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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 170656             August 15, 2007

THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY and BAYANI


FERNANDO as Chairman of the Metropolitan Manila Development
Authority, petitioners,
vs.
VIRON TRANSPORTATION CO., INC., respondent.

FACTS

President Gloria Macapagal Arroyo, to address the traffic congestion Metro Manila, issued EO
179. Relevant portions of the EO reads:

Xxxxxxx

(5th) WHEREAS, the MMDA has recommended a plan to decongest traffic by


eliminating the bus terminals now located along major Metro Manila thoroughfares and
providing more convenient access to the mass transport system to the commuting
public through the provision of mass transport terminal facilities  that would integrate
the existing transport modes, namely the buses, the rail-based systems of the LRT,
MRT and PNR and to facilitate and ensure efficient travel through the improved
connectivity of the different transport modes

xxxxxxxxx

Section 2. PROJECT OBJECTIVES. – In accordance with the plan proposed by


MMDA, the project aims to develop four (4) interim intermodal mass transport
terminals to integrate the different transport modes, as well as those that shall
hereafter be developed, to serve the commuting public in the northwest, north, east,
south, and southwest of Metro Manila. Initially, the project shall concentrate on
immediately establishing the mass transport terminals for the north and south Metro
Manila commuters as hereinafter described.

xxxxxxx

Section 3. PROJECT IMPLEMENTING AGENCY. – The Metropolitan Manila


Development Authority (MMDA), is hereby designated as the implementing Agency
for the project. For this purpose, MMDA is directed to undertake such infrastructure
development work as may be necessary and, thereafter, manage the project until it
may be turned-over to more appropriate agencies, if found suitable and convenient.
Specifically, MMDA shall have the following functions and responsibilities:

a) Cause the preparation of the Master Plan for the projects, including the designs and
costing;

b) Coordinate the use of the land and/or properties needed for the project with the
respective agencies and/or entities owning them;

c) Supervise and manage the construction of the necessary structures and facilities;
d) Execute such contracts or agreements as may be necessary, with the appropriate
government agencies, entities, and/or private persons, in accordance with existing
laws and pertinent regulations, to facilitate the implementation of the project;

e) Accept, manage and disburse such funds as may be necessary for the construction
and/or implementation of the projects, in accordance with prevailing accounting and
audit polices and practice in government.

f) Enlist the assistance of any national government agency, office or department,


including local government units, government-owned or controlled corporations, as
may be necessary;

g) Assign or hire the necessary personnel for the above purposes; and

h) Perform such other related functions as may be necessary to enable it to accomplish


the objectives and purposes of this Executive Order.4 (Emphasis in the original;
underscoring supplied)

Respondents posit that the MMDA is devoid of authority to order the elimination of their
bus terminals under the E.O. which, they argue, is unconstitutional because it violates
both the Constitution and the Public Service Act; and that neither is the MMDA clothed
with such authority under R.A. No. 7924.

Petitioners submit, however, that the real issue concerns the President’s authority to
undertake or to cause the implementation of the Project. They assert that the authority
of the President is derived from E.O. No. 125, "Reorganizing the Ministry of
Transportation and Communications Defining its Powers and Functions and for Other
Purposes," her residual power and/or E.O. No. 292, otherwise known as the
Administrative Code of 1987. They add that the E.O. is also a valid exercise of the
police power.

ISSUE:

WON the President has the authority to undertake or cause the implementation of the
Project through MMDA (NO)

RULING:

E.O. No. 125,32 which former President Corazon Aquino issued in the exercise of
legislative powers, reorganized the then Ministry (now Department) of Transportation
and Communications. Sections 4, 5, 6 and 22 of E.O. 125, as amended by E.O. 125-
A,33 read:

SECTION 4. Mandate. — The Ministry shall be the primary policy, planning,


programming, coordinating, implementing, regulating
and administrative entity of the Executive Branch of the government in
the promotion, development and regulation of dependable and
coordinated networks of transportation and communication systems as well
as in the fast, safe, efficient and reliable postal, transportation and
communications services.
SECTION 5. Powers and Functions. — To accomplish its mandate, the Ministry
shall have the following powers and functions:

(b) Establish and administer comprehensive and integrated programs for


transportation and communications, and for this purpose, may call on any
agency, corporation, or organization, whether public or private, whose
development programs include transportation and communications as an integral
part thereof, to participate and assist in the preparation and implementation of
such program;

(d) Administer all laws, rules and regulations in the field of


transportation and communications; (Emphasis and underscoring supplied)

SECTION 6. Authority and Responsibility. — The authority and responsibility


for the exercise of the mandate of the Ministry and for the discharge of
its powers and functions shall be vested in the Minister of
Transportation and Communications, hereinafter referred to as the Minister,
who shall have supervision and control over the Ministry and shall be appointed
by the President. (Emphasis and underscoring supplied)

SECTION 22. Implementing Authority of Minister. — The Minister shall issue


such orders, rules, regulations and other issuances as may be
necessary to ensure the effective implementation of the provisions of
this Executive Order. (Emphasis and underscoring supplied)

E.O. No. 125, as amended, that the President, then possessed of and exercising
legislative powers, mandated the DOTC to be the primary policy, planning,
programming, coordinating, implementing, regulating and administrative entity to
promote, develop and regulate networks of transportation and communications. The
grant of authority to the DOTC includes the power
to establish and administer comprehensive and integrated programs for
transportation and communications.

Since, under the law, the DOTC is authorized to establish and administer programs and
projects for transportation, it follows that the President may exercise the same power
and authority to order the implementation of the Project, which admittedly is one for
transportation.

Such authority springs from the President’s power of control over all executive
departments as well as the obligation for the faithful execution of the laws under Article
VII, Section 17 of the Constitution which provides:

SECTION 17. The President shall have control of all the executive departments, bureaus and
offices. He shall ensure that the laws be faithfully executed

The authority of the President to order the implementation of the Project


notwithstanding, the designation of the MMDA as the implementing agency for the
Project may not be sustained. It is ultra vires, there being no legal basis therefor.
It bears stressing that under the provisions of E.O. No. 125, as amended, it is the
DOTC, and not the MMDA, which is authorized to establish and implement a project
such as the one subject of the cases at bar. Thus, the President, although authorized to
establish or cause the implementation of the Project, must exercise the authority
through the instrumentality of the DOTC which, by law, is the primary implementing
and administrative entity in the promotion, development and regulation of networks of
transportation, and the one so authorized to establish and implement a project such as
the Project in question.

By designating the MMDA as the implementing agency of the Project, the President
clearly overstepped the limits of the authority conferred by law, rendering E.O. No.
179 ultra vires.

E.O. No. 179 is declared NULL and VOID for being ultra vires

The true role of Constitutional Law is to effect an equilibrium between authority and
liberty so that rights are exercised within the framework of the law and the laws are
enacted with due deference to rights.

A due deference to the rights of the individual thus requires a more careful formulation
of solutions to societal problems.

From the memorandum filed before this Court by petitioner, it is gathered that the
Sangguniang Panlungsod had identified the cause of traffic congestion to be the
indiscriminate loading and unloading of passengers by buses on the streets of the city
proper, hence, the conclusion that the terminals contributed to the proliferation of
buses obstructing traffic on the city streets.

Bus terminals per se do not, however, impede or help impede the flow of
traffic. How the outright proscription against the existence of all terminals,
apart from that franchised to petitioner, can be considered as reasonably
necessary to solve the traffic problem, this Court has not been enlightened. If
terminals lack adequate space such that bus drivers are compelled to load and unload
passengers on the streets instead of inside the terminals, then reasonable specifications
for the size of terminals could be instituted, with permits to operate the same denied
those which are unable to meet the specifications.

In the subject ordinances, however, the scope of the proscription against the


maintenance of terminals is so broad that even entities which might be able to
provide facilities better than the franchised terminal are barred from operating
at all.
G.R. No. 170656 
Petitioner:      THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY and BAYANI
FERNANDO as Chairman of the Metropolitan Manila Development Authority
Respondent:   VIRON TRANSPORTATION CO., INC.

G.R. No. 170657


Petitioner:      HON. ALBERTO G. ROMULO, Executive Secretary, the METROPOLITAN
MANILA DEVELOPMENT AUTHORITY and BAYANI FERNANDO as Chairman of the
Metropolitan Manila Development Authority
Respondent:   MENCORP TRANSPORTATION SYSTEM, INC.
Ponente:         CARPIO MORALES, J.

Facts
Due to the continuing traffic jams that clog the streets of Metro Manila, former President
Gloria Macapagal Arroyo issued the E.O. on February 10, 2003, "Providing for the
Establishment of Greater Manila Mass Transport System which states that;
Section 3. PROJECT IMPLEMENTING AGENCY – The Metropolitan Manila Development
Authority (MMDA) is hereby designated as the implementing Agency for the project. For this
purpose, MMDA is directed to undertake such infrastructure development work as may be
necessary and, thereafter, manage the project until it may be turned-over to more
appropriate agencies, if found suitable and convenient. Specifically, MMDA shall have the
following functions and responsibilities:
a) Cause the preparation of the Master Plan for the projects, including the designs and
costing;
b) Coordinate the use of the land and/or properties needed for the project with the
respective agencies and/or entities owning them;
c) Supervise and manage the construction of the necessary structures and facilities;
d) Execute such contracts or agreements as may be necessary, with the appropriate
government agencies, entities, and/or private persons, in accordance with existing laws and
pertinent regulations, to facilitate the implementation of the project;
e) Accept, manage and disburse such funds as may be necessary for the construction
and/or implementation of the projects, in accordance with prevailing accounting and audit
polices and practice in government.
f) Enlist the assistance of any national government agency, office or department, including
local government units, government-owned or controlled corporations, as may be
necessary;
g) Assign or hire the necessary personnel for the above purposes; and
h) Perform such other related functions as may be necessary to enable it to accomplish the
objectives and purposes of this Executive Order.
The E.O. thus designated the MMDA as the implementing agency for the Project. Pursuant
to the E.O., the Metro Manila Council (MMC), the governing board and policymaking body of
the MMDA, issued Resolution No. 03-07 series of 2003  expressing full support of the Project.
Recognizing the imperative to integrate the different transport modes via the establishment
of common bus parking terminal areas, the MMC cited the need to remove the bus terminals
located along major thoroughfares of Metro Manila.

Issue
Whether the E.O. was an unreasonable exercise of police power?
Held
For the faithful execution of the laws under Article VII, Section 17 of the Constitution which
provides:
Section 17: The President shall have control of all the executive departments, bureaus and
offices. He shall ensure that the laws be faithfully executed.
Police power is the plenary power vested in the legislature to make, ordain, and establish
wholesome and reasonable laws, statutes and ordinances, not repugnant to the
Constitution, for the good and welfare of the people. This power to prescribe regulations to
promote the health, morals, education, good order or safety, and general welfare of the
people flows from the recognition that salus populi est suprema lex ─ the welfare of the
people is the supreme law.
While police power rests primarily with the legislature, such power may be delegated, as it
is in fact increasingly being delegated. By virtue of a valid delegation, the power may be
exercised by the President and administrative boards  as well as by the lawmaking bodies of
municipal corporations or local governments under an express delegation by the Local
Government Code of 1991.
The authority of the President to order the implementation of the Project notwithstanding,
the designation of the MMDA as the implementing agency for the Project may not be
sustained. It is ultra vires, there being no legal basis there for.
It bears stressing that under the provisions of E.O. No. 125, as amended, it is the DOTC,
and not the MMDA, which is authorized to establish and implement a project such as the
one subject of the cases at bar. Thus, the President, although authorized to establish or
cause the implementation of the Project, must exercise the authority through the
instrumentality of the DOTC which, by law, is the primary implementing and administrative
entity in the promotion, development and regulation of networks of transportation, and the
one so authorized to establish and implement a project such as the Project in question.

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