15 scra 569

VOL. 15, DECEMBER 24, 1965

569

Pelaez vs. Auditor General

No. L-23825. December 24, 1965. EMMANUEL PELAEZ, petitioner, vs. THE AUDITOR GENERAL, respondent.

Administrative law; Power of President to create municipalities.—Since January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not be created or their boundaries altered nor their names changed" except by Act of Congress or of the corresponding" provincial board "upon petition of a majority of the voters in the areas affected" and the "recommendation of the council of the municipality or municipalities in which the proposed barrio is situated." This statutory denial of the presidential authority to create a new barrio implies a negation of the bigger power to create municipalities, each of which consists of several barrios.

Same; Same; Nature of power to create municipalities.—Whereas the power to f ix a common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities, may partake of an administrative nature—involving, as it does, the adoption of means and ways to carry into effect the law creating" said municipalities—the authority to create municipal corporations is essentially legislative in nature,

Same; Same; Same; Requisites for valid delegation of power.—Although Congress may delegate to another branch of the government the power to fill in the details in the execution, enforcement or administration of a law, it is essential that said

570

570

SUPREME COURT REPORTS ANNOTATED


law: (a) be complete in itself, setting forth therein the policy to be executed, carried out or implemented by the delegate; and (b) fix a standard—the limits of which are sufficiently determinate or determinable—to which the delegate must conform in the performance of his functions.

Same; Same; Same; Same; Requirements of due delegation of power not met by Section 68 of Revised Administrative Code.—Section 68 of the Revised Administrative Code, insofar as it grants to the President the power to create municipalities, does not meet the well-settled requirements for a valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by the President.

Same; Same; Same; Same; Same; Abdication of powers of Congress in favor of the Executive.—If the validity of said delegation of powers, made in Section 68 of the Revised Administrative Code, were upheld. there would no longer be any legal impediment to a

statutory grant of authority to the President to do anything which, in his opinion, may be required by public welfare or public interest. Such grant of authority would be a virtual abdication of the powers of Congress in favor of the Executive, and would bring about a total collapse of the democratic system established by the Constitution.

Same; Same; Same; Nature of powers dealt with in Section 68 of the Revised Administrative Code.—It is true that in Calalang vs. WiIliams (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had upheld "public welfare" and "public interest," respectively, as sufficient standards for a valid delegation of the authority to execute the law. But the doctrine laid down in these cases must be construed in relation to the specific facts and Issues involved therein, outside of which they do not constitute precedents and have no binding effect. Both cases involved grants to administrative officers of powers related to the exercise of their administrative functions, calling for the determination of questions of fact. Such is not the nature of the powers dealt with in Section 68 of the Revised Administrative Code. The creation of municipalities being essentially and eminently legislative in character, the question whether or not "public interest" demands the exercise of such power is not one of fact It is purely a legislative question (Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or a political question (Udall vs. Severn, 79 P. 2d. 347-349).

Same; Same; Same; Same; Proof that issuance of Executive Orders in question enteils exercise of purely legislative functions.—The fact that Executive Orders Nos. 93 to 121, 124 and 128 to 129, creating thirty-three municipalities, were issued

571


571


after the legislative bills for the creation of the said municipalities had failed to pass Congress, is the best proof that their issuance entails the exercise of purely legislative functions.

Same; Same; Same; Power of control over local governments.—The power of control under Section 10 (a) of Article X of the Constitution implies the right of the President to interfere in the exercise of such discretion as may be vested by law in the officers of the executive departments, bureaus or offices of the national government, as well as to act in lieu of such officers. This power is denied by the Constitution to the Executive, insofar as local governments are concerned. With respect to the latter, the fundamental law permits him to wield no more authority than that of checking whether said local governments or the officers thereof perform their duties as provided by statutory enactments. Hence, the President cannot interfere with local governments, so long as the same or its officers act within the scope of their authority. He may not, for instance, suspend an elective official of a regular municipality or take any disciplinary action against him, 'except on appeal from a decision of the corresponding provincial board. If, on the other hand, the President could create a municipality, he could, in effect, remove any of' its officials, by creating a new municipality and including therein the barrio in which the official concerned resides, for his office would thereby become vacant (Section 2179, Revised Administrative Code). Thus, by merely brandishing the power to create a new municipality, without actually creating it, he could compel local officials to submit to his dictation; thereby, in effect, exercising over them the power of control denied to him by the Constitution.

Same; Same; Same; Same; Section 68, Revised Administrative Code repealed by the Constitution.—The power of control of the President over executive departments, bureaus or offices under Section 10(a) of Article X of the Constitution implies no more than the authority to assume directly the functions thereof or to interfere in the exercise of discretion by its officials. Manifestly, such control does not include the authority either to abolish an executive department or bureau, or to create a new one. As a consequence, the alleged power of the President to create municipal corporations would necessarily connote the 'exercise by him of an authority even greater than that of control which he has over the executive departments, bureaus or offices, Instead of giving the President less power over local governments than that vested in him over the executive departments, bureaus or offices, it reverses the process and does the exact opposite, by conferring upon him more power over municipal corporations than that which he has over executive departments, bureaus or offices. Even if, therefore, it did not entail an undue delegation of legislative powers, as

572

572



it certainly does, said Section 68, as part of the Revised Administrative Code, approved on March 10, 1967, must be deemed repealed by the subsequent adoption of the Constitution in 1935, which is utterly incompatible and inconsistent with said statutory enactment. (De los Santos vs. Mallare, 87 Phil. 289, 298299.)

Same; Same; Same; Municipal officials concerned duly represented in present case.—lt is contended that not all the proper parties have been impleaded in the present case. Suffice it to say that the records do not show, and the parties do not claim, that the officers of any of the municipalities concerned have been appointed or elected and have assumed office. At any rate, the Solicitor General, who has appeared on behalf of respondent Auditor General, is the officer authorized by law "to act and represent the Government of the Philippines, its offices and agents, in any official investigation, proceeding or matter requiring the services of a lawyer" (Section 1661, Revised Administrative Code), and, in connection with the creation of the municipalities involved in this case, which involves a political, not proprietary function. said local officials, if any, are mere agents or representatives of the national government. Their interest in the case has accordingly been duly represented. (Mangubat vs. Osmeña, Jr., G.R. No. L-12837, April 30, 1959; City of Cebu vs. Judge Piccio, G.R. Nos L-13012 & 14876. December 81, 1960.)

Same; Same; Action not premature.—The present action cannot be said to be premature simply because respondent Auditor General has not yet acted on any of the executive orders in question and has not intimated how he would act in connection therewith. It is a matter of common knowledge that the President has for many years issued executive orders creating municipal corporations and that the same have been organized and are in actual operation, thus indicating without peradventure or doubt, that the expenditures incidental thereto have been sanctioned, approved or passed in audit by the General Auditing Office and its officials. There is no reason to believe that respondent would adopt a different policy as regards the new municipalities involved in this case, in the absence of an allegation to such effect, and none has been made by him.

ORIGINAL ACTION in the Supreme Court. Prohibition with preliminary injunction.

The facts are stated in the opinion of the Court.

Zulueta, Gonzales, Paculdo & Associates for petitioner.

Solicitor General for respondent.

573


573


CONCEPCION, J.:

During the period from September 4 to October 29, 1064 the President of the Philippines, purporting to act pursuant to Section 68 of the Revised Administrative Code, issued Executive Orders Nos, 93 to 121, 124 and 126 to 129; creating thirty-three (33) municipalities enumerated in the margin.1Executive Order No. Municipality Province Date Promulgated Annex (Original Petition) 93 Nilo Zamboanga del Sur Sept. 4, 1961 A 94 Midsalip ””” ””” B 95 Pitogo ””” ””... Soon after the date last mentioned, or on November 10, 1964 petitioner Emmanuel Pelaez, as Vice President of the Philippines and as taxpayer, instituted the present special civil action, for a writ of prohibition with preliminary injunction, against the Auditor General, to restrain him, as well as his representatives and agents from passing in audit any expenditure of public funds in implementation of said executive orders and/or any disbursement by ,said municipalities.

Petitioner alleges that said executive orders are null and void, upon the ground that said Section 68 has been impliedly repealed by Republic Act No. 2370 and constitutes an undue delegation of legislative power, Respondent maintains the contrary view and avers that the present action

_______________ 1

Executive Order No.

Municipality

Province

Date Promulgated

Annex (Original Petition)

93

Nilo

Zamboanga del Sur

Sept. 4, 1961

A

94

Midsalip

"""

"""

B

95

Pitogo

"""

"""

C

96

Maruing

"""

"""

D

97

Naga

"""

"""

E

"

99

Sebaste

Antique

"26"

F

"

100

Molugan

Misamis Oriental

"""

G

"

101

Malixi

Surigao del Sur

"28"

H

"

102

Roxas

Davao

"""

I

"

103

Magsaysay

"

"""

J

"

104

Sta, Maria

"

"""

K

"

105

Badiangan

Iloilo

"""

L

"

106

Mina

"

Oct. 1 "

M

"

107

Andong

Lanao del Sur

"""

N

"

108

Sultan Alonto

"""

"""

O

"

109

Maguing

"""

"""

P

"

110

Dianaton

"""

"""

Q

"

111

Elpidio Quirino

Mt. Province

"""

R

"

112

Bayog

Zamboanga del Sur

"""

S

"

117

Gloria

Oriental Mindoro

"""

GG

(Attached here to)

113

Maasin

Cotabato

"""

T

114

Siayan

Zamboanga del Norte

"""

LC

115

Roxas

"""

"""

V

116P

Panganuran

"""

"""

W

118

Kalilangan

Bukidnon

"""

X

119

Lantapan

"

"""

Y

120

Libertad

Zamboanga del Sur

"""

Z

121

General Aguinaldo

"""

"""

AA

124

Rizal

Surigao del Norte

"3"

BB

126

Tigao

Surigao del Sur

"23"

CC

127

Tampakan

Cotabato

"26"

DD

128

Maco

Davao

"29"

EE

129

New Corella

"

"""

FF

574

574



is premature and that not all proper parties—referring: to the officials of the new political subdivisions in question—have been impleaded, Subsequently, the mayors of several municipalities adversely affected by the aforementioned executive orders—because the latter have taken sway from the former the barrios composing the new political subdivisions—intervened in the case. Moreover, Attorneys Enrique M. Fernando and Emma Quisumbing-Fernando were allowed to and did appear as amici curiae.

The third paragraph of Section 3 of Republic Act No. 2370, reads:

"Barrios shall not be created or their boundaries altered nor their names changed except under the provisions of this Act or by Act of Congress."

Pursuant to the first two (2) paragraphs of the same Section 3:

"All barrios existing at the time of the passage of this Act shall come under the provisions hereof.

"Upon petition of a majority of the voters in the areas affected, a new barrio may be created or the name of an existing one may' be changed by the provincial board of the province, upon recommendation of the council of the municipality or municipalities in which the proposed barrio is stipulated. The recommendation of the municipal council shall be embodied in a resolution approved by at least two-thirds of the entire membership of the said council: Provided, however, That no new barrio may be created if its population is less than five hundred persons."

Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not be created or their boundaries altered nor their names changed'' except by Act of Congress or of the corresponding provincial board "upon petition of a majority of the voters in the areas affected" and the "recommendation of the council of the municipality or municipalities in which the proposed barrio is situated." Petitioner argues, accordingly: "If the President, under this new law, cannot even create a barrio, can he create a municipality which is composed of several barrios, since barrios are units of municipalities?"

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575


Respondent answers in the affirmative, upon the theory that a new municipality can be created without creating new barrios, such as, by placing old barrios under the jurisdiction of the new municipality. This theory overlooks, however, the main import of the petitioner's argument, which is that the statutory denial of the presidential authority to create a new barrio implies a negation of the bigger power to create municipalities, each of which consists of se everal barrios. The cogency and force of this argument is too obvious to be denied or even questioned. Founded upon logic and experience, it cannot be offset except by a clear manifestation of the intent of Congress to the contrary, and no such manifestation, subsequent to the passage of Republic Act No. 2379, has been brought to our attention.

Moreover, section 68 of the Administrative Code, upon which the disputed executive orders are based, provides:

"The (Governor-General) President of the Philippines may by executive order define the or boundaries, of any province, subprovince, municipality, [township] district, or other political subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovices, separate any political division other than a province, into such portions as may be required, merge any of such subdivisions or portions with another, name any new subdivision so created, may change the seat of government within any subdivision to such place therein as the public welfare may require: Provided, That the authorization of the (Philippine Legislature) Congress of the Philippines shall first be obtained whenever the boundary of any province or subprovince is to be defined or any province is to be divided into one or more subprovinces. When action by the (Governor-General) President of the Philippines in accordance herewith makes necessary a change of the territory under the jurisdiction of any administrative officer or any judicial officer, the (Governor-General) President of the Philippines, with the recommendation and advice of the head of the Department having executive control of such officer, shall redistrict the territory of the several officers affected and assign such officers to the new districts so formed.

"Upon the changing of the limits of political divisions in pursuance of the foregoing authority, an equitable distribution of the funds and obligations of the divisions thereby affected

576

576



shall be made in such manner as may be recommended by the (Insular Auditor) Auditor General and approved by the (Governor-General) President of the Philippines,"

Respondent alleges that the power of the President to create municipalities under this section does not amount to an undue delegation of legislative power, relying upon Municipality of Cardona vs, Municipality of Binañgonan (86 Phil. 547), which, he claims, has settled it. Such claim is untenable, for said case involved, not the creation of a new municipality, but a mere transfer of territory—from an already existing municipality (Cardona) to another municipality (Binañgonan), likewise, existing at the time of and prior to said transfer (See Gov't of the P.I. ex rel. Municipality of Cardona vs. Municipality of Binañgonan [34 Phil. 518, 519-520])—in consequence of the fixing and definition, pursuant to Act. No. 1748, of the common bound aries of two municipalities.

It is obvious, however, that, whereas the power to fix such common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities, may partake of an administrative nature—involving, as it does, the adoption of means and ways to carry into effect the law creating said municipalities—the authority to create municipal corporations is essentially legislative in nature, In the language of other courts, it is "strictly a legislative function" (State ex rel. Higgins vs. Aicklen, 119 S. 425, January 2, 1959) or "solely and exclusively the exercise of legislative power" (Udall vs. Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme Court of Washington has put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405, 409), "municipal corporations are purely the creatures of statutes."

Although1aExcept to local governments, to which legislative powers, with respect to matters of local concern, may be delegated. Congress may delegate to another branch of the Government the power to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of -powers, that said law: (a) be complete in itself

______________ 1a Except to local governments, to which legislative powers, with respect to matters of local concern, may be delegated. 577


577


—it must set forth therein the policy to be executed, carried out or implemented by the delegate2Calalang vs. Williams, 70 Phil. 726; Pangasinan Transp. Co. vs. Public Service Commission, 70 Phil. 221; Cruz vs. Youngberg, 56 Phil. 234; Alegre vs. Collector of

Customs, 53 Phil. 394; Mulford vs. Smith, 307 U.S. 38.—and (b) fix a standard—the limits of which are sufficiently determinate or determinable—to which the delegate must conform in the performance of his functions.2aPeople vs. Lim Ho, L- 12091-2, January 28, 1960; People vs. Jolliffe. L-9553, May 13, 1959; People vs. Vera, 65 Phil. 56; U.S. vs. Ang Tang Ho, 43 Phil. 1; Compañia General de Tabacos vs. Board of Public Utility, 34 Phil. 136; Mutual Film Co. vs. Indu... Indeed, without a statutory declaration of policy, the delegate would in effect, make or formulate such policy, which is the essence of every law; and without the aforementioned standard, there would be no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the scope of his authority.2bVigan Electric Light Company, Inc. vs. The Public Service Commission, L-19850, January 30, 1964. Hence, he could thereby arrogate upon himself the power, not only to make the law, but, also—and this is worse—to unmake it, by adopting measures inconsistent with the end sought to be attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and balances, and, consequently, undermining the very foundation of our Republican. system.

Section 68 of the Revised Administrative Code does not meet these well settled requirements for a valid delegation of the power to fix the details in the enforcement of a law,

_____________ 2 Calalang vs. Williams, 70 Phil. 726; Pangasinan Transp. Co. vs. Public Service Commission, 70 Phil. 221; Cruz vs. Youngberg, 56 Phil. 234; Alegre vs. Collector of Customs, 53 Phil. 394; Mulford vs. Smith, 307 U.S. 38. 2a People vs. Lim Ho, L- 12091-2, January 28, 1960; People vs. Jolliffe. L-9553, May 13, 1959; People vs. Vera, 65 Phil. 56; U.S. vs. Ang Tang Ho, 43 Phil. 1; Compañia General de Tabacos vs. Board of Public Utility, 34 Phil. 136; Mutual Film Co. vs. Industrial Commission, 236 U.S. 247, 59 L. Ed. 561; Mutual Film Corp. vs. Industrial Commission, 236 U.S. 230, 59 L. Ed. 552; Pamana Refining Co. vs. Ryan, 293 U.S. 388, 79 L. Ed. 446; A.L.A. Schechter Poultry Corp. vs. U.S., 295 U.S. 495, 79 L Ed. 1570; U S. vs. Rock Royal Coop., 307 U.S. 533, 83 L. Ed. 1446; Bowles vs. Willingham, 321 U.S. 503, 88 L. Ed. 892; Araneta vs. Gatmaitan, L-8895, April 30, 1957; Cervantes vs. Auditor General, L-4043, May 26,1952; Phil. Association of Colleges vs. See. of Education, 51 Off. Gaz. 6230; People vs. Arnault, 48 Off. Gaz. 4805; Antamok Gold Fields vs. CIR, 68 Phil. 340; U.S. vs. Barrias, 11 Phil. 327; Yakus vs. White, 321 U.S. 414; Ammann vs. Mailonce. 332 U.S. 245 2b Vigan Electric Light Company, Inc. vs. The Public Service Commission, L-19850, January 30, 1964. 578

578



It does not enunciate any policy to be carried out or implemented by the President Neither does it give a standard suf f iciently precise to avoid the evil effects above referred to, In this connection, we do not overlook the fact that, under the last clause of the first sentence of Section 68, the President:

"x x x may change the seat of the government within any subdivision to such place therein as the public welfare may require"

it is apparent, however, from the language of this clause, that the phrase "as the public welfare may require" qualified, not the clauses preceding the one just quoted, but only the place to which the seat of the government may be transferred. This fact becomes more apparent when we consider that said Section 68 was originally Section 1 of Act No. 1748,3Whenever in the judgment of the Governor-General the public welfare requires, he may, by executive order, enlarge, contract, or otherwise change the boundary of any province, subprovince, municipality or township or other political subdivision, or separate... which provided that, "whenever in the judgment of the Governor-General the public welfare, requires, he may, by executive order," effect the changes enumerated therein (as in said section 68), including the change of the seat of the government "to such place x x x

_____________ 3 Whenever in the judgment of the Governor-General the public welfare requires, he may, by executive order, enlarge, contract, or otherwise change the boundary of any province, subprovince, municipality or township or other political subdivision, or separate any

such subdivision into such portions as may be required as aforesaid, merge any of such subdivisions or portions with another, divide any province into one or more subprovinces as may be required as aforesaid, name any new subdivision so created, change the seat of government within any subdivision, 'existing or created hereunder, to such place therein as the public interests require, and shall fix in such executive order the date when the change, merger, separation, or other action shall take effect. Whenever such action as aforesaid creates a new political subdivision the Governor-General shall appoint such officers for the new subdivision with such powers and duties as may be required by the existing provisions of law applicable to the case and fix their salaries; such appointees shall hold office until their successors are elected or appointed and qualified. Successors to the elective offices shall be elected at the next general election following such appointment, Such equitable distribution of the funds of changed subdivisions between the subdivisions affected shall be as is recommended by the Insular Auditor and approved by the Governor-General. 579


579


as the public interest requires" The opening statement of said Section 1 of Act No, 1748—which was not included in Section 68 of the Revised Administrative Code—governed the time at which, or the conditions under which, the powers therein conferred could be exercised; whereas the last part of the first sentence of said section referred exclusively to the place to which the seat of the government was to be transferred.

At any rate, the conclusion would be the same, insofar as the case at bar is concerned, even if we assumed that the phrase "as the public welfare may require," in said Section 68, qualifies all other clauses thereof. It is true that in Calalang vs. Williams (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had upheld "public welfare" and "public interest," respectively, as sufficient standards for a valid delegation of the authority to execute the law, But, the doctrine laid down in these cases—as all judicial pronouncements—must be construed in relation to the specific facts and issues involved 'therein, outside of which they do not constitute precedents and have no binding effect.4McGirr vs. Hamilton, 30 Phil. 563; Hebron vs. Reyes, L-9124. July 28, 1958; U.S. vs. More, 3 Cranch 159, 172; U.S. vs. Sanges, 144 U.S. 310, 319; Cross vs. Burke, 146 U.S. 82; Louisville Trust Co. vs. Knott, 191 U.S. 225. See also, 15 C.J., 929-940; 21 C.J... The law construed in the Calalang case conferred upon the Director of Public Works, with the approval of the Secretary of Public Works and Communications, the power to issue rules and regulations to promote safe transit upon national roads and streets. Upon the other hand, the Rosenthal case referred to the authority of the Insular Treasurer, under Act No. 2581, to issue and cancel certificates or permits for the sale of speculative securities. Both cases involved grants to. administrative officers of powers related to the exercise of their administrative functions, calling for the determination of questions of fact.

Such is not the nature of the powers dealt with in section 880 As above indicated, the creation of municipalities,

_____________ 4 McGirr vs. Hamilton, 30 Phil. 563; Hebron vs. Reyes, L-9124. July 28, 1958; U.S. vs. More, 3 Cranch 159, 172; U.S. vs. Sanges, 144 U.S. 310, 319; Cross vs. Burke, 146 U.S. 82; Louisville Trust Co. vs. Knott, 191 U.S. 225. See also, 15 C.J., 929-940; 21 C.J.S. 297, 299; 14 Am. Jur. 345. 580

580



is not an administrative function, but one which is essentially and eminently legislative in character. The question of whether or not "public interest" demands the exercise of such power is not one of fact. It is "purely a legislative question "(Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or a political question (Udall vs. Severn, 79 P. 2d. 347-349), As the Supreme Court of Wisconsin has aptly characterized it, "the question as to whether incorporation is for the best interest of the community in any case is emphatically a question of public policy and statecraft" (In re Village of North Milwaukee, 67 N.W. 1033, 1035-1037).

For this reason, courts of justice have annulled, as constituting undue delegation of legislative powers, state laws granting the judicial department the power to determine whether certain territories should be annexed to a particular municipality (Udall vs. Severn, supra, 258-359); or vesting in a Commission the right to determine the plan and frame of government of proposed villages and what functions shall be exercised by the same, although the powers and functions of the village are specifically limited by statute (In re Municipal Charters, 86 Atl. 307-308); or conferring upon courts the authority to declare a given town or village incorporated, and designate its metes and bounds, upon petition of a majority of the taxable inhabitants thereof, setting forth the area desired to be included in such village (Territory ex rel Kelly vs. Stewart, 28 Pac. 405-409); or authorizing the territory of a town, containing a given area and population, to be incorporated as a town, on certain steps, being taken by the inhabitants thereof and on certain determination by a court and subsequent vote of the inhabitants in favor thereof, insofar as the court is allowed to determine whether the lands embraced in the petition "ought justly" to be included in the village, and whether the interest of the inhabitants will be promoted by such incorporation, and to enlarge and diminish the boundaries of the proposed village "as justice may require" (In re Villages of North Milwaukee, 67 N.W. 10351037); or creating a Municipal Board of Control which shall 'determine whether or not the laying out, construc-

581


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tion or operation of a toll road is in the "public interest" and whether the requirements of the law had been complied with, in which case the board shall enter an order creating a municipal corporation and fixing the name of the same (Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310).

Insofar as the validity of a delegation of power by Congress to the President is concerned, the case of Schechter Poultry Corporation vs. U.S. (79 L. Ed. 1570) is quite relevant to the one at bar. The Schechter case involved the constitutionality of Section 3 of the National Industrial Recovery Act authorizing the President of the United States to approve "codes of fair competiton" submitted to him by one or more trade or industrial associations or corporations which "impose no inequitable restrictions on admission to membership therein and are truly representative," provided that such codes are not designed "to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate against them, and will tend to effectuate the policy" of said Act. The Federal Supreme Court held:

"To summarize and conclude upon this point: Sec. 3 of the Recovery Act is without precedent. It supplies no standards for any trade, industry or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact determined by appropriate administrative procedure. Instead of prescribing rules of conduct, it authorizes the making of codes to prescribe them. For that legislative undertaking, Sec. 3 sets up no standards, aside from the statement of the general aims of rehabilitation. correction and expansion described in Sec. 1. In view of the scope of that broad declaration, and of the nature of the few restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the country, is virtually unfettered. We think that the code making authority thus conferred is an un constitutional delegation of legislative power."

If the term "unfair competition" is so broad as to vest in the President a discretion that is "virtually unfettered." and, consequently, tantamount to a delegation of legislative power, it is obvious that "public welfare," which has even a broader connotation, leads to the same result. In

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fact, if the validity of the delegation of powers made in Section 88 were upheld, there would no longer be any legal impediment to a statutory grant of authority to the President to do anything which, in his opinion, may be required by public welfare or public interest. Such grant of authority would be a virtual abdication of the powers of Congress in favor of the Executive, and would bring about a total collapse of the democratic system established by our Constitution, which it is the special duty and privilege of this Court to uphold.

It may not be amiss to note that the executive orders in question were issued after the legislative bills for the creation of the municipalities involved in this case had failed to pass Congress. A better proof of the fact that the issuance of said executive orders entails the exercise of purely legislative functions can hardly be given.

Again, Section 10(1) of Article VII of our fundamental law ordains:

"The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed."

The power of control under this provision implies the right of the President to interfere in the exercise of such discretion as may be vested by law in the officers of the executive departments, bureaus, or offices of the national government, as well as to act in lieu of such officers. This power is, denied by the Constitution to the Executive, insofar as local governments are concerned. With respect to the latter, the fundamental law permits him to wield no more authority than that of checking whether said local governments or the officers thereof perform their duties as provided by statutory enactments. Hence, the President cannot interfere with local governments, so long as the same or its officers act within the scope of their authority, He may not enact an ordinance which the municipal council has failed or refused to pass, even if it had thereby violated a duty imposed thereto by law, although he may see to it that the corresponding provincial officials take appropriate disciplinary action therefor.

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Neither may he vote, set aside or annul an ordinance passed by said council within the scope of its jurisdiction, no matter how patently unwise it may be. He may not even suspend an elective official of a regular municipality or take any disciplinary action against him, except on appeal from a decision of the corresponding provincial board.5Hebron vs. Reyes, L-9124, July 28, 1958; Mondano vs. Silvosa, 51 Off. Gaz. 2884; Rodriguez vs. Montinola, 50 Off. Gaz, 4820; Querubin vs. Castro, L-9779, July 31, 1958.

Upon the other hand, if the President could create a municipality, he could, in effect, remove any of its officials, by creating a new municipality and including therein the barrio in which the official concerned resides, for his office would thereby become vacant,6Pursuant to Section 2179 of the Revised Administrative Code:”When a part 01 a barrio is detached from a municipality to form a new municipality or to be added to an existing municipality, any officer of the old municipality living in the detached ter...

Thus, by merely brandishing the power to create a new municipality (if he had it), without actually creating it, he could compel local officials to submit to his dictation, thereby, in effect, exercising over them the power of control denied to him by the Constitution.

Then, also, the power of control of the President over executive departments, bureaus or offices implies no more than the authority to assume directly the f unctions thereof or to interfere in the exercise of discretion by its officials. Manifestly, such control does not include the authority either to abolish an executive department or bureau, or to create a new one. As a consequence, the alleged power of the President to create municipal corporations would necessarily connote the exercise by him of an authority even greater than that of control which he has over the executive departments, bureaus or offices. In other words, Section 68 of the Revised Administrative Code does not mere-

_____________ 5 Hebron vs. Reyes, L-9124, July 28, 1958; Mondano vs. Silvosa, 51 Off. Gaz. 2884; Rodriguez vs. Montinola, 50 Off. Gaz, 4820; Querubin vs. Castro, L-9779, July 31, 1958. 6 Pursuant to Section 2179 of the Revised Administrative Code:

"When a part 01 a barrio is detached from a municipality to form a new municipality or to be added to an existing municipality, any officer of the old municipality living in the detached territory may continue to hold his office and exert the functions thereof for the remainder of his term; but if he is resident of a barrio the whole of which is detached, his office shall be deemed to be vacated" 584

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ly fail to comply with the constitutional mandate above quoted. Instead of giving the President less power over local governments than that vested in him over the executive departments, bureaus or offices, it reverses the pro cess and does the exact opposite, by conferring upon him more power over municipal corporations than that which he has over said executive departments, bureaus or offices.

In short, even if it did entail an undue delegation of legislative powers, as it certainly does, said Section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly incompatible and inconsistent with said statutory enactment.7De los Santos vs. Mallare, 87 Phil, 289, 298-299.

There are only two (2) other points left for consideration, namely, respondent's claim (a) that "not all the proper parties"—referring to the officers of the newly created municipalities—"have been impleaded in this case," and (b) that "the present petition is premature/'

As regards the first point, suffice it to say that the records do not show, and the parties do not claim, that the officers, of any of said municipalities have been appointed or elected and assumed office. At any rate, the Solicitor General. who has appeared on behalf of respondent Auditor General, is the officer authorized by law "to act and represent the Government of the Philippines, its offices and agents, in any official investigation, proceeding or matter requiring the services of a lawyer" (Section 1661, Revised Administrative Code), and, in connection with the creation of the aforementioned municIpalities, which involves a political, not proprietary, function, said local officials, if any, are mere agents or representatives of the national government. Their interest in the case at bar has, accordingly, been, in effect, duly represented.8Mangubat vs. Osmeña, Jr., L-12837, April 20, 1959; City of Cebu vs. Judge Piccio. L-13012 & L-14876, December 31, 1960,

With respect to the second point, respondent alleges that

______________ 7 De los Santos vs. Mallare, 87 Phil, 289, 298-299. 8 Mangubat vs. Osmeña, Jr., L-12837, April 20, 1959; City of Cebu vs. Judge Piccio. L-13012 & L-14876, December 31, 1960,

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he has not as yet acted on any of the executive orders in question and has not intimated how he would act in connection therewith. It is, however, a matter of common, public knowledge, subject to judicial cognizance, that the President has, for many years, issued executive orders creating municipal corporations and that the same have been organized and in actual operation, thus indicating, without peradventure of doubt, that the expenditures incidental thereto have been sanctioned, approved or passed in audit by the General Auditing Office and its officials. There is no reason to believe, therefore, that respondent would adopt a different policy as regards the new municipalities involved in this case, in the absence of an allega-tion to such effect, and none has been made by him

WHEREFORE, the Executive Orders in question are hereby declared null and void ab initio and the respondent permanently restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders or any disbursement by the municipalities above referred to. It is so ordered.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon, JJ., concur. Zaldivar, J., took no part. Bengzon, J.P., J., concurs and dessents is a seperate opinion. Makalintal and Regala, JJ., concur with the opinion of Justice J.P. Bengzon.

BENGZON, J.P., J., concurring and dissenting:

A sign of progress in a developing nation is the rise of new municipalities. Fostering their rapid growth has long been the aim pursued by all three branches of our Government.

So it was that the Governor-General during the time of the Jones Law was given authority by the Legislature (Act No. 1748) to act upon certain details with respect to said local governments, such as fixing of boundaries, subdivisions and mergers. And the Supreme Court, within the framework of the Jones Law, ruled in 1917 that the exec-

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ution or implementation of such details, did not entail abdication of legislative power (Government vs. Municipality of Binangonan, 34 Phil. 518; Municipality ,of Cardona vs. Municipality of Binañgonan, 36 Phil. 547). Subsequently, Act No. 1748's aforesaid statutory authorization was embodied in Section 68 of the Revised Administrative Code. And Chief Executives since then up to the

present continued to avail of said provision, time and again invoking it to issue executive orders providing for the creation of municipalities.

From September 4, 1964 to October 29, 1964 the President of the Philippines issued executive orders to create thirty-three municipalities pursuant to Section 68 of the Revised Administrative Code. Public funds thereby stood to be disbursed in implementation of said executive orders.

Suing as private citizen and taxpayer, Vice President Emmanuel Pelaez filed in this Court a petition for prohibition with preliminary injunction against the Auditor General. It seeks to restrain the respondent or any person acting in his behalf, from passing in audit any expenditure of public funds in implementation of the executive orders aforementioned.

Petitioner contends that the President has no power to create a municipality by executive order. It is argued that Section 68 of the Revised Administrative Code of 1917, so far as it purports to grant any such power, is invalid or, at the least, already repealed, in light of the Philippine Constitution and Republic Act 2370 (The Barrio Charter),

Section 68 is again reproduced hereunder for convenience:

"SEC. 68. General authority of [Governor-General] President of the Philippines to fix boundaries and make new subdivisions.—The [Governor-General] President of the Philippines may by executive order define the boundary, or boundaries, of any province, subprovince, municipality, [township] municipal district, or other political subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovinces, separate any political division other than a province, into such portions as may be required.

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merge any of such subdivisions or portions with another, name any new subdivision so created, and may change the seat of government within any subdivision to such place therein as the public welfare may require: Provided, That the authorization of the [Philippine Legislature] Congress of the Philippines shall first be obtained whenever the boundary of any province or subprovince is to be defined or any province is to be divided into one or more subprovinces. When action by the [GovernorGeneral] President of the Philippines in accordance herewith makes necessary a change of the territory under the jurisdiction of any administrative officer or any judicial officer, the [Governor-General] President of the Philippines, with the recommendation and advice of the head of the Department having executive control of such officer, shall redistrict the territory of the several officers to the new districts so formed.

"Upon the changing of the limits of political divisions in pursuance of the foregoing authority, an equitable distribution of the funds and obligations of the divisions thereby affected shall be made in such manner as may be recommended by the [Insular Audtior] Auditor General and approved by the [Governor-General] President of the Philippines."

From such working I believe that power to create a municipality is included: to "separate any political division other than a province, into such portions as may be required, merge any such subdivisions or portions with another, name any new subdivision so created." The issue, however, is whether the legislature can validly delegate to the Executive such power,

The power to create a municipality is legislative in character. American authorities have therefore favored the view that it cannot be delegated; that what is delegable is not the power to create municipalities but only the power to determine the existence of facts under which creation of a municipality will result (37 Am. Jur. 628).

The test is said to lie in whether the statute allows any discretion on the delegate as to whether the municipal corporation should be created, If so, there is an attempted delegation of legislative power and the statute is invalid (Ibid.). Now Section 68 no doubt gives the President such discretion, since it says that the President "may by executive order" exercise the powers therein granted. Furthermore, Section 5 of the same Code states:

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"SEC. 5. Exercise of administrative discretion.—The exercise of the permissive powers of all executive or administrative officers and bodies is based upon discretion, and when such officer or body is given authority to do any act but not required to do such act, the doing of the same shall be dependent on a sound discretion to be exercised for the good of the service and benefit of the public, whether so expressed in the statute giving the authority or not"

Under the prevailing rule in the United States—and Section 68 is of American origin—the provision in question would be an invalid attempt to delegate purely legislative powers, contrary to the principle of separation of powers.

It is very pertinent that Section 68 should be considered with the stream of history in mind. A proper knowledge of the past is the only adequate background for the present. Section 68 was adopted half a century ago. Political change, two world wars, the recognition of our independence and rightful place in the family of nations, have since taken place. In 1917 the Philippines had for its Organic Act the Jones Law. And under the setup ordained therein 110 strict separation of powers was adhered to. Consequently, Section 68 was not constitutionally objectionable at the time of its enactment.

The advent of the Philippine Constitution in 1935 however altered the situation. For not only was separation of powers strictly ordained, except only in specific instances therein provided, but the power of the Chief Executive over local governments suffered an explicit reduction.

Formerly, Section 21 of the Jones Law provided that the Governor-General "shall have general supervision and control of all the departments and bureaus of the government in the Philippine Islands," Now Section 10 (1), Article VII of the Philippine Constitution provides: "The President shall have control of all the executive departments, bureaus, or offices. exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed.

In short, the power of control over local governments had now been taken away from the Chief Executive. Again,

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to fully understand the significance of this provision, one must trace its development and growth.

As early as April 7, 1900 President McKinley of the United States, in his Instructions to the Second Philippine Commission, laid down the policy that our municipal governments should be "subject to the least degree of supervision and control" on the part of the national government. Said supervision and control was to be confined within the "narrowest limits" or so much only as "may be necessary to secure and enforce faithful and efficient administration by local officers/' And the national government "shall have no direct administration except of matters of purely general concern." (See Hebron v. Reyes, L-9158, July 28, 1958.)

All this had one aim, to enable the Filipinos to acquire experience in the art of self-government, with the end in view of later allowing them to assume complete management and control of the administration of their local affairs. Such aim is the policy now embodied in Section 10(1), Article VII of the Constitution (Rodriguez v. Montinola, 50 O.G. 4820).

It is the evident decree of the Constitution, therefore, that the President shall have no power of control over local governments. Accordingly, Congress cannot by law grant him such power (Hebron v. Reyes, supra). And any such power formerly granted under the Jones Law thereby became unavoidably inconsistent with the Philippine Constitution.

It remains to examine the relation of the power to create and the power to control local governments. Said relationship has already been passed upon by this Court in Hebron v. Reyes, supra, In said case, it was ruled that the power to control is an incident of the power to create or abolish municipalities, Respondent's view therefore, that creating municipalities and controlling their local governments are "two worlds apart," is untenable. And since as stated, the power to control local governments can no longer be conferred on or exercised by the President, it follows a fortiori that the power to create them, all the more cannot be so conferred or exercised.

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I am compelled to conclude, therefore, that Section 10(1), Article VII of the Constitution has repealed Section 68 of the Revised Administrative Code as far as the latter empowers the President to create local governments. Repeal by the Constitution of prior statutes inconsistent with it has already been sustained in De los Santos v. Mallare, 87 Phil. 289. And it was there held that such repeal differs from a declaration of unconstitutionality of a posterior legislation, so much so that only a majority vote of the Court is needed to sustain a finding of repeal.

Since the Constitution repealed Section 68 as far back as 1935, it is academic to ask whether Republic Act 2370 likewise has provisions in conflict with Section 68 so as to repeal it. Suffice it to state, at any rate, that statutory prohibition on the President from creating a barrio does not, in my opinion, warrant the inference of statutory prohibition for creating a municipality. For although municipalities consist of barrios, there is nothing in the statute that would preclude creation of new municipalities out of pre-existing barrios.

It is not contrary to the logic of local autonomy to be able to create larger political units and unable to create smaller ones. For as long ago observed in President McKinley's instructions to the Second Philippine Commission, greater autonomy is to be imparted to the smaller of the two political units. The smaller the unit of local government, the lesser 'is the need for the national government's intervention in its political affairs. Furthermore, for practical reasons, local autonomy cannot be given from the to? downwards. The national government. in such a case, could still exercise power over the supposedly autonomous unit, e.g., municipalities, by exercising it over the smaller units that comprise them, e.g., the barrios. A realistic program of decentralization therefore calls for autonomy from the bottom upwards, so that it is not surprising for Congress to deny the national government some power over barrios without denying it over municipalities. For this reason, I disagree with the majority view that because the President could not create a barrio under Republic Act 2370, a fortiori he cannot create a municipality.

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It is my view, therefore, that the Constitution, and not Republic Act 2370, repealed Section 68 of the Revised Administrative Code's provision giving the President authority to create local governments. And for this reason I agree with the ruling in the majority opinion that the executive orders in question are null and void.

In thus ruling, the Court is but sustaining the fulfillment of our historic desire to be free and independent under a republican form of government, and exercising a function derived from the very sovereignty that it upholds,

Executive orders declared null and void. A N N O T A T I O N CREATION OF MUNICIPALITIES Historical Background of the Power of Creating Municipalities in the Philippines.

During the Spanish regime the procedure of the creation of municipalities has been prescribed by the Leyes de las Indias (Roman Catholic Bishop of Jaro vs. Director of Lands, 34 Phil. 528; see also Law VIII, Title VII, Book IV of Recopilación de Leyes de los Reynos de las Indias).

In the case of Catbalogan vs. Director of Lands, 17 Phil., 214, the Court took cognizance of the procedure for the formation of towns during the Spanish regime, Executive authorities and officials who then represented the Spanish government were obliged to adjust their procedures in the fulfillment of their duties with regard to the establishment and laying out of new towns to the Leyes de las Indias.

An Ayuntamiento corresponds to the English term municipal corporation and the municipal government in the Islands falls short of being such a corporation (Government of the Philippine Islands vs. Abadilla, 46 Phil. 842; see also Roman Catholic Church vs. Municipally of Cebu, 31 Phil. 517).

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The unit of local administration during the Spanish regime was the "pueblo" which ordinarily embraces an area of. many square miles and contained numerous barrios or villages. Historical Background under the American Regime.

The law governing municipalities was first provided for in General Order No. 43, Series of 1899. This law was followed by General Order No. 40, Series of 1900 promulgated by the Military Governor. President it William McKinley's Instructions to the Second Philippine Commission also stressed the importance of the creation of municipal governments.

The Philippine Commission forthwith enacted Act No. 82 on January 31, 1901 providing for the organization and government of municipalities. Act No. 88 was passed on February 5, 1901 for the organization of the provinces. The law on provincial and municipal governments were embodied in Chapters 56, 57, 64 and 67 of the Revised Administrative Code. The Power to Create Corporations is Essentially Legislative.

The power of the municipal corporation is essentially legislative in nature. The power is exclusive and almost unlimited. In the absence of any constitutional limitations, a legislative body may create any corporation it deems essential for the more efficient administration of the government (I McQuillin, Municipal Corporations, 3rd ed., 509; 19 R.C.L. section 2).

The legislative power to create municipal corporations may not be delegated (Cooley, Municipal Corporations, p. 30), The delegation, if at all, may be made if the legislature imposes conditions on which the municipal corporation may be created. The

legislative may prescribe standards for guidance and authorize an agency to determine facts on which the statute may be implemented for the creation of such corporation.

In some jurisdictions, it has been held that the legislative

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body may vest in a court the power to determine when the incorporation of the community is necessary or useful or to determine the extent and boundary of such corporations. (I McQuillin, Municipal Corporations, 3rd Ed., p. 505). Usually, in the creation of municipal corporations the conditions needed in order to obtain its incorporation as a city or town are prescribed. Such conditions may indicate the extent of the area proposed to incorporate, the nature of the territory, the character of the lands and the uses to which it may be devoted, the number of inhabitants and even the density and location of the area to be incorporated (I McQuillin, Municipal Corporations, p. 531). The Nature of the Power to Create Municipal Corporation in the Philippines.

The power to create corporation including municipal corporation resides in the Congress of the Philippines. Such power included in the general legislative power of Congress states: "The legislative power shall be vested in a Congress of the Philippines which shall consist of a Senate and a House of Representatives" (Art VI, Section 1, Constitution of the Philippines; Tiaco vs. Forbes, 228 U.S. 549; Asuncion vs. Yriarte, 37 Phil. 67).

Under this authority, Congress may enact laws creating provinces, sub-provinces, cities, municipalities, municipal districts, barrios and other local entities. It may group into one area those which are already existing. It may subdivide them into several other local areas. It may abolish them. There is no limitation upon Its power except the provisions of Art. VII, Section 1 of the Constitution (Aruego, Law on Municipal Government, 1968 Ed., p. 37),

The Provincial Board may also organize barrios under Republic Act No. 2370. See also Republic Act No. 2264, June 19, 1959, Republic Act No, 5185 and Republic Act No. 1205. For organization of municipalities, see Section 2170 of the Revised Administrative Code as amended by Republic Act No. 2368.

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The Nature of the Legislative Power to Create the Area For Local Government.

The legislative power to create an area of the local government involves two things: (1) the determination of whether a local area -shall be created or not; (2) the determination of whether said decision shall have the force of law. To leave the decision to another agency or person to create or not to create and to determine the conditions under which he would create, or to have discretion

whether to follow or not to follow the rule laid down in the law, would be undue delegation of legislative power (Aruego, op. cit., 1968 Ed., p. 37).

There would be no unlawful delegation of legislative power to create the area when the legislative power determines by law the conditions under which the local area may be created. Not leaving this or some of them to be determined by another agency of the government. It 10 not unlawf ul delegation of legislative power to create when the agency has the authority to carry out the provisions of the law and the discretion is only as to the manner of executing the law (Id.). Creation of Barrios by Authority of Law.

Under the Revised Barrio Charter (Republic Act No. 3590) barrios may be created directly by the lawmaking body, or a creation of the same may be caused by another agency (Sec. 3, Republic Act No. 3590). The Barrio Charter Law does not give the uncontrolled power to determine whether or not to create the barrio and the conditions under which such barrio should be created because the law has set forth specific conditions (Aruego, Id.). Constitutional Validity of Creation under Administrative Code by the Executive.

Before the effectivity of the Administrative Code of 1918, Act 1748 was passed authorizing the Governor General of the Philippines to make adjustment of provincial and municipal boundaries and the change of capitals of

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provinces from time to time to serve the public convenience and interest

The Supreme Court overruled the contention that the act was an undue delegation of legislative power. The Supreme Court ruled:

"The delegation of the power referred to on the Governor General does not involve an abdication of legislative functions on the part of the legislature with regard to the particular subject matter with which it authorizes the Governor General to deal. It is simply a transference of certain details with respect to provinces, municipalities, and townships, many of them newly created, and all of them subject to more or less rapid change both in development and center of population, the proper regulation of which might require not only prompt action but action of such a detailed character as not to permit the legislative body, as such, to take it efficiently." (Cardona vs. Binañgonan, 36 Phil. 547).

The Supreme Court likewise upheld the constitutional legality of an executive order of the Governor General in redefining the boundary between the municipalities of Cardona and Binañgonan (Government of the P.I. vs. Municipality of Binañgonan, 35 Phil. 518).

Section 68 of the Revised Administrative Code of 1917 was enacted.

"SEC. 68. General Authority of the (Governor General) President of the Philippines to fix boundaries and make new subdivisions.—The Governor General (now President of the Philippines) may by executive order define the boundary, or boundaries, of any province, subprovince, municipality, (township) municipal district (See Act 27824), or other political subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovinces, separate any political division other than a province, into such portions as may be required, merge any of such subdivisions or portions with another, name any new division so created, and may change the seat of government within any subdivision into such place therein as the public welfare may require: Provided. That the authorization of the Philippine Legislature (now Congress of the Philippines) shall first be obtained whenever the boundary of any province or subprovince is to be defined or any province is to be divided into one or more subprovinces. x x x."

The Governors General and later the Presidents of the

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Philippines create several municipalities under this section. This law practically gave uncontrolled discretion to the executive to create new areas as municipalities and is of doubtf ul legality, For cases on delegation of legislative powers as valid standards for delegation of power, see People vs. Lim Ho, L-12091-2, January 28,1960; People vs. Jolliffe, L-9553, May 13, 1959; People vs. Vera, 65 Phil. 56; U.S. vs. Ang Tang Ho, 43 Phil. 1; Compañia General de Tabacos vs. Board of Public Utility, 34 Phil. 136; Mutual Film Co. vs. Industrial Commission, 236 U.S. 247, 59 L. Ed. 561; Mutual Film Corp. vs. Industrial Commission, 236 U.S. 230, 59 L. Ed. 552; Pamana Refining Co. vs. Ryan, 293 U.S. 388, 79 L. Ed. 446; A.L.A. Schechter Poultry Corp. vs. U.S., 295 U.S. 79 L. Ed. 1570, U.S. vs. Rock Royal Coop., 307 U.S. 533, L. Ed. 1446; Bowles vs. Willingham, 321, U.S. 503, 88 L. Ed. 892; Araneta vs. Gatmaitan, L8895, April 30, 1957; Cervantes vs. Auditor General, L4043, May 30, 1952; Phil. Association of Colleges vs. Secretary of Education, 51 Off. Gaz. 6230; People vs. Arnault. 48 Off. Gaz, 4805; Antamok Gold Field-vs. CIR. 68 Phil. 340; U.S. vs. Barrias, 11 Phil. 327; Yajus vs. White, 821 U.S. 414; Ammann vs. Mailonce, 332 U.S. 245.

Section 68 of the Revised Administrative Code has been declared unconstitutional in the case of Pelaez vs. Jimenez, G.R. No. L-23825. December 24, 1965. The Supreme Court thus reiterated the f undamental principle that the creation of municipal corporations is legislative in nature.

Moreover, Section 3 of Republic Act No. 2370 which took effect on January 1, 1960 provided that barrios may not be created or their boundaries altered except by act of Congress or by the corresponding provincial board upon petition of the majority of the voters in the area affected and the recommendation of the municipality in which the proposed barrios are situated. If under this new law the President cannot create a barrio, he cannot create municipalities which are composed of several barrios (See Republic Act No. 5185).

For creation of barrios, see Revised Barrio Charter (Republic Act No. 3590).—JUDGE JORGE COQUIA

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A N N O T A T I O N VALID DELEGATION OF LEGISLATIVE POWER I. Principle of separation of powers.

The separation of powers is a fundamental principle in our system of government. It obtains not through express provision but by actual division in our Constitution. Each department of the government has exclusive cognizance of matters within its jurisdiction and is supreme within its own sphere. (Angara vs. Electoral Commission, et al., 63 Phil. 139). II. Constitutional provisions on separation of powers.

The Legislative power shall be vested in a Congress of the Philippines which shall consist of a Senate and a House of Representatives. (Article VI, Sec, I, Phil. Constitution).

The Executive power shall be vested in a President of the Philippines. (Art. VII, Sec. 1, Phil. Constitution).

The Judicial power shall be vested in one Supreme Court and in such inferior courts as may be established by law. (Art. VIII, Sec. 1, Phil. Constitution).

The Government of the United States in the Philippines is one whose powers have been carefully apportioned between three distinct departments which have their powers alike, limited and defined, and are of equal dignity and, within their respective spheres of action, equally independent. (Abueva vs. Wood, 46 Phil. 613). III. Importance of the principle.

It has been said that the principle of separation of powers of government is fundamental to the very existence of every constitutional government. It represents the most important principle of government declaring and guaranteeing the liberties of the people. (Am. Jur. 182) Under our constitutional system, the powers of government are distributed among three co-ordinate and substantially independent organs: the legislative, the executive and the

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judicial. Each of these departments of the government derives its authority from the Constitution, which, in turn, is the highest expression of the popular will. Each has exclusive cognizance of the matters within the jurisdiction and is supreme within its own sphere. (People vs. Vera, 65 Phil. 63).

By the organic law of the Philippine Islands and the Constitution of the United States, all powers are vested in the Legislature, Executive and Judiciary, It is the duty of the Legislature to make the law; of the Executive to execute; and of the Judiciary to construe the law. The Legislature has no authority 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, the power of each branch is supreme within its own jurisdiction, and it is for the judiciary only to say when any Act of the Legislature is or is not constitutional. (U.S. vs. Ang Tang Ho, 48 Phil. 1). IV. Scope of the principle of separation of powers.

The three departments of the government are co-ordinate, co-important, co-equal and independent of each other; that each of the several departments of the government derives its authority directly or indirectly from the people and is responsible to them; that each has exclusive cognizance of the matters within its jurisdiction and is supreme within its own sphere. In the exercise of the powers of government assigned to them severally, the departments operate harmoniously and independently of the others and the action of any one of them in the exercise of its powers is not subject to the control by either of the others. (Province of Tarlac vs. Gale, 26 Phil. 338; Barcelona vs. Baker, 5 Phil. 87). V. Principle of checks and balances.

It does not follow from the fact that the three powers are to be kept separate and distinct that the Constitution intended them to be absolutely unrestrained and independent of each other. The Constitution has provided for

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the elaborate system of checks and balances to secure coordination in the workings of various departments of the government For example, the Chief Executive under our Constitution in so far made a check on the Legislative power that his assent is required in the enactment of laws. This, however, is subject to the further check that a bill may become a law notwithstanding the refusal of the President to approve it, by a vote of two-thirds or threefourths as the case may be, of the National Assembly. The President has also the right to convene the Assembly in special session whenever he chooses, On the other hand, the National Assembly operates as a check on the Executive in the sense that its consent through the Commission on Appointments is necessary in the appointment of certain officers; and the concurrence of a majority of all its members is essential to the conclusion of treaties. Furthermore, in Its power to determine what courts, other than the Supreme Court shall be established, to define their jurisdiction and to appropriate funds for the support, the National Assembly exercises to a certain ,extent control over the judicial power of trying impeachments and the judiciary in turn, with the Supreme Court as the final arbiter, effectively checks the other departments in the exercise of its power to determine the law, and hence, to declare executive and legislative acts void if violative of the Constitution. (Angara vs. Electoral Commission, supra). VI. Principle of non-delegation of powers.

The maxim of Constitutional law forbidding the delegation of legislative power should be zealously protected. "The true distinction, therefore, is between the delegation of power to make the law, which necessarily involves 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 the latter no valid objection can be made." (Cincinnati, W. & Z. R. Co. vs. Comrs. Clinton County, 1 Ohio St. 88) Rubi vs. Province of Mindoro, 39 Phil. 662.

Thus, an Act of the Philippine Legislature giving to the Board of Public Utility Commissioners power to require

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public utility "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" is invalid for the reason that it is a delegation of legislative power to the Board of Public Utility Commissioners and is in violation of the Act of July 1, 1902. (Compañia General de Tabacos de Filipinas vs. Board of Public Utility Commissioners, 34 Phil. 137). VII. Delegation of legislative power; historical development.

The power to make laws—the legislative power—is vested in a bicameral Legislature by the Jones Law and in a unicameral National Assembly by the Constitution. The Philippine Legislature or the National Assembly may not escape Its duties and responsibilities by delegating that power to any other body or authority. Any attempt to abdicate the power is unconstitutional and void, on the principle that potestas delegata, non delegare potest. This principle is said to have originated with the glossators, was. introduced into English, law through a misreading of Bracton, there developed as a principle of agency, was established by Lord Coke in the English public law in decisions forbidding the delegation of judicial power, and found its way into America as an enlightened principle of free Government. It has since become an accepted corollary of the principle of separation of powers. (People vs. Vera, supra). VIII. Exceptions to the principle of non-delegation.

The rule, however, which forbids the delegation of legislative power is not absolute and inflexible, It admits of exceptions, An exception sanctioned by immemorial practice permits the central legislative body to delegate legislative power to local authorities. On quite the same principle, Congress is empowered to delegate legislative power to such agencies in the territories of the United States as it may select. Courts have also sustained the delegation of legislative powers to the people at large, though some authorities maintain that this may not be done, Doubtless, also, legislative power may be delegated by the

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Constitution itself. Section 14, paragraph 2 of Article VI of the Constitution of the Philippines provides that "the National Assembly may by law authorize the President, subject to such limitations and restrictions as it may impose, to fix within specified limits, tariff rates, import or export quotas, and tonnage and wharfage dues." In times of war or other national emergency, the National Assembly may by law authorize the President, for a limited period and subject to such restrictions as it may prescribe, to promulgate rules and regulations to carry out a declared national policy. (People vs. Vera, supra).

The provision of section 1 of Commonwealth Act No. 548 does not confer legislative power upon the Director of Public Works and the Secretary 01 Public Works and Communications. The authority conferred upon them and under which they promulgated the rules and regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit, to promote safe transit upon, and avoid obstruction on roads and streets designated as national roads by Acts of the National Assembly and to close them temporarily to any or all classes of traffic "whenever the condition of the road or the traffic thereon makes such action necessary or advisable in the public convenience and interest." The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the application of said law is to be predicated. (Calalang vs. Williams, 70 Phil. 726). IX. Tests of undue delegation.

In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to inquire whether the statute was complete in all its terms and provisions when it left the hands of the legislature so that nothing is left to the judgment of any other appointee or delegate of the legislature. In U.S. vs. Ang Tang Ho (43 Phil. 1) the Supreme Court adhered to the foregoing rule. The general rule, however, is limited by another

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rule that to a certain extent matters of detail may be left to be filled in by rules and regulations to be adopted or promulgated by executive officers and administrative boards. As a rule, an act of the legislature is incomplete and hence, invalid if it does not lay down by any rule or definite standard by which the administrative board may be guided in the exercise of the discretionary powers delegated to it. (People vs. Vera, supra).

In one case, appellants argue that, while Act No. 2581 empowers the Insular Treasurer to issue and cancel certificates or permits for the sale of speculative securities, no standard or rule is fixed in the Act which can guide said official in determining the cases in which a certificate or permit ought to be issued, thereby making his opinion the sole criterion in the matter of its issuance, with the result that legislative powers being unduly delegated to the Insular Treasurer, Act No. 2581 is unconstitutional. The Court is of the opinion that the Act furnishes a sufficient standard for the Insular Treasurer to follow in reaching a decision regarding the issuance or cancellation of a certificate or permit,

In view of the intention and purpose of Act No. 2581—to protect the public against "speculative schemes which have no more basis than so many feet of blue sky" and against the "sale of stock in fly-by-night concerns, visionary oil wells, distant gold mines and other like fraudulent exploitations,"—the Court was inclined to hold that "public interest" in this case is suf f icient standard to guide the Insular Treasurer, in reaching a decision on a matter pertaining to the issuance of certificates or permits. (People vs. Rosenthal, 68 Phil. 328).

The Legislature cannot delegate legislative power to enact any law. If Act No. 2868 is a law unto itself and within itself, and it does nothing more than to authorize the Governor General to make rules and regulations to carry it into effect, then the Legislature 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 the crime and it is not complete, and some legislative act renains to be done to make it a law or a crime the doing

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of which is vested in the Governor General, the Act is a delegation of legislative power, and is unconstitutional and void. (People vs. Vera, supra).

The Probation Act does not, by the force of any of Its provisions, fix and impose upon the provincial boards any standard or guide in the exercise of their discretionary power. What is granted is a "roving commission'' which enables the provincial boards to exercise arbitrary discretion. By section 11 of the Act, the Legislature does seemingly on its own authority extend the benefits of the probation Act to the provinces but in reality leaves the entire matter for the various provincial boards to determine. If a provincial board does not wish to have the Act applied in its province, all that it has to do is to decline to appropriate the needed amount for the salary of a probation officer. This is a virtual surrender of legislative power to the provincial boards. (People vs. Vera, supra).

The legislature may enact laws for a particular locality different from those applicable to other localities and while recognizing the f orce of the principle hereinabove expressed, courts in many jurisdictions have sustained the constitutionality of the submission of option laws to the vote of the people. (6 R.C.L. 171). But option laws thus sustained treat of subjects purely local in character which should receive different treatment in different localities placed under different circumstances. Without denying the right of self-government and the propriety of leaving matters of purely local concern in the hands of local authorities or for the people of small communities to pass upon in the matters of general legislation like that which treats of criminals in general, and as regards the general subject of probation, discretion may not be vested in a manner so unqualified and absolute as provided in Act No. 4221. (People vs. Vera, supra). X. Distinction between power to make laws and discretion as to its execution.

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

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Abaño vs. Aguipo

as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made. (Cincinnati, W. & Z. R. Co. vs. Clinton Country Commissioners, 1 Ohio St. 77, 88.). See also Sutherland on Statutory Construction, sec. 68. To the same effect are decisions of the Supreme Court in the Municipality of Cardona vs. Municipality of Binañgonan, 36 Phil 547; Rubi vs. Provincial Board of Mindoro, 39 Phil. 860; Cruz vs. Youngberg, 56 Phil. 234; People vs. Vera, supra.—ATTY. JULIANA B. DE CASTRO,

Note.—When delegation of legislative powers is not alIowed. It was not the intention of Congress, in enacting Republic Act No. 997, to authorize the transfer of powers and jurisdiction of the courts of justice to the officials to be appointed or offices to be created by the Reorganization Plan. Congress is well aware of the provision of the Constitution that judicial powers are vested "only in the Supreme Court and in such courts as the law may establish." The Reorganization Commission was not authorized to create courts of justice, or to take away from them their jurisdiction and transfer said jurisdiction to create courts of justice, or take away from them their jurisdiction and transfer said jurisdiction to the officials appointed or offices created under the Reorganization Plan. The Legislature may not and cannot delegate its power to legislate or create courts of justice to any other agency of the Government. (Chinese Flour Importers' Association vs. Price Stabilization Board, L-4465, July 12, 1961; U.S. vs. Shrevoport, 287 U.S. 7777, L. Ed. 175 and Johnson vs. San Diego, 42 P. 249, cited in 11 Am, Jur. 921-922), Corominas. Jr. vs. Labor Standards Commission, 2 SCRA 721.

_______________ [Pelaez vs. Auditor General, 15 SCRA 569(1965)]

15 scra 569

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