Admin Law Cases Complete V2.docx

1. Balbina Mendoza vsPacianoDizon GR. No L-387 Facts:

In 1932, Juan Cuevas married Florence Cicadiz (no children were born), but they got divorced on March 21, 1944. On 1945, Administrative Order 27 was issued by the President ordering the issuance of bonuses or gratuities to officials and employees of the National Government who were in service during 1941. Cuevas was entitled to this bonus. Balbina Mendoza, Cuevas’s mother, claimed the aforementioned bonus to be hers as the next of kin (Cuevas already died this time). On 1946, Deputy Auditor General by virtue of Art 262 of the Administrative Code, solved the issue raised against Mendoza, and said that the bonus shall be conjugal in nature, thus half of it shall belong to the divorced wife and the other half belongs to Mendoza. The Deputy Auditor General reasoned that the bonus was in connection to the time served by the Cuevas in the government thus forms part of the conjugal property as it was earned during the existence of their marriage. Mendoza now raises this case to this court under Rule 45, claiming that since the AO 27 was issued on 1945, when the marriage was already dissolved, it should not form part of the conjugal property. Issues: Whether or not the bonus given under AO 27 shall be treated as part of the conjugal property in relation to the actual years of service of Cuevas. Held: No. The AO used the word gratuity and has a known, categorical and conclusive in law and jurisprudence significance. Gratuity is not to wages or any other emolument, but means gift and something given and received by lucrative title. In this case more accentuated the difference between the two concepts considering that Congress, in its Joint Resolution 5 adopted on 1945 recommended the study of ways and means to pay the back salaries gratuities, bonuses or other emoluments of the loyal and deserving employees of the Commonwealth, The fact, therefore that the President Chose the term gratuity, leaving aside other words indicates that this is a calculated concession, clearly shows, the intention to strictly limit the scope of the privilege to the letter of the law. Thus, the bonus shall wholly belong to the mom. 2. Realty Dev. Corp vsSendino 223 SCRA 665 Facts: Lucina C. Sendino reserved with Realty Exchange Venture, Inc. (REVI) a 120-square meter lot in Raymondville Subdivision in Sucat, Paranaque for P307,800.00 as its purchase price. She paid P1,000.00 as partial reservation fee on January 15, 1989 and completed payment of this fee on January 20, 1989 by paying P4,000.00.

On July 18, 1989, Lucina paid REVI P16,600.00 as full downpayment on the purchase price. REVI informed respondent of the cancellation of the contract on the 31st of July 1989, for alleged non-compliance with the requirement of submission of the appropriate documents under the terms of the original agreement. On April 20, 1990, private respondent filed a complaint for Specific Performance against REVI with the office of Appeals, Adjudication and Legal Affairs (OAALA) of the Housing and Land Use Regulatory Board (HLURB) On April 3, 1991 the HLURB, whose authority to hear and decide the complaint was challenged by REVI in its answer, rendered its judgment in favor of Lucina and ordered petitioners to continue with the sale of the house and lot and to pay private respondent P5,000 as moral damages, P5,000 as exemplary damages and P6,000 as attorney's fees and costs of the suit. An appeal from this decision was taken to the HLURB OAALA Arbiter, which affirmed the Board's decision. The decision of the OAALA Arbiter was appealed to the Office of the President, which dismissed it. MR was denied on January 26, 1993. Issues: 1. W/N the HLURB has quasi-judicial functions, notwithstanding absence of express grant by executive order no. 90 of December 17, 1986 which created it 2. The board of commissioners is allowed to sit in a decision to render judgment and to delegate its quasi-judicial authority to a subordinate office. Ruling:

1. Yes. Executive Order No. 90, series of 1986, recognized the Human Settlements Regulatory Commission (renamed the HLURB) as one of the principal housing agencies of the government. Prior to this, Executive Order No. 648 in 1981 transferred all the functions of the National Housing Authority to the Human Settlements Regulatory Commission (HSRC) consolidating all regulatory functions relating to land use and housing development in a single entity. Being the sole regulatory body for housing and land development, the HLURB, would have been reduced to a functionally sterile entity if, it lacked the powers exercised by its predecessor which included the power to settle disputes concerning land use and housing development and acquisition. Obviously, the HLURB must interpret and apply contracts, determine the rights of the parties under these contracts, and award damages whenever appropriate. We fail to see how the HSRC — which possessed jurisdiction over the actions for specific performance for contractual and statutory obligations filed by buyers of subdivision lots against developers — had suddenly lots its adjudicatory powers by the mere fiat of a change in name through E.O. 90. 2. Under Section 5 of E.O. 648 which defines the powers and duties of the Commission, the Board is specifically mandated to "(a)dopt rules of procedure for the conduct of

its business" and perform such functions necessary for the effective accomplishment of (its) above mentioned functions." Since nothing in the provisions of either E.O. 90 or E.O. 648 denies or withholds the power or authority to delegate adjudicatory functions to a division, the Board, for the purpose of effectively carrying out its administrative responsibilities and quasijudicial powers as a regulatory body should not be denied the power, as a matter of practical administrative procedure, to constitute its adjudicatory boards into various divisions. After all, the power conferred upon an administrative agency to issue rules and regulations necessary to carry out its functions has been held "to be an adequate source of authority to delegate a particular function, unless by express provision of the Act or by implication it has been withheld." 3. Cebu United Enterprises v. Jose Gallofin[Collector of Customs] 106 Phil 491

Nov. 18, 1959

FACTS: Cebu United [Cebu] filed a suit for mandatory injunction against Gallofin, to compel him to release and deliver to Cebu two imported shipments of over issue newspapers purchased from US. The importation of the aforesaid shipments was made under and by virtue of an Import Control Commission License No. 1225, issued by the defunct Import Control Commission[ICC]. Under the terms of the license, the plaintiff could import over issue newspapers up to the amount/value of $118k on a no-dollar remittance basis. The license was to expire on Dec. 18, 1953. Gallofin refused to deliver the imported shipments on the ground that the bills of lading covering the shipments was dated on Dec. 17, 1953 [LA, USA]. However, the vessels M/S Ventura and M/S Bataan, which carried the shipments, left the ports of LA, and San Francisco on Jan. 12 and Jan. 16, 1954, respectively. Therefore, the importation was deemed to have been made without a valid import license because the Central Bank and the Monetary Board required that “all shipments that left the port of origin after June 30, 1953, and are covered by ICC licenses, may be released by the Bureau of Customs without the need of a Central Bank release certificate; provided they left the port of origin within the period of validity of the licenses". Since Cebu did not present a Central Bank certificate for the release of the goods, Gallofin refused to make the delivery. Lower court: The valid period of the license should be based on the date stated on the bills of lading [Dec. 17]. Gallofin must deliver. Gallofin appealed to CA. The import license was issued on June 18, 1953 and was valid for 6 months. ISSUE: WON the duly executed acts of the ICC still has valid effects even beyond its life span as a government agency.

HELD: Yes. What must be considered is the legal connotation of the word “shipped” as used in the license. Gallofin maintains that a cargo is shipped when the vessel leaves the port of embarkation, Cebu holds that it is the date on the bills of lading, w/c are usually issued after the cargo is placed on board the vessel. The issuance of the bills of lading carries the presumption that the goods were delivered to the carrier for immediate shipment. It does not appear here that the bill of lading specified any designated day on which the vessel was to lift anchor, nor was it shown that plaintiff had any knowledge that the vessel M/S VENTURA and M/S BATAAN were not to depart soon after he placed his cargo on board and the corresponding bills of lading issued to him. From this latter time, the goods in contemplation of law, are deemed already in transit. It should also be considered that it is entirely outside the shipper's hands to fix the dates of departure, route or arrival of a vessel (unless he charters the whole ship). Defendant's reliance upon Central Bank regulations that the shipment licensed must have "left the port of origin within the period of validity of the "license" is not maintainable in the present case, because the regulations came onto effect only on July 1, 1953 already after issuance of the appellee' license and cannot be read into the same. [cannot be applied retroactively] Appeal dismissed. 4.CRISOSTOMOvs COURT OF APPEALS MP: Creation, Reorganization, and Abolition of Administrative Agencies FACTS: Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce (PCC), two administrative cases were filed against petitioner, petitioner was preventively suspended from office pursuant to R.A. No. 3019. On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos, CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY. On April 3, 1979, Mateo was appointed Acting President and on March 28, 1980, as President for a term of six (6)years. On July 11, 1980, the court acquitted petitioner of the charges against him, said accused was ordered reinstated. On March 26, 1992, however, President Corazon C. Aquino appointed Dr. Jaime Gellor as acting president of the PUP. Dr. Gellor did not vacate the office. This led to a contempt citation against Dr. Gellor. Petitioner assumed the office of president of the PUP.

On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari and prohibition, assailing the orders and the writs of execution issued by the trial court. Hence this petition. Petitioner argues that P.D. No. 1341, which converted the PCC into the PUP, did not abolish the PCC. He contends that if the law had intended the PCC to lose its existence, it would have specified that the PCC was being "abolished" rather than "converted" and that if the PUP was intended to be a new institution, the law would have said it was being "created." Petitioner claims that the PUP is merely a continuation of the existence of the PCC, and, hence, he could be reinstated to his former position as president. ISSUE: Whether or not the conversion of the PCC into PUP abolished the PCC RULING: No. But reinstatement is no longer possible because of the promulgation of P.D. No. 1437. P.D. No. 1341 did not abolish, but only changed, the former Philippine College of Commerce. When the purpose is to abolish a department or an office or an organization and to replace it with another one, the lawmaking authority must says so. What took place was a change in academic status of the educational institution, not in its corporate life. Hence the change in its name, the expansion of its curricular offerings, and the changes in its structure and organization. As petitioner correctly points out, when the purpose is to abolish a department or an office or an organization and to replace it with another one, the lawmaking authority says so. But the reinstatement of petitioner to the position of president of the PUP could not be ordered by the trial court because on June 10, 1978, P.D. No. 1437 had been promulgated fixing the term of office of presidents of state universities and colleges at six (6) years, renewable for another term of six (6) years, and authorizing the President of the Philippines to terminate the terms of incumbents who were not reappointed. In this case, Dr. Pablo T. Mateo, Jr., who had been acting president of the university since April 3, 1979, was appointed president of PUP for a term of six (6) years on March 28, 1980, with the result that petitioner’s term was cut short. 5. Dario v. Mizon Facts: In January 1987, Corazon Aquino promulgated EO 127, "REORGANIZING THE MINISTRY OF FINANCE". Among other offices, Executive Order No. 127 provided for the reorganization of the Bureau of Customs and prescribed a new staffing pattern therefor. On January 1988, incumbent Commissioner of Customs Salvador Mison issued a Memorandum, in the nature of

“Guidelines on the Implementation of Reorganization Executive Orders," prescribing the procedure in personnel placement. It also provided that by February 1988, all employees covered by EO 127 and the grace period extended to the Bureau of Customs by the President on reorganization shall be: a) informed of their re-appointment, or b) offered another position in the same department or agency, or c) informed of their termination. A total of 394 officials and employees of the Bureau of Customs were given individual notices of separation. They filed appeals with the CSC. CSC promulgated its ruling for reinstatement of the 279 employees. Mison, filed a motion for reconsideration, which was denied. Commissioner Mison instituted certiorari proceedings.

Issue: WON EO No. 127, which provided for the reorganization of the Bureau of Customs is valid.

Ruling: YES. There is no question that the administration may validly carry out a government reorganization--insofar as these cases are concerned, the reorganization of the Bureau of Customs—by mandate not only of the Provisional Constitution, supra, but also of the various Executive Orders decreed by the Chief Executive in her capacity as sole law making authority under the 1986-1987 revolutionary government. It should also be noted that under the present Constitution, there is a recognition, albeit implied, that a government reorganization may be legitimately undertaken, subject to certain conditions. The core provision of law involved is Section 16 Article XVIII of the 1987 Constitution. Section 6. Career civil service employees separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of this Constitution shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieu thereof, at the option of the employees, they may be considered for employment in the government or in any of its subdivisions, instrumentalities, or agencies, including go3ernment-owned or controlled corporations and their subsidiaries. This pro3ision also applies to career officers whose resignation,tendered in line with the enlisting policy, had been accepted.

It is also to be observed that unlike the grants or power to effect reorganizations under the past Constitutions, the above provision comes as a mere recognition of the right of the government to reorganize its offices, bureaus, and instrumentalities. Other than references to reorganization following the ratification of this Constitution, there is no provision or automatic vacancies under the 1987 Constitution.

6.RUPERTO v. TORRES Facts: A complaint was filed against Ruperto, a government official, charging him with disloyalty to service, partiality, favoritism, violation of his oath of office, and corruption. A copy of the complaint was submitted to the Integrity Board. The Board found, after hearing, that the charges were sufficiently established and concluded that Ruperto made use of his public office for his personal interests. The Board recommended that Ruperto be given a warning, and any repetition will have greater consequences. The Integrity Board was created by EO 318 and was succeeded by the Presidential Complaints and Action Commission, which vested said board with the power to “proceed to a thorough and complete investigation of any specific case of graft, corruption, dereliction of duty or irregularity in office, and to submit to the President the record of such investigation together with its finding and recommendation.”

Issue: WON the defunct Integrity Board or its successor, Presidential Complaints and Action Commission, a board exercising judicial functions. Ruling: NO. The Investigatory Board’s power is limited to investigating the facts and making findings in respect thereto. The board neither adjudicates upon nor determines the rights and interests or duties of parties. After an investigation by the Integrity Board, the officer that ultimately passes upon and adjudicates the rights of the parties is the President and not the board, or its successor Presidential Complaints and Action Commission. While it is true that the board, in performing its duties and exercising its functions may exercise what is known as judicial discretion since it evaluates the evidence submitted to it on the facts and circumstances presented, such judicial discretion is only for the purpose of evaluation and for the determination of disputed facts. Not every function wherein judgment and discretion

are exercised is a judicial function. The test of judicial functions is not the exercise of judicial discretion, but the power and authority to adjudicate upon the rights and obligations of parties before it. As the Board lacks the power and authority to adjudicate upon the matters submitted to it for investigation and make final pronouncement thereon, the second requisite for availability of the action of certiorari is wanting.

7. People vs. De Vera 65 Phil 56 Doctrine of Non-Delegation of Powers Delegation to Administrative Agencies FACTS: Defendant Mariano Cu Unjieng applied for probation under the provisions of Act No. 4421, otherwise known as the Probation act . The action for certiorari and prohibition was filed to prohibit the Court of First Instanced of Manila from taking any further action in entertaining the aforementioned application for probation on the ground that Act No. 4421 in unconstitutional for being an undue delegation of legislative power. The challenged provision of the said Act was section 11 thereof which reads: This Act shall apply only in those provinces in which the respective provincial boards have provided for the salary of a probation officer at rates not lower than those not provided for provincial fiscals. Said probation officer shall be appointed by the secretary of justice and shall be subject to the direction of the probation office. ISSUE: Whether or not the provision in question constitute an unconstitutional delegation of legislative power RULING: Yes. For the purpose of the Probation Act, the provincial boards may be regarded as administrative bodies endowed with power to determine when the Act should take effect in their respective provinces. An examination of variety of cases on delegation of power to administrative bodies will show that the ratio decidendi is at variance but, it can be broadly asserted that the rationale revolves around the presence or absence of a standard or rule of action -or the sufficiency thereof in the statute, to aid the delegate in exercising the granted discretion. As a rule, an act of the legislature is incomplete and hence invalid if it does not lay down any rule or definite standard by which the administrative officer or board may be guided in the exercise of the discretionary powers delegated to it.

Doctrine of Non-Delegation of Powers: Corollary of separation of powers doctrine. - This rule which followsas a necessary corollary of the doctrine of separation of powers prohibits the delega tion of legislative power, the vesting of judicial officers with non-judicial functions, as well as the investing on non- judicial officers with judicial powers. Any attempt at such delegation is unconstitutional and void. The distinction is between a delegation of power to make the law, which involves discretion as to what the law shall be, which delegation is void; and the delegation of authority or discretion as to the execution of a law to be exercised under, and in pursuance of the law, to which delegation no objection can be made. The legislature may delegate its authority to make findings of fact, and the fact-finding power may be conferred for putting into effect, suspending, or applying the law. But where delegation to a fact-Finding body empowers it to create the conditions which constitute the fact, the delegation is invalid. The test of completeness has been said to be whether the provision is sufficiently definite and certain to enable one to #now his rights and obligations thereunder 8. Maceda v. Macaraig Facts: CA 120 created the NPC as a public corporation to undertake the development of hydraulic power and the production of power from other sources. RA 358 granted NPC tax and duty exemption privileges. This was further provided in detail by RA 6395, PD 380, and PD 938. However, PD 1931 withdrew all tax exemption privileges granted in favor of governmentowned or controlled corporations including their subsidiaries but said law empowered the President and/or the then Minister of Finance, upon recommendation of the FIRB, to restore, partially or totally, the exemption withdrawn, or otherwise revise the scope and coverage of any applicable tax and duty. Pursuant to this, the FIRB issued Resolution No. 10-85 restoring the tax and duty exemption privileges of NPC. However, EO 93 once again withdrew all tax and duty incentives granted to government and private entities which had been restored under PD 1931 and 1955 but it gave the authority to FIRB to restore, revise the scope and prescribe the date of effectivity of such tax and/or duty exemptions. So, the FIRB issued Resolution No. 17-87 restoring NPC’s tax and duty exemption privileges effective March 10, 1987. On October 5, 1987, the President, through respondent Executive Secretary Macaraig, Jr., confirmed and approved FIRB Resolution No. 17-87. Issue: Ruling:

The Executive Secretary, by authority of the President, has the power to modify, alter or reverse the construction of a statute given by a department secretary. True it is that the then Secretary of Justice in Opinion No. 77 dated August 6, 1977 was of the view that the powers conferred upon the FIRB by Sections 2(a), (b), (c), and (d) of Executive Order No. 93 constitute undue delegation of legislative power and is therefore unconstitutional. However, he was overruled by the respondent Executive Secretary in a letter to the Secretary of Finance dated March 30, 1989. The Executive Secretary, by authority of the President, has the power to modify, alter or reverse the construction of a statute given by a department secretary. 9. Rabor v. CSC 244 SCRA 614 Facts: Dionisio M. Rabor is a Utility Worker in the Office of the Mayor, Davao City. He entered the government service as a Utility Worker on 10 April 1978 at the age of 55 years. Sometime in May 1991, an official in the Office of the Mayor of Davao City, advised the petitioner to apply for retirement, considering that he had already reached the age of 68 years with 13 years and 1 month of government service. Rabor responded by showing a GSIS certificate with a notation to the effect that his service is extended for him to complete the 15-years requirement for retirement. The Davao City Government wrote to the Regional Director of the Civil Service Commission, Region XI, Davao City informing the latter of the foregoing and requesting advice as to what action should be taken on Rabor’s case. Director Caward replied by saying that Rabor’s extension of service is contrary to M.C. No. 65 of the Office of the President. Hence, it is non-extendible. Mayor Duterte furnished Rabor a copy of Cawad’s letter and order him not to work anymore. Rabor asked Director Cawad for extension of his job until he completed the 15year requirement under PD 1146. CSC MC. No 27, s. 1990 provides that “any request for extension of service of compulsory retires to complete the 15-year service requirement for retirement shall be allowed only to permanent appointees in the career service who are regular members of the GSIS and shall be granted for a period of not exceeding 1 year.” However, the request was denied. Rabor then asked OP for an extension. His request was referred by OP to CSC and thereafter CSC denied Rabor’s request. Rabor asked for reconsideration of CSC ruling citing Cena case but was denied. Rabor reiterated his request to Mayor Duterte but was rebuffed. Hence, this petition. Issue:

Whether or not Civil Service Commission Memorandum Circular No 27 must be in harmony with the provisions of law. Held:

Y e s . It is well established in this jurisdiction that while the making of laws is a nondelegable activity that corresponds exclusively to Congress, nevertheless, the latter may constitutionally delegate authority and promulgate rules and regulations to implement a

given legislation and effectuate its policies, for the reason that the legislature often finds it impracticable to anticipate and provide for the multifarious and complex situations that may be met in carrying the law into effect. All that is required is that the regulation should be 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. The CSC MC No. 27 being in the nature of an Administrative regulation, must be governed by the principle that administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. The rule on limiting to one year the extension of service of an employee who has reached the compulsory age of 65 years, but has less than 15 years of service under CSC MC No. 27 cannot likewise be accorded validity because it has no relationship of connection with any provision of PD 1146 supposed to be carried into effect. The rule was an addition to or extension of the law, not merely a mode of carrying it into effect. The CSC has no power to supply perceived omissions in PD 1146.

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

legislature intends is that the CSC should “fill in the details” in the implementation of PD 1146. 10. AbakadaGuro Party List vsPurisima Facts: RA 9335 (Attrition Act of 2005) was enacted to optimize the revenue-generation capability and collection of the BIR and the BOC. The law intends to encourage their officials and employees to exceed their revenue targets by providing a system of rewards and sanctions through the creation of Rewards and Incentives Fund and Revenue Performance Evaluation Board. The Boards in the BIR and BOC, DOF, DBM, and NEDA, were tasked to prescribe the rules and guidelines for the allocation, distribution and release of the fund, to set criteria and procedures for removing service officials and employees whose revenue collection fall short of the target; and further, to issue rules and regulations. Petitioners, invoking their right as taxpayers filed this petition challenging the constitutionality of RA 9335, a tax reform legislation. They contend that, by establishing a system of rewards and incentives, the law "transform[s] the officials and employees of the BIR and the BOC into mercenaries and bounty hunters" as they will do their best only in consideration of such rewards. Thus, the system of rewards and incentives invites corruption and undermines the constitutionally mandated duty of these officials and employees to serve the people with utmost responsibility, integrity, loyalty and efficiency. Issue: WON the provisions on Rewards and Incentives in RA 9335 is unconstitutional. Ruling: No. Petitioners’ claim is not only without any factual and legal basis; it is also purely speculative. Public officers enjoy the presumption of regularity in the performance of their duties. This presumption necessarily obtains in favor of BIR and BOC officials and employees. RA 9335 operates on the basis thereof and reinforces it by providing a system of rewards and sanctions for the purpose of encouraging the officials and employees of the BIR and the BOC to exceed their revenue targets and optimize their revenue-generation capability and collection. Public service is its own reward. Nevertheless, public officers may by law be rewarded for exemplary and exceptional performance. A system of incentives for exceeding the set expectations of a public office is not anathema to the concept of public accountability. In fact, it recognizes and reinforces dedication to duty, industry, efficiency and loyalty to public service of deserving government personnel. Employees of the BIR and the BOC may by law be entitled to a reward when, as a consequence of their zeal in the enforcement of tax and customs laws, they exceed their revenue targets. In addition, RA 9335 establishes safeguards

to ensure that the reward will not be claimed if it will be either the fruit of "bounty hunting or mercenary activity" or the product of the irregular performance of official duties. 11. GUTIERREZ VS DBM; GR NO.153266 (class suit) FACTS: Congress RA 6758, called the Compensation and Position Classification Act to rationalize the compensation of government employees. Its Section 12 directed the consolidation of allowances and additional compensation already being enjoyed by employees into their standardized salary rates. But it exempted certain additional compensations that the employees may be receiving from such consolidations such as transportation allowance. Department of Budget and Management (DBM) NCC 59 covering the government which enumerated the specific allowances and additional compensations which were deemed integrated in the basic salaries and these included the Cost of Living Allowance (COLA) and Inflation Connected Allowance(ICA).DBM issued Corporate Compensation Circular (CCC) covering GOCCs and government financial institutions. Accordingly, the Commission on Audit (COA) disallowed the payments of honoraria and other allowances which were deemed integrated into the standardized salary rates. Employees of government-owned or controlled corporations questioned the validity of CCC 10 due to its non-publication. Meanwhile, the DBM also issued Budget Circular 2001-03clarifying that only the exempt allowances may continue to be granted the employees; all others were deemed integrated in the standardized salary rates. Thus, the payment of allowances and compensation such as Cost of Living Allowances and Inflation Connected Allowance that were already deemed integrated in the basic salary were unauthorized. DBM issued a National Budget Circular which provided that all Supreme Court rulings on the integration of allowances, including COLA, of government employees under R.A. 6758 applied only to specific government-owned or controlled corporations. Consequently, the payment of allowances and other benefits to them remained prohibited until otherwise provided by law or ruled by this Court. ISSUES: 1. Whether or not the COLA should be deemed integrated into the standardized salary rates of the concerned government employees by virtue of Section 12 of R.A. 6758; 2. Whether or not the ICA may still be paid to officials and employees of the Insurance Commission;

3. Whether or not the non-publication of NCC 59 in the Official Gazette or newspaper of general circulation nullifies the integration of the COLA into the standardized salary rates; and 3. Whether or not the grant of COLA to military and police personnel to the exclusion of other government employees violates the equal protection clause. RULING: YES. Delegated rule-making is a practical necessity in modern governance because ofthe increasing complexity and variety of public functions. Congress has endowed administrative agencies like respondent DBM with the power to make rules and regulations to implement a given legislation and effectuate its policies. Such power is, however, necessarily limited to what the law provides. Implementing rules and regulations cannot extend the law or expand its coverage, as the power to amend or repeal a statute belongs to the legislature. Administrative agencies implement the broad policies laid down in a law by “filling in” only its details. The regulations must be germane to the objectives and purposes of the law and must conform to the standards prescribed by law. R.A. 6758 did not prohibit the DBM from identifying for the purpose of implementation what fell into the class of “all allowances.” With respect to what employees’ benefits fell outside the term apart from those that the law specified, the DBM, said this Court in a case, needed to promulgate rules and regulations identifying those excluded benefits.COLA is deemed already incorporated in the standardized salary rates of government employees under the general rule of integration. 1. YES. As defined, cost of living refers to “the level of prices relating to a range of everyday items” or “the cost of purchasing those goods and services which are included in an accepted standard level of consumption.” Based on this premise, COLA is a benefit intended to cover increases in the cost of living. Thus, it is and should be integrated into the standardized salary rates.

ICA, like COLA, falls under the general rule of integration. The DBM specifically identified it as an allowance or additional compensation integrated into the standardized salary rates. By its very nature, ICA is granted due to inflation and upon determination that the current salary of officials and employees of the Insurance Commission is insufficient to address the problem. The DBM determines whether a need for ICA exists and the fund from which it will be taken. The Insurance Commission cannot, on its own, determine what allowances are necessary and then grant them to its officials and employees without the approval of the DBM. 2. NO. It is a settled rule that publication is required as a condition precedent to the effectivity of a law to inform the public of its contents before their rights and interests are affected by the same. Administrative rules and regulations must also be published if their

purpose is to enforce or implement existing law pursuant also to a valid delegation. Nonetheless, as previously discussed, the integration of COLA into the standardized salary rates is not dependent on the publication of CCC 10 and NCC 59. This benefit is deemed included in the standardized salary rates of government employees since it falls under the general rule of integration—”all allowances.” 3. NO. While it may appear that petitioners are questioning the constitutionality of these issuance, they are in fact attacking the very constitutionality of Section 11 of R.A. 6758. It is actually this provision which allows the uniformed personnel to continue receiving their COLA over and above their basic pay. The classification must satisfy the following requirements: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same class.The fundamental right of equal protection of the laws is subject to reasonable classification. As for the personnel they are likely to be assigned to a variety of low, moderate, and high-cost areas, and since their basic pay does not vary based on location, the continued grant of Cost of living allowance (COLA) is intended to help them offset the effects of living in higher cost areas. 12. G.R. No. 170463.

February 2, 2011.

THE BOARD OF TRUSTEES OF THE GOVERNMENT SERVICE INSURANCE SYSTEM and WINSTON F. GARCIA, in his capacity as GSIS President and General Manager, petitioners, vs. ALBERT M. VELASCO and MARIO I. MOLINA, respondents. Facts: On May 2002, Petitioners charged the respondents with administrative case for grave misconduct for their alleged participation and in the demonstration held by some GSIS employees to denounce the alleged corruption within the agency and to oust its president Winston Garcia. The Board placed the respondents under preventive suspension for 90 days. On April 2003, respondent Molina requested for a step increment but it was denied because he did not pass the qualifications mentioned in the Board Resolution. The respondents filed a petition for prohibition with prayer for writ of preliminary injunction claiming that they were denied of their benefits as employees of GSIS due to their pending administrative case. Respondents also argued that the subject resolutions were ineffective because they were not registered with the UP Law Center pursuant to the Revised Administrative Code of 1987. The trial court granted the petition and declared the subject Board Resolution null and void. Issue: WON a Special Civil action for Prohibition against GSIS Board – who is exercising quasi legislative and administrative function – is within the jurisdiction of RTC Ruling: YES. The petition for prohibition filed by respondents is a special civil action which may be filed in the Supreme Court, the Court of Appeals, the Sandiganbayan or the regional trial court, as the case may be. It is also a personal action because it does not affect the title to, or possession of real property, or interest therein. It may comment and be tried where

the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, at the election of the plaintiff. Since respondent Velasco is a resident of the City of Manila, the petition could properly be filed in the City of Manila. Section 18 of Batas PambansaBlg. 129 (BP 129) provides:Authority to define territory appurtenant to each branch. - The Supreme Court shall define the territory over which a branch of the Regional Trial Court shall exercise its authority. The territory thus defined shall be deemed to be the territorial area of the branch concerned for purposes of determining the venue of all suits, proceedings or actions, whether civil or criminal, as well as determining the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts over which the said branch may exercise appellate jurisdiction. The power herein granted shall be exercised with a view to making the courts readily accessible to the people of the different parts of the region and making attendance of litigants and witnesses as inexpensive as possible. (Emphasis supplied) 13. CONTE VS COA FACTS Petitioners Avelina B. Conte and Leticia Boiser-Palma were former employees of the Social Security System (SSS) who retired from government service. They availed of compulsory retirement benefits under Republic Act No. 660. In addition, petitioners also claimed benefits granted under SSS Resolution No. 56, series of 1971 that provides financial incentive and inducement to SSS employees qualified to retire to avail of retirement benefits under RA 660 as amended, rather than the retirement benefits under RA 1616 as amended, by giving them “financial assistance” equivalent in amount to the difference between what a retiree would have received under RA 1616, less what he was entitled to under RA 660. Thereafter, COA issued a ruling disallowing in audit “all such claims for financial assistance under SSS Resolution No. 56” for the reason that it results in the increase of benefits beyond what is allowed under existing retirement laws. 1. 2.

ISSUES Whether or not public respondent abused its discretion when it disallowed in audit petitioners’ claims for benefits under SSS Res. 56. Whether or not SSS Resolution No. 56 is valid.

HELD 1. No. The Commission bears stress that the financial assistance contemplated under SSS Resolution No. 56 is granted to SSS employees who opt to retire under R.A. No. 660. It is clear that petitioners applied for benefits under RA 660 only because of the incentives offered by Res. 56, and that absent such incentives, they would have without fail availed of RA 1616 instead. The petition is dismissed for lack of merit, there having been no grave abuse of discretion on the part of respondent Commission.

2. No. The said financial assistance partakes of the nature of a retirement benefit that has the effect of modifying existing retirement laws particularly R.A. No. 660. It is simply beyond dispute that the SSS had no authority to maintain and implement such retirement plan and in the guise of rule-making, legislate or amend laws or worse, render them nugatory. Hence, SSS Resolution No. 56 is hereby illegal, void and no effect. SCRA: Same; Same; Same; Administrative Law; Delegation of Powers; The rule-making power of a public administrative body is a delegated legislative power, which it may not use either to abridge the authority given it by the Congress or the Constitution or to enlarge its power beyond the scope intended.—It is doctrinal that in case of conflict between a statute and an administrative order, the former must prevail. A rule or regulation must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation to be valid. The rule-making power of a public administrative body is a delegated legislative power, which it may not use either to abridge the authority given it by the Congress or the Constitution or to enlarge its power beyond the scope intended. 14. People vs. Santos 62 Phil. 300 Facts: The Secretary of Agriculture and Commerce, by virtue of the authority vested in him by section 4 of ActNo.4003 issued Administrative Order No. 2 Section 28 relative to fish and game provides as follows; “28. Prohibited fishing areas, collect, gather, take, or remove fish and other sea products from Philippine waters shall be allowed to fish, loiter, or anchor within 3 kilometers of the shore line of islands and reservations over which jurisdiction is exercised by naval or military authorities of the United States, particularly Corregidor, PuloCaballo, La Monja, El Fraile, and Carabao, and all other islands and detached rocks lying between Mariveles Reservation on the north side of the entrance to manila bay and Calumpan Point Reservation on the south side of said entrance; Provided, that boats not subject to license under Act No. 4003 and this order may fish within the areas mentioned above only upon receiving written permission therefore, which permission maybe granted by the Secretary of Agriculture and Commerce upon recommendation of the military or naval authorities concerned. “A violation of this paragraph may be proceeded against under section 41 of the Federal Penal Code.” The herein accused and appellee Augusto A. Santos is charged with having ordered his fishermen to manage and operate the motor launches Malabon II and Malabon III registered in his name and to fish, loiter and anchor within three kilometers of the shore line of the Island of Corregidor over which jurisdiction is exercised by naval and military authorities of the United States, without permission from the Secretary of Agriculture and Commerce. Issues: Whether or not violation of section 28 of Administrative Order No. 2 can give rise to criminal prosecution.

Held: Act No. 4003 does not contain a provision prohibiting boats not subject to license to fish wi thin the stipulated areas without the written permission of the Secretary. Since the act itself does not contain such prohibition, the rules and regulations promulgated by the Secretary of Agriculture to carry into effect the provisions of the law cannot incorporate such prohibition. For the foregoing considerations, we are of the opinion and so hold that the conditional clause of section 28 of Administrative Order No. 2, issued by the Secretary of Agriculture and Commerce, is null and void and without effect, as constituting an excess of the regulatory power conferred upon him by section 4 of Act No. 4003 and an exercise of a legislative power which has not been and cannot be delegated to him. Therefore, inasmuch as the facts with the commission of which Augusto A. Santos is charged do not constitute a crime or a violation of some criminal law within the jurisdiction of the civil courts, the information filed against him is dismissed, with the costs de oficio. So ordered. 15. People vs. Quepolay Facts: Que Po Lay is appealing from the decision of the Court of First Instance of Manila, finding him guilty of violating Central Bank Circular No. 20 in connection with section 34 of Republic Act No. 265, for possession of foreign exchange consisting of U.S. dollars, U.S. checks and U.S. money orders amounting to about $7,000 and failing to sell the same to the Central Bank through its agents within one day following the receipt of such foreign exchange as required by Circular No. 20. The appeal is based on the claim that said circular No. 20 was not published in the Official Gazette prior to the act or omission imputed to the appellant, and that consequently, said circular had no force and effect. The Solicitor General answering this contention says that Commonwealth Act. No. 638 and 2930 do not require the publication in the Official Gazette of said circular issued for the implementation of a law in order to have force and effect. Issue: WON Circular No. 20 should be published in Official Gazette in order to make it effective Ruling: Yes. Section11 of the Revised Administrative Code provides that statutes passed by Congress shall, in the absence of special provision, take effect at the beginning of the fifteenth day after the completion of the publication of the statute in the Official Gazette. Article 2 of the new Civil Code (Republic Act No. 386) equally provides that laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided. It is true that Circular No. 20 of the Central Bank is not a statute or law but being issued for the implementation of the law authorizing its issuance, it has the force and effect of law according to settled jurisprudence. (See U.S. vs. Tupasi Molina, 29 Phil., 119 and authorities cited therein.) Moreover, as a

rule, circulars and regulations especially like the Circular No. 20 of the Central Bank in question which prescribes a penalty for its violation should be published before becoming effective, this, on the general principle and theory that before the public is bound by its contents, especially its penal provisions, a law, regulation or circular must first be published and the people officially and specifically informed of said contents and its penalties. In the present case, although circular No. 20 of the Central Bank was issued in the year 1949, it was not published until November 1951, that is, about 3 months after appellant's conviction of its violation. It is clear that said circular, particularly its penal provision, did not have any legal effect and bound no one until its publication in the Official Gazzette or after November 1951. In other words, appellant could not be held liable for its violation, for it was not binding at the time he was found to have failed to sell the foreign exchange in his possession thereof. (Additionally the question of the non-publication may be raised it in any stage of the proceeding, thus it can be raised first time in appeal as it is fundamental and the court acquires no jurisdiction for in the eyes of the law no violation has been committed.)

16. Dagan vs Phil Racing Commission (Philracom) February 12, 2009 FACTS: Philracom directing the Manila Jockey Club, Inc. (MJCI) and Philippine Racing Club, Inc. (PRCI) to immediately come up with their respective Clubs House Rule to address Equine Infectious Anemia (EIA) problem and to rid their facilities of horses infected with EIA. Said directive was issued pursuant to Administrative Order No. 5 by the Department of Agriculture declaring it unlawful for any person, firm or corporation to ship, drive, or transport horses from any locality or place except when accompanied by a certificate issued by the authority of the Director of the Bureau of Animal Industry (BAI). In compliance with the directive, MJCI and PRCI ordered the owners of racehorses stable in their establishments to submit the horses to blood sampling and administration of the Coggins Test to determine whether they are afflicted with the EIA virus. Subsequently, on 17 September 2004, Philracom issued copies of the guidelines for the monitoring and eradication of EIA. Petitioners and racehorse owners refused to comply with the directive.Despite resistance from petitioners, the blood testing proceeded. The horses, whose owners refused to comply were banned from the races, were removed from the actual day of race, prohibited from renewing their licenses or evicted from their stables.

Racehorse owners lodged a complaint before the Office of the President (OP) which in turn issued a directive instructing Philracom to investigate the matter. Petitioners filed for a TRO with the RTC-granted. RTC however dismissed their petition for INJUNCTION because 1.) The issue is already moot since almost all racehorse owners complied with the directives and 2.) It is valid exercise of police power. Upon appeal, CA affirmed the RTC decision in toto. Issue: Whether or not there is a valid delegation of legislative power to Philracom

Ruling: YES The validity of an administrative issuance, such as the assailed guidelines, hinges on compliance with the following requisites: 1. 2. 3. 4.

Its promulgation must be authorized by the legislature; It must be promulgated in accordance with the prescribed procedure; It must be within the scope of the authority given by the legislature; It must be reasonable.

All the prescribed requisites are met as regards the questioned issuances. Philracoms authority is drawn from P.D. No. 420. The delegation made in the presidential decree is valid. Philracom did not exceed its authority. And the issuances are fair and reasonable.xxxx (in case lang, bakatatanunginni Ma’am) (First Requisite) The rule is that what has been delegated cannot be delegated, or as expressed in the Latin maxim: potestas delegate non delegarepotest. This rule is based upon the ethical principle that such delegated power constitutes not only a right but a duty to be performed by the delegate by the instrumentality of his own judgment acting immediately upon the matter of legislation and not through the intervening mind of another. This rule however admits of recognized exceptions] such as the grant of rule-making power to administrative agencies. They have been granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to them. Delegated rule-making has become a practical necessity in modern governance due to the increasing complexity and variety of public functions.]

(Second Requisite) While it is conceded that the guidelines were issued a month after Philracoms directive, this circumstance does not render the directive nor the guidelines void. The directives validity and effectivity are not dependent on any supplemental guidelines. Philracom has every right to issue directives to MJCI and PRCI with respect to the conduct of horse racing, with or without implementing guidelines. (Third requisite) The administrative body may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute.] The assailed guidelines prescribe the procedure for monitoring and eradicating EIA. These guidelines are in accord with Philracoms mandate under the law to regulate the conduct of horse racing in the country. (Fourth requisite) The assailed guidelines do not appear to be unreasonable or discriminatory. In fact, all horses stabled at the MJCI and PRCIs premises underwent the same procedure. The guidelines implemented were undoubtedly reasonable as they bear a reasonable relation to the purpose sought to be accomplished, i.e., the complete riddance of horses infected with EIA. House-owners were also informed beforehand. The lease contract executed between petitioner and MJC contains a proviso reserving the right of the lessor, MJCI in this case, the right to determine whether a particular horse is a qualified horse.In addition, Philracoms rules and regulations on horse racing provide that horses must be free from any contagious disease or illness in order to be eligible as race entries.

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