Valderrama Lumber Manufacturers Company, Inc. vs. The Administrator

Reorganization Plan No. 20-A did not become a law because the procedure of enactment by legislative inaction violates the constitutional requirements of positive and separate action by each House of Congress, including the presentation of the bill to the President. Moreover, the conferment of judicial powers on the regional offices of the Department of Labor, which had not previously exercised such powers, is unconstitutional because judicial power is vested exclusively in the Supreme Court and such inferior courts as may be established by law.

Petitioner Valderrama Lumber Manufacturers Company, Inc. is a corporation that employed Carlos Fernandez and others as laborers. The former employees filed money claims for overtime pay, salary differential, and separation pay against the company with Regional Office No. V of the Department of Labor at Iloilo City. The respondents are the Administrator and the Hearing Officer of that regional office, who assumed jurisdiction over the claims by virtue of Reorganization Plan No. 20-A, as implemented by Executive Order No. 218 and the Rules and Regulations of the Labor Standards Commission. The Reorganization Plan was submitted pursuant to Republic Act No. 997, as amended, which created the Government Survey and Reorganization Commission to reorganize the Executive Branch of the National Government.

Carlos Fernandez and other former employees and laborers of petitioner Valderrama Lumber Manufacturers Company, Inc. filed claims against the company for overtime pay, salary differential, and separation pay with Regional Office No. V of the Department of Labor at Iloilo City, docketed as Case No. 712 (606 LS). When the parties failed to settle amicably, the respondent Hearing Officer set the claims for hearing and reception of evidence, and concluded the hearing on August 26, 1958.

Before any further proceeding could be had, the petitioner company instituted an action for prohibition with preliminary injunction in the Court of First Instance of Negros Occidental, docketed as Special Civil Action No. 4989, against the respondents Administrator and Hearing Officer of the regional office. The Court of First Instance granted the preliminary injunction, restraining the respondents from further proceeding with the case. In that action, the petitioner assailed the exercise by the respondents of jurisdiction over the money claims, claiming that the same fall under the exclusive jurisdiction of the ordinary courts of justice.

The respondents, in their answer dated October 3, 1958, contended that the Regional Offices of the Department of Labor had been vested with original and exclusive jurisdiction over all cases falling under the Workmen's Compensation Law, or cases affecting all money claims arising from Labor Standard Laws, by virtue of Reorganization Plan No. 20-A, as implemented by Executive Order No. 218 of the President, issued on December 10, 1956, and Rules and Regulations Nos. 1 and 2-A of the Labor Standards Commission, dated January 17, 1957 and December 16, 1956. After trial, the Court of First Instance rendered a decision on August 26, 1960, dismissing the case and dissolving the preliminary injunction, holding that since Reorganization Plan No. 20-A had been admittedly approved by Congress and thereby became a part of Republic Act No. 997, as amended, the respondents validly assumed and exercised jurisdiction over the case. The petitioner appealed to the Supreme Court.

• Invalidity of Reorganization Plan 20-A as a Statute: Petitioner-appellant claimed that the trial court erred in not holding that Reorganization Plan 20-A cannot have the efficacy of a law because it was not validly passed as a statute and because it departed from the announced objectives of the Reorganization Act.
• Unconstitutional Invasion of Judicial Power: Petitioner-appellant argued that the trial court erred in giving force to Reorganization Plan 20-A, considering that the same is void legislation because it constitutes an invasion of the judicial power of the courts and, therefore, was an unconstitutional exercise of legislative power.

• Jurisdiction of Regional Offices: Respondents contended that the Regional Offices of the Department of Labor have been vested with original and exclusive jurisdiction over all cases falling under the Workmen's Compensation Law, or cases affecting all money claims arising from Labor Standard Laws, by virtue of Reorganization Plan No. 20-A, as implemented by Executive Order No. 218 and the Rules and Regulations of the Labor Standards Commission.

• Validity of Enactment: Whether Reorganization Plan No. 20-A became a law through the procedure of legislative inaction provided in Section 6(a) of Republic Act No. 997, notwithstanding the constitutional requirements for the passage of bills.
• Constitutionality of Conferring Judicial Powers: Whether Reorganization Plan No. 20-A is void legislation for constituting an invasion of the judicial power of the courts.

• Validity of Enactment: No. Reorganization Plan No. 20-A did not become a law because the procedure of enactment by legislative inaction violates the constitutional provisions requiring positive and separate action by each House of Congress, and dispenses with the requirement of presentation to the President.
• Constitutionality of Conferring Judicial Powers: No. The conferment of judicial powers on the regional offices of the Department of Labor, not previously exercised by said offices, is unconstitutional because judicial power rests exclusively in the judiciary.

• Validity of Enactment: The Court applied the ruling in Miller vs. Mardo and companion cases, which passed upon the same question of whether Reorganization Plan 20-A became a law upon the adjournment of Congress without that body passing a resolution disapproving or adopting the plan. The Court held that such a procedure of enactment of law by legislative inaction is not countenanced in this jurisdiction. Section 6(a) of the Reorganization Act provided that consent or approval is to be manifested by silence or adjournment or by "concurrent resolution." This procedure violates the constitutional provisions requiring positive and separate action by each House of Congress, as prescribed in Section 21(1), Article VI and Section 20(1), Article VI of the Constitution. The procedure is contrary to settled and well-understood parliamentary law requiring the two houses to hold separate sessions for their deliberations, with the determination of one house upon the proposed law submitted to the separate determination of the other. Furthermore, Section 6(a) would dispense with the "passage" of any measure, as that word is commonly used and understood, and with the requirement of presentation to the President. In effect, the section would be a reversal of the democratic processes required by the Constitution, for under it, the President would propose the legislative action by submitting the plan, rather than approve or disapprove the action taken by Congress.

• Constitutionality of Conferring Judicial Powers: The Court likewise applied the ruling in the Miller cases, which declared the invalidity of the conferment of judicial powers on the regional offices not previously exercised by said offices. While the Government Survey and Reorganization Commission was empowered by Republic Act 997 to create or abolish departments, offices, agencies, or functions which may be necessary for the efficient conduct of the government service, those "functions" which may thus be created refer merely to administrative, not judicial, ones. The Commission was created to carry out the reorganization of the Executive Branch of the National Government, which plainly did not include the creation of courts. 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. Thus, judicial power rests exclusively in the judiciary.

• Enactment of Laws by Legislative Inaction — A statute cannot validly provide that a proposed measure becomes law through the silence, inaction, or adjournment of Congress. The Constitution requires positive and separate action by each House of Congress, including the presentation of the bill to the President for approval or veto. The Court held that Section 6(a) of Republic Act No. 997, which allowed Reorganization Plan 20-A to become law through legislative inaction, violated the constitutional procedure for the enactment of laws and was therefore ineffective.

• Exclusive Vesting of Judicial Power — Judicial power is vested exclusively in the Supreme Court and in such inferior courts as may be established by law. An executive body or administrative agency cannot be vested with judicial powers that it had not previously exercised. The Court held that the conferment of judicial powers on the regional offices of the Department of Labor, which had not previously exercised such powers, was unconstitutional, as the Government Survey and Reorganization Commission was empowered only to create or abolish administrative functions, not judicial ones.

• "Such a procedure of enactment of law by legislative inaction is not countenanced in this jurisdiction." — This passage states the core holding that legislative inaction cannot validly enact a law, forming the basis for declaring Reorganization Plan 20-A ineffective.

• "A comparison between the procedure of enactment provided in section 6(a) of the Reorganization Act and that prescribed by the Constitution will show that the former is in distinct contrast to the latter. Under the first, consent or approval is to be manifested by silence or adjournment or by 'concurrent resolution'. In either case, the contemplated procedure violates the constitutional provisions requiring positive and separate action by each House of Congress." — This passage articulates the constitutional defect in the legislative inaction procedure, contrasting it with the affirmative requirements of the Constitution.

• "In a sense, the section, if given the effect suggested in counsel's argument, would be a reversal of the democratic processes required by the Constitution, for under it, the President would propose the legislative action by submitting the plan, rather than approve or disapprove the action taken by Congress." — This passage explains the fundamental inversion of the legislative process that would result from giving effect to the legislative inaction provision.

• "And 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.' (Sec. 1, Art. VIII of the Constitution). Thus, judicial power rests exclusively in the judiciary." — This passage states the constitutional basis for declaring the conferment of judicial powers on the regional offices unconstitutional.

• Miller vs. Mardo, L-15135, July 31, 1961 — Controlling precedent. The Court applied this case, which passed upon the same questions of whether Reorganization Plan 20-A became a law through legislative inaction and whether the conferment of judicial powers on the regional offices was valid. The Court quoted extensively from this decision in resolving both issues.
• Corominas vs. Labor Standards Commission, L-14837, June 30, 1961 — Companion case cited in the footnote, following the same ruling.
• Equitable Banking Corp. vs. Regional Office 3, L-14442, June 30, 1961 — Companion case cited in the footnote, following the same ruling.
• Earnshaw Docks & Honolulu Iron Works vs. Mardo, L-14759, July 31, 1961 — Companion case cited in the footnote, following the same ruling.
• Liwanag vs. Central Azucarera, L-15371, July 31, 1961 — Companion case cited in the footnote, following the same ruling.
• Lecture vs. Regional Office 3, L-15582, July 31, 1961 — Companion case cited in the footnote, following the same ruling.
• Pampanga Sugar Development Co. vs. Fuentes, L-14738, July 31, 1961 — Companion case cited in the footnote, following the same ruling.

• Section 6(a), Republic Act No. 997 — The provision that provided for the enactment of Reorganization Plan 20-A through legislative inaction, specifically through silence, adjournment, or concurrent resolution. The Court held this procedure unconstitutional for violating the constitutional requirements for the passage of bills.
• Section 21(1), Article VI, 1935 Constitution — The provision requiring that no bill shall be passed or become a law unless printed and furnished to Members at least three calendar days prior to its passage, with the yeas and nays entered on the Journal. The Court cited this provision to show the contrast between the constitutional procedure and the legislative inaction procedure.
• Section 20(1), Article VI, 1935 Constitution — The provision requiring that every bill passed by Congress be presented to the President for approval or veto. The Court held that Section 6(a) of the Reorganization Act dispensed with this presentation requirement.
• Section 1, Article VIII, 1935 Constitution — The provision vesting judicial power in one Supreme Court and in such inferior courts as may be established by law. The Court relied on this provision to declare the conferment of judicial powers on the regional offices unconstitutional.
• Section 3, Republic Act No. 997, as amended by Republic Act No. 1241 — The provision creating the Government Survey and Reorganization Commission to carry out the reorganization of the Executive Branch of the National Government. The Court held that this mandate did not include the creation of courts.

Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, Dizon, Regala, and Makalintal, JJ., concurred.