CHAPTER III:
THE PHILIPPINES AS A STATE
FACTS:
Antonio Campos Rueda was the administrator of the estate of late Estrella Soriano Vda. de Cerdeira, a Spanish national and Tangier resident, in the Philippines. In the estate tax return he filed with the Collector of Internal Revenue, Rueda claimed the value of intangible personal properties as exempt from taxes under the proviso of Sec. 122, NIRC:
That no tax shall be collected under this Title in respect of intangible personal property (a) if the decedent at the time of his death was a resident of a foreign country which at the time of his death did not impose a transfer tax or death tax of any character in respect of intangible person property of the Philippines not residing in that foreign country, or (b) if the laws of the foreign country of which the decedent was a resident at the time of his death allow a similar exemption from transfer taxes or death taxes of every character in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country.
The Collector, however, denied the exemption and assessed the estate of deficiency estate and inheritance taxes (amounting to P161, 874.95) for the transfer of intangible personal properties in the Philippines. The Collector reasoned that there is no reciprocity between Tangier and the Philippines because Tangier is a mere
principality and not a foreign country within the meaning of Sec. 122, NIRC. In effect, the Collector insists that the acquisition of international personality is a condition sine qua non to Tangier being considered a "foreign country."
Upon appeal to the Court of Tax Appeals, the CTA ruled that the expression ―foreign country‖ in Sec. 122 refers to a government of that foreign power which, although not an international person in the sense of international law, does not impose transfer or death taxes upon intangible person properties of Philippine citizens not residing therein, or whose law allows a similar exemption from such taxes. It was therefore not necessary that Tangier should have been recognized by the Philippine Government in order to entitle the estate of Estrella to the exemption benefits of Sec. 122.
ISSUE: Whether Section 22, NIRC requires that the
―foreign country‖ possesses an international personality to come within its terms.
HELD:
No. The Supreme Court ruled that Tangier comes within the term ―foreign country‖ of Sec. 122 because independence is not a condition of statehood. The following definitions of a State were provided by the Court to justify Tangier‘s statehood:
- it is a politically organized sovereign community, independent of outside control, bound by penalties of nationhood, legally supreme within its territory, acting through a government functioning under a regime of law (Pound)
G.R.NO.L-13250,OCTOBER 29,1971
COLLECTOR OF INTERNAL REVENUE V. ANTONIO CAMPOSRUEDA
- a sovereign person with the people composing it, viewed as an organized corporate society under a government, with the legal competence to exact obedience to its commands (Willoughby)
- a body-politic organized by common consent for mutual defense and mutual safety and to promote the general welfare (Cooley)
- the juridical personification of the nation (Esmein) - a territorial society divided into government and subjects, claiming within its allotted area a supremacy over all other institutions (Laski)
- a nation, its people occupying a definite territory, politically organized, exercising by means of its government its sovereign will over the individuals within it and maintaining its separate international personality The SC emphasized, however, that as long as there is power entrusted to its government to maintain within its territory the conditions of a legal order and to enter into international relations (McIver), international law does not exact independence as a condition of statehood. Assuming that Tangier was bereft of international personality, jurisprudence supports the finding that Sec. 122 treats even a principality as a foreign country. Collector of Internal Revenue v. De Lara considered California as a foreign country. In Kiene v. Collector of Internal Revenue, the tiny principality of Liechtenstein, with hardly an international personality, was found to fall under the exemption of Sec. 122.
FACTS:
Conchita Romualdez-Yap filed a petition for certiorari to question her separation from the Philippine National Bank. She was the Senior Vice President of the Fund Trust Department of PNB. While she was on leave of absence for medical reasons (April 1, 1986 – February 20, 1987), PNB underwent reorganization (December 3, 1986 by virtue of the Revised Charter of PNB or Executive Order No. 80) that caused the abolition of the Fund Trust Department. As a result of the reorganization, Romualdez-Yap was notified of her separation from service (effective February 1987, though the letter erroneously stated 1986). She contested her separation in the Civil Service Commission, arguing that her separation was made in bad faith because, among others: (1) it was based on her close identification with the previous regime, being the sister of Imelda Marcos; (2) her separation was antedated on February 16, 1986, prior to the effectivity of Executive Order No. 80 on December 3, 1986; (3) the Fund Transfer Department has recently been restored; and (4) she was not extended preference in appointment to the positions in the new staff.
The CSC and the Supreme Court upheld the validity of her separation.
ISSUE: Whether the separation arising from reorganization was made in good faith
G.R.NO.104226,AUGUST 12,1993
CONCHITA ROMUALDEZ-YAP V. CIVIL SERVICE COMMISSION AND PHILIPPINENATIONAL BANK
HELD: YES
1. Requirements for a valid reorganization
Reorganization is a management prerogative exercised pursuant to a business judgment. While a distinction can be made between a government bureau or office performing constituent functions (e.g. Customs) and a government-owned or controlled corporation performing ministrant functions (e.g. PNB), the common test for their valid reorganizations is the test of good faith.
CONSTITUENT FUNCTIONS are those which
constitute the very bonds of society and are compulsory in nature. These are functions which our government is required to exercise to promote its objectives as expressed in our Constitution and which are exercised by it as an attribute of sovereignty.
On the other hand, MINISTRANT FUNCTIONS are those undertaken by way of advancing the general interests of society, and are merely optional functions of government. These are functions which it may exercise to promote merely the welfare, progress and prosperity of the people. The option is exercised on the basis of the following are the principles: (1) that a government should do for the public welfare those things which private capital would not naturally undertake; and (2) that a government should do those things which by its very, nature it is better equipped to administer for the public welfare than is any private individual or group of individuals (Malcolm, The Government of the Philippine Islands). Examples are commercial or universal banking which is, not a governmental but, a private sector endeavor.
Reorganization in either case must be made in good faith. According to Dario v. Mison: Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. Reorganization is carried out in "good faith" if: (1) it is for the purpose of economy, or (2) to make bureaucracy more efficient. In those events, no dismissal (in case of dismissal) or separation actually occurs because the position itself ceases to exist. Otherwise, an "abolition" is void ab initio if it is nothing else but a separation or removal, is done for political reasons or purposely to defeat security of tenure, or otherwise not in good faith.
2. The reorganization of PNB was done in good faith.
The SC found the following circumstances as indicative of PNB‘s good faith in pursuing reorganization:
it was by virtue of a valid law
it was pursued to achieve economy considering PNB‘s critical financial situation at the time
the year "1986" stated in the notice of her separation from the service was a typographical error where PNB had submitted documents supporting its stand that the separation actually took effect on 16 February 1987.
the later restoration of the Fund Transfer Department, which took effect after the lapse of over four years from the date it was abolished in 1987, was primarily caused by the improved financial capability and present needs of PNB
the appointment of SVP Federico Pascual as head of the International Department, from among other
officers including Yap, is because his qualifications far exceeded those of the other candidates for the position, being a lawyer from the University of the Philippines, a Bachelor of Arts degree holder from Ateneo de Manila, a Master of Laws graduate of Columbia Law School, and a Masteral Arts in Public Administration graduate of the London School of Economics; he had also undergone extensive seminars at the International Department and had been assigned in several foreign branches of PNB; he held the second highest position of Executive Vice President and served as Acting President of PNB; while Yap only holds a Bachelor of Science in Commerce Degree from Assumption Convent and has undergone only one seminar on Management and Leadership Training Program.
Assuming that her separation was made in bad faith, an action for a quo warranto proceeding prescribes 1 year from the questioned termination. She was separated from PNB on February 16, 1987 and it was only in 1989 or about 2 years after when she brought the matter to the CSC. By her inaction in questioning her termination within a period of 1 year, she was considered to have acquiesced to her separation from the service and abandoned her right to the position.
FACTS:
Sps. Fontanilla sued the National Irrigation Administration for damages, arising from the tortious act of its driver, Hugo Garcia. NIA denied liability, alleging that it is a government agency tasked with governmental functions and is, therefore, not liable for the tortious acts of its driver who is not a special agent. The SC had ruled that NIA was liable as a government entity exercising proprietary functions. Thus NIA filed a Motion for Reconsideration on the ground that it is a governmental entity.
ISSUE: Whether NIA is a government entity exercising
governmental or proprietary functions.
HELD:
1. NIA is a governmental entity exercising proprietary functions.
Governmental functions are classified into governmental / constituent and proprietary / ministrant.
GOVERNMENTAL / CONSTITUENT FUNCTIONS
involve the exercise of sovereignty and are thus
considered as compulsory. PROPRIETARY /
MINISTRANT FUNCTIONS connote merely the
G.R.NOS.L-55963&61045,FEBRUARY 27,1991
SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA V. HONORABLE INOCENCIO D.
MALIAMAN AND NATIONAL IRRIGATION
ADMINISTRATION
NATIONAL IRRIGATION ADMINISTRATION V. SPOUSES JOSE FONTANILLA AND VIRGINIA
exercise of proprietary functions and thus considered as optional.
2. The operation of an irrigation system is a proprietary function.
In the United States where its irrigation districts are identical to Philippine irrigation systems, irrigation districts are characterized, according to jurisprudence, as public quasi corporations organized to conduct a business for the private benefit of the owners of land within its limits (Nampa v. Nampa & M. Irrig. Dist.). They are not considered as exercising sovereign functions where they furnish no facilities for the administration of the sovereign government and its officers have no power or authority to exercise any of the functions of the general government, or to enforce any of the laws of the state or any of its other subdivisions, or collect taxes other than those assessed by the district. They have no more power or authority than that of the officers of a private corporation organized for like purposes (Holderbaum vs. Hidalgo County Water Improvement District). They are thus considered as businesses because the land owners, as members of the corporation, control the affairs of the district and alone are benefited by its operations. While public benefit and public welfare may be found in the operation of certain enterprises (like those engaged in the supply of electric power, or in supplying telegraphic, telephonic, and radio communication, or in the production and distribution of prime necessities,), and even though the service rendered caters to the community as a whole and the goal is for the general interest of society (NAWASA v. NWSA Consolidated
Unions), the functions performed by such enterprises are basically proprietary in nature. Its general purposes are not essentially public in their nature, but are only incidentally so.
Therefore, an irrigation district is the owner of its system in a proprietary rather than a public capacity, and must assume and bear the burdens of proprietary ownership (Nampa v. Nampa & M. Irrig. Dist.). According to McQuillin (The Law of Municipal Corporations), when municipalities undertake to supply water at price, they are engaged in trade. Although the State may regulate the service and rates of water plants owned and operated by municipalities, such property is not employed for governmental purposes and in the ownership and operation thereof, the municipality acts in its proprietary capacity, free from legislative interference. Consequently, they are liable as any private company would be for any negligence in laying out of its pipes, in keeping them in repair, or in furnishing potable water through them.
NIA was not created for purposes of local government. NIA was created as a body corporate with a corporate personality separate and distinct from the government for the purpose of "constructing, improving, rehabilitating, and administering all national irrigation systems in the Philippines, including all communal and pump irrigation projects." While it is essentially a service agency of the government aimed at promoting public interest and public welfare, such fact does not make NIA essentially and purely a "government-function" corporation. Certainly, the state and the
community as a whole are largely benefited by the services NIA renders, but these functions are only incidental to the principal aim of the agency, which is the irrigation of lands.
FACTS:
An action for revival of judgment was instituted by the Republic of the Philippines but which the Court dismissed, having found that the Republic was not the real party in interest.
The issue began when Rafael Galvez obtained an Original Certificate of Title over four lots in La Union. He sold Lots 1 and 4 to Mamaril, Llana, Bustos and Balatbat, who obtained TCTs in their names and who, in turn, subsequently sold the same lots to Lepanto Consolidated Mining Company. Lepanto obtained a TCT in its name. Meanwhile, unknown to Lepanto, CFI La Union ordered the cancellation of Galvez/s title over the lots in a land registration case initiated by the Republic of the Philippines. The Order was issued on February 1, 1963, but the same subjects lots were unknowingly sold by Lepanto to Shipside Incorporated on October 28, 1963. Shipside had obtained a TCT in its name and had been exercising proprietary rights since then.
The CFI Order was contested by Galvez, but was affirmed by the Court of Appeals. The CA Decision became final and executory on October 23, 1973. A writ of execution was issued and served upon the
Register of Deeds. However, the writ had not been executed for 24 years until the OSG, representing the Republic of the Philippines, initiated a complaint for revival of judgment and cancellation of titles on April 21, 1999, against the successors-in-interest of Rafael Galvez.
Shipside filed a Motion to Dismiss on the ground that the Republic was not the real party in interest because the real property covered by the titles were allegedly part of Camp Wallace (Wallace Air Station) and under the ownership and administration of the Bases Conversion Development Authority under Republic Act No. 7227; and that the action has prescribed. The Republic, however, countered that prescription does not run against the State, which is still the real party in interest because the transfer of the military reservations to the Conversion Authority does not amount to an abdication on the part of the Republic of its interests, but simply a recognition of the need to create a body corporate which will act only as its agent for the realization of its program. The MTD was dismissed thus Shipside raised the issue before the Supreme Court.
ISSUE: Whether or not the Republic of the Philippines
is a real party in interest and can thus claim the imprescriptibility of the State‘s action – N
HELD:
The action to revive judgment has prescribed (CA Decision became final on October 23, 1973 while the action for revival of judgment was instituted only in 1999, or more than 25 years) under NCC 1144(3): an
G.R.NO.143377,FEBRUARY 20,2001
SHIPSIDE INCORPORATED V. COURT OF APPEALS AND THE REPUBLICOFTHEPHILIPPINES
action upon a judgment "must be brought within 10 years from the time the right of action accrues."
The Republic, represented by the OSG, cannot invoke imprescriptibility of State actions because the Republic is not the real party in interest, having transferred the ownership of Camp Wallace, which used to belong to the government, to the Bases Conversion and Development Authority. Under Sec. 4 of R.A. 7227 (Bases Conversion and Development Act of 1992), the BCDA owns, holds and/or administers military reservations including Wallace Air Station and, under Sec. 4, all areas covered by the Wallace Air Station are hereby transferred to the BCDA. Being the owner of the areas covered by Camp Wallace, it is the BCDA, not the Government, which stands to be benefited if the land covered by Shipside‘s title is cancelled.
The Republic also cannot invoke the relationship of mere agency between the Government and BCDA. BCDA is an entity invested with a personality separate and distinct from the government, having been created as a body corporate and vested with the powers of a corporation (Sec. 3, R.A. 7227). It is not a mere agency of the Government but a corporate body performing proprietary functions. While public benefit and public welfare, particularly, the promotion of the economic and social development of Central Luzon, may be attributable to the operation of the BCDA, yet it is certain that the functions performed by the BCDA are basically proprietary in nature. The promotion of economic and social development of Central Luzon, in particular, and the country's goal for enhancement, in
general, do not make the BCDA equivalent to the Government. Other corporations have been created by government to act as its agents for the realization of its programs, the SSS, GSIS, NAWASA arid the NIA, to count a few, and yet, the Court has ruled that these entities, although performing functions aimed at promoting public interest and public welfare, are not government-function corporations invested with governmental attributes.
The Republic cannot also invoke E.B. Marcha Transport Co., Inc. v. IAC which held that the Republic is the proper party to sue for the recovery of possession of property, which, at the time of the institution of the suit, was no longer held by the national government but by the Philippine Ports Authority. In E.B. Marcha, the claims of the Republic and the Philippine Ports Authority against the petitioner therein were the same and to dismiss the complaint in E.B. Marcha would have brought needless delay in the settlement of the matter since the PPA would have to re-file the case on the same claim already litigated upon. Such is not the case at bar since to allow the government to sue herein enables it to raise the issue of imprescriptibility, a claim which is not available to the BCDA. The rule that prescription does not run against the State does not apply to corporations or artificial bodies created by the State for special purposes, it being said that when the title of the Republic has been divested, its grantees, although artificial bodies of its own creation, are in the same category as ordinary persons (Kingston v. LeHigh Valley Coal Co., 241 Pa 469). To hold otherwise is to begin bad precedent as it would allow the Republic to
prosecute, on behalf of government-owned or controlled corporations, causes of action which have already prescribed, on the pretext that the Government is the real party in interest against whom prescription does not run, said corporations having been created merely as agents for the realization of government programs.
FACTS:
Labor claims (overtime compensations) were filed by laborers against the Philippine Virginia Tobacco Administration before the Court of Industrial Relations. The claims were granted by CIR. PVTA sought to declare the nullity of the decision on the ground that CIR had no jurisdiction over it and that the Eight-Hour Labor Law did not apply to it being an agency exercising governmental functions.
The laborers of PVTA sued the latter before the CIR for payment of their overtime services (in excess of the regular eight hours a day rendered by them) by virtue of the Eight-Hour Labor Law (C.A. No. 444). PVTA sought the dismissal of the suit on the following ground that it is an agency exercising governmental functions and by such reason, the 8-Hour Labor Law does not apply to it (lack of cause of action) and the CIR has no jurisdiction. The CIR ignored these defenses and ruled in favor of the laborers.
ISSUES:
Whether or not PVTA exercises governmental functions – Y
Whether or not agencies exercising governmental functions fall outside the jurisdiction of the CIR and the operation of the Eight-Hour Labor Law – N
HELD:
1. PVTA is an agency exercising governmental functions.
Under its Charter (R.A. 2265), PVTA was established to, among others, promote the effective merchandising of Virginia tobacco in the domestic and foreign markets so that those engaged in the industry will be placed on a basis of economic security; create, establish, maintain, and operate processing, warehousing and marketing facilities in suitable centers and supervise the selling and buying of Virginia tobacco so that the farmers will enjoy reasonable prices that secure a fair return of their investments; and improve the living and economic conditions of the people engaged in the tobacco industry.
The distinction, however, between constituent and ministrant functions of governments as set forth in Bacani v. National Coconut Corporation has become futile in the era of welfare states where the increased responsibility to provide for the general welfare necessitated the expanded role of government. According to Laski, "a definite increase in the profundity of the social conscience," resulted in "a state which seeks to realize more fully the common good of its members." Chief Justice Makalintal explained in
G.R.NO.L-32052,JULY 25,1975
PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION
Agricultural Credit and Cooperative Financing Administration v. Confederation of Unions in Government Corporations and Offices how the welfare state concept and the policy for social justice has blurred the distinction of the traditional functions of governmental agencies: the increasing social challenges of the times necessitated the government to undertake private enterprise and initiative, in its sovereign capacity, and to move towards a greater socialization of economic forces for the promotion of social justice. As the welfare state concept "is not alien to the philosophy of [the 1935] Constitution", it is thus much more so under the present Charter (1987 Constitution), which is impressed with an even more explicit recognition of social and economic rights.
Functions of that sort [general welfare] "may not be strictly what President Wilson described as "constituent" (as distinguished from "ministrant"), such as those relating to the maintenance of peace and the prevention of crime, those regulating property and property rights, those relating to the administration of justice and the determination of political duties of citizens, and those relating to national defense and foreign relations. Under this traditional classification, such constituent functions are exercised by the State as attributes of sovereignty, and not merely to promote the welfare, progress and prosperity of the people — these latter functions being ministrant, the exercise of which is optional on the part of the government.
Nonetheless, the growing complexities of modern society, however, have rendered this traditional classification of the functions of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally, and only "because it was better equipped to administer for the public welfare than is any private individual or group of individuals", continue to lose their well-defined boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere else the tendency is undoubtedly towards a greater socialization of economic forces. Here of course this development was envisioned, indeed adopted as a national policy, by the Constitution itself in its declaration of principle concerning the promotion of social justice.
Accordingly, in Rubi v. Provincial Board, the Court found that the modern period has shown a widespread belief in the amplest possible demonstration of government activity. Edu v. Ericta ruled that laissez-faire was rejected by the 1987 Constitution, having entrusted to our government the responsibility of coping with social and economic problems with the commensurate power of control over economic affairs. The State could thus live up to its commitment to promote the general welfare through state action. Through such activities, "the
harsh contract which [does] obtain between the levels of the rich and the poor" may be minimized. There is no longer any constitutional obstacle to a government pursuing lines of endeavor, formerly reserved for private enterprise. It is a response to a trend noted by Justice Laurel in Calalang v. Williams for the humanization of laws and the promotion of the interest of all component elements of society so that man's innate aspirations be attained.
2. The exercise of governmental functions does not exempt an agency from the operation of labor laws.
Naric Worker's Union v. Hon. Alvendia ruled that it is precisely CIR and not ordinary courts that should pass upon labor controversies. On the other hand, the Eight-Hour Labor Law provides that it shall apply to all persons employed in any industry or occupation, whether public or private.
FACTS:
Teddy Galo assails the constitutionality of Administrative Order No. 2 (―the Reflector Law‖) on the
grounds that: 1. It violates the due process clause, following the American principle of laissez faire, and 2. It constitutes an unlawful delegation of legislative power. The Reflector Law reads: "(g) Lights and reflector when parked or disabled. — Appropriate parking lights or flares visible one hundred meters away shall be displayed at a corner of the vehicle whenever such vehicle is parked on highways or in places that are not well-lighted or is placed in such manner as to endanger passing traffic. Furthermore, every motor vehicle shall be provided at all times with built-in reflectors or other similar warning devices either pasted, painted or attached to its front and back which shall likewise be visible at light at least one hundred meters away. No vehicle not provided with any of the requirements mentioned in this subsection shall be registered."
ISSUE: W/N the ―Reflector Law‖ violates the due
process clause, following the American principle of laissez faire.
HELD: No, it does not. The Laissez faire principle is
rejected my contemporary American jurisprudence and by Philippine Constitution and jurisprudence.
Definition of police power (―the greatest and most powerful attribute of government‖):
―state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare. Persons and property could thus "be subjected to all kinds of restraints and burdens in order
ROMEO F. EDU, IN HIS CAPACITY AS LAND
TRANSPORTATION COMMISSIONER V. HON. VICENTE G.
ERICTA IN HIS CAPACITY AS JUDGE OF THE COURT OF
FIRST INSTANCE OF RIZAL, BR. XVIII, QUEZON CITY, AND
to secure the general comfort, health and prosperity of the state." ~Calalang v. Williams
―the power to prescribe regulations to promote the health, morals, peace, education, good order or safety, and general welfare of the people." ~Primicias v. Fugoso
2. Laissez faire principle no longer recognized in US. There was a period in American history where series of legislations tending to reduce economic inequality (e.g. in People v. Pomar, a provision providing for maternity leave with pay thirty days before and thirty days after confinement; in Adkins v. Children's Hospital, a statute providing for minimum wages) were struck down as violative of the due process clause, under the theory that individuals should have unrestricted freedom in entering into contracts (laissez faire).
But under Pres. Roosevelt‘s ―The New Deal administration‖ the US Supreme Court began rejecting the laissez faire doctrine.
3. Laissez faire doctrine had always been rejected in the Philippines
Rubi v. Provincial Board of Mindoro: ―The doctrines of laissez-faire and of unrestricted freedom of the individual, as axioms of economic and political theory, are of the past‖
―the Constitutional Convention saw to it that the concept of laissez-faire was rejected. It entrusted to our government the responsibility of coping with social and economic problems with the commensurate power of control over economic affairs. Thereby it could live up to its commitment to promote the general welfare through
state action. No constitutional objection to regulatory measures adversely affecting property rights, especially so when public safety is the aim, is likely to be heeded, unless of course on the clearest and most satisfactory proof of invasion of rights guaranteed by the Constitution.‖
Justice Laurel, concurring in Antamok Goldfields Mining Co. v. Court of Industrial Relations, said that the 1935 Constitution did away with the laissez-faire doctrine.
‖during the Commonwealth era, no constitutional infirmity was found to have attached to legislation
covering such subjects as collective
bargaining, 22 security of tenure, 23 minimum wages, 24 compulsory arbitration, 25 the regulation of tenancy 26 as well as the issuance of securities, 27 and control of public services.‖
4. ―Galo thus could have profited by a little more diligence in the scrutiny of Philippine decisions rendered with not unexpected regularity, during all the while our Constitution has been in force attesting to the demise of such a shibboleth as laissez-faire…The Reflector Law is thus immune from the attack so recklessly hurled against it. It can survive, and quite easily too, the constitutional test.‖
ISSUE: W/N the ―Reflector Law‖ (A.O.) is contrary to the
principle of non-delegation of legislative power.
HELD: No, it is not.
The A.O. states: ―No motor vehicles of whatever style, kind, make, class or denomination shall be registered if not equipped with reflectors. Such
reflectors shall either be factory built-in-reflector commercial glass reflectors, reflection tape or luminous paint. The luminosity shall have an intensity to be maintained visible and clean at all times such that if struck by a beam of light shall be visible 100 meters away at night."
penalty for non-compliance is rejection or suspension of vehicle‘s registration and a fine.
―It is a fundamental principle flowing from the doctrine of separation of powers that Congress may not delegate its legislative power to the two other branches of the government… What cannot be delegated is the authority under the Constitution to make laws and to alter and repeal them…‖
A distinction has rightfully been made between delegation of power to make the laws which necessarily involves a discretion as to what it shall be, which constitutionally may not be done, and delegation of authority or discretion as to its execution to exercised under and in pursuance of the law, to which no valid objection call be made.
‖The test is the completeness of the statute in all its term and provisions when it leaves the hands of the legislature…The legislature does not abdicate its functions when it describes what job must be done, who is to do it, and what is the scope of his authority.‖
Justice J. B. L. Reyes in People vs. Exconde: "It is well establish in this jurisdiction that, while the making of laws is a non-delegable activity that corresponds exclusively to Congress, nevertheless the latter may constitutionally delegate authority to promulgate rules and regulations to implement a given legislation and effectuate its policies, for the reason that the legislature
often finds it impracticable (if not impossible) to anticipate and proved for the multifarious and complex situations that may be met in carrying the law in effect. All that is required is that the regulation should germane to the objects and purposes of the law; that the regulation be not in contradiction with it; but conform to the standards that the law prescribes ... "
‖It bears repeating that the Reflector Law construed together with the Land Transportation Code. Republic Act No. 4136, of which it is an amendment, leaves no doubt as to the stress and emphasis on public safety which is the prime consideration in statutes of this character. There is likewise a categorical affirmation Of the power of petitioner as Land Transportation Commissioner to promulgate rules and regulations to give life to and translate into actuality such fundamental purpose.
FACTS:
the Philippine Coconut Authority issued on March 24, 1993 Resolution No. 018-93, providing for the withdrawal of the Philippine Coconut Authority from all regulation of the coconut product processing industry. In its whereas clause, it stated that it is the policy of the State to promote free enterprise unhampered by protective regulations and unnecessary bureaucratic red tapes. As such, the PCA will no longer require any coconut processing plant to apply with PCA and the
ASSOCIATION OF PHILIPPINE COCONUT
DESICCATORS V. PHILIPPINE COCONUT AUTHORITY
latter shall no longer issue any form of license or permit as condition prior to establishment or operation of such mills or plants. Rather, it shall limit itself only to simply registering coconut product processors for the purpose of monitoring their volumes of production, administration of quality standards.
The PCA then proceeded to issue "certificates of registration" to those wishing to operate desiccated coconut processing plants, prompting petitioner to appeal to the Office of the President
When petitioner received no reply from the Office of the
President, they brought this suit for
certiorari and mandamus before the SC.
PCA: case should be dismissed as they did not wait for President‘s reply, thereby violating principle of exhaustion of administrative remedies.
ISSUE: W/N rule on exhaustion of administrative
remedies applies.
HELD: No, it does not.
―The rule of requiring exhaustion of administrative remedies before a party may seek judicial review…has obviously no application here. The resolution in question was issued by the PCA in the exercise of its rule-making or legislative power. However, only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion doctrine.‖
ISSUE: W/N PCA‘s resolution is valid. HELD: No, it does not.
―The Philippine Coconut Authority is… an independent public corporation . . . directly reporting to, and supervised by, the President of the Philippines, and charged with carrying out the State's policy "to promote the rapid integrated development and growth of the coconut industry…through a regulatory scheme set up by law.‖
Through this scheme, the government, on August 28, 1982, temporarily prohibited the opening of new coconut processing plants and, four months later, phased out some of the existing ones in view of overproduction in the coconut industry which resulted in cut-throat competition, underselling and smuggling of poor quality products and ultimately in the decline of the export performance of coconut-based commodities. The establishment of new plants could be authorized only upon determination by the PCA of the existence of certain economic conditions and the approval of the President.
On December 6, 1982, a phase-out of some of the existing plants was ordered by the government after finding that "a mere freeze in the present capacity of existing plants will not afford a viable solution to the problem considering that the total available limited market is not adequate to support all the existing processing plants, making it imperative to reduce the number of existing processing plants.
It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87, authorizing the establishment and operation of additional DCN plants, subject to the approval of the President, in view of the increased demand for desiccated coconut products in the world's markets. This authorized the opening of new
plants in "non-congested areas only as declared by the PCA" and subject to compliance by applicants with "all procedures and requirements for registration. This form of "deregulation" was approved by President Aquino. ―These measures — the restriction in 1982 on entry into the field, the reduction the same year of the number of the existing coconut mills and then the lifting of the restrictions in 1987 — were adopted within the framework of regulation as established by law "to promote the rapid integrated development and growth of the coconut industry.‖ The PCA could have only worked under this structure.
―In plain disregard of this legislative purpose, the PCA adopted on March 24, 1993 the questioned resolution which allows not only the indiscriminate opening of new coconut processing plants but the virtual dismantling of the regulatory infrastructure…In effect, the PCA would simply be compiling statistical data on these matters, but in case of violations of standards there would be nothing much it would do. ―
Under the Revised Coconut Code, the role of the PCA is "To formulate and adopt a general program of development for the coconut and other palm oil industry in all its aspects." And ―To regulate the marketing and the exportation of copra and its by-products by establishing standards for domestic trade and export..‖ By limiting the purpose of registration to merely "monitoring volumes of production [and] administration of quality standards" of coconut processing plants, the PCA in effect abdicates its role and leaves it almost completely to market forces how the coconut industry will develop. The result can very well be a repeat of 1982 when free enterprise degenerated into a
"free-for-all," resulting in cut-throat competition, underselling, the production of inferior products and the like, which badly affected the foreign trade performance of the coconut industry.
In the first "whereas" clause of the questioned resolution as set out above, the PCA invokes a policy of free enterprise that is "unhampered by protective regulations and unnecessary bureaucratic red tape" as justification for abolishing the licensing system. But free enterprise does not call for removal of "protective regulations."
At all events, any change in policy must be made by the legislative department of the government. The regulatory system has been set up by law. It is beyond the power of an administrative agency to dismantle it.
FACTS:
About $400,000, were subscribed and paid into the treasury of the Philippine Islands by the inhabitants of the Spanish Dominions of the relief of those damaged by the earthquake which took place in the Philippine Islands on June 3, 1863.
Subsequently, a central relief board was appointed to distribute the money. It allotted $365,703.50 to the various sufferers named in its resolution, which was published in the Official Gazette.
Upon the petition of the governing body of the Monte de Piedad, the Philippine Government directed its treasurer to turn over to the Monte de Piedad the sum of
THEGOVERNMENTOF THEPHILIPPINEISLANDS V.
EL MONTE DE PIEDAD Y CAJA DE AHORRAS DE MANILA
$80,000 of the relief fund in four installments of $20,000 each.
On account of various petitions of the originally intended beneficiaries of the money, the Philippine Government sued Monte de Piedad to recover the $80,000. The lower court ruled in favor of the Government.
Monte de Piedad asserts:
1. The sum was actually a donation, not a loan,
2. the obligation on the part of the Monte de Piedad to return the $80,000 to the Government, even considering it a loan, was wiped out on the change of sovereignty. Hence, the present Philippine government cannot maintain this suit.
3. The Philippine Government has no competence to institute the suit. The money was part of a charitable subscription, whereby the donors were people in Spain, the donees were people in the Philippines, and the Government was merely a trustee. It was never the owner of the money, and therefore could not sue for its recovery as it is not the proper party.
4. Monte de Piedad declined to return the $80,000 when ordered to do so by the Department of Finance in June, 1893, the plaintiff's right of action had prescribed at the time this suit was instituted on May 3, 1912
HELD:
1. Evidence shows that the money was a loan, not a donation.
The Monte de Piedad, after setting forth in its petition to the Governor-General its financial condition and its absolute necessity for more working capital, asked that out of the sum of $100,000 held in the Treasury of the
Philippine Islands, at the disposal of the central relief board, there be transferred to it the sum of $80,000 to be held under the same conditions, to wit, "at the disposal of the relief board." The Monte de Piedad agreed that if the transfer of these funds should not be approved by the Government of Spain, the same would be returned forthwith. It did not ask that the $80,000 be given to it as a donation.
2. The present Philippine government has the prerogative to enforce charities, as parens patriae
If the above-mentioned legal provisions are in conflict with the political character, constitution or institutions of the new sovereign, they became inoperative or lost their force upon the cession of the Philippine Islands to the United States, but if they are among "that great body of municipal law which regulates private and domestic rights," they continued in force and are still in force unless they have been repealed by the present Government. That they fall within the latter class is clear from their very nature and character.
Furthermore, upon the cession of the Philippine Islands the prerogatives of he crown of Spain devolved upon he United States. Chancellor Kent: ―In this country, the legislature or government of the State, as parens patriae, has the right to enforce all charities of public nature, by virtue of its general superintending authority over the public interests, where no other person is entrusted with it.‖ .
Mormon Church v US: ―it is a most beneficient functions, and often necessary to be exercised in the interest of humanity, and for the prevention of injury to those who cannot protect themselves.
Sohier vs. Mass. General Hospital: this beneficient functions has not ceased t exist under the change of government from a monarchy to a republic; but that it now resides in the legislative department, ready to be called into exercise whenever required for the purposes of justice and right, and is a clearly capable of being exercised in cases of charities as in any other cases whatever.
3. The Philippine government has competence to sue. It would be impracticable for them to institute an action or actions either individually or collectively to recover the $80,000. The only course that can be satisfactorily pursued is for the Government to again assume control of the fund and devote it to the object for which it was originally destined.
To deny the Government's right to maintain this action would be contrary to sound public policy, as tending to discourage the prompt exercise of similar acts of humanity and Christian benevolence in like instances in the future.
4. The action has not and can not prescribe.
U. S.vs. Nashville, Chattanooga & St. Louis Railway Co.: ―the United States, asserting rights vested in it as a sovereign government, is not bound by any statute of limitations, unless Congress has clearly manifested its intention that it should be so bound‖
the Philippine Government is not a mere nominal party because it, in bringing and prosecuting this action, is exercising its sovereign functions or powers and is seeking to carry out a trust developed upon it when the Philippine Islands were ceded to the United States.
FACTS:
Co Kim Chan had a pending civil case, initiated during the Japanese occupation, with the Court of First Instance of Manila. After the Liberation of the Manila and the American occupation, Judge Arsenio Dizon refused to continue hearings on the case, saying that a proclamation issued by General Douglas MacArthur had invalidated and nullified all judicial proceedings and judgments of the courts of the Philippines and, without an enabling law, lower courts have no jurisdiction to take cognizance of and continue judicial proceedings pending in the courts of the defunct Republic of the Philippines (the Philippine government under the Japanese).
ISSUES:
1. Whether or not judicial proceedings and decisions made during the Japanese occupation were valid and remained valid even after the American occupation; 2. Whether or not the October 23, 1944 proclamation MacArthur issued in which he declared that ―all laws, regulations and processes of any other government in the Philippines than that of the said Commonwealth are null and void and without legal effect in areas of the Philippines free of enemy occupation and control‖ invalidated all judgments and judicial acts and
proceedings of the courts;
3. And whether or not if they were not invalidated by MacArthur‘s proclamation, those courts could continue hearing the cases pending before them.
RATIO:
Political and international law recognizes that all acts and proceedings of a de facto government are good and valid. The Philippine Executive Commission and the Republic of the Philippines under the Japanese occupation may be considered de facto governments, supported by the military force and deriving their authority from the laws of war.
Municipal laws and private laws, however, usually remain in force unless suspended or changed by the conqueror. Civil obedience is expected even during war, for ―the existence of a state of insurrection and war did not loosen the bonds of society, or do away with civil government or the regular administration of the laws. And if they were not valid, then it would not have been necessary for MacArthur to come out with a proclamation abrogating them.
The second question, the court said, hinges on the interpretation of the phrase ―processes of any other government‖ and whether or not he intended it to annul all other judgments and judicial proceedings of courts during the Japanese military occupation.
IF, according to international law, non-political judgments and judicial proceedings of de facto governments are valid and remain valid even after the occupied territory has been liberated, then it could not have been MacArthur‘s intention to refer to judicial processes, which would be in violation of international law.
A well-known rule of statutory construction is: ―A statute ought never to be construed to violate the law of nations if any other possible construction remains.‖ Another is that ―where great inconvenience will result from a particular construction, or great mischief done, such construction is to be avoided, or the court ought to presume that such construction was not intended by the makers of the law, unless required by clear and unequivocal words.‖
Annulling judgments of courts made during the Japanese occupation would clog the dockets and violate international law, therefore what MacArthur said should not be construed to mean that judicial proceedings are included in the phrase ―processes of any other governments.‖
In the case of US vs Reiter, the court said that if such laws and institutions are continued in use by the occupant, they become his and derive their force from him. The laws and courts of the Philippines did not become, by being continued as required by the law of
nations, laws and courts of Japan.
It is a legal maxim that, excepting of a political nature, ―law once established continues until changed by some competent legislative power. IT IS NOT CHANGED MERELY BY CHANGE OF SOVEREIGNTY.‖ Until, of course, the new sovereign by legislative act creates a change.
Therefore, even assuming that Japan legally acquired sovereignty over the Philippines, and the laws and courts of the Philippines had become courts of Japan, as the said courts and laws creating and conferring jurisdiction upon them have continued in force until now, it follows that the same courts may continue exercising the same jurisdiction over cases pending therein before the restoration of the Commonwealth Government, until abolished or the laws creating and conferring jurisdiction upon them are repealed by the said government.
DECISION: Writ of mandamus issued to the judge of
the Court of First Instance of Manila, ordering him to take cognizance of and continue to final judgment the proceedings in civil case no. 3012.
SUMMARY OF RATIO:
1. International law says the acts of a de facto government are valid and civil laws continue even
during occupation unless repealed.
2. MacArthur annulled proceedings of other governments, but this cannot be applied on judicial proceedings because such a construction would violate
the law of nations.
3. Since the laws remain valid, the court must continue
hearing the case pending before it.
***3 kinds of de facto government: one established through rebellion (govt gets possession and control through force or the voice of the majority and maintains itself against the will of the rightful government) through occupation (established and maintained by military forces who invade and occupy a territory of the enemy in the course of war; denoted as a government
of paramount force) through insurrection (established as an independent government by the inhabitants of a country who rise in insurrection against the parent state)
(source:
http://danabatnag.wordpress.com/2008/12/04/co-kim-chan-v-valdez-tan-keh/)
FACTS:
Secretary of the Philippine Senate, Fernando M. Guerrero, discovered that certain documents which constituted the records of testimony given by witnesses in the investigation of oil companies, had disappeared from his office. Senate was convened and was informed of the loss.
Subsequently, the newspaper La Nacion, edited by Mr. Gregorio Perfecto, published an article reading as follows: ―Half a month has elapsed since the discovery, for the first time, of the scandalous robbery of records which were kept and preserved in the iron safe of the Senate, yet up to this time there is not the slightest indication that the author or authors of the crime will ever be discovered…To find them, it would not, perhaps, be necessary to go out of the Senate itself,.. The author or authors of the robbery of the records from the said iron safe of the Senate have, perhaps, but followed the example of certain Senators who secured their election through fraud and robbery.‖
The Senate then adopted a resolution referring the case to the Attorney-General. An information was filed against Perfecto for violation of Art 256 of the Penal Code: ―Any person who, by . . . writing, shall defame, abuse, or insult any Minister of the Crown or other person in authority . . .,"
The CFI convicted Fernando, stating: ―We now have no Ministers of the Crown or other persons in authority in the Philippines representing the King of Spain, and said provision, with other articles of the Penal Code, had apparently passed into "innocuous desuetude," but the Supreme Court of the Philippine Islands has, by a majority decision, held that said article 256 is the law of the land to-day…‖ Fernando was convicted following the ruling in U.S. v Helbig.
Issue: whether article 256 of the Spanish Penal Code, punishing "Any person who, by . . . writing, shall defame, abuse, or insult any Minister of the Crown or other person in authority . . .," is still in force.
HELD: No, it is not.
1. Effect of the Philippine Libel Law, Act No. 277, on article 256 of the Spanish Penal Code
That parts of laws in force in 1901 when the Libel Law took effect, were in conflict therewith, and that the Libel Law abrogated certain portion of the Spanish Penal Code, cannot be gainsaid. Title X of Book II of the Penal Code, covering the subjects of calumny and insults, must have been particularly affected by the Libel Law. Indeed, in the early case of Pardo de Tavera vs. Garcia Valdez, the Supreme Court spoke of the Libel Law as "reforming the preexisting Spanish law on the subject of calumnia and injuria." It was found that
PEOPLE OF THE PHILIPPINE ISLANDS V.
those provisions of the Penal Code on the subject of calumny and insults in which the elements of writing and publicity entered, were abrogated by the Libel Law. The Libel Law must have had the same result on other provisions of the Penal Code, as for instance article 256.
2. Effect of the change from Spanish to Amercian sovereignty over the Philippine son article 256 of the Spanish Penal Code.
It is a general principle of the public law that on acquisition of territory the previous political relations of the ceded region are totally abrogated. "Political" is here used to denominate the laws regulating the relations sustained by the inhabitants to the sovereign.
According to our view, article 256 of the Spanish Penal Code was enacted by the Government of Spain to protect Spanish officials who were the representatives of the King. With the change of sovereignty, a new government, and a new theory of government, as set up in the Philippines. It was in no sense a continuation of the old, although merely for convenience certain of the existing institutions and laws were continued. The demands which the new government made, and makes, on the individual citizen are likewise different. No longer is there a Minister of the Crown or a person in authority of such exalted position that the citizen must speak of him only with bated breath.
Article 256 of the Penal Code is contrary to the genius and fundamental principles of the American character and system of government. Penalties out of all proportion to the gravity of the offense, grounded in a
distorted monarchical conception of the nature of political authority, as opposed to the American conception of the protection of the interests of the public, have been obliterated by the present system of government in the Islands.
it must be noted that this article punishes contempts against executive officials, although its terms are broad enough to cover the entire official class. Punishment for contempt of non-judicial officers has no place in a government based upon American principles. Our official class is not, as in monarchies, an agent of some authority greater than the people but it is an agent and servant of the people themselves. These officials are only entitled to respect and obedience when they are acting within the scope of their authority and jurisdiction. The crime of lese majeste (crime against the crown, crimes against the Cortes and its members and against the council of ministers) disappeared in the Philippines with the ratification of the Treaty of Paris. Ministers of the Crown have no place under the American flag.
FACTS:
Vilas, Trigas, and Aguado are creditors of Manila as it existed before the cession of the Philippine Islands (PI) to the US by the treaty of Paris. According to them, under its present charter, the Government of the PI is the same juristic person and liable upon the obligations of the old city. The Supreme Court of the Philippine Islands denied relief, holding that the present municipality is a totally different corporate entity, and in
no way liable for the debts of the Spanish municipality. Thus it was elevated to the US Supreme Court.
ISSUE: WON notwithstanding the cession of the PI to
the US followed by a reincorporation of the city, the present municipality liable for obligations of old city. YES
HELD:
The city as now incorporated has succeeded to all of the property rights of the old city and to the right to enforce all its causes of action. There is identity of purpose between Sp and Am charters and substantial identity of municipal powers, area, and inhabitants. Argument against liability: Ayuntamiento of Manila was a corporation entity created by the Sp government . When the sovereignty of Sp ceased, municipality, ceased as well.--> analogy to doctrine of principal and agent, death of principal=death of agent
Dual Character of Municipal Corporations:
1. Governmental: exercises by delegation a part of the sovereignty of the state
2. Private/Business: mere legal entity or juristic person. Stands for the community in the administration of local affairs wholly beyond the sphere of the public purposes for which its governmental powers are conferred
In view of the dual character of municipal corporations, there is no public reason for presuming their total dissolution as a mere consequence of military occupation or territorial cession.
McKinley‘s instruction: relinquishment or cession cannot in any respect impair the property or rights which by law
belong to the peaceful possession of property of all kinds.
Property rights of municipal corporations and individuals were safeguarded. The cession did not operate as an extinction or dissolution of corporations. The legal entity survived both military occupation and cession. The corporate identity and liability of the city was not extinguished.
That there is a total abrogation of the former political relations of the inhabitants of the ceded region is obvious. That all laws theretofore in force which are in conflict with the political character, constitution, or institutions of the substituted sovereign, lose their force, is also plain. But it is equally settled in the same public law that that great body of municipal law which regulates private and domestic rights continues in force until abrogated or changed by the new ruler. In Chicago, R. I. & P. R. Co. v. McGlinn, it was said:
'It is a general rule of public law, recognized and acted upon by the United States, that whenever political jurisdiction and legislative power over any territory are transferred from one nation or sovereign to another, the municipal laws of the country, that is, laws which are intended for the protection of private rights, continue in force until abrogated or changed by the new government or sovereign. By the cession, public property passes from one government to the other, but private property remains as before, and with it those municipal laws which are designed to secure its peaceful use and enjoyment. As a matter of course, all laws, ordinances, and regulations in conflict with the political character, institutions, and constitution of the new government are at once displaced. Thus, upon a
cession of political jurisdiction and legislative power-and the latter is involved in the former-to the United States, the laws of the country in support of an established religion, or abridging the freedom of the press, or authorizing cruel and unusual punishments, and the like, would at once cease to be of obligatory force without any declaration to that effect; and the laws of the country on other subjects would necessarily be superseded by existing laws of the new government upon the same matters. But with respect to other laws affecting the possession, use, and transfer of property, and designed to secure good order and peace in the community, and promote its health and prosperity, which are strictly of a municipal character, the rule is general, that a change of government leaves them in force until, by direct action of the new government, they are altered or repealed.'
FACTS:
Peralta, a member of the Metropolitan Constabulary of Manila charged with the supervision and control of the production, procurement and distribution of goods and other necessaries, was prosecuted for the crime of robbery. He was found guilty and sentenced to life imprisonment, which he commenced to serve on August 21, 1944, by the Court of Special and Exclusive Criminal Jurisdiction, created in section 1 of Ordinance No. 7 promulgated by the President of the so-called Republic of the Philippines, pursuant to the authority conferred upon him by the Constitution and laws of the said Republic. And the procedure followed in the trial
was the summary one established in Chapter II of Executive Order No. 157 of the Chairman of the Executive Commission, made applicable to the trial violations of said Act No. 65 by section 9 thereof and section 5 of said Ordinance No. 7.
The petition for habeas corpus is based on the ground that the Court of Special and Executive Criminal Jurisdiction created by Ordinance No. 7 "was a political instrumentality of the military forces of the Japanese Imperial Army, the aims and purposes of which are repugnant to those aims and political purposes of the Commonwealth of the Philippines, as well as those of the United States of America, and therefore, null and void ab initio," that the provisions of said Ordinance No. 7 are violative of the fundamental laws of the Commonwealth of the Philippines and "the petitioner has been deprived of his constitutional rights"; that Peralta is being punished by a law created to serve the political purpose of the Japanese Imperial Army in the Philippines, and "that the penalties provided for are much (more) severe than the penalties provided for in the Revised Penal Code."
The Solicitor General opined that the Court of Special and Exclusive Criminal Jurisdiction created, and the summary procedure prescribed therefor are tinged with political complexion; that the procedure prescribed in Ordinance No. 7 does not afford a fair trial, violates the Constitution of the Commonwealth, and impairs the Constitutional rights of accused persons under their legitimate Constitution.
The features of the summary procedure adopted by Ordinance No. 7, assailed by Peralta and the Solicitor General as impairing the constitutional rights of an
