Administrative & Election Laws

Brief Case Digests

(2nd Batch)

1) Cari v. Barrias
G.R. No. 4349, September 24, 1908 (11 Phil 327)

Facts: By using a manually powered lighter in navigating the Pasig River, Aniceto Barrias was
charged for violating the Collector of Customs’ Circular No. 397 which allows only steam powered
ships or boats for navigation purposes. Such implementing circular was promulgated pursuant to Act
No. 1136 which provides that in case a fine is to be imposed, it should not exceed $100.00 (At that
time, the peso-dollar exchange was more or less equal).

In the information against Barias, however, it was alleged that the imposable penalty against him
should be a fine not exceeding P500.00 at the discretion of the court in conformity with Circular No.
397 abovementioned. In view thereof, Barrias challenged the validity of such provision of the Circular
as it is entirely different from the penal provision of Act. No. 1136.

Issue: Is the penal provision in Circular No. 397 valid?

Held: NO. The Collector of Customs cannot impose a certain range of penalty different from that
specified by Congress. It bears emphasis that fixing of penalties for violation of laws is a matter purely
within the hands of the legislature. In other words, the Collector cannot exercise a power exclusively
lodged in Congress, nor any authority to fix and impose penalties for violations of rules promulgated
pursuant to any congressional act can be delegated to the former.

This doctrine of non-delegation of powers is based on the maxim of "potestas delegata non potest
delegari" which means what has been delegated cannot in turn be delegated. It is based on the ethical
principle that a delegated power constitutes not only a right but a duty to be performed by the delegate
by the instrumentality of his own judgment acting immediately upon the matter and not through the
intervening mind of another.

Foregoing considered, Barrias should be penalized in accordance with the penalty being imposed by
the aforesaid Act No. 1136.
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2) People v. Vera
G.R. No. L-45685, November 16, 1937 (65 Phil 56)

Facts: In view of the conviction of Mariano Cu Unjieng by the lower court, the corresponding criminal
case against him was elevated to the Supreme Court which finally remanded it to the court of origin for
execution of the judgment. Cu Unjieng, however, filed an application for probation under the
provisions of Act No. 4221 before the trial court which set the same for hearing. It was opposed by the
Fiscal and the private prosecution, contending the unconstitutionality on the provision of Act No.
4221, particularly section 11 thereof, which states: "This Act shall apply only in those provinces in
which the respective provincial boards have provided for the salary of a probation officer at rates not
lower than those now provided for provincial fiscals…….”

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Issue: Is Act No. 4221 in the case at bar unconstitutional?

Held: YES. Section 11 of Act No. 4221 constitutes an improper and unlawful delegation of legislative
authority to the provincial boards amounting to undue delegation of legislative power thereby making
the Act unconstitutional and void. Since the Probation Act does not lay down any definite standards by
which the administrative boards may be guided in the exercise of discretionary powers, the
applicability and application of such Act are entirely placed in the hands of the provincial boards as
they have the power to determine for themselves, whether to apply the law or not. Indubitably
therefore, this becomes a surrender of legislative power to the provincial boards.
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3) Eastern Shipping v. POEA

G.R. No. 76633, October 18, 1988 ((166 SCRA 533)

Facts: Vitaliano Saco, the Chief Officer of M/V Eastern Polaris, was killed in an accident in Tokyo,
Japan. His widow filed a complaint for damages against the Eastern Shipping Lines (ESL) with the
POEA, based on a Memorandum Circular No. 2 issued by the latter which stipulated death benefits and
burial for the family of overseas workers. ESL questioned the validity of the said memorandum
circular as violative of the principle of non-delegation of legislative power. It contended that the
regulation represents an exercise of legislative discretion which, under the aforesaid principle, is not
subject to delegation.

Issue: Is Memorandum Circular No. 2 violative of the principle of non-delegation of legislative

power?

Held: NO. The Circular in question is an administrative regulation, which has the force and effect of
law. The model contract prescribed thereby has been applied in a significant number of the cases
without challenge by the employer. The power of the POEA in requiring the model contract is not
unlimited as there is a sufficient standard guiding the delegate in the exercise of the said authority.

It is true that legislative discretion as to the substantive contents of the law cannot be delegated. What
can be delegated is the discretion to determine how the law may be enforced, not what the law shall be.
The ascertainment of the latter subject is a prerogative of the legislature which cannot be abdicated or
surrendered to the delegate. As regards the former subject, the Court mentioned the two accepted tests
of a valid delegation of legislative power, viz, the completeness test and the sufficient standard test.
Under the first test, the law must be complete in all its terms and conditions when it leaves the
legislature such that when it reaches the delegate the only thing he will have to do is to enforce it.
Under the sufficient standard test, there must be adequate guidelines or limitations in the law to map
out the boundaries of the delegate’s authority and prevent the delegation from running riot.
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4) Rabor v. CSC
G.R. No. 111812, May 31, 1995 (244 SCRA 614)

Facts: Dionisio M. Rabor entered the government service in the Office of Davao City Mayor Duterte
in 1978 at the age of 55 years. In 1991, he was advised to apply for retirement considering that he had
already reached the age of more than 68 years. In response, Rabor showed a GSIS certificate of
membership with a notation that his service was purportedly extended for him to complete the 15-year
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service requirement. The Davao City Government then sought advice from the Regional Director of
the Civil Service Commission (CSC) as to what action should be taken on Rabor’s case. Accordingly,
Rabor’s extension of his services after reaching age 65 is contrary to Memorandum Circular No. 65 of
the Office of the President (OP), and as such, it is already non-extendible. As he was furnished a copy
of CSC’s letter stating such Circular, Rabor was advised to stop reporting for work. This prompted
Rabor to ask the CSC for extension of his job until he completed the 15-year requirement, but the same
was denied. Rabor then requested OP for an extension, but the latter referred it to the CSC which
eventually denied the request. Rabor again asked for reconsideration of CSC’s decision, citing Cena
case but it was denied, the same action was taken on his request by Mayor Duterte.

Issue: Should Rabor’s request for extension be granted in view of Cena case?

Held: NO. In Cena v. CSC, the Court reached its conclusion primarily on the basis of the "plain and
ordinary meaning" of Section 11 (b) of P.D. No. 1146. While Section 11 (b) appeared cast in verbally
unqualified terms, there were (and still are) two (2) administrative issuances which prescribe
limitations on the extension of service that may be granted to an employee who has reached sixty-five
(65) years of age. These are CSC Circular No. 27, s. 1990 and OP M.C. No. 65. The resolved the
challenges posed by the above two (2) administrative regulations by, firstly, considering as invalid
Civil Service Memorandum No. 27 and, secondly, by interpreting the Office of the President's
Memorandum Circular No. 65 as inapplicable to the case of Gaudencio T. Cena. Nevertheless, the
Court now ruled that the SC in Cena made a narrow interpretation. It is incorrect to decide
the issue on the basis only of PD 1146. Reading the pertinent provisions the Admin Code
particularly the provisions governing the CSC, it is clear that both the Admin Code and PD 1146 are
the governing laws relating to retirement of government officials and employees. It was on the basis of
the above quoted provisions of the 1987 Administrative Code that the Civil Service Commission
promulgated its Memorandum Circular No. 27. In doing so, the Commission was acting as "the central
personnel agency of the government empowered to promulgate policies, standards and guidelines for
efficient, responsive and effective personnel administration in the government." It was also discharging
its function of "administering the retirement program for government officials and employees" and of
"evaluating qualifications for retirement." It is also incorrect to say that limitation of permissible
extensions of service after an employee has reached sixty-five (65) years of age has no reasonable
relationship or is not germane to the foregoing provisions of the present Civil Service Law. The
physiological and psychological processes associated with ageing in human beings are in fact
related to the efficiency and quality of the service that may be expected from individual persons.
CSC Memo No. 27 is not invalid for having gone beyond the parameters set by PD 1146. In fact what
the legislature intends is that the CSC should “fill in the details” in the implementation of PD 1146.
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Cena v CSC

Facts: Gaudencio Cena worked for 7 years as a Legal Officer of the Law Dep’t of Caloocan City. He
was then transferred to the Office of the Congressman where he worked as a Supervising Staff
Officer for 3 months. He was then appointed as Registrar of the RD (Register of Deeds) in
Malabon. In total, he has rendered gov’t service for 11 years, 9 months and 6 days. Before reaching his
65th bday, he requested the LRA Administrator that he be allowed to extend his service to complete
the 15-year service requirement to enable him to retire with full benefits of old age pension. The LRA
Administrator sought a ruling from the CSC. The CSC denied the extension, but Cena filed a motion
for reconsideration. This time around, CSC granted a 1-yr extension to him. Cena still filed a case
against CSC for grave abuse of discretion when it granted an extension of only 1 yr. He contends that
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the law(Sec 11, PD 1146 also known as Revised Gov’t Insurance Act) does not limit or specify the
maximum number of years the retiree may avail of to complete the 15-year service. Thus, the CSC has
no authority to limit through a memorandum the number of years. In defense, CSC said that since it is
the central personnel agency of the gov’t, it is vested with power to grant or allow extension of service
beyond retirement age.

Issue: Whether or not Cena is allowed to continue in the service to complete the 15-year service
requirement?

Held: YES. An administrative circular, such as a memorandum of the CSC cannot limit PD 1146, on
extension of service of employees who reach 65. While it is true that CSC is given the authority
to take appropriate action on all appointments and other personnel matters in the Civil Service, it
cannot extend to matters not covered. The CSC’s authority is limited only to carrying into effect what
PD 1146 says. It cannot go beyond the terms and provisions of the basic law. The CSC Memorandum,
being in the nature of an administrative regulation, must be governed by the principle that a regulation
must be in harmony with the provisions of the law and should be for the sole purpose of
carrying into effect its general provisions. CSC has no power to supply or add perceived omissions in
PD 1146.
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5) Abakada v. Purisima
G.R. No. 166715, August 14, 2008 (562 SCRA 251)

Facts: Petitioners question the Attrition Act of 2005 and contend that by establishing a system of
rewards and incentives when they exceed their revenue targets, the law (1) transforms the officials and
employees of the BIR and BOC into mercenaries and bounty hunters; (2) violates the constitutional
guarantee of equal protection as it limits the scope of the law to the BIR and BOC; (3) unduly
delegates to the President the power to fix revenue targets without sufficient standards; and (4) violates
the doctrine of separation of powers by creating a Congressional Oversight Committee to approve the
law’s implementing rules.

Issue: Is R.A. No. 9335 constitutional?

Held: YES. R.A. No. 9335 is constitutional, except for Section 12 of the law which creates a Joint
Congressional Oversight Committee to review the law’s IRR.

That RA No. 9335 will turn BIR and BOC employees and officials into “bounty hunters and
mercenaries” is purely speculative as the law establishes safeguards by imposing liabilities on officers
and employees who are guilty of negligence, abuses, malfeasance, etc. Neither is the equal protection
clause violated since the law recognizes a valid classification as only the BIR and BOC have the
common distinct primary function of revenue generation. There are sufficient policy and standards to
guide the President in fixing revenue targets as the revenue targets are based on the original estimated
revenue collection expected of the BIR and the BOC.

However, the creation of a Joint Congressional Oversight Committee for the purpose of reviewing the
IRR formulated by agencies of the executive branch (DOF, DBM, NEDA, etc.) is unconstitutional
since it violates the doctrine of separation of powers since Congress arrogated judicial power upon
itself.
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Facts: Sometime in 2005, RA 9335, also known as the attrition act, was instituted. This law imposed a
system of rewards and punishment upon government officials who belonged to the BOC and the BIR.
The main gist of the law was that officials belonging to these departments would be rewarded for
collections in excess of the set quotas, and punished by dismissal if unable to reach the same quotas.
AGPL contests the constitutionality of the law, claiming among many other alleged negative effects,
that it will encourage the public officials of both these departments to become mercenaries and lead
them away from the proper performance of their duties.

Issue: Will the regularity of the performance of the duties of the officials of the BIR and BOC be cast
into doubt as a result of this law?

Held: Public officers enjoy the presumption of regularity in the performance of their duties. This
presumption necessarily obtains in favor of BIR and BOC officials and employees. RA 9335 operates
on the basis thereof and reinforces it by providing a system of rewards and sanctions for the purpose of
encouraging the officials and employees of the BIR and the BOC to exceed their revenue targets and
optimize their revenue-generation capability and collection. The presumption is disputable but proof to
the contrary is required to rebut it. It cannot be overturned by mere conjecture or denied in advance (as
petitioners would have the Court do) specially in this case where it is an underlying principle to
advance a declared public policy. Petitioners’ claim that the implementation of RA 9335 will turn BIR
and BOC officials and employees into "bounty hunters and mercenaries" is not only without any
factual and legal basis; it is also purely speculative. A law enacted by Congress enjoys the strong
presumption of constitutionality. To justify its nullification, there must be a clear and unequivocal
breach of the Constitution, not a doubtful and equivocal one. To invalidate RA 9335 based on
petitioners’ baseless supposition is an affront to the wisdom not only of the legislature that passed it
but also of the executive which approved it. Public service is its own reward. Nevertheless, public
officers may by law be rewarded for exemplary and exceptional performance. A system of incentives
for exceeding the set expectations of a public office is not anathema to the concept of public
accountability. In fact, it recognizes and reinforces dedication to duty, industry, efficiency and loyalty
to public service of deserving government personnel.
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6) Gutierrez v. DBM
G.R. No. 153266, March 18, 2010 (616 SCRA 1)

These consolidated cases question the inclusion of certain allowances and fringe benefits into the
standardized salary rates for offices in the national government, state universities and colleges, and
local government units as required by the Compensation and Position Classification Act of 1989 and
implemented through the challenged National Compensation Circular 59 (NCC 59).

The Facts and the Case

Congress enacted in 1989 Republic Act (R.A.) 6758, called the Compensation and Position
Classification Act of 1989 to rationalize the compensation of government employees. Its Section 12
directed the consolidation of allowances and additional compensation already being enjoyed by
employees into their standardized salary rates. But it exempted certain additional compensations that
the employees may be receiving from such consolidation. Thus:
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Section 12. Consolidation of Allowances and Compensation. -- All allowances, except for
representation and transportation allowances; clothing and laundry allowances; subsistence allowance
of marine officers and crew on board government vessels and hospital personnel; hazard pay;
allowances of foreign service personnel stationed abroad; and such other additional compensation not
otherwise specified herein as may be determined by the DBM, shall be deemed included in the
standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in
kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary
rates shall continue to be authorized.

Pursuant to the above, the Department of Budget and Management (DBM) issued NCC 59 dated
September 30, 1989,[1] covering the offices of the national government, state universities and colleges,
and local government units. NCC 59 enumerated the specific allowances and additional compensations
which were deemed integrated in the basic salaries and these included the Cost of Living Allowance
(COLA) and Inflation Connected Allowance (ICA). The DBM re-issued and published NCC 59 on
May 3, 2004.[2]

The DBM also issued Corporate Compensation Circular (CCC) 10 dated October 2, 1989,[3] covering
all government-owned or controlled corporations and government financial institutions. The DBM re-
issued this circular on February 15, 1999[4] and published it on March 16, 1999. Accordingly, the
Commission on Audit (COA) disallowed the payments of honoraria and other allowances which were
deemed integrated into the standardized salary rates. Employees of government-owned or controlled
corporations questioned the validity of CCC 10 due to its non-publication. In De Jesus v. Commission
on Audit,[5] this Court declared CCC 10 ineffective because of such non-publication. Until then, it
ordered the COA to pass on audit the employees honoraria which they were receiving prior to the
effectivity of R.A. 6758.

Meanwhile, the DBM also issued Budget Circular 2001-03 dated November 12, 2001,[6] clarifying
that only the exempt allowances under Section 12 of R.A. 6758 may continue to be granted the
employees; all others were deemed integrated in the standardized salary rates. Thus, the payment of
allowances and compensation such as COLA, amelioration allowance, and ICA, among others, which
were already deemed integrated in the basic salary were unauthorized. The Courts ruling in subsequent
cases involving government-owned or controlled corporations followed the De Jesus ruling.

On May 16, 2002 employees of the Office of the Solicitor General filed a petition for certiorari and
mandamus in G.R. 153266, questioning the propriety of integrating their COLA into their standardized
salary rates. Employees of other offices of the national government followed suit. In addition,
petitioners in G.R. 159007 questioned the disallowance of the allowances and fringe benefits that the
COA auditing personnel assigned to the Government Service Insurance System (GSIS) used to get.
Petitioners in G.R. 173119 questioned the disallowance of the ICA that used to be paid to the officials
and employees of the Insurance Commission.

The Court caused the consolidation of the petitions and treated them as a class suit for all government
employees, excluding the employees of government-owned or controlled corporations and government
financial institutions.[7]

On October 26, 2005 the DBM issued National Budget Circular 2005-502[8] which provided that all
Supreme Court rulings on the integration of allowances, including COLA, of government employees

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under R.A. 6758 applied only to specific government-owned or controlled corporations since the
consolidated cases covering the national government employees are still pending with this Court.
Consequently, the payment of allowances and other benefits to them, such as COLA and ICA,
remained prohibited until otherwise provided by law or ruled by this Court. The circular further said
that all agency heads and other responsible officials and employees found to have authorized the grant
of COLA and other allowances and benefits already integrated in the basic salary shall be personally
held liable for such payment.

Issue: Does non-publication of NCC 59 dated September 30, 1989 in the Official Gazette or
newspaper of general circulation nullify the integration of the COLA into the standardized salary rates?

Held: Petitioners argue that since CCC 10 dated October 2, 1989 covering all government-owned or
controlled corporations and government financial institutions was ineffective until its re-issuance and
publication on March 16, 1999, its counterpart, NCC 59 dated September 30, 1989 covering the offices
of the national government, state universities and colleges, and local government units should also be
regarded as ineffective until its re-issuance and publication on May 3, 2004. Thus, the COLA should
not be deemed integrated into the standardized salary rates from 1989 to 2004. Respondents counter
that the fact that NCC 59 was not published should not be considered as an obstacle to the integration
of COLA into the standardized salary rates. Accordingly, Budget Circular 2001-03, insofar as it
reiterates NCC 59, should not be treated as ineffective since it merely reaffirms the fact of
consolidation of COLA into the employees salary as mandated by Section 12 of R.A. 6758.

It is a settled rule that publication is required as a condition precedent to the effectivity of a law to
inform the public of its contents before their rights and interests are affected by the same.[26]
Administrative rules and regulations must also be published if their purpose is to enforce or implement
existing law pursuant also to a valid delegation.[27]

Nonetheless, as previously discussed, the integration of COLA into the standardized salary rates is not
dependent on the publication of CCC 10 and NCC 59. This benefit is deemed included in the
standardized salary rates of government employees since it falls under the general rule of integrationall
allowances.

More importantly, the integration was not by mere legal fiction since it was factually integrated into
the employees salaries. Records show that the government employees were informed by their
respective offices of their new position titles and their corresponding salary grades when they were
furnished with the Notices of Position Allocation and Salary Adjustment (NPASA). The NPASA
provided the breakdown of the employees gross monthly salary as of June 30, 1989 and the
composition of his standardized pay under R.A. 6758.[28] Notably, the COLA was considered part of
the employees monthly income.

In truth, petitioners never really suffered any diminution in pay as a consequence of the consolidation
of COLA into their standardized salary rates. There is thus nothing in these cases which can be the
subject of a back pay since the amount corresponding to COLA was never withheld from petitioners in
the first place.[29]

Consequently, the non-publication of CCC 10 and NCC 59 in the Official Gazette or newspaper of
general circulation does not nullify the integration of COLA into the standardized salary rates upon the
effectivity of R.A. 6758. As the Court has said in Philippine International Trading Corporation v.

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Commission on Audit,[30] the validity of R.A. 6758 should not be made to depend on the validity of
its implementing rules.
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7) BPI Leasing v. CA
G.R. No. 127624, November 18, 2003 (416 SCRA 4)

Facts: For the calendar year 1986, BPI Leasing Corporation, Inc. (BLC) paid the Commissioner of
Internal Revenue (CIR) a total of P1,139,041.49 representing 4% "contractor’s percentage tax" then
imposed by Section 205 of the National Internal Revenue Code (NIRC), based on its gross rentals from
equipment leasing for the said year amounting to P27,783,725.42.On November 10, 1986, the CIR
issued RR 19-86. Section 6.2 thereof provided that finance and leasing companies registered under
Republic Act 5980 shall be subject to gross receipt tax of 5%-3%-1% on actual income earned. This
means that companies registered under Republic Act 5980, such as BLC, are not liable for
"contractor’s percentage tax" under Section 205 but are, instead, subject to "gross receipts tax" under
Section 260 (now Section 122) of the NIRC. Since BLC had earlier paid the aforementioned
"contractor’s percentage tax," it re-computed its tax liabilities under the "gross receipts tax" and
arrived at the amount ofP361,924.44. BLC filed a claim for a refund with the CIR for the amount of
P777,117.05, representing the difference between the P1,139,041.49 it had paid as "contractor’s
percentage tax" and P361,924.44 it should have paid for "gross receipts tax."The CTA dismissed the
petition and denied BLC’s claim of refund and held that RR 19-86, may only be applied prospectively
such that it only covers all leases written on or after January 1, 1987. The CTA ruled that, since BLC’s
rental income was all received prior to 1986, it follows that this was derived from lease transactions
prior to January 1, 1987, and hence, not covered by the RR.A motion for reconsideration of the CTA’s
decision was filed, but was denied. BLC then appealed the case to the Court of Appeals. BLC submits
that the Court of Appeals and the CTA erred in not ruling that RR 19-86may be applied retroactively
so as to allow BLC’s claim for a refund of P777,117.05. Respondents, on the other hand, maintain that
the provision on the date of effectivity of RR 19-86 is clear and unequivocal, leaving no room for
interpretation on its prospective application.

Issue: Is Revenue Regulation 19-86 legislative or interpretative in nature.

Held: BLC attempts to convince the Court that RR 19-86 is legislative rather than interpretative in
character and hence, should retroact to the date of effectivity of the law it seeks to interpret. A
legislative rule is in the matter of subordinate legislation, designed to implement a primary legislation
by providing the details thereof. An interpretative rule, on the other hand, is designed to provide
guidelines to the law which the administrative agency is in charge of enforcing. The Court finds the
questioned RR to be legislative in nature. Section 1 of RR 19-86 plainly states that it was promulgated
pursuant to Section 277 of the NIRC (now Section 244), an express grant of authority to the Secretary
of Finance to promulgate all needful rules and regulations for the effective enforcement of the
provisions of the NIRC. Verily, it cannot be disputed that RR 19-86 was issued pursuant to
the rule-making power of the Secretary of Finance, thus making it legislative, and not interpretative
as alleged by BLC.BLC further posits that, it is invalid for want of due process as no prior notice,
publication and public hearing attended the issuance thereof. To support its view, BLC cited CIR v.
Fortune Tobacco, et al., wherein the Court nullified a revenue memorandum circular which reclassified
certain cigarettes and subjected them to a higher tax rate, holding it invalid for lack of notice,
publication and public hearing. In this case, RR 19-86 would be beneficial to the taxpayers

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as they are subjected to lesser taxes. Petitioner, in fact, is invoking RR 19-86 as the very basis
of its claim for refund. If it were invalid, then petitioner all the more has no right to a refund.
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Facts: For the calendar year 1986, BLC paid the CIR a total of P1,139,041.49 representing 4%
"contractor’s percentage tax" imposed by Section 205 of the NIRC based on its gross rentals from
equipment leasing for said year. On November 10, 1986, CIR issued Revenue Regulation 19-86.
Section 6.2 thereof provided that finance and leasing companies registered under RA 5980 shall be
subject to gross receipt tax of 5%-3%-1% on actual income earned. This means that companies
registered under Republic Act 5980, such as BLC, are not liable for "contractor’s percentage tax"
under Section 205 but are, instead, subject to "gross receipts tax" under Section 260 (now Section
122)of the NIRC. Since BLC had earlier paid the "contractor’s percentage tax for its 1986 lease rentals
BLC filed a claim for a refund with the CIR on April 1988 for the amount representing the difference
between what it had paid as "contractor’s percentage tax" and what it should have paid for "gross
receipts tax."

Issue: Is Revenue Regulation 19-86 legislative rather than interpretative in character?

Held: NO. Section 1 of Revenue Regulation 19-86 plainly states that it was promulgated pursuant to
Section 277 of the NIRC. Section 277 (now Section 244) is an express grant of authority to the
Secretary of Finance to promulgate all needful rules and regulations for the effective enforcement of
the provisions of the NIRC.
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Facts: On February 1999, petitioner Matibag was appointed Acting Director IV of the Comelec’s EID
by then Comelec Chairperson Harriet Demetriou in a temporary capacity. On March 2001, respondent
Benipayo was appointed Comelec Chairman together with other commissioners in an ad interim
appointment. While on such ad interim appointment, respondent Benipayo in his capacity as Chairman
issued a Memorandum address transferring petitioner to the Law Department. Petitioner requested
Benipayo to reconsider her relief as Director IV of the EID and her reassignment to the Law
Department. She cited Civil Service Commission Memorandum Circular No. 7 dated April 10, 2001,
reminding heads of government offices that "transfer and detail of employees are prohibited during the
election period. Benipayo denied her request for reconsideration on April 18, 2001, citing COMELEC
Resolution No. 3300 dated November 6, 2000, exempting Comelec from the coverage of the said
Memo Circular. Petitioner appealed the denial of her request for reconsideration to the COMELEC en
banc. She also filed an administrative and criminal complaint with the Law Department against
Benipayo, alleging that her reassignment violated Section 261 (h)of the Omnibus Election Code,
COMELEC Resolution No. 3258, Civil Service Memorandum Circular No. 07, s. 001, and other
pertinent administrative and civil service laws, rules and regulations. During the pendency of her
complaint before the Law Department, petitioner filed the instant petition questioning the appointment
and the right to remain in office of Benipayo, Borra and Tuason, as Chairman and Commissioners of
the COMELEC, respectively. Petitioner claims that the ad interim appointments of Benipayo, Borra
and Tuason violate the constitutional provisions on the independence of the COMELEC.

Issues: Whether or not the assumption of office by Benipayo, Borra and Tuason on the basis of the ad
interim appointments issued by the President amounts to a temporary appointment prohibited by
Section 1 (2), Article IX-C of the Constitution.

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Held: We find petitioner’s argument without merit. An ad interim appointment is a permanent
appointment because it takes effect immediately and can no longer be withdrawn by the President once
the appointee has qualified into office. The fact that it is subject to confirmation by the Commission on
Appointments does not alter its permanent character. The Constitution itself makes an ad interim
appointment permanent in character by making it effective until disapproved by the Commission on
Appointments or until the next adjournment of Congress.
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8) Re: Entitlement to Hazard Pay of SC Medical and Dental Clinic Personnel

AM No. 03-09-02-56, November 27, 2008 (572 SCRA 1)

Facts: The SC medical and dental services division was entitled through hazard pay through RA 7305
also known as the Magna Carta for Public Workers. This paved the way for the issuance Of
Administration Circular no. 57 – 2004 which prescribed the guidelines of the grant of hazard
allowance in favor of the SCMDS personnel. The circular initially classified SCMDS employees
according to levels of exposure to health hazards and not on salary grades alone. But DOH abolished
the classification and declared that a uniform hazard pay rate should be given without regard for the
nature of the risks and hazards to which they are exposed. Thus, SMBS personnel requested that the
hazard pay must be granted.

Issue: Does the DBM have authority to review Supreme Court issuances relative to court personnel on
matters of compensation?

Held: The role of the DBM is "supervisorial in nature." Its main duty is to ascertain that the proposed
compensation, benefits, and other incentives to be given to officials and employees adhere to the
policies and guidelines issued in accordance with applicable laws. Thus, its authority to review SC
issuances is relative to the court personnel on matters of compensation is very limited, circumscribed
as it is by the constitution. Fiscal autonomy makes freedom from outside controls pursuant to Article
VIII, Section 3.The court in its ruling has to deny the request because the subject circular cannot be
amended according to the mechanism of hazard pay allocation under AO 2006–0011.
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9) Dagan v. PRC
G.R. No. 175220, February 12, 2009 (578 SCRA 585)

Facts: Philippine Racing Commission issued a directive, directing the Manila Jockey Club Inc.
(MJCI)and Philippine Racing Club (PRC) to come up with their respective Clubs’ House Rule to
addressEquine Infectious Anemia problem and to rid their facilities of horses infected with EIA. The
saiddirective was pursuant to Department of Agriculture’s AO No. 5 declaring it unlawful for
anyperson, firm or corporation to ship, drive, or transport horses from any locality or place except
when accompanied by a certificate issued by the authority of the Director of the Bureau of
AnimalIndustry (BAI).In compliance with the directive, MJCI and PRCI ordered owners of racehorses
stable in theirestablishments to submit the horses to exams that will determine whether they are
infected with EIA. Subsequently, on 17 September 2004, Philracom issued copies of the guidelines for
the monitoring and eradication of EIA. Despite the resistance, the blood testing proceeded and
thosewho refused to comply, including Dagan, were banned from the races, removed from the actual
dayof race and prohibited from renewing their licenses and evicted from their stables.

10
Issue: Was there an undue delegation by PHILRACOM of its rule-making powers to MJCI and PRCI?

Held: No. The PHILRACOM directive is merely instructive in character. MJCI and PRCI’s
compliance is part of their mandate under RA 7953 and 8407. Philracom has every right to issue
directives to MJCI and PRCI with respect to the conduct of horse racing, with or without implementing
guidelines inclusive of prescribing the procedure for monitoring and eradicating EIA. These guidelines
are in accord with Philracom’s mandate under the law to regulate the conduct of horse racing in the
country. The assailed guidelines do not appear to be unreasonable or discriminatory. In fact, all horses
stabled at the MJCI and PRCI’s premises underwent the same procedure. The guidelines implemented
were undoubtedly reasonable as they bear a reasonable relation to the purpose sought to be
accomplished, i.e., the complete riddance of horses infected with EIA.
---------------------------------------------------------------------
Procedure: This case began when the petitioners and racehorse owners refused to comply with the
directive issued by Philracom. They lodged a complaint before the Office of the President (OP), which
instructed Philacrom to investigate the matter. However, Philacrom failed to act upon the directive of
the OP. Thus, the petitioners filed a petition for injuction with the application for the issuance of a
TRO. The trial court found no valid grounds for the issuance of a writ of injunction. Petitioner's
appealed to the Court of Appeals, of which it confirmed in toto the decision of the trial court.
Aggrieved, petitioner's filed the instant certiorari petition imputing grave abuse of discretion on the
part of the respondents in compelling petitioner's to subject their racehorses to blood testing.

Facts: Philracom issued a directive requiring MJCI and PRCI to come up with their Clubs’ House
Rule to address the Equine Infectious Anemia (EIA) problem and to rid their facilities of horses
infected it. Said directive was issued pursuant to Administrative Order No. 55 by the Department of
Agriculture declaring it unlawful for any person, firm or corporation to ship, drive, or transport horses
from any locality or place except when accompanied by a certificate issued by the authority of the
Director of the Bureau of Animal Industry (BAI).Thus, MJCI and PRCI ordered the owners of
racehorses stable in their establishments to submit the horses to blood sampling and administration of
the Coggins Test to determine if they are infected. Subsequently, Philracom issued copies of the
guidelines for the monitoring and eradication of EIA. Despite resistance from petitioners, the blood
testing proceeded. The horses, whose owners refused to comply were banned from the races, were
removed from the actual day of race, prohibited from renewing their licenses or evicted from their
stables.

Issue: WON Philracom had unconstitutionally delegated its rule-making power to PRCI and MJCI in
issuing the directive for them to come up with club rules.

Held: PETITION is DISMISSED. The court finds no grave abuse of discretion on the part of
Philracom in issuing the contested guidelines and on the part MJCI and PRCI in complying with
Philracom’s directive. Philracom’s authority is drawn from P.D. No. 420. The delegation made in the
presidential decree is valid. Philracom did not exceed its authority. And the issuances are fair and
reasonable in every case of permissible delegation, there must be a showing that the delegation itself is
valid. It is valid only if the law is complete in itself and fixes a standard to which the delegate must
conform in the performance of his functions. A sufficient standard is one which indicates the
circumstances under which the legislative command is to be effected. Philracom was created for the
purpose of carrying out the declared policy in Section 1 of said law. Furthermore, Philracom was
granted exclusive jurisdiction and control over every aspect of the conduct of horse racing, including
the framing and scheduling of races, the construction and safety of race tracks, and the security of
11
racing. P.D. No. 420 is already complete in itself. Section 9 of the law fixes the standards and
limitations to which Philracom must conform in the performance of its functions. Its discretion to rid
the facilities of MJCI and PRCI of horses afflicted with EIA is aimed at preserving the security and
integrity of horse races. As to the supposed delegation by Philracom of its rule-making powers to
MJCI and PRCI, there is no delegation of power to speak of between Philracom, as the delegator and
MJCI and PRCI as delegates. The Philracom directive is merely instructive in character. PRCI and
MJCI followed-up when they ordered the racehorse owners to submit blood samples and subject their
race horses to blood testing. Compliance with the Philracom’s directive is part of the mandate of PRCI
and MJCI.

As preferred by MJCI, its duty is not derived from the delegated authority of Philracom but arises from
the franchise granted to them by Congress. As justified by PRCI, "obeying the terms of the franchise
and abiding by whatever rules enacted by Philracom is its duty."While it is conceded that the
guidelines were issued a month after Philracom’s directive, this circumstance does not render the
directive nor the guidelines void. The directive’s validity and effectivity are not dependent on
any supplemental guidelines.

The administrative body may not make rules and regulations which are inconsistent with the
provisions of the Constitution or a statute. The assailed guidelines prescribe the procedure for
monitoring and eradicating EIA are in accord with Philracom’s mandate under the law to regulate the
conduct of horse racing in the country. They do not appear to be unreasonable or discriminatory. In
fact, all horses stabled at the MJCI and PRCI’s premises underwent the same procedure. They are
reasonable as they bear a reasonable relation to the purpose sought to be accomplished.
---------------------------------------------------------------------------------------------------------------------------------------

10) Smart v. NTC

G.R. No. 151908, August 12, 2003 (408 SCRA 678)

Facts: Pursuant to its rule-making and regulatory powers, the National Telecommunications
Commission issued a Memorandum Circulars on the billing of telecommunications services and on
measures in minimizing, if not eliminating, the incidence of stealing of cellular phone unit. Isla
Communications Co., Inc. (IslaCom) and Pilipino Telephone Corporation (PilTel) filed an action for
the declaration of nullity of the memorandum circulars, alleging that NTC has no jurisdiction to
regulate the sale of consumer goods as stated in the subject memorandum circulars. Such jurisdiction
belongs to the DTI under the Consumer Acts of the Philippines. Soon thereafter, Globe Telecom, Inc.
and Smart Communications, Inc. filed a joint motion for leave to intervene and to admit complaint-in-
intervention. This was granted by the trial court.

The trial court issued a TRO enjoining NTC from implementing the MCs. NTC filed a Motion to
Dismiss, on the ground that petitioners failed to exhaust administrative remedies. The defendant's MD
is denied for lack of merit. NTC filed a MR but was later on denied by the trial court. The CA, upon
NTC's filing of a special action for certiorari and prohibition, reversed the decision of the lower court.
Hence, this petition.

Issue: Did the CA err in holding that the private respondents failed to exhaust administrative
remedies?

12
Held: Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or
administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules
and regulations which results in delegated legislation that is within the confines of the granting statute
and the doctrine of non-delegability and separability of powers.

The rules and regulations that administrative agencies promulgate, which are the product of a delegated
legislative power to create new and additional legal provisions that have the effect of law, should be
within the scope of the statutory authority granted by the legislature to the administrative agency. It is
required that the regulation be germane to the objects and purposes of the law, and be not in
contradiction to, but in conformity with, the standards prescribed by law. They must conform to and be
consistent with the provisions of the enabling statute in order for such rule or regulation to be valid.
Constitutional and statutory provisions control with respect to what rules and regulations may be
promulgated by an administrative body, as well as with respect to what fields are subject to regulation
by it. It may not make rules and regulations which are inconsistent with the provisions of the
Constitution or a statute, particularly the statute it is administering or which created it, or which are in
derogation of, or defeat, the purpose of a statute. In case of conflict between a statute and an
administrative order, the former must prevail.

Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its
quasi-judicial or administrative adjudicatory power. This is the power to hear and determine questions
of fact to which the legislative policy is to apply and to decide in accordance with the standards laid
down by the law itself in enforcing and administering the same law. The administrative body exercises
its quasi-judicial power when it performs in a judicial manner an act which is essentially of an
executive or administrative nature, where the power to act in such manner is incidental to or reasonably
necessary for the performance of the executive or administrative duty entrusted to it. In carrying out
their quasi-judicial functions, the administrative officers or bodies are required to investigate facts or
ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them as
basis for their official action and exercise of discretion in a judicial nature.

The doctrine of primary jurisdiction applies only where the administrative agency exercises its quasi-
judicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has been to
refer the same to an administrative agency of special competence pursuant to the doctrine of primary
jurisdiction. The courts will not determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative
tribunal, where the question demands the exercise of sound administrative discretion requiring the
special knowledge, experience and services of the administrative tribunal to determine technical and
intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the
regulatory statute administered. The objective of the doctrine of primary jurisdiction is to guide a court
in determining whether it should refrain from exercising its jurisdiction until after an administrative
agency has determined some question or some aspect of some question arising in the proceeding
before the court. It applies where the claim is originally cognizable in the courts and comes into play
whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme,
has been placed within the special competence of an administrative body; in such case, the judicial
process is suspended pending referral of such issues to the administrative body for its view.

However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the
administrative agency in the performance of its quasi-legislative function, the regular courts have
jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued
13
by an administrative agency contravenes the law or the constitution is within the jurisdiction of the
regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a
law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or
regulation in the courts, including the regional trial courts. This is within the scope of judicial power,
which includes the authority of the courts to determine in an appropriate action the validity of the acts
of the political departments. Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government.
------------------------------------------------------
Facts: Petitioners Isla Communications Co., Inc. and Pilipino Telephone Corporation filed against the
National Telecommunications Commission, an action for declaration of nullity of NTC Memorandum
Circular No. 13-6-2000 (the Billing Circular). Petitioners allege that the NTC has no jurisdiction to
regulate the sale of consumer goods such as the prepaid call cards since such jurisdiction belongs to the
Department of Trade and Industry under the Consumer Act of the Philippines; that the Billing Circular
is oppressive, confiscatory and violative of the constitutional prohibition against deprivation of
property without due process of law; that the Circular will result in the impairment of the viability of
the prepaid cellular service by unduly prolonging the validity and expiration of the prepaid SIM and
call cards; and that the requirements of identification of prepaid card buyers and call balance
announcement are unreasonable. Hence, they prayed that the Billing Circular be declared null and void
ab initio.

Issue : Has the RTC jurisdiction over the case?

Held: YES. The issuance by the NTC of Memorandum Circular No. 13-6-2000 and its Memorandum
dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power. As such, petitioners
were justified in invoking the judicial power of the Regional Trial Court to assail the constitutionality
and validity of the said issuances. What is assailed is the validity or constitutionality of a rule or
regulation issued by the administrative agency in the performance of its quasi-legislative function, the
regular courts have jurisdiction to pass upon the same. The determination of whether a specific rule or
set of rules issued by an administrative agency contravenes the law or the constitution is within the
jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the
power to declare a law, treaty, international or executive agreement, presidential decree, order,
instruction, ordinance, or regulation in the courts, including the regional trial courts. This is within the
scope of judicial power, which includes the authority of the courts to determine in an appropriate
action the validity of the acts of the political departments. Judicial power includes the duty of the
courts of justice to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. Not to be
confused with the quasi-legislative or rule-making power of an administrative agency is its quasi-
judicial or administrative adjudicatory power. This is the power to hear and determine questions of fact
to which the legislative policy is to apply and to decide in accordance with the standards laid down by
the law itself in enforcing and administering the same law. The administrative body exercises its quasi-
judicial power when it performs in a judicial manner an act which is essentially of an executive or
administrative nature, where the power to act in such manner is incidental to or reasonably necessary
for the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-
judicial functions, the administrative officers or bodies are required to investigate facts or ascertain the

14
existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their
official action and exercise of discretion in a judicial nature.
-------------------------------------------------------------

Facts: The NTC issued Billing Circular 13-6-2000 which promulgated rules and regulations on the
billing of telecommunications services. Petitioners filed with the RTC a petition to declare the circular
as unconstitutional. A motion to dismiss was filed by the NTC on the ground of petitioner’s to exhaust
administrative remedies. The RTC denied the motion to dismiss but on certiorari, the CA reversed
RTC.

Held: 1. Administrative bodies had (a) quasi-legislative or rule-making powers and (b) quasi-judicial
or administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make
rules and regulations which results in delegated legislation that is within the confines of the granting
statute and the doctrine of non-delegability and separability of powers. To be valid, such rules and
regulations must conform to, and be consistent with, the provisions of enabling statute.

Quasi-judicial or administrative adjudicatory power is the power to hear and determine questions of
fact to which the legislative policy is to apply and to decide in accordance with the standards laid down
by law itself in enforcing and administering the same law. In carrying out their quasi-judicial
functions, the administrative officers or bodies are required to investigate facts or ascertain the
existence of facts, hold hearings, weigh evidence, and draw conclusions from them for their official
action and exercise of discretion in a judicial.

2. The determination of whether a specific rule or set of rules issued by an administrative body
contravenes the law or the constitution is within the judicial power as defined by the Constitution
which is “ the duty of the Courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there haw been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of
the Government.” The NTC circular was issued pursuant to its quasi-legislative or rule-making power.
Hence, the action must be filed directly with the regular courts without requiring exhaustion of
administrative remedies.

3. Where the act of administrative agency was performed pursuant to its quasi-judicial function,
exhaustion of administrative remedy is required, before going to court.

4. The doctrine of primary jurisdiction applies only where the administrative agency exercises its
quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes, the same must be
referred to an administrative agency of special competence pursuant to the doctrine of primary
jurisdiction. This doctrine of primary jurisdiction applies where the claim requires the resolution of
issues which, under a regulatory scheme, has been placed within the special competence of an
administrative body. In such case, the judicial process is suspended pending referral of such issues to
the administrative body for its view.
-----------------------------------------------------------------------

Facts: On 16 June 2000, the NTC issued Memorandum Circular 13-6-2000, promulgating rules and
regulations on the billing of telecommunications services; which includes provisions pertaining to the
use and sale of pre-paid cards and unit of billing for cellular mobile telephone service (CMTS). On 30
August 2000, the NTC issued a memorandum to all CMTS operators which contained measures to
15
minimize if not totally eliminate the incidence of stealing of cellular phone units. Another
memorandum dated 6 October 2000 addressed to all telecommunications entities reminding them that
the validity of all prepaid cards and SIM packs sold and used on 7 October 2000 and beyond shall be
valid for at least 2 years from the date of first use. Telecommunications Law, 2004 ( 3 ) Digests (Berne
Guerrero) On 20 October 2000, Islacom and Piltel questioned the validity of the memoranda, and
prayed for the issuance of a writ of preliminary injunction. The lower court granted the issuance of the
injunction. NTC moved for reconsideration, but was denied. NTC thereafter filed a special civil action
for certiorari and probation before the Court of Appeals. The appellate court granted the petition and
dismissed the companies’ complaint without prejudice to the referral of their grievances with the NTC.
Hence, the petition for review with the Supreme Court.

Issue: Should a party have exhausted administrative remedies before it filed the case in court?

Held: NO. A party need not exhaust administrative remedies before going to Court, when questioning
the validity or constitutionality of a rule or regulation issued by an administrative agency. The
principle only applies when the act of the agency was performed pursuant to its quasi-judicial function,
and not when the assailed and pertained to its rule-making or quasi-legislative power.
------------------------------------------------------------

Facts: The National Telecommunications Commission (NTC) issued on June 16, 2000 Memorandum
Circular No. 13-6-2000, promulgating rules and regulations on the billing of telecommunications
services.

The Memorandum Circular provided that it shall take effect 15 days after its publication in a
newspaper of general circulation and three certified true copies thereof furnished the UP Law Center. It
was published in the newspaper, The Philippine Star, on June 22, 2000. Meanwhile, the provisions of
the Memorandum Circular pertaining to the sale and use of prepaid cards and the unit of billing for
cellular mobile telephone service took effect 90 days from the effectivity of the Memorandum
Circular.

On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone service (CMTS)
operators which contained measures to minimize if not totally eliminate the incidence of stealing of
cellular phone units. This was followed by another Memorandum dated October 6, 2000 addressed to
all public telecommunications entities.

Isla Communications Co., Inc. and Pilipino Telephone Corporation filed against the National
Telecommunications Commission, Commissioner Joseph A. Santiago, Deputy Commissioner Aurelio
M. Umali and Deputy Commissioner Nestor C. Dacanay, an action for declaration of nullity of NTC
Memorandum Circular No. 13-6-2000 (the Billing Circular) and the NTC Memorandum dated October
6, 2000, with prayer for the issuance of a writ of preliminary injunction and temporary restraining
order.

Petitioners alleged that NTC has no jurisdiction to regulate the sale of consumer goods such as the
prepaid call cards since such jurisdiction belongs to the Department of Trade and Industry under the
Consumer Act of the Philippines; that the Billing Circular is oppressive, confiscatory and violative of
the constitutional prohibition against deprivation of property without due process of law; that the
Circular will result in the impairment of the viability of the prepaid cellular service by unduly
prolonging the validity and expiration of the prepaid SIM and call cards; and that the requirements of
16
identification of prepaid card buyers and call balance announcement are unreasonable. Hence, they
prayed that the Billing Circular be declared null and void ab initio.

Globe Telecom, Inc and Smart Communications, Inc. filed a joint Motion for Leave to Intervene and to
Admit Complaint-in-Intervention and this was granted by the trial court.

Respondent NTC and its co-defendants filed a motion to dismiss the case on the ground of petitioners'
failure to exhaust administrative remedies. Likewise, Globe and Islacom filed a petition for review,
docketed as G.R. No. 152063, assigning the following errors. Thus, two petitions were consolidated in
a Resolution dated February 17, 2003.

Issues:
1. Whether NTC has a jurisdiction and not the regular courts over the case; and
2. Whether Billing Circular issued by NTC is unconstitutional and contrary to law and public policy.

Held:
Jurisdiction: NTC vs. RTC
Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or
administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules
and regulations which results in delegated legislation that is within the confines of the granting statute
and the doctrine of non-delegability and separability of powers.

The doctrine of primary jurisdiction applies only where the administrative agency exercises its quasi-
judicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has been to
refer the same to an administrative agency of special competence pursuant to the doctrine of primary
jurisdiction. The courts will not determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative
tribunal, where the question demands the exercise of sound administrative discretion requiring the
special knowledge, experience and services of the administrative tribunal to determine technical and
intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the
regulatory statute administered.

Hence, the Regional Trial Court has jurisdiction to hear and decide Civil Case No. Q-00-42221. The
Court of Appeals erred in setting aside the orders of the trial court and in dismissing the case.

Constitutionality of the Circular

In questioning the validity or constitutionality of a rule or regulation issued by an administrative
agency, a party need not exhaust administrative remedies before going to court. This principle applies
only where the act of the administrative agency concerned was performed pursuant to its quasi-judicial
function, and not when the assailed act pertained to its rule-making or quasi-legislative power.

However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the
administrative agency in the performance of its quasi-legislative function, the regular courts have
jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued
by an administrative agency contravenes the law or the constitution is within the jurisdiction of the
regular courts.

17
In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and its
Memorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power.

Ruling:
Contrary to the finding of the Court of Appeals, the issues raised in the complaint do not entail highly
technical matters. Rather, what is required of the judge who will resolve this issue is a basic familiarity
with the workings of the cellular telephone service, including prepaid SIM and call cards – and this is
judicially known to be within the knowledge of a good percentage of our population – and expertise in
fundamental principles of civil law and the Constitution.

Hence, the consolidated petitions are granted but the decision of the Court of Appeals on the civil cases
are reversed and set aside. Thus, it is remanded to the court a quo for continuation of the proceedings.
--------------------------------------------------------------

Facts: On October 20, 2000, petitioners ISLACOM and PILTEL filed against the NTC an action for
declaration of nullity of the Billing Circular, with prayer for the issuance of a writ of preliminary
injunction and temporary restraining order. Petitioners ISLACOM and PILTEL alleged, inter alia, that
the NTC has no jurisdiction to regulate the sale of consumer goods such as the prepaid call cards since
such jurisdiction belongs to the DTI under the Consumer Act of the Philippines; that the Billing
Circular is oppressive, confiscatory and violative of the constitutional prohibition against deprivation
of property without due process of law; that the Circular will result in the impairment of the viability of
the prepaid cellular service by unduly prolonging the validity and expiration of the prepaid SIM and
call cards; and that the requirements of identification of prepaid card buyers and call balance
announcement are unreasonable. Hence, they prayed that the Billing Circular be declared null and void
ab initio.
Soon thereafter, petitioners Globe Telecom, Inc and Smart Communications, Inc. filed a joint Motion
for Leave to Intervene and to Admit Complaint-in-Intervention. This was granted by the trial court.
On October 27, 2000, the trial court issued a temporary restraining order enjoining the NTC from
implementing Memorandum Circular No. 13-6-2000(the Billing Circular).In the meantime, respondent
NTC and  its co-defendants filed a motion to dismiss the case on the ground of petitioners’ failure to
exhaust administrative remedies.
Issues:
1.       Whether the private respondents failed to exhaust an available administrative remedy.
2.       Whether NTC and not the Regular Courts has jurisdiction over the case.
3.       Whether the Billing Circular issued by the respondent NTC is unconstitutional and contrary to
law and public policy.
Held:
First Issue: No. In questioning the validity or constitutionality of a rule or regulation issued by an
administrative agency, a party need not exhaust administrative remedies before going to court. This
principle applies only where the act of the administrative agency concerned was performed pursuant to
its quasi-judicial function, and not when the assailed act pertained to its rule-making or quasi-
legislative power.
In this case, the records reveal that petitioners sufficiently complied with this requirement. Even during
the drafting and deliberation stages leading to the issuance of Memorandum Circular No. 13-6-2000,
petitioners were able to register their protests to the proposed billing guidelines. They submitted their
18
respective position papers setting forth their objections and submitting proposed schemes for the
billing circular. After the same was issued, petitioners wrote successive letters dated July 3, 2000 and
July 5, 2000, asking for the suspension and reconsideration of the so-called Billing Circular. These
letters were not acted upon until October 6, 2000, when respondent NTC issued the second assailed
Memorandum implementing certain provisions of the Billing Circular. This was taken by petitioners as
a clear denial of the requests contained in their previous letters, thus prompting them to seek judicial
relief.
Second Issue: No. Regional Trial Court has jurisdiction to hear and decide Civil Case. The Court of
Appeals erred in setting aside the orders of the trial court and in dismissing the case.
The doctrine of primary jurisdiction applies only where the administrative agency exercises its quasi-
judicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has been to
refer the same to an administrative agency of special competence pursuant to the doctrine of primary
jurisdiction. The courts will not determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative
tribunal, where the question demands the exercise of sound administrative discretion requiring the
special knowledge, experience and services of the administrative tribunal to determine technical and
intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the
regulatory statute administered. The objective of the doctrine of primary jurisdiction is to guide a court
in determining whether it should refrain from exercising its jurisdiction until after an administrative
agency has determined some question or some aspect of some question arising in the proceeding
before the court. It applies where the claim is originally cognizable in the courts and comes into play
whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme,
has been placed within the special competence of an administrative body; in such case, the judicial
process is suspended pending referral of such issues to the administrative body for its view.
However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the
administrative agency in the performance of its quasi-legislative function, the regular courts have
jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued
by an administrative agency contravenes the law or the constitution is within the jurisdiction of the
regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a
law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or
regulation in the courts, including the regional trial courts. This is within the scope of judicial power,
which includes the authority of the courts to determine in an appropriate action the validity of the acts
of the political departments. Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government.
Third Issue: No. In their complaint before the Regional Trial Court, petitioners averred that the
Circular contravened Civil Code provisions on sales and violated the constitutional prohibition against
the deprivation of property without due process of law. These are within the competence of the trial
judge. Contrary to the finding of the Court of Appeals, the issues raised in the complaint do not entail
highly technical matters. Rather, what is required of the judge who will resolve this issue is a basic
familiarity with the workings of the cellular telephone service, including prepaid SIM and call cards –
and this is judicially known to be within the knowledge of a good percentage of our population – and
expertise in fundamental principles of civil law and the Constitution.
----------------------------------------------------------------------------------------------------------------------------

19
11) Conde v. CA
G.R. No. (264 SCRA 19)

---------------------------------------------------------------------------------------------------------------------
12) People v. Santos
G.R. No. L-32166, October 18, 1977, (63 Phil 300)

People v. Santos, 63 Phil 300

-----------------------------------------------------------------------------------------------------------------------

13) People v. Que Po Lay

G.R. No. L-6791, March 29, 1954, (94 Phil 641)

Facts: Appellant who was in possession of foreign exchange consisting of U.S. dollars, U.S. checks
and U.S. money orders failed to sell the same to the Central Bank through its agents within one day
following the receipt of such foreign exchange as required by Central Bank Circular No. 20. Appellant
appeals on the claim that the said circular had no force or effect because the same was not published in
the official Gazette prior to the act or omission imputed to said appellant. The Solicitor General
counters that Commonwealth Act. No. 638 and 2930 do not require the publication in the Official
Gazette of said circular issued for the implementation of a law in order to have force and effect.

Issue: Should circulars and regulations be published in order to have force and effect?

Held: Yes, circulars and regulations especially like Circular No. 20 of the Central Bank which
prescribes a penalty for its violation should be published before becoming effective. Before the public
is bound by its contents, especially its penal provisions, a law, regulation or circular must first be
published and the people officially and specifically informed of said contents and its penalties.
--------------------------------------------------------------

Facts: The appellant was in possession of foreign exchange consisting of US dollars, US checks and
US money orders amounting to about $7000 but failed to sell the same to the Central Bank as required
under Circular No. 20.

Circular No. 20 was issued in the year 1949 but was published in the Official Gazette only on Nov.
1951 after the act or omission imputed to Que Po Lay.

Que Po Lay appealed from the decision of the lower court finding him guilty of violating Central Bank
Circular No. 20 in connection with Sec 34 of RA 265 sentencing him to suffer 6 months imprisonment,
pay fine of P1,000 with subsidiary imprisonment in case of insolvency, and to pay the costs.

Issue: Is publication of Circular 20 in the Official Gazette needed for it to become effective and
subject violators to corresponding penalties?

Held: It was held by the Supreme Court, in an en banc decision, that as a rule, circular and regulations
of the Central Bank in question prescribing a penalty for its violation should be published before
becoming effective. This is based on the theory that before the public is bound by its contents
especially its penal provisions, a law, regulation or circular must first be published for the people to be
officially and specifically informed of such contents including its penalties.
20
 -------------------------------------------------------

Facts: Defendant-appellant Que Po Lay was in possession of foreign exchange consisting of U.S.
dollars, U.S. checks and U.S. money orders amounting to about $7,000. He failed to sell the same to
the Central Bank through its agents within one day following the receipt of such foreign exchange as
required by Circular No. 20. The appeal is based on the claim that said circular No. 20 was not
published in the Official Gazette prior to the act or omission imputed to the appellant, and that
consequently, said circular had no force and effect.

Defendant-appellant contended that Commonwealth Act. No., 638 and Act 2930 both require said
circular to be published in the Official Gazette, it being an order or notice of general applicability. The
Solicitor General answering this contention says that Commonwealth Act. No. 638 and 2930 do not
require the publication in the Official Gazette of said circular issued for the implementation of a law in
order to have force and effect.

Issue: Should the circular be published first to have the force and effect of law?

Held: Yes. Section 11 of the Revised Administrative Code provides that statutes passed by Congress
shall, in the absence of special provision, take effect at the beginning of the fifteenth day after the
completion of the publication of the statute in the Official Gazette. Article 2 of the new Civil Code
(Republic Act No. 386) equally provides that laws shall take effect after fifteen days following the
completion of their publication in the Official Gazette, unless it is otherwise provided. It is true that
Circular No. 20 of the Central Bank is not a statute or law but being issued for the implementation of
the law authorizing its issuance, it has the force and effect of law according to settled jurisprudence.

Moreover, as a rule, circulars and regulations especially like the Circular No. 20 of the Central Bank in
question which prescribes a penalty for its violation should be published before becoming effective,
this, on the general principle and theory that before the public is bound by its contents, especially its
penal provisions, a law, regulation or circular must first be published and the people officially and
specifically informed of said contents and its penalties.

In the present case, although circular No. 20 of the Central Bank was issued in the year 1949, it was
not published until November 1951, that is, about 3 months after appellant's conviction of its violation.
It is clear that said circular, particularly its penal provision, did not have any legal effect and bound no
one until its publication in the Official Gazette or after November 1951.
--------------------------------------------------------------

Facts: Que Po Lay is appealing from the decision of the Court of First Instance of Manila, finding him
guilty of violating Central Bank Circular No. 20. The charge was that the appellant who was in
possession of foreign exchange failed to sell to the Central Bank through its agents within one day
following the receipt of such foreign exchange as required by Circular No. 20. He appeals basing on
the claim that said circular No. 20 was not published in the Official Gazette and that consequently, said
circular had no force and effect.

Issues: Was there a need for a publication of the said circular to make it effective?

Held: The Court agrees that the laws in question do not require the publication of the circulars,
regulations and notices therein mentioned in order to become binding and effective. All that said two
21
laws provide is that laws, resolutions, decisions of the Supreme Court and Court of Appeals, notices
and documents required by law to be of no force and effect.

Article 2 of the new Civil Code (Republic Act No. 386) equally provides that laws shall take effect
after fifteen days following the completion of their publication in the Official Gazette, unless it is
otherwise provided.

Moreover, as a rule, circulars and regulations especially like the Circular No. 20 of the Central Bank in
question which prescribes a penalty for its violation should be published before becoming effective,
this, on the general principle and theory that before the public is bound by its contents, especially its
penal provisions, a law, regulation or circular must first be published and the people officially and
specifically informed of said contents and its penalties.
----------------------------------------------------------------------------------------------------------------------------

14) People v. Maceren

G.R. No. 32166, October 18, 1977, (79 SCRA 450)

Facts: The respondents were charged with violating Fisheries Administrative Order No. 84-1 which
penalizes electro fishing in fresh water fisheries. This was promulgated by the Secretary of Agriculture
and Natural Resources and the Commissioner of Fisheries under the old Fisheries Law and the law
creating the Fisheries Commission. The municipal court quashed the complaint and held that the law
does not clearly prohibit electro fishing, hence the executive and judicial departments cannot consider
the same. On appeal, the CFI affirmed the dismissal. Hence, this appeal to the SC.

Issue: Is the administrative order penalizing electro fishing valid?

Held: NO. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries
exceeded their authority in issuing the administrative order. The old Fisheries Law does not expressly
prohibit electro fishing. As electro fishing is not banned under that law, the Secretary of Agriculture
and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. Had the
lawmaking body intended to punish electro fishing, a penal provision to that effect could have been
easily embodied in the old Fisheries Law. The lawmaking body cannot delegate to an executive official
the power to declare what acts should constitute an offense. It can authorize the issuance of regulations
and the imposition of the penalty provided for in the law itself. Where the legislature has delegated to
executive or administrative officers and boards authority to promulgate rules to carry out an express
legislative purpose, the rules of administrative officers and boards, which have the effect of extending,
or which conflict with the authority granting statute, do not represent a valid precise of the rule-making
power.

Note: Administrative regulations adopted under legislative authority by a particular department must
be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect
its general provisions. By such regulations, the law itself cannot be extended. An administrative
agency cannot amend an act of Congress.
-----------------------------------------------------------------------

Facts: The respondents were charged with violating Fisheries Administrative Order No. 84-1 which
penalizes electro fishing in fresh water fisheries. This was promulgated by the Secretary of Agriculture
and Natural Resources and the Commissioner of Fisheries under the old Fisheries Law and the law
22
creating the Fisheries Commission. The municipal court quashed the complaint and held that the law
does not clearly prohibit electro fishing, hence the executive and judicial departments cannot consider
the same. On appeal, the CFI affirmed the dismissal. Hence, this appeal to the SC.

Issue: Is the administrative order penalizing electro fishing valid?

Held: NO. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries
exceeded their authority in issuing the administrative order. The old Fisheries Law does not expressly
prohibit electro fishing. As electro fishing is not banned under that law, the Secretary of Agriculture
and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. Had the
lawmaking body intended to punish electro fishing, a penal provision to that effect could have been
easily embodied in the old Fisheries Law. The lawmaking body cannot delegate to an executive official
the power to declare what acts should constitute an offense. It can authorize the issuance of regulations
and the imposition of the penalty provided for in the law itself. Where the legislature has delegated to
executive or administrative officers and boards authority to promulgate rules to carry out an express
legislative purpose, the rules of administrative officers and boards, which have the effect of extending,
or which conflict with the authority granting statute, do not represent a valid precise of the rule-making
power but constitute an attempt by an administrative body to legislate

Administrative agent are clothed with rule-making powers because the lawmaking body finds it
impracticable, if not impossible, to anticipate and provide for the multifarious and complex situations
that may be encountered in enforcing the law. All that is required is that the regulation should be
germane to the defects and purposes of the law and that it should conform to the standards that the law
prescribes. Administrative regulations adopted under legislative authority by a particular department
must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into
effect its general provisions. By such regulations, of course, the law itself cannot be extended.

The rule-making power must be confined to details for regulating the mode or proceeding to carry into
effect the law as it his been enacted. The power cannot be extended to amending or expanding the
statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute
cannot be sanctioned.
-----------------------------------------------------------------------

Facts: Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario Aquino and Carlito del
Rosario were charged with having violated Fisheries Administrative Order No. 84-1.

It alleged that the five accused resorted to electro fishing in the waters of Barrio San Pablo Norte, Sta.
Cruz by using their own motor banca, equipped with motor and electrocuting device locally known as
sensored with a somewhat webbed copper wire on the tip or other end of a bamboo pole with electric
wire attachment which was attached to the dynamo direct and with the use of these devices or
equipments catches fish thru electric current, which destroy any aquatic animals within its cuffed
reach, to the detriment and prejudice of the populace.

Sec. 11 of the Fisheries Law prohibits "the use of any obnoxious or poisonous substance" in fishing.

Section 76 of the same law punishes any person who uses an obnoxious or poisonous substance in
fishing with a fine of not more than five hundred pesos nor more than five thousand, and by
imprisonment for not less than six months or more than five years.
23
It is noteworthy that the Fisheries Law does not expressly punish electro fishing. Notwithstanding the
silence of the law, the Secretary of Agriculture and Natural Resources, upon the recommendation of
the Commissioner of Fisheries, promulgated Fisheries Administrative Order No. 84 (62 O.G. 1224),
prohibiting electro fishing in all Philippine waters.

On June 28, 1967 the Secretary of Agriculture and Natural Resources, upon the recommendation of the
Fisheries Commission, issued Fisheries Administrative Order No. 84-1, amending section 2 of
Administrative Order No. 84, by restricting the ban against electro fishing to fresh water fisheries (63
O.G. 9963).

Thus, the phrase "in any portion of the Philippine waters" found in section 2, was changed by the
amendatory order to read as follows: "in fresh water fisheries in the Philippines, such as rivers, lakes,
swamps, dams, irrigation canals and other bodies of fresh water."

Issue: Did the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries
exceed their authority in issuing Fisheries Administrative Orders Nos. 84 and 84-1?

Held: Yes. They exceeded their authority. The rule-making power confined to details for regulating
the mode or proceeding to carry into effect the law as it has been enacted. The power cannot be
extended to amending or expanding the statutory requirements or to embrace matters not covered by
the statute.

The Fisheries Law does not expressly prohibit electro fishing .As electro fishing is not banned under
that law. Hence, the Secretary of Agriculture and Natural Resources and the Commissioner of
Fisheries are powerless to penalize it. Had the lawmaking body intended to punish electro fishing, a
penal provision to that effect could have been easily embodied in the old Fisheries Law. Nowhere in
the said law is electro fishing specifically punished. Administrative agents are clothed with rule-
making powers because the lawmaking body finds it impracticable, if not impossible, to anticipate and
provide for the multifarious and complex situations that may be encountered in enforcing the law. All
that is required is that the regulation should be germane to the defects and purposes of the law and that
it should conform to the standards that the law prescribes.
----------------------------------------------------------------------------------------------------------------------------

15) Peralta v. CSC

G.R. No. 95832, August 10, 1992, (212 SCRA 425)

Facts: Pursuant to Civil Service Act of 1959 (R.A. No. 2260) which conferred upon the Commissioner
of Civil Service to prescribe, amend and enforce suitable rules and regulations for carrying into effect
the provisions of this Civil Service Law, the Commission interpreted provisions of Republic Act No.
2625 amending the Revised Administrative Code and adopted a policy that when an employee who
was on leave of absence without pay on a day before or on a day time immediately preceding a
Saturday, Sunday or Holiday, he is also considered on leave of absence without pay on such Saturday,
Sunday or Holiday. Petitioner Peralta, affected by the said policy, questioned the said administrative
interpretation.

Issues: Is the Civil Service Commission’s interpretative construction valid and constitutional, and
binding upon the courts?
24
Held: NO. The construction by the respondent Commission of R.A. 2625 is not in accordance with the
legislative intent. R.A. 2625 specifically provides that government employees are entitled to leaves of
absence with full pay exclusive of Saturdays, Sundays and Holidays. The law speaks of the granting of
a right and the law does not provide for a distinction between those who have accumulated leave
credits and those who have exhausted their leave credits in order to enjoy such right. Ubi lex non
distinguit nec nos distinguere debemus. The fact remains that government employees, whether or not
they have accumulated leave credits, are not required by law to work on Saturdays, Sundays and
Holidays and thus they cannot be declared absent on such non-working days. They cannot be or are not
considered absent on non-working days; they cannot and should not be deprived of their salary
corresponding to said non-working days just because they were absent without pay on the day
immediately prior to, or after said non-working days. A different rule would constitute a deprivation of
property without due process.

Likewise, administrative construction is not necessarily binding upon the courts. Action of an
administrative agency may be disturbed or set aside by the judicial department if there is an error of
law, or abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with
either the letter or the spirit of a legislative enactment. When an administrative or executive agency
renders an opinion or issues a statement of policy, it merely interprets a pre-existing law; and the
administrative interpretation of the law is at best advisory, for it is the courts that finally determine
what the law means.

The general rule vis-a-vis legislation is that an unconstitutional act is not a law; it confers no rights; it
imposes no duties; it affords no protection; it creates no office; it is in legal contemplation as
inoperative as though it had never been passed.

To allow all the affected government employees, similarly situated as petitioner herein, to claim their
deducted salaries resulting from the past enforcement of the herein invalidated CSC policy, would
cause quite a heavy financial burden on the national and local governments considering the length of
time that such policy has been effective. Also, administrative and practical considerations must be
taken into account if this ruling will have a strict restrospective application. The Court, in this
connection, calls upon the respondent Commission and the Congress of the Philippines, if necessary, to
handle this problem with justice and equity to all affected government employees.

Doctrine: When an administrative or executive agency renders an opinion or issues a statement of policy,
it merely interprets a pre-existing law; and the administrative interpretation of the law is at best advisory ,
for it is the courts that finally determine what the law means. It has also been held that interpretative
regulations need not be published.
------------------------------------------------------------------------------------------------------------------------------------------

16) CIR v. CA
G.R. No. 95832, August 10, 1992, (261 SCRA 236)

Facts: On 22 August 1986, Executive Order No. 41 was promulgated declaring a one-time tax
amnesty on unpaid income taxes, later amended to include estate and donor's taxes and taxes on
business, for the taxable years 1981 to 1985. Availing itself of the amnesty, respondent R.O.H. Auto
Products Philippines, Inc., filed, in October 1986 and November 1986, its Tax Amnesty Return No.
34-F-00146-41and Supplemental Tax Amnesty Return No. 34-F-00146-64-B, respectively, and paid
the corresponding amnesty taxes due. Prior to this availment, petitioner Commissioner of Internal
25
Revenue, in a communication received by private respondent on 13 August 1986, assessed the latter
deficiency income and business taxes for its fiscal years ended 30 September 1981 and 30 September
1982 in an aggregate amount of P1,410,157.71. However, the request to cancel the deficiency taxes
was denied.

Issue: Can private respondent avail of the tax amnesty?

Held: YES. Executive Order No. 41 is quite explicit and requires hardly anything beyond a simple
application of its provisions. If, as the Commissioner argues, Executive Order No. 41 had not been
intended to include 1981-1985 tax liabilities already assessed (administratively) prior to 22 August
1986,the law could have simply so provided in its exclusionary clauses. It did not. The conclusion is
unavoidable, and it is that the executive order has been designed to be in the nature of a general grant
of tax amnesty subject only to the cases specifically excepted by it. It might not be amiss to recall that
the taxable periods covered by the amnesty include the years immediately preceding the 1986
revolution during which time there had been persistent calls, all too vivid to be easily forgotten, for
civil Disobedience , most particularly in the payment of taxes, to the martial law regime. It should be
understandable then that those who ultimately took over the reigns of government following the
successful revolution would promptly provide for a broad, and not a confined, tax amnesty.
------------------------------------------------------------

Facts: At the center of controversy in this case is Customs Memorandum Order (CMO) No. 27-2003
issued by the Commissioner of Customs on November 7, 2003. Said issuance provided that, for tariff
purposes, wheat shall be classified according to the following: (1) importer or consignee; (2) country
of origin; (3) port of discharge. The same likewise made an exclusive list of corporations, ports of
discharge, commodity descriptions and countries of origin. On these factors would depend whether
wheat would be classified as food grade (3%) or feed grade (7%). The CMO also placed the procedure
for protest or Valuation and Classification Review Committee (VCRC) cases. In anticipation of the
implementation of CMO 27-2003, respondent filed on December 19, 2003, a Petition for Declaratory
Relief with the Regional Trial Court (RTC). Hypermix claims that said CMO: (1) was issued without
observing the provisions of the Revised Administrative Code; (2) declared it to be a feed grade
supplier sans the benefit of prior assessment and examination; (3) violated the equal protection clause
of the 1987 Constitution; and (4) was confiscatory in nature since it had a retroactive application. The
RTC issued a twenty (20) day Temporary Restraining Order (TRO) on January 24, 2004. Subsequently
the Commissioner of Customs filed a Motion to Dismiss based on the ensuing grounds: (1) that RTC is
without jurisdiction because Hypermix was seeking for a judicial determination of the classification of
wheat; (2) action for Declaratory Relief is improper; (3) The CMO was an internal administrative rule
and not legislative in character; (4) Hypermix’ assertions were speculative and premature. Finally,
petitioner “X x x likewise opposed the application for a writ of preliminary injunction on the ground
that they had not inflicted any injury through the issuance x x x; and that the action would be contrary
to the rule that administrative issuances are assumed valid until declared otherwise.” The RTC and
Court of Appeals (CA) decided in favor of respondent Hypermix Feeds Corporation.

Issues: 1. Did the CA decide a question of substance? 2. Did the CA make a mistake in pronouncing
that the RTC acted within its jurisdiction?

Held: The Supreme Court (SC) denied the petition and decided in favor of Hypermix Feeds
Corporation, the respondent herein. 9 The SC first tackled the issue regarding Declaratory Relief. The
court mentioned that for an action for Declaratory Relief to prosper, these requisites must be present:
26
(1) justiciable controversy; (2) persons whose interests are adverse; (3) legal interest of the party
seeking the action; and (4) issue must be ripe for judicial determination. The court ruled that the
petition filed by respondent in the lower court meets the requirements. The SC said: “Indeed, the
Constitution vests the power of judicial review or the power to declare a law, treaty, international or
executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts,
including the regional trial courts. This is within the scope of judicial power, which includes the
authority of the courts to determine in an appropriate action the validity of the acts of the political
departments.” The court also ruled that the controversy is between two parties who have adverse
interest, i.e., the Commissioner of Customs is imposing the tariff rate that Hypermix is refusing to pay.
On the third requirement, the SC declared: “X x x. Respondent has adequately shown that, as a regular
importer of wheat, on 14 August 2003, it has actually made shipments of wheat from China to Subic.
The shipment was set to arrive in December 2003. Upon its arrival, it would be subjected to the
conditions of CMO 27-2003. The regulation calls for the imposition of different tariff rates, depending
on the factors enumerated therein. Thus, respondent alleged that it would be made to pay 7% tariff
applied to feed grade wheat, instead of the 3% tariff on food grade wheat. In addition, respondent
would have to go through the procedure under CMO 27-2003, which would undoubtedly toll its time
and resources.” The SC likewise mentioned that issue is ripe for judicial determination because
litigation is forthcoming for the reason that Hypermix is not included in the list of flour millers
grouped as food grade wheat importers. The court struck down CMO 27-2003 for violating the
Revised Administrative Code rules on Filing and Public Participation. Furthermore, it ruled that the
provision of the Memorandum is unconstitutional for being violative of the equal protection clause of
the 1987 Constitution. There must be a valid classification. Moreover, the SC declared that petitioner
Commissioner of Customs went beyond his powers when CMO 27-2003 limited the customs officer’s
duties mandated under Section 1403 of the Tariff and Customs Code of the Philippines (TCCP)[Duties
of Customs Officer Tasked to Examine, Classify, and Appraise Imported Articles]
----------------------------------------------------------------------------------------------------------------------------

17) CIR v. Hypermix

G.R. No. 179579, February 1, 2012, (664 SCRA 666)

Facts: The Commissioner of Customs issued CM 27-2003 classifying wheat as (1) importer or
consignee; (2) country of origin; and (3) port of discharge and depending on these factors, wheat
would be classified further as either food grade with a tariff rate of 3% or feed grade with a tariff rate
of 7%. The regulation also provides for an exclusive list of corporations, ports of discharge,
commodity descriptions and countries of origin. On December 19, 2003, the respondent filed a Petition
for Declaratory Relief with the Regional Trial Court of Las Pinas contending the following: (1) the
regulation was issued without following the mandate of the Revised Administrative Code, (2) that the
regulation classified them to be a feed grade supplier without prior assessment and examination, (3)the
equal protection clause of the Constitution was violated when the regulation treated the non-flour
millers differently from flour millers for no reason at all, and(4) the retroactive application of the
regulation is confiscatory. The petitioners thereafter filed a motion to dismiss contending that: (1) the
RTC does not have jurisdiction of the subject matter, (2) an action for declaratory relief was improper,
(3) CM 27-2003 was an internal administrative rule and not legislative in nature; and (4) the claims of
the respondent were speculative and premature. On March10, 2005, the Regional Trial Court rendered
a decision ruling in favour of the respondent. It held that the jurisdiction is properly held because the
subject matter is quasi-legislative in nature. It also held that the petition for declaratory relief was
proper remedy and that the respondent was the proper party to file it. On matters relating to the validity
of the regulation, the court held that the regulation is invalid because the basic requirements of hearing
27
and publication were not complied with. The petitioners then appealed to Court of Appeals but it was,
however, dismissed. Hence, this petition for review on certiorari under Rule45 assailing the decision of
the Court of Appeals.

Issue: Was the issuance of CMO 27-2003 within the powers of the Commissioner of Customs?

Held: The provision mandates that the customs officer must first assess and determine the
classification of the imported article before tariff may be imposed. Unfortunately, CMO 23-2007 has
already classified the article even before the customs officer had the chance to examine it. In effect,
petitioner Commissioner of Customs diminished the powers granted by the Tariff and Customs Code
with regard to wheat importation when it no longer required the customs officer’s prior examination
and assessment of the proper classification of the wheat. It is well-settled that rules and regulations,
which are the product of a delegated power to create new and additional legal provisions that have the
effect of law, should be within the scope of the statutory authority granted by the legislature to the
administrative agency. It is required that the regulation be germane to the objects and purposes of the
law; and that it be not in contradiction to, but inconformity with, the standards prescribed by law.
(P.S. Customs Memorandum Order No. 27-2003 (CMO 23-2007) is invalid).

28