adminlaw cases volume 1

8/10/2019 Adminlaw Cases Volume 1

http://slidepdf.com/reader/full/adminlaw-cases-volume-1 1/24



provisions thereof are not applicable to valid and subsisting certificates issued prior to June 8, 1939.Stated in the language of the petitioner, it is contended:

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

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

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

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

The Commission may prescribed as a condition for the issuance of the certificate provided inthe preceding paragraph that the service can be acquired by the Commonwealth of thePhilippines or by any instrumentality thereof upon payment of the cost price of its usefulequipment, less reasonable depreciation; and likewise, that the certificate shall valid only for a

definite period of time; and that the violation of any of these conditions shall produce theimmediate cancellation of the certificate without the necessity of any express action on the partof the Commission.

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

The foregoing is likewise applicable to any extension or amendment of certificates actuallyforce and to those which may hereafter be issued, to permits to modify itineraries and timeschedules of public services and to authorization to renew and increase equipment and

properties.

Under the first paragraph of the aforequoted section 15 of Act No. 146, as amended, no publicservice can operate without a certificate of public convenience or certificate of convenience andpublic necessity to the effect that the operation of said service and the authorization to do businesswill "public interests in a proper and suitable manner." Under the second paragraph, one of theconditions which the Public Service Commission may prescribed the issuance of the certificateprovided for in the first paragraph is that "the service can be acquired by the Commonwealth of thePhilippines or by any instrumental thereof upon payment of the cost price of its useful equipment, lessreasonable depreciation," a condition which is virtually a restatement of the principle alreadyembodied in the Constitution, section 6 of Article XII, which provides that "the State may, in the



interest of national welfare and defense, establish and operate industries and means of transportationand communication, and, upon payment of just compensation, transfer to public ownership utilitiesand other private enterprises to be operated by the Government. "Another condition which theCommission may prescribed, and which is assailed by the petitioner, is that the certificate "shall bevalid only for a definite period of time." As there is a relation between the first and second paragraphsof said section 15, the two provisions must be read and interpreted together. That is to say, in issuinga certificate, the Commission must necessarily be satisfied that the operation of the service undersaid certificate during a definite period fixed therein "will promote the public interests in a proper and

suitable manner." Under section 16 (a) of Commonwealth Act. No. 146 which is a complement ofsection 15, the Commission is empowered to issue certificates of public convenience whenever it"finds that the operation of the public service proposed and the authorization to do business willpromote the public interests in a proper and suitable manner." Inasmuch as the period to be fixed bythe Commission under section 15 is inseparable from the certificate itself, said period cannot bedisregarded by the Commission in determining the question whether the issuance of the certificatewill promote the public interests in a proper and suitable manner. Conversely, in determining "adefinite period of time," the Commission will be guided by "public interests," the only limitation to itspower being that said period shall not exceed fifty years (sec. 16 (a), Commonwealth Act No. 146;Constitution, Art. XIII, sec. 8.) We have already ruled that "public interest" furnishes a sufficientstandard. (People vs. Fernandez and Trinidad, G. R. No. 45655, promulgated June 15, 1938;

People vs. Rosenthal and Osmeña, G. R. Nos. 46076 and 46077, promulgated June 12, 1939, citingNew York Central Securities Corporation vs. U.S.A., 287 U.S. 12, 24, 25, 77 Law. ed. 138, 145, 146;Schenchter Poultry Corporation vs. I.S., 295, 540, 79 Law. ed. 1570, 1585; Ferrazzini vs. Gsell, 34Phil., 697, 711-712.)

Section 8 of Article XIII of the Constitution provides, among other things, that no franchise, certificate,or any other form of authorization for the operation of a public utility shall be "for a longer period thanfifty years," and when it was ordained, in section 15 of Commonwealth Act No. 146, as amended byCommonwealth Act No. 454, that the Public Service Commission may prescribed as a condition forthe issuance of a certificate that it "shall be valid only for a definite period of time" and, in section 16(a) that "no such certificates shall be issued for a period of more than fifty years," the National

Assembly meant to give effect to the aforesaid constitutional mandate. More than this, it has therebyalso declared its will that the period to be fixed by the Public Service Commission shall not be longerthan fifty years. All that has been delegated to the Commission, therefore, is the administrativefunction, involving the use discretion, to carry out the will of the National Assembly having in view, inaddition, the promotion of "public interests in a proper and suitable manner." The fact that theNational Assembly may itself exercise the function and authority thus conferred upon the PublicService Commission does not make the provision in question constitutionally objectionable.

The theory of the separation of powers is designed by its originators to secure action and at the sametime to forestall overaction which necessarily results from undue concentration of powers, andthereby obtain efficiency and prevent deposition. Thereby, the "rule of law" was established which

narrows the range of governmental action and makes it subject to control by certain devices. As acorollary, we find the rule prohibiting delegation of legislative authority, and from the earliest time

American legal authorities have proceeded on the theory that legislative power must be exercised bythe legislature alone. It is frankness, however, to confess that as one delves into the mass of judicialpronouncement, he finds a great deal of confusion. One thing, however, is apparent in thedevelopment of the principle of separation of powers and that is that the maxim of delegatus non

potest delegari or delegata potestas non potest delegari , attributed to Bracton (De Legius etConsuetedinious Angliae, edited by G. E. Woodbine, Yale University Press, 1922, vol. 2, p. 167) butwhich is also recognized in principle in the Roman Law (D. 17.18.3), has been made to adapt itself tothe complexities of modern governments, giving rise to the adoption, within certain limits, of theprinciple of "subordinate legislation," not only in the United States and England but in practically all



modern governments. (People vs. Rosenthal and Osmeña, G. R. Nos. 46076 and 46077,promulgated June 12, 1939.) Accordingly, with the growing complexity of modern life, themultiplication of the subjects of governmental regulation, and the increased difficulty of administeringthe laws, there is a constantly growing tendency toward the delegation of greater powers by thelegislature, and toward the approval of the practice by the court. (Dillon Catfish Drainage Dist, v. Bankof Dillon, 141 S. E. 274, 275, 143 S. Ct. 178; State vs. Knox County, 54 S. W. 2d. 973, 976, 165Tenn. 319.) In harmony with such growing tendency, this Court, since the decision in the caseof Compañia General de Tabacos de Filipinas vs. Board of Public Utility Commissioner (34 Phil.,

136), relied upon by the petitioner, has, in instances, extended its seal of approval to the "delegationof greater powers by the legislature." (Inchausti Steamship Co. vs. Public Utility Commissioner, 44Phil., Autobus Co. vs. De Jesus, 56 Phil., 446; People vs. Fernandez & Trinidad, G. R. No. 45655,promulgated June 15, 1938; People vs. Rosenthal & Osmeña, G. R. Nos. 46076, 46077, promulgatedJune 12, 1939; and Robb and Hilscher vs. People, G. R. No. 45866, promulgated June 12, 1939.).

Under the fourth paragraph of section 15 of Commonwealth Act No. 146, as amended byCommonwealth Act No. 454, the power of the Public Service Commission to prescribed theconditions "that the service can be acquired by the Commonwealth of the Philippines or by anyinstrumentality thereof upon payment of the cost price of its useful equipment, less reasonable," and"that the certificate shall be valid only for a definite period of time" is expressly made applicable "to

any extension or amendment of certificates actually in force" and "to authorizations to renew andincrease equipment and properties." We have examined the legislative proceedings on the subjectand have found that these conditions were purposely made applicable to existing certificates of publicconvenience. The history of Commonwealth Act No. 454 reveals that there was an attempt tosuppress, by way of amendment, the sentence "and likewise, that the certificate shall be valid only fora definite period of time," but the attempt failed:

x x x x x x x x x

Sr. CUENCO. Señor Presidente, para otra enmienda. En la misma pagina, lineas 23 y 24, pidoque se supriman las palabras 'and likewise, that the certificate shall be valid only for a definite

period time.' Esta disposicion del proyecto autoriza a la Comision de Servicios Publicos a fijarun plazo de vigencia certificado de conveniencia publica. Todo el mundo sabe que bo sepuede determinar cuando los intereses del servicio publico requiren la explotacion de unservicio publico y ha de saber la Comision de Servisios, si en un tiempo determinado, laexplotacion de algunos buses en cierta ruta ya no tiene de ser, sobre todo, si tiene en cuenta;que la explotacion de los servicios publicos depende de condiciones flutuantes, asi como delvolumen como trafico y de otras condiciones. Ademas, el servicio publico se concede por laComision de Servicios Publicos el interes publico asi lo exige. El interes publico no tieneduracion fija, no es permanente; es un proceso mas o menos indefinido en cuanto al tiempo.Se ha acordado eso en el caucus de anoche.

EL PRESIDENTE PRO TEMPORE. ¿Que dice el Comite?

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

x x x x x x x x x



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

The petitioner is mistaken in the suggestion that, simply because its existing certificates had beengranted before June 8, 1939, the date when Commonwealth Act No. 454, amendatory of section 15of Commonwealth Act No. 146, was approved, it must be deemed to have the right of holding them inperpetuity. Section 74 of the Philippine Bill provided that "no franchise, privilege, or concession shallbe granted to any corporation except under the conditions that it shall be subject to amendment,

alteration, or repeal by the Congress of the United States." The Jones Law, incorporating a similarmandate, provided, in section 28, that "no franchise or right shall be granted to any individual, firm, orcorporation except under the conditions that it shall be subject to amendment, alteration, or repeal bythe Congress of the United States." Lastly, the Constitution of the Philippines provided, in section 8 of

Article XIII, that "no franchise or right shall be granted to any individual, firm, or corporation, exceptunder the condition that it shall be subject to amendment, alteration, or repeal by the National

Assembly when the public interest so requires." The National Assembly, by virtue of the Constitution,logically succeeded to the Congress of the United States in the power to amend, alter or repeal anyfranchise or right granted prior to or after the approval of the Constitution; and when Commonwealth

Acts Nos. 146 and 454 were enacted, the National Assembly, to the extent therein provided, hasdeclared its will and purpose to amend or alter existing certificates of public convenience.

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

Nor is there any merit in petitioner's contention, that, because of the establishment ofpetitioner's operations prior to May 1, 1917, they are not subject to the regulations of theCommission. Statutes for the regulation of public utilities are a proper exercise by the state ofits police power. As soon as the power is exercised, all phases of operation of establishedutilities, become at once subject to the police power thus called into operation. Procedures'Transportation Co. v. Railroad Commission, 251 U. S. 228, 40 Sup. Ct. 131, 64 Law. ed. 239,

Law v. Railroad Commission, 184 Cal. 737, 195 Pac. 423, 14 A. L. R. 249. The statute isapplicable not only to those public utilities coming into existence after its passage, but likewiseto those already established and in operation. The 'Auto Stage and Truck Transportation Act'(Stats. 1917, c. 213) is a statute passed in pursuance of the police power. The only distinctionrecognized in the statute between those established before and those established after thepassage of the act is in the method of the creation of their operative rights. A certificate ofpublic convenience and necessity it required for any new operation, but no such certificate isrequired of any transportation company for the operation which was actually carried on in goodfaith on May 1, 1917, This distinction in the creation of their operative rights in no way affectsthe power of the Commission to supervise and regulate them. Obviously the power of theCommission to hear and dispose of complaints is as effective against companies securing their

operative rights prior to May 1, 1917, as against those subsequently securing such right undera certificate of public convenience and necessity. (Motor Transit Co. et al. v. RailroadCommission of California et al., 209 Pac. 586.)

Moreover, Commonwealth Acts Nos. 146 and 454 are not only the organic acts of the Public ServiceCommission but are "a part of the charter of every utility company operating or seeking to operate afranchise" in the Philippines. (Streator Aqueduct Co. v. et al., 295 Fed. 385.) The business of acommon carrier holds such a peculiar relation to the public interest that there is superinduced upon itthe right of public regulation. When private property is "affected with a public interest it ceased tobe juris privati only." When, therefore, one devotes his property to a use in which the public has aninterest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by



the public for the common good, to the extent of the interest he has thus created. He may withdrawhis grant by discounting the use, but so long as he maintains the use he must submit to control.Indeed, this right of regulation is so far beyond question that it is well settled that the power of thestate to exercise legislative control over public utilities may be exercised through boards ofcommissioners. (Fisher vs. Yangco Steamship Company, 31 Phil., 1, citing Munn vs. Illinois, 94 U.S.113; Georgia R. & Bkg. Co. vs. Smith, 128 U.S. 174; Budd vs. New York, 143 U.S. 517; New Yorketc. R. Co. vs. Bristol 151 U.S. 556, 571; Connecticut etc. R. Co. vs. Woodruff, 153 U.S. 689;Louisville etc. Ry Co. vs. Kentucky, 161 U.S. 677, 695.) This right of the state to regulate public

utilities is founded upon the police power, and statutes for the control and regulation of utilities are alegitimate exercise thereof, for the protection of the public as well as of the utilities themselves. Suchstatutes are, therefore, not unconstitutional, either impairing the obligation of contracts, takingproperty without due process, or denying the equal protection of the laws, especially inasmuch as thequestion whether or not private property shall be devoted to a public and the consequent burdensassumed is ordinarily for the owner to decide; and if he voluntarily places his property in publicservice he cannot complain that it becomes subject to the regulatory powers of the state. (51 C. J.,sec. 21, pp. 9-10.) in the light of authorities which hold that a certificate of public convenienceconstitutes neither a franchise nor contract, confers no property right, and is mere license or privilege.(Burgess vs. Mayor & Alderman of Brockton, 235 Mass. 95, 100, 126 N. E. 456;Roberto vs. Commisioners of Department of Public Utilities, 262 Mass. 583, 160 N. E. 321;

Scheible vs. Hogan, 113 Ohio St. 83, 148 N. E. 581; Martz vs. Curtis [J. L.] Cartage Co. [1937], 132Ohio St. 271, 7 N. E. [d] 220; Manila Yellow Taxicab Co. vs. Sabellano, 59 Phil., 773.)

Whilst the challenged provisions of Commonwealth Act No. 454 are valid and constitutional, we are,however, of the opinion that the decision of the Public Service Commission should be reversed andthe case remanded thereto for further proceedings for the reason now to be stated. The PublicService Commission has power, upon proper notice and hearing, "to amend, modify or revoke at anytime any certificate issued under the provisions of this Act, whenever the facts and circumstances onthe strength of which said certificate was issued have been misrepresented or materially changed."(Section 16, par. [m], Commonwealth Act No. 146.) The petitioner's application here was for anincrease of its equipment to enable it to comply with the conditions of its certificates of public

convenience. On the matter of limitation to twenty five (25) years of the life of its certificates of publicconvenience, there had been neither notice nor opportunity given the petitioner to be heard or presentevidence. The Commission appears to have taken advantage of the petitioner to augment petitioner'sequipment in imposing the limitation of twenty-five (25) years which might as well be twenty or fifteenor any number of years. This is, to say the least, irregular and should not be sanctioned. There arecardinal primary rights which must be respected even in proceedings of this character. The first ofthese rights is the right to a hearing, which includes the right of the party interested or affected topresent his own case and submit evidence in support thereof. In the language of Chief JusticeHughes, in Morgan v. U.S., (304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129), "the liberty andproperty of the citizen shall be protected by the rudimentary requirements of fair play." Not only mustthe party be given an opportunity to present his case and to adduce evidence tending to establish the

rights which he asserts but the tribunal must consider the evidence presented. (Chief Justice Hughesin Morgan vs. U.S., 298 U.S. 468, 56 S. Ct. 906, 80 :Law. ed. 1288.) In the language of this Courtin Edwards vs. McCoy (22 Phil., 598), "the right to adduce evidence, without the corresponding dutyon the part of the board to consider it, is vain. Such right is conspicuously futile if the person orpersons to whom the evidence is presented can thrust it aside without or consideration." While theduty to deliberate does not impose the obligation to decide right, it does imply a necessity whichcannot be disregarded, namely, that of having something to support its decision. A decision withabsolutely nothing to support it is a nullity, at least when directly attacked.(Edwards vs. McCoy, supra.) This principle emanates from the more fundamental principle that thegenius of constitutional government is contrary to the vesting of unlimited power anywhere. Law isboth a grant and a limitation upon power.



determining the question whether the issuance of the certificate will promote the public interests in

a proper and suitable manner. Conversely, in determining "a definite period of time," the

Commission will be guided by "public interests," the only limitation to its power being that said

period shall not exceed fifty years (sec. 16 (a), Commonwealth Act No. 146; Constitution, Art. XIII,

sec. 8.) The Supreme Court had earlier ruled that "public interest" furnishes a sufficient standard.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 17122 February 27, 1922

THE UNITED STATES, plaintiff-appellee,vs.ANG TANG HO, defendant-appellant.

Williams & Ferrier for appellant. Acting Attorney-General Tuason for appellee.

JOHNS, J .:

At its special session of 1919, the Philippine Legislature passed Act No. 2868, entitled "An Actpenalizing the monopoly and holding of, and speculation in, palay, rice, and corn under extraordinarycircumstances, regulating the distribution and sale thereof, and authorizing the Governor-General,with the consent of the Council of State, to issue the necessary rules and regulations therefor, andmaking an appropriation for this purpose," the material provisions of which are as follows:

Section 1. The Governor-General is hereby authorized, whenever, for any cause, conditionsarise resulting in an extraordinary rise in the price of palay, rice or corn, to issue andpromulgate, with the consent of the Council of State, temporary rules and emergencymeasures for carrying out the purpose of this Act, to wit:

(a) To prevent the monopoly and hoarding of, and speculation in, palay, rice or corn.

(b) To establish and maintain a government control of the distribution or sale of thecommodities referred to or have such distribution or sale made by the Government itself.

(c ) To fix, from time to time the quantities of palay rice, or corn that a company or individualmay acquire, and the maximum sale price that the industrial or merchant may demand.

(d ) . . .



SEC. 2. It shall be unlawful to destroy, limit, prevent or in any other manner obstruct theproduction or milling of palay, rice or corn for the purpose of raising the prices thereof; tocorner or hoard said products as defined in section three of this Act; . . .

Section 3 defines what shall constitute a monopoly or hoarding of palay, rice or corn within themeaning of this Act, but does not specify the price of rice or define any basic for fixing the price.

SEC. 4. The violations of any of the provisions of this Act or of the regulations, orders and

decrees promulgated in accordance therewith shall be punished by a fine of not more than fivethousands pesos, or by imprisonment for not more than two years, or both, in the discretion ofthe court: Provided , That in the case of companies or corporations the manager oradministrator shall be criminally liable.

SEC. 7. At any time that the Governor-General, with the consent of the Council of State, shallconsider that the public interest requires the application of the provisions of this Act, he shallso declare by proclamation, and any provisions of other laws inconsistent herewith shall fromthen on be temporarily suspended.

Upon the cessation of the reasons for which such proclamation was issued, the Governor-

General, with the consent of the Council of State, shall declare the application of this Act tohave likewise terminated, and all laws temporarily suspended by virtue of the same shall againtake effect, but such termination shall not prevent the prosecution of any proceedings or causebegun prior to such termination, nor the filing of any proceedings for an offense committedduring the period covered by the Governor-General's proclamation.

August 1, 1919, the Governor-General issued a proclamation fixing the price at which rice should besold.

August 8, 1919, a complaint was filed against the defendant, Ang Tang Ho, charging him with thesale of rice at an excessive price as follows:

The undersigned accuses Ang Tang Ho of a violation of Executive Order No. 53 of theGovernor-General of the Philippines, dated the 1st of August, 1919, in relation with theprovisions of sections 1, 2 and 4 of Act No. 2868, committed as follows:

That on or about the 6th day of August, 1919, in the city of Manila, Philippine Islands, the said Ang Tang Ho, voluntarily, illegally and criminally sold to Pedro Trinidad, one ganta of rice atthe price of eighty centavos (P.80), which is a price greater than that fixed by Executive OrderNo. 53 of the Governor-General of the Philippines, dated the 1st of August, 1919, under theauthority of section 1 of Act No. 2868. Contrary to law.

Upon this charge, he was tried, found guilty and sentenced to five months' imprisonment and to pay afine of P500, from which he appealed to this court, claiming that the lower court erred in findingExecutive Order No. 53 of 1919, to be of any force and effect, in finding the accused guilty of theoffense charged, and in imposing the sentence.

The official records show that the Act was to take effect on its approval; that it was approved July 30,1919; that the Governor-General issued his proclamation on the 1st of August, 1919; and that the lawwas first published on the 13th of August, 1919; and that the proclamation itself was first published onthe 20th of August, 1919.



The question here involves an analysis and construction of Act No. 2868, in so far as it authorizes theGovernor-General to fix the price at which rice should be sold. It will be noted that section 1authorizes the Governor-General, with the consent of the Council of State, for any cause resulting inan extraordinary rise in the price of palay, rice or corn, to issue and promulgate temporary rules andemergency measures for carrying out the purposes of the Act. By its very terms, the promulgation oftemporary rules and emergency measures is left to the discretion of the Governor-General. TheLegislature does not undertake to specify or define under what conditions or for what reasons theGovernor-General shall issue the proclamation, but says that it may be issued "for any cause," and

leaves the question as to what is "any cause" to the discretion of the Governor-General. The Act alsosays: "For any cause, conditions arise resulting in an extraordinary rise in the price of palay, rice orcorn." The Legislature does not specify or define what is "an extraordinary rise." That is also left to thediscretion of the Governor-General. The Act also says that the Governor-General, "with the consentof the Council of State," is authorized to issue and promulgate "temporary rules and emergencymeasures for carrying out the purposes of this Act." It does not specify or define what is a temporaryrule or an emergency measure, or how long such temporary rules or emergency measures shallremain in force and effect, or when they shall take effect. That is to say, the Legislature itself has notin any manner specified or defined any basis for the order, but has left it to the sole judgement anddiscretion of the Governor-General to say what is or what is not "a cause," and what is or what is not"an extraordinary rise in the price of rice," and as to what is a temporary rule or an emergency

measure for the carrying out the purposes of the Act. Under this state of facts, if the law is valid andthe Governor-General issues a proclamation fixing the minimum price at which rice should be sold,any dealer who, with or without notice, sells rice at a higher price, is a criminal. There may not havebeen any cause, and the price may not have been extraordinary, and there may not have been anemergency, but, if the Governor-General found the existence of such facts and issued aproclamation, and rice is sold at any higher price, the seller commits a crime.

By the organic law of the Philippine Islands and the Constitution of the United States all powers arevested in the Legislative, Executive and Judiciary. It is the duty of the Legislature to make the law; ofthe Executive to execute the law; and of the Judiciary to construe the law. The Legislature has noauthority to execute or construe the law, the Executive has no authority to make or construe the law,

and the Judiciary has no power to make or execute the law. Subject to the Constitution only, thepower of each branch is supreme within its own jurisdiction, and it is for the Judiciary only to saywhen any Act of the Legislature is or is not constitutional. Assuming, without deciding, that theLegislature itself has the power to fix the price at which rice is to be sold, can it delegate that power toanother, and, if so, was that power legally delegated by Act No. 2868? In other words, does the Actdelegate legislative power to the Governor-General? By the Organic Law, all Legislative power isvested in the Legislature, and the power conferred upon the Legislature to make laws cannot bedelegated to the Governor-General, or any one else. The Legislature cannot delegate the legislativepower to enact any law. If Act no 2868 is a law unto itself and within itself, and it does nothing morethan to authorize the Governor-General to make rules and regulations to carry the law into effect,then the Legislature itself created the law. There is no delegation of power and it is valid. On the other

hand, if the Act within itself does not define crime, and is not a law, and some legislative act remainsto be done to make it a law or a crime, the doing of which is vested in the Governor-General, then the

Act is a delegation of legislative power, is unconstitutional and void.

The Supreme Court of the United States in what is known as the Granger Cases (94 U.S., 183-187;24 L. ed., 94), first laid down the rule:

Railroad companies are engaged in a public employment affecting the public interest and,under the decision in Munn vs. Ill., ante, 77, are subject to legislative control as to their rates offare and freight unless protected by their charters.



The Illinois statute of Mar. 23, 1874, to establish reasonable maximum rates of charges for thetransportation of freights and passengers on the different railroads of the State is not void asbeing repugnant to the Constitution of the United States or to that of the State.

It was there for the first time held in substance that a railroad was a public utility, and that, being apublic utility, the State had power to establish reasonable maximum freight and passenger rates. Thiswas followed by the State of Minnesota in enacting a similar law, providing for, and empowering, arailroad commission to hear and determine what was a just and reasonable rate. The constitutionality

of this law was attacked and upheld by the Supreme Court of Minnesota in a learned and exhaustiveopinion by Justice Mitchell, in the case of State vs. Chicago, Milwaukee & St. Paul ry. Co. (38 Minn.,281), in which the court held:

Regulations of railway tariffs — Conclusiveness of commission's tariffs. — Under Laws 1887,c. 10, sec. 8, the determination of the railroad and warehouse commission as to what areequal and reasonable fares and rates for the transportation of persons and property by arailway company is conclusive, and, in proceedings by mandamus to compel compliance withthe tariff of rates recommended and published by them, no issue can be raised or inquiry hadon that question.

Same — constitution — Delegation of power to commission. — The authority thus given to thecommission to determine, in the exercise of their discretion and judgement, what are equal andreasonable rates, is not a delegation of legislative power.

It will be noted that the law creating the railroad commission expressly provides —

That all charges by any common carrier for the transportation of passengers and property shallbe equal and reasonable.

With that as a basis for the law, power is then given to the railroad commission to investigate all thefacts, to hear and determine what is a just and reasonable rate. Even then that law does not make the

violation of the order of the commission a crime. The only remedy is a civil proceeding. It was thereheld —

That the legislative itself has the power to regulate railroad charges is now too well settled torequire either argument or citation of authority.

The difference between the power to say what the law shall be, and the power to adopt rulesand regulations, or to investigate and determine the facts, in order to carry into effect a lawalready passed, is apparent. The true distinction is between the delegation of power to makethe law, which necessarily involves a discretion as to what it shall be, and the conferring anauthority or discretion to be exercised under and in pursuance of the law.

The legislature enacts that all freights rates and passenger fares should be just andreasonable. It had the undoubted power to fix these rates at whatever it deemed equal andreasonable.

They have not delegated to the commission any authority or discretion as to what the law shallbe, — which would not be allowable, — but have merely conferred upon it an authority anddiscretion, to be exercised in the execution of the law, and under and in pursuance of it, whichis entirely permissible. The legislature itself has passed upon the expediency of the law, andwhat is shall be. The commission is intrusted with no authority or discretion upon these



questions. It can neither make nor unmake a single provision of law. It is merely charged withthe administration of the law, and with no other power.

The delegation of legislative power was before the Supreme Court of Wisconsin inDowling vs. Lancoshire Ins. Co. (92 Wis., 63). The opinion says:

"The true distinction is between the delegation of power to make the law, which necessarilyinvolves a discretion as to what it shall be, and conferring authority or discretion as to its

execution, to be exercised under and in pursuance of the law. The first cannot be done; to thelatter no valid objection can be made."

The act, in our judgment, wholly fails to provide definitely and clearly what the standard policy shouldcontain, so that it could be put in use as a uniform policy required to take the place of all others,without the determination of the insurance commissioner in respect to maters involving the exerciseof a legislative discretion that could not be delegated, and without which the act could not possibly beput in use as an act in confirmity to which all fire insurance policies were required to be issued.

The result of all the cases on this subject is that a law must be complete, in all its terms andprovisions, when it leaves the legislative branch of the government, and nothing must be left to the

judgement of the electors or other appointee or delegate of the legislature, so that, in form andsubstance, it is a law in all its details in presenti , but which may be left to take effect in futuro, ifnecessary, upon the ascertainment of any prescribed fact or event.

The delegation of legislative power was before the Supreme Court in United States vs. Grimaud (220U.S., 506; 55 L. ed., 563), where it was held that the rules and regulations of the Secretary of

Agriculture as to a trespass on government land in a forest reserve were valid constitutional. The Actthere provided that the Secretary of Agriculture ". . . may make such rules and regulations andestablish such service as will insure the object of such reservations; namely, to regulate theiroccupancy and use, and to preserve the forests thereon from destruction; and any violation of the

provisions of this act or such rules and regulations shall be punished , . . ."

The brief of the United States Solicitor-General says:

In refusing permits to use a forest reservation for stock grazing, except upon stated terms or instated ways, the Secretary of Agriculture merely assert and enforces the proprietary right ofthe United States over land which it owns. The regulation of the Secretary, therefore, is not anexercise of legislative, or even of administrative, power; but is an ordinary and legitimaterefusal of the landowner's authorized agent to allow person having no right in the land to use itas they will. The right of proprietary control is altogether different from governmental authority.

The opinion says:

From the beginning of the government, various acts have been passed conferring uponexecutive officers power to make rules and regulations, — not for the government of theirdepartments, but for administering the laws which did govern. None of these statutes couldconfer legislative power. But when Congress had legislated power. But when Congress hadlegislated and indicated its will, it could give to those who were to act under such generalprovisions "power to fill up the details" by the establishment of administrative rules andregulations, the violation of which could be punished by fine or imprisonment fixed byCongress, or by penalties fixed by Congress, or measured by the injury done.



That "Congress cannot delegate legislative power is a principle universally recognized as vitalto the integrity and maintenance of the system of government ordained by the Constitution."

If, after the passage of the act and the promulgation of the rule, the defendants drove andgrazed their sheep upon the reserve, in violation of the regulations, they were making anunlawful use of the government's property. In doing so they thereby made themselves liable tothe penalty imposed by Congress.

The subjects as to which the Secretary can regulate are defined. The lands are set apart as a forestreserve. He is required to make provisions to protect them from depredations and from harmful uses.He is authorized 'to regulate the occupancy and use and to preserve the forests from destruction.' Aviolation of reasonable rules regulating the use and occupancy of the property is made a crime, notby the Secretary, but by Congress."

The above are leading cases in the United States on the question of delegating legislative power. Itwill be noted that in the "Granger Cases," it was held that a railroad company was a publiccorporation, and that a railroad was a public utility, and that, for such reasons, the legislature had thepower to fix and determine just and reasonable rates for freight and passengers.

The Minnesota case held that, so long as the rates were just and reasonable, the legislature coulddelegate the power to ascertain the facts and determine from the facts what were just and reasonablerates,. and that in vesting the commission with such power was not a delegation of legislative power.

The Wisconsin case was a civil action founded upon a "Wisconsin standard policy of fire insurance,"and the court held that "the act, . . . wholly fails to provide definitely and clearly what the standardpolicy should contain, so that it could be put in use as a uniform policy required to take the place of allothers, without the determination of the insurance commissioner in respect to matters involving theexercise of a legislative discretion that could not be delegated."

The case of the United States Supreme Court, supra dealt with rules and regulations which were

promulgated by the Secretary of Agriculture for Government land in the forest reserve.

These decisions hold that the legislative only can enact a law, and that it cannot delegate it legislativeauthority.

The line of cleavage between what is and what is not a delegation of legislative power is pointed outand clearly defined. As the Supreme Court of Wisconsin says:

That no part of the legislative power can be delegated by the legislature to any otherdepartment of the government, executive or judicial, is a fundamental principle in constitutionallaw, essential to the integrity and maintenance of the system of government established by the

constitution.

Where an act is clothed with all the forms of law, and is complete in and of itself, it may beprovided that it shall become operative only upon some certain act or event, or, in like manner,that its operation shall be suspended.

The legislature cannot delegate its power to make a law, but it can make a law to delegate apower to determine some fact or state of things upon which the law makes, or intends to make,its own action to depend.

The Village of Little Chute enacted an ordinance which provides:



All saloons in said village shall be closed at 11 o'clock P.M. each day and remain closed until 5o'clock on the following morning, unless by special permission of the president.

Construing it in 136 Wis., 526; 128 A. S. R., 1100,1the Supreme Court of that State says:

We regard the ordinance as void for two reasons; First, because it attempts to confer arbitrarypower upon an executive officer, and allows him, in executing the ordinance, to make unjustand groundless discriminations among persons similarly situated; second, because the power

to regulate saloons is a law-making power vested in the village board, which cannot bedelegated. A legislative body cannot delegate to a mere administrative officer power to make alaw, but it can make a law with provisions that it shall go into effect or be suspended in itsoperations upon the ascertainment of a fact or state of facts by an administrative officer orboard. In the present case the ordinance by its terms gives power to the president to decidearbitrary, and in the exercise of his own discretion, when a saloon shall close. This is anattempt to vest legislative discretion in him, and cannot be sustained.

The legal principle involved there is squarely in point here.

It must be conceded that, after the passage of act No. 2868, and before any rules and regulations

were promulgated by the Governor-General, a dealer in rice could sell it at any price, even at a pesoper "ganta," and that he would not commit a crime, because there would be no law fixing the price ofrice, and the sale of it at any price would not be a crime. That is to say, in the absence of aproclamation, it was not a crime to sell rice at any price. Hence, it must follow that, if the defendantcommitted a crime, it was because the Governor-General issued the proclamation. There was no actof the Legislature making it a crime to sell rice at any price, and without the proclamation, the sale ofit at any price was to a crime.

The Executive order 2 provides:

(5) The maximum selling price of palay, rice or corn is hereby fixed, for the time being as

follows:

In Manila —

Palay at P6.75 per sack of 57½ kilos, or 29 centavos per ganta.

Rice at P15 per sack of 57½ kilos, or 63 centavos per ganta.

Corn at P8 per sack of 57½ kilos, or 34 centavos per ganta.

In the provinces producing palay, rice and corn, the maximum price shall be the Manila price

less the cost of transportation from the source of supply and necessary handling expenses tothe place of sale, to be determined by the provincial treasurers or their deputies.

In provinces, obtaining their supplies from Manila or other producing provinces, the maximumprice shall be the authorized price at the place of supply or the Manila price as the case maybe, plus the transportation cost, from the place of supply and the necessary handlingexpenses, to the place of sale, to be determined by the provincial treasurers or their deputies.



Governor-General to fix the maximum price at which palay, rice and corn may be sold in the mannerpower in violation of the organic law.

This opinion is confined to the particular question here involved, which is the right of the Governor-General, upon the terms and conditions stated in the Act, to fix the price of rice and make it a crime tosell it at a higher price, and which holds that portions of the Act unconstitutional. It does not decide orundertake to construe the constitutionality of any of the remaining portions of the Act.

The judgment of the lower court is reversed, and the defendant discharged. So ordered.

Araullo, C.J., Johnson, Street and Ostrand, JJ., concur.Romualdez, J., concurs in the result.

Separate Opinions

MALCOLM, J., concurring:

I concur in the result for reasons which reach both the facts and the law. In the first place, as to thefacts, — one cannot be convicted ex post facto of a violation of a law and of an executive orderissued pursuant to the law, when the alleged violation thereof occurred on August 6, 1919, while the

Act of the Legislature in question was not published until August 13, 1919, and the order was notpublished until August 20, 1919. In the second place, as to the law, — one cannot be convicted of aviolation of a law or of an order issued pursuant to the law when both the law and the order fail to setup an ascertainable standard of guilt. (U.S. vs. Cohen Grocery Company [1921], 255 U.S., 81,holding section 4 of the Federal Food Control Act of August 10, 1917, as amended, invalid.)

In order that there may not be any misunderstanding of our position, I would respectfully invite

attention to the decision of the United States Supreme Court in German Alliance Ins. Co. vs. Lewis([1914, 233 U.S., 389), concerning the legislative regulation of the prices charged by businessaffected with a public interest, and to another decision of the United States Supreme Court, that ofMarshall Field & Co. vs. Clark ([1892], 143 U.S., 649), which adopts as its own the principles laiddown in the case of Locke's Appeal ([1873], 72 Pa. St., 491), namely; "The Legislature cannotdelegate its power to make a law; but it can make a law to delegate a power to determine some factor state of things upon which the law makes, or intends to make, its own action depend. To deny thiswould be to stop the wheels of government. There are many things upon which wise and usefullegislation must depend which cannot be known to the law-making power, and must, therefore, be asubject of inquiry and determination outside of the halls of legislation."

Avanceña and Villamor, JJ., concur.

Footnotes

1Village of Little Chute vs. Van Camp.

2Executive Order No. 53, series of 1919.

US vs. Ang Tang Ho

43 Phil. 1 – Political Law – Delegation of Power – Administrative Bodies



In July 1919, the Philippine Legislature (during special session) passed and approved Act No. 2868

entitled An Act Penalizing the Monopoly and Hoarding of Rice, Palay and Corn. The said act, under

extraordinary circumstances, authorizes the Governor General (GG) to issue the necessary Rules

and Regulations in regulating the distribution of such products. Pursuant to this Act, in August 1919,

the GG issued Executive Order No. 53 which was published on August 20, 1919. The said EO fixed

the price at which rice should be sold. On the other hand, Ang Tang Ho, a rice dealer, sold a ganta o

rice to Pedro Trinidad at the price of eighty centavos. The said amount was way higher than thatprescribed by the EO. The sale was done on the 6 th of August 1919. On August 8, 1919, he was

charged for violation of the said EO. He was found guilty as charged and was sentenced to 5 months

imprisonment plus a P500.00 fine. He appealed the sentence countering that there is an undue

delegation of power to the Governor General.

ISSUE: Whether or not there is undue delegation to the Governor General.

HELD: First of, Ang Tang Ho’s conviction must be reversed because he committed the act prior to the

publication of the EO. Hence, he cannot be ex post facto charged of the crime. Further, one cannot

be convicted of a violation of a law or of an order issued pursuant to the law when both the law and

the order fail to set up an ascertainable standard of guilt.

Anent the issue of undue delegation, the said Act wholly fails to provide definitely and clearly what the

standard policy should contain, so that it could be put in use as a uniform policy required to take the

place of all others without the determination of the insurance commissioner in respect to matters

involving the exercise of a legislative discretion that could not be delegated, and without which the act

could not possibly be put in use. The law must be complete in all its terms and provisions when it

leaves the legislative branch of the government and nothing must be left to the judgment of the

electors or other appointee or delegate of the legislature, so that, in form and substance, it is a law in

all its details in presenti, but which may be left to take effect in future, if necessary, upon the

ascertainment of any prescribed fact or event.

COMPANIA GENERAL DE TABACOS DE FILIPINAS vs. THE BOARD OF PUBLIC UTILITY

COMMISSIONERS (1916) G.R. L-11216

Facts:

COMPANIA GENERAL DE TABACOS DE FILIPINAS is a foreign corporation organized under the

laws of Spain and engaged in business in the Philippine Islands as a common carrier of passengers

and merchandise by water: On June 7, 1915, the Board of Public Utility Commissioners issued and

caused to be served an order to show cause why they should not be required to present detailed

annual reports respecting its finances and operations respecting the vessels owned and operated by

it, in the form and containing the matters indicated by the model attached to the petition.

They are ordered to present annually on or before March first of each year a detailed report of

finances and operations of such vessels as are operated by it as a common carrier within the

Philippine Islands, in the form and containing the matters indicated in the model of annual report

which accompanied the order to show cause herein.



COMPANIA GENERAL DE TABACOS DE FILIPINAS denied the authority of the board to require

the report asked for on the ground that the provision of Act No. 2307 relied on by said board as

authority for such requirement was, if construed as conferring such power, invalid as constituting an

unlawful attempt on the part of the Legislature to delegate legislative power to the board. It is

cumbersome and unnecessarily prolix and that the preparation of the same would entail an immense

amount of clerical work.”

ISSUE:

Whether or not it is constitutional to require COMPANIA GENERAL DE TABACOS DE FILIPINAS to

pass a detailed report to the Board of Public Utility Commissioners of the Philippine Islands?

Whether the power to require the detailed report is strictly legislative, or administrative, or merely

relates to the execution of the law?

RULING: The order appealed from is set aside and the cause is returned to the Board of Public

Utility Commissioners with instructions to dismiss the proceeding.

The section of Act No. 2307 under which the Board of Public Utility Commissioners relies for its

authority, so far as pertinent to the case at hand, reads as follows:

Sec. 16. The Board shall have power, after hearing, upon notice, by order in writing, to require every

public utility as herein defined: (e) To furnish annually a detailed report of finances and operations, in

such form and containing such matters as the Board may from time to time by order prescribe.

The statute which authorizes a Board of Public Utility Commissioners to require detailed reports from

public utilities, leaving the nature of the report, the contents thereof, the general lines which it shal

follow, the principle upon which it shall proceed, indeed, all other matters whatsoever, to the exclusive

discretion of the board, is not expressing its own will or the will of the State with respect to the public

utilities to which it refers.

Such a provision does not declare, or set out, or indicate what information the State requires, what is

valuable to it, what it needs in order to impose correct and just taxation, supervision or control, or the

facts which the State must have in order to deal justly and equitably with such public utilities and to

require them to deal justly and equitably with the State. The Legislature seems simply to have

authorized the Board of Public Utility Commissioners to require what information the board wants. Itwould seem that the Legislature, by the provision in question, delegated to the Board of Public Utility

Commissioners all of its powers over a given subject-matter in a manner almost absolute, and withou

laying down a rule or even making a suggestion by which that power is to be directed, guided or

applied.

The true distinction is between the delegation of power to make the law, which necessarily involves a

discretion as to what shall be, and conferring authority or discretion as to its execution, to be



exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection

can be made.

The Supreme Court held that there was no delegation of legislative power, it said:

The Congress may not delegate its purely legislative powers to a commission, but, having laid down

the general rules of action under which a commission shall proceed, it may require of that

commission the application of such rules to particular situations and the investigation of facts, with a

view to making orders in a particular matter within the rules laid down by the Congress.

In section 20 (of the Commerce Act), Congress has authorized the commission to require annual

reports. The act itself prescribes in detail what those reports shall contain. In other words, Congress

has laid down general rules for the guidance of the Commission, leaving to it merely the carrying ou

of details in the exercise of the power so conferred. This, we think, is not a delegation of legislative

authority.

In the case at bar the provision complained of does not law “down the general rules of action under

which the commission shall proceed.” nor does it itself prescribe in detail what those reports shal

contain. Practically everything is left to the judgment and discretion of the Board of Public Utility

Commissioners, which is unrestrained as to when it shall act, why it shall act, how it shall act, to what

extent it shall act, or what it shall act upon.

The Legislature, by the provision in question, has abdicated its powers and functions in favor of the

Board of Public Utility Commissioners with respect to the matters therein referred to, and that such

Act is in violation of the Act of Congress of July 1, 1902. The Legislature, by the provision referred to

has not asked for the information which the State wants but has authorized and board to obtain the

information which the board wants.

Republic of the Philippines

SUPREME COURT Manila

EN BANC

G.R. No. 9321 September 24, 1914

NORBERTO ASUNCION, ET AL., petitioners-appellants,vs.MANUEL DE YRIARTE, respondent-appellee.



Modesto Reyes for appellants. Attorney-General Villamor for appellee.

MORELAND, J .:

This is an action to obtain a writ of mandamus to compel the chief of the division of achieves of theExecutive Bureau to file a certain articles of incorporation.

The chief of the division of archives, the respondent, refused to file the articles of incorporation,hereinafter referred to, upon the ground that the object of the corporation, as stated in the articles,was not lawful and that, in pursuance of section 6 of Act No. 1459, they were not registerable.

The proposed incorporators began an action in the Court of First Instance of the city of Manila tocompel the chief of the division of archives to receive and register said articles of incorporation and todo any and all acts necessary for the complete incorporation of the persons named in the articles.The court below found in favor of the defendant and refused to order the registration of the articlesmentioned, maintaining ad holding that the defendant, under the Corporation Law, had authority todetermine both the sufficiency of the form of the articles and the legality of the object of the proposedcorporation. This appeal is taken from that judgment.

The first question that arises is whether or not the chief of the division of archives has authority, underthe Corporation for registration, to decide not only as to the sufficiency of the form of the articles, butalso as to the lawfulness of the purpose of the proposed corporation.

It is strongly urged on the part of the appellants that the duties of the defendant are purely ministerialand that he has no authority to pass upon the lawfulness of the object for which the incorporatorspropose to organize. No authorities are cited to support this proposition and we are of the opinion thatit is not sound.

Section 6 of the Corporation Law reads in part as follows:

Five or more persons, not exceeding fifteen, a majority of whom are residents of the PhilippineIslands, may form a private corporation for any lawful purpose by filing with the division ofarchives, patents, copyrights, and trademarks if the Executive Bureau articles of incorporationduly executed and acknowledged before a notary public, . . . .

Simply because the duties of an official happens to be ministerial, it does not necessarily follow thathe may not, in the administration of his office, determine questions of law. We are of the opinion thatit is the duty of the division of archives, when articles of incorporation are presented for registration, todetermine whether the objects of the corporation as expressed in the articles are lawful. We do notbelieve that, simply because articles of incorporation presented foe registration are perfect in form,

the division of archives must accept and register them and issue the corresponding certificate ofincorporation no matter what the purpose of the corporation may be as expressed in the articles. Wedo not believe it was intended that the division of archives should issue a certificate of incorporationto, and thereby put the seal of approval of the Government upon, a corporation which was organizedfor base of immoral purposes. That such corporation might later, if it sought to carry out suchpurposes, be dissolved, or its officials imprisoned or itself heavily fined furnished no reason why itshould have been created in the first instance. It seems to us to be not only the right but the duty ofthe divisions of archives to determine the lawfulness of the objects and purposes of the corporationbefore it issues a certificate of incorporation.



It having determined that the division of archives, through its officials, has authority to determine notonly the sufficiency as to form of the articles of incorporation offered for registration, but also thelawfulness of the purposes of leads us to the determination of the question whether or not the chief ofthe division of archives, who is the representative thereof and clothed by it with authority to dealsubject to mandamus in the performance of his duties.

We are of the opinion that he may be mandamused if he act in violation of law or if he refuses,unduly, to comply with the law. While we have held that defendant has power to pass upon the

lawfulness of the purposes of the proposed corporation and that he may, in the fulfillment of hisduties, determine the question of law whether or not those purposes are lawful and embraced withinthat class concerning which the law permits corporations to be formed, that does not necessarilymean, as we have already intimated, that his duties are not ministerial. On the contrary, there is noincompatibility in holding, as we do hold, that his duties are ministerial and that he has no authority toexercise discretion in receiving and registering articles of incorporation. He may exercise judgment —that is, the judicial function — in the determination of the question of law referred to, but he may notuse discretion. The question whether or not the objects of a proposed corporation are lawful is onethat can be decided one way only. If he err in the determination of that question and refuse to filearticles which should be filed under the law, the decision is subject to review and correction and, uponproper showing, he will be ordered to file the articles. This is the same kind of determination which a

court makes when it decides a case upon the merits, the court makes when it decides a case uponthe merits. When a case is presented to a court upon the merits, the court can decide only one wayand be right. As a matter of law, there is only one way and be right. As a matter of law, there is onlyone course to pursue. In a case where the court or other official has discretion in the resolution of aquestion, then, within certain limitations, he may decide the question either way and still be right.Discretion, it may be said generally, is a faculty conferred upon a court or other official by which hemay decide a question either way and still be right. The power conferred upon the division of archiveswith respect to the registration of articles of incorporation is not of that character. It is of the samecharacter as the determination of a lawsuit by a court upon the merits. It can be decided only one waycorrectly.

If, therefore, the defendant erred in determining the question presented when the articles wereoffered for registration, then that error will be corrected by this court in this action and he will becompelled to register the articles as offered. If, however, he did not commit an error, but decided thatquestion correctly, then, of course, his action will be affirmed to the extent that we will deny the reliefprayed for.

The next question leads us to the determination of whether or not the purposes of the corporation asstated in the articles of incorporation are lawful within the meaning of the Corporation Law.

The purpose of the incorporation as stated in the articles is: "That the object of the corporation is ( a)to organize and regulate the management, disposition, administration and control which the barrio of

Pulo or San Miguel or its inhabitants or residents have over the common property of said residents orinhabitants or property belonging to the whole barrio as such; and (b) to use the natural products ofthe said property for institutions, foundations, and charitable works of common utility and advantageto the barrio or its inhabitants."

The municipality of Pasig as recognized by law contains within its limits several barrios or smallsettlements, like Pulo or San Miguel, which have no local government of their own but are governedby the municipality of Pasig through its municipal president and council. The president and membersof the municipal council are elected by a general vote of the municipality, the qualified electors of allthe barrios having the right to participate.



The municipality of Pasig is a municipal corporation organized by law. It has the control of all propertyof the municipality. The various barrios of the municipality have no right to own or hold property, theynot being recognized as legal entities by any law. The residents of the barrios participate in theadvantages which accrue to the municipality from public property and receive all the benefits incidentto residence in a municipality organized by law. If there is any public property situated in the barrio ofPulo or San Miguel not belonging to the general government or the province, it belongs to themunicipality of Pasig and the sole authority to manage and administer the same resides in thatmunicipality. Until the present laws upon the subject are charged no other entity can be the owner of

such property or control or administer it.

The object of the proposed corporation, as appears from the articles offered for registration, is tomake of the barrio of Pulo or San Miguel a corporation which will become the owner of and have theright to control and administer any property belonging to the municipality of Pasig found within thelimits of that barrio. This clearly cannot be permitted. Otherwise municipalities as now established bylaw could be deprived of the property which they now own and administer. Each barrio of themunicipality would become under the scheme proposed, a separate corporation, would take over theownership, administration, and control of that portion of the municipal territory within its limits. Thiswould disrupt, in a sense, the municipalities of the Islands by dividing them into a series of smallermunicipalities entirely independent of the original municipality.

What the law does not permit cannot be obtained by indirection. The object of the proposedcorporation is clearly repugnant to the provisions of the Municipal Code and the governments ofmunicipalities as they have been organized thereunder. (Act No. 82, Philippine Commission.)

The judgment appealed from is affirmed, with costs against appellants.

Arellano, C.J., Torres, Johnson, Carson and Araullo, JJ., concur.

NORBERTO ASUNCION, ET AL. vs. MANUEL DE YRIARTE

[G.R. No. 9321. September 24, 1914.]

FACTS: The proposed incorporators began an action in the CFI to compel the chief of the division of

archives to receive and register said articles of incorporation and to do any and all acts necessary for

the complete incorporation of the persons named in the articles. The court below found in favor of the

defendant and refused to order the registration of the articles mentioned, maintaining and holding that

the defendant, under the Corporation Law, had authority to determine both the sufficiency of the form

of the articles and the legality of the object of the proposed corporation. This appeal is taken from that

judgment

The chief of the division of archives, the respondent, refused to file the articles of incorporation, uponthe ground that the object of the corporation, as stated in the articles, was not lawful and that, in

pursuance of section 6 of Act No. 1459, they were not registerable.

Hence, this action to obtain a writ of mandamus.

ISSUE: Whether or not the chief of the division of archives has authority, under the Corporation Law,

on being presented with articles of incorporation for registration, to decide not only as to the

sufficiency of the form of the articles, but also as to the lawfulness of the purposes of the proposed

corporation.



HELD: YES.

CORPORATION LAW; POWERS AND DUTIES OF CHIEF OF DIVISION OF ARCHIVES,

EXECUTIVE BUREAU. — The chief of the division of archives, for and on behalf of the division, has

authority under the Corporation Law (Act No. 1459) to determine the sufficiency of the form of articles

of incorporation offered for registration with the division.

Section 6 of the Corporation Law reads in part as follows:

―Five or more persons, not exceeding fifteen, a majority of whom are residents of the PhilippineIslands, may form a private corporation for any lawful purpose by filing with the division of archives,

patents, copyrights, and trademarks of the Executive Bureau articles of incorporation duly executed

and acknowledged before a notary public, . . .‖

Simply because the duties of an official happen to be ministerial, it does not necessarily

follow that he may not, in the administration of his office, determine questions of law. We are

of the opinion that it is the duty of the division of archives, when articles of incorporation are

presented for registration, to determine whether the objects of the corporation as expressed in the

articles are lawful. We do not believe that, simply because articles of incorporation presented for

registration are perfect in form, the division of archives must accept and register them and issue the

corresponding certificate of incorporation no matter what the purpose of the corporation may be as

expressed in the articles. The chief of the division of archives, on behalf of the division, has also the

power and duty to determine from the articles of incorporation presented for registration the

lawfulness of the purposes of the proposed corporation and whether or not those purposes bring the

proposed corporation within the purview of the law authorizing corporations for given purposes.

MANDAMUS TO COMPEL HIM TO PERFORM DUTIES. — The duties of the chief of the division of

archives, so far as relates to the registration of articles of incorporation, are purely ministerial and not

discretional; and mandamus will lie to compel him to perform his duties under the Corporation Law if,

in violation of law, he refuse to perform them

On the contrary, there is no incompatibility in holding, as we do hold, that his duties are ministerial

and that he has no authority to exercise discretion in receiving and registering articles of

incorporation. He may exercise judgment — that is, the judicial function — in the determination of the

question of law referred to, but he may not use discretion. The question whether or not the objects of

a proposed corporation are lawful is one that can be decided one way only. If he err in the

determination of that question and refuse to file articles which should be filed under the law, that

decision is subject to review and correction and, upon proper showing, he will be ordered to file the

articles.

Discretion, it may be said generally, is a faculty conferred upon a court or other official by

which he may decide a question either way and still be right. The power conferred upon the

division of archives with respect to the registration of articles of incorporation is not of that

character. It is of the same character as the determination of a lawsuit by a court upon the

merits. It can be decided only one way correctly.

adminlaw cases volume 1

Documents