xxx

(b) Cancellation and/or enforcement of mining contracts due to the refusal of the claim owner/operator to abide by the
terms and conditions thereof.

xxx xxx xxx

SECTION 12. All laws, executive orders, decrees, rules and regulations or parts thereof contrary to or inconsistent
with the provisions of this decree, are hereby repealed and amended or modified accordingly. (Emphasis supplied.)

On March 13,1978, ATLAS filed a supplemental opposition to the supplemental motion to dismiss arguing that BIGA COPPER had no
right to unilaterally cancel their operating agreement. 13

After considering the pleadings filed by the conflicting parties to the case, the trial court, then presided by Judge Regino Hermosisima,
Jr., issued an order dated May 29, 1978 requiring the defendants therein to answer the petition for declaratory relief it appearing "[t]hat
the ground stated in the motion to dismiss does not appear to be indubitable." 14

Accordingly, the defendants filed their answer which reiterated the allegations contained in their motion to dismiss filed earlier. 15

On December 29, 1978, some of the defendants in the court below, namely, BIGA COPPER, BIGA PARTNERS, Malayan Integrated
Industries Corp., Guillermo Ponce and Esmael Garaygay, filed another motion to dismiss the proceedings reiterating, once again, the
same allegations in their previous motions to dismiss. 16 It was likewise alleged in that same motion that the trial court had already lost
jurisdiction over the case in view of an action for annulment of the operating agreement between BIGA COPPER and ATLAS which had
been filed with the Bureau of Mines (docketed as Special Case No. V-95) and which was set for hearing on January 22, 1979.

In an order dated January 17, 1979, the trial court denied the above mentioned motion, ruling that there is no mining controversy
involved in the case before it. Further, the court a quo clarified that the declaratory action is merely for a judicial pronouncement on the
rights and obligations of ATLAS under several operating agreements. It went on to state that the action for annulment of the operating

38
agreement filed with the Bureau of Mines is not Identical with the petition for declaratory relief and, therefore, does not oust the trial
court of its jurisdiction to hear the petition. 17

Respondents herein sought reconsideration of the immediately preceding order but failed in their attempt. Thus, a petition for certiorari
was filed with the Court of Appeals, docketed as CA-G.R. No. SP-09773, assailing the orders of the court a quo as having been issued
with grave abuse of discretion amounting to lack or excess of jurisdiction.

The issues presented before the Court of Appeals were as follows:

(1) Whether or not the trial court had jurisdiction to try the action for declaratory relief, and assuming it had, whether it
was divested of said jurisdiction by the subsequent enactment of PD 1281 ... and

(2) Whether or not respondent Judge committed grave abuse of discretion ... in issuing the assailed orders. 18

In its decision, 19 the appellate court ruled in favor of herein respondents and ordered the trial court to dismiss the declaratory action.
We quote the pertinent portions of that decision, to wit:

But while we hold that respondent Judge has jurisdiction over the declaratory action of which he was not divested by
the promulgation of PD 1281, he should have precisely exercised his jurisdiction by sustaining petitioners' motion to
dismiss grounded on lack of cause of action primordially because the allegations of the complaint patently present no
justiciable controversy. ...

xxx xxx xxx

Considering then that the declaratory suit calls for resolution of questions which necessarily involve the validity and
enforcement of the operating and deeds of assignment, now subject of pending administrative cases before the
Bureau of Mines from which adequate and exclusive relief may be obtained, and the fact that Atlas' right to file the
suit is even questionable, the ineluctable conclusion is that respondent Judge gravely abused his discretion ...

xxx xxx xxx

Here, We are confronted with a situation where the declaratory action should not have been allowed xxx, the
allegations of the complaint clearly suggesting more of a request for an advisory opinion or the more proper remedy
of interpleader. ... 20

Claiming to be adversely affected by the decision of the Court of Appeals, ATLAS interposed the present petition for review on certiorari.

After requiring respondents herein to file their comments to the petition, 21 Epifanio A. Anoos, claiming to have a legal interest over the
matter in litigation, filed with this Court a motion to admit his petition in intervention dated September 12, 1980. In support thereof,
Anoos alleges that he is one of the defendants in the proceedings for declaratory relief; and that the trial court in the same case, under
date of February 21, 1979, had already rendered a summary judgment in his favor. 22

Anoos, in effect, joins ATLAS in its prayer to have the decision of the respondent appellate court set aside and additionally, as
arguments peculiar only to him, asserts that (1) the Court of Appeals violated the due process clause of the Constitution when it
rendered the questioned decision without notice to the rest of the parties in the proceeding below; and (2) that the summary judgment
in his favor dated February 21, 1979 had already become final and executory by reason of the failure of private respondents herein to
take steps to appeal therefrom. 23

On December 8, 1980, Milagros Cuenco, Antonio V. Cuenco, Ramon V. Cuenco, Manuel V. Cuenco, Jr., Jose V. Cuenco, Filomena
Cuenco, Jesus V. Cuenco and Jose P. Velez, earlier referred to herein as CUENCO-VELEZ, filed with this Court a similar petition in
intervention 24 alleging that (1) their right to both substantive and procedural due process was violated, inasmuch as they were not
impleaded before the respondent appellate court; and (2) that the decision of the appellate court is not in accordance with law. 25

In a resolution dated July 1, 1981 this Court finally resolved to give due course to the petition for review filed by ATLAS. In that same
resolution, the motions for intervention of both Efifanio A. Anoos and CUENCO-VELEZ were granted. 26

We now proceed to the discussion of the merits of this petition. To reiterate the first issuecan a person who is not a party to a contract
file a petition for declaratory relief and seek a judicial interpretation of such contract?

We rule in the negative.

Declaratory relief has been defined as an action by any person interested under a deed, will, contract or other written instrument or
whose rights are affected by a statute, ordinance, executive order or regulation to determine any question of construction or validity
arising under the instrument, executive order or regulation, or statute and for a declaration of his rights and duties thereunder. 27 The
only question that may be raised in such kind of petition is the question of "construction' or "validity" arising under an instrument or
statute. 28

Corollary to this is the general rule that such an action must be justified such that no other adequate relief or remedy is available under
the circumstances. 29 This, in turn, can be explained by the fact that the only object of a declaratory action is merely to terminate
uncertainties in an instrument or a statute. The judgment of the court concerned cannot extend beyond a declaration of the rights and
duties of the parties to the action or provide for corrective relief. 30

39
In the case at bar, ATLAS wants Us to sustain its position that under the factual backdrop narrated earlier, it is entitled, as a matter of
law, to proceed with its petition for declaratory relief.

After a careful analysis of the arguments presented by the parties herein, this Court rules that there is no legal ground to sustain the
contention of ATLAS.

ATLAS cannot be considered as an interested party under the deeds of assignment and, therefore, has no standing to institute the
declaratory action.

It cannot be disputed that ATLAS, being one of the parties to the operating agreements, has an interest therein. A review of the record,
in fact, reveals that ATLAS purports to be seeking a judicial interpretation of its operating agreements with BIGA COPPER and
CUENCO-VELEZ But after evaluating the lengthy arguments it presented to justify the declaratory action this Court arrives at one
logical conclusionthe ambiguity is not in the operating agreements themselves but in the validity of the assignments of mining rights
made by BIGA COPPER and CUENCO-VELEZ to third parties. Obviously, these third parties are not part of ATLAS' contract with either
BIGA COPPER or CUENCO-VELEZ. In the same vein, neither is ATLAS a party to the deeds of assignments executed by BIGA
COPPER or CUENCO-VELEZ. While this Court may concede that as a result of the numerous assignments made by both BIGA
COPPER and CUENCO-VELEZ, ATLAS is left in a quandary as to whom to pay the royalties in the course of its mining operations,
legally speaking however, the ambiguity or uncertainty is not of the character as to call for the procedural remedy of a declaratory action
ATLAS not being a party to the said deeds of assignment.

While this issue cannot find a square precedent in existing jurisprudence, however, pronouncements made by this Court in Tadeo vs.
Provincial Fiscal of Pangasinan 31 and United Central & Cellulose Labor Association (PLUM) vs. Santos 32 are of great significance in
the resolution of this legal question.

In Tadeo, this Court ruled that a notary public before whom the execution of a deed of sale was acknowledged is not entitled to file an
action for declaratory judgment. "None of his rights or duties thereunder need be declared." 33 On the other hand, in United Central, We
seriously doubted if a declaratory action can be filed in relation to a contract by persons who are not parties thereto after considering
that a substantive law, more specifically Article 1311 of the Civil Code provides that contracts take effect only between the parties."
Thus, "[i]t is quite plain that one who is not a party to a contract cannot have the interest in it that the rule requires as basis for a
declaratory relief." 34

Aside from the reason advanced herein above, this Court is in agreement with the observation made by respondent appellate court at
least insofar as the question of justiciability is concerned Clearly then, other effective remedies are available to ATLASsuch as an
action for interpleaderto determine with finality who among BIGA COPPER, CUENCO-VELEZ and the latter's respective assignees is
entitled to the royalties it will pay later on under the operating agreements. At this juncture, it is worthy to recall that courts should refuse
to exercise its prerogative to declare rights and to construe instruments where it would not terminate the uncertainty or controversy
which gave rise to the action or where it is not necessary and proper at the time under all circumstances. 35

We now come to the second issue. Is the trial court divested of jurisdiction to hear and decide a mining controversy in view of the
promulgation of Presidential Decree No. 1281?

The answer is in the affirmative.

Tracing the development of Presidential Decree No. 1281, Justice Nocon, now Presiding Justice of the Court of Appeals, in his
separate concurring opinion on the assailed decision, thus, correctly noted the following:

As early as January 15, 1973, PD 99-A provided where mining controversies should be litigated: Director of Mines
whose decision is appealable to the Secretary of Agriculture and Natural Resources and finally to the President (Sec.
2). All laws in conflict or inconsistent therewith were repealed (Sec. 3). ...

The same procedure was reiterated in PD 309 (Sec. 5), issued on October 10, 1973, to accelerate disposition of
mining controversies with creation (sic) of a panel of investigators to submit a report to the Director of Mines within
five days (Sec. 1). Exclusive jurisdiction of the Bureau of Mines is implicit from Section 3 thereof which give parties in
pending litigations "before any judicial tribunal" 15 days to file 'an adverse claim of any nature whatsoever with the
Bureau of Mines.'

PD 1281 issued on January 16, 1978, gives more teeth to the Bureau of Mines (Sec. 3) for its regulatory and
adjudicative powers and functions which becomes (sic) 'original and exclusive even over 'cancellation and/or
enforcement of mining contracts,' reiterating the same procedure laid down in PD 99-A and PD 309. Clearly, the three
Decrees99-A, 309 and 1281divested judicial tribunals of jurisdiction over mining controversies including
cancellation and enforcement of mining contracts by making the regulatory and adjudicative functions of the Bureau
'original and exclusive' (Sec. 7, PD 1281). 36 (Emphasis supplied).

This Court agrees with the conclusion espoused by the respondent appellate court as to this aspect of the case.

The declaratory action flied by ATLAS is within the ambit of Presidential Decree No. 1281. It is not an entirely different or distinct cause
of action. Were We to rule otherwise it would be ratifying two judicial bodies exercising jurisdiction over an essentially the same subject
mattera situation analogous to split jurisdiction which is obnoxious to the orderly administration of justice. 37

Presidential Decree No. 1281 is a remedial statute. It does not create new rights or take away rights that are already vested. It only
operates in furtherance of a remedy or confirmation of rights already in existence. It does not come within the legal purview of a
prospective law. As such, it can be applied retroactively independent of the general rule against the retrospective application of
statutes. 38 Being procedural in nature, it shall apply to all actions pending at the time of its enactment except only with respect to those
cases which had already attained the character of a final and executory judgment. 39 Were it not so, the purpose of the Decree, which is
to facilitate the immediate resolution of mining controversies by granting jurisdiction to a body or agency more adept to the technical

40
complexities of mining operations, would be thwarted and rendered meaningless. Litigants in a mining controversy cannot be permitted
to choose a forum of convenience. Jurisdiction is imposed by law and not by any of the parties to such proceedings.

Furthermore, Presidential Decree No. 1281 is a special law and under a well-accepted principle in statutory construction, the special
law will prevail over a statute or law of general application. 40 Jurisdiction having been conferred by a special statute therefore prevails
over the jurisdiction granted by a general law. 41

Finally, as aptly observed by the respondent appellate court, it is a rule oft repeated by this Court that the construction placed upon a
law by the officials in charge of enforcing the same deserves great and considerable weight. Unless the same would result in legal
absurdity, the same should be respected. 42

From the foregoing, the inevitable conclusion is that the operative act which divested the trial court of jurisdiction to decide the
declaratory action is not respondents' act of filing an administrative suit for the cancellation of their operating agreement with ATLAS.
With or without such administrative action, the trial court is deemed to have lost jurisdiction to proceed with the declaratory action
immediately upon the effectivity of Presidential Decree No. 1281 on January 16, 1978.

The case of Twin Peaks Mining Association vs. Navarro, 43 while not squarely applicable to the present case in view of the difference in
the dates when the respective declaratory actions were commenced, 44 nevertheless bolsters the conclusion We have reached thus far
when it pointed out that the promulgation of Presidential Decree No. 1281 is indicative of "[t]he trend to make the adjudication of mining
cases a purely administrative matter." 45

WHEREFORE, inasmuch as the trial court has lost jurisdiction to proceed, hear and decide the action for declaratory relief filed by
ATLAS, the summary judgment in favor of herein intervenor Efifanio A. Anoos is declared null and void, having been rendered on
February 21, 1979 when Presidential Decree No. 1281 was already in full force and effect. The petition in intervention of CUENCO-
VELEZ is hereby dismissed for lack of merit. And, finally, the decision of the Court of Appeals in CA-G.R. No. SP-09773 is affirmed
insofar as it declared that the trial court acted with grave abuse of discretion in proceeding with the declaratory action. No
pronouncement as to costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-46496 February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and

NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.

Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.

LAUREL, J.:

The Solicitor-General in behalf of the respondent Court of Industrial Relations in the above-entitled case has filed a motion for
reconsideration and moves that, for the reasons stated in his motion, we reconsider the following legal conclusions of the majority
opinion of this Court:

1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o que no sea para una determinada,
termina o bien por voluntad de cualquiera de las partes o cada vez que ilega el plazo fijado para el pago de los salarios segun
costumbre en la localidad o cunado se termine la obra;

2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya colectivamente, con ell, sin tiempo fijo,
y que se han visto obligados a cesar en sus tarbajos por haberse declarando paro forzoso en la fabrica en la cual tarbajan,
dejan de ser empleados u obreros de la misma;

3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus osbreros sin tiempo fijo de duracion y
sin ser para una obra determiminada y que se niega a readmitir a dichos obreros que cesaron como consecuencia de un paro
forzoso, no es culpable de practica injusta in incurre en la sancion penal del articulo 5 de la Ley No. 213 del Commonwealth,
aunque su negativa a readmitir se deba a que dichos obreros pertenecen a un determinado organismo obrero, puesto que
tales ya han dejado deser empleados suyos por terminacion del contrato en virtud del paro.

The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the judgement rendered by the majority of this
Court and the remanding of the case to the Court of Industrial Relations for a new trial, and avers:

1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather soles in ANG TIBAY making it
necessary for him to temporarily lay off the members of the National Labor Union Inc., is entirely false and unsupported by the
records of the Bureau of Customs and the Books of Accounts of native dealers in leather.

41
 2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme to systematically prevent the
forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army.

3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re supposed delay of leather soles from the
States) was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the
Philippine Army.

4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union dominated by Toribio Teodoro, the
existence and functions of which are illegal. (281 U.S., 548, petitioner's printed memorandum, p. 25.)

5. That in the exercise by the laborers of their rights to collective bargaining, majority rule and elective representation are
highly essential and indispensable. (Sections 2 and 5, Commonwealth Act No. 213.)

6. That the century provisions of the Civil Code which had been (the) principal source of dissensions and continuous civil war
in Spain cannot and should not be made applicable in interpreting and applying the salutary provisions of a modern labor
legislation of American origin where the industrial peace has always been the rule.

7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating against the National Labor Union,
Inc., and unjustly favoring the National Workers' Brotherhood.

8. That the exhibits hereto attached are so inaccessible to the respondents that even with the exercise of due diligence they
could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations.

9. That the attached documents and exhibits are of such far-reaching importance and effect that their admission would
necessarily mean the modification and reversal of the judgment rendered herein.

The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the respondent National Labor Union, Inc.

In view of the conclusion reached by us and to be herein after stead with reference to the motion for a new trial of the respondent
National Labor Union, Inc., we are of the opinion that it is not necessary to pass upon the motion for reconsideration of the Solicitor-
General. We shall proceed to dispose of the motion for new trial of the respondent labor union. Before doing this, however, we deem it
necessary, in the interest of orderly procedure in cases of this nature, in interest of orderly procedure in cases of this nature, to make
several observations regarding the nature of the powers of the Court of Industrial Relations and emphasize certain guiding principles
which should be observed in the trial of cases brought before it. We have re-examined the entire record of the proceedings had before
the Court of Industrial Relations in this case, and we have found no substantial evidence that the exclusion of the 89 laborers here was
due to their union affiliation or activity. The whole transcript taken contains what transpired during the hearing and is more of a record of
contradictory and conflicting statements of opposing counsel, with sporadic conclusion drawn to suit their own views. It is evident that
these statements and expressions of views of counsel have no evidentiary value.

The Court of Industrial Relations is a special court whose functions are specifically stated in the law of its creation (Commonwealth Act
No. 103). It is more an administrative than a part of the integrated judicial system of the nation. It is not intended to be a mere receptive
organ of the Government. Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and deciding
only cases that are presented to it by the parties litigant, the function of the Court of Industrial Relations, as will appear from perusal of
its organic law, is more active, affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in the determination of
disputes between employers and employees but its functions in the determination of disputes between employers and employees but
its functions are far more comprehensive and expensive. It has jurisdiction over the entire Philippines, to consider, investigate, decide,
and settle any question, matter controversy or dispute arising between, and/or affecting employers and employees or laborers, and
regulate the relations between them, subject to, and in accordance with, the provisions of Commonwealth Act No. 103 (section 1). It
shall take cognizance or purposes of prevention, arbitration, decision and settlement, of any industrial or agricultural dispute causing or
likely to cause a strike or lockout, arising from differences as regards wages, shares or compensation, hours of labor or conditions of
tenancy or employment, between landlords and tenants or farm-laborers, provided that the number of employees, laborers or tenants of
farm-laborers involved exceeds thirty, and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or
by any or both of the parties to the controversy and certified by the Secretary of labor as existing and proper to be by the Secretary of
Labor as existing and proper to be dealth with by the Court for the sake of public interest. (Section 4, ibid.) It shall, before hearing the
dispute and in the course of such hearing, endeavor to reconcile the parties and induce them to settle the dispute by amicable
agreement. (Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it shall investigate and study all industries
established in a designated locality, with a view to determinating the necessity and fairness of fixing and adopting for such industry or
locality a minimum wage or share of laborers or tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants or less
to landowners. (Section 5, ibid.) In fine, it may appeal to voluntary arbitration in the settlement of industrial disputes; may employ
mediation or conciliation for that purpose, or recur to the more effective system of official investigation and compulsory arbitration in
order to determine specific controversies between labor and capital industry and in agriculture. There is in reality here a mingling of
executive and judicial functions, which is a departure from the rigid doctrine of the separation of governmental powers.

In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated September 13, 1939, we had occasion to
joint out that the Court of Industrial Relations et al., G. R. No. 46673, promulgated September 13, 1939, we had occasion to point out
that the Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and the Act requires it to "act according
to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any
technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as it
may deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be restricted to the specific relief claimed or
demands made by the parties to the industrial or agricultural dispute, but may include in the award, order or decision any matter or
determination which may be deemed necessary or expedient for the purpose of settling the dispute or of preventing further industrial or
agricultural disputes. (section 13, ibid.) And in the light of this legislative policy, appeals to this Court have been especially regulated by
the rules recently promulgated by the rules recently promulgated by this Court to carry into the effect the avowed legislative purpose.
The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does
not mean that it can, in justifiable cases before it, entirely ignore or disregard the fundamental and essential requirements of due
process in trials and investigations of an administrative character. There are primary rights which must be respected even in
proceedings of this character:
42
 (1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his
own case and submit evidence in support thereof. In the language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct.
773, 999, 82 Law. ed. 1129, "the liberty and property of the citizen shall be protected by the rudimentary requirements of fair
play.

(2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights
which he asserts but the tribunal must consider the evidence presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S.
468, 56 S. Ct. 906, 80 law. ed. 1288.) In the language of this court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce
evidence, without the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the
person or persons to whom the evidence is presented can thrust it aside without notice or consideration."

(3) "While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be
disregarded, namely, that of having something to support it is a nullity, a place when directly attached." (Edwards vs.
McCoy, supra.) This principle emanates from the more fundamental is contrary to the vesting of unlimited power anywhere.
Law is both a grant and a limitation upon power.

(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs. Agustin, G.R. No. 45844,
promulgated November 29, 1937, XXXVI O. G. 1335), but the evidence must be "substantial." (Washington, Virginia and
Maryland Coach Co. v. national labor Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such
relevant evidence as a reasonable mind accept as adequate to support a conclusion." (Appalachian Electric Power v. National
Labor Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13,
15; Ballston-Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that
"the rules of evidence prevailing in courts of law and equity shall not be controlling.' The obvious purpose of this and similar
provisions is to free administrative boards from the compulsion of technical rules so that the mere admission of matter which
would be deemed incompetent inn judicial proceedings would not invalidate the administrative order. (Interstate Commerce
Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville and
Nashville R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene and Southern Ry. Co. S. Ct.
220, 225, 74 Law. ed. 624.) But this assurance of a desirable flexibility in administrative procedure does not go far as to justify
orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute
substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op.,
p. 131.)"

(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed
to the parties affected. (Interstate Commence Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.)
Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to
know and meet the case against them. It should not, however, detract from their duty actively to see that the law is enforced,
and for that purpose, to use the authorized legal methods of securing evidence and informing itself of facts material and
relevant to the controversy. Boards of inquiry may be appointed for the purpose of investigating and determining the facts in
any given case, but their report and decision are only advisory. (Section 9, Commonwealth Act No. 103.) The Court of
Industrial Relations may refer any industrial or agricultural dispute or any matter under its consideration or advisement to a
local board of inquiry, a provincial fiscal. a justice of the peace or any public official in any part of the Philippines for
investigation, report and recommendation, and may delegate to such board or public official such powers and functions as the
said Court of Industrial Relations may deem necessary, but such delegation shall not affect the exercise of the Court itself of
any of its powers. (Section 10, ibid.)

(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the
law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. It may be that the
volume of work is such that it is literally Relations personally to decide all controversies coming before them. In the United
States the difficulty is solved with the enactment of statutory authority authorizing examiners or other subordinates to render
final decision, with the right to appeal to board or commission, but in our case there is no such statutory authority.

(7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties
to the proceeding can know the various issues involved, and the reasons for the decision rendered. The performance of this
duty is inseparable from the authority conferred upon it.

In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to the alleged agreement between the
Ang Tibay and the National Worker's Brotherhood (appendix A), the record is barren and does not satisfy the thirst for a factual basis
upon which to predicate, in a national way, a conclusion of law.

This result, however, does not now preclude the concession of a new trial prayed for the by respondent National Labor Union, Inc., it is
alleged that "the supposed lack of material claimed by Toribio Teodoro was but a scheme adopted to systematically discharged all the
members of the National Labor Union Inc., from work" and this avernment is desired to be proved by the petitioner with the "records of
the Bureau of Customs and the Books of Accounts of native dealers in leather"; that "the National Workers Brotherhood Union of Ang
Tibay is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal." Petitioner further
alleges under oath that the exhibits attached to the petition to prove his substantial avernments" are so inaccessible to the respondents
that even within the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of
Industrial Relations", and that the documents attached to the petition "are of such far reaching importance and effect that their
admission would necessarily mean the modification and reversal of the judgment rendered herein." We have considered the reply of
Ang Tibay and its arguments against the petition. By and large, after considerable discussions, we have come to the conclusion that the
interest of justice would be better served if the movant is given opportunity to present at the hearing the documents referred to in his
motion and such other evidence as may be relevant to the main issue involved. The legislation which created the Court of Industrial
Relations and under which it acts is new. The failure to grasp the fundamental issue involved is not entirely attributable to the parties
adversely affected by the result. Accordingly, the motion for a new trial should be and the same is hereby granted, and the entire record
of this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen the case, receive all such evidence as
may be relevant and otherwise proceed in accordance with the requirements set forth hereinabove. So ordered.

Avancea, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.

43
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 79538 October 18, 1990

FELIPE YSMAEL, JR. & CO., INC., petitioner,

vs.
THE DEPUTY EXECUTIVE SECRETARY, THE SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, THE DIRECTOR
OF THE BUREAU OF FOREST DEVELOPMENT and TWIN PEAKS DEVELOPMENT AND REALTY CORPORATION, respondents.

Taada, Vivo & Tan for petitioner.

Antonio E. Escober and Jurado Law Office for respondent Twin Peaks Development Corporation.

COURTS, J.:

Soon after the change of government in February 1986, petitioner sent a letter dated March 17, 1986 to the Office of the President, and
another letter dated April 2, 1986 to Minister Ernesto Maceda of the Ministry of Natural Resources [MNR], seeking: (1) the
reinstatement of its timber license agreement which was cancelled in August 1983 during the Marcos administration; (2) the revocation
of TLA No. 356 which was issued to Twin Peaks Development and Realty Corporation without public bidding and in violation of forestry
laws, rules and regulations; and, (3) the issuance of an order allowing petitioner to take possession of all logs found in the concession
area [Annexes "6" and "7" of the Petition; Rollo, pp. 54-63].

Petitioner made the following allegations:

(a) That on October 12, 1965, it entered into a timber license agreement designated as TLA No. 87 with the Department of Agriculture
and Natural Resources, represented by then Secretary Jose Feliciano, wherein it was issued an exclusive license to cut, collect and
remove timber except prohibited species within a specified portion of public forest land with an area of 54,920 hectares located in the
municipality of Maddela, province of Nueva Vizcaya * from October 12, 1965 until June 30, 1990;

(b) That on August 18, 1983, the Director of the Bureau of Forest Development [hereinafter referred to as "Bureau"], Director Edmundo
Cortes, issued a memorandum order stopping all logging operations in Nueva Vizcaya and Quirino provinces, and cancelling the
logging concession of petitioner and nine other forest concessionaires, pursuant to presidential instructions and a memorandum order
of the Minister of Natural Resources Teodoro Pena [Annex "5" of the Petition; Rollo, p. 49];

(c) that on August 25, 1983, petitioner received a telegram from the Bureau, the contents of which were as follows:

PURSUANT TO THE INSTRUCTIONS OF THE PRESIDENT YOU ARE REQUESTED TO STOP ALL LOGGING
OPERATIONS TO CONSERVE REMAINING FORESTS PLEASE CONDUCT THE ORDERLY PULL-OUT OF
LOGGING MACHINERIES AND EQUIPMENT AND COORDINATE WITH THE RESPECTIVE DISTRICT
FORESTERS FOR THE INVENTORY OF LOGS CUT PRIOR TO THIS ORDER THE SUBMISSION OF A
COMPLIANCE REPORT WITHIN THIRTY DAYS SHALL BE APPRECIATED [Annex "4" of the Petition; Rollo, p.
48];

(d) That after the cancellation of its timber license agreement, it immediately sent a letter addressed to then President Ferdinand
Marcos which sought reconsideration of the Bureau's directive, citing in support thereof its contributions to alleging that it was not given
the forest conservation and opportunity to be heard prior to the cancellation of its logging 531, but no operations (Annex "6" of the
Petition; Rollo, pp. 50 favorable action was taken on this letter;

(e) That barely one year thereafter, approximately one-half or 26,000 hectares of the area formerly covered by TLA No. 87 was re-
awarded to Twin Peaks Development and Reality Corporation under TLA No. 356 which was set to expire on July 31, 2009, while the
other half was allowed to be logged by Filipinas Loggers, Inc. without the benefit of a formal award or license; and,

(f) That the latter entities were controlled or owned by relatives or cronies of deposed President Ferdinand Marcos. Acting on
petitioner's letter, the MNR through then Minister Ernesto Maceda issued an order dated July 22, 1986 denying petitioner's request. The
Ministry ruled that a timber license was not a contract within the due process clause of the Constitution, but only a privilege which could
be withdrawn whenever public interest or welfare so demands, and that petitioner was not discriminated against in view of the fact that
it was among ten concessionaires whose licenses were revoked in 1983. Moreover, emphasis was made of the total ban of logging
operations in the provinces of Nueva Ecija, Nueva Vizcaya, Quirino and Ifugao imposed on April 2, 1986, thus:

xxx xxx xxx

It should be recalled that [petitioner's] earlier request for reinstatement has been denied in view of the total ban of all
logging operations in the provinces of Nueva Ecija, Nueva Vizcaya, Quirino and Ifugao which was imposed for
reasons of conservation and national security.

The Ministry imposed the ban because it realizes the great responsibility it bear [sic] in respect to forest t considers
itself the trustee thereof. This being the case, it has to ensure the availability of forest resources not only for the
present, but also for the future generations of Filipinos.
44
 On the other hand, the activities of the insurgents in these parts of the country are well documented. Their financial
demands on logging concessionaires are well known. The government, therefore, is well within its right to deprive its
enemy of sources of funds in order to preserve itself, its established institutions and the liberty and democratic way of
life of its people.

xxx xxx xxx

[Annex "9" of the Petition, pp. 2-4; Rollo, pp. 65-67.]

Petitioner moved for reconsideration of the aforestated order reiterating, among others. its request that TLA No. 356 issued to private
respondent be declared null and void. The MNR however denied this motion in an order dated September 15, 1986. stating in part:

xxx xxx xxx

Regarding [petitioner's] request that the award of a 26,000 hectare portion of TLA No. 87 to Twin Peaks Realty
Development Corporation under TLA No. 356 be declared null and void, suffice it to say that the Ministry is now in the
process of reviewing all contracts, permits or other form of privileges for the exploration, development, exploitation, or
utilization of natural resources entered into, granted, issued or acquired before the issuance of Proclamation No. 3,
otherwise known as the Freedom Constitution for the purpose of amending, modifying or revoking them when the
national interest so requires.

xxx xxx xxx

The Ministry, through the Bureau of Forest Development, has jurisdiction and authority over all forest lands. On the
basis of this authority, the Ministry issued the order banning all logging operations/activities in Quirino province,
among others, where movant's former concession area is located. Therefore, the issuance of an order disallowing
any person or entity from removing cut or uncut logs from the portion of TLA No. 87, now under TLA No. 356, would
constitute an unnecessary or superfluous act on the part of the Ministry.

xxx xxx xxx

[Annex "11" of the Petition, pp. 3-4; Rollo, pp. 77-78.]

On November 26, 1986, petitioner's supplemental motion for reconsideration was likewise denied. Meanwhile, per MNR Administrative
Order No. 54, series of 1986, issued on November 26, 1986, the logging ban in the province of Quirino was lifted.

Petitioner subsequently appealed from the orders of the MNR to the Office of the President. In a resolution dated July 6, 1987, the
Office of the President, acting through then Deputy Executive Secretary Catalino Macaraig, denied petitioner's appeal for lack of merit.
The Office of the President ruled that the appeal of petitioner was prematurely filed, the matter not having been terminated in the MNR.
Petitioner's motion for reconsideration was denied on August 14, 1987.

Hence, petitioner filed directly with this Court a petition for certiorari, with prayer for the issuance of a restraining order or writ of
preliminary injunction, on August 27, 1987. On October 13, 1987, it filed a supplement to its petition for certiorari. Thereafter, public and
private respondents submitted their respective comments, and petitioner filed its consolidated reply thereto. In a resolution dated May
22, 1989, the Court resolved to give due course to the petition.

After a careful study of the circumstances in the case at bar, the Court finds several factors which militate against the issuance of a writ
of certiorari in favor of petitioner.

1. Firstly, the refusal of public respondents herein to reverse final and executory administrative orders does not constitute grave abuse
of discretion amounting to lack or excess of jurisdiction.

It is an established doctrine in this jurisdiction that the decisions and orders of administrative agencies have upon their finality, the force
and binding effect of a final judgment within the purview of the doctrine of res judicata. These decisions and orders are as conclusive
upon the rights of the affected parties as though the same had been rendered by a court of general jurisdiction. The rule of res
judicata thus forbids the reopening of a matter once determined by competent authority acting within their exclusive jurisdiction
[See Brillantes v. Castro, 99 Phil. 497 (1956); Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430, September
30, 1963, 9 SCRA 72; San Luis v. Court of Appeals, G.R. No. 80160, June 26, 1989].

In the case at bar, petitioner's letters to the Office of the President and the MNR [now the Department of Environment and Natural
Resources (DENR) dated March 17, 1986 and April 2, 1986, respectively, sought the reconsideration of a memorandum order issued by
the Bureau of Forest Development which cancelled its timber license agreement in 1983, as well as the revocation of TLA No. 356
subsequently issued by the Bureau to private respondents in 1984.

But as gleaned from the record, petitioner did not avail of its remedies under the law, i.e. Section 8 of Pres. Dec. No. 705 as amended,
for attacking the validity of these administrative actions until after 1986. By the time petitioner sent its letter dated April 2, 1986 to the
newly appointed Minister of the MNR requesting reconsideration of the above Bureau actions, these were already settled matters as far
as petitioner was concerned [See Rueda v. Court of Agrarian Relations, 106 Phil. 300 (1959); Danan v. Aspillera G.R. No. L-17305,
November 28, 1962, 6 SCRA 609; Ocampo v. Arboleda G.R. No. L-48190, August 31, 1987, 153 SCRA 374].

No particular significance can be attached to petitioner's letter dated September 19, 1983 which petitioner claimed to have sent to then
President Marcos [Annex "6" of Petition, Rollo, pp. 50-53], seeking the reconsideration of the 1983 order issued by Director Cortes of
the Bureau. It must be pointed out that the averments in this letter are entirely different from the charges of fraud against officials under
the previous regime made by petitioner in its letters to public respondents herein. In the letter to then President Marcos, petitioner

45
simply contested its inclusion in the list of concessionaires, whose licenses were cancelled, by defending its record of selective logging
and reforestation practices in the subject concession area. Yet, no other administrative steps appear to have been taken by petitioner
until 1986, despite the fact that the alleged fraudulent scheme became apparent in 1984 as evidenced by the awarding of the subject
timber concession area to other entities in that year.

2. Moreover, petitioner is precluded from availing of the benefits of a writ of certiorari in the present case because he failed to file his
petition within a reasonable period.

The principal issue ostensibly presented for resolution in the instant petition is whether or not public respondents herein acted with
grave abuse of discretion amounting to lack or excess of jurisdiction in refusing to overturn administrative orders issued by their
predecessors in the past regime. Yet, what the petition ultimately seeks is the nullification of the Bureau orders cancelling TLA No. 87
and granting TLA No. 356 to private respondent, which were issued way back in 1983 and 1984, respectively.

Once again, the fact that petitioner failed to seasonably take judicial recourse to have the earlier administrative actions reviewed by the
courts through a petition for certiorari is prejudicial to its cause. For although no specific time frame is fixed for the institution of a special
civil action for certiorari under Rule 65 of the Revised Rules of Court, the same must nevertheless be done within a "reasonable time".
The yardstick to measure the timeliness of a petition for certiorari is the "reasonableness of the length of time that had expired from the
commission of the acts complained of up to the institution of the proceeding to annul the same" [Toledo v. Pardo, G.R. No. 56761,
November 19, 1982, 118 SCRA 566, 571]. And failure to file the petition for certiorari within a reasonable period of time renders the
petitioner susceptible to the adverse legal consequences of laches [Municipality of Carcar v. Court of First Instance of Cebu, G.R. No.
L-31628, December 27, 1982, 119 SCRA 392).

Laches is defined as the failure or neglect for an unreasonable and unexplained length of time to do that which by exercising due
diligence, could or should have been done earlier, or to assert a right within a reasonable time, warranting a presumption that the party
entitled thereto has either abandoned it or declined to assert it [Tijam v. Sibonghanoy, G.R. No. L-21450, April 15, 1968, 23 SCRA 29;
Seno v. Mangubat, G.R. No. L-44339, December 2, 1987, 156 SCRA 113]. The rule is that unreasonable delay on the part of a plaintiff
in seeking to enforce an alleged right may, depending upon the circumstances, be destructive of the right itself. Verily, the laws aid
those who are vigilant, not those who sleep upon their rights (Vigilantibus et non dormientibus jura subveniunt) [See Buenaventura v.
David, 37 Phil. 435 (1918)].

In the case at bar, petitioner waited for at least three years before it finally filed a petition for certiorari with the Court attacking the
validity of the assailed Bureau actions in 1983 and 1984. Considering that petitioner, throughout the period of its inaction, was not
deprived of the opportunity to seek relief from the courts which were normally operating at the time, its delay constitutes unreasonable
and inexcusable neglect, tantamount to laches. Accordingly, the writ of certiorari requiring the reversal of these orders will not lie.

3. Finally, there is a more significant factor which bars the issuance of a writ of certiorari in favor of petitioner and against public
respondents herein. It is precisely this for which prevents the Court from departing from the general application of the rules enunciated
above.

A cursory reading of the assailed orders issued by public respondent Minister Maceda of the MNR which were ed by the Office of the
President, will disclose public policy consideration which effectively forestall judicial interference in the case at bar,

Public respondents herein, upon whose shoulders rests the task of implementing the policy to develop and conserve the country's
natural resources, have indicated an ongoing department evaluation of all timber license agreements entered into, and permits or
licenses issued, under the previous dispensation. In fact, both the executive and legislative departments of the incumbent
administration are presently taking stock of its environmental policies with regard to the utilization of timber lands and developing an
agenda for future programs for their conservation and rehabilitation.

The ongoing administrative reassessment is apparently in response to the renewed and growing global concern over the despoliation of
forest lands and the utter disregard of their crucial role in sustaining a balanced ecological system. The legitimacy of such concern can
hardly be disputed, most especially in this country. The Court takes judicial notice of the profligate waste of the country's forest
resources which has not only resulted in the irreversible loss of flora and fauna peculiar to the region, but has produced even more
disastrous and lasting economic and social effects. The delicate balance of nature having been upset, a vicious cycle of floods and
droughts has been triggered and the supply of food and energy resources required by the people seriously depleted.

While there is a desire to harness natural resources to amass profit and to meet the country's immediate financial requirements, the
more essential need to ensure future generations of Filipinos of their survival in a viable environment demands effective and
circumspect action from the government to check further denudation of whatever remains of the forest lands. Nothing less is expected
of the government, in view of the clear constitutional command to maintain a balanced and healthful ecology. Section 16 of Article II of
the 1987 Constitution provides:

SEC. 16. The State shall protect and promote the right of the people to a balanced and healthful ecology in accord
with the rhythm and harmony of nature.

Thus, while the administration grapples with the complex and multifarious problems caused by unbridled exploitation of these
resources, the judiciary will stand clear. A long line of cases establish the basic rule that the courts will not interfere in matters which are
addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical
knowledge and training of such agencies [See Espinosa v. Makalintal, 79 Phil. 134 (1947); Coloso v. Board of Accountancy, 92 Phil. 938
(1953); Pajo v. Ago, 108 Phil. 905 (1960); Suarez v. Reyes, G.R. No. L-19828, February 28, 1963, 7 SCRA 461; Ganitano v. Secretary
of Agriculture and Natural Resources, G. R. No. L-21167, March 31, 1966, 16 SCRA 543; Villegas v. Auditor General, G.R. No. L-21352,
November 29, 1966, 18 SCRA 877; Manuel v. Villena, G.R. No. L-28218, February 27, 1971, 37 SCRA 745; Lacuesta v. Herrera, G.R.
No. L-33646, January 28, 1975, 62 SCRA 115; Lianga Bay Logging Co., Inc. v. Enage, G.R. No. L-30637, July 16, 1987, 152 SCRA 80].
More so where, as in the present case, the interests of a private logging company are pitted against that of the public at large on the
pressing public policy issue of forest conservation. For this Court recognizes the wide latitude of discretion possessed by the
government in determining the appropriate actions to be taken to preserve and manage natural resources, and the proper parties who
should enjoy the privilege of utilizing these resources [Director of Forestry v. Munoz, G.R. No. L-24796, June 28, 1968, 23 SCRA 1183;

46
Lim, Sr. v. The Secretary of Agriculture and Natural Resources, G.R. No. L-26990, August 31, 1970, 34 SCRA 751]. Timber licenses,
permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest
resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the
State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest
products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests so
require. Thus, they are not deemed contracts within the purview of the due process of law clause [See Sections 3 (ee) and 20 of Pres.
Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302].

In fine, the legal precepts highlighted in the foregoing discussion more than suffice to justify the Court's refusal to interfere in the DENR
evaluation of timber licenses and permits issued under the previous regime, or to pre-empt the adoption of appropriate corrective
measures by the department.

Nevertheless, the Court cannot help but express its concern regarding alleged irregularities in the issuance of timber license
agreements to a number of logging concessionaires.

The grant of licenses or permits to exploit the country's timber resources, if done in contravention of the procedure outlined in the law,
or as a result of fraud and undue influence exerted on department officials, is indicative of an arbitrary and whimsical exercise of the
State's power to regulate the use and exploitation of forest resources. The alleged practice of bestowing "special favors" to preferred
individuals, regardless of merit, would be an abuse of this power. And this Court will not be a party to a flagrant mockery of the avowed
public policy of conservation enshrined in the 1987 Constitution. Therefore, should the appropriate case be brought showing a clear
grave abuse of discretion on the part of officials in the DENR and related bureaus with respect to the implementation of this public
policy, the Court win not hesitate to step in and wield its authority, when invoked, in the exercise of judicial powers under the
Constitution [Section 1, Article VIII].

However, petitioner having failed to make out a case showing grave abuse of discretion on the part of public respondents herein, the
Court finds no basis to issue a writ of certiorari and to grant any of the affirmative reliefs sought.

WHEREFORE, the present petition is DISMISSED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 85502 February 24, 1992

SUNVILLE TIMBER PRODUCTS, INC., petitioner,

vs.
HON. ALFONSO G. ABAD, as Judge RTC, Br. 22 of Pagadian City, COURT OF APPEALS, ISIDRO GILBOLINGO AND
ROBUSTIANO BUGTAI, respondents.

Manuel V. Trinida for petitioner.

Adolf Leo P. Boncavil for private respondents.

CRUZ, J.:

The Court will focus its attention only on one of the issues raised in this petition the correct application of the doctrine of exhaustion
of administrative remedies.

The petitioner was granted a Timber License Agreement (TLA), authorizing it to cut, remove and utilize timber within the concession
area covering 29,500 hectares of forest land in Zamboanga del Sur, for a period of ten years expiring on September 31, 1992.

On July 31, 1987, the herein private respondents filed a petition with the Department of Environment and Natural Resources for the
cancellation of the TLA on the ground of serious violations of its conditions and the provisions of forestry laws and regulations.

The same charges were subsequently made, also by the herein private respondents, in a complaint for injunction with damages against
the petitioner, which was docketed as Civil Case No. 2732 in the Regional Trial Court of Pagadian City.

The petitioner moved to dismiss this case on three grounds, to wit: 1) the court had no jurisdiction over the complaint; 2) the plaintiffs
had not yet exhausted administrative remedies; and 3) the injunction sought was expressly prohibited by section 1 of PD 605.

Judge Alfonso G. Abad denied the motion to dismiss on December 11, 1987, 1 and the motion for reconsideration on February 15,
1988. 2 The petitioner then elevated the matter to the respondent Court of Appeals, which sustained the trial court in a decision dated
July 4, 1988, 3 and in its resolution of September 27, 1988, denying the motion for reconsideration. 4

47
The Court of Appeals held that the doctrine of exhaustion of administrative remedies was not without exception and pointed to the
several instances approved by this Court where it could be dispensed with. The respondent court found that in the case before it, the
applicable exception was the urgent need for judicial intervention, which it explained thus:

The lower court found out that sometime on July 1981, the City Council of Pagadian in its Resolution No. 111
requested the Bureau of Forest Development to reserve 1,000 hectares in Lison Valley. This request remained
unacted upon. Instead in 1982, a TLA covering 29,500 hectares, including the area requested, was given to
petitioner.

Then the fear expressed by the City Council of Pagadian in its resolution became reality.

"As averred in the complaint, the erosion caused by the logging operations of the defendant has
caused heavy siltation not only in the Labangan River (as predicted by the City Council of Pagadian
City in 1981) but also in the Tukuran River, Salug River, Sindangan River, and Sibuguey River. In
other words, the adverse effects of the logging operations of the defendant have already covered a
wider area than that feared to be adversely affected by the City Council of Pagadian City.

Floods are unknown phenomena in heavily forested areas years back, particularly in the Island of
Mindanao. When the grant of logging concessions started, so was the denudation of forests. . . . It
is common knowledge that heavy floods have occurred in areas/places adjoining logging
concessions. (Resolution dated December 11, 1987, p. 5).

Thus, it is urgent that indiscriminate logging be stopped. Irreparable damage would ensue unless the court
intervenes. Reliance on the DENR may not be enough, judging from its inaction on the council's request seven years
back.

The respondent court cited in support of this conclusion the case of De Lara v. Cloribel, 5 where "irreparable damage and injury" was
allowed as an exceptional ground, and Arrow Transportation Corporation v. Board of Transportation, 6 where the doctrine was waived
because of "the strong public interest in having the matter settled" as soon as possible.

The decision also declared invalid Section 1 of PD 605, which provides:

Sec. 1. No court of the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or
preliminary mandatory injunction in any case involving or growing out of the issuance, approval or disapproval,
revocation or suspension of, or any action whatsoever by the proper administrative official or body on concessions,
licenses, permits, patents, or public grants of any kind in connection with the disposition, exploitation, utilization,
exploration and/or development of the natural resources of the Philippines.

This was held to be an encroachment on the judicial power vested in the Supreme Court and the lower courts by Article VIII, Section 1,
of the Constitution. The respondent court cited Export Processing Zone Authority v. Dulay, 7where several presidential decrees were
declared unconstitutional for divesting the courts of the judicial power to determine just compensation in expropriation cases.

The petitioner is now before the Court, contending that the doctrine of exhaustion of administrative remedies was not correctly applied
and that the declaration of the unconstitutionality of Section 1 of PD 605 was improper.

The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution
of a controversy falling under their jurisdiction before the same may be elevated to the courts of justice for review. Non-observance of
the doctrine results in lack of a cause of action, 8 which is one of the grounds allowed in the Rules of Court for the dismissal of the
complaint. The deficiency is not jurisdictional. Failure to invoke it operates as a waiver of the objection as a ground for a motion to
dismiss and the court may then proceed with the case as if the doctrine had been observed.

One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the Judiciary a becoming policy of
non-interference with matters coming primarily (albeit not exclusively) within the competence of the other departments. The theory is
that the administrative authorities are in a better position to resolve questions addressed to their particular expertise and that errors
committed by subordinates in their resolution may be rectified by their superiors if given a chance to do so. A no less important
consideration is that administrative decisions are usually questioned in the special civil actions of certiorari, prohibition and mandamus,
which are allowed only when there is no other plain, speedy and adequate remedy available to the petitioner. It may be added that strict
enforcement of the rule could also relieve the courts of a considerable number of avoidable cases which otherwise would burden their
heavily loaded dockets. 9

As correctly suggested by he respondent court, however, there are a number of instances when the doctrine may be dispensed with
and judicial action validly resorted to immediately. Among these exceptional cases are: 1) when the question raised is purely legal; 10 2)
when the administrative body is in estoppel; 11 3) when the act complained of is patently illegal; 12 4) when there is urgent need for
judicial intervention; 13 5) when the claim involved is small; 14 6) when irreparable damage will be suffered; 15 7) when there is no other
plain, speedy and adequate remedy; 16 8) when strong public interest is involved; 17 9) when the subject of the controversy is private
land; 18 and 10) in quo warranto proceedings. 19

The private respondents now submit that their complaint comes under the exceptions because forestry laws do not require observance
of the doctrine as a condition precedent to judicial action; the question they are raising is purely legal; application of the doctrine will
cause great and irreparable damage; and public interest is involved.

We rule for the petitioner.

Even if it be assumed that the forestry laws do not expressly require prior resort to administrative remedies, the reasons for the doctrine
above given, if nothing else, would suffice to still require its observance. Even if such reasons were disregarded, there would still be the
48
explicit language of pertinent laws vesting in the DENR the power and function "to regulate the development, disposition, extraction,
exploration and use of the country's forests" and "to exercise exclusive jurisdiction" in the "management and disposition of all lands of
the public domain," 20 and in the Forest Management Bureau (formerly the Bureau of Forest Development) the responsibility for the
enforcement of the forestry laws aid regulations 21 here claimed to have been violated. This comprehensive conferment
clearly implies at the very least that the DENR should be allowed to rule in the first instance on any controversy coming under its
express powers before the courts of justice may intervene.

The argument that the questions raised in the petition are purely legal is also not acceptable. The private respondents have charged,
both in the administrative case before the DENR and in the civil case before the Regional Trial Court of Pagadian City, that the
petitioner has violated the terms and conditions of the TLA and the provisions of forestry laws and regulations. The charge involves
factual issues calling for the presentation of supporting evidence. Such evidence is best evaluated first by the administrative authorities,
employing their specialized knowledge of the agreement and the rules allegedly violated, before the courts may step in to exercise their
powers of review.

As for the alleged urgent necessity for judicial action and the claimed adverse impact of the case on the national interest, the record
does not show that the petitioners have satisfactorily established these extraordinary circumstances to justify deviation from the
doctrine by exhaustion of administrative remedies and immediate resort to the courts of justice. In fact, this particular submission must
fall flat against the petitioner's uncontested contention that it has since 1988 stopped its operations under the TLA in compliance with
the order of the DENR.

In the Petition for prohibition filed with the respondent court, the petitioner alleged that its logging operations had been suspended
pursuant to a telegram 22 received on February 23, 1988, by the District Forester from the Regional Executive Director of the DENR,
Zamboanga City; reading as follows:

DISTRICT FORESTER
PAGADIAN CITY

QUOTED HEREUNDER IS RADIO MESSAGE DATED FEBRUARY 22, 1988 FROM SECRETARY FULGENCIO S.
FACTORAN, JR. QUOTE EFFECTIVE IMMEDIATELY CMA SUSPEND ALL LOGGING OPERATIONS OF SUNVILLE
IN VIEW OF SERIOUS VIOLATIONS OF FOREST PROTECTION AND REFORESTATION UNQUOTE SUBMIT
REPORT ASAP.

RED BATCAGAN

The petition now before us contains the allegations that the "petition for cancellation of petitioner's TLA is still pending up to this date
and that petitioner's logging operations (were) ordered suspended by the Secretary of the DENR pending further investigation." 23

In the memorandum filed by the petitioner with this Court, it is informed that "the Secretary of the DENR suspended petitioner's logging
operations until further investigation. The suspension is still in force up to this date after the lapse of almost 3 years." 24

These statements have not been disputed by the private respondents in their pleadings before the respondent court and this Court and
are therefore deemed admitted.

There in no question that Civil Case No. 2732 comes within the jurisdiction of the respondent court. Nevertheless, as the wrong alleged
in the complaint was supposedly committed as a result of the unlawful logging activities of the petitioner, it will be necessary first to
determine whether or not the TLA and the forestry laws and regulations had indeed been violated. To repeat for emphasis,
determination of this question is the primary responsibility of the Forest Management Bureau of the DENR. The application of the
expertise of the administrative agency in the resolution of the issue raised is a condition precedent for the eventual examination, if still
necessary, of the same question by a court of justice.

In view of the above observations, we find that there was no need for the respondent court to declare the unconstitutionality of Section
1 of PD 605. The rule is that a question of constitutionality must be avoided where the case can be decided on some other available
ground, 25 as we have done in the case before us. The resolution of this same question must await another case, where all the
indispensable requisites of a judicial inquiry into a constitutional question are satisfactorily established. In such an event, it will be time
for the Court "to make the hammer fall, and heavily," in the words of Justice Laurel, if such action is warranted.

WHEREFORE, the petition is GRANTED. The decision of the respondent court dated July 4, 1988, and its resolution dated September
27, 1988, as well as the resolutions of the trial court dated December 11, 1987 and February 15, 1988, are all REVERSED and SET
ASIDE. Civil Case No. 2732 in the Regional Trial Court of Pagadian City is hereby DISMISSED.

SO ORDERED.

SECOND DIVISION

[G.R. No. 123619. June 8, 2000]

SEAGULL SHIPMANAGEMENT AND TRANSPORT, INC., and DOMINION INSURANCE CORPORATION, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION and BENJAMIN T. TUAZON, respondents.

DECISION

QUISUMBING, J.: Esm

49
This petition for review is properly a special civil action for certiorari under Rule 65 and not Rule 45 of the Revised Rules of Court. In it,
petitioners assail the Resolution dated November 24, 1995 of the National Labor Relations Commission (NLRC) which affirmed the
Decision dated January 19, 1995 of the Philippine Overseas Employment Administration (POEA). The Resolution ordered petitioners to
pay, jointly and severally, complainant Benjamin Tuazon, the amount of US$2,200 representing 120 days sickness benefits and
US$15,000 representing disability benefits as appended to the POEA Standard Contract.

On March 17, 1991, private respondent Benjamin T. Tuazon, now deceased, and represented in the instant case by her daughter, Mrs.
Noelee Tuazon-Buenaventura,[1] was deployed by Seagull to work as radio officer on board its vessel, MV Pixy Maru. The contract was
for 12 months commencing on March 7, 1991, with basic monthly salary of US$550.00 plus a fixed monthly overtime pay equivalent to
thirty (30%) percent of the basic monthly salary.

Prior to his deployment and as a condition to final hiring, Tuazon was required to submit to a medical examination with the petitioner's
accredited clinic which is the LDM Clinic and Laboratory. The medical examination consisted among others, of the standard X-ray
exposure, and urine tests.

In 1986, complainant underwent a heart surgery for an insertion of a pacemaker.[2] Hence, the accredited clinic of Seagull, through Dr.
Tordesillas,[3] required him to secure from his cardiologist a certification to the effect that he could do normal physical activities.
Consequently, he was declared fit to work.

Sometime in December 1991, while on board the vessel, Tuazon suffered bouts of coughing and shortness of breathing. He was
immediately sent to a hospital in Japan for medical check-up, and was confined at the Kagoshimashiritsu Hospital, Kagoshima City,
from December 12 to 27, 1991.[4] Based on the doctor's diagnosis, an open heart surgery was needed. Due to this medical findings, on
December 28, 1991, he was repatriated back in the Philippines. Upon arrival, Seagull referred him to its accredited physician, Dr.
Villena.[5] An open-heart surgery was then performed on Tuazon. He shouldered all the costs and expenses.

Tuazon then filed a complaint asking for sickness and disability benefits with the POEA. On January 19, 1995, the POEA rendered a
decision, the dispositive portion of which states:

"WHEREFORE, foregoing premises considered, respondent Seagull Shipmanagement and Transport, Inc. and
Dominion Insurance Corporation are hereby ordered jointly and severally liable to pay complainant, Benjamin
Tuazon, the following:

1.....US$2,200 representing 120 days sickness benefits;

2.....100% for permanent disability in the amount of US$15,00[0].00 representing the disability benefits provided for
under Appendix "A" of the POEA Standard Contract.

SO ORDERED."[6] Esmsc

On appeal the NLRC affirmed the findings of the POEA and dismissed the appeal for lack of merit. In its Resolution dated November
24, 1995 the NLRC held in part,

"It must be stated, at the outset that the appeal is not impressed with merit. The preponderance of evidence indicates
that complainant was repatriated due to an illness sustained during the period of his employment with the respondent.
Moreover, it was sufficiently established that respondent's physician already knew, as early as June 1989, of the
existence of complainant's pacemaker. This is, indeed, precisely the reason why he was asked to submit a medical
certificate to the effect that he could do normal physical activities." (p. 3 of Administrator's Decision; Rollo, p. 141)[7]

Dissatisfied, petitioners now claim before us that the NLRC erred:

I........ IN AFFIRMING THE FINDINGS OF POEA THAT IT WAS SUFFICIENTLY ESTABLISHED THAT
PETITIONER'S PHYSICIAN KNEW OF THE EXISTENCE OF THE PACEMAKER INSERTED IN PRIVATE
RESPONDENT

II........ IN NOT FINDING THAT PRIVATE RESPONDENT MISREPRESENTED AND/OR DID NOT MAKE A
FULL DISCLOSURE OF HIS STATE OF HEALTH AND/OR MEDICAL HISTORY

III......... IN FINDING THAT PRIVATE COMPLAINANT'S SICKNESS WAS SUSTAINED DURING THE
PERIOD OF HIS EMPLOYMENT AND THEREFORE COMPENSABLE

IV........ IN SUSTAINING THE POEA IN AWARDING SICKNESS AND PERMANENT DISABILITY BENEFITS

V........ IN NOT FINDING THAT PRIVATE RESPONDENT SHOULD BE LIABLE FOR PAYMENT OF
REPATRIATION EXPENSES AND ATTORNEY'S FEES.

In their Memorandum, petitioners admitted that they inadvertently stated that the instant petition is under Rule 45 but asked for
consideration since they had substantially complied with the requisites of Rule 65 and that their petition be given due course for it had
merit. Esmso

Private respondent countered that even if the instant petition could be considered under Rule 65, the petition should still not prosper for
failure to exhaust administrative remedies and for not filing the required Motion for Reconsideration with the NLRC before going to the
Supreme Court.

50
In the interest of justice, we have often treated as special civil actions for certiorari petitions erroneously captioned as petitions for
review on certiorari.[8] Accordingly, we shall now consider the petition.

Firstly, with regard to the non-exhaustion of administrative remedies, we have long settled that the filing of a motion for reconsideration
is a condition sine qua non to the institution of a special civil action for certiorari, subject to well-recognized exceptions. The law intends
to afford the tribunal, board or office, an opportunity to rectify the errors and mistakes it may have lapsed into before resort to the courts
of justice can be had. However, in the case at bar, petitioners had not only failed to explain its failure to file a motion for reconsideration
before the NLRC, it has also failed to show sufficient justification for dispensing with the requirement. Certiorari cannot be resorted to as
a shield from the adverse consequences of petitioners' own omission to file the required motion for reconsideration.[9]

Secondly, petitioners argue mainly that the NLRC erred in affirming the POEA's holdings that petitioner's physician knew of the
pacemaker of private respondent and that private respondent was liable for misrepresentation and non-disclosure of his true health
condition.

But, on this and other points, we find no reason to disturb the findings of the NLRC. The records of the case do not clearly show that the
NLRC committed any error in affirming the decision of the POEA, and in ordering the petitioners, jointly and severally, to pay Tuazon or
his heirs sickness benefits and permanent disability benefits.

As succinctly observed by the NLRC -

". . . The preponderance of evidence indicates that complainant was repatriated due to an illness sustained during the
period of his employment with the respondent. Moreover, it was sufficiently established that respondent's physician
already knew, as early as June 1989, or the existence of the complainant's pacemaker. This is, indeed, precisely the
reason why he was asked to submit a medical certificate to the effect that he could do normal physical activities. (p. 3
of Administrator's Decision; Rollo, p., 141)[10] Msesm

In our view, there is no merit in petitioners' suggestion that private respondent did not make a full disclosure of his medical history. The
records reveal that private respondent was deployed by petitioners twice already. The first was in 1989. When his contract was
completed, petitioners without any hitch again deployed him, despite of the fact that he had already undergone pacemaker surgery in
1986. Twice, private respondent underwent the required medical and physical examination. Twice, he was certified physically fit by the
petitioners' own accredited physician. Twice, too, he was hired and deployed by them. All these clearly belie the allegation of
misrepresentation and non-disclosure. Petitioners cannot now deny the sickness and disability benefits private respondent deserves.

Petitioners aver that the illness of the private respondent was not contracted during his employment nor was it aggravated by his work.
They relied on Kirit, Sr., et al. vs. GSIS, 187 SCRA 224, 226 (1990), which says that presumptions of compensability and aggravation
have been abandoned under the compensation scheme in the present Labor Code.

It will be noted that the claim for sickness and permanent disability benefits of the private respondent arose from the stipulations on the
standard format contract of employment between him and petitioner Seagull per Circular No. 2, Series of 1984 of POEA. This circular
was intended for all parties involved in the employment of Filipino seamen on board any ocean-going vessel. Significantly, under the
contract, compensability of the illness or death of seamen need not depend on whether the illness was work connected or not.[11] It is
sufficient that the illness occurred during the term of the employment contract. It will also be recalled that petitioners admitted that
private respondent's work as a radio officer exposed him to different climates and unpredictable weather, which could trigger a heart
attack or heart failure.[12]

Even assuming that the ailment of the worker was contracted prior to his employment, this still would not deprive him of compensation
benefits. For what matters is that his work had contributed, even in a small degree, to the development of the disease and in bringing
about his eventual death.[13] Neither is it necessary, in order to recover compensation, that the employee must have been in perfect
health at the time he contracted the disease. A worker brings with him possible infirmities in the course of his employment, and while
the employer is not the insurer of the health of the employees, he takes them as he finds them and assumes the risk of liability. If the
disease is the proximate cause of the employee's death for which compensation is sought, the previous physical condition of the
employee is unimportant, and recovery may be had for said death, independently of any pre-existing disease.[14] Percuriam

WHEREFORE, the petition is DISMISSED. The assailed Decision of public respondent National labor Relations Commission dated
November 24, 1995, is AFFIRMED. Costs against petitioners.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-80160 June 26, 1989

GOVERNOR FELICISIMO T. SAN LUIS, THE SANGGUNIANG PANLALAWIGAN, PROVINCIAL ENGINEER JUANITO C. RODIL
AND PROVINCIAL TREASURER AMADEO C. ROMEY, ALL OF LAGUNA, petitioners,
vs.
COURT OF APPEALS AND MARIANO L. BERROYA, JR., respondents.

Dakila F. Castro & Associates for petitioners.

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Cecilio C. Villanueva for Gov. San Luis.

Felicisimo T. San Luis for himself and in behalf of his co- petitioners.

Renato B. Vasquez for private respondent.

CORTES, J.:

The instant petition for certiorari and mandamus and/or appeal by certiorari assails the appellate court's ruling that mandamus lies to
compel the reinstatement of a quarry superintendent in the provincial government of Laguna who was initially detailed or transferred to
another office, then suspended, and finally dismissed following his expose of certain anomalies and irregularities committed by
government employees in the province.

The background facts, as narrated by the respondent Court of Appeals are:

Records show that at all pertinent times, petitioner-appellant (private respondent herein) had been the quarry superintendent in the
Province of Laguna since his appointment as such on May 31, 1959. In April and May of 1973, petitioner-appellant denounced graft and
corrupt practices by employees of the provincial government of Laguna. Thereafter, the development of events may be briefly
encapsulated as follows:

a. On July 20, l973, herein respondent-appellee provincial governor (one of the petitioners herein) issued Office Order No. 72
transferring Berroya to the office of the Provincial Engineer. An amended office order invoked LOI 14-B for said transfer.

b. Berroya challenged said transfer, and on October 25, 1973, the Civil Service Commission ruled the same violative of Section 32, RA
2260, and ordered that Berroya be reverted to his regular position of quarry superintendent.

c. On December 12, 1973, instead of complying with the CSC directive that Berroya be reverted to his regular position, herein
respondent-appellee provincial governor suspended Berroya for alleged gross discourtesy, inefficiency and insubordination. On that
basis, reconsideration of the CSC directive that Berroya be reverted to the position of quarry superintendent was sought as academic
(sic).

d. On February 26, 1974 the Civil Service Commission reiterated its October 25, 1973 directive for the immediate reversion of Berroya
to his former position, and ruled the one-year suspension illegal.

e. Respondent-appellee provincial governor appealed to the Office of the President from the CSC rulings alluded to.

f. On May 29, 1974, there issued OP Decision 954, Series of 1974 reversing the CSC rulings without prejudice to the decision of the
Local Review Board [which had in fact already sustained the one-year suspension under date of May 6, 1974].

g. On petitioner-appellant's motion for reconsideration, the Office of the President rendered OP Decision 1834, Series of 1976, dated
May 19, 1976, setting aside OP Decision 954, declaring the one-year suspension improper, and ordering payment of back salaries to
Berroya.

h. Respondent-appellant moved for reconsideration of OP Decision 1834 on June 14, 1976. The said motion for reconsideration was
denied on November 6, 1978.

i. In the interim, respondent-appellant provincial governor issued an Order of April 27, 1977 dismissing Berroya for alleged neglect of
duty, frequent unauthorized absences, conduct prejudicial to the best interest of duty and abandonment of office, which order of
dismissal was appealed by Berroya to the Civil Service Commission on May 12, 1977.

j. On January 23, 1979, the Civil Service Commission resolved said appeal by declaring the dismissal unjustified, exonerating Berroya
of charges, and directing his reinstatement as quarry superintendent.

k. On February l4, 1979, respondent-appellee provincial governor sought relief from the CSC decision of January 23, 1979 declaring
Berroya's dismissal unjustified.

1. On October 15, 1979, the CSC Merit System Board denied said motion for reconsideration in its Resolution No. 567.

m. Thereafter, respondent-appellee provincial governor moved anew to set aside O.P. Decision 1834, Series of 1976-the first motion for
reconsideration of which had been denied on November 6, 1978. (ref. #h, supra). The Office of the President dismissed said motion on
March 27, 1981.

Petitioner-appellant's formal demand for reinstatement to the position of quarry superintendent having been disdained despite the
factual antecedents aforestated, he filed, [on May 27, 1980] the antecedent Civil Case No. SC-1834 for mandamus to compel his
reversion to the position of quarry superintendent at the Oogong Quarry, with back salaries for the entire period of his suspension and
dismissal (exclusive of leaves of absence with pay), and prayed for moral and exemplary damages, attorney's fees and expenses of
suit.

Respondents-appellees moved to dismiss said petition for mandamus, as amended, and opposed the therein application for preliminary
injunctive relief for immediate reinstatement.

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In an Order of December 1, 1980, the trial court denied the application for preliminary injunctive relief "until after the parties shall have
adduced evidence, pro and con the grant of injunctive relief", and similarly deferred its resolution on the motion to dismiss "for lack of
merit for the present ... until after the trial."

On December 15, 1980, respondents-appellees answered the petition for mandamus and prayed that judgment be rendered-

1. Dismissing the Complaint and denying the prayer for Preliminary Injunction;

2. Declaring petitioner to have been legally separated or dismissed from the government service;

3. Order petitioner to pay each of them the sum of P 200,000.00 by way of moral damages; P 100,000.00 as
exemplary damages and P 10,000.00 as attorney's fees plus P 300.00 each per court appearance; other litigation
expenses which may be incurred as may be proved in due course; and to pay the costs of suit [Rollo, pp. 35-37].

During the pendency of the civil case for mandamus, on April 9, 1981 petitioner provincial governor filed a petition for relief from O.P.
Decision 1834 with the Office of the President. This was denied on November 27, 1984 on the ground that only one motion for
reconsideration of O.P. Decision 1834 was allowed, the petition for relief being the third such motion filed by petitioner.

On May 17, 1985, after trial, the court a quo rendered its decision finding the transfer of petitioner- appellant from his position of quarry
superintendent to the office of the Provincial Engineer sufficiently warranted. Furthermore, his one-year suspension was found to be
proper under LOI 14-B and unassailable upon affirmation by the Local Review Board. His summary dismissal was likewise found to be
a justified exercise of the authority granted under LOI 14-B. The trial Court further decided "that none of the respondents should be held
personally liable in their private capacity to the petitioner because their actuations are not at all tainted with malice and bad faith" [Rollo,
p. 38].

However, although the trial court upheld the validity of Berroya's dismissal, it nevertheless ordered his reinstatement to an equivalent
position as a matter of equity. Hence, the dispositive portion of its decision reads as follows:

WHEREFORE, judgment is hereby rendered:

1. Ordering respondents to reinstate petitioner to any position equivalent to that of a quarry superintendent which has
been abolished in the present plantilla of the provincial government of Laguna as reorganized pursuant to PD 1136
without diminution in rank and salary;

2. Ordering respondents to pay the back salary of petitioner from April 26, 1977 to September 1, 1977 only and
appropriating funds therefor, as soon as this decision becomes final;

3. Dismissing all claims and counterclaims of both parties for other damages including attorney's fees [Rollo, p. 35].

On June 6, 1985, herein private respondent Berroya appealed from the decision of the Regional Trial Court dated May 17, 1985. The
appeal was resolved by the respondent Court of Appeals in his favor in a decision which was promulgated on April 30, 1987, the
decretal portion of which states:

WHEREFORE, the present appeal is accordingly resolved as follows:

(a) Petitioner-appellant is ordered to be reinstated to the position of quarry superintendent of the Oogong Quarry in Laguna or to the
position which said office may now be called pursuant to the reorganization of the plantilla of the Provincial Government of Laguna
under PD 1136, without diminution in rank and salary;

(b) Respondents-appellees are ordered to pay the back salary of petitioner-appellant corresponding to the period of suspension and of
illegal dismissal from the service, exclusive of that corresponding to leaves of absences with pay;

(c) Respondents-appellants (sic) are ordered, jointly and severally, to pay petitioner-appellant the sum of P 50,000.00 as and for moral
damages;

(d) Respondents-appellants (sic) are ordered, jointly and severally, to pay petitioner-appellant the further sum of P 20,000.00 as and for
attorney's fees, plus costs and expenses of suit.

The decision of May 17, 1985, in Civil Case No. SC-1748 is accordingly set aside forthwith.

With costs against respondents-appellees.

SO ORDERED. [Rollo, p. 43.]

Petitioners moved to reconsider the decision of the appellate court but their motion was denied. Hence, the instant petition docketed as
G.R. No. 80160, which is "both or alternatively an original action for certiorari and mandamus and an appeal by certiorari" [See Rollo, p.
1, et seq.] Another petition for review of the Court of Appeals' decision was filed with this Court on October 8, 1987 docketed as G.R.
No. 79985 by the same petitioners. However, in a resolution dated November 16, 1987, the Court noted the manifestation/motion filed
by petitioners stating, among other things, that the petition docketed as G.R. No. 79985 be considered withdrawn and the petition dated
October 16, 1987 which was filed on October 19, 1987 and docketed as G.R. No. 80160 be considered as the main and real petition
[Rollo, p. 50].

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Accordingly, the parties were required to submit their respective pleadings in G.R. No. 80160. The petition in G.R. No. 80160 contains
the following assignment of errors:

First

THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN DENYING
PETITIONERS' MOTION FOR RECONSIDERATION BY MEANS OF A MERE MINUTE RESOLUTION, STATING NO LEGAL BASIS
THEREFOR, IN GROSS VIOLATION OF THE CONSTITUTION'S EXPRESS MANDATE AND WHEN IT STATED AND HELD IN SAID
RESOLUTION "THAT NO NEW REASON HAS BEEN ADDUCED [IN SAID MOTION] TO JUSTIFY A REVERSAL OR MODIFICATION
OF [ITS] FINDINGS AND CONCLUSIONS".

Second

THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN
FINDING THAT THE RESPONDENT MARIANO L. BERROYA, JR. DOES NOT FALL UNDER THE CATEGORY OF "NOTORIOUSLY
UNDESIRABLE" AND THAT THE "APPLICABILITY OF LOI 14-B TO RESPONDENT BERROYA IS OPEN TO QUESTION AS HE WAS
NEVER ASKED TO RESIGN AS BEING NOTORIOUSLY UNDESIRABLE".

Third

THE RESPONDENT COURT BLATANTLY ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS
JURISDICTION IN FINDING THAT THE "RECALL" OF THE DISMISSAL ORDER IS ITSELF ATTENDED BY A TOUCH OF MYSTERY,
MENTIONED ONLY IN THE TESTIMONY OF PETITIONER PROVINCIAL GOVERNOR, UNFORTIFIED BY ANY WRITING THEREOF,
AND NOT ADVERTED TO IN THE DECEMBER 15, 1980 ANSWER FILED IN THE ANTECEDENT mandamus ACTION, AND IN NOT
FINDING THAT RESPONDENT BERROYA COMMITTED ABANDONMENT OF OFFICE.

Fourth

THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN
FINDING THAT THE DECISION OF THE LOCAL BOARD OF REVIEW UNDER LOI 14-B MAY BE REVIEWED UNDER THE
CONSTITUTIONAL PREROGATIVE OF THE PRESIDENT TO SUPERVISE LOCAL GOVERNMENT UNITS, WHICH INCLUDES THE
AUTHORITY TO REVIEW, MODIFY OR REVERSE DECISION INVOLVING SUSPENSION OF LOCAL OFFICIALS AND
EMPLOYEES.

Fifth

THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN
CONCLUDING IN RATHER STRONG LANGUAGE THAT THE "ABOLITION OF THE POSITION OF QUARRY SUPERINTENDENT
FROM THE PLANTILLA OF THE PROVINCIAL GOVERNMENT OF LAGUNA MUST BE VIEWED WITH (sic) ABERRATION AND AN
ANOMALY, IN THE LIGHT OF UNCONTROVERTED SHOWING THAT QUARRY OPERATIONS AT THE SAME SITE CONTINUE TO
DATE, AS WOULD MILITATE AGAINST ATTENDANCE OF GOOD FAITH IN THE ABOLITION OF SAID OFFICE."

Sixth

THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN
ORDERING THE PAYMENT OF PRIVATE RESPONDENTS BACK SALARIES FOR THE PERIOD OF HIS SUSPENSION AS WELL AS
DISMISSAL UNTIL REINSTATEMENT AS QUARRY SUPERINTENDENT, AND IN AWARDING MORAL DAMAGES IN THE SUM OF
P50,000.00 AND ATTORNEY'S FEES IN THE SUM OF P20,000.00 IN FAVOR OF THE PRIVATE RESPONDENT BERROYA, AND IN
HOLDING ALL THE PETITIONERS HEREIN SOLIDARILY LIABLE FOR THE PAYMENT OF AFORESAID BACK SALARIES AND
DAMAGES [Rollo, pp. 13-14].

The first error assigned in the instant petition is not well taken. A thorough perusal of the assailed resolution of the respondent CA
denying petitioners' motion for reconsideration reveals clearly its legal basis. Thus, its resolution stating that

Considering that the motion for reconsideration of the decision promulgated on April 30, 1987 filed by respondent-appellee merely
reiterates the grounds and arguments already discussed, thoroughly analyzed and passed upon by this Court; and that no new reason
has been adduced to justify a reversal or modification of the findings and conclusion of this Court.

WHEREFORE, the motion for reconsideration is DENIED for lack of merit [Rollo, p. 45; Emphasis supplied].

constitutes sufficient compliance with the constitutional mandate that no motion for reconsideration of a decision of the court shall be
denied without stating the legal basis therefor (1987 Constitution, Art. VIII, Sec. 14, par. 2).

The resolution of the remaining assigned errors hinges on a determination of the effect of the decisions rendered in favor of Berroya by
two administrative agencies.

A. It is worth noting that the issue of legality of the order of suspension by petitioner Governor dated December 12, 1973 had already
been passed upon in a decision of the Office of the President (O.P. Decision No. 1834) dated May 19, 1976 reversing its earlier ruling in
O.P. Decision No. 954 dated May 29, 1974. The Office of the President categorically ruled as follows:

xxx xxx xxx

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It is not disputed that the Governor, in issuing his Order of Suspension, was exercising an authority legally endowed upon (sic) him by
LOI 14-B, but it must not be an unbridled exercise of such authority....

A review of the records discloses that the only act of the governor which was sustained by the Local Review Board was his imposing
the suspension on Berroya for alleged discourtesy. This Office is prone to adopt a contrary stand on the matter taking into consideration
the circumstances leading to the writing of the so-called "dishonest' statements of the petitioner. It is unfortunate that the Local Review
Board took it as an infraction of the Civil Service Rules and Regulations. It must be observed that the said statements were made in the
course of a pending case before the Civil Service Commission, and in defense of the position of the petitioner. Although the said
statements, by themselves, may be considered as lacking in refinement, still this fact alone does not justify the drastic action taken
against the petitioner in this case. . . .

In view of the foregoing, this Office rules that the suspension order was unjustified. Considering that respondent Berroya has already
served the suspension order and that his suspension was not proper, it is hereby ordered that he be entitled to the payment of his back
salaries corresponding to the period of his suspension [Folder of Exhibits, Vol. 1, pp. 102-103].

From this decision of the Office of the President, petitioner Governor filed a petition for reconsideration dated June 14, 1976 which was
denied for lack of merit in a resolution of the Office of the President dated November 6, 1978 [Folder of Exhibits, Vol. 1, p. 170]. On July
3, 1979, petitioner governor filed a second petition to reconsider O.P. Decision No. 1834 on the main ground that the disputed decision
is null and void ab initio allegedly because Berroya filed his motion for reconsideration of O.P. Decision No. 954 only on July 15, 1975 or
after a lapse of one year and forty seven (47) days from the date when the said decision was rendered. The Office of the President
denied such petition in a resolution dated March 27, 1981 [Folder of Exhibits, Vol. 1, p. 210] on the strength of Executive Order No. 19,
Series of 1966 which empowers said office to act upon petitions for reconsideration, even if filed late, in exceptionally meritorious
cases. Said Office further pointed out that upon review of the records of the case, it was shown that Berroya's motion for
reconsideration was filed on July 15, 1974 and not on July 15, 1975 as erroneously indicated in O.P. Decision No. 1834 [Folder of
Exhibits, Vol. 1, p. 213].

From the foregoing, it can be seen that OP Decision No. 1834 had already attained finality upon denial of the first motion for
reconsideration in view of the clear provisions of the applicable law at the time. Executive Order No. 19, Series of 1966, which provides:

xxx xxx xxx

5. Petitions for reconsideration filed after the lapse of the aforesaid period (fifteen days from receipt of the decision) shall not be
entertained unless the Office of the President, for exceptionally meritorious causes, decides to act thereon, provided that only one
petition for reconsideration by any party shall be allowed [Emphasis supplied.]

Accordingly, the filing of the second petition for reconsideration could not have stayed the finality of the aforesaid decision.

In a last ditch attempt to assail the validity of O.P. Decision No. 1834, a petition for relief was filed by herein petitioners on April 9, 1981,
during the pendency of the mandamus case. This petition was finally denied in a resolution of the office dated November 27, 1984.

B. On the other hand, the validity of Berroya's dismissal was already passed upon by the Merit Systems Board of the Civil Service
Commission in MSB Case No. 40. In a decision promulgated on January 23, 1979, the Merit Systems Board held as follows:

After carefully perusing the records of this case, this board is convinced that there is no strong evidence of guilt against Berroya. In fact,
there is not even sufficient evidence to maintain the charges against him. Hence, the same does not fall within the scope of Section 40,
Presidential Decree No. 807.

The record does not show that Berroya is notoriously undesirable. On the contrary, his performance ratings from the period ending
December 31, 1969 to the period ending June 30, 1973 are all very satisfactory.

Such being the case, he is not notoriously undesirable under the standard laid down by the President, to wit: "the test of being
notoriously undesirable is two-fold: whether it is common knowledge or generally known as universally believed to be true or manifest to
the world that petitioner committed the acts imputed against him, and whether he had contracted the habit for any of the enumerated
misdemeanors". The same are not present in the case of Berroya. On the contrary he should be given recognition for his efforts in
exposing the irregularities allegedly committed by some authorities of the Laguna Provincial Government which led to the filing of
criminal as well as administrative cases against such officials.

Foregoing premises considered, this Board finds the order of dismissal dated April 27, 1977, without justifiable basis. Wherefore, the
Board hereby exonerates Engr. Mariano Berroya, Jr. of the charges against him. Consequently, it is hereby directed that he be
reinstated to his position as Quarry Superintendent of Laguna immediately, [Folder of Exhibits, Vol. 1, pp. 175-176].

The motion for reconsideration from this decision was denied in a resolution of the Board dated October 15, 1979. This decision was
therefore already final when Berroya instituted suit in 1980 to compel petitioner to reinstate him to his former position and to pay his
back salaries.

Since the decisions of both the Civil Service Commission and the Office of the President had long become final and executory, the
same can no longer be reviewed by the courts. It is well-established in our jurisprudence that the decisions and orders of administrative
agencies, rendered pursuant to their quasi-judicial authority, have upon their finality, the force and binding effect of a final judgment
within the purview of the doctrine of resjudicata [Brillantes v. Castro, 99 Phil. 497 (1956), Ipekdjian Merchadising Co., Inc. v. Court of
Tax Appeals, G.R. No. L-15430, September 30, 1963, 9 SCRA 72.] The rule of res judicata which forbids the reopening of a matter once
judicially determined by competent authority applies as well to the judicial and quasi-judicial acts of public, executive or administrative
officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers [Brillantes v.
Castro, supra at 503].

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Indeed, the principle of conclusiveness of prior adjudications is not confined in its operation to the judgments of what are ordinarily
known as courts, but it extends to all bodies upon whom judicial powers had been conferred. Hence, whenever any board, tribunal or
person is by law vested with authority to judicially determine a question, like the Merit Systems Board of the Civil Service Commission
and the Office of the President, for instance, such determination, when it has become final, is as conclusive between the same parties
litigating for the same cause as though the adjudication had been made by a court of general jurisdiction [Ipekdjian Merchandising Co.,
Inc. v. Court of Tax Appeals, supra at 76].

Furthermore, the trial court's act of reviewing and setting aside the findings of the two administrative bodies was in gross disregard of
the basic legal precept that accords finality to administrative findings of facts.

The general rule, under the principles of administrative law in force in this jurisdiction, is that decisions of administrative officers shall
not be disturbed by the courts, except when the former have acted without or in excess of their jurisdiction, or with grave abuse of
discretion. Findings of administrative officials and agencies who have acquired expertise because their jurisdiction is confined to
specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial]
evidence. . . . [Lianga Bay Logging Co., Inc. v. Lopez Enage, G.R. No. L-30637, July 16, 1987,152 SCRA 80].

Finally, the Court cannot ignore the undisputed fact that the decisions rendered by the Office of the President and the Merit Systems
Board had attained finality without petitioners having taken any timely legal recourse to have the said decisions reviewed by the courts.
On the other hand, Berroya, in order to enforce his right to reinstatement and to back salaries pursuant to these final and executory
administrative rulings, instituted a suit for mandamus to compel petitioners to comply with the directives issued by the two
administrative agencies.

Since private respondent Berroya had established his clear legal right to reinstatement and back salaries under the aforementioned
final and executory administrative decisions, it became a clear ministerial duty on the part of the authorities concerned to comply with
the orders contained in said decisions [Tanala v. Legaspi, G.R. No. L-22537, March 31, 1965,13 SCRA 566 at 574-575].

The established rule is that a writ of mandamus lies to enforce a ministerial duty or "the performance of an act which the law specifically
enjoins as a duty resulting from office, trust or station" [Section 3, Rule 65 of the Revised Rules of Court; Lianto v. Mohamad Ali
Dimaporo, et al., G.R. No. L-21905, March 31, 1966, 16 SCRA 599]. In this case, the appropriate administrative agencies having
determined with finality that Berroya's suspension and dismissal were without just cause, his reinstatement becomes a plain ministerial
duty of the petitioner Provincial Governor, a duty whose performance may be controlled and enjoined by mandamus [Ynchausit and Co.
v. Wright, 47 Phil. 866 (1925); Tee and Co. v. Wright, 53 Phil. 194 (1929); Gementiza v. Court of Appeals, G.R. Nos. L-41717-33, April
12, 1982,113 SCRA 477; Laganapan v. Asedillo, G.R. No. L-28353, September 30, 1987, 154 SCRA 377].

Thus, this Tribunal upholds the appellate court's judgment for the reinstatement of respondent Berroya and payment of his back
salaries corresponding to the period of suspension and of illegal dismissal from service, exclusive of that corresponding to leaves of
absences with pay. However, as respondent Berroya can no longer be reinstated because he has already reached the compulsory
retirement age of sixty five years on December 7, 1986,** he should be paid his back salaries [Salcedo v. Court of Appeals, G.R. No. L-
40846, January 31, 1978, 81 SCRA 408] and also all the retirement and leave privileges that are due him as a retiring employee in
accordance with law [Tanala v. Legaspi, supra at 576].

According to settled jurisprudence, Berroya, as an illegally terminated civil service employee is entitled to back salaries limited only to a
maximum period of five years Laganapan v. Asedillo, supra; Balquidra v. CFI of Capiz, Branch II, G.R. No. L-40490, October 28, 1977,
80 SCRA 123; Salcedo v. Court of Appeals, supra, Gementiza v. Court of Appeals, supra].

That petitioners Provincial Governor, Provincial Treasurer and Provincial Engineer of Laguna, the Sangguniang Panlalawigan of
Laguna and the Province of Laguna, formally impleaded herein,'** are liable for back salaries in case of illegal termination of a civil
service employee finds support in earlier decisions of this Court [Balquidra v. Court of First Instance of Capiz, Branch II, supra;
Gementiza v. Court of Appeals, supra; Rama v. Court of Appeals, G.R. Nos. L-44484, 1,44842, L-44894, L-44591, March 16, 1987,148
SCRA 496; Laganapan v. Asedillo, supra].

However, the petitioners Juanito Rodil and Amado Romey must be held liable only in their official capacities as Provincial Engineer and
Provincial Treasurer, respectively since they had been expressly sued by Berroya as such [Petition for mandamus with Preliminary
Injunction, Record, Vol. 1, p. 1, et seq.; Gray v. De Vera, G.R. No. L-23966, May 22, 1969, 28 SCRA 268].

The same does not hold true for petitioner provincial governor who was found by the appellate court to have acted in bad faith as
manifested by his contumacious refusal to comply with the decisions of the two administrative agencies, thus prompting respondent
Berroya to secure an indorsement from the Minister of Local Government and Community Development dated November 15, 1979 for
his reinstatement [Annex "Y-9", Folder of Exhibits, Vol. 1, p. 207]. The Minister's directive having been ignored, Berroya was compelled
to bring an action for mandamus.

Where, as in this case, the provincial governor obstinately refused to reinstate the petitioner, in defiance of the orders of the Office of
the President and the Ministry of Local Government and in palpable disregard of the opinion of the Civil Service Commission, the
appellate court's finding of bad faith cannot be faulted and accordingly, will not be disturbed by this Tribunal Enciso v. Remo, G.R. No.
L-23670, September 30, 1969, 29 SCRA 580.] This is in line with our previous ruling in Remo v. Palacio [107 Phil. 803 (1960)] that

xxx xxx xxx

(i)t having been clearly shown by evidence, that respondent, Deogracias Remo, in his capacity as Mayor of Goa,
refused to reinstate the petitioner to his former position in the police force of Goa, despite the orders of Malacanang
to do so (Exhs. G and I), and inspite of the opinion of the Secretary of Finance (Exh. H), the respondent Mayor of
Goa, willfully acted in bad faith, and therefore, he, as Mayor of Goa, should pay for damages caused to the petitioner,
Angel Enciso. [At pp. 807-808.]

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It is well-settled that when a public officer goes beyond the scope of his duty, particularly when acting tortiously, he is not entitled to
protection on account of his office, but is liable for his acts like any private individual [Palma v. Graciano, 99 Phil. 72 (1956)].

Thus, in Mendoza v. De Leon [33 Phil. 508 (1916)], it was held:

Nor are officers or agents of the Government charged with the performance of governmental duties which are in their nature legislative
or quasi-judicial liable for the consequences of their official acts, unless it be shown that they act wilfully and maliciously and with the
express purpose of inflicting injury upon the plaintiff [at 513; Emphasis supplied].

Accordingly, applying the principle that a public officer, by virtue of his office alone, is not immune from damages in his personal
capacity arising from illegal acts done in bad faith [Tabuena v. Court of Appeals, G.R. No. L-16290, October 31, 1961, 3 SCRA 413;
Correa v. Court of First Instance of Bulacan, G. R. No. L-46096, July 30, 1979, 92 SCRA 312], the Court holds that petitioner Felicisimo
T. San Luis, the Provincial Governor of Laguna who has been sued both in his official and private capacities, must be held personally
liable to Berroya for the consequences of his illegal and wrongful acts.

In this regard, the Court sustains the appellate court's finding that petitioner San Luis must be held liable to Berroya for moral damages
since justice demands that the latter be recompensed for the mental suffering and hardship he went through in order to vindicate his
right, apart from the back salaries legally due him [Rama v. Court of Appeals,supra at p. 5061]. The appellate court was clearly
warranted in awarding moral damages in favor of respondent Berroya because of the obstinacy of petitioner Governor who arbitrarily
and without legal justification refused Berroya's reinstatement in defiance of directives of the administrative agencies with final authority
on the matter. We agree with the appellate court that the sum of P 50,000.00 for moral damages is a reasonable award considering the
mental anguish and serious anxiety suffered by Berroya as a result of the wrongful acts of petitioner Governor in refusing to reinstate
him.

Finally, as correctly adjudged by respondent court, petitioner San Luis must likewise answer to Berroya for attorney's fees plus costs
and expenses of suit, which have been fixed by said court at P 20,000.00, in view of the wrongful refusal of petitioner provincial
governor to afford Berroya his plainly valid and just claim for reinstatement and back salaries [Rollo, p. 42].

WHEREFORE, the assailed decision of the appellate court is hereby MODIFIED as follows: (1) the petitioners, in their official
capacities, are ordered to pay private respondent Berroya, his back salaries for a maximum period of five years; (2) since the
reinstatement of Berroya can no longer be ordered by reason of his having reached the retirement age, he should instead be paid all
the retirement benefits to which he is entitled under the law; and (3) petitioner Felicisimo T. San Luis, in his personal capacity, is further
ordered to pay Berroya the sum of P 50,000.00 as and for moral damages, the sum of P 20,000.00 as and for attorney's fees plus costs
and other expenses of suit. This decision shall be IMMEDIATELY EXECUTORY.

SO ORDERED.

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