The power to create municipal corporations is strictly legislative in nature and cannot be delegated to the President; Section 68 of the Revised Administrative Code, insofar as it grants the President the power to create municipalities, constitutes an undue delegation of legislative power because it fails to provide a sufficient standard for the President to follow, and is therefore unconstitutional.

The President of the Philippines, from September 4 to October 29, 1964, issued thirty-three Executive Orders creating new municipalities, purportedly pursuant to Section 68 of the Revised Administrative Code. This action prompted Vice-President Emmanuel Pelaez, as a taxpayer, to question the legality of these creations and the underlying statutory authority, fearing the unauthorized expenditure of public funds.

• Between September 4 and October 29, 1964, the President of the Philippines issued Executive Orders Nos. 93 to 121, 124, and 126 to 129, creating a total of thirty-three (33) new municipalities.
• The President purportedly acted pursuant to Section 68 of the Revised Administrative Code, which grants the President authority to define boundaries, increase or diminish territory, divide provinces, separate political divisions, merge subdivisions, and name new subdivisions.
• On November 10, 1964, petitioner Emmanuel Pelaez, as Vice-President and taxpayer, filed a special civil action for prohibition with preliminary injunction against the Auditor General.
• Pelaez sought to restrain the Auditor General from passing in audit any expenditure of public funds for the implementation of said executive orders or any disbursement by the newly created municipalities.

• Section 68 of the Revised Administrative Code has been impliedly repealed by Republic Act No. 2370 (the Barrio Charter), which provides that barrios may not be created or their boundaries altered except by Act of Congress or by the corresponding provincial board, thus negating the President's power to create municipalities composed of barrios.
• Section 68 of the Revised Administrative Code constitutes an undue delegation of legislative power, as the creation of municipalities is a legislative function, and the said section does not provide sufficient standards to guide the President's discretion.
• The executive orders are null and void.

• Section 68 of the Revised Administrative Code has not been repealed and does not constitute an undue delegation of legislative power, citing Municipality of Cardona vs. Municipality of Binangonan.
• A new municipality can be created by placing old barrios under its jurisdiction without creating new barrios, thus not conflicting with RA 2370.
• The present action is premature as the Auditor General has not yet acted on any expenditure related to the new municipalities.
• Not all proper parties, specifically the officials of the new municipalities, have been impleaded.

• Whether Section 68 of the Revised Administrative Code has been impliedly repealed by Republic Act No. 2370.
• Whether Section 68 of the Revised Administrative Code constitutes an undue delegation of legislative power.
• Whether the President of the Philippines has the authority to create municipalities by executive order.
• Whether the petition is premature and fails to implead all proper parties.

• The Supreme Court declared the Executive Orders in question null and void ab initio and permanently restrained the respondent Auditor General from passing in audit any expenditure of public funds in implementation thereof.
• The Court held that the authority to create municipal corporations is essentially legislative in nature and cannot be delegated to the President.
• Section 68 of the Revised Administrative Code does not meet the requirements for a valid delegation of power because it does not enunciate any policy to be carried out by the President and fails to provide a sufficiently determinate standard to guide the President's actions. The phrase "as the public welfare may require" in Section 68, even if construed to apply to the creation of municipalities, is too broad and does not constitute a sufficient standard for such a legislative act.
• The power to create municipalities is not an administrative function but a legislative one, involving public policy and statecraft.
• The Court further reasoned that Section 68 of the Revised Administrative Code, approved in 1917, must be deemed repealed by the subsequent adoption of the 1935 Constitution, which limits the President's power over local governments to general supervision, not control. Granting the President power to create municipalities would be tantamount to granting him control, which is unconstitutional.
• The argument that the President cannot create a barrio under RA 2370, therefore a fortiori cannot create a municipality composed of several barrios, was found cogent.
• The Court dismissed the respondent's claims of prematurity and non-joinder of proper parties, stating that it is common knowledge that such executive orders lead to expenditures audited by the Auditor General, and the Solicitor General adequately represents the government's interest.

• Separation of Powers — This doctrine divides governmental authority among three branches: legislative (law-making), executive (law-enforcing), and judicial (law-interpreting), to prevent concentration of power. The Court invoked this to emphasize that the creation of municipalities is a legislative function, and allowing the President to do so via Section 68 would violate this principle by encroaching upon legislative power.
• Undue Delegation of Legislative Power — This principle states that Congress cannot delegate its essential legislative powers to other branches, though it may delegate the power to fill in details in the execution of a law, provided the law is complete in itself and sets a sufficient standard. The Court found Section 68 an undue delegation because it lacked a policy and a sufficient standard for the President to create municipalities, thus giving the President unfettered discretion, which is characteristic of law-making itself.
• Sufficient Standard Test — For a delegation of legislative power to be valid, the law must provide a standard to guide the delegate's action, limiting the scope of discretion. The Court found that "public welfare" or "public interest" as used in Section 68 was not a sufficient standard for the legislative act of creating municipalities, distinguishing it from cases where such phrases were upheld for purely administrative functions.
• Power of Control vs. Power of General Supervision over Local Governments — The Constitution grants the President the power of general supervision over local governments, not control. Control means the power of an officer to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for that of the latter. Supervision means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. The Court held that the power to create municipalities, if granted to the President, would imply a power greater than control, which is denied by the Constitution concerning local governments.
• Implied Repeal — A statute may be repealed by a subsequent statute if there is an irreconcilable inconsistency between them, or if the later statute covers the whole subject of the earlier one and is clearly intended as a substitute. The Court found that Section 68 of the RAC was incompatible with the 1935 Constitution's provisions on presidential power over local governments, leading to its implied repeal by the Constitution. The Court also found petitioner's argument regarding implied repeal by RA 2370 cogent.

• "municipal corporations are purely the creatures of statutes."
• "Although Congress may delegate to another branch of the government the power to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separa tion of powers, that said law: (a) be complete in itself— it must set forth therein the policy to be executed, carried out or implemented by the delegate— and (b) fix a standard—the limits of which are sufficiently determinate or determinable—to which the delegate must conform in the performance of his functions."
• "If the term 'unfair competition' is so broad as to vest in the President a discretion that is 'virtually unfettered', and, consequently, tantamount to a delegation of legislative power, it is obvious that 'public welfare', which has even a broader connotation, leads to the same result."
• "The President shall have control of all executive departments, bureaus or offices, exercise general supervision over all local govern ments as may be provided by law, and take care that the laws be faithfully executed." (Quoting Article VII, Section 10(1) of the 1935 Constitution)
• "In short, even if it did not entail an undue delegation of legislative powers, as it certainly does, said Section 68, as part of the Revised Administrative Code, approved or March 10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly incompatible and inconsistent with said statutory enact ment."

• Municipality of Cardona vs. Municipality of Binangonan (36 Phil. 547) — Cited by respondent to support the President's power. Distinguished by the Court as involving a mere transfer of territory between existing municipalities due to boundary fixing under Act No. 1748, not the creation of a new municipality.
• State ex rel. Higgins vs. Aicklen (119 S. 425) — Cited to support the principle that the authority to create municipal corporations is "strictly a legislative function."
• Udall vs. Severn (79 P. 2d. 347-349) — Cited to support that creating municipalities is "solely and exclusively the exercise of legislative power" and that the question of whether incorporation is in the best interest of the community is a political question.
• Territory ex rel. Kelly vs. Stewart (23 Pac. 405, 409) — Cited for the statement that "municipal corporations are purely the creatures of statutes."
• Calalang vs. Williams (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328) — Cited by the Court to acknowledge that "public welfare" and "public interest" were upheld as sufficient standards in those cases, but distinguished them as involving administrative functions and determination of facts, unlike the legislative act of creating municipalities.
• Schechter Poultry Corporation vs. U. S. (79 L. ed. 1570) — Cited as relevant to the invalidity of delegation of power without sufficient standards. The U.S. Supreme Court found the National Industrial Recovery Act unconstitutional for providing no standards for the President to approve "codes of fair competition," which was deemed an unconstitutional delegation of legislative power.
• De los Santos vs. Mallare (87 Phil., 289, 298-299) — Cited to support the principle that a statute (like Sec. 68 RAC) can be repealed by the subsequent adoption of a Constitution if inconsistent with it.

• Section 68, Revised Administrative Code — This is the primary statute invoked by the President for creating the municipalities. The Court found this section, insofar as it grants power to create municipalities, to be an undue delegation of legislative power and impliedly repealed by the Constitution.
• Republic Act No. 2370 (Barrio Charter), Section 3 — This Act provides that barrios shall not be created or their boundaries altered except by Act of Congress or by the provincial board. Petitioner argued this impliedly repealed Section 68 RAC. The Court found this argument cogent.
• Article VII, Section 10(1), 1935 Philippine Constitution — This provision states that "The President shall have control of all executive departments, bureaus or offices, exercise general supervision over all local govern ments as may be provided by law, and take care that the laws be faithfully executed." The Court held that Section 68 RAC was incompatible with this provision, as granting the President power to create municipalities would be an exercise of control, not mere supervision, over local governments, and thus Section 68 was impliedly repealed by the Constitution.
• Section 1661, Revised Administrative Code — Cited to show the authority of the Solicitor-General to represent the Government and its agents, thereby addressing the respondent's argument about non-joinder of proper parties.

• Bengzon, J.P., J. — Justice Bengzon, J.P. concurred that the executive orders were null and void. He agreed that the power to create a municipality is legislative and Section 68 RAC gives the President discretion that amounts to an invalid delegation under the separation of powers doctrine established by the 1935 Constitution. He emphasized that while Section 68 might not have been objectionable under the Jones Law (which did not have a strict separation of powers), the 1935 Constitution explicitly reduced the Chief Executive's power over local governments from "control" (under the Jones Law's Section 21) to "general supervision." He concluded that Section 10(1) of Article VII of the Constitution repealed Section 68 of the RAC regarding the President's power to create local governments. He disagreed with the majority's reasoning that if the President cannot create a barrio under RA 2370, a fortiori he cannot create a municipality, arguing that local autonomy logic could support denying power over smaller units (barrios) without necessarily denying it over larger units (municipalities) if pre-existing barrios were used. His primary basis for repeal was the Constitution itself, not RA 2370.