Miller vs. Mardo

Reorganization Plan No. 20-A is invalid insofar as it confers judicial power to the Regional Offices of the Department of Labor over cases other than those falling under the Workmen's Compensation Law, because the Reorganization Commission's delegated authority extended only to administrative functions, and the "deemed approved" mechanism for legislative enactment by congressional inaction violates the Constitution's prescribed procedure for the passage of laws.

The Government Survey and Reorganization Commission was created under Republic Act No. 997, as amended by Republic Act No. 1241, to carry out the reorganization of the Executive Branch of the National Government. The Commission prepared Reorganization Plan No. 20-A, which the President transmitted to Congress on February 14, 1956; Congress adjourned its sessions without passing a resolution either disapproving or adopting the plan. Paragraph 25 of Article VI of the Plan conferred original and exclusive jurisdiction to the Regional Offices of the Department of Labor over all cases affecting money claims arising from violations of labor standards, including unpaid wages, overtime, separation pay, and maternity leave. Before the Plan's effectivity, the Department of Labor had no compulsory power to settle such claims; its authority was limited to mediation or arbitration upon the written agreement of the parties, with the remedy in case of refusal being a complaint filed in the proper court.

Five appeals, originating from different Courts of First Instance, were consolidated because they presented one identical question of law: the validity of Reorganization Plan No. 20-A insofar as it conferred jurisdiction to the Regional Offices of the Department of Labor to decide claims of laborers for wages, overtime, separation pay, and similar money claims. Each case arose from a labor dispute in which an employee filed a complaint either with a Regional Office of the Department of Labor or with a Court of First Instance, and the opposing party challenged or defended the tribunal's jurisdiction based on Paragraph 25 of Article VI of the Plan.

In G.R. No. L-15138, Manuel Gonzales filed a complaint with Regional Office No. 3 of the Department of Labor in Manila against Bill Miller, owner and manager of Miller Motors, claiming to have been employed as a driver from December 1, 1956 to October 31, 1957, when he was allegedly arbitrarily dismissed without separation pay. Upon being required to answer, Miller filed a petition for prohibition with the Court of First Instance of Baguio, praying that the Hearing Officer be enjoined from proceeding for lack of jurisdiction. The respondents moved to dismiss on the ground that the regional offices had exclusive and original jurisdiction under Republic Acts Nos. 997 and 1241, as implemented by Executive Order No. 218 and Plan No. 20-A. After hearing, the CFI held that those statutes and issuances did not repeal the Judiciary Act's conferment of jurisdiction on courts of first instance over labor money claims. The respondents appealed.

In G.R. No. L-16781, Cresencio Estano filed a complaint with Regional Office No. 3 against Chin Hua Trading Company and its officers, claiming unpaid overtime pay and vacation leave pay for service as driver from June 17, 1947 to June 4, 1955. Before trial could be completed, Chin Hua Trading filed a petition for prohibition with the Court of First Instance of Manila, arguing that Plan No. 20-A and Executive Order No. 218, in relation to Republic Act No. 997 as amended, were invalid or unconstitutional. The CFI held Plan No. 20-A null and void and made the preliminary injunction permanent. The claimant and hearing officers appealed, and the Court of Appeals certified the case to the Supreme Court as involving only questions of law.

In G.R. No. L-15377, Numeriana Raganas filed a complaint with the Court of First Instance of Cebu against Sen Bee Trading Company and its owners, claiming underpayment, unpaid overtime, and unpaid vacation and sick leave for employment as a seamstress from June 5, 1952 to January 11, 1958. The defendants moved to dismiss on the ground that the trial court lacked jurisdiction, the case being a money claim that should be filed with the Regional Office under Plan No. 20-A, and that a similar claim was already pending before the regional office. The CFI dismissed the case, relying on Paragraph 25 of Article VI of Plan No. 20-A and the Court's resolution in NASSCO vs. Arca. Raganas appealed, and the Court of Appeals certified the case to the Supreme Court.

In G.R. No. L-16660, Vicente Romero filed a complaint with Regional Office No. 2 against Sia Seng for recovery of unpaid wages, overtime, and separation pay. Sia Seng failed to appear at the hearing despite due notice, and Romero was allowed to present his evidence ex parte. The Hearing Officer rendered a decision in Romero's favor. Upon Romero's motion for execution, the records were referred to Regional Labor Administrator Angel Hernando, who refused to issue the writ and instead ordered a rehearing. Romero filed a petition for mandamus with the Court of First Instance of Isabela, praying that Hernando be commanded to issue the writ. Sia Seng questioned the validity of the rules and regulations issued under Plan No. 20-A. The CFI ordered Hernando to issue the writ, as enjoined by Section 48 of Rules and Regulations No. 1 of the Labor Standards Commission. Sia Seng and Hernando appealed.

In G.R. No. L-17056, Mariano Pabillare filed a complaint with Regional Office No. 3 against Fred Wilson & Co., Inc., alleging that he had been employed as Chief Mechanic from October 1947 to February 19, 1959, when he was summarily dismissed without cause, sufficient notice, or separation pay, and that he was not paid for overtime. Fred Wilson & Co. moved to dismiss, arguing that the regional office, being purely an administrative body, had no power or jurisdiction to adjudicate the claim. The motion was denied, and the company filed a petition for certiorari and prohibition with the Court of First Instance of Manila, praying that Plan No. 20-A be declared null and void and unconstitutional insofar as it vested original and exclusive jurisdiction over money claims on the Regional Offices to the exclusion of regular courts. The CFI held that Plan No. 20-A was deemed approved by Congress under Section 6 of R.A. No. 997, as amended, and was therefore valid. Fred Wilson & Co. appealed directly to the Supreme Court.

• Lack of Jurisdiction of Regional Offices: Petitioners Miller, Chin Hua Trading, and Fred Wilson & Co. argued that the Hearing Officers and Regional Offices of the Department of Labor had no jurisdiction to hear and decide labor money claims, the regional offices being purely administrative bodies without adjudicatory authority.
• Invalidity of Plan No. 20-A: Petitioners Chin Hua Trading and Fred Wilson & Co. maintained that Reorganization Plan No. 20-A, insofar as it vested original and exclusive jurisdiction over money claims on the Regional Offices to the exclusion of regular courts, was invalid, null and void, and unconstitutional.
• Right to Execution: Petitioner Romero argued that the Regional Labor Administrator was duty-bound to issue a writ of execution of the decision rendered by the Hearing Officer in his favor, as enjoined by Section 48 of Rules and Regulations No. 1 of the Labor Standards Commission, and sought mandamus to compel its issuance.

• Exclusive Jurisdiction of Regional Offices: Respondents Mardo and Gonzales argued that pursuant to Republic Acts Nos. 997 and 1241, as implemented by Executive Order No. 218 and Reorganization Plan No. 20-A, the regional offices of the Department of Labor had exclusive and original jurisdiction over all cases affecting money claims arising from violations of labor standards or working conditions.
• Deemed Approved by Congress: It was urged that the defect in the conferment of judicial or quasi-judicial functions to the Regional Offices, emanating from the Reorganization Commission's lack of authority, was cured by the non-disapproval of Plan No. 20-A by Congress under Section 6(a) of Republic Act No. 997, as amended, such that the plan became a law enacted by Congress itself in the mode provided in the enabling act.
• No Authority of Hearing Officer: Respondent Sia Seng argued that the Hearing Officer had no authority to render the decision sought to be enforced, and that Plan No. 20-A was not validly passed as a statute and was unconstitutional.
• Lack of Trial Court Jurisdiction: Respondents Sen Bee Trading argued that the trial court had no jurisdiction over the money claim, which should under Plan No. 20-A be filed with the Regional Office of the Department of Labor.

• Authority to Confer Judicial Power: Whether the Government Survey and Reorganization Commission, created under Republic Act No. 997 as amended by Republic Act No. 1241 to reorganize the Executive Branch, had authority to confer judicial or quasi-judicial functions to the Regional Offices of the Department of Labor through Reorganization Plan No. 20-A.
• Constitutionality of Deemed Approval: Whether the "deemed approved" mechanism under Section 6(a) of Republic Act No. 997, whereby a reorganization plan becomes law upon congressional inaction or by concurrent resolution, complies with the constitutional requirements for the enactment of laws.

• Authority to Confer Judicial Power: No. The Commission's power to create "functions" under Republic Act No. 997, as amended, referred only to administrative functions, not judicial functions, as the Commission was created to reorganize the Executive Branch, not to create courts or transfer judicial jurisdiction from the courts.
• Constitutionality of Deemed Approval: No. The "deemed approved" mechanism violates constitutional provisions requiring positive and separate action by each House of Congress, the three-day printing rule, yea and nay voting on final reading, and presentment to the President for approval or veto.

• Authority to Confer Judicial Power: The Constitution expressly provides that "the Judicial power shall be vested in one Supreme Court and in such inferior courts as may be established by law" (Section 1, Article VII), so that judicial power rests exclusively in the judiciary. While the legislature may confer quasi-judicial powers on administrative boards or bodies as incident to the performance of administrative functions, it must state its intention in express terms, and such quasi-judicial prerogatives must be limited to those incidental to or in connection with the performance of jurisdiction over a matter exclusively vested in the courts. The Government Survey and Reorganization Commission was created to carry out the reorganization of the Executive Branch of the National Government (Section 3, R.A. No. 997), which plainly did not include the creation of courts. The power to create "functions" under Section 4 of R.A. No. 997, as amended by R.A. No. 1241, obviously referred to administrative, not judicial, functions. If a statute actually passed by Congress must be clear when clothing administrative bodies with quasi-judicial functions, such conferment cannot be implied from a mere grant of power to create "functions" in connection with the reorganization of the Executive Branch. The Court relied on its ruling in Corominas vs. Labor Standards Commission, which held that Congress did not intend to authorize the transfer of powers and jurisdiction granted to the courts of justice to officials appointed or offices created under the Reorganization Plan, as the legislature may not delegate its power to create courts of justice to any other agency of the government.
• Constitutionality of Deemed Approval: Section 6(a) of Republic Act No. 997 provides that a reorganization plan submitted by the President is "deemed approved" after the adjournment of the congressional session or after seventy session days without disapproval by either House, or may be approved by a concurrent resolution within such period. This procedure is in distinct contrast to the constitutional method of lawmaking. The Constitution requires that no bill shall become law unless printed and copies furnished to members at least three calendar days before passage, with no amendment allowed on last reading and the question on final passage taken immediately with yea and nay entered on the Journal (Section 21[a], Article VI). Every bill passed by Congress must be presented to the President for approval or veto (Section 20[1], Article VI). Under Section 6(a), consent is manifested by silence, adjournment, or concurrent resolution, violating the requirement of positive and separate action by each House. The procedure dispenses with "passage" as commonly understood and with presentment to the President, effectively reversing democratic processes by having the President propose legislative action ratified by congressional inaction. Even in the United States and England, similar mechanisms are used only as techniques in the delegation of rule-making power to preserve legislative control, not as a mode of enacting laws. Sanctioning such a procedure would constitute a dangerous precedent opening the way to eventual abdication of legislative prerogatives to the Executive and would strike at the very root of the tri-departmental scheme of government.

• Separation of Powers — Judicial Power Vested Exclusively in the Judiciary — The Constitution vests judicial power exclusively in the Supreme Court and such inferior courts as may be established by law. While the legislature may confer quasi-judicial powers on administrative bodies as incident to administrative functions, it must do so in express terms, and such powers must be limited to those incidental to or in connection with the performance of jurisdiction over a matter exclusively vested in the courts. The Court applied this doctrine to hold that the Reorganization Commission, an executive body, could not create judicial functions or transfer judicial jurisdiction from the courts to administrative offices.

• Non-Delegation of Legislative Power to Create Courts — The legislature may not delegate its power to legislate or create courts of justice to any other agency of the government. A body created to reorganize the Executive Branch cannot create courts or take away from existing courts their jurisdiction and transfer it to officials or offices created under a reorganization plan. The Court relied on this principle to invalidate the conferment of judicial power to Regional Offices through Plan No. 20-A, as the plan was the product of a delegated authority that did not extend to the creation of judicial functions.

• Constitutional Requirements for Lawmaking — A bill must be printed with copies furnished to members at least three calendar days before passage; no amendment is allowed on last reading; the question on final passage must be taken immediately with yea and nay entered on the Journal; and the bill must be presented to the President for approval or veto. A "deemed approved" mechanism that dispenses with these requirements — manifesting legislative consent by silence, adjournment, or concurrent resolution — is unconstitutional. The Court applied this doctrine to invalidate Section 6(a) of R.A. No. 997 as a mode of legislative enactment.

• "But these 'functions' which could thus be created, obviously refer merely to administrative, not judicial functions." — This passage states the ratio decidendi on the scope of the Reorganization Commission's delegated authority, establishing that the power to create "functions" in an executive reorganization context does not extend to judicial functions.

• "Such a procedure of enactment of law by legislative inaction is not countenanced in this jurisdiction." — This passage articulates the holding that the "deemed approved" mechanism under Section 6(a) of R.A. No. 997 is unconstitutional, as it dispenses with the positive legislative action required by the Constitution for the enactment of laws.

• "To sanction such a procedure will be to strike at the very root of the tri-departmental scheme of our democracy." — This passage states the policy rationale for invalidating the deemed-approved mechanism, emphasizing the separation of powers as a structural constitutional guarantee.

• "Reorganization Plan No. 20-A, insofar as confers judicial power to the Regional Offices over cases other than these falling under the Workmen's Compensation on Law, is invalid and of no effect." — This is the dispositive legal holding of the case, defining the precise scope of the invalidation and preserving the Workmen's Compensation Commission's pre-existing quasi-judicial powers.

• Corominas vs. Labor Standards Commission, G.R. No. L-14837 (June 30, 1961) — Companion case decided on the same date, followed as controlling authority. Held that Congress did not intend, in enacting R.A. No. 997, to authorize the transfer of judicial powers and jurisdiction from courts of justice to officials or offices created under the Reorganization Plan, and that the legislature may not delegate its power to create courts to any other agency of the government.

• National Steel & Shipyards Corporation vs. Arca, G.R. No. L-12249 (May 6, 1957) — Distinguished. The Court clarified that its resolution in this case was not affected by the ruling, because that case involved a claim before the Workmen's Compensation Commission, which exercised quasi-judicial powers even before the reorganization of the Department of Labor.

• Chinese Flour Importers Assoc. vs. Price Stabilization Board, G.R. No. L-4465 (July 12, 1951) — Cited in Corominas for the principle that the legislature may not delegate its power to legislate or create courts of justice to any other agency of the government.

• Potente vs. Saulog, G.R. No. L-12300 (April 24, 1959) — Cited for the proposition that before the effectivity of Plan No. 20-A, the Department of Labor had no compulsory power to settle labor money claims, its authority being limited to mediation or arbitration upon the parties' written agreement.

• Article VII, Section 1, 1935 Constitution — Vests judicial power in one Supreme Court and such inferior courts as may be established by law. Applied to establish that judicial power rests exclusively in the judiciary and cannot be conferred on administrative offices by a reorganization plan.

• Article VI, Section 21(a), 1935 Constitution — Requires that no bill shall become law unless printed and copies furnished to members at least three calendar days before passage, with no amendment allowed on last reading and yea and nay voting on the Journal. Applied to demonstrate that the "deemed approved" mechanism violates constitutional lawmaking procedures.

• Article VI, Section 20(1), 1935 Constitution — Requires presentment of every bill passed by Congress to the President for approval or veto, with provisions for override. Applied to show that the "deemed approved" mechanism dispenses with presentment, a constitutionally indispensable step.

• Section 6(a), Republic Act No. 997, as amended — Provides that reorganization plans submitted by the President are "deemed approved" upon congressional adjournment or after seventy session days without disapproval, or may be approved by concurrent resolution. Held unconstitutional as a mode of lawmaking, as it violates the constitutional procedure for the passage of laws.

• Section 4, Republic Act No. 997, as amended by Republic Act No. 1241 — Empowers the Reorganization Commission to abolish or create departments, offices, agencies, or functions necessary for efficient government service. Held to refer only to administrative functions, not judicial functions, as the Commission was created to reorganize the Executive Branch.

• Paragraph 25, Article VI, Reorganization Plan No. 20-A — Confers original and exclusive jurisdiction on the Regional Offices of the Department of Labor over all cases affecting money claims arising from violations of labor standards. Held invalid and of no effect insofar as it conferred judicial power over cases other than those falling under the Workmen's Compensation Law.

Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Dizon, De Leon, and Natividad, JJ., concurred.