G.R. No. L-17781 December 29, 1962
FILIPRO, INC. and HILARION TANTOCO BROKERAGE, INCORPORATED, petitioners-appellees, vs. F. A. FUENTES, ET AL., respondents-appellants.

FACTS

On March 24, 1958, thirty-one former employees filed a claim for separation pay against the petitioners with Regional Office No. 3 of the Department of Labor, alleging dismissal without just cause and prior notice. The case was docketed as Case No. R-03-LS-1206. Before the scheduled hearing, the petitioners filed a Petition for Prohibition with Preliminary Injunction in the Court of First Instance of Manila. They contended that the labor officials, Administrator F. A. Fuentes and Hearing Officer J. Benedicto, lacked valid authority to conduct judicial proceedings on the money claim. They argued that Republic Act No. 997, as amended, which created the Reorganization Commission, did not authorize the delegation of judicial or quasi-judicial powers to the Department of Labor’s regional offices, and that any such delegation would be an unconstitutional act.
The lower court issued a preliminary injunction. In their Answer, the respondents maintained that the authority was validly delegated through Reorganization Plan No. 20-A, specifically Section 25, which granted regional offices original and exclusive jurisdiction over money claims arising from labor standards violations. On October 20, 1960, the lower court rendered judgment granting the writ of prohibition, ruling that the regional offices were not legally created with such judicial authority and that the respondents therefore had no power to hear the complaint. This decision was appealed to the Supreme Court.

ISSUE

The core issue is whether the Reorganization Commission, under Republic Act No. 997 as amended, validly conferred judicial or quasi-judicial powers upon the regional offices of the Department of Labor to adjudicate money claims of laborers.

RULING

The Supreme Court affirmed the lower court’s decision, ruling that the grant of jurisdiction to the regional offices was null and void. The legal logic is anchored on the principle of non-delegation of legislative power and the separation of powers. Republic Act No. 997 created the Reorganization Commission to reorganize the executive branch. The Court held it was not the intention of Congress, through this law, to authorize the transfer of powers and jurisdiction constitutionally vested in courts of justice to administrative bodies created by the Reorganization Plan. The legislature cannot delegate its power to create courts of justice or to confer judicial functions to another agency, such as the Reorganization Commission.
The Court cited its settled doctrine established in prior cases like Corominas, Jr. v. Labor Standards Commission and Cagalawan v. Customs Canteen. It reiterated that Section 25 of Reorganization Plan No. 20-A, which purported to grant regional offices original and exclusive jurisdiction over laborers’ money claims, was enacted without authority and was therefore invalid. Consequently, the labor officials had no legal authority to hear and decide the claim for separation pay. The writ of prohibition was correctly issued to restrain them from proceeding with the case, as they were attempting to exercise a judicial function without valid jurisdiction.