Delegation of Powerss

7/28/2019 Delegation of Powerss

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Philippine Airlines vs Civil Aeronautics Board Case DigestPhilippine Airlines, Inc. vs. Civil Aeronautics Board(270 SCRA 538)

Facts: Grand Air applied for a Certificate of Public Convenience and Necessity with the Civil

Aeronautics Board (CAB). The Chief Hearing Officer issued a notice of hearing directing Grand Air toserve a copy of the application and notice to all scheduled Philippine Domestic operators. Grand Airfiled its compliance and requested for a Temporary Operating Permit (TOP). PAL filed an oppositionto the application on the ground that the CAB had no jurisdiction to hear the application until Grand

Air first obtains a franchise to operate from Congress. The Chief Hearing Officer denied theopposition and the CAB approved the issuance of the TOP for a period of 3 months. The oppositionfor the TOP was likewise denied. The CAB justified its assumption of jurisdiction over Grand Airsapplication on the basis of Republic Act 776 which gives it the specific power to issue any TOP orCertificate of Public Convenience and Necessity.

Issue: Whether or not the CAB can issue a Certificate of Public Convenience and Necessity or TOPeven though the prospective operator does not have a legislative franchise?

Held: Yes, as mentioned by the CAB, it is duly authorized to do so under Republic Act 776 and alegislative franchise is not necessary before it may do so, since Congress has delegated theauthority to authorize the operation of domestic air transport services to the CAB, an administrativeagency. The delegation of such authority is not without limits since Congress had set specificstandard and limitations on how such authority should be exercised.

Public convenience and necessity exists when the proposed facility will meet a reasonable want ofthe public and supply a need which the existing facilities do not adequately afford.

Thus, the Board should be allowed to continue hearing the application, since it has jurisdiction over itprovided that the applicant meets all the requirements of the law.

EN BANC

[G.R. No. 100481. January 22, 1997]

PHILIPPINE INTERISLAND SHIPPING ASSOCIATION OF THEPHILIPPINES, CONFERENCE OF INTERISLAND SHIP-OWNERS

AND OPERATORS, UNITED PETROLEUM TANKER OPERATORSASSOCIATION OF THE PHILIPPINES, LIGHTERAGEASSOCIATION OF THE PHILIPPINES and PILOTAGEINTEGRATED SERVICES CORPORATION, pet i t ioners,vs . COURT OF APPEALS, UNITED HARBOR PILOTS'ASSOCIATION OF THE PHILIPPINES, INC. and MANILA PILOTS'ASSOCIATION, respondents.
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[G.R. Nos. 103716-17. January 22, 1997]

HON. PETE NICOMEDES PRADO, in his capacity as Secretary of

Transportation and Communications and the PHILIPPINEPORTS AUTHORITY, pet i t ioners, vs. COURT OF APPEALS,UNITED HARBOR PILOTS' ASSOCIATION OF THE PHILIPPINES,INC., respondents.

[G.R. No. 107720. January 22, 1997]

HON. JESUS B. GARCIA, JR., in his capacity as Secretary ofTransportation and Communications and Chairman of thePHILIPPINE PORTS AUTHORITY, COMMODORE ROGELIO A.DAYAN, in his capacity as General Manager of the PhilippinePorts Authority, and SIMEON T. SILVA, JR., in his capacity asthe South Harbor Manager, Philippine PortsAuthority, pet i t ioners, vs. HON. NAPOLEON R. FLOJO, in hiscapacity as the Presiding Judge of Branch 2, Regional TrialCourt - Manila, UNITED HARBOR PILOTS' ASSOCIATION OFTHE PHILIPPINES and the MANILA PILOTS'

ASSOCIATION, respondents.

D E C I S I O N

MENDOZA, J.:

Private respondent United Harbor Pilots' Association of the Philippines, Inc.(UHPAP) is the umbrella organization of various groups rendering pilotage service indifferent ports of the Philippines. The service consists of navigating a vessel from aspecific point, usually about two (2) miles off shore, to an assigned area at the pier andvice versa. When a vessel arrives, a harbor pilot takes over the ship from its captain to

maneuver it to a berth in the port, and when it departs, the harbor pilot also maneuversit up to a specific point off shore. The setup is required by the fact that each port haspeculiar topography with which a harbor pilot is presumed to be more familiar than aship captain.

The Philippine Ports Authority (PPA) is the government agency which regulatespilotage. Pursuant to Presidential Decree No. 857, it has the power "to supervise,control, regulate . . . such services as are necessary in the ports vested in, or belongingto the Authority"[1]and to "control, regulate and supervise pilotage and the conduct of
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pilots in any Port District."[2]It also has the power "to impose, fix, prescribe, increase ordecrease such rates, charges or fees. . . for the services rendered by the Authority or byany private organization within a Port District.[3]

These cases arose out of the efforts of harbor pilots to secure enforcement ofExecutive Order No. 1088, which fixes the rates of pilotage service, and the equally

determined efforts of the PPA and its officials, the herein petitioners, to blockenforcement of the executive order, even as they promulgated their own orders which inthe beginning fixed lower rates of pilotage and later left the matter to self determinationby parties to a pilotage contract.

I. THE FACTS

G.R. No. 103716

On February 3, 1986, shortly before the presidential elections, President FerdinandE. Marcos, responding to the clamor of harbor pilots for an increase in pilotage rates,issued Executive Order No. 1088, PROVIDING FOR UNIFORM AND MODIFIEDRATES FOR PILOTAGE SERVICES RENDERED TO FOREIGN AND COASTWISEVESSELS IN ALL PRIVATE AND PUBLIC PORTS. The executive order increasedsubstantially the rates of the existing pilotage fees previously fixed by the PPA.

However, the PPA refused to enforce the executive order on the ground that it hadbeen drawn hastily and without prior consultation; that its enforcement would createdisorder in the ports as the operators and owners of the maritime vessels hadexpressed opposition to its implementation; and that the increase in pilotage, as

mandated by it, was exorbitant and detrimental to port operations.[4]

The UHPAP then announced its intention to implement E.O. No. 1088 effectiveNovember 16, 1986. This in turn drew a warning from the PPA that disciplinarysanctions would be applied to those who would charge rates under E.O. No. 1088. ThePPA instead issued Memorandum Circular No. 43-86, fixing pilotage fees at rates lowerthan those provided in E.O. No. 1088.

Consequently, the UHPAP filed on January 7, 1987 a complaint for injunction withthe Regional Trial Court of Manila, against the then Minister of Transportation andCommunications, Hernando Perez, and PPA General Manager, Primitivo S. Solis, Jr. Itsought a writ of preliminary mandatory injunction for the immediate implementation of

E.O. No. 1088, as well as a temporary restraining order to stop PPA officials fromimposing disciplinary sanctions against UHPAP members charging rates in accordancewith E.O. No. 1088.

The case, docketed as Civil Case No. 87-38913, was raffled to Branch 28 of theRegional Trial Court of Manila which issued a temporary restraining order, enjoining thePPA from threatening the UHPAP, its officers and its members with suspension andother disciplinary action for collecting pilotage fees pursuant to E.O. No. 1088.
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On March 16, 1987, the Chamber of Maritime Industries of the Philippines, WilliamLines, Inc., Loadstar Shipping Co., Inc. and Delsen Transport Lines, Inc., after obtainingleave, filed a joint answer in intervention.

On February 26, 1988, while the case was pending, the PPA issued AdministrativeOrder No. 02-88, entitled IMPLEMENTING GUIDELINES ON OPEN PILOTAGE

SERVICE. The PPA announced in its order that it was leaving to the contracting parties,i.e., the shipping lines and the pilots, the fixing of mutually acceptable rates for pilotageservices, thus abandoning the rates fixed by it (PPA) under Memorandum Circular No.43-86, as well as those provided in E.O. No. 1088. The administrative order provided:

Section 3. Terms/Conditions on Pilotage Service.The shipping line or vessel'sagent/representative and the harbor pilot/firm chosen by the former shall agreebetween themselves, among others, on what pilotage service shall be performed, theuse of tugs and their rates, taking into consideration the circumstances stated inSection 12 of PPA AO No. 03-85, and such other conditions designed to ensure the

safe movement of the vessel in pilotage areas/grounds.

The PPA then moved to dismiss the case, contending that the issuance of its orderhad rendered the case moot and academic and that consequently E.O. No. 1088 hadceased to be effective. The UHPAP opposed the motion. Together with the ManilaPilots' Association (MPA), it filed on May 25, 1988 a petition forcertiorariand prohibitionin the RTC-Manila, questioning the validity of A.O. No. 02-88. This petition wasdocketed as Civil Case No. 88-44726 (United Harbor Pilots' Association and ManilaPilots' Association v. Hon. Rainerio Reyes, as Acting Secretary of the Department ofTransportation and Communications and Chairman of the Philippine Ports Authority(PPA) and Maximo Dumlao, Jr., as General Manager of the Philippine Ports Authority

(PPA), et al.) and raffled to Branch 2 of RTC-Manila. The factual antecedents of thiscase are discussed in G.R. No. 100481 below.

Meanwhile, in Civil Case 87-38913, the court, without resolving the motion todismiss filed by the PPA, rendered a decision[5]holding that A.O. No. 02-88 did notrender the case moot and academic and that the PPA was under obligation to complywith E.O. No. 1088 because the order had the force of law which the PPA could notrepeal.

The then Transportation Minister Hernando Perez and the PPA filed a petition forreview. The petition was filed in this Court which later referred the case to the Court of

Appeals where it was docketed as CA G.R. SP. No. 18072. On the other hand the

intervenors appealed to the Court of Appeals where this case was docketed as CA G.R.No. 21590. The two cases were then consolidated.

In a decision rendered on October 4, 1991, the Twelfth Division [6]of the Court ofAppeals affirmed the decision of the trial court, by dismissing CA G.R. No. 21590 anddenying CA G.R. SP. No. 18072. Hence, this petition by the Secretary of Transportationand Communications and the PPA. The intervenor shipping lines did not appeal.
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G.R. No. 100481

Meanwhile, in a petition forcertiorarifiled before RTC-Manila, Branch 2 (Civil CaseNo. 88-44726), the UHPAP and the MPA sought the annulment of A.O. No. 02-88,which in pertinent parts provided:

Section 1. Statement of Policy.It is hereby declared that the provision of pilotagein ports/harbors/areas defined as compulsory in Section 8 of PPA AdministrativeOrder No. 03-85, entitled, "Rules and Regulations Governing Pilotage Services, theConduct of Pilots and Pilotage Fees in Philippine Ports" shall be open to all licensedharbor pilots/pilotage firms/associations appointed/accredited by this authority toperform pilotage service.

Section 2. Persons Authorized to Render Pilotage.The following individuals,persons or groups shall be appointed/accredited by this Authority to provide pilotage

service:

a. Harbor Pilots of the present Pilotage Associations of the different pilotagedistricts in the Philippines. Their probationary training as required underSection 31 of PPA AO No. 03-85 shall be undertaken by any member of saidAssociation.

b. Members/employees of any partnership/corporation or association, includingFilipino shipmasters/ captains of vessel (domestic/foreign) of PhilippineRegistry and individuals who meet the minimum qualifications and comply

with the requirements prescribed in Sec. 29 of PPA AO No. 03-85, aforestated,and who are appointed by said firm or association and accredited as harborpilots by this authority. New Harbor Pilots who wish to be appointed/accreditedby PPA under the open pilotage system either as an individual pilot or as amember of any Harbor Pilot partnership/association shall be required toundergo a practical examination, in addition to the written examination givenby the Philippine Coast Guard, prior to their appointment/ accreditation by thisAuthority.

The UHPAP and MPA, as petitioners below, contended (1) that A.O. No. 02-88 was

issued without the benefit of a public hearing; (2) that E.O. No. 1088 had not beenrepealed by any other Executive Order or Presidential Decree and, therefore, should begiven effect; and (3) that A.O. No. 02-88 contravened P.D. No. 857.

On August 21, 1989, the Philippine Interisland Shipping Association, Conference ofInterisland Shipowners and Operators, United Petroleum Tanker Operators of thePhilippines, Lighterage Association of the Philippines, and Pilotage Integrated ServicesCorp., were allowed to intervene.


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On September 8, 1989, a writ of preliminary injunction was issued by the court,enjoining the PPA from implementing A.O. No. 02-88 and, on October 26, 1989,

judgment was rendered in favor of the petitioners therein. The dispositive portion of thecourt's decision[7]reads:

WHEREFORE, for all of the foregoing, the petition is hereby granted.

1. Respondents are hereby declared to have acted in excess of jurisdiction and withgrave abuse of discretion amounting to lack of jurisdiction in approving ResolutionNo. 860 and in enacting Philippine Ports Authority Administrative Order No. 02-88,the subject of which is "Implementing Guidelines on Open Pilotage Service";

2. Philippine Ports Authority Administrative Order No. 02-88 is declared null andvoid;

3. The preliminary injunction issued on September 8, 1989 is made permanent; and

4. Without costs.

SO ORDERED.

Respondents and the intervenors below filed a joint petition forcertiorariin theCourt of Appeals (CA G.R. SP No. 19570), assailing the decision of the trial court. Buttheir petition was dismissed for lack of jurisdiction on the ground that the issue raisedwas purely legal.

The parties separately filed petitions for review before this Court. The first one, bythe PPA and its officers, was docketed as G.R. No. 100109 (Hon. Pete NicomedesPrado, Philippine Ports Authority and Commodore Rogelio Dayan v. United HarborPilots' Association of the Philippines and Manila Pilots' Association), while the secondone, by the intervenors, was docketed as G.R. No. 100481 (Philippine InterislandShipping Association of the Philippines, Conference of Interisland Ship Owners andOperators, United Petroleum Tanker Operators Association of the Philippines,Inc. v. The Court of Appeals, United Harbor Pilots' Association of the Philippines andManila Pilots' Association.)

The petition filed by the government in G.R. No. 100109 was dismissed for failure ofpetitioners to show that the Court of Appeals committed a reversible error. [8]On the other

hand, the petition of the intervenors in G.R. No. 100481 was given due course.

G.R. No. 107720

Following the denial of its petition in G.R. No. 100109, the PPA issued on July 31,1992, Administrative Order No. 05-92, placing harbor pilots under the control of the PPA
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with respect to the scheduling and assignment of service of vessels. The PPA cited asjustification "pilotage delays . . . under the set-up where private respondents (UHPAP &MPA) assign the pilots. Intentionally or otherwise, several vessels do not receive thepilotage service promptly, causing them operational disruptions and additionalexpenses/costs."[9]

Private respondents UHPAP and MPA viewed the matter differently. On October 28,1992, they asked the RTC-Manila, Branch 2 which heard and decided Civil Case No.88-44726 to cite PPA officials in contempt of court. On the same day, the trial courtissued an order restraining the herein petitioners from implementing AdministrativeOrder No. 05-92. However, the PPA proceeded to implement its order, prompting theUHPAP and MPA to move again to cite petitioners in contempt, even as theyquestioned the validity of A.O. No. 05-92. Accordingly the trial court issued anotherorder on November 4, 1992, reiterating its previous order of October 28, 1992 topetitioners to refrain from implementing A.O. No. 05-92 pending resolution of thepetitions.

Making a special appearance, petitioners questioned the jurisdiction of the courtand moved for the dismissal of the petitions for contempt. Allegedly to prevent thedisruption of pilotage services, petitioners created a special team of reserve pilots totake over the pilotage service in the event members of UHPAP/MPA refused to renderpilotage services.

For the third time respondents moved to cite petitioners in contempt of court. Againpetitioners questioned the court's jurisdiction and manifested that they were adoptingtheir previous motion to dismiss petitions for contempt filed against them.

On November 17, 1992, the trial court denied the petitioners' motion and set thecontempt petitions for hearing on November 19, 1992. Hence, this petition, which was

docketed as G.R. No. 107720 (Hon. Jesus B. Garcia, Jr. in his capacity as Secretary ofTransportation and Communications and Chairman of the Philippine Ports Authority,Commodore Rogelio A. Dayan, in his capacity as General Manager of the PhilippinePorts Authority and Simeon T. Silva, Jr., in his capacity as the South Harbor Manager,Philippine Ports Authority v. Hon. Napoleon Flojo, in his capacity as the Presiding Judgeof Branch 2, RTC, Manila, UHPAP and MPA).

Pending resolution of this case, the Court ordered the parties to maintain thestatus quo as of October 31, 1992.

II. THE ISSUES AND THEIR DISPOSITION

The issues raised are:

I. WHETHER OR NOT RESPONDENT COURT OF APPEALS ERRED INAFFIRMING THE CHALLENGED DECISION OF RTC-MANILA,BRANCH 41, WHICH RULED THAT:
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(A) CIVIL CASE NO. 87-38913 HAS NOT BECOME MOOT ANDACADEMIC WITH THE ISSUANCE OF ADMINISTRATIVEORDER NO. 02-88; AND

(B) HEREIN PETITIONERS ARE BOUND TO COMPLY WITH E.O.

NO. 1088;

II. WHETHER OR NOT THE COURT OF APPEALS COMMITTEDREVERSIBLE ERROR IN DISMISSING CA G.R. SP. NO. 19570 FORLACK OF JURISDICTION?

III. WHETHER OR NOT RESPONDENT JUDGE NAPOLEON FLOJOCOMMITTED GRAVE ABUSE OF DISCRETION IN ASSUMINGJURISDICTION OVER THE PETITIONS FOR CONTEMPT FILED BYPRIVATE RESPONDENTS AS A RESULT OF THE ISSUANCE OF A.O.

NO. 05-92?

These issues will be discussed in seriatim.

A. Wheth er Execu tive Order No. 1088 is Valid andPetit ioners are Bound to Obey i t

(G.R. Nos. 103716-17)

Executive Order No. 1088 reads:

EXECUTIVE ORDER No. 1088

PROVIDING FOR UNIFORM AND MODIFIED RATES FOR PILOTAGESERVICES RENDERED TO FOREIGN AND COASTWISE VESSELS INALL PRIVATE OR PUBLIC PHILIPPINE PORTS.

WHEREAS, the United Harbor Pilots' Association of the Philippines has clamored forthe rationalization of pilotage service charges, through the imposition of uniform andadjusted rates for foreign and coastwise vessels in all Philippine ports, whether public

or private;

WHEREAS, the plea of the Association has been echoed by a great number ofMembers of Parliament and other persons and groups;


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NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, byvirtue of the powers vested in me by the Constitution and by law, do hereby direct andorder:

Section 1. The following shall be the rate of pilotage fees or charges based on

tonnage for services rendered to both foreign and coastwise vessels;

For Foreign Vessels Rate in US $or

its PesoEquivalent

Less than 500GT $ 30.00500GT to 2,500GT 43.33

2,500GT to 5,000GT 71.33

5,000GT to 10,000GT 133.6710,000GT to 15,000GT 181.6715,000GT to 20,000GT 247.0020,000GT to 30,000GT 300.0030,000GT to 40,000GT 416.6740,000GT to 60,000GT 483.3360,000GT to 80,000GT 550.0080,000GT to 100,000GT 616.67

100,000GT to 120,000GT 666.67120,000GT to 130,000GT 716.67

130,000GT to 140,000GT 766.67

Over 140,000 gross tonnage $0.05 or its peso equivalent every excess tonnage. Ratefor docking and undocking anchorage, conduction and shifting other related specialservices is equal to 100%. Pilotage services shall be compulsory in government andprivate wharves or piers,

For Coastwise Vessels: Regular

100 and under 500 gross tons P 41.70

500 and under 600 gross tons 55.60600 and under 1,000 gross tons 69.60

1,000 and under 3,000 gross tons 139.203,000 and under 5,000 gross tons 300.00

5,000 and over gross tons


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SEC. 2. With respect to foreign vessels, payment of pilotage services shall be made indollars or in pesos at the prevailing exchange rate.

SEC. 3. All orders, letters of instruction, rules, regulations and other issuancesinconsistent with this Executive Order are hereby repealed or amended accordingly.

SEC. 4. This Executive Order shall take effect immediately.

Done in the City of Manila, this 3rd day of February, in the year of our Lord, nineteenhundred and eighty-six.

(Sgd.) FERDINAND E. MARCOSPresident of the Philippines

By the President:

(Sgd.) JUAN C. TUVERAPresidential Executive Assistant

Petitioners contend that E.O. No. 1088 was merely an administrative issuance ofthen President Ferdinand E. Marcos and, as such, it could be superseded by an orderof the PPA. They argue that to consider E.O. No. 1088 a statute would be to deprive thePPA of its power under its charter to fix pilotage rates.

The contention has no merit. The fixing of rates is essentially a legislativepower.[10]Indeed, the great battle over the validity of the exercise of this power by

administrative agencies was fought in the 1920s on the issue of undue delegationprecisely because the power delegated was legislative. The growing complexity ofmodern society, the multiplication of the subjects of governmental regulations and theincreased difficulty of administering the laws made the creation of administrativeagencies and the delegation to them of legislative power necessary.[11]

There is no basis for petitioners' argument that rate fixing is merely an exercise ofadministrative power; that if President Marcos had power to revise the rates previouslyfixed by the PPA through the issuance of E.O. No. 1088, the PPA could in turn revisethose fixed by the President, as the PPA actually did in A.O. No. 43-86, which fixedlower rates of pilotage fees, and even entirely left the fees to be paid for pilotage to theagreement of the parties to a contract. The orders previously issued by the PPA were in

the nature of subordinate legislation, promulgated by it in the exercise of delegatedpower. As such these could only be amended or revised by law, as the President did byE.O. No. 1088.

It is not an answer to say that E.O. No. 1088 should not be considered a statutebecause that would imply the withdrawal of power from the PPA. What determineswhether an act is a law or an administrative issuance is not its form but its nature. Here,
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as we have already said, the power to fix the rates of charges for services, includingpilotage service, has always been regarded as legislative in character.

Nor is there any doubt of the power of the then President to fix rates. On February3, 1986, when he issued E.O. No. 1088, President Marcos was authorized under

Amendment No. 6 of the 1973 Constitution to exercise legislative power, just as he was

under the original 1973 Constitution, when he issued P.D. NO. 857 which created thePPA, endowing it with the power to regulate pilotage service in Philippine ports.

Although the power to fix rates for pilotage had been delegated to the PPA, it becamenecessary to rationalize the rates of charges fixed by it through the imposition of uniformrates. That is what the President did in promulgating E.O. No. 1088. As the Presidentcould delegate the ratemaking power to the PPA, so could he exercise it in specificinstances without thereby withdrawing the power vested by P.D. No. 857, Section 20(a)in the PPA "to impose, fix, prescribe, increase or decrease such rates, charges or fees...for the services rendered by the Authority or by any private organization within a PortDistrict."

It is worthy to note that E.O. No. 1088 provides for adjusted pilotage service rateswithout withdrawing the power of the PPA to impose, prescribe, increase or decreaserates, charges or fees. The reason is because E.O. NO. 1088 is not meant simply to fixnew pilotage rates. Its legislative purpose is the "rationalization of pilotage servicecharges, through the imposition of uniform and adjusted rates for foreign and coastwisevessels in all Philippine ports."

The case presented is similar to the fixing of wages under the Wage RationalizationAct (R.A. No. 6727) whereby minimum wages are determined by Congress andprovided by law, subject to revision by Wage Boards should later conditions warranttheir revision. It cannot be denied that Congress may intervene anytime despite theexistence of administrative agencies entrusted with wage-fixing powers, by virtue of the

former's plenary power of legislation. When Congress does so, the result is not thewithdrawal of the powers delegated to the Wage Boards but cooperative lawmaking inan area where initiative and expertise are required. The Court of Appeals is correct inholding that

The power of the PPA to fix pilotage rates and its authority to regulate pilotage stillremain notwithstanding the fact that a schedule for pilotage fees has already beenprescribed by the questioned executive order. PPA is at liberty to fix new rates ofpilotagesubject only to the limitation that such new rates should not go below therates fixed under E.O. 1088. The rationale behind the limitation is no different from

what has been previously stated. Being a mere administrative agency, PPA cannotvalidly issue orders or regulations that would have the effect of rendering nugatory theprovisions of the legislative issuance such as those of the executive order inquestion.(emphasis supplied)

Petitioners refused to implement E.O. No. 1088 on the ground that it was issuedwithout notice to the PPA and that it was nothing but a "political gimmick" resorted to by


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then President Marcos. This perception obviously stemmed from the fact that E.O. No.1088 was issued shortly before the presidential elections in 1986.

But lack of notice to the PPA is not proof that the necessary factual basis for theorder was wanting. To the contrary, the presumption is that the President had beforehim pertinent data on which he based the rates prescribed in his order. Nor is the fact

that the order might have been issued to curry favor with the voters a reason for thePPA to refuse to enforce the order in question. It is not unusual for lawmakers to have inmind partisan political consideration in sponsoring legislation. Yet that is not a groundfor invalidating a statute.

Moreover, an inquiry into legislative motivation is not proper since the only relevantquestion is whether in issuing it the President violated constitutional and statutoryrestrictions on his power. The PPA did not have any objection to the order based onconstitutional ground. In fact the nearest to a challenge on constitutional grounds wasthat mounted not by the PPA but by the intervenors below which claimed that the ratesfixed in E.O. NO. 1088 were exorbitant and unreasonable. However, both the trial court

and the Court of Appeals overruled the objections and the intervenors apparentlyaccepted the ruling because they did not appeal further to this Court.

There is, therefore, no legal basis for PPA's intransigence, after failing to get thenew administration of President Aquino to revoke the order by issuing it own order in theform of A.O. NO. 02-88. It is noteworthy that if President Marcos had legislative powerunder Amendment No. 6 of the 1973 Constitution[12]so did President Aquino under theProvisional (Freedom) Constitution[13]who could, had she thought E.O. No. 1088 to be amere "political gimmick," have just as easily revoked her predecessor's order. It istempting to ask if the administrative agency would have shown the same act of defianceof the President's order had there been no change of administration. What this Courtsaid in La Perla Cigar and Cigarette Factory v. Capapas,"[14]mutatis mutandis may be

applied to the cases at bar:

Was it within the powers of the then Collector Ang-angco to refuse to collect theduties that must be paid? That is the crucial point of inquiry. We hold that it was not.

Precisely, he had to give the above legal provisions, quite explicit in character, forceand effect. His obligation was to collect the revenue for the government in accordancewith existing legal provisions, executive agreements and executive orders certainlynot excluded. He would not be living up to his official designation if he werepermitted to act otherwise. He was not named Collector of Customs for nothing. . . .

Certainly, if the President himself were called upon to execute the laws faithfully, aCollector of Customs, himself a subordinate executive official, cannot be consideredas exempt in any wise from such an obligation of fealty. Similarly, if the Presidentcannot suspend the operation of any law, it would be presumptuous in the extreme forone in the position of then Collector Ang-angco to consider himself as possessed ofsuch a prerogative. . . .
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At this juncture, We are at a loss why appellants had elevated the present actionbefore Us where at the outset they already noted that the issue is purely legal.

If in the case of Murillo v. Consul (UDK-9748, Resolution en banc, March 1, 1990)the Supreme Court laid down the rule that "if an appeal by notice of appeal is taken

from the Regional Trial Court to the Court of Appeals, and in the latter Court, theappellant raised naught but issues of law, the appeal should be dismissed for lack ofjurisdiction (page 5, Resolution in Murillo)," then with more reason where as in thecase at bar public-appellants thru the Office of the Solicitor General in theirmemorandum manifested that the controversy has reference to the pure legal questionof the validity of the questioned administrative order. Consequently, We have no otherrecourse but to dismiss the petition on the strength of these pronouncements.

As already stated, from this decision, both the government and the intervenorsseparately brought petitions for review to this Court. In G.R. No. 100109, the

government's petition was dismissed for lack of showing that the appellate courtcommitted reversible error. The dismissal of the government's petition goes far tosustain the dismissal of the intervenors' petition in G.R. No. 100481 for the review of thesame decision of the Court of Appeals. After all, the intervenors' petition is based onsubstantially the same grounds as those stated in the government's petition. It is nowsettled that the dismissal of a petition for review on certiorariis an adjudication on themerits of a controversy.[16]Such dismissal can only mean that the Supreme Court agreeswith the findings and conclusions of the Court of Appeals or that the decision sought tobe reviewed is correct.[17]

It is significant to note that the Secretary of Transportation and Communicationsand the PPA, petitioners in G.R. No. 100109, have conceded the finality of the dismissalof their appeal.[18]Thus, the administrative policy, the validity of which herein petitionersseek to justify by their appeal, has already been abandoned by the very administrativeagency which adopted it, with the result that the question of validity of A.O. No. 02-88 isnow moot and academic.

C. Whether the Tr ial Court has Jur isd ict ion to Hear andDecide the Contempt Charges

against Peti t ioners(G.R. No. 107720)

As already noted, following the dismissal of the government's appeal in G.R. No.100109, the PPA abandoned A.O. No. 02-88 which provided for "Open PilotageSystem." But it subsequently promulgated Administrative Order No. 05-92, under whichthe PPA assumed the power of scheduling and assigning pilots to service vessels,allegedly regardless of whether the pilots assigned are or are not members of theUHPAP and the MPA which theretofore had been the exclusive agencies renderingpilotage service in Philippine ports. The UHPAP and the MPA saw the adoption of this
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system as a return to the "Open Pilotage System" and, therefore, a violation of the trialcourt's decision invalidating the "Open Pilotage System." They considered this to be acontempt of the trial court.

Petitioners moved to dismiss the motions for contempt against them. They contendthat even if the motions were filed as incidents of Civil Case No. 88-44726, the RTC-

Manila, Branch 2 did not have jurisdiction to hear them because the main case was nolonger before the court and the fact was that the contempt citation was not an incidentof the case, not even of its execution, but a new matter raising a new cause of actionwhich must be litigated in a separate action, even as petitioners denied they hadcommitted any contumacious act by the issuance of A.O. No. 05-92.

Private respondents maintained that their petitions were mere incidents of CivilCase No. 88-44726 and that the trial court has jurisdiction because in fact this Courthad not yet remanded the case to the court a quo for execution of its decision. Privaterespondents complain that petitioners are trying to circumvent the final and executorydecision of the court in Civil Case No. 88-44726, through the issuance of A.O. No. 05-

92.As already noted, however, the decision of the trial court in Civil Case No. 88-44726

enjoined petitioners from implementing the so called "Open Pilotage System" embodiedin A O. No. 02-88. If, as alleged, A.O. No. 05-92 is in substance a reenactment of A.O.No. 02-88, then there is basis for private respondents' invocation of the trial court's

jurisdiction to punish for contempt.

Still it is argued that the trial court lost jurisdiction over Civil Case No. 887426, uponthe perfection of their appeal from its decision. That is indeed true. "The appealtransfers the proceedings to the appellate court, and this last court becomes therebycharged with the authority to deal with contempt's committed after perfection of the

appeal."

[19]

The trial court would have jurisdiction only in the event of an attempt to blockexecution of its decision and that would be after the remand of the case to the trialcourt.[20]Until then the trial court would have no jurisdiction to deal with allegedcontemptuous acts.

The fly in the ointment, however, is that by accepting the dismissal of their petitionfor review in G.R. No. 100109, petitioners rendered execution of the decision of the trialcourt superfluous. Any attempt by them, therefore, to disobey the court's final injunctionas embodied in its decision would be properly subject to punishment for contempt.Petitioners' contention that private respondents' complaint must be the subject of aseparate action would nullify contempt proceedings as means of securing obedience tothe lawful processes of a court. Petitioners' theory would reward ingenuity and cunning

in devising orders which substantially are the same as the order previously prohibited bythe court.

We hold that the trial court has jurisdiction to hear the motions for contempt filed byprivate respondent, subject to any valid defense which petitioners may interpose.

III. JUDGMENT
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WHEREFORE, the several petitions in these cases are DISMISSED.

SO ORDERED.

Narvasa, C.J., Padilla, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan,Francisco, Hermosisima, Jr., Panganiban, andTorres, Jr., JJ., concur.

Regalado, J., no part related to a counsel in G.R. No. 100481.

[1]P.D. No. 857, 6(a)(ii).

[2]Id., 6(a)(viii).

[3]Id., 20(a).

[4]Petition in G.R. No. 103716, p. 4; Rollo, p. 13.

[5]Per Judge Domingo D. Panis.

[6]Per Justice Cancio C. Garcia and concurred in by Justices Manuel Herrera (Chairman) and AlfredoBenipayo.

[7]Per Judge Napoleon R. Flojo.

[8]Res., March 25, 1992.

[9]Petition in G.R. No. 107720, p. 10; Rollo, p. 11.

[10]See e.g., Ynchausti Steamship Co. v. Public Utility Commissioner, 42 Phil. 621, 624 (1922) ("the fixingof rates is a legislative and governmental power over which the government has completecontrol."); Employers Confederation of the Philippines v. National Wages and ProductivityCommission, 201 SCRA 759,765 (1991) ("wage-fixing, like rate-making, constitutes an act ofCongress.")

[11]As Justice Irene R. Cortes points out in her book, PHILIPPINE ADMINISTRATIVE LAW 117(1963): "[T]hat the legislature may directly provide for these rates, wages, or prices. But whilethe legislature may deal directly with these subjects it has been found more advantageous toplace the performance of these functions in some administrative agency. The reason is that thelegislature has not the time, the knowledge or the means necessary to handle adequately thesematters. The needs for dispatch, for flexibility and for technical know-how is better met byentrusting the rate-fixing to an agency other than the legislature itself."

[12]Legaspi v. Minister of Finance, 115 SCRA 418 (1982); Marcos v. Manlapus, 178 SCRA 760 (1989).

[13]Maceda v. Macaraig, Jr., 223 SCRA 217 (1993).

[14]28 SCRA 1085, 1091-1092 (1969) (emphasis supplied).

[15]Per Justice Manuel C. Herrera (Chairman) and concurred in by Justices Alfredo L. Benipayo andFortunato A. Vailoces.

[16]Commercial Union Assurance Limited v. Lepanto Consolidated Mining Company, 86 SCRA 79 (1978);Tayag v. Yuseco, 105 Phil. 484 (1959).

[17]Smith Bell and Company (Phils.), Inc. v. Court of Appeals, 197 SCRA 201 (1991).

[18]See discussion in G.R. 107720, infra.

[19]People v. Alarcon, 69 Phil 265, 272 (1939). See People v. Godoy, 243 SCRA 64 (1995).
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[20]Philippine National Construction Corp. v. Court of Appeals, 228 SCRA 565 (1993); Shoji v. Harvey, 43Phil 333 (1922).

East Shipping Lines (ESL)vs Court of AppealsPosted onDecember 6, 2012

95 SCAD 349

291 SCRA 485

1998

Constitutionality of E.O. No. 1088 providing for uniform & adjusted rates for foreign and coasteise

vessels in all Philippine Ports is assailed.

FACTS:

Davao Pilots Association (DPA) filed a compliant against ESL for non-payment of pilotage services.

ESL assailed the constitutionality of EO 1088, upon which DPA bases its claim,because (1) its

interpretation & application are left private respondent, and (2) it constitutes an undue delegation of

powers. It insists that it should pay pilotage fees in accordance with and on the basis of the PPAs

memorandum circulars. The PPA is the administrative body vested with the power to regulate &

prescribe pilotage fees.

ISSUES:

1. Whether EO 1088 is unconstitutional.

2. Whether the PPA circulars are valid.HELD:

1.

EO 1088 was upheld as valid & constitutional inPhilippine Inter-island Shipping Association vs

CA (78 SCAD 197, 266 SCRA 489 [1997]). It was held that what determines whether an act is a

law or an administrative issuance is not its form but its natureThe power to fix the rates of

charges for serviceshas always been regarded as legislative in character.

EO 1088 is not meant simply to fix new pilotage rates. Its legislative purpose is the rationalization

of pilotage service charges through the imposition if uniform and adjusted rates for foreign &

coastwise vessels in all Philippine ports.

The PPA is duty-bound to comply with EO 1088. PPA may increase the rates but it may not decrease

them below those mandated by EO 1088.

2.

Since the PPA circulars are inconsistent with EO 1088, they are void and ineffective.

Administrative/Executive acts, orders and regulations are only valid when they are not
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contrary to the laws or the Constitution.

As stated inLBP vs CA (64 SCAD 905, 249 SCRA 149 [1995]), the conclusive effect of

administrative construction is not absolute. Action of an administrative agency may be

disturbed/set aside by the judicial department if there is an Error of Law, a Grave Abuse of

Power or Lack or Jurisdiction, orGrave Abuse of Discretionclearly conflicting with either the

letter or spirit of the law.

An administrative agency has no discretion whether to implement a law or not. If there is any

conflict between the PPA circular and a law, the latter prevails.Posted inCase Digests| Tagged1998,291 SCRA 485,95 SCAD 349,Admin Law,administrative agency,administrative

construction,administrative issuance,Administrative Law,CA,Court of Appeals,East Shipping Lines,Eastern Shipping

Lines vs CA,EO No. 1088,ESL,ESL vs CA,rate-fixing,Rule-Making Powers|Leave a reply

Sultan Osop Camid vs. The office of the President

G.R. No. 161414 January 14, 2005

Facts:

The municipality of Andong, Lanao del Sur, is a town that is not supposed to exist yet is

actually insisted by some as alive and thriving. The creation of the putative municipality was

declared void ab initio by the Supreme Court four decades ago, but the present petition

insists that Andong thrives on and, hence, its legal personality should be given judicial

affirmation.

xxx

The factual antecedents derive from the ruling inPelaez vs.Auditor Generalin 1965. ThenPresident Diosdado Macapagal issued several Executive Orders creating 33 municipalities

in Mindanao.

President Macapagal justified the creation of these municipalities citing his powers under

Sec.68 of the Revised Admin. Code. Then VP Emmanuel Pelaez filed a special civil action

for a writ of prohibition alleging that the EOs were null and void, Sec. 68 having been

repealed by RA 2370, and said orders constituting an undue delegation of legislative

power.

After due deliberation, the SC ruled that the challenged EOs were null and void since Sec.

68 of the Revised Admin. Code did not meet the well-settled requirements for a valid

delegation of legislative power to the executive branch.

Among the EOs annulled was EO 107 which created the Municipality of Andong.

Petitioner represents himself as a current resident of Andong and alleged that Andong has

metamorphosed into a full-blown municipality with a complete set of officials appointed to

handle essential services for the municipality and its constituents, despite the fact that no
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person has been appointed, elected or qualified to serve any of the local government offices

of Andong since 1968.

Camid imputed grave abuse of discretion on the part of DILG in not classifying [Andong] as

a regular existing municipality and in not including said municipality in its records and official

database as [an] existing regular municipality. He argues thatPelaezhas already been

modified by supervening events consisting of subsequent laws and jurisprudence,

particularly citing Municipality of San Narciso v. Hon. Mendezwherein the court affirmed the

unique status of the Municipality of San Andres as a de factomunicipal corporation. Camid

also cites Sec. 442(d) of the Local Government Code of 1991 as basis for the recognition of

the impugned municipality.

Issue:

Whether the judicial annulment of the Municipality of Andong continues despite the

petitioners allegation that Andong has thrived into a full-blown municipalityHeld:

Municipal corporations may exist by prescription where it is shown that the community has claimed

and exercised corporate functions with the knowledge and acquiescence of the legislature, and

without interruption or objection for period long enough to afford title by prescription. What is

clearly essential is a factual demonstration of the continuous exercise by the municipal

corporation of its corporate powers, as well as the acquiescence thereto by instrumentalities

of the state. Camids plaint should have undergone the usual administrative gauntlet and,

once that was done, should have been filed first with the Court of Appeals, which at least

would have had the power to make the necessary factual determinations.Petitioners seeming

ignorance of the principles of exhaustion of administrative remedies and hierarchy of courts, as well

as the concomitant prematurity of the present petition, cannot be countenanced.

The question as to whether a municipality previously annulled by the Supreme Court may

attain recognition in the absence of any curative/reimplementing statute has never been

decided before. The effect of Sec. 442(d) of the Local Government Code on municipalities

such as Andong warrants explanation.

EO 107 which established Andong was declared null and voidab initio in 1965 by theSupreme Court inPelaez vs. Auditor General, 15 SCRA 569 (1965), along with 33 other EOs.

The phrase ab initio means from the beginning.Pelaezwas never reversed by the SC but

was rather expressly affirmed in the cases of Municipality of San Joaquin v. Siva,Municipality

of Malabang v. Benito, andMunicipality of Kapalong v. Moya. No subsequent ruling

declaredPelaezas overturned/inoperative. No subsequent legislation has been passed


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since 1965 creating the Municipality of Andong. Given these facts, there is hardly any

reason to elaborate why Andong does not exist as a duly constituted municipality.

Pelaezand its offspring cases ruled that the President has no power to create municipalities yet

limited its nullificatory effects to the particular municipalities challenged in actual cases

before this Court. With the promulgation of the LGC in 1991, the legal cloud was lifted over

the municipalities similarly created by executive order but not judicially annulled Sec.

442(b) of the LGC deemed curative whatever legal defects to title these municipalities had

labored under.

There are eminent differences between Andong and municipalities such as San Andres,

Alicia and Sinacaban. Most prominent is the fact that the EO creating Andong was expressly

annulled by the SC in 1965. Court decisions cannot lose their efficacy due to sheer defiance by the

parties aggrieved.

Sec. 442(d) of the LGC does not serve to affirm/reconstitute the judicially dissolvedmunicipalities which had been previously created by presidential issuances/EOs. The

provision only affirms the legal personalities of those municipalities which may have been created

using the same infirm legal basis, yet were fortunate enough not to have been judicially annulled. On

the other hand, the municipalities judicially dissolved remain inexistent unless recreated

through specific legislative enactments.

The legal effect of the nullification of a municipality in Pelaez was to revert the constituent barrios

of the voided town back to their original municipalities.

If there is only a strong impulse for the reconstitution of the municipality nullified inPelaez,

thesolution is through the legislature and not judicial confirmation of void title.

Sema vs COMELECon June 23, 2011

Municipal CorporationCreation of LGUs by Autonomous Regions (ARMM)Population Requirement

The Province of Maguindanao is part of ARMM. Cotabato City is part of the province of Maguindanao but

it is not part or ARMM because Cotabato City voted against its inclusion in a plebiscite held in 1989.

Maguindanao has two legislative districts. The 1stlegislative district comprises of Cotabato City and 8 other

municipalities.

A law (RA 9054) was passed amending ARMMs Organic Act and vesting it with power to create

provinces, municipalities, cities and barangays. Pursuant to this law, the ARMM Regional Assembly

created Shariff Kabunsuan (Muslim Mindanao Autonomy Act 201) which comprised of the municipalities

of the 1st district of Maguindanao with the exception of Cotabato City.


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For the purposes of the 2007 elections, COMELEC initially stated that the 1 st district is now only made of

Cotabato City (because of MMA 201). But it later amended this stating that status quo should be retained

however just for the purposes of the elections, the first district should be called Shariff Kabunsuan with

Cotabato Citythis is also while awaiting a decisive declaration from Congress as to Cotabatos status as

a legislative district (or part of any).

Sema was a congressional candidate for the legislative district of S. Kabunsuan with Cotabato

(1st district). Later, Sema was contending that Cotabato City should be a separate legislative district and

that votes therefrom should be excluded in the voting (probably because her rival Dilangalen was from

there and D was winning in fact he won). She contended that under the Constitution, upon creation of

a province (S. Kabunsuan), that province automatically gains legislative representation and since S.

Kabunsuan excludes Cotabato City so in effect Cotabato is being deprived of a representative in the

HOR.

COMELEC maintained that the legislative district is still there and that regardless of S. Kabunsuan being

created, the legislative district is not affected and so is its representation.

ISSUE: Whether or not RA 9054 is unconstitutional. Whether or not ARMM can create validly LGUs.

HELD: RA 9054 is unconstitutional. The creation of local government units is governed by Section 10,

Article X of the Constitution, which provides:

Sec. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished or its

boundary substantially altered except in accordance with the criteria established in the local government

code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly

affected.

Thus, the creation of any of the four local government units province, city, municipality or barangay must

comply with three conditions. First, the creation of a local government unit must follow the criteria fixed

in the Local Government Code. Second, such creation must not conflict with any provision of the

Constitution. Third, there must be a plebiscite in the political units affected.

There is neither an express prohibition nor an express grant of authority in the Constitution for Congress

to delegate to regional or local legislative bodies the power to create local government units. However,

under its plenary legislative powers, Congress can delegate to local legislative bodies the power to create

local government units, subject to reasonable standards and provided no conflict arises with any

provision of the Constitution. In fact, Congress has delegated to provincial boards, and city and municipal

councils, the power to create barangays within their jurisdiction, subject to compliance with the criteria


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established in the Local Government Code, and the plebiscite requirement in Section 10, Article X of the

Constitution. Hence, ARMM cannot validly create Shariff Kabunsuan province.

Note that in order to create a city there must be at least a population of at least 250k, and that a

province, once created, should have at least one representative in the HOR. Note further that in order to

have a legislative district, there must at least be 250k (population) in said district. Cotabato City did not

meet the population requirement so Semas contention is untenable. On the other hand, ARMM cannot

validly create the province of S. Kabunsuan without first creating a legislative district. But this can never

be legally possible because the creation of legislative districts is vested solely in Congress. At most, what

ARMM can create are barangays not cities and provinces.

Delegation of Powerss

Documents

Transcript of Delegation of Powerss