G.R. No.

L-24796 June 28, 1968

DIRECTOR OF FORESTRY, FOREST STATION WARDEN, DISTRICT 13, BUREAU

OF FORESTRY, BOARD OF DIRECTORS, NATIONAL WATERWORKS AND
SEWERAGE AUTHORITY 1 and CHIEF OF STAFF, ARMED FORCES OF THE
PHILIPPINES, petitioners,
vs.
HON. EMMANUEL M. MUÑOZ, as Judge of the Court of First Instance of Bulacan,
Branch I, the SHERIFF OF THE PROVINCE of BULACAN, and PINAGCAMALIGAN
INDO-AGRO DEVELOPMENT CORPORATION, INC.,respondents.

SANCHEZ, J.:

FACTS: Pinagcamaligan Indo-Agro Development Corporation, Inc. (Piadeco) is a

company engaged in logging. It was given a Certificate of Private Woodland Registration
so that it can operate in a 72,000 hectare land. It also has a Titulo de Propriedad which it
acquired in 1894 under the Spanish regime.
In 1964, the NAWASA (National Water and Sewerage Authority) director ordered the
cancellation of Piadeco’s certificate because it encroached beyond what was allowed in
the certificate. It actually cut trees in the Angat and Marikina watershed area which was
prohibited. The lower court ruled in favor of Piadeco. Piadeco also had a settlement with
Nawasa. Lower court approved the compromise agreement and held that Piadeco was
the owner of the land in question; that its operation was not in violation of forestry rules
and regulations; that aside from its regulation certificate, Piadeco was permitted by
Nawasa thru the latter's Resolution 1050, Section of 1963, to conduct selective logging
within the Angat-Marikina Watershed.
Piadeco sought to renew its certificate but it was denied by the Asst. Director of Forestry.
The Director ruled that the Spanish title is no longer recognized and should have never
been used to apply for a Certificate but still Piadeco continued logging operations.
Thereafter, the President of the Philippines directed the Secretary of Agriculture and
Natural Resources to lead the stop of illegal logging operations, thus, they wrote
Secretary of National Defense with the request that units of the Armed Forces of the
Philippines be detailed at the areas involved, deputizing them agents of the Bureau of
Forestry to assist in the enforcement of forest laws, rules and regulations, and the
protection of the forests. Piadeco’s log cuts were seized, hence, this petition for
prohibition and injunction.
ISSUE: Whether or not Piadeco can claim ownership over the property and whether that
Forestry Administrative Order 12-2 is valid.
HELD: No. The Spanish title it acquired cannot be used to register for another Certificate.
There should be no question now that Forestry Administrative Order 12-2 has the force
and effect of law. It was promulgated pursuant to law. Section 1817, Revised
Administrative Code, empowers the Bureau of Forestry, with the approval of the
department head, to issue regulations “deemed expedient or necessary to secure the
protection and conservation of the public forests in such manner as to insure a continued
supply of valuable timber and other forest products for the future, and regulating the use
and occupancy of the forests and forest reserves, to the same end.” Forestry
Administrative Order 12-2 was recommended by the Director of Forestry, and approved
by the Secretary of Agriculture and Natural Resources. It is no less a valid law. It is an
administrative regulation germane to the objects and purposes of the law. A rule shaped
out by jurisprudence is that when Congress authorized the promulgation of administrative
rules and regulations to implement a given legislation, “[a]ll 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.”

G.R. No. L-16704 March 17, 1962

VICTORIAS MILLING COMPANY, INC., petitioner-appellant,
vs.
SOCIAL SECURITY COMMISSION, respondent-appellee.

BARRERA, J.:

Facts: The Social Security Commission issued Circular No. 22 on October 15, 1958
requiring all employers in computing premiums to include employee’s remuneration all
bonuses and overtime time pay, as well as the cash value of other media remunerate

The petitioner Victorias Milling Company, Inc. protest against the circular as it is contrary
to a previous Circular No. 7 dated October 7, 1957. Circular No. 7 excludes overtime pay
and bonus in the computation of the employers’ and the employees’ respective monthly
premium contributions. Petitioner through counsel questioned the validity of Circular 22
for lack of authority on the part of the Social Security Commission to promulgate it without
the approval of the President and for lack of publication in the Official Gazette.

Social Security Commission ruled that Circular No. 22 is not a rule or regulation that
needed the approval of the President and publication in the Official Gazette to be
effective, but a mere administrative interpretation of the statute, a mere statement of
general policy or opinion as to how the law should be construed. Hence, this appeal to
the Supreme Court.

Issue Whether or not Circular No. 22 is rule and regulation as contemplated in Section
4(a) of Republic Act 1161 empowering the Social Security Commission “to adopt, amend
and repeal subject to the approval of the President such rules and regulations as may be
necessary to carry out the provisions and purposes of this Act”

Held: No. The Supreme Court finds that Circular No. 22 purports merely to advise
employers-members of the System of what, in the light of the amendment of the law, they
should include in determining the monthly compensation of their employees upon which
the social security contributions should be based, and that such circular did not require
presidential approval and publication in the Official Gazette for its effectivity.

There can be no doubt that there is a distinction between an administrative rule or

regulation and an administrative interpretation of a law whose enforcement is entrusted
to an administrative body. When an administrative agency promulgates rules and
regulations, it "makes" a new law with the force and effect of a valid law, while when it
renders an opinion or gives a statement of policy, it merely interprets a pre-existing law
(Parker, Administrative Law, p. 197; Davis, Administrative Law, p. 194). Rules and
regulations when promulgated in pursuance of the procedure or authority conferred upon
the administrative agency by law, partake of the nature of a statute, and compliance
therewith may be enforced by a penal sanction provided in the law. This is so because
statutes are usually couched in general terms, after expressing the policy, purposes,
objectives, remedies and sanctions intended by the legislature. The details and the
manner of carrying out the law are often times left to the administrative agency entrusted
with its enforcement. In this sense, it has been said that rules and regulations are the
product of a delegated power to create new or additional legal provisions that have the
effect of law. (Davis, op. cit., p. 194.) .

Republic Act No. 1161 before its amendment defines compensation as: All remuneration
for employment include the cash value of any remuneration paid in any medium other
than cash. Except:

that part of the remuneration in excess of P500 received during the month;

bonuses, allowances or overtime pay; and

dismissal and all other payments which the employer may make, although not legally
required to do so.

Republic Act No. 1792 changed the definition of “compensation” to: (f) Compensation —
All remuneration for employment include the cash value of any remuneration paid in any
medium other than cash except that part of the remuneration in excess of P500.00 rceived
during the month.

Circular No. 22 was issued to advise the employers and employees concerned with the
interpretation of the law as amended which was Social Security Commission’s duty to
enforce. The Commission simply stated their opinion as to how the law should be
construed and that such circular did not require presidential approval and publication in
the Official Gazette for its effectivity. Whereas if it renders an opinion or a statement of
policy, it merely interprets a pre-existing law. Administrative interpretation of law is at best
merely advisory for it is the courts that finally determine what the law means.

IN VIEW OF THE FOREGOING, the Resolution appealed from is hereby affirmed, with
costs against appellant. So ordered.
G.R. No. L-37869 February 17, 1933

PANAY AUTOBUS COMPANY, petitioner-appellant,

vs.
PHILIPPINE RAILWAY CO., respondent-appellee.

VICKERS, J.:

DOCTRINE: An administrative agency cannot delegate its power to set rates unless it is
specifically provided in a law. When the administrative agency is given the power to set
rates, a company may only propose rates and such proposal is still subject to the approval
of said agency. There are cases (as in vessels) when the company set rates when the
law is silent on the matter (the law only gives the administrative agency the authority ot
set max rates). However legislature still has not authorized the Public Service
Commission to delegate the power to fix rates to common carriers or other public services

FACTS: On April 8, 1932, R. R. Hancock, vice-president and general manager of the

Philippine Railway Co.(RESP), filed with the Public Service Commission a petition to be
allowed to “alter the freight rates of the Philippine Railway Company on the Cebu and
Panay Divisions whenever in our judgment we find it necessary in order to meet the
competition of road trucks and auto busses” in line with their previous request to be
allowed to “alter our passenger rates at will”

According to them(RESP), they need to be able to adjust and fix rates because freight,
as well as passengers, is handled by road trucks and auto busses without regard to any
regulation or law they run up and down the highways and into station grounds bargaining
for every piece of freight and every passenger.

The changes are based primarily on the railway rates. The trucks simply go to a shipper
and ask that what the railway charges, and then offer to haul the freight at a few centavos
less per bulto or ton.Because their rates are fixed they are left with no chance to secure
the freight and Railway Company is placed at a great disadvantage in not being able to
bid for the business, and consequently loses out whenever the road autos can charge a
slightly lower rate.

On June 28, 1932 the Panay Autobus Company filed its opposition to the applications of
the Philippine Railway Co. on the following grounds:

1. That the opponent company operates a bus service in the Island of Panay with the
right and privilege to transport passengers and freight at schedule of rates fixed by
this Honorable Commission;
2. That the petition for flexible rates could not be granted by this Honorable as it is
against the fundamental principles of public utility regulation;
3. That the granting of a flexible rate will work ruinous competition with other common
carriers in the field"; and on the same date asked for a rehearing on the ground
that the decision was contrary to law and the fundamental principles of public utility
 regulation. The motion for a rehearing was denied by the commission on July 20,
1932.

Hence, this petition.

ISSUE: Whether the Public Service Commission can delegate to the Phil Railway Co. the
power of altering its freight rates

RULING: No. The Supreme Court ruled that the Public Service Commission was not
authorized by law to delegate to the Philippine Railway Co. the power of altering its freight
rates whenever it should find it necessary to do so in order to meet the competition of
road trucks and autobuses, or to change its freight rates at will, or to regard its present
rates as maximum rates, and to fix lower rates whenever in the opinion of the Philippine
Railway Co. it would be to its advantage to do so because the legislature has not
authorized such act.

The rates of public services like the Philippine Railway Co. have been approved or fixed
by the Public Service Commission and any change in such rates must be authorized or
approved by the Public Service Commission after they have been shown to be just and
reasonable. Section 16 of the Public Service Commission prohibits any public service
from exacting any unjustly discriminatory rate, clearly, the commission cannot determine
in advance whether or not the new rates of the Philippine

Railway Co, will be just and reasonable, because it does not know what those rates will
be since respondent company can change the rates at will.

In the present case the Philippine Railway Co. in effect asked for permission to change
its freight rates at will. It may change them every day or every hour, whenever it deems it
necessary to do so in order to meet competition or whenever in its opinion it would be to
its advantage. Such a procedure would create a most unsatisfactory state of affairs and
largely defeat the purposes of the public service law. RULING:

Decision in question as grants the application of the Philippine Railway Co. in case No.
31724 to reduce its rates at will to meet competition is reversed, with the costs in favor of
the appellant.
G.R. No. 115381 December 23, 1994
KILUSANG MAYO UNO LABOR CENTER, petitioner,
vs.
HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION FRANCHISING AND
REGULATORY BOARD, and the PROVINCIAL BUS OPERATORS ASSOCIATION OF
THE PHILIPPINES, respondents.

FACTS:
In 1990, DOTC Sec. Oscar Orbos issued Memo Circular to LTFRB Chair Remedios
Fernando to allow provincial bus to change passenger rates w/in a fare range of 15%
above or below the LTFRB official rate for a 1yr. period. This is in line with the
liberalization of regulation in the transport sector which the government intends to
implement and to make progress towards greater reliance on free market forces.
Fernando respectfully called attention of DOTC Sec. that the Public Service Act requires
publication and notice to concerned parties and public hearing. In Dec. 1990, Provincial
Bus Operators Assoc. of the Phils. (PBOAP) filed an application for across the board fare
rate increase, which was granted by LTFRB. In 1992, then DOTC Sec. Garcia issued a
memo to LTFRB suggesting a swift action on adoption of procedures to implement the
Department Order & to lay down deregulation policies. Pursuant to LTFRB Guideline,
PBOAP, w/o benefit of public hearing announced a 20% fare rate increase.
Petitioner Kilusang Mayo Uno (KMU) opposed the move and filed a petition before LTFRB
w/c was denied. Hence the instant petition for certiorari w/ urgent prayer for a TRO, w/c
was readily granted by the Supreme Court.
ISSUE: Whether the authority granted by LTFB to provincial buses to set a fare range
above existing authorized fare range is unconstitutional and invalid.
RULING: YES. The grant of power by LTFRB of its delegated authority is unconstitutional.
The doctrine of Potestas delegate non delegari (what has been delegated cannot be
delegated) is applicable because a delegated power constitutes not only a right but a duty
to be performed by the delegate thru instrumentality of his own judgment. To delegate
this power is a negation of the duty in violation of the trust reposed in the delegate
mandated to discharge such duty. Also, to give provincial buses the power to charge their
fare rates will result to a chaotic state of affairs ad this would leave the riding public at the
mercy of transport operators who can increase their rates arbitrarily whenever it pleases
or when they deem it necessary.