People vs. Exconde

Central Bank Circular No. 37 is a valid exercise of the regulatory power constitutionally delegated to the Monetary Board under the Central Bank Act, and violations thereof are punishable as criminal offenses under Section 34 of said Act; Article 45 of the Revised Penal Code, providing for confiscation of instruments of a crime, applies to offenses under special laws in the absence of a contrary provision, pursuant to Article 10 of the same Code.

The Central Bank of the Philippines was established under Republic Act No. 265 (the Central Bank Act), which vested in the Monetary Board authority to issue rules and regulations necessary for the effective discharge of the Bank's responsibilities. Among these responsibilities, as set forth in Section 2 of the Act, were maintaining monetary stability, preserving the international value of the peso, and promoting production, employment, and real income. Section 64 further directed the Monetary Board to control any expansion or contraction in the money supply prejudicial to these objectives. Pursuant to Section 14(a) of the Act, the Monetary Board promulgated Circular No. 37 on September 25, 1952, prohibiting the import and export of Philippine coins and notes without license, except for amounts not exceeding P100 for travelers. Section 34 of the Act prescribed penal sanctions — fine of not more than P20,000 and imprisonment of not more than five years — for willful violations of the Act or any rule or regulation legally issued by the Monetary Board.

On May 5, 1954, Pedro R. Exconde boarded the s.s. President Wilson as a passenger bound for Japan. Supervising agent Jose A. Fojas of the Department of Finance found in Exconde's possession P5,090 in Philippine currency, U.S. $50 in cash, travelers' checks for $100, and a Bank of America remitter's receipt for $350. It was undisputed that Exconde's possession of the P5,090 was not licensed by the Central Bank and was in violation of Circular No. 37, which limited outgoing passengers to P100 in Philippine currency, with coins not exceeding P5.

Exconde was charged in the Court of First Instance of Manila with violating Central Bank Circular No. 37, promulgated pursuant to Section 34 of Republic Act No. 265. The trial court convicted him, imposing four months of imprisonment, a fine of P100, and costs. However, the court below refused to order the confiscation of the P5,090 found in Exconde's possession, prompting the Government to appeal that aspect of the ruling. Exconde separately appealed, contesting the validity of Circular No. 37 itself.

• Scope of Section 34: Exconde argued that Section 34 of the Central Bank Act could not validate the issuance of Circular No. 37 because Section 34 referred solely to regulations under Article IV, Chapter B of the Act, concerning the activities of the "Department of Supervision and Examination" of banking institutions.
• Lack of Authority and Invalid Delegation: Exconde contended that Section 14 of the Central Bank Law did not grant authority to the Monetary Board to prohibit the exportation of Philippine currency, and that if any such authority was in fact granted, it constituted an invalid delegation of legislative power.

• Validity of Penal Sanctions: Whether Section 34 of the Central Bank Act provides penal sanctions for violations of Circular No. 37, or whether its scope is limited to regulations under Article IV, Chapter B of the Act.
• Validity of Delegated Rule-Making Power: Whether Section 14 of the Central Bank Act constitutionally authorizes the Monetary Board to prohibit the exportation of Philippine currency, or whether such delegation constitutes an invalid delegation of legislative power.
• Confiscation of Unlicensed Currency: Whether the unlicensed currency found in Exconde's possession should be declared forfeited to the Government pursuant to Article 45 of the Revised Penal Code, as applied through Article 10, and whether the Government's appeal for such confiscation is barred by double jeopardy.

• Validity of Penal Sanctions: Yes. Section 34's first paragraph is broad enough to establish penal sanctions for any and all violations of the Act and regulations legally issued by the Monetary Board; limiting it to Article IV, Chapter B would render all other provisions of the Act unenforceable.
• Validity of Delegated Rule-Making Power: Yes. Section 14(a), read with Sections 2 and 64 of the Central Bank Act, provides adequate standards to guide the Monetary Board, making Circular No. 37 a valid exercise of delegated regulatory power and not an unconstitutional delegation of legislative authority.
• Confiscation of Unlicensed Currency: Yes. Article 45 of the Revised Penal Code applies to special-law offenses through Article 10, and because Exconde himself appealed, no double jeopardy bar prevents the Government from seeking the additional penalty of confiscation.

• Validity of Penal Sanctions: The first paragraph of Section 34 is couched in broad terms, penalizing any person who "willfully violates this Act or any order, instruction, rule or regulation legally issued by the Monetary Board." There being no other sanctioning provision elsewhere in the Act, construing Section 34 as limited to Article IV, Chapter B would mean that all other provisions of the Central Bank Act could be violated with impunity — a result the legislature could not have intended. The provision was evidently designed to establish penal sanctions for any and all violations of the Act and its duly issued regulations.

• Validity of Delegated Rule-Making Power: While lawmaking is a non-delegable legislative function, Congress may constitutionally delegate authority to promulgate rules and regulations to implement legislation, provided the regulation is germane to the law's objects and purposes, not contradictory to it, and conforms to the standards the law prescribes. Section 14(a) authorizes the Monetary Board to issue rules and regulations necessary for the effective discharge of its responsibilities. Those responsibilities, defined in Section 2, include maintaining monetary stability and preserving the international value of the peso, while Section 64 directs the Board to control any prejudicial expansion or contraction in the money supply. These provisions constitute adequate standards. Circular No. 37's restriction on currency exportation is in harmony with these objectives, since unchecked exportation would increase the peso supply abroad and depress its international value. The Court's concern is with the existence of authority, not the wisdom of the measure. Exconde himself did not dispute that Sections 2 and 64 provide adequate standards.

• Confiscation of Unlicensed Currency: Article 10 of the Revised Penal Code provides that the Code shall be supplementary to special laws unless the latter specially provide otherwise. Pursuant to this rule, Article 45 — providing for confiscation or forfeiture of instruments or tools employed in the commission of a crime — has repeatedly been applied to crimes penalized by special laws, as in U.S. vs. Bruhez (Opium Law), U.S. vs. Filart (lottery act), Villaruz vs. CFI (usury), and Commissioner of Customs vs. Sadia (Revised Administrative Code). In U.S. vs. Bruhez, the Court affirmed confiscation of money used to bribe a customs official, treating it as an instrument of the crime. While People vs. Paet and People vs. Sanchez refused to entertain the Government's appeal for forfeiture, those cases turned on double jeopardy — the accused had not appealed, and confiscation being an additional penalty, the Government could not seek its imposition. Here, Exconde's own appeal removed all bars to review and correction of the penalty, even if an increase should result, pursuant to Rule 120, Section 11.

• Valid Delegation of Legislative Power — While the making of laws is a non-delegable activity exclusively belonging to Congress, the legislature may constitutionally delegate authority to promulgate rules and regulations to implement a given legislation, provided that: (1) the regulation is germane to the objects and purposes of the law; (2) the regulation is not in contradiction with the law; and (3) the regulation conforms to the standards that the law prescribes. In this case, Sections 2 and 64 of the Central Bank Act supplied adequate standards — maintaining monetary stability, preserving the international value of the peso, and controlling prejudicial expansion or contraction of the money supply — against which Circular No. 37's validity was measured and upheld.

• Supplementary Application of the Revised Penal Code to Special Laws (Article 10) — Offenses punishable under special laws are not subject to the provisions of the Revised Penal Code, but the Code shall be supplementary to such laws unless the latter specially provide otherwise. This doctrine was applied to extend Article 45's confiscation provision to violations of the Central Bank Act and its duly issued regulations, there being no contrary provision in the special law.

• Penal Sanctions for Violations of Valid Administrative Regulations — A violation of a regulation prescribed by an administrative officer in conformity with and based upon a statute authorizing such regulation constitutes an offense and renders the offender liable to punishment as provided in the authorizing statute. The legislature, not the administrative agency, makes the action penal; the agency merely prescribes duties on which the law operates in imposing a penalty.

• Double Jeopardy and Government Appeals — Where the accused has not appealed, the Government cannot appeal to increase the penalty, as confiscation is an additional penalty that would place the accused twice in jeopardy. However, where the accused himself appeals, all bars to review and correction of the penalty are removed, even if an increase results.

• "It is well established in this jurisdiction that, while the making of laws is a non-delegable activity that corresponds exclusively to Congress, nevertheless the latter may constitutionally delegate authority to promulgate rules and regulations to implement a given legislation and effectuate its policies, for the reason that the legislature often finds it impracticable (if not impossible) to anticipate and provide for the multifarious and complex situations that may be met in carrying the law into effect." — This passage articulates the foundational doctrine on valid delegation of legislative power in Philippine jurisprudence, establishing the threshold requirements that administrative regulations must meet.

• "It requires no effort to understand that unless the exportation of currency is curtailed, the value of the peso in terms of other currencies can not be maintained, for the increase of the peso supply in foreign countries would tend to depress its value therein." — This reasoning links the factual basis of Circular No. 37 to the statutory objectives in Sections 2 and 64, demonstrating how the regulation is germane to the law's purposes — the germaneness test for valid delegation.

• "Courts are only concerned with the question of authority, not the wisdom of the measure involved." — This formulation delineates the boundary of judicial review over delegated legislation: courts examine whether the delegate acted within conferred authority, not whether the regulation is wise or optimal.

• Calalang vs. Williams, 70 Phil. 727 — Followed as authority for the doctrine that Congress may delegate rule-making power provided the regulation is germane to the law's purposes and conforms to prescribed standards.
• Pangasinan Transportation vs. Public Service Commission, 70 Phil. 221 — Followed for the principle that separation of powers has been relaxed to accommodate subordinate legislation in modern government.
• People vs. Rosenthal, 68 Phil. 328 — Followed as authority sustaining delegation where the standard of "public interest" was deemed adequate.
• Rubi vs. Provincial Board of Mindoro, 39 Phil. 660 — Cited as an example of a sustained delegation standard ("necessary in the interest of law and order").
• U.S. vs. Bruhez, 28 Phil. 305 — Followed as controlling precedent for applying Article 45 confiscation to special-law offenses (Opium Law), treating money used in bribery as an instrument of the crime.
• U.S. vs. Filart, 30 Phil. 80 — Followed as precedent for applying Article 45 confiscation to violations of the lottery act (Act No. 1757).
• Villaruz vs. Court of First Instance, 71 Phil. 72 — Followed as precedent for applying Article 45 to usury-law violations.
• Commissioner of Customs vs. Sadia, 95 Phil. 439 — Followed as precedent for applying Article 45 to violations of the Revised Administrative Code.
• People vs. Paet, 53 Off. Gaz. 668 — Distinguished. The Government's appeal for forfeiture was refused not because Article 45 did not apply, but because the accused had not appealed, barring an increase in penalty on double jeopardy grounds.
• People vs. Sanchez — Distinguished on the same ground as People vs. Paet: the accused had not appealed, so the Government could not seek an additional penalty.

• Section 34, Republic Act No. 265 (Central Bank Act) — Prescribes penal sanctions (fine not exceeding P20,000 and imprisonment not exceeding five years) for willful violations of the Act or any rule or regulation legally issued by the Monetary Board. Applied as the penal basis for prosecuting violations of Circular No. 37.
• Section 14(a), Republic Act No. 265 — Authorizes the Monetary Board to prepare and issue rules and regulations necessary for the effective discharge of its responsibilities and exercise of its powers. Applied as the source of the Monetary Board's rule-making authority to promulgate Circular No. 37.
• Section 2, Republic Act No. 265 — Defines the Central Bank's responsibilities and objectives, including maintaining monetary stability and preserving the international value of the peso. Applied as an adequate standard guiding the Monetary Board's delegated power.
• Section 64, Republic Act No. 265 — Directs the Monetary Board to control any expansion or contraction in the money supply prejudicial to the attainment of high production, employment, and real income. Applied as an additional adequate standard for delegation.
• Central Bank Circular No. 37 — Prohibits the import and export of Philippine coins and notes without license, except for amounts not exceeding P100 for travelers. Upheld as a valid exercise of delegated regulatory power.
• Article 10, Revised Penal Code — Provides that offenses punishable under special laws are not subject to the Code, but the Code shall be supplementary to such laws unless the latter specially provide otherwise. Applied to extend Article 45's confiscation provision to violations of the Central Bank Act.
• Article 45, Revised Penal Code — Provides for the confiscation or forfeiture of instruments or tools employed in the commission of a crime. Applied through Article 10 to order forfeiture of the unlicensed currency used in violating Circular No. 37.
• Rule 120, Section 11, Rules of Court — Governs appeals by the Government and the effect of the accused's own appeal on the review of penalties. Applied to hold that Exconde's own appeal removed all bars to review and correction of the penalty, even if an increase resulted.

Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista, Angelo, Labrador, Concepcion, Endencia, and Felix, JJ., concurred.