Rafael v. Embroidery & Apparel Control & Inspection Bd.
REITERATIONFacts
The Antecedents: Petitioner, Cecilio Rafael, doing business as "El Barato Alce Company," was authorized to operate a manufacturing bonded warehouse for the exportation of embroidery and apparel products using imported raw materials, exempt from duty, pursuant to Republic Act No. 1937. Procedural History: On June 17, 1961, Republic Act No. 3137 was enacted, creating the Embroidery and Apparel Control and Inspection Board (Board) to regulate the importation of raw materials and the liquidation of re-exportations. The Board was constituted, and petitioner was requested to submit an application for a license and remit P200.00. Petitioner filed an action for prohibition with preliminary injunction, seeking to declare Republic Act No. 3137 unconstitutional. The trial court declared Section 2 of Republic Act No. 3137 unconstitutional and the Board illegally constituted, enjoining its enforcement. Both parties appealed. The Petition: Petitioner prayed for the declaration of Republic Act No. 3137 as unconstitutional and void ab initio, or in the alternative, for the nullification of specific acts of the Board and the Secretary of Finance for being done without jurisdiction.
Issue(s)
Whether Section 2 of Republic Act No. 3137, concerning the composition of the Embroidery and Apparel Control and Inspection Board, is unconstitutional for infringing upon the President's power of appointment. Whether Republic Act No. 3137 constitutes class legislation and violates the equal protection clause by allegedly favoring one private organization. Whether Section 4, XVI, paragraph 2 of Republic Act No. 3137 constitutes an undue delegation of legislative power due to insufficient standards for the special assessment.
Ruling
The Supreme Court reversed the judgment of the lower court. It declared Republic Act No. 3137, particularly Section 2 thereof, constitutional and set aside the permanent injunction issued by the lower court. Costs were against the petitioner.
Ratio Decidendi
On the constitutionality of Section 2 regarding the appointment of Board members: The Court found the argument that Section 2 infringes upon the President's power of appointment untenable. The members of the Board, with the exception of the private sector representative, are designated by their respective department heads and serve ex officio. They already hold positions in the mentioned offices, and their designation to the Board is merely an addition of duties germane to their original appointments, not requiring new appointments by the President. The Court cited Shoemaker vs. United States and Manalang vs. Quitoriano to support the principle that Congress may increase the powers and duties of an existing office without necessitating a new appointment by the President. The specification of the departments from which representatives should come was deemed logical due to the direct relation of these departments' functions to the industry regulated by the Act. On the issue of class legislation and equal protection: The Court dismissed the claim that the Act constitutes class legislation and violates the equal protection clause. It reasoned that the law applies uniformly to all persons engaged in the embroidery and apparel manufacturing industry under the same conditions. The selection of the Association of Embroidery and Apparel Exporters of the Philippines (P.A.E.A.E.) as the source for the private sector representative was justified because it was the dominant organization in the field, and the law does not grant exclusive privileges to its members. The Court reiterated the principle that legislation affecting all persons in the same class equally is not class legislation, citing Tolentino vs. Board of Accountancy, et al. and Meralco vs. Public Utilities Employees, Assn.. On the delegation of legislative power for special assessments: The Court found no undue delegation of legislative power in Section 4, XVI, paragraph 2 of the Act. It clarified that the special assessment is levied on manufactured goods intended for exportation and is limited to a maximum of one percent of the value of labor, processing, or finishing costs. The law provides sufficient standards by specifying the basis (manufactured goods for export) and the limit (not exceeding one percent of costs). The Court distinguished between delegation of the power to legislate and the conferring of authority to execute the law, stating that the latter, when exercised under and in pursuance of the law, is valid, citing Araneta, et al. vs. Gatmaitan, et al..
Main Doctrine
Republic Act No. 3137, creating the Embroidery and Apparel Control and Inspection Board and prescribing its powers and functions, is constitutional. The designation of representatives from various government agencies to sit on the Board does not infringe upon the President's power of appointment, as these representatives serve ex officio and perform duties germane to their original offices. Furthermore, the Act does not constitute class legislation nor does it violate the equal protection clause, as it applies uniformly to all engaged in the embroidery and apparel manufacturing industry under similar conditions. The delegation of power to the Board to levy special assessments is also valid, as it is accompanied by sufficient standards provided in the law.