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KMU Labor Center v Garcia G.R. No. 115381. December 23, 1994
07/05/2010
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Facts: LTFRB Chairman Remedios A.S. Fernando submitted the following memorandum to Oscar M. Orbos on July 24, 1990, to wit: “With reference to DOTC Memorandum Order No. 90-395 dated 26 June 1990 which the LTFRB received on 19 July 1990, directing the Board "to immediately publicize a fare range scheme for all provincial bus routes in the country (except those operating within Metro Manila)"
December 5, 1990, private respondent Provincial Bus Operators Association of the Philippines, Inc. (PBOAP) filed an application for fare rate increase. An across-the-board increase of eight and a half centavos (P0.085) per kilometer for all types of provincial buses
December 6, 1990, private respondent PBOAP reduced its applied proposed fare to an across-the-board increase of six and a half (P0.065) centavos per kilometer for ordinary buses. December 14, 1990, public respondent LTFRB rendered a decision granting the fare rate increase.
On February 17, 1993, the LTFRB issued Memorandum Circular No. 92-009 promulgating the guidelines for the implementation of DOTC Department Order No. 92-587: …The control in pricing shall be liberalized to introduce price competition complementary with the quality of service, subject to prior notice and public hearing. Fares shall not be provisionally authorized without public hearing. (Section V. Rate and Fare Setting)
Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent of the existing fares. Said increased fares were to be made effective on March 16, 1994.
On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares. First, the authority given by respondent LTFRB to provincial bus operators to set a fare range is unconstitutional, invalid and illegal. Second, the establishment of a presumption of public need in favor of an applicant for a proposed transport service without having to prove public necessity is illegal for being violative of the Public Service Act and the Rules of Court.
On March 24, 1994, the LTFRB issued one of the assailed orders dismissing the petition for lack of merit. PBOAP, DOTC Secretary Jesus B. Garcia, Jr. and the LTFRB asseverate that the petitioner does not have the standing to maintain the instant suit. They further claim that it is
within DOTC and LTFRB's authority to set a fare range scheme and establish a presumption of public need in applications for certificates of public convenience.
Issue:Whether DOTC Department Order No. 92-587: Defining the policy framework on the regulation of transport services and LTFRB Memorandum Circular No. 92-009: Promulgating the implementing guidelines on DOTC Department Order No. 92-587 is violative of the Constitution, Public Service Act and the Rules of Court.
Whether, the twenty (20%) per centum fare increase imposed by respondent PBOAP on March 16, 1994 without the benefit of a petition and a public hearing is constitutional.
Held: DOTC Department Order No. 92-587 and LTFRB Memorandum Circular No. 92-009 is both violative of the Public Service Act and the Rules of Court.
The twenty (20%) per centum fare increase imposed by respondent PBOAP on March 16, 1994 without the benefit of a petition and a public hearing is null and void and of no force and effect.
The Temporary Restraining Order issued on June 20, 1994 is hereby MADE PERMANENT insofar as it enjoined the bus fare rate increase granted under the provisions of the aforementioned administrative circulars, memoranda and/or orders declared invalid.
Ratio: DOTC Department Order No. 92-587, LTFRB Memorandum Circular No. 92-009, and the order dated March 24, 1994 issued by respondent LTFRB are hereby DECLARED contrary to law and invalid insofar as they affect provisions therein: (a) delegating to provincial bus and jeepney operators the authority to increase or decrease the duly prescribed transportation fares; and (b) creating a presumption of public need for a service in favor of the applicant for a certificate of public convenience and placing the burden of proving that there is no need for the proposed service to the oppositor.
LTFRB Memorandum Circular No. 92-009 is INCONSISTENT with Section 16(c)(iii) of the Public Service Act which requires that before a CPC will be issued, the applicant must prove by proper notice and hearing that the operation of the public service proposed will promote public interest in a proper and suitable manner. The provision does not put the burden of proof to the oppositor but the applicant.
In view of legal standing: The principle of locus standi of a party litigant. One who is directly affected by and whose interest is immediate and substantial in the controversy has the standing to sue.
A party's standing before this Court is a procedural technicality which it may, in the exercise
of its discretion, set aside in view of the importance of the issues raised. Court brushed aside this technicality because 'the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure.
In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and even association of planters, and non-profit civic organizations were allowed to initiate and prosecute actions before this court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies or instrumentalities.
In view of DELEGATION Respondent LTFRB, the existing regulatory body today, is likewise vested with the same under Executive Order No. 202 dated June 19, 1987. Such delegation of legislative power to an administrative agency is permitted in order to adapt to the increasing complexity of modern life.
However, nowhere under the aforesaid provisions of law are the regulatory bodies, the PSC and LTFRB alike, authorized to delegate that power to a common carrier, a transport operator, or other public service. The Authority given by the LTFRB to the provincial bus operators to set a fare range over and above the authorized existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislative authority.
What has been delegated cannot be delegated. This doctrine is based on the ethical principle that such as delegated power constitutes not only a right but a duty to be performed by the delegate through the instrumentality of his own judgment and not through the intervening mind of another. A further delegation of such power would indeed constitute a negation of the duty in violation of the trust reposed in the delegate mandated to discharge it directly.
In view of Transcendental Importance One veritable consequence of the deregulation of transport fares is a compounded fare. If transport operators will be authorized to impose and collect an additional amount equivalent to 20% over and above the authorized fare over a period of time, this will unduly prejudice a commuter who will be made to pay a fare that has been computed in a manner similar to those of compounded bank interest rates.
Hence, the rate should enable public utilities to generate revenues sufficient to cover operational costs and provide reasonable return on the investments. A rate, therefore, must be reasonable and fair and must be affordable to the end user who will utilize the services.
The presumption of public need for a service shall be deemed in favor of the applicant, while the burden of proving that there is no need for the proposed service shall be the oppositor's is inconsistent with Section 16(c)(iii) of the Public Service Act which requires that before a CPC will be issued, the applicant must prove by proper notice and hearing that the operation of the public service proposed will promote public interest in a proper and suitable manner.
United States vs Ang Tang HoOn December 18, 2011
Delegation of Power – Administrative Bodies
On 30July 1919, the Philippine Legislature (during special session) passed and approved Act No. 2868 entitled An Act Penalizing the Monopoly and Hoarding of Rice, Palay and Corn. The said act under extraordinary circumstances authorizes the Governor General to issue the necessary Rules and Regulations in regulating the distribution of such products. Pursuant to this Act, On 01 August 1919, the GG issued EO 53 which was published on 20 August 1919. The said EO fixed the price at which rice should be sold. On the other hand, Ang Tang Ho, a rice dealer, voluntarily, criminally and illegally sold a ganta of rice to Pedro Trinidad at the price of eighty centavos. The said amount was way higher than that prescribed by the EO. The sale was done on the 6th of August 1919. On 08 August 1919, he was charged in violation of the said EO. He was found guilty as charged and was sentenced to 5 months imprisonment plus a P500.00 fine. He appealed the sentence countering that there is an undue delegation of power to the Governor General.
ISSUE: Whether or not there is undue delegation to the Governor General.
HELD: Fist of, Ang Tang Ho’s conviction must be reversed because he committed the act prior to the publication of the EO. Hence, he cannot be ex post facto charged of the crime. Further, one cannot be convicted of a violation of a law or of an order issued pursuant to the law when both the law and the order fail to set up an ascertainable standard of guilt. The said Act, as to the judgment of the SC, wholly fails to provide definitely and clearly what the standard policy should contain, so that it could be put in use as a uniform policy required to take the place of all others without the determination of the insurance commissioner in respect to matters involving the exercise of a legislative discretion that could not be delegated, and without which the act could not possibly be put in use. The law must be complete in all its terms and provisions when it leaves the legislative branch of the government and nothing must be left to the judgment of the electors or other appointee or delegate of the legislature, so that, in form and substance, it is a law in all its details in presenti, but which may be left to take effect in future, if necessary, upon the ascertainment of any prescribed fact or event.
Ynot vs IAC - A case Digest
RESTITUTO YNOT -petitioner; an owner of carabaos
Station Commander, Integrated National Police, Barotac Nuevo, Iloilo & the Regional Director, Bureau of Animal Industry, Region IV- respondents
Type of petition filed: PETITION FOR CERTIORARI
ISSUE:
Whether Executive Order No. 626-A is constitutional or not.
FACTS:
Petitioner was charged of violation of EO 626 when he transported six carabaos in a pump boat from Masbate to Iloilo on January 13, 1984, when they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of the above measure. 1 The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon his filing of a supersedeas bond of P12,000.00.
Petitioner raised the issue of EO’s constituitonality and filed case in the lower court. However, the court sustained the the confiscation of the carabaos and, since they could no longer be produced, ordered the confiscation of the bond. The court also declined to rule on the constitutionality of the executive order, as raised by the petitioner. Therefore, petitioner appealed the decsion to IAC with the following contentions:
1. EO is unconstitutional as confiscation is outright
2. Penalty is invalid as it is imposed without the owner's right to be heard before a competent and impartial court.
3. Measure should have not been presumed
4. Raises a challenge to the improper exercise of the legislative power by the former President.
HELD:
Petiton is GRANTED with the following justifications:
1. Right of the petitioner to question for constitutionality is valid as there’s no exigency showing to justify the exercise of this extraordinary power of the President
2. Properties involved were not even inimical per se as to require their instant destrcution3. Case involved ‘roving commission’ and invalid delegation of powers and invalid exercise of police power4. Due process is violated because the owner is denied the right to be heard in his defense and was immediately condemned and punish
Solicitor General vs. Metropolitan Manila Authority
Facts:
On July 13, 1990 the Court held in the case of Metropolitan Traffic Command, West Traffic District vs. Hon. Arsenio M. Gonong, that the confiscation of the license plates of motor vehicles for traffic violations was not among the sanctions that could be imposed by the Metro Manila Commission under PD 1605 and was permitted only under the conditions laid down by LOI 43 in the case of stalled vehicles obstructing the public streets. Even the confiscation of driver’s licenses for traffic violations was not directly prescribed or allowed by the decree. After no motion for reconsideration of the decision was filed the judgment became final and executor.
Withstanding the Gonong decision still violations of the said decision transpired, wherein there were several persons who sent complaint letters to the Court regarding the confiscation of driver’s licenses and removal of license plate numbers.
On May 24, 1990 the MMA issued Ordinance No. 11, Series of 1991, authorizing itself “to detach license plate/tow and impound attended/unattended/abandoned motor vehicles illegally parked or obstructing the flow of traffic in Metro Manila.”
On July 2, 1991, the Court issued a resolution regarding the matter which stated that the Ordinance No. 11, Section 2 appears to be in conflict with the decision of the Court, and that the Court has received several complaints against the enforcement of such ordinance.
Issue:
W/N Ordinance No. 11 Series of 1991 and Ordinance No. 7, Series of 1998 are valid in the exercise of such delegated power to local government acting only as agents of the national legislature?
Held:
No, the Court rendered judgment: 1) declaring Ordinance No. 11, Series of 1991, of the MMA and Ordinance No. 7, Series of 1998, of the Municipality of Mandaluyong, Null and Void; and 2)
enjoining all law-enforcement authorities in Metropolitan Manila from removing the license plates of motor vehicles (except when authorized under LOI43) and confiscating driver’s licenses for traffic violations within the said area.
To test the validity of said acts the principles governing municipal corporations was applied, according to Elliot for a municipal ordinance to be valid the following requisites should be complied: 1) must not contravene the Constitution or any statute; 2) must not be unfair or oppressive; 3) must not be partial or discriminatory; 4) must not prohibit but may regulate trade; 5) must not be unreasonable; and 6) must be general and consistent with public policy.
In the Gonong decision it was shown that the measures under consideration did not pass the first criterion because it did not conform to existing law. PD 1605 does not allow either the removal of license plates or the confiscation of driver’s licenses for traffic violations committed in Metropolitan Manila. There is nothing in the decree authorizing the MMA to impose such sanctions. Thus Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the local government unit cannot contravene but must obey at all times the will of the principal. In the case at bar the enactments in question, which are merely local in origin, cannot prevail against the decree, which has the force and effect of a statute.
Lupangco v. Court of Appeals
FACTS: On or about October 6, 1986, herein respondent Professional Regulation Commission (PRC) issued Resolution No. 105 as parts of its "Additional Instructions to Examinees," to all those applying for admission to take the licensure examinations in accountancy. The resolution embodied the following pertinent provisions:
No examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer, lecturer, instructor official or employee of any of the aforementioned or similar institutions during the three days immediately proceeding every examination day including examination day.
Any examinee violating this instruction shall be subject to the sanctions prescribed by Sec. 8, Art. III of the Rules and Regulations of the Commission.
On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure examinations in accountancy scheduled on October 25 and November 2 of the same year, filed on their own behalf of all others similarly situated like them, with the Regional Trial Court of Manila, Branch XXXII, a complaint for injunction with a prayer with the issuance of a writ of a preliminary injunction against respondent PRC to restrain the latter from enforcing the abovementioned resolution and to declare the same unconstitutional.
Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the lower court had no jurisdiction to review and to enjoin the enforcement of its resolution. In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try the case and enjoined the respondent commission from enforcing and giving effect to Resolution No. 105 which it found to be unconstitutional.
Not satisfied therewith, respondent PRC, on November 10, 1986, filed with the Court of Appeals a petition for the nullification of the above Order of the lower court. Said petition was granted in the Decision of the Court of Appeals promulgated on January 13, 1987.
ISSUE: Is the Regional Trial Court of the same category as the Professional Regulation Commission so that it cannot pass upon the validity of the administrative acts of the latter? Can this Commission lawfully prohibit the examinees from attending review classes, receiving handout materials, tips, or the like three (3) days before the date of the examination?
HELD:The Court of Appeals, in deciding that the Regional Trial Court of Manila had no jurisdiction to entertain the case and to enjoin the enforcement of the Resolution No. 105, stated as its basis that the Professional Regulation Commission and the Regional Trial Court are coequal bodies.
The respondent court erred when it placed the Securities and Exchange Commission and the Professional Regulation Commission in the same category. As already mentioned, with respect to the Securities and Exchange Commission, the laws cited explicitly provide with the procedure that need be taken when one is aggrieved by its order or ruling. Upon the other hand, there is no law providing for the next course of action for a party who wants to question a ruling or order of the Professional Regulation Commission.
Well settled in our jurisprudence is the view that even acts of the Office of the President may be reviewed by the Court of First Instance (now the Regional Trial Court). In Medalla vs. Sayo,this rule was thoroughly propounded on, to wit:
In so far as jurisdiction of the Court below to review by certiorari decisions and/or resolutions of the Civil Service Commission and of the Presidential Executive Assistant is concerned, there should be no question but that the power of judicial review should be upheld.
In view of the foregoing, we find no cogent reason why Resolution No. 105, issued by the respondent Professional Regulation Commission, should be exempted from the general jurisdiction of the Regional Trial Court.
Respondent PRC, on the other hand, contends that under Section 9, paragraph 3 of B.P. Blg. 129, it is the Court of Appeals which has jurisdiction over the case. The said law provides:
SEC. 9. Jurisdiction. ² The Intermediate Appellate Court shall exercise: (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
The contention is devoid of merit. In order to invoke the exclusive appellate jurisdiction of the Court of Appeals as provided for in Section 9, paragraph 3 of B.P. Blg. 129, there has to be a final order or ruling which resulted from proceedings wherein the administrative body involved exercised its quasi-judicial functions. This does not cover rules and regulations of general applicability issued by the administrative body to implement its purely administrative policies and functions like Resolution No. 105 which was adopted by the respondent PRC as a measure to preserve the integrity of licensure examinations.
In view of the foregoing, we hold that the Regional Trial Court has jurisdiction to entertain Civil Case No. 86-37950 and enjoin the respondent PRC from enforcing its resolution.
The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives will be barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how the Commission can manage to have a watchful eye on each and every examinee during the three days before the examination period. It is an axiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such rules and regulations must be reasonable and fairly adapted to the end in view.
Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees' right to liberty guaranteed by the Constitution. Respondent PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the licensure examinations.
DEPARTMENT OF AGRARIAN G.R. No. 162070
REFORM, represented by SECRETARY
JOSE MARI B. PONCE (OIC), Present:
Petitioner, Davide, C.J.,
Puno,
Panganiban,
Quisumbing,
Ynares-Santiago,
Sandoval-Gutierrez,
Carpio,
- versus - Austria-Martinez,
Corona,
Carpio Morales,
Callejo, Sr.,
Azcuna,
Tinga,
Chico-Nazario and
Garcia, JJ.
DELIA T. SUTTON, ELLA T.
SUTTON-SOLIMAN and Promulgated:
HARRY T. SUTTON,
Respondents. October 19, 2005
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
PUNO, J.:
This is a petition for review filed by the Department of Agrarian Reform
(DAR) of the Decision and Resolution of the Court of Appeals, dated September
19, 2003 and February 4, 2004, respectively, which declared DAR Administrative
Order (A.O.) No. 9, series of 1993, null and void for being violative of the
Constitution.
The case at bar involves a land in Aroroy, Masbate, inherited by respondents
which has been devoted exclusively to cow and calf breeding. On October 26,
1987, pursuant to the then existing agrarian reform program of the government,
respondents made a voluntary offer to sell (VOS)[1] their landholdings to
petitioner DAR to avail of certain incentives under the law.
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also
known as the Comprehensive Agrarian Reform Law (CARL) of 1988, took effect.
It included in its coverage farms used for raising livestock, poultry and swine.
On December 4, 1990, in an en banc decision in the case of Luz Farms v.
Secretary of DAR,[2] this Court ruled that lands devoted to livestock and poultry-
raising are not included in the definition of agricultural land. Hence, we declared
as unconstitutional certain provisions of the CARL insofar as they included
livestock farms in the coverage of agrarian reform.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a
formal request to withdraw their VOS as their landholding was devoted exclusively
to cattle-raising and thus exempted from the coverage of the CARL.[3]
On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy,
Masbate, inspected respondents’ land and found that it was devoted solely to
cattle-raising and breeding. He recommended to the DAR Secretary that it be
exempted from the coverage of the CARL.
On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal
of their VOS and requested the return of the supporting papers they submitted in
connection therewith.[4] Petitioner ignored their request.
On December 27, 1993, DAR issued A.O. No. 9, series of 1993,[5] which
provided that only portions of private agricultural lands used for the raising of
livestock, poultry and swine as of June 15, 1988 shall be excluded from the
coverage of the CARL. In determining the area of land to be excluded, the A.O.
fixed the following retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of
land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815
hectares for livestock infrastructure for every 21 heads of cattle shall likewise be
excluded from the operations of the CARL.
On February 4, 1994, respondents wrote the DAR Secretary and advised him
to consider as final and irrevocable the withdrawal of their VOS as, under the Luz
Farms doctrine, their entire landholding is exempted from the CARL.[6]
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an
Order[7] partially granting the application of respondents for exemption from the
coverage of CARL. Applying the retention limits outlined in the DAR A.O. No. 9,
petitioner exempted 1,209 hectares of respondents’ land for grazing purposes, and
a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of
respondents’ landholding to be segregated and placed under Compulsory
Acquisition.
Respondents moved for reconsideration. They contend that their entire
landholding should be exempted as it is devoted exclusively to cattle-raising.
Their motion was denied.[8] They filed a notice of appeal[9] with the Office of
the President assailing: (1) the reasonableness and validity of DAR A.O. No. 9, s.
1993, which provided for a ratio between land and livestock in determining the
land area qualified for exclusion from the CARL, and (2) the constitutionality of
DAR A.O. No. 9, s. 1993, in view of the Luz Farms case which declared cattle-
raising lands excluded from the coverage of agrarian reform.
On October 9, 2001, the Office of the President affirmed the impugned
Order of petitioner DAR.[10] It ruled that DAR A.O. No. 9, s. 1993, does not run
counter to the Luz Farms case as the A.O. provided the guidelines to determine
whether a certain parcel of land is being used for cattle-raising. However, the
issue on the constitutionality of the assailed A.O. was left for the
determination of the courts as the sole arbiters of such issue.
On appeal, the Court of Appeals ruled in favor of the respondents. It
declared DAR A.O. No. 9, s. 1993, void for being contrary to the intent of the 1987
Constitutional Commission to exclude livestock farms from the land reform
program of the government. The dispositive portion reads:
WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 is hereby DECLARED null and void. The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the Department of Agrarian Reform’s ruling that petitioners’ landholding is covered by the agrarian reform program of the government is REVERSED and SET ASIDE.
SO ORDERED.[11]
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9,
series of 1993, which prescribes a maximum retention limit for owners of lands
devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL, petitioner
submits that it issued DAR A.O. No. 9 to limit the area of livestock farm that may
be retained by a landowner pursuant to its mandate to place all public and private
agricultural lands under the coverage of agrarian reform. Petitioner also contends
that the A.O. seeks to remedy reports that some unscrupulous landowners have
converted their agricultural farms to livestock farms in order to evade their
coverage in the agrarian reform program.
Petitioner’s arguments fail to impress.
Administrative agencies are endowed with powers legislative in nature, i.e.,
the power to make rules and regulations. 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.
However, while administrative rules and regulations have the force and effect of
law, they are not immune from judicial review.[12] They may be properly
challenged before the courts to ensure that they do not violate the Constitution and
no grave abuse of administrative discretion is committed by the administrative
body concerned.
The fundamental rule in administrative law is that, to be valid,
administrative rules and regulations must be issued by authority of a law and
must not contravene the provisions of the Constitution.[13] The rule-making
power of an administrative agency may not be used to abridge the authority given
to it by Congress or by the Constitution. Nor can it be used to enlarge the power
of the administrative agency beyond the scope intended. Constitutional and
statutory provisions control with respect to what rules and regulations may be
promulgated by administrative agencies and the scope of their regulations.
[14]
In the case at bar, we find that the impugned A.O. is invalid as it
contravenes the Constitution. The A.O. sought to regulate livestock farms by
including them in the coverage of agrarian reform and prescribing a maximum
retention limit for their ownership. However, the deliberations of the 1987
Constitutional Commission show a clear intent to exclude, inter alia, all lands
exclusively devoted to livestock, swine and poultry- raising. The Court clarified
in the Luz Farms case that livestock, swine and poultry-raising are industrial
activities and do not fall within the definition of “agriculture” or “agricultural
activity.” The raising of livestock, swine and poultry is different from crop or tree
farming. It is an industrial, not an agricultural, activity. A great portion of the
investment in this enterprise is in the form of industrial fixed assets, such as:
animal housing structures and facilities, drainage, waterers and blowers, feedmill
with grinders, mixers, conveyors, exhausts and generators, extensive warehousing
facilities for feeds and other supplies, anti-pollution equipment like bio-gas and
digester plants augmented by lagoons and concrete ponds, deepwells, elevated
water tanks, pumphouses, sprayers, and other technological appurtenances.[15]
Clearly, petitioner DAR has no power to regulate livestock farms which
have been exempted by the Constitution from the coverage of agrarian
reform. It has exceeded its power in issuing the assailed A.O.
The subsequent case of Natalia Realty, Inc. v. DAR[16] reiterated our
ruling in the Luz Farms case. In Natalia Realty, the Court held that industrial,
commercial and residential lands are not covered by the CARL.[17] We stressed
anew that while Section 4 of R.A. No. 6657 provides that the CARL shall cover
all public and private agricultural lands, the term “agricultural land” does
not include lands classified as mineral, forest, residential, commercial or
industrial. Thus, in Natalia Realty, even portions of the Antipolo Hills
Subdivision, which are arable yet still undeveloped, could not be considered as
agricultural lands subject to agrarian reform as these lots were already classified as
residential lands.
A similar logical deduction should be followed in the case at bar. Lands
devoted to raising of livestock, poultry and swine have been classified as
industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner
DAR argues that, in issuing the impugned A.O., it was seeking to address the
reports it has received that some unscrupulous landowners have been converting
their agricultural lands to livestock farms to avoid their coverage by the agrarian
reform. Again, we find neither merit nor logic in this contention. The
undesirable scenario which petitioner seeks to prevent with the issuance of the
A.O. clearly does not apply in this case. Respondents’ family acquired their
landholdings as early as 1948. They have long been in the business of breeding
cattle in Masbate which is popularly known as the cattle-breeding capital of the
Philippines.[18] Petitioner DAR does not dispute this fact. Indeed, there is no
evidence on record that respondents have just recently engaged in or converted to
the business of breeding cattle after the enactment of the CARL that may lead one
to suspect that respondents intended to evade its coverage. It must be stressed that
what the CARL prohibits is the conversion of agricultural lands for non-
agricultural purposes after the effectivity of the CARL. There has been no
change of business interest in the case of respondents.
Moreover, it is a fundamental rule of statutory construction that the
reenactment of a statute by Congress without substantial change is an implied
legislative approval and adoption of the previous law. On the other hand, by
making a new law, Congress seeks to supersede an earlier one.[19] In the case at
bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881[20]
which amended certain provisions of the CARL. Specifically, the new law
changed the definition of the terms “agricultural activity” and “commercial
farming” by dropping from its coverage lands that are devoted to commercial
livestock, poultry and swine-raising.[21] With this significant modification,
Congress clearly sought to align the provisions of our agrarian laws with the
intent of the 1987 Constitutional Commission to exclude livestock farms from
the coverage of agrarian reform.
In sum, it is doctrinal that rules of administrative bodies must be in harmony
with the provisions of the Constitution. They cannot amend or extend the
Constitution. To be valid, they must conform to and be consistent with the
Constitution. In case of conflict between an administrative order and the
provisions of the Constitution, the latter prevails.[22] The assailed A.O. of
petitioner DAR was properly stricken down as unconstitutional as it enlarges the
coverage of agrarian reform beyond the scope intended by the 1987 Constitution.
IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision
and Resolution of the Court of Appeals, dated September 19, 2003 and February 4,
2004, respectively, are AFFIRMED. No pronouncement as to costs.
SO ORDERED
