People v. Rosenthal & Osmena
People of
the Philippines, plaintiff-appellee v. Jacob Rosenthal & Nicasio Osmena,
defendants-appellants
En Banc
Doctrine: Due process & equal
protection
Keywords: void of vagueness, equal
protection, undue delegation of legislative authority
Date: June 12, 1939
Ponente: Justice Laurel
Facts:
· Jacob Rosenthal and Nicasio Osmeña were founders and shareholders of the
O.R.O. Oil Company. The main objects and purposes of the company are to mine, refine,
market, buy and sell petroleum, natural gas and other oil products.
· Rosenthal and Osmeña were found guilty by the RTC in two cases of
selling their shares to individuals without first obtaining the corresponding
written permit or license from the Insular Treasurer of the Commonwealth of the
Philippines.
· This is in violation of Sections 2 & 5 of Act No. 2581, commonly
known as the Blue Sky Law.
o
Section 2 of said law provides
that every person, partnership,
association, or corporation attempting to offer to sell in the Philippines speculative
securities of any kind or character whatsoever, is under obligation to file
previously with the Insular Treasurer the various documents and papers enumerated therein and to pay the required tax of twenty-pesos.
o
Sec 5, on the other hand, provides
that “whatever the said Treasurer of the
Philippine Islands is satisfied, either with or without the examination herein provided, that any person, partnership, association or
corporation is entitled to the right to offer its securities as above defined
and provided for sale in the Philippine Islands, he shall issue to such person,
partnership, association or corporation a certificate or permit reciting that
such person, partnership, association or corporation has complied with the
provisions of this act, and that such person, partnership, association or
corporation, its brokers or agents are entitled to order the securities named
in said certificate or permit for sale”; that “said Treasurer shall furthermore
have authority, whenever in his judgment it is in the public interest, to
cancel said certificate or permit”, and that “an appeal from the decision of the Insular Treasurer may be had within the period of thirty days to the Secretary of Finance.”
· The shares are said to be speculative because their value materially
depended upon a promise of future promotion and development of the oil
business, rather than on actual tangible assets.
· On appeal, Rosenthal & Osmena argued that Act 2581 is
unconstitutional on three grounds:
o
1) That it constitutes undue
delegation of legislative authority to the Insular treasurer
o
2) that it does not afford equal
protection before the law
o
3) that it is vague and ambiguous
Issue: WON the law is unconstitutional
in any of the three grounds
Held: The law is CONSTITUTIONAL on all grounds alleged by the appellants.
Ratio:
·
That it constitutes undue
delegation of legislative authority to the Insular treasurer
- The Act furnishes a sufficient standard for the Treasurer to
follow in reaching a decision regarding the issuance or cancellation of a
certificate or permit. The certificate or permit to be issued under the
Act must recite that the person ,partnership, association or corporation
applying therefor “has complied with the provisions of this Act”, and
this requirement, construed in relation to the other provisions of the
law, means that a certificate or permit shall be issued by the Insular
Treasurer when the provisions of Act 2581 have been complied with. Upon
the other hand, the authority of the Insular Treasurer to cancel a certificate
or permit is expressly conditioned upon a finding that such cancellation
“is in the public interest.” In view of the intention and purpose of Act
2581 to protect the public against “speculative schemes which have no
more basis than so many feet of blue sky” and against the “sale of stock
infly-by-night concerns, visionary oil wells, distant gold mines, and
other like fraudulent exploitations”, we hold that “public interest” in
this case is a sufficient standard to guide the Insular Treasurer in reaching
a decision on a matter pertaining to the issuance or cancellation of
certificates or permits.
- Act 2581 allows appeal from the decision of the Treasurer to the
Sec of Finance. Hence, it cannot be contended that the Treasurer can act
and decide without any restraining influence.
- The theory of the separation of powers is designed by its
originators to secure action and at the same time to forestall over
action which necessarily results from undue concentration of powers, and
thereby obtain efficiency and prevent despotism. Thereby, the “rule of
law” was established which narrows the range of governmental action and
makes it subject to control by certain legal devices. As a corollary, we
find the rule prohibiting delegation of legislative authority, and from
the earliest time American legal authorities have proceeded on the theory
that legislative power must be exercised by the legislative alone. It is
frankness, however, to confess that as one delves into the mass of
judicial pronouncements, he finds a great deal of confusion.
- the maxim “delegatus non
potest delegare or delegata potestas non potest delegare” has beenmade to adapt itself to the
complexities of modern governments, giving rise to the adoption, within
certain limits, of the principle of “subordinate legislation”, in
practically all modern governments. Difficulty lies in fixing the limit
and extent of the authority. While courts have undertaken to laydown
general principles, the safest is to decide each case according to its
peculiar environment, having in mind the wholesome legislative purpose
intended to be achieved.
- Hall v Geiger-Jones: it is well-settled principle of law in this
state that by legislative act a commission or board may be empowered to
ascertain the existence of facts, upon the finding of which may depend
the right to continue in the practice of a profession or a regulated
business.
·
that it does not afford equal
protection before the law
o
Another ground relied upon by appellants in
contending that Act No. 2581 is unconstitutional is that it denies equal
protection of the laws because the law discriminates between an owner who sells
his securities in a single transaction and one who disposes of them in repeated
and successive transactions.
o
Hall vs. Geiger-Jones Co:
"Prominent among such discriminations are . . . between an owner who sells
his securities in a single transaction and one who disposes of them in
successive transactions; . . . " If a class is deemed to present a
conspicuous example of what the legislature seeks to prevent, the 14th
Amendment allows it to be dealt with although otherwise and merely logically
not distinguishable from others not embraced in the law
·
that it is vague and ambiguous
o
People vs.
Fernandez and Trinidad. An Act will be declared void and
inoperative on the ground of vagueness and uncertainty only upon a showing that the defect
is such that the courts are unable to determine, with any reasonable degree of certainty, what
the legislature intended.
o
In this connection we cannot pretermit reference to
the rule that “legislation should not be
held invalid on the ground of uncertainty if susceptible of any reasonable
construction that will support and give it effect. An Act will not be declared inoperative and ineffectual on the ground
that it furnishes no adequate means to secure the purpose for which it is
passed, if men of common sense and reason can devise and provide the means,
and all the instrumentalities necessary for its execution are within the reach
of those intrusted therewith.”
Judgement of lower court is
affirmed, with modifications that the fines are reduced.
Rosenthal:
from P500 -> P200 in each case
Osmena:
from P1000 -> P500, from P2000 -> P1000
Subsidiary
imprisonment for both in case of insolvency, and costs.
Note: sinama ko na lang din yung isa pang issue. Hahaha. Pero ung equal
protection & vagueness ung main na kailangan for crim I think. <3, Nina
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