G.R. No.
159796 July 17, 2007
ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST
CONSUMERS NETWORK, INC. (ECN), petitioners
vs
DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC),
NATIONAL POWER CORPORATION (NPC), POWER SECTOR ASSETS AND
LIABILITIES MANAGEMENT GROUP (PSALM Corp.), STRATEGIC POWER UTILITIES
GROUP (SPUG), and PANAY ELECTRIC COMPANY INC. (PECO), respondents.
FACTS:
On June 8, 2001 Congress enacted RA 9136 or the Electric Power Industry Act of
2001. Petitioners Romeo P. Gerochi and company assail the validity of Section 34
of the EPIRA Law for being an undue delegation of the power of taxation. Section
34 provides for the imposition of a “Universal Charge” to all electricity end users
after a period of (1) one year after the effectively of the EPIRA Law. The universal
charge to be collected would serve as payment for government debts, missionary
electrification, equalization of taxes and royalties applied to renewable energy
and imported energy, environmental charge and for a charge to account for all
forms of cross subsidies for a period not exceeding three years. The universal
charge shall be collected by the ERC on a monthly basis from all end users and
will then be managed by the PSALM Corp. through the creation of a special trust
fund.
ISSUE:
Whether or not there is an undue delegation of the power to tax on the part of
the ERC
HELD:
No, the universal charge as provided for in section 34 is not a tax but an exaction
of the regulatory power (police power) of the state. The universal charge under
section 34 is incidental to the regulatory duties of the ERC, hence the provision
assailed is not for generation of revenue and therefore it cannot be considered as
tax, but an execution of the states police power thru regulation.
Moreover, the amount collected is not made certain by the ERC, but by the
legislative parameters provided for in the law (RA 9136) itself, it therefore cannot
be understood as a rule solely coming from the ERC. The ERC in this case is only
a specialized administrative agency which is tasked of executing a subordinate
legislation issued by congress; which before execution must pass both the
completeness test and the sufficiency of standard test. The court in appreciating
Section 34 of RA 9136 in its entirety finds the said law and the assailed portions
free from any constitutional defect and thus deemed complete and sufficient in
form.
JAWORSKI vs. PAGCOR
G.R. No. 144463 - January 14, 2004
FACTS:
The Philippine Amusement and Gaming Corporation (PAGCOR) is a government
owned and controlled corporation existing under PD No. 1869 issued on July 11,
1983 by then President Ferdinand Marcos.
On March 31, 1998, PAGCOR’s board of directors approved an instrument
denominated as “Grant of Authority and Agreement for the Operation of Sports
Betting and Internet Gaming,” which granted Sports and Games and
Entertainment Corporation (SAGE) the authority to operate and maintain Sports
Betting station in PAGCOR’s casino locations, and Internet Gaming facilities to
service local and international bettors, provided that to the satisfaction of
PAGCOR, appropriate safeguards and procedures are established to ensure the
integrity and fairness of the games. On September 1, 1998, PAGCOR,
represented by its Chairperson, Alicia LI. Reyes, and SAGE, represented by its
Chairman of the Board, Henry Sy, Jr., and its President, Antonio D. Lacdao,
executed the above-named document. Pursuant to the authority granted by
PAGCOR, SAGE commended its operations by conducting gambling on the
Internet on a trial-run basis, making pre-paid cards and redemption of winnings
available at various Bingo Bonanza outlets.
Petitioner Senator Robert Jaworski, in his capacity as member of the Senate and
Chairman of the Senate Committee on Games, Amusement and Sports, filed the
instant petition, praying that the grant of authority by PAGCOR in favor of SAGE
be nullified. He maintains that PAGCOR committed grave abuse of discretion
amounting to lack or excess of jurisdiction when it authorized SAGE to operate
gambling on the internet. He contends that PAGCOR is not authorized under its
legislative franchise, PD No. 1869, to operate gambling on the internet for the
simple reason that the said decree could not have possibly contemplated internet
gambling since at the time of its enactment on July 11, 1983 the internet was yet
inexistent and gambling activities were confined exclusively to real-space.
Further, he argues that the internet, being an international network of computers,
necessarily transcends the territorial jurisdiction of the Philippines, and the grant
to SAGE of authority to operate internet gambling contravenes the limitation of
PAGCOR’s franchise, under Section 14 of PD No. 1869 which provides: “Place. –
The Corporation [i.e., PAGCOR] shall conduct gambling activities or games of
chance on land or water within the territorial jurisdiction of the Republic of the
Philippines. x x x.”
Moreover, according to petitioner, internet gambling does not fall under any of
the categories of the authorized gambling activities enumerated under Section 10
of PD No. 1869 which grants PAGCOR the “right, privilege and authority to
operate and maintain gambling casinos, clubs, and other recreation or
amusement places, sports gaming pools, within the territorial jurisdiction of the
Republic of the Philippines.” He contends that internet gambling could not have
been included within the commonly accepted definition of “gambling casinos,”
“clubs” or “other recreation or amusement places” as these terms refer to a
physical structure in real-space where people who intend to bet or gamble go
and play games of chance authorized by law.
ISSUE:
Whether or not PAGCOR is allowed to contract any of its franchise to another
entity such as SAGE.
RULING:
No. A legislative franchise is a special privilege granted by the state to
corporations. It is a privilege of public concern which cannot be exercised at will
and pleasure, but should be reserved for public control and administration, either
by the government directly, or by public agents, under such conditions and
regulations as the government may impose on them in the interest of the public.
It is Congress that prescribes the conditions on which the grant of the franchise
may be made. Thus the manner of granting the franchise, to whom it may be
granted, the mode of conducting the business, the charter and the quality of the
service to be rendered and the duty of the grantee to the public in exercising the
franchise are almost always defined in clear and unequivocal language.
While PAGCOR is allowed under its charter to enter into operator’s and/or
management contracts, it is not allowed under the same charter to relinquish or
share its franchise, much less grant a veritable franchise to another entity such
as SAGE. PAGCOR cannot delegate its power in view of the legal principle of
delegata potestas delegare non potest, inasmuch as there is nothing in the
charter to show that it has been expressly authorized to do so. In Lim v.
Pacquing, the Court clarified that “since ADC has no franchise from Congress to
operate the jai-alai, it may not so operate even if it has a license or permit from
the City Mayor to operate the jai-alai in the City of Manila.” By the same token,
SAGE has to obtain a separate legislative franchise and not “ride on” PAGCOR’s
franchise if it were to legally operate on-line Internet gambling.
PHILIPPINE INTERISLAND SHIPPING ASSOCIATION OF PHILIPPINES v. CA, GR
No. 100481, 1997-01-22
Facts:
Private respondent United Harbor Pilots' Association of the Philippines, Inc.
(UHPAP) is the umbrella organization of various groups rendering pilotage service
in different ports of the Philippines.
On February 3, 1986, shortly before the presidential elections, President
Ferdinand E. Marcos, responding to the clamor of harbor pilots for an increase in
pilotage rates, issued Executive Order No. 1088, PROVIDING FOR UNIFORM AND
MODIFIED RATES FOR PILOTAGE SERVICES RENDERED TO
FOREIGN AND COASTWISE VESSELS IN ALL PRIVATE AND PUBLIC PORTS. The
executive order increased substantially 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
had been drawn hastily and without prior consultation; that its enforcement
would create disorder in the ports as the operators and owners of the maritime
vessels had expressed opposition to its... implementation; and that the increase
in pilotage, as mandated by it, was exorbitant and detrimental to port operations.
The UHPAP then announced its intention to implement E.O. No. 1088 effective
November 16, 1986.
Consequently, the UHPAP filed on January 7, 1987 a complaint for injunction with
the Regional Trial Court of Manila
On February 26, 1988, while the case was pending, the PPA issued Administrative
Order 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 pilotage services, 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 PPA then moved to dismiss the case, contending that the issuance of its
order had rendered the case moot and academic and that consequently E.O. No.
1088 had ceased to be effective.
Meanwhile, in Civil Case 87-38913, the court, without resolving the motion to
dismiss filed by the PPA, rendered a decision[5] holding that A.O. No. 02-88 did
not render the case moot and academic and that the PPA was under obligation to
comply with E.O.
No. 1088 because the order had the force of law which the PPA could not repeal.
The then Transportation Minister Hernando Perez and the PPA filed a petition for
review. 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.
In a decision rendered on October 4, 1991, the Twelfth Division[6] of the Court of
Appeals affirmed the decision of the trial court, by dismissing CA G.R. No. 21590
and denying CA G.R. SP. No. 18072.
Issues:
Issue No. 1
Whether Executive Order No. 1088 is Valid and
Petitioners are Bound to Obey it
Issue No. 2
Whether the Court of Appeals had Jurisdiction over the
Appeal of Intervenors from the Decision of the
Trial Court Invalidating Administrative Order
No. 02-88 of the PPA
Issue no. 3
Whether the Trial Court has Jurisdiction to Hear and
Decide the Contempt Charges... against Petitioners
Ruling:
For issue no. 1
The fixing of rates is essentially a legislative power.
On February 3, 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 the PPA, 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 became necessary to
rationalize the rates of charges fixed... by it through the imposition of uniform
rates.
As the President could delegate the ratemaking power to the PPA, so could he
exercise it in specific instances 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 Port District."
We conclude that E.O. No. 1088 is a valid statute and that the PPA is duty bound
to comply with its provisions. The PPA may increase the rates but it may not
decrease them below those mandated by E.O. No. 1088.
For issue no. 2... both the government and the intervenors separately 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 court committed reversible
error. The... dismissal of the government's petition goes far to sustain the
dismissal of the intervenors' petition in G.R. No. 100481 for the review of the
same decision of the Court of Appeals. After all, the intervenors' petition is based
on substantially the same grounds as those stated... in the government's petition.
It is now settled that the dismissal of a petition for review on certiorari is an
adjudication on the merits of a controversy.[16] Such dismissal can only mean
that the Supreme Court agrees with the findings and conclusions of... the Court
of Appeals or that the decision sought to be reviewed is correct.
For issue no. 3
The trial court would have jurisdiction only in the event of an attempt to block
execution of its decision and that would be after the remand of the case to the
trial... court.[20] Until then the trial court would have no jurisdiction to deal with
alleged contemptuous acts.
The fly in the ointment, however, is that by accepting the dismissal of their
petition for review in G.R. No. 100109, petitioners rendered execution of the
decision of the trial court superfluous. Any attempt by them, therefore, to disobey
the court's final injunction as... embodied in its decision would be properly
subject to punishment for contempt. Petitioners' contention that private
respondents' complaint must be the subject of a separate action would nullify
contempt proceedings as means of securing obedience to the 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 by the
court.
We hold that the trial court has jurisdiction to hear the motions for contempt filed
by private respondent, subject to any valid defense which petitioners may
interpose.
Principles:
The fixing of rates is essentially a legislative power.
Garcia v. Executive Secretary GR 101273, 211 SCRA 219 [Jul
3, 1992]
Facts. The Tariff and Customs Code (TCC) states that in the
interest of national economy, general welfare and/or national
security, the President, subject to limitations therein provided, may
increase xxx existing protective rates of import duty xxx when
necessary. Pursuant to the TCC, the President issued EO 475 and
478 imposing an additional duty of 9% ad valorem to imported
crude oil and other oil products, and a special duty of P0.95 per liter
of imported crude oil and P1.00 per liter of imported oil products.
Rep. Garcia contests the validity of the foregoing EOs averring that
they are violative of Sec 24, Art VI of the Constitution which
provides: All xxx revenue or tariff bills shall originate in the House
of Representatives xxx. He also argues that said EOs contravene
the TCC because the latter authorizes the President to, according to
him, impose additional duties only when necessary to protect local
industries.
Issue. Are said EOs unconstitutional?
Held. No. There is explicit Constitutional permission to Congress to
authorize the President to, “subject to such limitations and
restrictions as [Congress] may impose”, fix “within specific limits
tariff rates xxx and other duties or imposts xxx.”54 Moreover,
Garcia’s argument that the “protection of local industries” is the
only permissible objective that can be secured by the exercise of
the delegated authority—that which was provided in the TCC to be
exercised by the President in “the interest of national economy,
general welfare and/or national security”—is a stiflingly narrow one.
We believe, for instance, that the protection of consumers is at the
very least as important a dimension of the “the interest of national
economy, general welfare and national security” as the protection of
local industries.
Eastern Shipping Lines v. POEA
GR 76633 [Oct 18, 1988]
Facts. POEA was created by EO 797 which mandated it to protect OFWs to "fair
and equitable employment practices.”
Saco who was married to private respondent was killed in an accident
while employed as Chief Officer of the vessel owned by petitioner Eastern
Shipping Lines (ESL). Private respondent sued for damages. ESL argued
that the complaint was not cognizable by the POEA but by the SSS. POEA
nevertheless assumed jurisdiction and ruled in favor of the private
respondent in accordance with POEA MC No. 2. MC No. 2 prescribed a
standard contract to be adopted by shipping companies. ESL went to this
Court to move for dismissal. It contests the validity of MC No. 2 stating that it is
violative of the principle of non-delegation of legislative powers, contending that
it represents an exercise of legislative discretion. It further avers that it has been
denied due process because the same POEA that issued MC No. 2 has also
sustained and applied it.
Issues.
(1) Is MC No. 2 a violation of the principle of non-delegation of legislative
powers?
(2) Did MC No. 2 deny the petitioner of due process?
Held.
(1) No. Because of the increasing complexity of the task of the govt and
the growing inability of the legislature to cope directly with the myriad
problems demanding its attention, specialization in legislation has
become necessary and thus delegation of legislative power is in many
instances permitted. The “power of subordinate legislation” or the
authority to issue rules (supplementary regulations) to carry out the
general provisions of the statute given to administrative bodies has
become more and more necessary. MC No. 2 is one such
administrative regulation. There are two accepted tests to determine
whether or not there is a valid delegation of legislative power, viz, the
completeness test and the sufficient standard test.50 The power of
POEA in requiring the contract prescribed by MC No. 2 is not unlimited
as there is a sufficient standard guiding the delegate (POEA) in the
exercise of said authority. That standard is discoverable in the EO
itself which, in creating the POEA, mandated it to protect the rights of
OFWs to "fair and equitable employment practices.”
(2) No. Administrative agencies, such as POEA, are vested with two basic
powers, the quasi-legislative and the quasi-judicial. The first enables
them to promulgate implementing rules and regulations, and the
second enables them to interpret and apply such regulations. Such an
arrangement has been accepted as a fact of life of modern
governments and cannot be considered violative of due process as
