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G.R. No.

47065 June 26, 1940

PANGASINAN TRANSPORTATION CO., INC., petitioner, vs. THE PUBLIC SERVICE COMMISSION, respondent.

LAUREL, J.:

The petitioner has been engaged for the past twenty years in the business of transporting passengers in the Province of
Pangasinan and Tarlac and, to a certain extent, in the Province of Nueva Ecija and Zambales, by means of motor vehicles
commonly known as TPU buses, in accordance with the terms and conditions of the certificates of public convenience
issued in its favor by the former Public Utility Commission in cases Nos. 24948, 30973, 36830, 32014 and 53090. On
August 26, 1939, the petitioner filed with the Public Service Commission an application for authorization to operate ten
additional new Brockway trucks (case No. 56641), on the ground that they were needed to comply with the terms and
conditions of its existing certificates and as a result of the application of the Eight Hour Labor Law. In the decision of
September 26, 1939, granting the petitioner's application for increase of equipment, the Public Service Commission
ordered:

Y de acuerdo con que se provee por el articulo 15 de la ley No. 146 del Commonwealth, tal como ha sido
enmendada por el articulo 1 de la Ley No. 454, por la presente se enmienda las condiciones de los certificados
de convenciencia publica expedidos en los expedientes Nos. 24948, 30973, 36831, 32014 y la authorizacion el el
expediente No. 53090, asi que se consideran incorporadas en los mismos las dos siguientes condiciones:

Que los certificados de conveniencia publica y authorizacion arriba mencionados seran validos y subsistentes
solamente durante de veinticinco (25) anos, contados desde la fecha de la promulgacion de esta decision.

Que la empresa de la solicitante porda ser adquirida por el Commonwealth de Filipinas o por alguna dependencia
del mismo en cualquier tiempo que lo deseare previo pago del precio d costo de su equipo util, menos una
depreciacion razonable que se ha fijar por la Comision al tiempo de su adquisicion.

Not being agreeable to the two new conditions thus incorporated in its existing certificates, the petitioner filed on October
9, 1939 a motion for reconsideration which was denied by the Public Service Commission on November 14, 1939.
Whereupon, on November 20, 1939, the present petition for a writ of certiorari was instituted in this court praying that an
order be issued directing the secretary of the Public Service Commission to certify forthwith to this court the records of all
proceedings in case No. 56641; that this court, after hearing, render a decision declaring section 1 of Commonwealth Act
No. 454 unconstitutional and void; that, if this court should be of the opinion that section 1 of Commonwealth Act No. 454
is constitutional, a decision be rendered declaring that the provisions thereof are not applicable to valid and subsisting
certificates issued prior to June 8, 1939. Stated in the language of the petitioner, it is contended:

1. That the legislative powers granted to the Public Service Commission by section 1 of Commonwealth Act No.
454, without limitation, guide or rule except the unfettered discretion and judgment of the Commission, constitute
a complete and total abdication by the Legislature of its functions in the premises, and for that reason, the Act, in
so far as those powers are concerned, is unconstitutional and void.

2. That even if it be assumed that section 1 of Commonwealth Act No. 454, is valid delegation of legislative
powers, the Public Service Commission has exceeded its authority because: (a) The Act applies only to future
certificates and not to valid and subsisting certificates issued prior to June 8, 1939, when said Act took effect, and
(b) the Act, as applied by the Commission, violates constitutional guarantees.

Section 15 of Commonwealth Act No. 146, as amended by section 1 of Commonwealth Act No. 454, invoked by the
respondent Public Service Commission in the decision complained of in the present proceedings, reads as follows:

With the exception to those enumerated in the preceding section, no public service shall operate in the Philippines
without possessing a valid and subsisting certificate from the Public Service Commission, known as "certificate of
public convenience," or "certificate of convenience and public necessity," as the case may be, to the effect that
the operation of said service and the authorization to do business will promote the public interests in a proper and
suitable manner.

The Commission may prescribed as a condition for the issuance of the certificate provided in the preceding
paragraph that the service can be acquired by the Commonwealth of the Philippines or by any instrumentality
thereof upon payment of the cost price of its useful equipment, less reasonable depreciation; and likewise, that
the certificate shall valid only for a definite period of time; and that the violation of any of these conditions shall
produce the immediate cancellation of the certificate without the necessity of any express action on the part of the
Commission.

In estimating the depreciation, the effect of the use of the equipment, its actual condition, the age of the model, or
other circumstances affecting its value in the market shall be taken into consideration.

The foregoing is likewise applicable to any extension or amendment of certificates actually force and to those
which may hereafter be issued, to permits to modify itineraries and time schedules of public services and to
authorization to renew and increase equipment and properties.

Under the first paragraph of the aforequoted section 15 of Act No. 146, as amended, no public service can operate
without a certificate of public convenience or certificate of convenience and public necessity to the effect that the
operation of said service and the authorization to do business will "public interests in a proper and suitable manner."
Under the second paragraph, one of the conditions which the Public Service Commission may prescribed the issuance of
the certificate provided for in the first paragraph is that "the service can be acquired by the Commonwealth of the
Philippines or by any instrumental thereof upon payment of the cost price of its useful equipment, less reasonable
depreciation," a condition which is virtually a restatement of the principle already embodied in the Constitution, section 6
of Article XII, which provides that "the State may, in the interest of national welfare and defense, establish and operate
industries and means of transportation and communication, and, upon payment of just compensation, transfer to public
ownership utilities and other private enterprises to be operated by the Government. "Another condition which the
Commission may prescribed, and which is assailed by the petitioner, is that the certificate "shall be valid only for a definite
period of time." As there is a relation between the first and second paragraphs of said section 15, the two provisions must
be read and interpreted together. That is to say, in issuing a certificate, the Commission must necessarily be satisfied that
the operation of the service under said certificate during a definite period fixed therein "will promote the public interests in
a proper and suitable manner." Under section 16 (a) of Commonwealth Act. No. 146 which is a complement of section 15,
the Commission is empowered to issue certificates of public convenience whenever it "finds that the operation of the
public service proposed and the authorization to do business will promote the public interests in a proper and suitable
manner." Inasmuch as the period to be fixed by the Commission under section 15 is inseparable from the certificate itself,
said period cannot be disregarded by the Commission in determining the question whether the issuance of the certificate
will promote the public interests in a proper and suitable manner. Conversely, in determining "a definite period of time,"
the Commission will be guided by "public interests," the only limitation to its power being that said period shall not exceed
fifty years (sec. 16 (a), Commonwealth Act No. 146; Constitution, Art. XIII, sec. 8.) We have already ruled that "public
interest" furnishes a sufficient standard. (People vs. Fernandez and Trinidad, G. R. No. 45655, promulgated June 15,
1938; People vs. Rosenthal and Osmeña, G. R. Nos. 46076 and 46077, promulgated June 12, 1939, citing New York
Central Securities Corporation vs. U.S.A., 287 U.S. 12, 24, 25, 77 Law. ed. 138, 145, 146; Schenchter Poultry
Corporation vs. I.S., 295, 540, 79 Law. ed. 1570, 1585; Ferrazzini vs. Gsell, 34 Phil., 697, 711-712.)

Section 8 of Article XIII of the Constitution provides, among other things, that no franchise, certificate, or any other form of
authorization for the operation of a public utility shall be "for a longer period than fifty years," and when it was ordained, in
section 15 of Commonwealth Act No. 146, as amended by Commonwealth Act No. 454, that the Public Service
Commission may prescribed as a condition for the issuance of a certificate that it "shall be valid only for a definite period
of time" and, in section 16 (a) that "no such certificates shall be issued for a period of more than fifty years," the National
Assembly meant to give effect to the aforesaid constitutional mandate. More than this, it has thereby also declared its will
that the period to be fixed by the Public Service Commission shall not be longer than fifty years. All that has been
delegated to the Commission, therefore, is the administrative function, involving the use discretion, to carry out the will of
the National Assembly having in view, in addition, the promotion of "public interests in a proper and suitable manner." The
fact that the National Assembly may itself exercise the function and authority thus conferred upon the Public Service
Commission does not make the provision in question constitutionally objectionable.

The theory of the separation of powers is designed by its originators to secure action and at the same time to forestall
overaction which necessarily results from undue concentration of powers, and thereby obtain efficiency and prevent
deposition. Thereby, the "rule of law" was established which narrows the range of governmental action and makes it
subject to control by certain devices. As a corollary, we find the rule prohibiting delegation of legislative authority, and from
the earliest time American legal authorities have proceeded on the theory that legislative power must be exercised by the
legislature alone. It is frankness, however, to confess that as one delves into the mass of judicial pronouncement, he finds
a great deal of confusion. One thing, however, is apparent in the development of the principle of separation of powers and
that is that the maxim of delegatus non potest delegari or delegata potestas non potest delegari, attributed to Bracton (De
Legius et Consuetedinious Angliae, edited by G. E. Woodbine, Yale University Press, 1922, vol. 2, p. 167) but which is
also recognized in principle in the Roman Law (D. 17.18.3), has been made to adapt itself to the complexities of modern
governments, giving rise to the adoption, within certain limits, of the principle of "subordinate legislation," not only in the
United States and England but in practically all modern governments. (People vs. Rosenthal and Osmeña, G. R. Nos.
46076 and 46077, promulgated June 12, 1939.) Accordingly, with the growing complexity of modern life, the multiplication
of the subjects of governmental regulation, and the increased difficulty of administering the laws, there is a constantly
growing tendency toward the delegation of greater powers by the legislature, and toward the approval of the practice by
the court. (Dillon Catfish Drainage Dist, v. Bank of Dillon, 141 S. E. 274, 275, 143 S. Ct. 178; State vs. Knox County, 54 S.
W. 2d. 973, 976, 165 Tenn. 319.) In harmony with such growing tendency, this Court, since the decision in the case
of Compañia General de Tabacos de Filipinas vs. Board of Public Utility Commissioner (34 Phil., 136), relied upon by the
petitioner, has, in instances, extended its seal of approval to the "delegation of greater powers by the legislature."
(Inchausti Steamship Co. vs. Public Utility Commissioner, 44 Phil., Autobus Co. vs. De Jesus, 56 Phil., 446;
People vs. Fernandez & Trinidad, G. R. No. 45655, promulgated June 15, 1938; People vs. Rosenthal & Osmeña, G. R.
Nos. 46076, 46077, promulgated June 12, 1939; and Robb and Hilscher vs. People, G. R. No. 45866, promulgated June
12, 1939.).

Under the fourth paragraph of section 15 of Commonwealth Act No. 146, as amended by Commonwealth Act No. 454, the
power of the Public Service Commission to prescribed the conditions "that the service can be acquired by the
Commonwealth of the Philippines or by any instrumentality thereof upon payment of the cost price of its useful equipment,
less reasonable," and "that the certificate shall be valid only for a definite period of time" is expressly made applicable "to
any extension or amendment of certificates actually in force" and "to authorizations to renew and increase equipment and
properties." We have examined the legislative proceedings on the subject and have found that these conditions were
purposely made applicable to existing certificates of public convenience. The history of Commonwealth Act No. 454
reveals that there was an attempt to suppress, by way of amendment, the sentence "and likewise, that the certificate shall
be valid only for a definite period of time," but the attempt failed:

xxx xxx xxx

Sr. CUENCO. Señor Presidente, para otra enmienda. En la misma pagina, lineas 23 y 24, pido que se supriman
las palabras 'and likewise, that the certificate shall be valid only for a definite period time.' Esta disposicion del
proyecto autoriza a la Comision de Servicios Publicos a fijar un plazo de vigencia certificado de conveniencia
publica. Todo el mundo sabe que bo se puede determinar cuando los intereses del servicio publico requiren la
explotacion de un servicio publico y ha de saber la Comision de Servisios, si en un tiempo determinado, la
explotacion de algunos buses en cierta ruta ya no tiene de ser, sobre todo, si tiene en cuenta; que la explotacion
de los servicios publicos depende de condiciones flutuantes, asi como del volumen como trafico y de otras
condiciones. Ademas, el servicio publico se concede por la Comision de Servicios Publicos el interes publico asi
lo exige. El interes publico no tiene duracion fija, no es permanente; es un proceso mas o menos indefinido en
cuanto al tiempo. Se ha acordado eso en el caucus de anoche.

EL PRESIDENTE PRO TEMPORE. ¿Que dice el Comite?

Sr. ALANO. El Comite siente tener que rechazar esa enmienda, en vista de que esto certificados de conveniencia
publica es igual que la franquicia: sepuede extender. Si los servicios presentados por la compañia durante el
tiempo de su certificado lo require, puede pedir la extension y se le extendera; pero no creo conveniente el que
nosotros demos un certificado de conveniencia publica de una manera que podria pasar de cincuenta anos,
porque seria anticonstitucional.

xxx xxx xxx

By a majority vote the proposed amendment was defeated. (Sesion de 17 de mayo de 1939, Asamblea Nacional.)

The petitioner is mistaken in the suggestion that, simply because its existing certificates had been granted before June 8,
1939, the date when Commonwealth Act No. 454, amendatory of section 15 of Commonwealth Act No. 146, was
approved, it must be deemed to have the right of holding them in perpetuity. Section 74 of the Philippine Bill provided that
"no franchise, privilege, or concession shall be granted to any corporation except under the conditions that it shall be
subject to amendment, alteration, or repeal by the Congress of the United States." The Jones Law, incorporating a similar
mandate, provided, in section 28, that "no franchise or right shall be granted to any individual, firm, or corporation except
under the conditions that it shall be subject to amendment, alteration, or repeal by the Congress of the United States."
Lastly, the Constitution of the Philippines provided, in section 8 of Article XIII, that "no franchise or right shall be granted to
any individual, firm, or corporation, except under the condition that it shall be subject to amendment, alteration, or repeal
by the National Assembly when the public interest so requires." The National Assembly, by virtue of the Constitution,
logically succeeded to the Congress of the United States in the power to amend, alter or repeal any franchise or right
granted prior to or after the approval of the Constitution; and when Commonwealth Acts Nos. 146 and 454 were enacted,
the National Assembly, to the extent therein provided, has declared its will and purpose to amend or alter existing
certificates of public convenience.

Upon the other hand, statutes enacted for the regulation of public utilities, being a proper exercise by the state of its police
power, are applicable not only to those public utilities coming into existence after its passage, but likewise to those already
established and in operation.

Nor is there any merit in petitioner's contention, that, because of the establishment of petitioner's operations prior
to May 1, 1917, they are not subject to the regulations of the Commission. Statutes for the regulation of public
utilities are a proper exercise by the state of its police power. As soon as the power is exercised, all phases of
operation of established utilities, become at once subject to the police power thus called into operation.
Procedures' Transportation Co. v. Railroad Commission, 251 U. S. 228, 40 Sup. Ct. 131, 64 Law. ed. 239, Law v.
Railroad Commission, 184 Cal. 737, 195 Pac. 423, 14 A. L. R. 249. The statute is applicable not only to those
public utilities coming into existence after its passage, but likewise to those already established and in operation.
The 'Auto Stage and Truck Transportation Act' (Stats. 1917, c. 213) is a statute passed in pursuance of the police
power. The only distinction recognized in the statute between those established before and those established
after the passage of the act is in the method of the creation of their operative rights. A certificate of public
convenience and necessity it required for any new operation, but no such certificate is required of any
transportation company for the operation which was actually carried on in good faith on May 1, 1917, This
distinction in the creation of their operative rights in no way affects the power of the Commission to supervise and
regulate them. Obviously the power of the Commission to hear and dispose of complaints is as effective against
companies securing their operative rights prior to May 1, 1917, as against those subsequently securing such right
under a certificate of public convenience and necessity. (Motor Transit Co. et al. v. Railroad Commission of
California et al., 209 Pac. 586.)

Moreover, Commonwealth Acts Nos. 146 and 454 are not only the organic acts of the Public Service Commission but are
"a part of the charter of every utility company operating or seeking to operate a franchise" in the Philippines. (Streator
Aqueduct Co. v. et al., 295 Fed. 385.) The business of a common carrier holds such a peculiar relation to the public
interest that there is superinduced upon it the right of public regulation. When private property is "affected with a public
interest it ceased 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 be controlled by the public for the
common good, to the extent of the interest he has thus created. He may withdraw his grant by discounting the use, but so
long as he maintains the use he must submit to control. Indeed, this right of regulation is so far beyond question that it is
well settled that the power of the state to exercise legislative control over public utilities may be exercised through boards
of commissioners. (Fisher vs. Yangco Steamship Company, 31 Phil., 1, citing Munn vs. Illinois, 94 U.S. 113; Georgia R. &
Bkg. Co. vs. Smith, 128 U.S. 174; Budd vs. New York, 143 U.S. 517; New York etc. R. Co. vs. Bristol 151 U.S. 556, 571;
Connecticut etc. R. Co. vs. Woodruff, 153 U.S. 689; Louisville etc. Ry Co. vs. Kentucky, 161 U.S. 677, 695.) This right of
the state to regulate public utilities is founded upon the police power, and statutes for the control and regulation of utilities
are a legitimate exercise thereof, for the protection of the public as well as of the utilities themselves. Such statutes are,
therefore, not unconstitutional, either impairing the obligation of contracts, taking property without due process, or denying
the equal protection of the laws, especially inasmuch as the question whether or not private property shall be devoted to a
public and the consequent burdens assumed is ordinarily for the owner to decide; and if he voluntarily places his property
in public service he cannot complain that it becomes subject to the regulatory powers of the state. (51 C. J., sec. 21, pp.
9-10.) in the light of authorities which hold that a certificate of public convenience constitutes neither a franchise nor
contract, confers no property right, and is mere license or privilege. (Burgess vs. Mayor & Alderman of Brockton, 235
Mass. 95, 100, 126 N. E. 456; Roberto vs. Commisioners of Department of Public Utilities, 262 Mass. 583, 160 N. E. 321;
Scheible vs. Hogan, 113 Ohio St. 83, 148 N. E. 581; Martz vs. Curtis [J. L.] Cartage Co. [1937], 132 Ohio St. 271, 7 N. E.
[d] 220; Manila Yellow Taxicab Co. vs. Sabellano, 59 Phil., 773.)

Whilst the challenged provisions of Commonwealth Act No. 454 are valid and constitutional, we are, however, of the
opinion that the decision of the Public Service Commission should be reversed and the case remanded thereto for further
proceedings for the reason now to be stated. The Public Service Commission has power, upon proper notice and hearing,
"to amend, modify or revoke at any time any certificate issued under the provisions of this Act, whenever the facts and
circumstances on the strength of which said certificate was issued have been misrepresented or materially changed."
(Section 16, par. [m], Commonwealth Act No. 146.) The petitioner's application here was for an increase of its equipment
to enable it to comply with the conditions of its certificates of public convenience. On the matter of limitation to twenty five
(25) years of the life of its certificates of public convenience, there had been neither notice nor opportunity given the
petitioner to be heard or present evidence. The Commission appears to have taken advantage of the petitioner to
augment petitioner's equipment in imposing the limitation of twenty-five (25) years which might as well be twenty or fifteen
or any number of years. This is, to say the least, irregular and should not be sanctioned. There are cardinal primary rights
which must be respected even in proceedings of this character. 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 Justice 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." 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 vs. 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 or consideration." 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 its decision. A decision with absolutely nothing to support it is a nullity, at least when directly
attacked. (Edwards vs. McCoy, supra.) This principle emanates from the more fundamental principle that the genius of
constitutional government is contrary to the vesting of unlimited power anywhere. Law is both a grant and a limitation
upon power.

The decision appealed from is hereby reversed and the case remanded to the Public Service Commission for further
proceedings in accordance with law and this decision, without any pronouncement regarding costs. So ordered.
G.R. No. L-37878 November 25, 1932

MANILA ELECTRIC COMPANY, petitioner,


vs.
PASAY TRANSPORTATION COMPANY, INC., ET AL., respondents.

MALCOLM, J.:

The preliminary and basic question presented by the petition of the Manila Electric Company, requesting the members of
the Supreme Court, sitting as a board of arbitrators, to fix the terms upon which certain transportation companies shall be
permitted to use the Pasig bridge of the Manila Electric Company and the compensation to be paid to the Manila Electric
Company by such transportation companies, relates to the validity of section 11 of Act No. 1446 and to the legal right of
the members of the Supreme Court, sitting as a board of arbitrators, to act on the petition. Act No. 1446 above referred to
is entitled. "An Act granting a franchise to Charles M. Swift to construct, maintain, and operate an electric railway, and to
construct, maintain, and operate an electric light, heat, and power system from a point in the City of Manila in an easterly
direction to the town of Pasig, in the Province of Rizal." Section 11 of the Act provides: "Whenever any franchise or right
of way is granted to any other person or corporation, now or hereafter in existence, over portions of the lines and tracks of
the grantee herein, the terms on which said other person or corporation shall use such right of way, and the compensation
to be paid to the grantee herein by such other person or corporation for said use, shall be fixed by the members of the
Supreme Court, sitting as a board of arbitrators, the decision of a majority of whom shall be final."

When the petition of the Manila Electric Company was filed in this court, it was ordered that the petitioner be required to
serve copies on the Attorney-General and the transportation companies affected by the petition. Thereafter, the Attorney-
General disclaimed any interest in the proceedings, and opposition was entered to the petition by a number of public utility
operators. On the submission of memoranda after an oral hearing, the petition was made ready for resolution.

Examining the statutory provision which is here invoked, it is first noted that power is attempted to be granted to the
members of the Supreme Court sitting as a board of arbitrators and to the Supreme Court as an entity. It is next seen that
the decision of a majority of the members of the Supreme Court is made final. And it is finally observed that the franchise
granted the Manila Electric Company by the Government of the Philippine Islands, although only a contract between the
parties to it, is now made to effect the rights of persons not signatories to the covenant.

The law calls for arbitration which represents a method of the parties' own choice. A submission to arbitration is a
contract. The parties to an arbitration agreement may not oust the courts of jurisdiction of the matters submitted to
arbitration. These are familiar rules which find support in articles 1820 and 1821 of the Civil Code. Citation of authority is
hardly necessary, except that it should be recalled that in the Philippines, and in the United States for that matter, it has
been held that a clause in a contract, providing that all matters in dispute between the parties shall be referred to
arbitrators and to them alone, is contrary to public policy and cannot oust the courts of jurisdiction (Wahl and
Wahl vs. Donaldson, Sims & Co. [1903], 2 Phil., 301; Puentebella vs. Negros Coal Co. [1927], 50 Phil., 69; Vega vs. San
Carlos Milling Co. [1924], 51 Phil., 908; District of Columbia vs. Bailey [1897], 171 U. S., 161.)

We would not be understood as extending the principles governing arbitration and award too far. Unless the arbitration
agreement is such as absolutely to close the doors of the courts against the parties, the courts should look with favor
upon such amicable arrangements. We can also perceive a distinction between a private contract for submission to
arbitration and agreements to arbitrate falling within the terms of a statute enacted for such purpose and affecting others
than the parties to a particular franchise. Here, however, whatever else may be said in extenuation, it remains true that
the decision of the board of arbitrators is made final, which if literally enforced would leave a public utility, not a party to
the contract authorized by Act No. 1446, without recourse to the courts for a judicial determination of the question in
dispute.

Counsel for the petitioner rely principally on the case of Tallassee Falls Mfg. Co. vs. Commissioner's Court [1908], 158
Ala., 263. It was there held that an Act of a state legislature authorizing the commissioners' court of a certain county to
regulate and fix the rate of toll to be charged by the owners of a bridge is not unconstitutional as delegating legislative
power to the courts. But that is not the question before us. Here the question is not one of whether or not there has been a
delegation of legislative authority to a court. More precisely, the issue concerns the legal right of the members of the
Supreme Court, sitting as a board of arbitrators the decision of a majority of whom shall be final, to act in that capacity.

We run counter to this dilemma. Either the members of the Supreme Court, sitting as a board of arbitrators, exercise
judicial functions, or the members of the Supreme Court, sitting as board of arbitrators, exercise administrative
or quasi judicial functions. The first case would appear not to fall within the jurisdiction granted the Supreme Court. Even
conceding that it does, it would presuppose the right to bring the matter in dispute before the courts, for any other
construction would tend to oust the courts of jurisdiction and render the award a nullity. But if this be the proper
construction, we would then have the anomaly of a decision by the members of the Supreme Court, sitting as a board of
arbitrators, taken therefrom to the courts and eventually coming before the Supreme Court, where the Supreme Court
would review the decision of its members acting as arbitrators. Or in the second case, if the functions performed by the
members of the Supreme Court, sitting as a board of arbitrators, be considered as administrative or quasi judicial in
nature, that would result in the performance of duties which the members of the Supreme Court could not lawfully take it
upon themselves to perform. The present petition also furnishes an apt illustration of another anomaly, for we find the
Supreme Court as a court asked to determine if the members of the court may be constituted a board of arbitrators, which
is not a court at all.lawphil.net

The Supreme Court of the Philippine Islands represents one of the three divisions of power in our government. It is judicial
power and judicial power only which is exercised by the Supreme Court. Just as the Supreme Court, as the guardian of
constitutional rights, should not sanction usurpations by any other department of the government, so should it as strictly
confine its own sphere of influence to the powers expressly or by implication conferred on it by the Organic Act. The
Supreme Court and its members should not and cannot be required to exercise any power or to perform any trust or to
assume any duty not pertaining to or connected with the administering of judicial functions.

The Organic Act provides that the Supreme Court of the Philippine Islands shall possess and exercise jurisdiction as
heretofore provided and such additional jurisdiction as shall hereafter be prescribed by law (sec. 26). When the Organic
Act speaks of the exercise of "jurisdiction" by the Supreme Court, it could not only mean the exercise of "jurisdiction" by
the Supreme Court acting as a court, and could hardly mean the exercise of "jurisdiction" by the members of the Supreme
Court, sitting as a board of arbitrators. There is an important distinction between the Supreme Court as an entity and the
members of the Supreme Court. A board of arbitrators is not a "court" in any proper sense of the term, and possesses
none of the jurisdiction which the Organic Act contemplates shall be exercised by the Supreme Court.lawph!l.net

In the last judicial paper from the pen of Chief Justice Taney, it was said:

The power conferred on this court is exclusively judicial, and it cannot be required or authorized to exercise any
other. . . . Its jurisdiction and powers and duties being defined in the organic law of the government, and being all
strictly judicial, Congress cannot require or authorize the court to exercise any other jurisdiction or power, or
perform any other duty. . . . The award of execution is a part, and an essential part of every judgment passed by a
court exercising judicial power. It is no judgment, in the legal sense of the term, without it. Without such an award
the judgment would be inoperative and nugatory, leaving the aggrieved party without a remedy. It would be
merely an opinion, which would remain a dead letter, and without any operation upon the rights of the parties,
unless Congress should at some future time sanction it, and pass a law authorizing the court to carry its opinion
into effect. Such is not the judicial power confided to this court, in the exercise of its appellate jurisdiction; yet it is
the whole power that the court is allowed to exercise under this act of Congress. . . . And while it executes firmly
all the judicial powers entrusted to it, the court will carefully abstain from exercising any power that is not strictly
judicial in its character, and which is not clearly confided to it by the Constitution. . . . (Gordon vs. United States
[1864], 2 Wall., 561; 117 U. S., 697 Appendix.)

Confirming the decision to the basic question at issue, the Supreme Court holds that section 11 of Act No. 1446
contravenes the maxims which guide the operation of a democratic government constitutionally established, and that it
would be improper and illegal for the members of the Supreme Court, sitting as a board of arbitrators, the decision of a
majority of whom shall be final, to act on the petition of the Manila Electric Company. As a result, the members of the
Supreme Court decline to proceed further in the matter.
G.R. No. L-28790 April 29, 1968

ANTONIO H. NOBLEJAS, as Commissioner of Land Registration, petitioner,


vs.
CLAUDIO TEEHANKEE, as Secretary of Justice, and RAFAEL M. SALAS, as Executive Secretary,respondents.

REYES, J.B.L., Actg. C.J.:

Petition for a writ of prohibition with preliminary injunction to restrain the Secretary of Justice from investigating the official
actuations of the Commissioner of Land Registration, and to declare inoperative his suspension by the Executive
Secretary pending investigation.

The facts are not in dispute. Petitioner Antonio H. Noblejas is the duly appointed, confirmed and qualified Commissioner
of Land Registration, a position created by Republic Act No. 1151. By the terms of section 2 of said Act, the said
Commissioner is declared "entitled to the same compensation, emoluments and privileges as those of a Judge of the
Court of First Instance." The appropriation laws (Rep. Acts 4642, 4856 and 5170) in the item setting forth the salary of
said officer, use the following expression:

1. One Land Registration Commissioner with the rank and privileges of district judge — P19,000.00.

On March 7, 1968, respondent Secretary of Justice coursed to the petitioner a letter requiring him to explain in writing not
later than March 9, 1968 why no disciplinary action should be taken against petitioner for "approving or recommending
approval of subdivision, consolidation and consolidated-subdivision plans covering areas greatly in excess of the areas
covered by the original titles." Noblejas answered and apprised the Secretary of Justice that, as he enjoyed the rank,
privileges, emoluments and compensation of a Judge of the Court of First Instance, he could only be suspended and
investigated in the same manner as a Judge of the Courts of First Instance, and, therefore, the papers relative to his case
should be submitted to the Supreme Court, for action thereon conformably to section 67 of the Judiciary Act (R. A. No.
296) and Revised Rule 140 of the Rules of Court.

On March 17, 1968, petitioner Noblejas received a communication signed by the Executive Secretary, "by authority of the
President", whereby, based on "finding that a prima facie case exists against you for gross negligence and conduct
prejudicial to the public interest", petitioner was "hereby suspended, upon receipt hereof, pending investigation of the
above charges."

On March 18, 1968, petitioner applied to this Court, reiterating the contentions advanced in his letter to the Secretary of
Justice, claiming lack of jurisdiction and abuse of discretion, and praying for restraining writs. In their answer respondents
admit the facts but denied that petitioner, as Land Registration Commissioner, exercises judicial functions, or that the
petitioner may be considered a Judge of First Instance within the purview of the Judiciary Act and Revised Rules of Court
140; that the function of investigating charges against public officers is administrative or executive in nature; that the
Legislature may not charge the judiciary with non-judicial functions or duties except when reasonably incidental to the
fulfillment of judicial duties, as it would be in violation of the principle of the separation of powers.

Thus, the stark issue before this Court is whether the Commissioner of Land Registration may only be investigated by the
Supreme Court, in view of the conferment upon him by the Statutes heretofore mentioned (Rep. Act 1151 and
Appropriation Laws) of the rank and privileges of a Judge of the Court of First Instance.

First to militate against petitioner's stand is the fact that section 67 of the Judiciary Act providing for investigation,
suspension or removal of Judges, specifically recites that "No District Judge shall be separated or removed from office by
the President of the Philippines unless sufficient cause shall exist in the judgment of the Supreme Court . . ." and it is
nowhere claimed, much less shown, that the Commissioner of Land Registration is a District Judge, or in fact a member
of the Judiciary at all.

In the second place, petitioner's theory that the grant of "privileges of a Judge of First Instance" includes by implication the
right to be investigated only by the Supreme Court and to be suspended or removed upon its recommendation, would
necessarily result in the same right being possessed by a variety of executive officials upon whom the Legislature had
indiscriminately conferred the same privileges. These favoured officers include (a) the Judicial Superintendent of the
Department of Justice (Judiciary Act, sec. 42); (b) the Assistant Solicitors General, seven in number (Rep. Act No. 4360);
(c) the City Fiscal of Quezon City (R.A. No. 4495); (d) the City Fiscal of Manila (R. A. No. 4631) and (e) the Securities and
Exchange Commissioner (R. A. No. 5050, s. 2). To adopt petitioner's theory, therefore, would mean placing upon the
Supreme Court the duty of investigating and disciplining all these officials, whose functions are plainly executive, and the
consequent curtailment by mere implication from the Legislative grant, of the President's power to discipline and remove
administrative officials who are presidential appointees, and which the Constitution expressly placed under the President's
supervision and control (Constitution, Art. VII, sec. 10[i]).

Incidentally, petitioner's stand would also lead to the conclusion that the Solicitor General, another appointee of the
President, could not be removed by the latter, since the Appropriation Acts confer upon the Solicitor General the rank and
privileges of a Justice of the Court of Appeals, and these Justices are only removable by the Legislature, through the
process of impeachment (Judiciary Act, sec. 24, par. 2).

In our opinion, such unusual corollaries could not have been intended by the Legislature when it granted these executive
officials the rank and privileges of Judges of First Instance. This conclusion gains strength when account is taken of the
fact that in the case of the Judges of the Court of Agrarian Relations and those of the Court of Tax Appeals, the organic
statutes of said bodies (Republic Act 1267, as amended by Act 1409; Rep. Act No. 1125) expressly provide that they are
to be removed from office for the same causes and in the same manner provided by law for Judges of First Instance", or
"members of the judiciary of appellate rank". The same is true of Judges of the Court of Agrarian Relations (Comm. Act
No. 103) and of the Commissioner of Public Service (Public Service Act, Sec. 3). It is thereby shown that where the
legislative design is to make the suspension or removal procedure prescribed for Judges of First Instance applicable to
other officers, provision to that effect is made in plain and unequivocal language.

But the more fundamental objection to the stand of petitioner Noblejas is that, if the Legislature had really intended to
include in the general grant of "privileges" or "rank and privileges of Judges of the Court of First Instance" the right to be
investigated by the Supreme Court, and to be suspended or removed only upon recommendation of that Court, then such
grant of privileges would be unconstitutional, since it would violate the fundamental doctrine of separation of powers, by
charging this court with the administrative function of supervisory control over executive officials, and simultaneously
reducing pro tanto the control of the Chief Executive over such officials.

Justice Cardozo ruled in In re Richardson et al., Connolly vs. Scudder (247 N. Y. 401, 160 N. E. 655), saying:

There is no inherent power in the Executive or Legislature to charge the judiciary with administrative functions
except when reasonably incidental to the fulfillment of judicial duties.

The United States Supreme Court said in Federal Radio Commission vs. General Electric Co., et al., 281 U.S. 469, 74
Law. Ed., 972, —

But this court cannot be invested with jurisdiction of that character, whether for purposes of review or otherwise. It
was brought into being by the judiciary article of the Constitution, is invested with judicial power only and can have
no jurisdiction other than of cases and controversies falling within the classes enumerated in that article. It cannot
give decisions which are merely advisory; nor can it exercise or participate in the exercise of functions which are
essentially legislative or administrative. Keller v. Potomac Electric Power Co., supra (261 U.S. 444, 67 L. ed. 736,
43 Sup. Ct. Rep. 445) and cases cited; Postum Cereal Co. vs. California Fig Nut Co. supra (272 U.S. 700, 701,
71 L. ed. 481, 47 Sup. Ct. Rep. 284); Liberty Warehouse Co. v. Grannis, 273 U.S. 70, 74, 71 L. ed. 541, 544, 47
Sup. Ct. Rep. 282; Willing v. Chicago Auditorium Asso. 277 U.S. 274, 289, 72 L. ed. 880, 884, 48 Sup. Ct. Rep.
507; Ex parte Bakelite Corp. 279 U.S. 438, 449, 73 L. ed. 789, 793, 49 Sup. Ct. Rep. 411. (Federal Radio
Commission v. General Electric Company, 281 U.S. 469, 74 L. ed. 972.) (Emphasis supplied.)

In this spirit, it has been held that the Supreme Court of the Philippines and its members should not and cannot be
required to exercise any power or to perform any trust or to assume any duty not pertaining to or connected with the
administration of judicial functions; and a law requiring the Supreme Court to arbitrate disputes between public utilities
was pronounced void in Manila Electric Co. vs. Pasay Transportation Co. (57 Phil. 600).1äwphï1.ñët

Petitioner Noblejas seeks to differentiate his case from that of other executive officials by claiming that under Section 4 of
Republic Act No. 1151, he is endowed with judicial functions. The section invoked runs as follows:

Sec. 4. Reference of doubtful matters to Commissioner of Land Registration. — When the Register of Deeds is in
doubt with regard to the proper step to be taken or memorandum to be made in pursuance of any deed,
mortgage, or other instrument presented to him for registration, or where any party in interest does not agree with
the Register of Deeds with reference to any such matter, the question shall be submitted to the Commissioner of
Land Registration either upon the certification of the Register of Deeds, stating the question upon which he is in
doubt, or upon the suggestion in writing by the party in interest; and thereupon the Commissioner, after
consideration of the matter shown by the records certified to him, and in case of registered lands, after notice to
the parties and hearing, shall enter an order prescribing the step to be taken or memorandum to be made. His
decision in such cases shall be conclusive and binding upon all Registers of Deeds: Provided, further, That, when
a party in interest disagrees with the ruling or resolution of the Commissioner and the issue involves a question of
law, said decision may be appealed to the Supreme Court within thirty days from and after receipt of the notice
thereof.

Serious doubt may well be entertained as to whether the resolution of a consulta by a Register of Deeds is a judicial
function, as contrasted with administrative process. It will be noted that by specific provision of the section, the decision of
the Land Registration Commissioner "shall be conclusive and binding upon all Registers of Deeds" alone, and not upon
other parties. This limitation1 in effect identifies the resolutions of the Land Registration Commissioner with those of any
other bureau director, whose resolutions or orders bind his subordinates alone. That the Commissioner's resolutions are
appealable does not prove that they are not administrative; any bureau director's ruling is likewise appealable to the
corresponding department head.

But even granting that the resolution of consultas by the Register of Deeds should constitute a judicial (or more
properly quasi judicial) function, analysis of the powers and duties of the Land Registration Commissioner under Republic
Act No. 1151, sections 3 and 4, will show that the resolution of consultas are but a minimal portion of his administrative or
executive functions and merely incidental to the latter.

Conformably to the well-known principle of statutory construction that statutes should be given, whenever possible, a
meaning that will not bring them in conflict with the Constitution,2 We are constrained to rule that the grant by Republic Act
1151 to the Commissioner of Land Registration of the "same privileges as those of a Judge of the Court of First Instance"
did not include, and was not intended to include, the right to demand investigation by the Supreme Court, and to be
suspended or removed only upon that Court's recommendation; for otherwise, the said grant of privileges would be
violative of the Constitution and be null and void. Consequently, the investigation and suspension of the aforenamed
Commissioner pursuant to sections 32 and 34 of the Civil Service Law (R. A. 2260) are neither abuses of discretion nor
acts in excess of jurisdiction.

WHEREFORE, the writs of prohibition and injunction applied for are denied, and the petition is ordered dismissed. No
costs.
A.M. No. 88-7-1861-RTC October 5, 1988

IN RE: DESIGNATION OF JUDGE RODOLFO U. MANZANO AS MEMBER OF THE ILOCOS NORTE PROVINCIAL
COMMITTEE ON JUSTICE.

PADILLA, J.:

On 4 July 1988, Judge Rodolfo U. Manzano, Executive Judge, RTC, Bangui, Ilocos Norte, Branch 19, sent this Court a
letter which reads:

Hon. Marcelo Fernan


Chief Justice of the Supreme Court
of the Philippines
Manila

Thru channels: Hon. Leo Medialdea


Court Administrator
Supreme Court of the Philippines

Sir:

By Executive Order RF6-04 issued on June 21, 1988 by the Honorable Provincial Governor of Ilocos
Norte, Hon. Rodolfo C. Farinas, I was designated as a member of the Ilocos Norte Provincial Committee
on Justice created pursuant to Presidential Executive Order No. 856 of 12 December 1986, as amended
by Executive Order No. 326 of June 1, 1988. In consonance with Executive Order RF6-04, the Honorable
Provincial Governor of Ilocos Norte issued my appointment as a member of the Committee. For your
ready reference, I am enclosing herewith machine copies of Executive Order RF6-04 and the
appointment.

Before I may accept the appointment and enter in the discharge of the powers and duties of the position
as member of the Ilocos (Norte) Provincial Committee on Justice, may I have the honor to request for the
issuance by the Honorable Supreme Court of a Resolution, as follows:

(1) Authorizing me to accept the appointment and to as assume and discharge the
powers and duties attached to the said position;

(2) Considering my membership in the Committee as neither violative of the


Independence of the Judiciary nor a violation of Section 12, Article VIII, or of the second
paragraph of Section .7, Article IX (B), both of the Constitution, and will not in any way
amount to an abandonment of my present position as Executive Judge of Branch XIX,
Regional Trial Court, First Judicial Region, and as a member of the Judiciary; and

(3) Consider my membership in the said Committee as part of the primary functions of an
Executive Judge.

May I please be favored soon by your action on this request.

Very respectfully yours,

(Sgd) RODOLFO U. MANZANO


Judge

An examination of Executive Order No. 856, as amended, reveals that Provincial/City Committees on Justice are created
to insure the speedy disposition of cases of detainees, particularly those involving the poor and indigent ones, thus
alleviating jail congestion and improving local jail conditions. Among the functions of the Committee are—
3.3 Receive complaints against any apprehending officer, jail warden, final or judge who may be found to
have committed abuses in the discharge of his duties and refer the same to proper authority for
appropriate action;

3.5 Recommend revision of any law or regulation which is believed prejudicial to the proper administration
of criminal justice.

It is evident that such Provincial/City Committees on Justice perform administrative functions. Administrative functions are
those which involve the regulation and control over the conduct and affairs of individuals for; their own welfare and the
promulgation of rules and regulations to better carry out the policy of the legislature or such as are devolved upon the
administrative agency by the organic law of its existence (Nasipit Integrated Arrastre and Stevedoring Services Inc., vs.
Tapucar, SP-07599-R, 29 September 1978, Blacks Law Dictionary).

Furthermore, under Executive Order No. 326 amending Executive Order No. 856, it is provided that—

Section 6. Supervision.—The Provincial/City Committees on Justice shall be under the supervision of the
Secretary of justice Quarterly accomplishment reports shall be submitted to the Office of the Secretary of
Justice.

Under the Constitution, the members of the Supreme Court and other courts established by law shag not be designated to
any agency performing quasi- judicial or administrative functions (Section 12, Art. VIII, Constitution).

Considering that membership of Judge Manzano in the Ilocos Norte Provincial Committee on Justice, which discharges a
administrative functions, will be in violation of the Constitution, the Court is constrained to deny his request.

Former Chief Justice Enrique M. Fernando in his concurring opinion in the case of Garcia vs. Macaraig (39 SCRA 106)
ably sets forth:

2. While the doctrine of separation of powers is a relative theory not to be enforced with pedantic rigor,
the practical demands of government precluding its doctrinaire application, it cannot justify a member of
the judiciary being required to assume a position or perform a duty non-judicial in character. That is
implicit in the principle. Otherwise there is a plain departure from its command. The essence of the trust
reposed in him is to decide. Only a higher court, as was emphasized by Justice Barredo, can pass on his
actuation. He is not a subordinate of an executive or legislative official, however eminent. It is
indispensable that there be no exception to the rigidity of such a norm if he is, as expected, to be confined
to the task of adjudication. Fidelity to his sworn responsibility no less than the maintenance of respect for
the judiciary can be satisfied with nothing less.

This declaration does not mean that RTC Judges should adopt an attitude of monastic insensibility or unbecoming
indifference to Province/City Committee on Justice. As incumbent RTC Judges, they form part of the structure of
government. Their integrity and performance in the adjudication of cases contribute to the solidity of such structure. As
public officials, they are trustees of an orderly society. Even as non-members of Provincial/City Committees on Justice,
RTC judges should render assistance to said Committees to help promote the laudable purposes for which they exist, but
only when such assistance may be reasonably incidental to the fulfillment of their judicial duties.

ACCORDINGLY, the aforesaid request of Judge Rodolfo U. Manzano is DENIED.

SO ORDERED.
G.R. No. L-51122 March 25, 1982

EUGENIO J. PUYAT, ERWIN L. CHIONGBIAN, EDGARDO P. REYES, ANTONIO G. PUYAT, JAIME R. BLANCO,
RAFAEL R. RECTO and REYNALDO L. LARDIZABAL, petitioners,
vs.
HON. SIXTO T. J. DE GUZMAN, JR., as Associate Commissioner of the Securities & Exchange Commission,
EUSTAQUIO T. C. ACERO, R. G. VILDZIUS, ENRIQUE M. BELO, MANUEL G. ABELLO, SERVILLANO DOLINA,
JUANITO MERCADO and ESTANISLAO A. FERNANDEZ, respondents.

MELENCIO-HERRERA, J.:

This suit for certiorari and Prohibition with Preliminary Injunction is poised against the Order of respondent Associate
Commissioner of the Securities and Exchange Commission (SEC) granting Assemblyman Estanislao A. Fernandez leave
to intervene in SEC Case No. 1747.

A question of novel import is in issue. For its resolution, the following dates and allegations are being given and made:

a) May 14,1979. An election for the eleven Directors of the International Pipe Industries Corporation (IPI) a private
corporation, was held. Those in charge ruled that the following were elected as Directors:

Eugenio J. Puyat Eustaquio T.C. Acero


Erwin L. Chiongbian R. G. Vildzius
Edgardo P. Reyes Enrique M. Belo
Antonio G. Puyat Servillano Dolina
Jaime R. Blanco Juanito Mercado
Rafael R. Recto

Those named on the left list may be called the Puyat Group; those on the right, the Acero Group. Thus, the Puyat Group
would be in control of the Board and of the management of IPI.

b) May 25, 1979. The Acero Group instituted at the Securities and Exchange Commission (SEC) quo
warrantoproceedings, docketed as Case No. 1747 (the SEC Case), questioning the election of May 14, 1979. The Acero
Group claimed that the stockholders' votes were not properly counted.

c) May 25-31, 1979. The Puyat Group claims that at conferences of the parties with respondent SEC Commissioner de
Guzman, Justice Estanislao A. Fernandez, then a member of the Interim Batasang Pambansa, orally entered his
appearance as counsel for respondent Acero to which the Puyat Group objected on Constitutional grounds. Section 11,
Article VIII, of the 1973 Constitution, then in force, provided that no Assemblyman could "appear as counsel before ... any
administrative body", and SEC was an administrative body. Incidentally, the same prohibition was maintained by the April
7, 1981 plebiscite. The cited Constitutional prohibition being clear, Assemblyman Fernandez did not continue his
appearance for respondent Acero.

d) May 31, 1979. When the SEC Case was called, it turned out that:

(i) On May 15, 1979, Assemblyman Estanislao A. Fernandez had purchased from Augusto A. Morales ten
(10) shares of stock of IPI for P200.00 upon request of respondent Acero to qualify him to run for election
as a Director.

(ii) The deed of sale, however, was notarized only on May 30, 1979 and was sought to be registered on
said date.

(iii) On May 31, 1979, the day following the notarization of Assemblyman Fernandez' purchase, the latter
had filed an Urgent Motion for Intervention in the SEC Case as the owner of ten (10) IPI shares alleging
legal interest in the matter in litigation.

e) July 17, 1979. The SEC granted leave to intervene on the basis of Atty. Fernandez' ownership of the said ten
shares. 1 It is this Order allowing intervention that precipitated the instant petition for certiorari and Prohibition with
Preliminary Injunction.
f) July 3, 1979. Edgardo P. Reyes instituted a case before the Court of First Instance of Rizal (Pasig), Branch XXI, against
N.V. Verenigde Bueinzenfabrieken Excelsior — De Maas and respondent Eustaquio T. C. Acero and others, to annul the
sale of Excelsior's shares in the IPI to respondent Acero (CC No. 33739). In that case, Assemblyman Fernandez
appeared as counsel for defendant Excelsior In L-51928, we ruled that Assemblyman Fernandez could not appear as
counsel in a case originally filed with a Court of First Instance as in such situation the Court would be one "without
appellate jurisdiction."

On September 4, 1979, the Court en banc issued a temporary Restraining Order enjoining respondent SEC Associate
Commissioner from allowing the participation as an intervenor, of respondent Assemblyman Estanislao Fernandez at the
proceedings in the SEC Case.

The Solicitor General, in his Comment for respondent Commissioner, supports the stand of the latter in allowing
intervention. The Court en banc, on November 6, 1979, resolved to consider the Comment as an Answer to the Petition.

The issue which will be resolved is whether or not Assemblyman Fernandez, as a then stockholder of IPI may intervene in
the SEC Case without violating Section 11, Article VIII of the Constitution, which, as amended, now reads:

SEC. 11.

No Member of the Batasang Pambansa shall appear as counsel before any court without appellate
jurisdiction.

before any court in any civil case wherein the Government, or any subdivision, agency, or instrumentality
thereof is the adverse party,

or in any criminal case wherein any officer or employee of the Government is accused of an offense
committed in relation to his office,

or before any administrative body.

Neither shall he, directly or indirectly be interested financially in any contract with, or in any franchise or
special privilege granted by the Government, or any subdivision, agency or instrumentality thereof,
including any government-owned or controlled corporation, during his term of office.

He shall not accept employment to intervene in any cause or matter where he may be called to act on
account of his office. (Emphasis supplied)

What really has to be resolved is whether or not, in intervening in the SEC Case, Assemblyman Fernandez is, in effect,
appearing as counsel, albeit indirectly, before an administrative body in contravention of the Constitutional provision.

Ordinarily, by virtue of the Motion for Intervention, Assemblyman Fernandez cannot be said to be appearing as counsel.
Ostensibly, he is not appearing on behalf of another, although he is joining the cause of the private respondents. His
appearance could theoretically be for the protection of his ownership of ten (10) shares of IPI in respect of the matter in
litigation and not for the protection of the petitioners nor respondents who have their respective capable and respected
counsel.

However, certain salient circumstances militate against the intervention of Assemblyman Fernandez in the SEC Case. He
had acquired a mere P200.00 worth of stock in IPI, representing ten shares out of 262,843 outstanding shares. He
acquired them "after the fact" that is, on May 30, 1979, after the contested election of Directors on May 14, 1979, after
the quo warranto suit had been filed on May 25, 1979 before SEC and one day before the scheduled hearing of the case
before the SEC on May 31, 1979. And what is more, before he moved to intervene, he had signified his intention to
appear as counsel for respondent Eustaquio T. C. Acero, 2 but which was objected to by petitioners. Realizing, perhaps,
the validity of the objection, he decided, instead, to "intervene" on the ground of legal interest in the matter under litigation.
And it maybe noted that in the case filed before the Rizal Court of First Instance (L-51928), he appeared as counsel for
defendant Excelsior, co-defendant of respondent Acero therein.

Under those facts and circumstances, we are constrained to find that there has been an indirect "appearance as counsel
before ... an administrative body" and, in our opinion, that is a circumvention of the Constitutional prohibition. The
"intervention" was an afterthought to enable him to appear actively in the proceedings in some other capacity. To believe
the avowed purpose, that is, to enable him eventually to vote and to be elected as Director in the event of an unfavorable
outcome of the SEC Case would be pure naivete. He would still appear as counsel indirectly.

A ruling upholding the "intervention" would make the constitutional provision ineffective. All an Assemblyman need do, if
he wants to influence an administrative body is to acquire a minimal participation in the "interest" of the client and then
"intervene" in the proceedings. That which the Constitution directly prohibits may not be done by indirection or by a
general legislative act which is intended to accomplish the objects specifically or impliedly prohibited. 3

In brief, we hold that the intervention of Assemblyman Fernandez in SEC. No. 1747 falls within the ambit of the prohibition
contained in Section 11, Article VIII of the Constitution.

Our resolution of this case should not be construed as, absent the question of the constitutional prohibition against
members of the Batasan, allowing any stockholder, or any number of stockholders, in a corporation to intervene in any
controversy before the SEC relating to intra-corporate matters. A resolution of that question is not necessary in this case.

WHEREFORE, respondent Commissioner's Order granting Atty. Estanislao A. Fernandez leave to intervene in SEC Case
No. 1747 is hereby reversed and set aside. The temporary Restraining Order heretofore issued is hereby made
permanent.

No costs.

SO ORDERED.
[G.R. No. 86695. September 3, 1992.]

MARIA ELENA MALAGA, doing business under the name B.E. CONSTRUCTION; JOSIELEEN NAJARRO, doing
business under the name BEST BUILT CONSTRUCTION; JOSE N. OCCEÑA, doing business under the name THE
FIRM OF JOSE N. OCCEÑA; and the ILOILO BUILDERS CORPORATION, Petitioners, v. MANUEL R. PENACHOS,
JR., ALFREDO MATANGGA, ENRICO TICAR AND TERESITA VILLANUEVA, in their respective capacities as
Chairman and Members of the Pre-qualification Bids and Awards Committee (PBAC)-BENIGNO PANISTANTE, in
his capacity as President of Iloilo State College of Fisheries, as well as in their respective personal capacities;
and HON. LODRIGIO L. LEBAQUIN, Respondents.

Salas, Villareal & Velasco, for Petitioners.

Virgilio A. Sindico for Respondents.

SYLLABUS

1. ADMINISTRATIVE LAW; GOVERNMENT INSTRUMENTALITY, DEFINED. — The 1987 Administrative Code defines a
government instrumentality as follows: Instrumentality refers to any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. This term
includes regulatory agencies, chartered institutions, and government-owned or controlled corporations. (Sec. 2 (5)
Introductory Provisions).

2. ID.; CHARTERED INSTITUTION; DEFINED; APPLICATION IN CASE AT BAR. — The 1987 Administrative Code
describes a chartered institution thus: Chartered institution — refers to any agency organized or operating under a special
charter, and vested by law with functions relating to specific constitutional policies or objectives. This term includes the
state universities and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions). It is clear
from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818. There are also
indications in its charter that ISCOF is a government instrumentality. First, it was created in pursuance of the integrated
fisheries development policy of the State, a priority program of the government to effect the socio-economic life of the
nation. Second, the Treasurer of the Republic of the Philippines shall also be the ex-officio Treasurer of the state college
with its accounts and expenses to be audited by the Commission on Audit or its duly authorized representative. Third,
heads of bureaus and offices of the National Government are authorized to loan or transfer to it, upon request of the
president of the state college, such apparatus, equipment, or supplies and even the services of such employees as can
be spared without serious detriment to public service. Lastly, an additional amount of P1.5M had been appropriated out of
the funds of the National Treasury and it was also decreed in its charter that the funds and maintenance of the state
college would henceforth be included in the General Appropriations Law. (Presidential Decree No. 1523)

3. ID.; PROHIBITION OF ANY COURT FROM ISSUING INJUNCTION IN CASES INVOLVING INFRASTRUCTURE
PROJECTS OF GOVERNMENT (P.D. 1818); POWER OF THE COURTS TO RESTRAIN APPLICATION. — In the case
of Datiles and Co. v. Sucaldito, (186 SCRA 704) this Court interpreted a similar prohibition contained in P.D. 605, the law
after which P.D. 1818 was patterned. It was there declared that the prohibition pertained to the issuance of injunctions or
restraining orders by courts against administrative acts in controversies involving facts or the exercise of discretion in
technical cases. The Court observed that to allow the courts to judge these matters would disturb the smooth functioning
of the administrative machinery. Justice Teodoro Padilla made it clear, however, that on issues definitely outside of this
dimension and involving questions of law, courts could not be prevented by P.D. No. 605 from exercising their power to
restrain or prohibit administrative acts. We see no reason why the above ruling should not apply to P.D. 1818. There are
at least two irregularities committed by PBAC that justified injunction of the bidding and the award of the project.

4. ID.; POLICIES AND GUIDELINES PRESCRIBED FOR GOVERNMENT INFRASTRUCTURE (PD 1594); RULES
IMPLEMENTING THEREOF, NOT SUFFICIENTLY COMPLIED WITH IN CASE AT BAR. — Under the Rules
Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure contracts, PBAC shall provide
prospective bidders with the Notice to Pre-qualification and other relevant information regarding the proposed work.
Prospective contractors shall be required to file their ARC-Contractors Confidential Application for Registration &
Classifications & the PRE-C2 Confidential Pre-qualification Statement for the Project (prior to the amendment of the rules,
this was referred to as Pre-C1) not later than the deadline set in the published Invitation to Bid, after which date no PRE-
C2 shall be submitted and received. Invitations to Bid shall be advertised for at least three times within a reasonable
period but in no case less than two weeks in at least two newspapers of general circulations. (IB 13 1.2-19, Implementing
Rules and Regulations of P.D. 1594 as amended) PBAC advertised the pre-qualification deadline as December 2, 1988,
without stating the hour thereof, and announced that the opening of bids would be at 3 o’clock in the afternoon of
December 12, 1988. This scheduled was changed and a notice of such change was merely posted at the ISCOF bulletin
board. The notice advanced the cut-off time for the submission of pre-qualification documents to 10 o’clock in the morning
of December 2, 1988, and the opening of bids to 1 o’clock in the afternoon of December 12, 1988. The new schedule
caused the pre-disqualification of the petitioners as recorded in the minutes of the PBAC meeting held on December 6,
1988. While it may be true that there were fourteen contractors who were pre-qualified despite the change in schedule,
this fact did not cure the defect of the irregular notice. Notably, the petitioners were disqualified because they failed to
meet the new deadline and not because of their expired licenses. (B.E. & Best Built’s licenses were valid until June 30,
1989. [Ex. P & O respectively: both were marked on December 28, 1988]) We have held that where the law requires a
previous advertisement before government contracts can be awarded, non-compliance with the requirement will, as a
general rule, render the same void and of no effect. (Caltex Phil. v. Delgado Bros., 96 Phil. 368) The fact that an invitation
for bids has been communicated to a number of possible bidders is not necessarily sufficient to establish compliance with
the requirements of the law if it is shown that other possible bidders have not been similarly notified.

5. ID.; ID.; ID.; PURPOSE THEREOF; CASE AT BAR. — The purpose of the rules implementing P.D. 1594 is to secure
competitive bidding and to prevent favoritism, collusion and fraud in the award of these contracts to the detriment of the
public. This purpose was defeated by the irregularities committed by PBAC. It has been held that the three principles in
public bidding are the offer to the public, an opportunity for competition and a basis for exact comparison of bids. A
regulation of the matter which excludes any of these factors destroys the distinctive character of the system and thwarts
the purpose of its adoption. (Hannan v. Board of Education, 25 Okla. 372) In the case at bar, it was the lack of proper
notice regarding the pre-qualification requirement and the bidding that caused the elimination of petitioners B.E. and Best
Built. It was not because of their expired licenses, as private respondents now claim. Moreover, the plans and
specifications which are the contractors’ guide to an intelligent bid, were not issued on time, thus defeating the guaranty
that contractors be placed on equal footing when they submit their bids. The purpose of competitive bidding is negated if
some contractors are informed ahead of their rivals of the plans and specifications that are to be the subject of their bids.

6. ID.; ID.; ID.; EFFECT OF NON-COMPLIANCE THEREOF. — It has been held in a long line of cases that a contract
granted without the competitive bidding required by law is void, and the party to whom it is awarded cannot benefit from it.
It has not been shown that the irregularities committed by PBAC were induced by or participated in by any of the
contractors. Hence, liability shall attach only to the private respondents for the prejudice sustained by the petitioners as a
result of the anomalies described above.

7. CIVIL LAW; NOMINAL DAMAGES; AWARD THEREOF, WHEN AVAILABLE. — As there is no evidence of the actual
loss suffered by the petitioners, compensatory damage may not be awarded to them. Moral damages do not appear to be
due either. Even so, the Court cannot close its eyes to the evident bad faith that characterized the conduct of the private
respondents, including the irregularities in the announcement of the bidding and their efforts to persuade the ISCOF
president to award the project after two days from receipt of the restraining order and before they moved to lift such order.
For such questionable acts, they are liable in nominal damages at least in accordance with Article 2221 of the Civil Code,
which states: Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant may be vindicated or, recognized, and not for the purpose of indemnifying the plaintiff for any
loss suffered by him. These damages are to be assessed against the private respondents in the amount of P10,000.00
each, to be paid separately for each of petitioners B.E. Construction and Best Built Construction.

DECISION

CRUZ, J.:

This controversy involves the extent and applicability of P.D. 1818, which prohibits any court from issuing injunctions in
cases involving infrastructure projects of the government.chanrobles.com.ph : virtual law library

The facts are not disputed.

The Iloilo State College of Fisheries (henceforth ISCOF) through its Pre-qualification, Bids and Awards Committee
(henceforth PBAC) caused the publication in the November 25, 26, 28, 1988 issues of the Western Visayas Daily an
Invitation to Bid for the construction of the Micro Laboratory Building at ISCOF. The notice announced that the last day for
the submission of pre-qualification requirements (PRE C-1) ** was December 2, 1988, and that the bids would be
received and opened on December 12, 1988, 3 o’clock in the afternoon. 1

Petitioners Maria Elena Malaga and Josieleen Najarro, respectively doing business under the name of the B.E.
Construction and Best Built Construction, submitted their pre-qualification documents at two o’clock in the afternoon of
December 2, 1988. Petitioner Jose Occeña submitted his own PRE-C1 on December 5, 1988. All three of them were not
allowed to participate in the bidding because their documents were considered late, having been submitted after the cut-
off time of ten o’clock in the morning of December 2, 1988.

On December 12, 1988, the petitioners filed a complaint with the Regional Trial Court of Iloilo against the chairman and
members of PBAC in their official and personal capacities. The plaintiffs claimed that although they had submitted their
PRE-C1 on time, the PBAC refused without just cause to accept them. As a result, they were not included in the list of
pre-qualified bidders, could not secure the needed plans and other documents, and were unable to participate in the
scheduled bidding.

In their prayer, they sought the resetting of the December 12, 1988 bidding and the acceptance of their PRE-C1
documents. They also asked that if the bidding had already been conducted, the defendants be directed not to award the
project pending resolution of their complaint.

On the same date, Judge Lodrigio L. Lebaquin issued a restraining order prohibiting PBAC from conducting the bidding
and awarding the project. 2

On December 16, 1988, the defendants filed a motion to lift the restraining order on the ground that the Court was
prohibited from issued restraining orders, preliminary injunctions and preliminary mandatory injunctions by P.D.
1818.chanroblesvirtualawlibrary

The decree reads pertinently as follows:chanrob1es virtual 1aw library

Section 1. No Court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction, or
preliminary infrastructure project, or a mining, fishery, forest or other natural resource development project of the
government, or any public utility operated by the government, including among others public utilities for the transport of
the goods and commodities, stevedoring and arrastre contracts, to prohibit any person or persons, entity or government
official from proceeding with, or continuing the execution or implementation of any such project, or the operation of such
public utility, or pursuing any lawful activity necessary for such execution, implementation or operation.

The movants also contended that the question of the propriety of a preliminary injunction had become moot and academic
because the restraining order was received late, at 2 o’clock in the afternoon of December 12, 1988, after the bidding had
been conducted and closed at eleven thirty in the morning of that date.

In their opposition of the motion, the plaintiffs argued against the applicability of P.D. 1818, pointing out that while ISCOF
was a state college, it had its own charter and separate existence and was not part of the national government or of any
local political subdivision. Even if P.D. 1818 were applicable, the prohibition presumed a valid and legal government
project, not one tainted with anomalies like the project at bar.

They also cited Filipinas Marble Corp. v. IAC, 3 where the Court allowed the issuance of a writ of preliminary injunction
despite a similar prohibition found in P.D. 385. The Court therein stated that:chanrob1es virtual 1aw library

The government, however, is bound by basic principles of fairness and decency under the due process clauses of the Bill
of Rights. P.D. 385 was never meant to protect officials of government-lending institutions who take over the management
of a borrower corporation, lead that corporation to bankruptcy through mismanagement or misappropriation of its funds,
and who, after ruining it, use the mandatory provisions of the decree to avoid the consequences of their misleads (p.
188, Emphasis supplied).

On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary injunction. It declared
that the building sought to be construed at the ISCOF was an infrastructure project of the government falling within the
coverage of P.D. 1818. Even if it were not, the petition for the issuance of a writ of preliminary injunction would still fail
because the sheriff’s return showed that PBAC was served a copy of the restraining order after the bidding sought to be
restrained had already been held. Furthermore, the members of the PBAC could not be restrained from awarding the
project because the authority to do so was lodged in the President of the ISCOF, who was not a party to the case. 4

In the petition now before us, it is reiterated that P.D. 1818 does not cover the ISCOF because of its separate and distinct
corporate personality. It is also stressed again that the prohibition under P.D. 1818 could not apply to the present
controversy because the project was vitiated with irregularities, to wit:chanrobles.com : virtual law library

1. The invitation to bid as published fixed the deadline of submission of pre-qualification document on December 2, 1988
without indicating any time, yet after 10:00 o’clock of the given late, the PBAC already refused to accept petitioners’
documents.
2. The time and date of bidding was published as December 12, 1988 at 3:00 p.m. yet it was held at 10:00 o’clock in the
morning.

3. Private respondents, for the purpose of inviting bidders to participate, issued a mimeographed "Invitation to Bid" form,
which by law (P.D. 1594 and Implementing Rules, Exh. B-1) is to contain the particulars of the project subject of bidding
for the purpose of.

(i) enabling bidders to make an intelligent and accurate bids;

(ii) for PBAC to have a uniform basis for evaluating the bids;

(iii) to prevent collusion between a bidder and the PBAC, by opening to all the particulars of a project.

Additionally, the Invitation to Bid prepared by the respondents and the Itemized Bill of Quantities therein were left blank. 5
And although the project in question was a "Construction," the private respondents used an Invitation to Bid form for
"Materials." 6

The petitioners also point out that the validity of the writ of preliminary injunction had not yet become moot and academic
because even if the bids had been opened before the restraining order was issued, the project itself had not yet been
awarded. The ISCOF president was not an indispensable party because the signing of the award was merely a ministerial
function which he could perform only upon the recommendation of the Award Committee. At any rate, the complaint had
already been duly amended to include him as a party defendant.

In their Comment, the private respondents maintain that since the members of the board of trustees of the ISCOF are all
government officials under Section 7 of P.D. 1523 and since the operations and maintenance of the ISCOF are provided
for in the General Appropriations Law, it is should be considered a government institution whose infrastructure project is
covered by P.D. 1818.

Regarding the schedule for pre-qualification, the private respondents insist that PBAC posted on the ISCOF bulletin board
an announcement that the deadline for the submission of pre-qualifications documents was at 10 o’clock of December 2,
1988, and the opening of bids would be held at 1 o’clock in the afternoon of December 12, 1988. As of ten o’clock in the
morning of December 2, 1988, B.E. construction and Best Built construction had filed only their letters of intent. At two
o’clock in the afternoon, B.E., and Best Built filed through their common representative, Nenette Garuello, their pre-
qualification documents which were admitted but stamped "submitted late." The petitioners were informed of their
disqualification on the same date, and the disqualification became final on December 6, 1988. Having failed to take
immediate action to compel PBAC to pre-qualify them despite their notice of disqualification, they cannot now come to this
Court to question the binding proper in which they had not participated.

In the petitioners’ Reply, they raise as an additional irregularity the violation of the rule that where the estimate project cost
is from P1M to P5M, the issuance of plans, specifications and proposal book forms should made thirty days before the
date of bidding. 7 They point out that these forms were issued only on December 2, 1988, and not at the latest on
November 12, 1988, the beginning of the 30-day period prior to the scheduled bidding.

In their Rejoinder, the private respondents aver that the documents of B.E. and Best Built were received although filed late
and were reviewed by the Award Committee, which discovered that the contractors had expired licenses. B.E.’s
temporary certificate of Renewal of Contractor’s License was valid only until September 30, 1988, while Best Built’s
license was valid only up to June 30, 1988.chanrobles lawlibrary : rednad

The Court has considered the arguments of the parties in light of their testimonial and documentary evidence and the
applicable laws and jurisprudence. It finds for the petitioners.

The 1987 Administrative Code defines a government instrumentality as follows:chanrob1es virtual 1aw library

Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested
with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds,
and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered
institutions, and government-owned or controlled corporations. (Sec. 2 (5) Introductory Provisions).

The same Code describes a chartered institution thus:chanrob1es virtual 1aw library

Chartered institution — refers to any agency organized or operating under a special charter, and vested by law with
functions relating to specific constitutional policies or objectives. This term includes the state universities and colleges,
and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818.

There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in pursuance of
the integrated fisheries development policy of the State, a priority program of the government of effect the socio-economic
life of the nation. Second, the Treasurer of the Republic of the Philippines also be the ex-officio Treasurer of the state
college with its accounts and expenses to be audited by the Commission on Audit or its duly authorized representative.
Third, heads of bureaus and offices of the National Government are authorized to loan or transfer to it, upon request of
the president of the state college, such apparatus, equipment, or supplies and even the services of such employees as
can be spared without serious detriment to public service. Lastly, an additional amount of P1.5M had been appropriated
out of the funds of the National Treasury and it was also decreed in its charter that the funds and maintenance of the state
college would henceforth be included in the General Appropriations Law. 8

Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree.

In the case of Datiles and Co. v. Sucaldito, 9 this Court interpreted a similar prohibition contained in P.D. 605, the law
after which P.D. 1818 was patterned. It was there declared that the prohibition pertained to the issuance of injunctions or
restraining orders by courts against administrative acts in controversies involving facts or the exercise of discretion in
technical cases. The Court observed that to allow the courts to judge these matters would disturb the smooth functioning
of the administrative machinery. Justice Teodoro Padilla made it clear, however, that on issues definitely outside of this
dimension and involving questions of law, courts could not be prevented by P.D. No. 605 from exercising their power to
restrain or prohibit administrative acts.

We see no reason why the above ruling should not apply to P.D. 1818.

There are at least two irregularities committed by PBAC that justified injunction of the bidding and the award of the
project.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

First, PBAC set deadlines for the filing of the PRE-C1 and the opening of bids and then changed these deadlines without
prior notice to prospective participants.

Under the Rules Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure contracts,
PBAC shall provide prospective bidders with the Notice of Pre-qualification and other relevant information regarding the
proposed work. Prospective contractors shall be required to file their ARC-Contractors Confidential Application for
Registration & Classifications & the PRE-C2 Confidential Pre-qualification Statement for the Project (prior to the
amendment of the rules, this was referred to as PRE-C1) not later than the deadline set in the published Invitation to Bid,
after which date no PRE-C2 shall be submitted and received. Invitations to Bid shall be advertised for at least three times
within a reasonable period but in no case less than two weeks in at least two newspapers of general circulations. 10

PBAC advertised the pre-qualification deadline as December 2, 1988, without stating the hour thereof, and announced
that the opening of bids would be at 3 o’clock in the afternoon of December 12, 1988. This schedule was changed and a
notice of such change was merely posted at the ISCOF bulletin board. The notice advanced the cut-off time for the
submission of pre-qualification documents to 10 o’clock in the morning of December 2, 1988, and the opening of bids to 1
o’clock in the afternoon of December 12, 1988.

The new schedule caused the pre-disqualification of the petitioners as recorded in the minutes of the PBAC meeting held
on December 6, 1988. While it may be true that there were fourteen contractors who were pre-qualified despite the
change in schedule, this fact did not cure the defect of the irregular notice. Notably, the petitioners were disqualified
because they failed to meet the new deadline and not because of their expired licenses. ***

We have held that where the law requires a previous advertisement before government contracts can be awarded, non-
compliance with the requirement will, as a general rule, render the same void and of no effect 11 The facts that an
invitation for bids has been communicated to a number of possible bidders is not necessarily sufficient to establish
compliance with the requirements of the law if it is shown that other public bidders have not been similarly notified. 12

Second, PBAC was required to issue to pre-qualified applicants the plans, specifications and proposal book forms for the
project to be bid thirty days before the date of bidding if the estimate project cost was between P1M and P5M. PBAC has
not denied that these forms were issued only on December 2, 1988, or only ten days before the bidding scheduled for
December 12, 1988. At the very latest, PBAC should have issued them on November 12, 1988, or 30 days before the
scheduled bidding.
It is apparent that the present controversy did not arise from the discretionary acts of the administrative body nor does it
involve merely technical matters. What is involved here is non-compliance with the procedural rules on bidding which
required strict observance. The purpose of the rules implementing P.D. 1594 is to secure competitive bidding and to
prevent favoritism, collusion and fraud in the award of these contracts to the detriment of the public. This purpose was
defeated by the irregularities committed by PBAC.chanrobles law library : red

It has been held that the three principles in public bidding are the offer to the public, an opportunity for competition and a
basis for exact comparison of bids. A regulation of the matter which excludes any of these factors destroys the distinctive
character of the system and thwarts and purpose of its adoption. 13

In the case at bar, it was the lack of proper notice regarding the pre-qualification requirement and the bidding that caused
the elimination of petitioners B.E. and Best Built. It was not because of their expired licenses, as private respondents now
claim. Moreover, the plans and specifications which are the contractors’ guide to an intelligent bid, were not issued on
time, thus defeating the guaranty that contractors be placed on equal footing when they submit their bids. The purpose of
competitive bidding is negated if some contractors are informed ahead of their rivals of the plans and specifications that
are to be the subject of their bids.

P.D. 1818 was not intended to shield from judicial scrutiny irregularities committed by administrative agencies such as the
anomalies above described. Hence, the challenged restraining order was not improperly issued by the respondent judge
and the writ of preliminary injunction should not have been denied. We note from Annex Q of the private respondent’s
memorandum, however, that the subject project has already been "100% completed as to the Engineering Standard."
This fait accompli has made the petition for a writ of preliminary injunction moot and academic.

We come now to the liabilities of the private respondents.

It has been held in a long line of cases that a contract granted without the competitive bidding required by law is void, and
the party to whom it is awarded cannot benefit from it. 14 It has not been shown that the irregularities committed by PBAC
were induced by or participated in by any of the contractors. Hence, liability shall attach only to the private respondents for
the prejudice sustained by the petitioners as a result of the anomalies described above.

As there is no evidence of the actual loss suffered by the petitioners, compensatory damage may not be awarded to them.
Moral damages do not appear to be due either. Even so, the Court cannot close its eyes to the evident bad faith that
characterized the conduct of the private respondents, including the irregularities in the announcement of the bidding and
their efforts to persuade the ISCOF president to award the project after two days from receipt of the restraining order and
before they moved to lift such order. For such questionable acts, they are liable in nominal damages at least in
accordance with Article 2221 of the Civil Code, which states:jgc:chanrobles.com.ph

"Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by
the defendant may be vindicated or, recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered
by him.

These damages are to assessed against the private respondents in the amount of P10,000.00 each, to be paid separately
for each of petitioners B.E. Construction and Best Built Construction. The other petitioner, Occeña Builders, is not entitled
to relief because it admittedly submitted its pre-qualification documents on December 5, 1988, or three days after the
deadline.chanrobles virtual lawlibrary

WHEREFORE, judgment is hereby rendered: a) upholding the restraining order dated December 12, 1988, as not
covered by the prohibition in P.D. 1818; b) ordering the chairman and the members of the PBAC board of trustees,
namely Manuel R. Penachos, Jr., Alfredo Matangga, Enrico Ticar, and Teresita Villanueva, to each pay separately to
petitioners Maria Elena Malaga and Josieleen Najarro nominal damages P10,000.00 each; and c) removing the said
chairman and members from the PBAC board of trustees, or whoever among them is still incumbent therein, for their
malfeasance in office. Costs against PBAC.

Let a copy of this decision be sent to the Office of the Ombudsman.

SO ORDERED.
G.R. No. 97149 March 31, 1992

FIDENCIO Y. BEJA, SR., petitioner,


vs.
COURT OF APPEALS, HONORABLE REINERIO O. REYES, in his capacity as Secretary of the Department of
Transportation and Communications; COMMODORE ROGELIO A. DAYAN, in his capacity as General Manager of
the Philippine Ports Authority; DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS,
ADMINISTRATIVE ACTION BOARD; and JUSTICE ONOFRE A. VILLALUZ, in his capacity as Chairman of the
Administrative Action Board, DOTC, respondents.

ROMERO, J.:

The instant petition for certiorari questions the jurisdiction of the Secretary of the Department of Transportation and
Communications (DOTC) and/or its Administrative Action Board (AAB) over administrative cases involving personnel
below the rank of Assistant General Manager of the Philippine Ports Authority (PPA), an agency attached to the said
Department.

Petitioner Fidencio Y. Beja, Sr. 1 was first employed by the PPA as arrastre supervisor in 1975. He became Assistant Port
Operations Officer in 1976 and Port Operations Officer in 1977. In February 1988, as a result of the reorganization of the
PPA, he was appointed Terminal Supervisor.

On October 21, 1988, the PPA General Manager, Rogelio A. Dayan, filed Administrative Case No. 11-04-88 against
petitioner Beja and Hernando G. Villaluz for grave dishonesty, grave misconduct, willful violation of reasonable office rules
and regulations and conduct prejudicial to the best interest of the service. Beja and Villaluz allegedly erroneously
assessed storage fees resulting in the loss of P38,150.77 on the part of the PPA. Consequently, they were preventively
suspended for the charges. After a preliminary investigation conducted by the district attorney for Region X, Administrative
Case No. 11-04-88 was "considered closed for lack of merit."

On December 13, 1988, another charge sheet, docketed as Administrative Case No. 12-01-88, was filed against Beja by
the PPA General Manager also for dishonesty, grave misconduct, violation of reasonable office rules and regulations,
conduct prejudicial to the best interest of the service and for being notoriously undesirable. The charge consisted of six (6)
different specifications of administrative offenses including fraud against the PPA in the total amount of P218,000.00. Beja
was also placed under preventive suspension pursuant to Sec. 41 of P.D. No. 807.

The case was redocketed as Administrative Case No. PPA-AAB-1-049-89 and thereafter, the PPA general manager
indorsed it to the AAB for "appropriate action." At the scheduled hearing, Beja asked for continuance on the ground that
he needed time to study the charges against him. The AAB proceeded to hear the case and gave Beja an opportunity to
present evidence. However, on February 20, 1989, Beja filed a petition for certiorari with preliminary injunction before the
Regional Trial Court of Misamis Oriental. 2 Two days later, he filed with the AAB a manifestation and motion to suspend
the hearing of Administrative Case No. PPA-AAB-1-049-89 on account of the pendency of the certiorari proceeding before
the court. AAB denied the motion and continued with the hearing of the administrative case.

Thereafter, Beja moved for the dismissal of the certiorari case below and proceeded to file before this Court a petition
for certiorari with preliminary injunction and/or temporary restraining order. The case was docketed as G.R. No. 87352
captioned "Fidencio Y. Beja v. Hon. Reinerio 0. Reyes, etc., et al." In the en banc resolution of March 30, 1989, this Court
referred the case to the Court of Appeals for "appropriate action." 3 G.R. No. 87352 was docketed in the Court of Appeals
as CA-G.R. SP No. 17270.

Meanwhile, a decision was rendered by the AAB in Administrative Case No. PPA-AAB-049-89. Its dispositive portion
reads:

WHEREFORE, judgment is hereby rendered, adjudging the following, namely:

a) That respondents Geronimo Beja, Jr. and Hernando Villaluz are exonerated from the charge against
them;

b) That respondent Fidencio Y. Beja be dismissed from the service;


c) That his leave credits and retirement benefits are declared forfeited;

d) That he be disqualified from re-employment in the government service;

e) That his eligibility is recommended to be cancelled.

Pasig, Metro Manila, February 28, 1989.

On December 10, 1990, after appropriate proceedings, the Court of Appeals also rendered a decision 4 in CA-G.R. SP
No. 17270 dismissing the petition for certiorari for lack of merit. Hence, Beja elevated the case back to this Court through
an "appeal by certiorari with preliminary injunction and/or temporary restraining order."

We find the pleadings filed in this case to be sufficient bases for arriving at a decision and hence, the filing of memoranda
has been dispensed with.

In his petition, Beja assails the Court of Appeals for having "decided questions of substance in a way probably not in
accord with law or with the applicable decisions" of this Court. 5 Specifically, Beja contends that the Court of Appeals
failed to declare that: (a) he was denied due process; (b) the PPA general manager has no power to issue a preventive
suspension order without the necessary approval of the PPA board of directors; (c) the PPA general manager has no
power to refer the administrative case filed against him to the DOTC-AAB, and (d) the DOTC Secretary, the Chairman of
the DOTC-AAB and DOTC-AAB itself as an adjudicatory body, have no jurisdiction to try the administrative case against
him. Simply put, Beja challenges the legality of the preventive suspension and the jurisdiction of the DOTC Secretary
and/or the AAB to initiate and hear administrative cases against PPA personnel below the rank of Assistant General
Manager.

Petitioner anchors his contention that the PPA general manager cannot subject him to a preventive suspension on the
following provision of Sec. 8, Art. V of Presidential Decree No. 857 reorganizing the PPA:

(d) the General Manager shall, subject to the approval of the Board, appoint and remove personnel below
the rank of Assistant General Manager. (Emphasis supplied.)

Petitioner contends that under this provision, the PPA Board of Directors and not the PPA General Manager is the "proper
disciplining authority. 6

As correctly observed by the Solicitor General, the petitioner erroneously equates "preventive suspension" as a remedial
measure with "suspension" as a penalty for administrative dereliction. The imposition of preventive suspension on a
government employee charged with an administrative offense is subject to the following provision of the Civil Service Law,
P.D. No. 807:

Sec. 41. Preventive Suspension. — The proper disciplining authority may preventively suspend any
subordinate officer or employee under his authority pending an investigation, if the charge against such
officer or employee involves dishonesty, oppression or grave misconduct, or neglect in the performance
of duty, or if there are reasons to believe that the respondent is guilty of charges which would warrant his
removal from the service.

Imposed during the pendency of an administrative investigation, preventive suspension is not a penalty in itself. It is
merely a measure of precaution so that the employee who is charged may be separated, for obvious reasons, from the
scene of his alleged misfeasance while the same is being investigated. 7 Thus, preventive suspension is distinct from the
administrative penalty of removal from office such as the one mentioned in Sec. 8(d) of P.D. No 857. While the former
may be imposed on a respondent during the investigation of the charges against him, the latter is the penalty which may
only be meted upon him at the termination of the investigation or the final disposition of the case.

The PPA general manager is the disciplining authority who may, by himself and without the approval of the PPA Board of
Directors, subject a respondent in an administrative case to preventive suspension. His disciplinary powers are
sanctioned, not only by Sec. 8 of P.D. No. 857 aforequoted, but also by Sec. 37 of P.D. No. 807 granting heads of
agencies the "jurisdiction to investigate and decide matters involving disciplinary actions against officers and employees"
in the PPA.
Parenthetically, the period of preventive suspension is limited. It may be lifted even if the disciplining authority has not
finally decided the administrative case provided the ninety-day period from the effectivity of the preventive suspension has
been exhausted. The employee concerned may then be reinstated. 8 However, the said ninety-day period may be
interrupted. Section 42 of P.D. No. 807 also mandates that any fault, negligence or petition of a suspended employee may
not be considered in the computation of the said period. Thus, when a suspended employee obtains from a court of
justice a restraining order or a preliminary injunction inhibiting proceedings in an administrative case, the lifespan of such
court order should be excluded in the reckoning of the permissible period of the preventive suspension. 9

With respect to the issue of whether or not the DOTC Secretary and/or the AAB may initiate and hear administrative
cases against PPA Personnel below the rank of Assistant General Manager, the Court qualifiedly rules in favor of
petitioner.

The PPA was created through P.D. No. 505 dated July 11, 1974. Under that Law, the corporate powers of the PPA were
vested in a governing Board of Directors known as the Philippine Port Authority Council. Sec. 5(i) of the same decree
gave the Council the power "to appoint, discipline and remove, and determine the composition of the technical staff of the
Authority and other personnel."

On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857, See. 4(a) thereof created the Philippine Ports
Authority which would be "attached" to the then Department of Public Works, Transportation and Communication. When
Executive Order No. 125 dated January 30, 1987 reorganizing the Ministry of Transportation and Communications was
issued, the PPA retained its "attached" status. 10 Even Executive Order No. 292 or the Administrative Code of 1987
classified the PPA as an agency "attached" to the Department of Transportation and Communications (DOTC). Sec. 24 of
Book IV, Title XV, Chapter 6 of the same Code provides that the agencies attached to the DOTC "shall continue to
operate and function in accordance with the respective charters or laws creating them, except when they conflict with this
Code."

Attachment of an agency to a Department is one of the three administrative relationships mentioned in Book IV, Chapter 7
of the Administrative Code of 1987, the other two being supervision and control and administrative supervision.
"Attachment" is defined in Sec. 38 thereof as follows:

(3) Attachment. — (a) This refers to the lateral relationship between the Department or its equivalent and
the attached agency or corporation for purposes of policy and program coordination. The coordination
shall be accomplished by having the department represented in the governing board of the attached
agency or corporation, either as chairman or as a member, with or without voting rights, if this is permitted
by the charter; having the attached corporation or agency comply with a system of periodic reporting
which shall reflect the progress of programs and projects; and having the department or its equivalent
provide general policies through its representative in the board, which shall serve as the framework for
the internal policies of the attached corporation or agency;

(b) Matters of day-to-day administration or all those pertaining to internal operations shall he left to the
discretion or judgment of the executive officer of the agency or corporation. In the event that the
Secretary and the head of the board or the attached agency or corporation strongly disagree on the
interpretation and application of policies, and the Secretary is unable to resolve the disagreement, he
shall bring the matter to the President for resolution and direction;

(c) Government-owned or controlled corporations attached to a department shall submit to the Secretary
concerned their audited financial statements within sixty (60) days after the close of the fiscal year; and

(d) Pending submission of the required financial statements, the corporation shall continue to operate on
the basis of the preceding year's budget until the financial statements shall have been submitted. Should
any government-owned or controlled corporation incur an operation deficit at the close of its fiscal year, it
shall be subject to administrative supervision of the department; and the corporation's operating and
capital budget shall be subject to the department's examination, review, modification and approval.
(emphasis supplied.)

An attached agency has a larger measure of independence from the Department to which it is attached than one which is
under departmental supervision and control or administrative supervision. This is borne out by the "lateral relationship"
between the Department and the attached agency. The attachment is merely for "policy and program coordination." With
respect to administrative matters, the independence of an attached agency from Departmental control and supervision is
further reinforced by the fact that even an agency under a Department's administrative supervision is free from
Departmental interference with respect to appointments and other personnel actions "in accordance with the
decentralization of personnel functions" under the Administrative Code of 1987. 11 Moreover, the Administrative Code
explicitly provides that Chapter 8 of Book IV on supervision and control shall not apply to chartered institutions attached to
a Department. 12

Hence, the inescapable conclusion is that with respect to the management of personnel, an attached agency is, to a
certain extent, free from Departmental interference and control. This is more explicitly shown by P.D. No. 857 which
provides:

Sec. 8. Management and Staff. — a) The President shall, upon the recommendation of the Board,
appoint the General Manager and the Assistant General Managers.

(b) All other officials and employees of the Authority shall be selected and appointed on the basis of merit
and fitness based on a comprehensive and progressive merit system to be established by the Authority
immediately upon its organization and consistent with Civil Service rules and regulations. The
recruitment, transfer, promotion, and dismissal of all personnel of the Authority, including temporary
workers, shall be governed by such merit system.

(c) The General Manager shall, subject to the approval of the Board, determine the staffing pattern and
the number of personnel of the Authority, define their duties and responsibilities, and fix their salaries and
emoluments. For professional and technical positions, the General Manager shall recommend salaries
and emoluments that are comparable to those of similar positions in other government-owned
corporations, the provisions of existing rules and regulations on wage and position classification
notwithstanding.

(d) The General Manager shall, subject to the approval by the Board, appoint and remove personnel
below the rank of Assistant General Manager.

xxx xxx xxx

(emphasis supplied.)

Although the foregoing section does not expressly provide for a mechanism for an administrative investigation of
personnel, by vesting the power to remove erring employees on the General Manager, with the approval of the PPA
Board of Directors, the law impliedly grants said officials the power to investigate its personnel below the rank of Assistant
Manager who may be charged with an administrative offense. During such investigation, the PPA General Manager, as
earlier stated, may subject the employee concerned to preventive suspension. The investigation should be conducted in
accordance with the procedure set out in Sec. 38 of P.D. No. 807. 13 Only after gathering sufficient facts may the PPA
General Manager impose the proper penalty in accordance with law. It is the latter action which requires the approval of
the PPA Board of Directors. 14

From an adverse decision of the PPA General Manager and the Board of Directors, the employee concerned may elevate
the matter to the Department Head or Secretary. Otherwise, he may appeal directly to the Civil Service Commission. The
permissive recourse to the Department Secretary is sanctioned by the Civil Service Law (P.D. No. 807) under the
following provisions:

Sec. 37. Disciplinary Jurisdiction. — (a) The Commission shall decide upon appeal all administrative
disciplinary cases involving the imposition of a penalty of suspension for more than thirty days, or fine in
an amount exceeding thirty days salary, demotion in rank or salary or transfer, removal or dismissal from
office. A complaint may be filed directly with the Commission by a private citizen against a government
official or employee in which case it may hear and decide the case or it may deputize any department or
agency or official or group of officials to conduct the investigation. The results of the investigation shall be
submitted to the Commission with recommendation as to the penalty to be imposed or other action to be
taken.

(b) The heads of departments, agencies and instrumentalities, provinces, cities and municipalities shall
have jurisdiction to investigate and decide matters involving disciplinary action against officers and
employees under their jurisdiction. The decisions shall be final in case the penalty imposed is suspension
for not more than thirty days or fine in an amount not exceeding thirty days' salary. In case the decision
rendered by a bureau or office head is appealable to the Commission, the same may be initially appealed
to the department and finally to the Commission and pending appeal, the same shall be executory except
when the penalty is removal, in which case the same shall be executory only after confirmation by the
department head.

xxx xxx xxx

(Emphasis supplied.)

It is, therefore, clear that the transmittal of the complaint by the PPA General Manager to the AAB was premature. The
PPA General Manager should have first conducted an investigation, made the proper recommendation for the imposable
penalty and sought its approval by the PPA Board of Directors. It was discretionary on the part of the herein petitioner to
elevate the case to the then DOTC Secretary Reyes. Only then could the AAB take jurisdiction of the case.

The AAB, which was created during the tenure of Secretary Reyes under Office Order No. 88-318 dated July 1, 1988, was
designed to act, decide and recommend to him "all cases of administrative malfeasance, irregularities, grafts and acts of
corruption in the Department." Composed of a Chairman and two (2) members, the AAB came into being pursuant to
Administrative Order No. 25 issued by the President on May 25, 1987. 15 Its special nature as a quasi-
judicial administrative body notwithstanding, the AAB is not exempt from the observance of due process in its
proceedings. 16 We are not satisfied that it did so in this case the respondents protestation that petitioner waived his right
to be heard notwithstanding. It should be observed that petitioner was precisely questioning the AAB's jurisdiction when it
sought judicial recourse.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED insofar as it upholds the power of the PPA General
Manager to subject petitioner to preventive suspension and REVERSED insofar as it validates the jurisdiction of the
DOTC and/or the AAB to act on Administrative Case No. PPA-AAB-1-049-89 and rules that due process has been
accorded the petitioner.

The AAB decision in said case is hereby declared NULL and VOID and the case in REMANDED to the PPA whose
General Manager shall conduct with dispatch its reinvestigation.

The preventive suspension of petitioner shall continue unless after a determination of its duration, it is found that he had
served the total of ninety (90) days in which case he shall be reinstated immediately.

SO ORDERED.
G.R. No. L-27811 November 17, 1967

LACSON-MAGALLANES CO., INC., plaintiff-appellant,


vs.
JOSE PAÑO, HON. JUAN PAJO, in his capacity as Executive Secretary, and HON. JUAN DE G. RODRIGUEZ, in
his capacity as Secretary of Agriculture and Natural Resources, defendants-appellees.

Leopoldo M. Abellera for plaintiff-appellant.


Victorio Advincula for defendant Jose Paño.
Office of the Solicitor General for defendant Secretary of Agriculture and Natural Resources and Executive Secretary.

SANCHEZ, J.:

The question — May the Executive Secretary, acting by authority of the President, reverse a decision of the Director of
Lands that had been affirmed by the Executive Secretary of Agriculture and Natural Resources — yielded an affirmative
answer from the lower court.1

Hence, this appeal certified to this Court by the Court of Appeals upon the provisions of Sections 17 and 31 of the
Judiciary Act of 1948, as amended.

The undisputed controlling facts are:

In 1932, Jose Magallanes was a permittee and actual occupant of a 1,103-hectare pasture land situated in Tamlangon,
Municipality of Bansalan, Province of Davao.

On January 9, 1953, Magallanes ceded his rights and interests to a portion (392,7569 hectares) of the above public land
to plaintiff.

On April 13, 1954, the portion Magallanes ceded to plaintiff was officially released from the forest zone as pasture land
and declared agricultural land.

On January 26, 1955, Jose Paño and nineteen other claimants2 applied for the purchase of ninety hectares of the
released area.

On March 29, 1955, plaintiff corporation in turn filed its own sales application covering the entire released area. This was
protested by Jose Paño and his nineteen companions upon the averment that they are actual occupants of the part
thereof covered by their own sales application.

The Director of Lands, following an investigation of the conflict, rendered a decision on July 31, 1956 giving due course to
the application of plaintiff corporation, and dismissing the claim of Jose Paño and his companions. A move to reconsider
failed.

On July 5, 1957, the Secretary of Agriculture and Natural Resources — on appeal by Jose Paño for himself and his
companions — held that the appeal was without merit and dismissed the same.

The case was elevated to the President of the Philippines.

On June 25, 1958, Executive Secretary Juan Pajo, "[b]y authority of the President" decided the controversy, modified the
decision of the Director of Lands as affirmed by the Secretary of Agriculture and Natural Resources, and (1) declared that
"it would be for the public interest that appellants, who are mostly landless farmers who depend on the land for their
existence, be allocated that portion on which they have made improvements;" and (2) directed that the controverted land
(northern portion of Block I, LC Map 1749, Project No. 27, of Bansalan, Davao, with Latian River as the dividing line)
"should be subdivided into lots of convenient sizes and allocated to actual occupants, without prejudice to the
corporation's right to reimbursement for the cost of surveying this portion." It may be well to state, at this point, that the
decision just mentioned, signed by the Executive Secretary, was planted upon the facts as found in said decision.

Plaintiff corporation took the foregoing decision to the Court of First Instance praying that judgment be rendered declaring:
(1) that the decision of the Secretary of Agriculture and Natural Resources has full force and effect; and (2) that the
decision of the Executive Secretary is contrary to law and of no legal force and effect.
And now subject of this appeal is the judgment of the court a quo dismissing plaintiff's case.

1. Plaintiff's mainstay is Section 4 of Commonwealth Act 141. The precept there is that decisions of the Director of Lands
"as to questions of facts shall be conclusive when approved" by the Secretary of Agriculture and Natural Resources.
Plaintiff's trenchment claim is that this statute is controlling not only upon courts but also upon the President.

Plaintiff's position is incorrect. The President's duty to execute the law is of constitutional origin. 3 So, too, is his control of
all executive departments.4 Thus it is, that department heads are men of his confidence. His is the power to appoint them;
his, too, is the privilege to dismiss them at pleasure. Naturally, he controls and directs their acts. Implicit then is his
authority to go over, confirm, modify or reverse the action taken by his department secretaries. In this context, it may not
be said that the President cannot rule on the correctness of a decision of a department secretary.

Particularly in reference to the decisions of the Director of Lands, as affirmed by the Secretary of Agriculture and Natural
Resources, the standard practice is to allow appeals from such decisions to the Office of the President. 5This Court has
recognized this practice in several cases. In one, the decision of the Lands Director as approved by the Secretary was
considered superseded by that of the President's appeal.6 In other cases, failure to pursue or resort to this last remedy of
appeal was considered a fatal defect, warranting dismissal of the case, for non-exhaustion of all administrative remedies.7

Parenthetically, it may be stated that the right to appeal to the President reposes upon the President's power of control
over the executive departments.8 And control simply means "the power of an officer to alter or modify or nullify or set
aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for
that of the latter."9

This unquestionably negates the assertion that the President cannot undo an act of his department secretary.

2. Plaintiff next submits that the decision of the Executive Secretary herein is an undue delegation of power. The
Constitution, petitioner asserts, does not contain any provision whereby the presidential power of control may be
delegated to the Executive Secretary. It is argued that it is the constitutional duty of the President to act personally upon
the matter.

It is correct to say that constitutional powers there are which the President must exercise in person. 10 Not as correct,
however, is it so say that the Chief Executive may not delegate to his Executive Secretary acts which the Constitution
does not command that he perform in person.11 Reason is not wanting for this view. The President is not expected to
perform in person all the multifarious executive and administrative functions. The Office of the Executive Secretary is an
auxiliary unit which assists the President. The rule which has thus gained recognition is that "under our constitutional
setup the Executive Secretary who acts for and in behalf and by authority of the President has an undisputed jurisdiction
to affirm, modify, or even reverse any order" that the Secretary of Agriculture and Natural Resources, including the
Director of Lands, may issue.12

3. But plaintiff underscores the fact that the Executive Secretary is equal in rank to the other department heads, no higher
than anyone of them. From this, plaintiff carves the argument that one department head, on the pretext that he is an alter
ego of the President, cannot intrude into the zone of action allocated to another department secretary. This argument
betrays lack of appreciation of the fact that where, as in this case, the Executive Secretary acts "[b]y authority of the
President," his decision is that of the President's. Such decision is to be given full faith and credit by our courts. The
assumed authority of the Executive Secretary is to be accepted. For, only the President may rightfully say that the
Executive Secretary is not authorized to do so. Therefore, unless the action taken is "disapproved or reprobated by the
Chief Executive,"13 that remains the act of the Chief Executive, and cannot be successfully assailed. 14 No such
disapproval or reprobation is even intimated in the record of this case.

For the reasons given, the judgment under review is hereby affirmed. Costs against plaintiff. So ordered.