G.R. No.

92389 September 11, 1991

HON. JEJOMAR C. BINAY and the MUNICIPALITY OF MAKATI, petitioners,
vs.
HON. EUFEMIO DOMINGO and the COMMISSION ON AUDIT, respondents.

PARAS, J.:p
The only pivotal issue before Us is whether or not Resolution No. 60, re-enacted under Resolution No. 243, of the
Municipality of Makati is a valid exercise of police power under the general welfare clause.
The pertinent facts are:
On September 27, 1988, petitioner Municipality, through its Council, approved Resolution No. 60 which reads:
A RESOLUTION TO CONFIRM AND/OR RATIFY THE ONGOING BURIAL ASSISTANCE
PROGRAM INITIATED BY THE OFFICE OF THE MAYOR, OF EXTENDING FINANCIAL
ASSISTANCE OF FIVE HUNDRED PESOS (P500.00) TO A BEREAVED FAMILY, FUNDS TO BE
TAKEN OUT OF UNAPPROPRIATED AVAILABLE FUNDS EXISTING IN THE MUNICIPAL
TREASURY. (Rollo, Annnex "A" p. 39)
Qualified beneficiaries, under the Burial Assistance Program, are bereaved families of Makati whose gross family income
does not exceed two thousand pesos (P2,000.00) a month. The beneficiaries, upon fulfillment of other requirements, would
receive the amount of five hundred pesos (P500.00) cash relief from the Municipality of Makati. (Reno, Annex "13", p. 41)
Metro Manila Commission approved Resolution No. 60. Thereafter, the municipal secretary certified a disbursement fired
of four hundred thousand pesos (P400,000.00) for the implementation of the Burial Assistance Program. (Rollo, Annex "C",
p. 43).
Resolution No. 60 was referred to respondent Commission on Audit (COA) for its expected allowance in audit. Based on its
preliminary findings, respondent COA disapproved Resolution No. 60 and disallowed in audit the disbursement of finds for
the implementation thereof. (Rollo, Annex "D", P. 44)
Two letters for reconsideration (Annexes "E" and "F", Rollo, pp. 45 and 48, respectively) filed by petitioners Mayor Jejomar
Binay, were denied by respondent in its Decision No. 1159, in the following manner:
Your request for reconsideration is predicated on the following grounds, to wit:
1. Subject Resolution No. 60, s. 1988, of the Municipal Council of Makati and the intended disbursements
fall within the twin principles of 'police power and parens patriae and
2. The Metropolitan Manila Commission (MMC), under a Certification, dated June 5, 1989, has already
appropriated the amount of P400,000.00 to implement the Id resolution, and the only function of COA on
the matter is to allow the financial assistance in question.
The first contention is believed untenable. Suffice it to state that:
a statute or ordinance must have a real substantial, or rational relation to the public
safety, health, morals, or general welfare to be sustained as a legitimate exercise of the
police power. The mere assertion by the legislature that a statute relates to the public
health, safety, or welfare does not in itself bring the statute within the police power of a
state for there must always be an obvious and real connection between the actual
provisions of a police regulations and its avowed purpose, and the regulation adopted
must be reasonably adapted to accomplish the end sought to be attained. 16 Am. Jur 2d,
pp. 542-543; emphasis supplied).

Here, we see no perceptible connection or relation between the objective sought to be attained under
Resolution No. 60, s. 1988, supra, and the alleged public safety, general welfare, etc. of the inhabitants of
Makati.
Anent the second contention, let it be stressed that Resolution No. 60 is still subject to the limitation that
the expenditure covered thereby should be for a public purpose, i.e., that the disbursement of the amount
of P500.00 as burial assistance to a bereaved family of the Municipality of Makati, or a total of
P400,000.00 appropriated under the Resolution, should be for the benefit of the whole, if not the majority,
of the inhabitants of the Municipality and not for the benefit of only a few individuals as in the present
case. On this point government funds or property shall be spent or used solely for public purposes. (Cf.
Section 4[2], P.D. 1445). (pp. 50-51, Rollo)
Bent on pursuing the Burial Assistance Program the Municipality of Makati, through its Council, passed Resolution No.
243, re-affirming Resolution No. 60 (Rollo, Annex "H", p. 52).
However, the Burial Assistance Program has been stayed by COA Decision No. 1159. Petitioner, through its Mayor, was
constrained to file this special civil action of certiorari praying that COA Decision No. 1159 be set aside as null and void.
The police power is a governmental function, an inherent attribute of sovereignty, which was born with civilized
government. It is founded largely on the maxims, "Sic utere tuo et ahenum non laedas and "Salus populi est suprema lex Its
fundamental purpose is securing the general welfare, comfort and convenience of the people.
Police power is inherent in the state but not in municipal corporations (Balacuit v. CFI of Agusan del Norte, 163 SCRA
182). Before a municipal corporation may exercise such power, there must be a valid delegation of such power by the
legislature which is the repository of the inherent powers of the State. A valid delegation of police power may arise from
express delegation, or be inferred from the mere fact of the creation of the municipal corporation; and as a general rule,
municipal corporations may exercise police powers within the fair intent and purpose of their creation which are reasonably
proper to give effect to the powers expressly granted, and statutes conferring powers on public corporations have been
construed as empowering them to do the things essential to the enjoyment of life and desirable for the safety of the people.
(62 C.J.S., p. 277). The so-called inferred police powers of such corporations are as much delegated powers as are those
conferred in express terms, the inference of their delegation growing out of the fact of the creation of the municipal
corporation and the additional fact that the corporation can only fully accomplish the objects of its creation by exercising
such powers. (Crawfordsville vs. Braden, 28 N.E. 849). Furthermore, municipal corporations, as governmental agencies,
must have such measures of the power as are necessary to enable them to perform their governmental functions. The power
is a continuing one, founded on public necessity. (62 C.J.S. p. 273) Thus, not only does the State effectuate its purposes
through the exercise of the police power but the municipality does also. (U.S. v. Salaveria, 39 Phil. 102).
Municipal governments exercise this power under the general welfare clause: pursuant thereto they are clothed with
authority to "enact such ordinances and issue such regulations as may be necessary to carry out and discharge the
responsibilities conferred upon it by law, and such as shall be necessary and proper to provide for the health, safety, comfort
and convenience, maintain peace and order, improve public morals, promote the prosperity and general welfare of the
municipality and the inhabitants thereof, and insure the protection of property therein." (Sections 91, 149, 177 and 208, BP
337). And under Section 7 of BP 337, "every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary and proper for governance such as to promote health and safety,
enhance prosperity, improve morals, and maintain peace and order in the local government unit, and preserve the comfort
and convenience of the inhabitants therein."
Police power is the power to prescribe regulations to promote the health, morals, peace, education, good order or safety and
general welfare of the people. It is the most essential, insistent, and illimitable of powers. In a sense it is the greatest and
most powerful attribute of the government. It is elastic and must be responsive to various social conditions. (Sangalang, et
al. vs. IAC, 176 SCRA 719). On it depends the security of social order, the life and health of the citizen, the comfort of an
existence in a thickly populated community, the enjoyment of private and social life, and the beneficial use of property, and

it has been said to be the very foundation on which our social system rests. (16 C.J.S., P. 896) However, it is not confined
within narrow circumstances of precedents resting on past conditions; it must follow the legal progress of a democratic way
of life. (Sangalang, et al. vs. IAC, supra).
In the case at bar, COA is of the position that there is "no perceptible connection or relation between the objective sought to
be attained under Resolution No. 60, s. 1988, supra, and the alleged public safety, general welfare. etc. of the inhabitants of
Makati." (Rollo, Annex "G", p. 51).
Apparently, COA tries to re-define the scope of police power by circumscribing its exercise to "public safety, general
welfare, etc. of the inhabitants of Makati."
In the case of Sangalang vs. IAC, supra, We ruled that police power is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all comprehensiveness. Its scope, over-expanding to meet the exigencies
of the times, even to anticipate the future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits.
The police power of a municipal corporation is broad, and has been said to be commensurate with, but not to exceed, the
duty to provide for the real needs of the people in their health, safety, comfort, and convenience as consistently as may be
with private rights. It extends to all the great public needs, and, in a broad sense includes all legislation and almost every
function of the municipal government. It covers a wide scope of subjects, and, while it is especially occupied with whatever
affects the peace, security, health, morals, and general welfare of the community, it is not limited thereto, but is broadened to
deal with conditions which exists so as to bring out of them the greatest welfare of the people by promoting public
convenience or general prosperity, and to everything worthwhile for the preservation of comfort of the inhabitants of the
corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to attempt to frame any definition which shall absolutely
indicate the limits of police power.
COA's additional objection is based on its contention that "Resolution No. 60 is still subject to the limitation that the
expenditure covered thereby should be for a public purpose, ... should be for the benefit of the whole, if not the majority, of
the inhabitants of the Municipality and not for the benefit of only a few individuals as in the present case." (Rollo, Annex
"G", p. 51).
COA is not attuned to the changing of the times. Public purpose is not unconstitutional merely because it incidentally
benefits a limited number of persons. As correctly pointed out by the Office of the Solicitor General, "the drift is towards
social welfare legislation geared towards state policies to provide adequate social services (Section 9, Art. II, Constitution),
the promotion of the general welfare (Section 5, Ibid) social justice (Section 10, Ibid) as well as human dignity and respect
for human rights. (Section 11, Ibid." (Comment, p. 12)
The care for the poor is generally recognized as a public duty. The support for the poor has long been an accepted exercise
of police power in the promotion of the common good.
There is no violation of the equal protection clause in classifying paupers as subject of legislation. Paupers may be
reasonably classified. Different groups may receive varying treatment. Precious to the hearts of our legislators, down to our
local councilors, is the welfare of the paupers. Thus, statutes have been passed giving rights and benefits to the disabled,
emancipating the tenant-farmer from the bondage of the soil, housing the urban poor, etc.
Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a paragon of the continuing
program of our government towards social justice. The Burial Assistance Program is a relief of pauperism, though not
complete. The loss of a member of a family is a painful experience, and it is more painful for the poor to be financially
burdened by such death. Resolution No. 60 vivifies the very words of the late President Ramon Magsaysay 'those who have
less in life, should have more in law." This decision, however must not be taken as a precedent, or as an official go-signal
for municipal governments to embark on a philanthropic orgy of inordinate dole-outs for motives political or otherwise.
PREMISES CONSIDERED, and with the afore-mentioned caveat, this petition is hereby GRANTED and the Commission
on Audit's Decision No. 1159 is hereby SET ASIDE.

SO ORDERED.

G.R. No. 166494

June 29, 2007

CARLOS SUPERDRUG CORP., petitioners,

vs.
DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT (DSWD), DEPARTMENT OF HEALTH (DOH),
DEPARTMENT OF FINANCE (DOF), DEPARTMENT OF JUSTICE (DOJ), and DEPARTMENT OF INTERIOR
and LOCAL GOVERNMENT (DILG), respondents.
DECISION
AZCUNA, J.:

This is a petition1 for Prohibition with Prayer for Preliminary Injunction assailing the constitutionality of Section 4(a) of
Republic Act (R.A.) No. 9257,2 otherwise known as the "Expanded Senior Citizens Act of 2003."
Petitioners are domestic corporations and proprietors operating drugstores in the Philippines.
Public respondents, on the other hand, include the Department of Social Welfare and Development (DSWD), the
Department of Health (DOH), the Department of Finance (DOF), the Department of Justice (DOJ), and the Department of
Interior and Local Government (DILG) which have been specifically tasked to monitor the drugstores compliance with the
law; promulgate the implementing rules and regulations for the effective implementation of the law; and prosecute and
revoke the licenses of erring drugstore establishments.
The antecedents are as follows:
On February 26, 2004, R.A. No. 9257, amending R.A. No. 7432,3 was signed into law by President Gloria MacapagalArroyo and it became effective on March 21, 2004. Section 4(a) of the Act states:
SEC. 4. Privileges for the Senior Citizens. The senior citizens shall be entitled to the following:
(a) the grant of twenty percent (20%) discount from all establishments relative to the utilization of services in hotels and
similar lodging establishments, restaurants and recreation centers, and purchase of medicines in all establishments for the
exclusive use or enjoyment of senior citizens, including funeral and burial services for the death of senior citizens;
...
The establishment may claim the discounts granted under (a), (f), (g) and (h) as tax deduction based on the net cost of the
goods sold or services rendered: Provided, That the cost of the discount shall be allowed as deduction from gross income for
the same taxable year that the discount is granted. Provided, further, That the total amount of the claimed tax deduction net
of value added tax if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper
documentation and to the provisions of the National Internal Revenue Code, as amended.4
On May 28, 2004, the DSWD approved and adopted the Implementing Rules and Regulations of R.A. No. 9257, Rule VI,
Article 8 of which states:
Article 8. Tax Deduction of Establishments. The establishment may claim the discounts granted under Rule V, Section 4
Discounts for Establishments;5 Section 9, Medical and Dental Services in Private Facilities[,]6 and Sections 107 and 118
Air, Sea and Land Transportation as tax deduction based on the net cost of the goods sold or services rendered. Provided,
That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is
granted; Provided, further, That the total amount of the claimed tax deduction net of value added tax if applicable, shall be
included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of
the National Internal Revenue Code, as amended; Provided, finally, that the implementation of the tax deduction shall be
subject to the Revenue Regulations to be issued by the Bureau of Internal Revenue (BIR) and approved by the Department
of Finance (DOF).9
On July 10, 2004, in reference to the query of the Drug Stores Association of the Philippines (DSAP) concerning the
meaning of a tax deduction under the Expanded Senior Citizens Act, the DOF, through Director IV Ma. Lourdes B. Recente,
clarified as follows:
1) The difference between the Tax Credit (under the Old Senior Citizens Act) and Tax Deduction (under the Expanded
Senior Citizens Act).
1.1. The provision of Section 4 of R.A. No. 7432 (the old Senior Citizens Act) grants twenty percent (20%) discount from
all establishments relative to the utilization of transportation services, hotels and similar lodging establishment, restaurants
and recreation centers and purchase of medicines anywhere in the country, the costs of which may be claimed by the private
establishments concerned as tax credit.
Effectively, a tax credit is a peso-for-peso deduction from a taxpayers tax liability due to the government of the amount of

discounts such establishment has granted to a senior citizen. The establishment recovers the full amount of discount given to
a senior citizen and hence, the government shoulders 100% of the discounts granted.
It must be noted, however, that conceptually, a tax credit scheme under the Philippine tax system, necessitates that prior
payments of taxes have been made and the taxpayer is attempting to recover this tax payment from his/her income tax due.
The tax credit scheme under R.A. No. 7432 is, therefore, inapplicable since no tax payments have previously occurred.
1.2. The provision under R.A. No. 9257, on the other hand, provides that the establishment concerned may claim the
discounts under Section 4(a), (f), (g) and (h) as tax deduction from gross income, based on the net cost of goods sold or
services rendered.
Under this scheme, the establishment concerned is allowed to deduct from gross income, in computing for its tax liability,
the amount of discounts granted to senior citizens. Effectively, the government loses in terms of foregone revenues an
amount equivalent to the marginal tax rate the said establishment is liable to pay the government. This will be an amount
equivalent to 32% of the twenty percent (20%) discounts so granted. The establishment shoulders the remaining portion of
the granted discounts.
It may be necessary to note that while the burden on [the] government is slightly diminished in terms of its percentage share
on the discounts granted to senior citizens, the number of potential establishments that may claim tax deductions, have
however, been broadened. Aside from the establishments that may claim tax credits under the old law, more establishments
were added under the new law such as: establishments providing medical and dental services, diagnostic and laboratory
services, including professional fees of attending doctors in all private hospitals and medical facilities, operators of domestic
air and sea transport services, public railways and skyways and bus transport services.
A simple illustration might help amplify the points discussed above, as follows:
Tax Deduction Tax Credit
Gross Sales x x x x x x x x x x x x
Less : Cost of goods sold x x x x x x x x x x
Net Sales x x x x x x x x x x x x
Less: Operating Expenses:
Tax Deduction on Discounts x x x x -Other deductions: x x x x x x x x
Net Taxable Income x x x x x x x x x x
Tax Due x x x x x x
Less: Tax Credit -- ______x x
Net Tax Due -- x x
As shown above, under a tax deduction scheme, the tax deduction on discounts was subtracted from Net Sales together
with other deductions which are considered as operating expenses before the Tax Due was computed based on the Net
Taxable Income. On the other hand, under a tax credit scheme, the amount of discounts which is the tax credit item, was
deducted directly from the tax due amount.10
Meanwhile, on October 1, 2004, Administrative Order (A.O.) No. 171 or the Policies and Guidelines to Implement the
Relevant Provisions of Republic Act 9257, otherwise known as the "Expanded Senior Citizens Act of 2003" 11was issued by
the DOH, providing the grant of twenty percent (20%) discount in the purchase of unbranded generic medicines from all
establishments dispensing medicines for the exclusive use of the senior citizens.

On November 12, 2004, the DOH issued Administrative Order No 17712 amending A.O. No. 171. Under A.O. No. 177, the
twenty percent discount shall not be limited to the purchase of unbranded generic medicines only, but shall extend to both
prescription and non-prescription medicines whether branded or generic. Thus, it stated that "[t]he grant of twenty percent
(20%) discount shall be provided in the purchase of medicines from all establishments dispensing medicines for the
exclusive use of the senior citizens."
Petitioners assail the constitutionality of Section 4(a) of the Expanded Senior Citizens Act based on the following
grounds:13
1) The law is confiscatory because it infringes Art. III, Sec. 9 of the Constitution which provides that private property shall
not be taken for public use without just compensation;
2) It violates the equal protection clause (Art. III, Sec. 1) enshrined in our Constitution which states that "no person shall be
deprived of life, liberty or property without due process of law, nor shall any person be denied of the equal protection of the
laws;" and
3) The 20% discount on medicines violates the constitutional guarantee in Article XIII, Section 11 that makes "essential
goods, health and other social services available to all people at affordable cost."14
Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation of private property.
Compelling drugstore owners and establishments to grant the discount will result in a loss of profit
and capital because 1) drugstores impose a mark-up of only 5% to 10% on branded medicines; and 2) the law failed to
provide a scheme whereby drugstores will be justly compensated for the discount.
Examining petitioners arguments, it is apparent that what petitioners are ultimately questioning is the validity of the tax
deduction scheme as a reimbursement mechanism for the twenty percent (20%) discount that they extend to senior citizens.
Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners for the discount
privilege accorded to senior citizens. This is because the discount is treated as a deduction, a tax-deductible expense that is
subtracted from the gross income and results in a lower taxable income. Stated otherwise, it is an amount that is allowed by
law15 to reduce the income prior to the application of the tax rate to compute the amount of tax which is due. 16 Being a tax
deduction, the discount does not reduce taxes owed on a peso for peso basis but merely offers a fractional reduction in taxes
owed.
Theoretically, the treatment of the discount as a deduction reduces the net income of the private establishments concerned.
The discounts given would have entered the coffers and formed part of the gross sales of the private establishments, were it
not for R.A. No. 9257.
The permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private property for public
use or benefit.17 This constitutes compensable taking for which petitioners would ordinarily become entitled to a just
compensation.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The
measure is not the takers gain but the owners loss. The word just is used to intensify the meaning of the
word compensation, and to convey the idea that the equivalent to be rendered for the property to be taken shall be real,
substantial, full and ample.18
A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would not meet the definition of
just compensation.19
Having said that, this raises the question of whether the State, in promoting the health and welfare of a special group of
citizens, can impose upon private establishments the burden of partly subsidizing a government program.
The Court believes so.

The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens to nation-building, and to
grant benefits and privileges to them for their improvement and well-being as the State considers them an integral part of
our society.20
The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself. Thus, the Act provides:
SEC. 2. Republic Act No. 7432 is hereby amended to read as follows:
SECTION 1. Declaration of Policies and Objectives. Pursuant to Article XV, Section 4 of the Constitution, it is the duty
of the family to take care of its elderly members while the State may design programs of social security for them. In
addition to this, Section 10 in the Declaration of Principles and State Policies provides: "The State shall provide social
justice in all phases of national development." Further, Article XIII, Section 11, provides: "The State shall adopt an
integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and
other social services available to all the people at affordable cost. There shall be priority for the needs of the underprivileged
sick, elderly, disabled, women and children." Consonant with these constitutional principles the following are the declared
policies of this Act:
...
(f) To recognize the important role of the private sector in the improvement of the welfare of senior citizens and to
actively seek their partnership.21
To implement the above policy, the law grants a twenty percent discount to senior citizens for medical and dental services,
and diagnostic and laboratory fees; admission fees charged by theaters, concert halls, circuses, carnivals, and other similar
places of culture, leisure and amusement; fares for domestic land, air and sea travel; utilization of services in hotels and
similar lodging establishments, restaurants and recreation centers; and purchases of medicines for the exclusive use or
enjoyment of senior citizens. As a form of reimbursement, the law provides that business establishments extending the
twenty percent discount to senior citizens may claim the discount as a tax deduction.
The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its
object. Police power is not capable of an exact definition, but has been purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response to conditions and
circumstances, thus assuring the greatest benefits. 22 Accordingly, it has been described as "the most essential, insistent and
the least limitable of powers, extending as it does to all the great public needs."23 It is "[t]he power vested in the legislature
by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances,
either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the
commonwealth, and of the subjects of the same."24
For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy of
police power because property rights, though sheltered by due process, must yield to general welfare.25
Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners
that they will suffer loss of earnings and capital, the questioned provision is invalidated. Moreover, in the absence of
evidence demonstrating the alleged confiscatory effect of the provision in question, there is no basis for its nullification in
view of the presumption of validity which every law has in its favor.26
Given these, it is incorrect for petitioners to insist that the grant of the senior citizen discount is unduly oppressive to their
business, because petitioners have not taken time to calculate correctly and come up with a financial report, so that they
have not been able to show properly whether or not the tax deduction scheme really works greatly to their disadvantage.27
In treating the discount as a tax deduction, petitioners insist that they will incur losses because, referring to the DOF
Opinion, for every P1.00 senior citizen discount that petitioners would give, P0.68 will be shouldered by them as only P0.32
will be refunded by the government by way of a tax deduction.
To illustrate this point, petitioner Carlos Super Drug cited the anti-hypertensive maintenance drug Norvasc as an example.

According to the latter, it acquires Norvasc from the distributors at P37.57 per tablet, and retails it atP39.60 (or at a margin
of 5%). If it grants a 20% discount to senior citizens or an amount equivalent to P7.92, then it would have to
sell Norvasc at P31.68 which translates to a loss from capital of P5.89 per tablet. Even if the government will allow a tax
deduction, only P2.53 per tablet will be refunded and not the full amount of the discount which is P7.92. In short, only 32%
of the 20% discount will be reimbursed to the drugstores.28
Petitioners computation is flawed. For purposes of reimbursement, the law states that the cost of the discount shall be
deducted from gross income,29 the amount of income derived from all sources before deducting allowable expenses, which
will result in net income. Here, petitioners tried to show a loss on a per transaction basis, which should not be the case. An
income statement, showing an accounting of petitioners sales, expenses, and net profit (or loss) for a given period could
have accurately reflected the effect of the discount on their income. Absent any financial statement, petitioners cannot
substantiate their claim that they will be operating at a loss should they give the discount. In addition, the computation was
erroneously based on the assumption that their customers consisted wholly of senior citizens. Lastly, the 32% tax rate is to
be imposed on income, not on the amount of the discount.
Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices of their medicines given the
cutthroat nature of the players in the industry. It is a business decision on the part of petitioners to peg the mark-up at 5%.
Selling the medicines below acquisition cost, as alleged by petitioners, is merely a result of this decision. Inasmuch as
pricing is a property right, petitioners cannot reproach the law for being oppressive, simply because they cannot afford to
raise their prices for fear of losing their customers to competition.
The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive pricing component of the
business. While the Constitution protects property rights, petitioners must accept the realities of business and the State, in
the exercise of police power, can intervene in the operations of a business which may result in an impairment of property
rights in the process.
Moreover, the right to property has a social dimension. While Article XIII of the Constitution provides the precept for the
protection of property, various laws and jurisprudence, particularly on agrarian reform and the regulation of contracts and
public utilities, continuously serve as a reminder that the right to property can be relinquished upon the command of the
State for the promotion of public good.30
Undeniably, the success of the senior citizens program rests largely on the support imparted by petitioners and the other
private establishments concerned. This being the case, the means employed in invoking the active participation of the
private sector, in order to achieve the purpose or objective of the law, is reasonably and directly related. Without sufficient
proof that Section 4(a) of R.A. No. 9257 is arbitrary, and that the continued implementation of the same would be
unconscionably detrimental to petitioners, the Court will refrain from quashing a legislative act.31
WHEREFORE, the petition is DISMISSED for lack of merit.

G.R. No. 126102

December 4, 2000

ORTIGAS & CO. LTD., petitioner,

vs.
THE COURT OF APPEALS and ISMAEL G. MATHAY III, respondents.
DECISION
QUISUMBING, J.:
This petition seeks to reverse the decision of the Court of Appeals, dated March 25, 1996, in CA-G.R. SP No. 39193, which
nullified the writ of preliminary injunction issued by the Regional Trial Court of Pasig City, Branch 261, in Civil Case No.
64931. It also assails the resolution of the appellate court, dated August 13, 1996, denying petitioners motion for
reconsideration.
The facts of this case, as culled from the records, are as follows:
On August 25, 1976, petitioner Ortigas & Company sold to Emilia Hermoso, a parcel of land known as Lot 1, Block 21,
Psd-66759, with an area of 1,508 square meters, located in Greenhills Subdivision IV, San Juan, Metro Manila, and covered
by Transfer Certificate of Title No. 0737. The contract of sale provided that the lot:
1. (1) be used exclusivelyfor residential purposes only, and not more than one single-family residential
building will be constructed thereon,
xxx
6. The BUYER shall not erectany sign or billboard on the rooffor advertising purposes
xxx
11. No single-family residential building shall be erecteduntil the building plans, specificationhave been
approved by the SELLER

xxx
14....restrictions shall run with the land and shall be construed as real covenants until December 31, 2025 when
they shall cease and terminate1
These and the other conditions were duly annotated on the certificate of title issued to Emilia.
In 1981, the Metropolitan Manila Commission (now Metropolitan Manila Development Authority) enacted MMC
Ordinance No. 81-01, also known as the Comprehensive Zoning Area for the National Capital Region. The ordinance
reclassified as a commercial area a portion of Ortigas Avenue from Madison to Roosevelt Streets of Greenhills Subdivision
where the lot is located.
On June 8, 1984, private respondent Ismael Mathay III leased the lot from Emilia Hermoso and J.P. Hermoso Realty Corp..
The lease contract did not specify the purposes of the lease. Thereupon, private respondent constructed a single story
commercial building for Greenhills Autohaus, Inc., a car sales company.
On January 18, 1995, petitioner filed a complaint against Emilia Hermoso with the Regional Trial Court of Pasig, Branch
261. Docketed as Civil Case No. 64931, the complaint sought the demolition of the said commercial structure for having
violated the terms and conditions of the Deed of Sale. Complainant prayed for the issuance of a temporary restraining order
and a writ of preliminary injunction to prohibit petitioner from constructing the commercial building and/or engaging in
commercial activity on the lot. The complaint was later amended to implead Ismael G. Mathay III and J.P. Hermoso Realty
Corp., which has a ten percent (10%) interest in the lot.
In his answer, Mathay III denied any knowledge of the restrictions on the use of the lot and filed a cross-claim against the
Hermosos.
On June 16, 1995, the trial court issued the writ of preliminary injunction. On June 29, 1995, Mathay III moved to set aside
the injunctive order, but the trial court denied the motion.
Mathay III then filed with the Court of Appeals a special civil action for certiorari, docketed as CA-G.R. SP No. 39193,
ascribing to the trial court grave abuse of discretion in issuing the writ of preliminary injunction. He claimed that MMC
Ordinance No. 81-01 classified the area where the lot was located as commercial area and said ordinance must be read into
the August 25, 1976 Deed of Sale as a concrete exercise of police power.
Ortigas and Company averred that inasmuch as the restrictions on the use of the lot were duly annotated on the title it issued
to Emilia Hermoso, said restrictions must prevail over the ordinance, specially since these restrictions were agreed upon
before the passage of MMC Ordinance No. 81-01.
On March 25, 1996, the appellate court disposed of the case as follows:
WHEREFORE, in light of the foregoing, the petition is hereby GRANTED. The assailed orders are hereby nullified and set
aside.
SO ORDERED.2
In finding for Mathay III, the Court of Appeals held that the MMC Ordinance No. 81-01 effectively nullified the restrictions
allowing only residential use of the property in question.
Ortigas seasonably moved for reconsideration, but the appellate court denied it on August 13, 1996.
Hence, the instant petition.
In its Memorandum, petitioner now submits that the "principal issue in this case is whether respondent Court of Appeals
correctly set aside the Order dated June 16, 1995 of the trial court which issued the writ of preliminary injunction on
the sole ground that MMC Ordinance No. 81-01 nullified the building restriction imposing exclusive residential use on the
property in question."3 It also asserts that "Mathay III lacks legal capacity to question the validity of conditions of the deed
of sale; and he is barred by estoppel or waiver to raise the same question like his principals, the owners."4 Lastly, it avers

that the appellate court "unaccountably failed to address" several questions of fact.
Principally, we must resolve the issue of whether the Court of Appeals erred in holding that the trial court committed grave
abuse of discretion when it refused to apply MMC Ordinance No.81-01 to Civil Case No. 64931.
But first, we must address petitioners allegation that the Court of Appeals "unaccountably failed to address" questions of
fact. For basic is the rule that factual issues may not be raised before this Court in a petition for review and this Court is not
duty-bound to consider said questions.5 CA-G.R. SP No. 39193 was a special civil action for certiorari, and the appellate
court only had to determine if the trial court committed grave abuse of discretion amounting to want or excess of
jurisdiction in issuing the writ of preliminary injunction. Thus, unless vital to our determination of the issue at hand, we
shall refrain from further consideration of factual questions.
Petitioner contends that the appellate court erred in limiting its decision to the cited zoning ordinance. It avers that a
contractual right is not automatically discarded once a claim is made that it conflicts with police power. Petitioner submits
that the restrictive clauses in the questioned contract is not in conflict with the zoning ordinance. For one, according to
petitioner, the MMC Ordinance No. 81-01 did not prohibit the construction of residential buildings. Petitioner argues that
even with the zoning ordinance, the seller and buyer of the re-classified lot can voluntarily agree to an exclusive residential
use thereof. Hence, petitioner concludes that the Court of Appeals erred in holding that the condition imposing exclusive
residential use was effectively nullified by the zoning ordinance.
In its turn, private respondent argues that the appellate court correctly ruled that the trial court had acted with grave abuse of
discretion in refusing to subject the contract to the MMC Ordinance No. 81-01. He avers that the appellate court properly
held the police power superior to the non-impairment of contract clause in the Constitution. He concludes that the appellate
court did not err in dissolving the writ of preliminary injunction issued by the trial court in excess of its jurisdiction.
We note that in issuing the disputed writ of preliminary injunction, the trial court observed that the contract of sale was
entered into in August 1976, while the zoning ordinance was enacted only in March 1981. The trial court reasoned that since
private respondent had failed to show that MMC Ordinance No. 81-01 had retroactive effect, said ordinance should be given
prospective application only,6 citing Co vs. Intermediate Appellate Court, 162 SCRA 390 (1988).
In general, we agree that laws are to be construed as having only prospective operation. Lex prospicit, non respicit. Equally
settled, only laws existing at the time of the execution of a contract are applicable thereto and not later statutes, unless the
latter are specifically intended to have retroactive effect.7 A later law which enlarges, abridges, or in any manner changes
the intent of the parties to the contract necessarily impairs the contract itself8and cannot be given retroactive effect without
violating the constitutional prohibition against impairment of contracts.9
But, the foregoing principles do admit of certain exceptions. One involves police power. A law enacted in the exercise of
police power to regulate or govern certain activities or transactions could be given retroactive effect and may reasonably
impair vested rights or contracts. Police power legislation is applicable not only to future contracts, but equally to those
already in existence.10 Nonimpairment of contracts or vested rights clauses will have to yield to the superior and legitimate
exercise by the State of police power to promote the health, morals, peace, education, good order, safety, and general
welfare of the people.11 Moreover, statutes in exercise of valid police power must be read into every
contract.12 Noteworthy, in Sangalang vs. Intermediate Appellate Court,13 we already upheld MMC Ordinance No. 81-01
as a legitimate police power measure.
The trial courts reliance on the Co vs. IAC,14 is misplaced. In Co, the disputed area was agricultural and Ordinance No. 8101 did not specifically provide that "it shall have retroactive effect so as to discontinue all rights previously acquired over
lands located within the zone which are neither residential nor light industrial in nature,"15and stated with respect to
agricultural areas covered that "the zoning ordinance should be given prospective operation only."16 The area in this case
involves not agricultural but urban residential land. Ordinance No. 81-01 retroactively affected the operation of the zoning
ordinance in Greenhills by reclassifying certain locations therein as commercial.
Following our ruling in Ortigas & Co., Ltd. vs. Feati Bank & Trust Co., 94 SCRA 533 (1979), the contractual stipulations

annotated on the Torrens Title, on which Ortigas relies, must yield to the ordinance. When that stretch of Ortigas Avenue
from Roosevelt Street to Madison Street was reclassified as a commercial zone by the Metropolitan Manila Commission in
March 1981, the restrictions in the contract of sale between Ortigas and Hermoso, limiting all construction on the disputed
lot to single-family residential buildings, were deemed extinguished by the retroactive operation of the zoning ordinance
and could no longer be enforced. While our legal system upholds the sanctity of contract so that a contract is deemed law
between the contracting parties,17nonetheless, stipulations in a contract cannot contravene "law, morals, good customs,
public order, or public policy."18 Otherwise such stipulations would be deemed null and void. Respondent court correctly
found that the trial court committed in this case a grave abuse of discretion amounting to want of or excess of jurisdiction in
refusing to treat Ordinance No. 81-01 as applicable to Civil Case No. 64931. In resolving matters in litigation, judges are
not only duty-bound to ascertain the facts and the applicable laws,19 they are also bound by their oath of office to apply the
applicable law.20
As a secondary issue, petitioner contends that respondent Mathay III, as a mere lessee of the lot in question, is a total
stranger to the deed of sale and is thus barred from questioning the conditions of said deed. Petitioner points out that the
owners of the lot voluntarily agreed to the restrictions on the use of the lot and do not question the validity of these
restrictions. Petitioner argues that Mathay III as a lessee is merely an agent of the owners, and could not override and rise
above the status of his principals. Petitioner submits that he could not have a higher interest than those of the owners, the
Hermosos, and thus had no locus standi to file CA-G.R. SP No. 39193 to dissolve the injunctive writ issued by the RTC of
Pasig City.
For his part, private respondent argues that as the lessee who built the commercial structure, it is he and he alone who stands
to be either benefited or injured by the results of the judgment in Civil Case No. 64931. He avers he is the party with real
interest in the subject matter of the action, as it would be his business, not the Hermosos, which would suffer had not the
respondent court dissolved the writ of preliminary injunction.
A real party in interest is defined as "the party who stands to be benefited or injured by the judgment or the party entitled to
the avails of the suit." "Interest" within the meaning of the rule means material interest, an interest in issue and to be
affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest.21 By real
interest is meant a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate,
or consequential interest.22
Tested by the foregoing definition, private respondent in this case is clearly a real party in interest. 1wphi1 It is not disputed
that he is in possession of the lot pursuant to a valid lease. He is a possessor in the concept of a "holder of the thing" under
Article 525 of the Civil Code.23 He was impleaded as a defendant in the amended complaint in Civil Case No. 64931.
Further, what petitioner seeks to enjoin is the building by respondent of a commercial structure on the lot. Clearly, it is
private respondents acts which are in issue, and his interest in said issue cannot be a mere incidental interest. In its amended
complaint, petitioner prayed for, among others, judgment "ordering the demolition of all improvements illegally built on the
lot in question."24 These show that it is petitioner Mathay III, doing business as "Greenhills Autohaus, Inc.," and not only
the Hermosos, who will be adversely affected by the courts decree.
Petitioner also cites the rule that a stranger to a contract has no rights or obligations under it,25 and thus has no standing to
challenge its validity.26 But in seeking to enforce the stipulations in the deed of sale, petitioner impleaded private
respondent as a defendant. Thus petitioner must recognize that where a plaintiff has impleaded a party as a defendant, he
cannot subsequently question the latters standing in court.27
WHEREFORE, the instant petition is DENIED. The challenged decision of the Court of Appeals dated March 25, 1996, as
well as the assailed resolution of August 13, 1996, in CA-G.R. SP No. 39193 is AFFIRMED. Costs against petitioner.
SO ORDERED.

G.R. No. 135962

March 27, 2000

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner,

vs.
BEL-AIR VILLAGE ASSOCIATION, INC., respondent.
PUNO, J.:
Not infrequently, the government is tempted to take legal shortcuts solve urgent problems of the people. But even when
government is armed with the best of intention, we cannot allow it to run roughshod over the rule of law. Again, we let the
hammer fall and fall hard on the illegal attempt of the MMDA to open for public use a private road in a private subdivision.
While we hold that the general welfare should be promoted, we stress that it should not be achieved at the expense of the
rule of law.
Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Respondent Bel-Air
Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose members are homeowners in Bel-Air Village,
a private subdivision in Makati City. Respondent BAVA is the registered owner of Neptune Street, a road inside Bel-Air
Village.
On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December 22, 1995
requesting respondent to open Neptune Street to public vehicular traffic starting January 2, 1996. The notice reads:
SUBJECT: NOTICE of the Opening of Neptune Street to Traffic.
Dear President Lindo,
Please be informed that pursuant to the mandate of the MMDA law or Republic Act No. 7924 which requires the
Authority to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of persons,
Neptune Street shall be opened to vehicular traffic effective January 2, 1996.
In view whereof, the undersigned requests you to voluntarily open the points of entry and exit on said street.
Thank you for your cooperation and whatever assistance that may be extended by your association to the MMDA
personnel who will be directing traffic in the area.
Finally, we are furnishing you with a copy of the handwritten instruction of the President on the matter.
Very truly yours,
PROSPERO I. ORETA
Chairman 1
On the same day, respondent was apprised that the perimeter wall separating the subdivision from the adjacent

Kalayaan Avenue would be demolished.

On January 2, 1996, respondent instituted against petitioner before the Regional Trial Court, Branch 136, Makati City, Civil
Case No. 96-001 for injunction. Respondent prayed for the issuance of a temporary restraining order and preliminary
injunction enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter wall. The trial court
issued a temporary restraining order the following day.
On January 23, 1996, after due hearing, the trial court denied issuance of a preliminary injunction. 2 Respondent questioned
the denial before the Court of Appeals in CA-G.R. SP No. 39549. The appellate court conducted an ocular inspection of
Neptune Street 3 and on February 13, 1996, it issued a writ of preliminary injunction enjoining the implementation of the
MMDA's proposed action. 4
On January 28, 1997, the appellate court rendered a Decision on the merits of the case finding that the MMDA has no
authority to order the opening of Neptune Street, a private subdivision road and cause the demolition of its perimeter walls.
It held that the authority is lodged in the City Council of Makati by ordinance. The decision disposed of as follows:
WHEREFORE, the Petition is GRANTED; the challenged Order dated January 23, 1995, in Civil Case No. 96001, is SET ASIDE and the Writ of Preliminary Injunction issued on February 13, 1996 is hereby made permanent.
For want of sustainable substantiation, the Motion to Cite Roberto L. del Rosario in contempt is denied. 5
No pronouncement as to costs.
SO ORDERED. 6
The Motion for Reconsideration of the decision was denied on September 28, 1998. Hence, this recourse.
Petitioner MMDA raises the following questions:
I
HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) THE MANDATE TO OPEN
NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT TO ITS REGULATORY AND POLICE POWERS?
II
IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT BEFORE THE MMDA MAY ORDER
THE OPENING OF SUBDIVISION ROADS TO PUBLIC TRAFFIC?
III
IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM DENYING OR ASSAILING
THE AUTHORITY OF THE MMDA TO OPEN THE SUBJECT STREET?
IV
WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL MEETINGS HELD
BETWEEN MMDA AND THE AFFECTED EEL-AIR RESIDENTS AND BAVA OFFICERS?
V
HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?7
Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village, a private residential subdivision in
the heart of the financial and commercial district of Makati City. It runs parallel to Kalayaan Avenue, a national road open to
the general public. Dividing the two (2) streets is a concrete perimeter wall approximately fifteen (15) feet high. The
western end of Neptune Street intersects Nicanor Garcia, formerly Reposo Street, a subdivision road open to public
vehicular traffic, while its eastern end intersects Makati Avenue, a national road. Both ends of Neptune Street are guarded
by iron gates.

Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is an agent of the state
endowed with police power in the delivery of basic services in Metro Manila. One of these basic services is traffic
management which involves the regulation of the use of thoroughfares to insure the safety, convenience and welfare of the
general public. It is alleged that the police power of MMDA was affirmed by this Court in the consolidated cases
of Sangalang v. Intermediate Appellate Court. 8 From the premise that it has police power, it is now urged that there is no
need for the City of Makati to enact an ordinance opening Neptune street to the public.9
Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the
legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with
penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the
commonwealth, and for the subjects of the same. 10 The power is plenary and its scope is vast and pervasive, reaching and
justifying measures for public health, public safety, public morals, and the general welfare. 11
It bears stressing that police power is lodged primarily in the National Legislature. 12 It cannot be exercised by any group or
body of individuals not possessing legislative power. 13 The National Legislature, however, may delegatethis power to the
President and administrative boards as well as the lawmaking bodies of municipal corporations or local government
units. 14 Once delegated, the agents can exercise only such legislative powers as are conferred on them by the national
lawmaking body. 15
A local government is a "political subdivision of a nation or state which is constituted by law and has substantial control of
local affairs." 16The Local Government Code of 1991 defines a local government unit as a "body politic and
corporate." 17 one endowed with powers as a political subdivision of the National Government and as a corporate entity
representing the inhabitants of its territory. 18 Local government units are the provinces, cities, municipalities and
barangays. 19 They are also the territorial and political subdivisions of the state. 20
Our Congress delegated police power to the local government units in the Local Government Code of 1991. This delegation
is found in Section 16 of the same Code, known as the general welfare clause, viz:
Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and technological capabilities, improve public morals,
enhance economic prosperity and social justice, promote full employment among their residents, maintain peace
and order, and preserve the comfort and convenience of their inhabitants. 21
Local government units exercise police power through their respective legislative bodies. The legislative body of the
provincial government is the sangguniang panlalawigan, that of the city government is the sangguniang panlungsod, that of
the municipal government is the sangguniang bayan, and that of the barangay is thesangguniang barangay. The Local
Government Code of 1991 empowers the sangguniang panlalawigan,sangguniang panlungsod and sangguniang bayan to
"enact ordinances, approve resolutions and appropriate funds for the general welfare of the [province, city or municipality,
as the case may be], and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the corporate
powers of the [province, city municipality] provided under the Code . . . " 22 The same Code gives the sangguniang
barangay the power to "enact ordinances as may be necessary to discharge the responsibilities conferred upon it by law or
ordinance and to promote the general welfare of the inhabitants thereon." 23
Metropolitan or Metro Manila is a body composed of several local government units i.e., twelve (12) cities and five (5)
municipalities, namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pinas,
Marikina, Paranaque and Valenzuela, and the municipalities of Malabon, Navotas, Pateros, San Juan and Taguig. With the
passage of Republic Act (R. A.) No. 7924 24 in 1995, Metropolitan Manila was declared as a "special development and
administrative region" and the Administration of "metro-wide" basic services affecting the region placed under "a

development authority" referred to as the MMDA. 25

"Metro-wide services" are those "services which have metro-wide impact and transcend local political boundaries or entail
huge expenditures such that it would not be viable for said services to be provided by the individual local government units
comprising Metro Manila." 26 There are seven (7) basic metro-wide services and the scope of these services cover the
following: (1) development planning; (2) transport and traffic management; (3) solid waste disposal and management; (4)
flood control and sewerage management; (5) urban renewal, zoning and land use planning, and shelter services; (6) health
and sanitation, urban protection and pollution control; and (7) public safety. The basic service of transport and traffic
management includes the following:
(b) Transport and traffic management which include the formulation, coordination, and monitoring of
policies, standards, programs and projects to rationalize the existing transport operations, infrastructure
requirements, the use of thoroughfares, and promotion of safe and convenient movement of persons and
goods; provision for the mass transport system and the institution of a system to regulate road users;administration
and implementation of all traffic enforcement operations, traffic engineering services and traffic education
programs, including the institution of a single ticketing system in Metropolitan Manila;" 27
In the delivery of the seven (7) basic services, the MMDA has the following powers and functions:
Sec. 5. Functions and powers of the Metro Manila Development Authority. The MMDA shall:
(a) Formulate, coordinate and regulate the implementation of medium and long-term plans and programs for the
delivery of metro-wide services, land use and physical development within Metropolitan Manila, consistent with
national development objectives and priorities;
(b) Prepare, coordinate and regulate the implementation of medium-term investment programs for metro-wide
services which shall indicate sources and uses of funds for priority programs and projects, and which shall include
the packaging of projects and presentation to funding institutions;
(c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific services under
its jurisdiction, subject to the approval of the Council. For this purpose, MMDA can create appropriate project
management offices;
(d) Coordinate and monitor the implementation of such plans, programs and projects in Metro Manila; identify
bottlenecks and adopt solutions to problems of implementation;
(e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and regulate the
implementation of all programs and projects concerning traffic management, specifically pertaining to
enforcement, engineering and education. Upon request, it shall be extended assistance and cooperation,including
but not limited to, assignment of personnel, by all other government agencies and offices concerned;
(f) Install and administer a single ticketing system, fix, impose and collect fines and penalties for all kinds of
violations of traffic rules and regulations, whether moving or non-moving in nature, and confiscate and suspend or
revoke drivers' licenses in the enforcement of such traffic laws and regulations, the provisions of RA 4136 and PD
1605 to the contrary notwithstanding. For this purpose, the Authority shall impose all traffic laws and regulations
in Metro Manila, through its traffic operation center, and may deputize members of the PNP, traffic enforcers of
local government units, duly licensed security guards, or members of non-governmental organizations to whom
may be delegated certain authority, subject to such conditions and requirements as the Authority may impose; and
(g) Perform other related functions required to achieve the objectives of the MMDA, including the undertaking of
delivery of basic services to the local government units, when deemed necessary subject to prior coordination with
and consent of the local government unit concerned.
The implementation of the MMDA's plans, programs and projects is undertaken by the local government units, national
government agencies, accredited people's organizations, non-governmental organizations, and the private sector as well as

by the MMDA itself. For this purpose, the MMDA has the power to enter into contracts, memoranda of agreement and other
arrangements with these bodies for the delivery of the required services Metro Manila. 28
The governing board of the MMDA is the Metro Manila Council. The Council is composed of the mayors of the component
12 cities and 5 municipalities, the president of the Metro Manila Vice-Mayors' League and the president of the Metro
Manila Councilors' League. 29 The Council is headed by Chairman who is appointed by the President and vested with the
rank of cabinet member. As the policy-making body of the MMDA, the Metro Manila Council approves metro-wide plans,
programs and projects, and issues the necessary rules and regulations for the implementation of said plans; it approves the
annual budget of the MMDA and promulgate the rules and regulations for the delivery of basic services, collection of
service and regulatory fees, fines and penalties. These functions are particularly enumerated as follows:
Sec. 6. Functions of the Metro Manila Council.
(a) The Council shall be the policy-making body of the MMDA;
(b) It shall approve metro-wide plans, programs and projects and issue rules and regulations deemed necessary by
the MMDA to carry out the purposes of this Act;
(c) It may increase the rate of allowances and per diems of the members of the Council to be effective during the
term of the succeeding Council. It shall fix the compensation of the officers and personnel of the MMDA, and
approve the annual budget thereof for submission to the Department of Budget and Management (DBM);
(d) It shall promulgate rules and regulations and set policies and standards for metro-wide application governing
the delivery of basic services, prescribe and collect service and regulatory fees, and impose and collect fines and
penalties.
Clearly, the scope of the MMDA's function is limited to the delivery of the seven (7) basic services. One of these is
transport and traffic management which includes the formulation and monitoring of policies, standards and projects to
rationalize the existing transport operations, infrastructure requirements, the use of thoroughfares and promotion of the safe
movement of persons and goods. It also covers the mass transport system and the institution of a system of road regulation,
the administration of all traffic enforcement operations, traffic engineering services and traffic education programs,
including the institution of a single ticketing system in Metro Manila for traffic violations. Under the service, the MMDA is
expressly authorized "to set the policies concerning traffic" and "coordinate and regulate the implementation of all traffic
management programs." In addition, the MMDA may "install and administer a single ticketing system," fix, impose and
collect fines and penalties for all traffic violations.
It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation,
implementation, preparation, management, monitoring, setting of policies, installation of a system and administration. There
is no syllable in R.A. No. 7924 that grants the MMDA police power, let alone legislative power. Even the Metro Manila
Council has not been delegated any legislative power. Unlike the legislative bodies of the local government units, there is
no provision in R.A. No. 7924 that empowers the MMDA or its Council to "enact ordinances, approve resolutions
appropriate funds for the general welfare" of the inhabitants of Metro Manila. The MMDA is, as termed in the charter itself,
"development authority." 30 It is an agency created for the purpose of laying down policies and coordinating with the
various national government agencies, people's organizations, non-governmental organizations and the private sector for the
efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions are administrative in
nature and these are actually summed up in the charter itself, viz:
Sec. 2. Creation of the Metropolitan Manila Development Authority. . . . .
The MMDA shall perform planning, monitoring and coordinative functions, and in the process exerciseregulatory
and supervisory authority over the delivery of metro-wide services within Metro Manila, without diminution of the
autonomy of the local government units concerning purely local matters. 31
Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate Court 32 where we upheld a zoning

ordinance issued by the Metro Manila Commission (MMC), the predecessor of the MMDA, as an exercise of police power.
The first Sangalang decision was on the merits of the petition, 33 while the second decision denied reconsideration of the
first case and in addition discussed the case of Yabut v. Court of Appeals. 34
Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA and three residents of Bel-Air Village
against other residents of the Village and the Ayala Corporation, formerly the Makati Development Corporation, as the
developer of the subdivision. The petitioners sought to enforce certain restrictive easements in the deeds of sale over their
respective lots in the subdivision. These were the prohibition on the setting up of commercial and advertising signs on the
lots, and the condition that the lots be used only for residential purposes. Petitioners alleged that respondents, who were
residents along Jupiter Street of the subdivision, converted their residences into commercial establishments in violation of
the "deed restrictions," and that respondent Ayala Corporation ushered in the full commercialization" of Jupiter Street by
tearing down the perimeter wall that separated the commercial from the residential section of the village. 35
The petitions were dismissed based on Ordinance No. 81 of the Municipal Council of Makati and Ordinance No. 81-01 of
the Metro Manila Commission (MMC). Municipal Ordinance No. 81 classified Bel-Air Village as a Class A Residential
Zone, with its boundary in the south extending to the center line of Jupiter Street. The Municipal Ordinance was adopted by
the MMC under the Comprehensive Zoning Ordinance for the National Capital Region and promulgated as MMC
Ordinance No. 81-01. Bel-Air Village was indicated therein as bounded by Jupiter Street and the block adjacent thereto was
classified as a High Intensity Commercial Zone. 36
We ruled that since both Ordinances recognized Jupiter Street as the boundary between Bel-Air Village and the commercial
district, Jupiter Street was not for the exclusive benefit of Bel-Air residents. We also held that the perimeter wall on said
street was constructed not to separate the residential from the commercial blocks but simply for security reasons, hence, in
tearing down said wall, Ayala Corporation did not violate the "deed restrictions" in the deeds of sale.
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate exercise of police power. 37 The power
of the MMC and the Makati Municipal Council to enact zoning ordinances for the general welfare prevailed over the "deed
restrictions".
In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street was warranted by the demands of the
common good in terms of "traffic decongestion and public convenience." Jupiter was opened by the Municipal Mayor to
alleviate traffic congestion along the public streets adjacent to the Village. 38 The same reason was given for the opening to
public vehicular traffic of Orbit Street, a road inside the same village. The destruction of the gate in Orbit Street was also
made under the police power of the municipal government. The gate, like the perimeter wall along Jupiter, was a public
nuisance because it hindered and impaired the use of property, hence, its summary abatement by the mayor was proper and
legal. 39
Contrary to petitioner's claim, the two Sangalang cases do not apply to the case at bar. Firstly, both involved zoning
ordinances passed by the municipal council of Makati and the MMC. In the instant case, the basis for the proposed opening
of Neptune Street is contained in the notice of December 22, 1995 sent by petitioner to respondent BAVA, through its
president. The notice does not cite any ordinance or law, either by the Sangguniang Panlungsod of Makati City or by the
MMDA, as the legal basis for the proposed opening of Neptune Street. Petitioner MMDA simply relied on its authority
under its charter "to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of persons."
Rationalizing the use of roads and thoroughfares is one of the acts that fall within the scope of transport and traffic
management. By no stretch of the imagination, however, can this be interpreted as an express or implied grant of ordinancemaking power, much less police power.
Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the forerunner of the present
MMDA, an examination of Presidential Decree (P. D.) No. 824, the charter of the MMC, shows that the latter possessed
greater powers which were not bestowed on the present MMDA.
Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824. It comprised the Greater Manila Area
composed of the contiguous four (4) cities of Manila, Quezon, Pasay and Caloocan, and the thirteen (13) municipalities of

Makati, Mandaluyong, San Juan, Las Pinas, Malabon, Navotas, Pasig, Pateros, Paranaque, Marikina, Muntinlupa and
Taguig in the province of Rizal, and Valenzuela in the province of Bulacan. 40Metropolitan Manila was created as a
response to the finding that the rapid growth of population and the increase of social and economic requirements in these
areas demand a call for simultaneous and unified development; that the public services rendered by the respective local
governments could be administered more efficiently and economically if integrated under a system of central planning; and
this coordination, "especially in the maintenance of peace and order and the eradication of social and economic ills that
fanned the flames of rebellion and discontent [were] part of reform measures under Martial Law essential to the safety and
security of the State."41
Metropolitan Manila was established as a "public corporation" with the following powers:
Sec. 1. Creation of the Metropolitan Manila. There is hereby created a public corporation, to be known as the
Metropolitan Manila, vested with powers and attributes of a corporation including the power to make
contracts, sue and be sued, acquire, purchase, expropriate, hold, transfer and dispose of property and such other
powers as are necessary to carry out its purposes. The Corporation shall be administered by a Commission created
under this Decree. 42
The administration of Metropolitan Manila was placed under the Metro Manila Commission (MMC) vested with the
following powers:
Sec. 4. Powers and Functions of the Commission. The Commission shall have the following powers and functions:
1. To act as a central government to establish and administer programs and provide services common to the area;
2. To levy and collect taxes and special assessments, borrow and expend money and issue bonds, revenue
certificates, and other obligations of indebtedness. Existing tax measures should, however, continue to be operative
until otherwise modified or repealed by the Commission;
3. To charge and collect fees for the use of public service facilities;
4. To appropriate money for the operation of the metropolitan government and review appropriations for the city
and municipal units within its jurisdiction with authority to disapprove the same if found to be not in accordance
with the established policies of the Commission, without prejudice to any contractual obligation of the local
government units involved existing at the time of approval of this Decree;
5. To review, amend, revise or repeal all ordinances, resolutions and acts of cities and municipalities within
Metropolitan Manila;
6. To enact or approve ordinances, resolutions and to fix penalties for any violation thereof which shall not exceed
a fine of P10,000.00 or imprisonment of six years or both such fine and imprisonment for a single offense;
7. To perform general administrative, executive and policy-making functions;
8. To establish a fire control operation center, which shall direct the fire services of the city and municipal
governments in the metropolitan area;
9. To establish a garbage disposal operation center, which shall direct garbage collection and disposal in the
metropolitan area;
10. To establish and operate a transport and traffic center, which shall direct traffic activities;
11. To coordinate and monitor governmental and private activities pertaining to essential services such as
transportation, flood control and drainage, water supply and sewerage, social, health and environmental services,
housing, park development, and others;
12. To insure and monitor the undertaking of a comprehensive social, economic and physical planning and
development of the area;

13. To study the feasibility of increasing barangay participation in the affairs of their respective local governments
and to propose to the President of the Philippines definite programs and policies for implementation;
14. To submit within thirty (30) days after the close of each fiscal year an annual report to the President of the
Philippines and to submit a periodic report whenever deemed necessary; and
15. To perform such other tasks as may be assigned or directed by the President of the Philippines.
The MMC was the "central government" of Metro Manila for the purpose of establishing and administering programs
providing services common to the area. As a "central government" it had the power to levy and collect taxes and special
assessments, the power to charge and collect fees; the power to appropriate money for its operation, and at the same time,
review appropriations for the city and municipal units within its jurisdiction. It was bestowed the power to enact or approve
ordinances, resolutions and fix penalties for violation of such ordinances and resolutions. It also had the power to review,
amend, revise or repeal all ordinances, resolutions and acts of any of the four (4) cities and thirteen (13) municipalities
comprising Metro Manila.
P.D. No. 824 further provided:
Sec. 9. Until otherwise provided, the governments of the four cities and thirteen municipalities in the Metropolitan
Manila shall continue to exist in their present form except as may be inconsistent with this Decree. The members of
the existing city and municipal councils in Metropolitan Manila shall, upon promulgation of this Decree, and until
December 31, 1975, become members of the Sangguniang Bayan which is hereby created for every city and
municipality of Metropolitan Manila.
In addition, the Sangguniang Bayan shall be composed of as many barangay captains as may be determined and
chosen by the Commission, and such number of representatives from other sectors of the society as may be
appointed by the President upon recommendation of the Commission.
xxx

xxx

xxx

The Sangguniang Bayan may recommend to the Commission ordinances, resolutions or such measures as it may
adopt; Provided, that no such ordinance, resolution or measure shall become effective, until after its approval by
the Commission; and Provided further, that the power to impose taxes and other levies, the power to appropriate
money and the power to pass ordinances or resolutions with penal sanctions shall be vested exclusively in the
Commission.
The creation of the MMC also carried with it the creation of the Sangguniang Bayan. This was composed of the members of
the component city and municipal councils, barangay captains chosen by the MMC and sectoral representatives appointed
by the President. The Sangguniang Bayan had the power to recommend to the MMC the adoption of ordinances, resolutions
or measures. It was the MMC itself, however, that possessed legislative powers. All ordinances, resolutions and measures
recommended by the Sangguniang Bayan were subject to the MMC's approval. Moreover, the power to impose taxes and
other levies, the power to appropriate money, and the power to pass ordinances or resolutions with penal sanctions were
vested exclusively in the MMC.
Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully possessed legislative police powers.
Whatever legislative powers the component cities and municipalities had were all subject to review and approval by the
MMC.
After President Corazon Aquino assumed power, there was a clamor to restore the autonomy of the local government units
in Metro Manila. Hence, Sections 1 and 2 of Article X of the 1987 Constitution provided:
Sec. 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities,
municipalities and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as
herein provided.

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
The Constitution, however, recognized the necessity of creating metropolitan regions not only in the existing National
Capital Region but also in potential equivalents in the Visayas and Mindanao. 43 Section 11 of the same Article X thus
provided:
Sec. 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as set
forth in Section 10 hereof. The component cities and municipalities shall retain their basic autonomy and shall be
entitled to their own local executives and legislative assemblies. The jurisdiction of the metropolitan authority that
will thereby be created shall be limited to basic services requiring coordination.
Constitution itself expressly provides that Congress may, by law, create "special metropolitan political subdivisions" which
shall be subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected; the
jurisdiction of this subdivision shall be limited to basic services requiring coordination; and the cities and municipalities
comprising this subdivision shall retain their basic services requiring coordination; and the cities and municipalities
comprising this subdivision shall retain their basic autonomy and their own local executive and legislative
assemblies. 44 Pending enactment of this law, the Transitory Provisions of the Constitution gave the President of the
Philippines the power to constitute the Metropolitan Authority, viz:
Sec. 8. Until otherwise provided by Congress, the President may constitute the Metropolitan Authority to be
composed of the heads of all local government units comprising the Metropolitan Manila area. 45
In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted the Metropolitan Manila Authority
(MMA). The powers and functions of the MMC were devolved to the MMA. 46 It ought to be stressed, however, that not all
powers and functions of the MMC were passed to the MMA. The MMA's power was limited to the "delivery of basic urban
services requiring coordination in Metropolitan Manila." 47 The MMA's governing body, the Metropolitan Manila Council,
although composed of the mayors of the component cities and municipalities, was merely given power of: (1) formulation
of policies on the delivery of basic services requiring coordination and consolidation; and (2) promulgation resolutions and
other issuances, approval of a code of basic services and the exercise of its rule-making power. 48
Under the 1987 Constitution, the local government units became primarily responsible for the governance of their respective
political subdivisions. The MMA's jurisdiction was limited to addressing common problems involving basic services that
transcended local boundaries. It did not have legislative power. Its power was merely to provide the local government units
technical assistance in the preparation of local development plans. Any semblance of legislative power it had was confined
to a "review [of] legislation proposed by the local legislative assemblies to ensure consistency among local governments
and with the comprehensive development plan of Metro Manila," and to "advise the local governments accordingly." 49
When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrative region" and the
MMDA a "special development authority" whose functions were "without prejudice to the autonomy of the affected local
government units." The character of the MMDA was clearly defined in the legislative debates enacting its charter.
R.A. No. 7924 originated as House Bill No. 14170/11116 and was introduced by several legislators led by Dante Tinga,
Roilo Golez and Feliciano Belmonte. It was presented to the House of Representatives by the Committee on Local
Governments chaired by Congressman Ciriaco R. Alfelor. The bill was a product of Committee consultations with the local
government units in the National Capital Region (NCR), with former Chairmen of the MMC and MMA,50 and career
officials of said agencies. When the bill was first taken up by the Committee on Local Governments, the following debate
took place:
THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been debated a long time ago, you
know. It's a special . . . we can create a special metropolitan political subdivision.
Actually, there are only six (6) political subdivisions provided for in the Constitution: barangay, municipality, city,
province, and we have the Autonomous Region of Mindanao and we have the Cordillera. So we have 6. Now. . . . .

HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the Autonomous Region, that is also
specifically mandated by the Constitution.
THE CHAIRMAN: That's correct. But it is considered to be a political subdivision. What is the meaning of a
political subdivision? Meaning to say, that it has its own government, it has its own political personality, it has the
power to tax, and all governmental powers: police power and everything. All right. Authority is different; because it
does not have its own government. It is only a council, it is an organization of political subdivision, powers, "no,
which is not imbued with any political power.
If you go over Section 6, where the powers and functions of the Metro Manila Development Authority, it is purely
coordinative. And it provides here that the council is policy-making. All right.
Under the Constitution is a Metropolitan Authority with coordinative power. Meaning to say, it coordinates all of
the different basic services which have to be delivered to the constituency. All right.
There is now a problem. Each local government unit is given its respective . . . as a political subdivision. Kalookan
has its powers, as provided for and protected and guaranteed by the Constitution. All right, the exercise. However,
in the exercise of that power, it might be deleterious and disadvantageous to other local government units. So, we
are forming an authority where all of these will be members and then set up a policy in order that the basic services
can be effectively coordinated. All right.
Of course, we cannot deny that the MMDA has to survive. We have to provide some funds, resources. But it does
not possess any political power. We do not elect the Governor. We do not have the power to tax. As a matter of fact,
I was trying to intimate to the author that it must have the power to sue and be sued because it coordinates. All
right. It coordinates practically all these basic services so that the flow and the distribution of the basic services will
be continuous. Like traffic, we cannot deny that. It's before our eyes. Sewerage, flood control, water system, peace
and order, we cannot deny these. It's right on our face. We have to look for a solution. What would be the right
solution? All right, we envision that there should be a coordinating agency and it is called an authority. All right, if
you do not want to call it an authority, it's alright. We may call it a council or maybe a management agency.
xxx

xxx

x x x 51

Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that given to the Metro
Manila Council to promulgate administrative rules and regulations in the implementation of the MMDA's functions. There
is no grant of authority to enact ordinances and regulations for the general welfare of the inhabitants of the metropolis. This
was explicitly stated in the last Committee deliberations prior to the bill's presentation to Congress. Thus:
THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I think this was already approved before,
but it was reconsidered in view of the proposals, set-up, to make the MMDA stronger. Okay, so if there is no
objection to paragraph "f". . . And then next is paragraph "b," under Section 6. "It shall approve metro-wide plans,
programs and projects and issue ordinances or resolutions deemed necessary by the MMDA to carry out the
purposes of this Act." Do you have the powers? Does the MMDA... because that takes the form of a local
government unit, a political subdivision.
HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we say that it has the policies, it's very clear
that those policies must be followed. Otherwise, what's the use of empowering it to come out with policies. Now,
the policies may be in the form of a resolution or it may be in the form of a ordinance. The term "ordinance" in this
case really gives it more teeth, your honor. Otherwise, we are going to see a situation where you have the power to
adopt the policy but you cannot really make it stick as in the case now, and I think here is Chairman Bunye. I think
he will agree that that is the case now. You've got the power to set a policy, the body wants to follow your policy,
then we say let's call it an ordinance and see if they will not follow it.
THE CHAIRMAN: That's very nice. I like that. However, there is a constitutional impediment.1wphi1 You are
making this MMDA a political subdivision. The creation of the MMDA would be subject to a plebiscite. That is

what I'm trying to avoid. I've been trying to avoid this kind of predicament. Under the Constitution it states: if it is
a political subdivision, once it is created it has to be subject to a plebiscite. I'm trying to make this as
administrative. That's why we place the Chairman as a cabinet rank.
HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there is . . . . .
THE CHAIRMAN: In setting up ordinances, it is a political exercise, Believe me.
HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of rules and regulations. That would be . . .
it shall also be enforced.
HON. BELMONTE: Okay, I will . . . .
HON. LOPEZ: And you can also say that violation of such rule, you impose a sanction. But you know, ordinance
has a different legal connotation.
HON. BELMONTE: All right, I defer to that opinion, your Honor.
THE CHAIRMAN: So instead of ordinances, say rules and regulations.
HON. BELMONTE: Or resolutions. Actually, they are actually considering resolutions now.
THE CHAIRMAN: Rules and resolutions.
HON. BELMONTE: Rules, regulations and resolutions. 52
The draft of H. B. No. 14170/11116 was presented by the Committee to the House of Representatives. The explanatory note
to the bill stated that the proposed MMDA is a "development authority" which is a "national agency, not a political
government unit." 53 The explanatory note was adopted as the sponsorship speech of the Committee on Local
Governments. No interpellations or debates were made on the floor and no amendments introduced. The bill was approved
on second reading on the same day it was presented. 54
When the bill was forwarded to the Senate, several amendments were made.1wphi1 These amendments, however, did not
affect the nature of the MMDA as originally conceived in the House of Representatives. 55
It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed with legislative
power. It is not even a "special metropolitan political subdivision" as contemplated in Section 11, Article X of the
Constitution. The creation of a "special metropolitan political subdivision" requires the approval by a majority of the votes
cast in a plebiscite in the political units directly affected." 56 R. A. No. 7924 was not submitted to the inhabitants of Metro
Manila in a plebiscite. The Chairman of the MMDA is not an official elected by the people, but appointed by the President
with the rank and privileges of a cabinet member. In fact, part of his function is to perform such other duties as may be
assigned to him by the President, 57 whereas in local government units, the President merely exercises supervisory
authority. This emphasizes the administrative character of the MMDA.
Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA under R.A. No. 7924. Unlike the MMC, the
MMDA has no power to enact ordinances for the welfare of the community. It is the local government units, acting through
their respective legislative councils, that possess legislative power and police power. In the case at bar, the Sangguniang
Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of Neptune Street, hence, its
proposed opening by petitioner MMDA is illegal and the respondent Court of Appeals did not err in so ruling. We desist
from ruling on the other issues as they are unnecessary.
We stress that this decision does not make light of the MMDA's noble efforts to solve the chaotic traffic condition in Metro
Manila. Everyday, traffic jams and traffic bottlenecks plague the metropolis. Even our once sprawling boulevards and
avenues are now crammed with cars while city streets are clogged with motorists and pedestrians. Traffic has become a
social malaise affecting our people's productivity and the efficient delivery of goods and services in the country. The
MMDA was created to put some order in the metropolitan transportation system but unfortunately the powers granted by its

charter are limited. Its good intentions cannot justify the opening for public use of a private street in a private subdivision
without any legal warrant. The promotion of the general welfare is not antithetical to the preservation of the rule of
law.1wphi1.nt
IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No.
39549 are affirmed.
SO ORDERED.

G.R. No. 118127

April 12, 2005

CITY OF MANILA, Petitioner,

vs.
HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST
DEVELOPMENT CORPORATION, Respondents.
DECISION
TINGA, J.:
I know only that what is moral is what you feel good after and what is immoral is what you feel bad after.
Ernest Hermingway
Death in the Afternoon, Ch. 1
It is a moral and political axiom that any dishonorable act, if performed by oneself, is less immoral than if
performed by someone else, who would be well-intentioned in his dishonesty.
J. Christopher Gerald
Bonaparte in Egypt, Ch. I
The Court's commitment to the protection of morals is secondary to its fealty to the fundamental law of the land. It is
foremost a guardian of the Constitution but not the conscience of individuals. And if it need be, the Court will not hesitate to
"make the hammer fall, and heavily" in the words of Justice Laurel, and uphold the constitutional guarantees when faced
with laws that, though not lacking in zeal to promote morality, nevertheless fail to pass the test of constitutionality.
The pivotal issue in this Petition1 under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure seeking the

reversal of the Decision2 in Civil Case No. 93-66511 of the Regional Trial Court (RTC) of Manila, Branch 18 (lower
court),3 is the validity of Ordinance No. 7783 (the Ordinance) of the City of Manila.4
The antecedents are as follows:
Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating
hotels, motels, hostels and lodging houses.5 It built and opened Victoria Court in Malate which was licensed as a motel
although duly accredited with the Department of Tourism as a hotel.6 On 28 June 1993, MTDC filed a Petition for
Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order7 (RTC
Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon.
Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance,
insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional.8
Enacted by the City Council9 on 9 March 1993 and approved by petitioner City Mayor on 30 March 1993, the
saidOrdinance is entitled
AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING
CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITAMALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER
PURPOSES.10
The Ordinance is reproduced in full, hereunder:
SECTION 1. Any provision of existing laws and ordinances to the contrary notwithstanding, no person,
partnership, corporation or entity shall, in the Ermita-Malate area bounded by Teodoro M. Kalaw Sr. Street in
the North, Taft Avenue in the East, Vito Cruz Street in the South and Roxas Boulevard in the West, pursuant to P.D.
499 be allowed or authorized to contract and engage in, any business providing certain forms of amusement,
entertainment, services and facilities where women are used as tools in entertainment and which tend to
disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the
community, such as but not limited to:
1. Sauna Parlors
2. Massage Parlors
3. Karaoke Bars
4. Beerhouses
5. Night Clubs
6. Day Clubs
7. Super Clubs
8. Discotheques
9. Cabarets
10. Dance Halls
11. Motels
12. Inns
SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the said officials are prohibited
from issuing permits, temporary or otherwise, or from granting licenses and accepting payments for the
operation of business enumerated in the preceding section.

SEC. 3. Owners and/or operator of establishments engaged in, or devoted to, the businesses enumerated in
Section 1 hereof are hereby given three (3) months from the date of approval of this ordinance within which to
wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said
businesses to other kinds of business allowable within the area, such as but not limited to:
1. Curio or antique shop
2. Souvenir Shops
3. Handicrafts display centers
4. Art galleries
5. Records and music shops
6. Restaurants
7. Coffee shops
8. Flower shops
9. Music lounge and sing-along restaurants, with well-defined activities for wholesome family
entertainment that cater to both local and foreign clientele.
10. Theaters engaged in the exhibition, not only of motion pictures but also of cultural shows, stage and
theatrical plays, art exhibitions, concerts and the like.
11. Businesses allowable within the law and medium intensity districts as provided for in the zoning
ordinances for Metropolitan Manila, except new warehouse or open-storage depot, dock or yard, motor
repair shop, gasoline service station, light industry with any machinery, or funeral establishments.
SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction, be punished by
imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both, at the discretion of
the Court, PROVIDED, that in case of juridical person, the President, the General Manager, or person-in-charge of
operation shall be liable thereof; PROVIDED FURTHER, that in case of subsequent violation and conviction,
the premises of the erring establishment shall be closed and padlocked permanently.
SEC. 5. This ordinance shall take effect upon approval.
Enacted by the City Council of Manila at its regular session today, March 9, 1993.
Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)
In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in its enumeration of prohibited
establishments, motels and inns such as MTDC's Victoria Court considering that these were not establishments for
"amusement" or "entertainment" and they were not "services or facilities for entertainment," nor did they use women as
"tools for entertainment," and neither did they "disturb the community," "annoy the inhabitants" or "adversely affect the
social and moral welfare of the community."11
MTDC further advanced that the Ordinance was invalid and unconstitutional for the following reasons: (1) The City
Council has no power to prohibit the operation of motels as Section 458 (a) 4 (iv)12 of the Local Government Code of 1991
(the Code) grants to the City Council only the power to regulate the establishment, operation and maintenance of hotels,
motels, inns, pension houses, lodging houses and other similar establishments; (2) The Ordinance is void as it is violative of
Presidential Decree (P.D.) No. 49913 which specifically declared portions of the Ermita-Malate area as a commercial zone
with certain restrictions; (3) The Ordinance does not constitute a proper exercise of police power as the compulsory closure
of the motel business has no reasonable relation to the legitimate municipal interests sought to be protected; (4)
The Ordinance constitutes an ex post facto law by punishing the operation of Victoria Court which was a legitimate business

prior to its enactment; (5) The Ordinanceviolates MTDC's constitutional rights in that: (a) it is confiscatory and constitutes
an invasion of plaintiff's property rights; (b) the City Council has no power to find as a fact that a particular thing is a
nuisance per se nor does it have the power to extrajudicially destroy it; and (6) The Ordinance constitutes a denial of equal
protection under the law as no reasonable basis exists for prohibiting the operation of motels and inns, but not pension
houses, hotels, lodging houses or other similar establishments, and for prohibiting said business in the Ermita-Malate area
but not outside of this area.14
In their Answer15 dated 23 July 1993, petitioners City of Manila and Lim maintained that the City Council had the power to
"prohibit certain forms of entertainment in order to protect the social and moral welfare of the community" as provided for
in Section 458 (a) 4 (vii) of the Local Government Code,16 which reads, thus:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative
body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the
city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the
city as provided for under Section 22 of this Code, and shall:
....
(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the
general welfare and for said purpose shall:
....
(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities,
including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls,
sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events
or activities for amusement or entertainment, particularly those which tend to disturb the community or
annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of
amusement or entertainment in order to protect the social and moral welfare of the community.
Citing Kwong Sing v. City of Manila,17 petitioners insisted that the power of regulation spoken of in the above-quoted
provision included the power to control, to govern and to restrain places of exhibition and amusement.18
Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to protect the social and moral
welfare of the community in conjunction with its police power as found in Article III, Section 18(kk) of Republic Act No.
409,19 otherwise known as the Revised Charter of the City of Manila (Revised Charter of Manila)20 which reads, thus:
ARTICLE III
THE MUNICIPAL BOARD
. . .
Section 18. Legislative powers. The Municipal Board shall have the following legislative powers:
. . .
(kk) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the
prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare of the
city and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and
duties conferred by this chapter; and to fix penalties for the violation of ordinances which shall not exceed two
hundred pesos fine or six months' imprisonment, or both such fine and imprisonment, for a single offense.
Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private respondent had the burden to
prove its illegality or unconstitutionality.21
Petitioners also maintained that there was no inconsistency between P.D. 499 and the Ordinance as the latter simply

disauthorized certain forms of businesses and allowed the Ermita-Malate area to remain a commercial
zone.22 The Ordinance, the petitioners likewise claimed, cannot be assailed as ex post facto as it was prospective in
operation.23 The Ordinance also did not infringe the equal protection clause and cannot be denounced as class legislation as
there existed substantial and real differences between the Ermita-Malate area and other places in the City of Manila.24
On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-parte temporary restraining order
against the enforcement of the Ordinance.25 And on 16 July 1993, again in an intrepid gesture, he granted the writ of
preliminary injunction prayed for by MTDC.26
After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the petitioners from
implementing the Ordinance. The dispositive portion of said Decision reads:27
WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of the City of Manila
null and void, and making permanent the writ of preliminary injunction that had been issued by this Court against
the defendant. No costs.
SO ORDERED.28
Petitioners filed with the lower court a Notice of Appeal29 on 12 December 1994, manifesting that they are elevating the
case to this Court under then Rule 42 on pure questions of law.30
On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were committed by the lower
court in its ruling: (1) It erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair, unreasonable and
oppressive exercise of police power; (2) It erred in holding that the questioned Ordinancecontravenes P.D. 49931 which
allows operators of all kinds of commercial establishments, except those specified therein; and (3) It erred in declaring
the Ordinance void and unconstitutional.32
In the Petition and in its Memorandum,33 petitioners in essence repeat the assertions they made before the lower court.
They contend that the assailed Ordinance was enacted in the exercise of the inherent and plenary power of the State and the
general welfare clause exercised by local government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of
Manila and conjunctively, Section 458 (a) 4 (vii) of the Code.34 They allege that theOrdinance is a valid exercise of police
power; it does not contravene P.D. 499; and that it enjoys the presumption of validity.35
In its Memorandum36 dated 27 May 1996, private respondent maintains that the Ordinance is ultra vires and that it is void
for being repugnant to the general law. It reiterates that the questioned Ordinance is not a valid exercise of police power;
that it is violative of due process, confiscatory and amounts to an arbitrary interference with its lawful business; that it is
violative of the equal protection clause; and that it confers on petitioner City Mayor or any officer unregulated discretion in
the execution of the Ordinance absent rules to guide and control his actions.
This is an opportune time to express the Court's deep sentiment and tenderness for the Ermita-Malate area being its home
for several decades. A long-time resident, the Court witnessed the area's many turn of events. It relished its glory days and
endured its days of infamy. Much as the Court harks back to the resplendent era of the Old Manila and yearns to restore its
lost grandeur, it believes that the Ordinance is not the fitting means to that end. The Court is of the opinion, and so holds,
that the lower court did not err in declaring the Ordinance, as it did, ultra vires and therefore null and void.
The Ordinance is so replete with constitutional infirmities that almost every sentence thereof violates a constitutional
provision. The prohibitions and sanctions therein transgress the cardinal rights of persons enshrined by the Constitution. The
Court is called upon to shelter these rights from attempts at rendering them worthless.
The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must
not only be within the corporate powers of the local government unit to enact and must be passed according to the procedure
prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution
or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may
regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.37

Anent the first criterion, ordinances shall only be valid when they are not contrary to the Constitution and to the
laws.38 The Ordinance must satisfy two requirements: it must pass muster under the test of constitutionality and the test of
consistency with the prevailing laws. That ordinances should be constitutional uphold the principle of the supremacy of the
Constitution. The requirement that the enactment must not violate existing law gives stress to the precept that local
government units are able to legislate only by virtue of their derivative legislative power, a delegation of legislative power
from the national legislature. The delegate cannot be superior to the principal or exercise powers higher than those of the
latter.39
This relationship between the national legislature and the local government units has not been enfeebled by the new
provisions in the Constitution strengthening the policy of local autonomy. The national legislature is still the principal of the
local government units, which cannot defy its will or modify or violate it.40
The Ordinance was passed by the City Council in the exercise of its police power, an enactment of the City Council acting
as agent of Congress. Local government units, as agencies of the State, are endowed with police power in order to
effectively accomplish and carry out the declared objects of their creation.41 This delegated police power is found in
Section 16 of the Code, known as the general welfare clause, viz:
SECTION 16. General Welfare.Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and technological capabilities, improve public morals,
enhance economic prosperity and social justice, promote full employment among their residents, maintain peace
and order, and preserve the comfort and convenience of their inhabitants.
Local government units exercise police power through their respective legislative bodies; in this case, thesangguniang
panlungsod or the city council. The Code empowers the legislative bodies to "enact ordinances, approve resolutions and
appropriate funds for the general welfare of the province/city/municipality and its inhabitants pursuant to Section 16 of the
Code and in the proper exercise of the corporate powers of the province/city/ municipality provided under the Code. 42 The
inquiry in this Petition is concerned with the validity of the exercise of such delegated power.
The Ordinance contravenes
the Constitution
The police power of the City Council, however broad and far-reaching, is subordinate to the constitutional limitations
thereon; and is subject to the limitation that its exercise must be reasonable and for the public good.43In the case at bar, the
enactment of the Ordinance was an invalid exercise of delegated power as it is unconstitutional and repugnant to general
laws.
The relevant constitutional provisions are the following:
SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the
general welfare are essential for the enjoyment by all the people of the blessings of democracy.44
SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality
before the law of women and men.45
SEC. 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be
denied the equal protection of laws.46
Sec. 9. Private property shall not be taken for public use without just compensation.47
A. The Ordinance infringes the Due Process Clause

The constitutional safeguard of due process is embodied in the fiat "(N)o person shall be deprived of life, liberty or property
without due process of law. . . ."48
There is no controlling and precise definition of due process. It furnishes though a standard to which governmental action
should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid. This standard is aptly
described as a responsiveness to the supremacy of reason, obedience to the dictates of justice,49 and as such it is a limitation
upon the exercise of the police power.50
The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and property of individuals; to
secure the individual from the arbitrary exercise of the powers of the government, unrestrained by the established principles
of private rights and distributive justice; to protect property from confiscation by legislative enactments, from seizure,
forfeiture, and destruction without a trial and conviction by the ordinary mode of judicial procedure; and to secure to all
persons equal and impartial justice and the benefit of the general law.51
The guaranty serves as a protection against arbitrary regulation, and private corporations and partnerships are "persons"
within the scope of the guaranty insofar as their property is concerned.52
This clause has been interpreted as imposing two separate limits on government, usually called "procedural due process"
and "substantive due process."
Procedural due process, as the phrase implies, refers to the procedures that the government must follow before it deprives a
person of life, liberty, or property. Classic procedural due process issues are concerned with what kind of notice and what
form of hearing the government must provide when it takes a particular action.53
Substantive due process, as that phrase connotes, asks whether the government has an adequate reason for taking away a
person's life, liberty, or property. In other words, substantive due process looks to whether there is a sufficient justification
for the government's action.54 Case law in the United States (U.S.) tells us that whether there is such a justification depends
very much on the level of scrutiny used.55 For example, if a law is in an area where only rational basis review is applied,
substantive due process is met so long as the law is rationally related to a legitimate government purpose. But if it is an area
where strict scrutiny is used, such as for protecting fundamental rights, then the government will meet substantive due
process only if it can prove that the law is necessary to achieve a compelling government purpose.56
The police power granted to local government units must always be exercised with utmost observance of the rights of the
people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or
despotically57 as its exercise is subject to a qualification, limitation or restriction demanded by the respect and regard due to
the prescription of the fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears
emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate demands of public
interest or public welfare.58 Due process requires the intrinsic validity of the law in interfering with the rights of the person
to his life, liberty and property.59
Requisites for the valid exercise
of Police Power are not met
To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free it from
the imputation of constitutional infirmity, not only must it appear that the interests of the public generally, as distinguished
from those of a particular class, require an interference with private rights, but the means adopted must be reasonably
necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.60 It must be evident that no
other alternative for the accomplishment of the purpose less intrusive of private rights can work. A reasonable relation must
exist between the purposes of the police measure and the means employed for its accomplishment, for even under the guise
of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be
arbitrarily invaded.61
Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into private
rights62 a violation of the due process clause.

The Ordinance was enacted to address and arrest the social ills purportedly spawned by the establishments in the ErmitaMalate area which are allegedly operated under the deceptive veneer of legitimate, licensed and tax-paying nightclubs, bars,
karaoke bars, girlie houses, cocktail lounges, hotels and motels. Petitioners insist that even the Court in the case of ErmitaMalate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila63 had already taken judicial notice of the
"alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to existence of
motels, which provide a necessary atmosphere for clandestine entry, presence and exit and thus become the ideal haven for
prostitutes and thrill-seekers."64
The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the
community. Granting for the sake of argument that the objectives of the Ordinance are within the scope of the City
Council's police powers, the means employed for the accomplishment thereof were unreasonable and unduly oppressive.
It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations looking to the
promotion of the moral and social values of the community. However, the worthy aim of fostering public morals and the
eradication of the community's social ills can be achieved through means less restrictive of private rights; it can be attained
by reasonable restrictions rather than by an absolute prohibition. The closing down and transfer of businesses or their
conversion into businesses "allowed" under the Ordinance have no reasonable relation to the accomplishment of its
purposes. Otherwise stated, the prohibition of the enumerated establishments will notper se protect and promote the social
and moral welfare of the community; it will not in itself eradicate the alluded social ills of prostitution, adultery, fornication
nor will it arrest the spread of sexual disease in Manila.
Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and establishments of the like which
the City Council may lawfully prohibit,65 it is baseless and insupportable to bring within that classification sauna parlors,
massage parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This
is not warranted under the accepted definitions of these terms. The enumerated establishments are lawful pursuits which are
not per se offensive to the moral welfare of the community.
That these are used as arenas to consummate illicit sexual affairs and as venues to further the illegal prostitution is of no
moment. We lay stress on the acrid truth that sexual immorality, being a human frailty, may take place in the most innocent
of places that it may even take place in the substitute establishments enumerated under Section 3 of the Ordinance. If the
flawed logic of the Ordinance were to be followed, in the remote instance that an immoral sexual act transpires in a church
cloister or a court chamber, we would behold the spectacle of the City of Manila ordering the closure of the church or court
concerned. Every house, building, park, curb, street or even vehicles for that matter will not be exempt from the
prohibition. Simply because there are no "pure" places where there are impure men. Indeed, even the Scripture and the
Tradition of Christians churches continually recall the presence and universality of sin in man's history.66
The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said to be injurious to the
health or comfort of the community and which in itself is amoral, but the deplorable human activity that may occur within
its premises. While a motel may be used as a venue for immoral sexual activity, it cannot for that reason alone be punished.
It cannot be classified as a house of ill-repute or as a nuisance per se on a mere likelihood or a naked assumption. If that
were so and if that were allowed, then the Ermita-Malate area would not only be purged of its supposed social ills, it would
be extinguished of its soul as well as every human activity, reprehensible or not, in its every nook and cranny would be laid
bare to the estimation of the authorities.
The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as the Ordinance may to shape
morality, it should not foster the illusion that it can make a moral man out of it because immorality is not a thing, a building
or establishment; it is in the hearts of men. The City Council instead should regulate human conduct that occurs inside the
establishments, but not to the detriment of liberty and privacy which are covenants, premiums and blessings of democracy.
While petitioners' earnestness at curbing clearly objectionable social ills is commendable, they unwittingly punish even the
proprietors and operators of "wholesome," "innocent" establishments. In the instant case, there is a clear invasion of
personal or property rights, personal in the case of those individuals desirous of owning, operating and patronizing those

motels and property in terms of the investments made and the salaries to be paid to those therein employed. If the City of
Manila so desires to put an end to prostitution, fornication and other social ills, it can instead impose reasonable regulations
such as daily inspections of the establishments for any violation of the conditions of their licenses or permits; it may
exercise its authority to suspend or revoke their licenses for these violations;67 and it may even impose increased license
fees. In other words, there are other means to reasonably accomplish the desired end.
Means employed are
constitutionally infirm
The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs,
super clubs, discotheques, cabarets, dance halls, motels and inns in the Ermita-Malate area. In Section 3 thereof, owners
and/or operators of the enumerated establishments are given three (3) months from the date of approval of
the Ordinance within which "to wind up business operations or to transfer to any place outside the Ermita-Malate area or
convert said businesses to other kinds of business allowable within the area." Further, it states in Section 4 that in cases of
subsequent violations of the provisions of the Ordinance, the "premises of the erring establishment shall be closed and
padlocked permanently."
It is readily apparent that the means employed by the Ordinance for the achievement of its purposes, the governmental
interference itself, infringes on the constitutional guarantees of a person's fundamental right to liberty and property.
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and the right to be
free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the
person of the citizen, but is deemed to embrace the right of man to enjoy the facilities with which he has been endowed by
his Creator, subject only to such restraint as are necessary for the common welfare."68 In accordance with this case, the
rights of the citizen to be free to use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by
any lawful calling; and to pursue any avocation are all deemed embraced in the concept of liberty.69
The U.S. Supreme Court in the case of Roth v. Board of Regents,70 sought to clarify the meaning of "liberty." It said:
While the Court has not attempted to define with exactness the liberty. . . guaranteed [by the Fifth and Fourteenth
Amendments], the term denotes not merely freedom from bodily restraint but also the right of the individual to
contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a
home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy
those privileges long recognizedas essential to the orderly pursuit of happiness by free men. In a Constitution for
a free people, there can be no doubt that the meaning of "liberty" must be broad indeed.
In another case, it also confirmed that liberty protected by the due process clause includes personal decisions relating to
marriage, procreation, contraception, family relationships, child rearing, and education. In explaining the respect the
Constitution demands for the autonomy of the person in making these choices, the U.S. Supreme Court explained:
These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to
personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of
liberty is the right to define one's own concept of existence, of meaning, of universe, and of the mystery of human
life. Beliefs about these matters could not define the attributes of personhood where they formed under compulsion
of the State.71
Persons desirous to own, operate and patronize the enumerated establishments under Section 1 of the Ordinancemay seek
autonomy for these purposes.
Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their bonds in intimate
sexual conduct within the motel's premisesbe it stressed that their consensual sexual behavior does not contravene any
fundamental state policy as contained in the Constitution.72 Adults have a right to choose to forge such relationships with
others in the confines of their own private lives and still retain their dignity as free persons. The liberty protected by the
Constitution allows persons the right to make this choice.73 Their right to liberty under the due process clause gives them

the full right to engage in their conduct without intervention of the government, as long as they do not run afoul of the law.
Liberty should be the rule and restraint the exception.
Liberty in the constitutional sense not only means freedom from unlawful government restraint; it must include privacy as
well, if it is to be a repository of freedom. The right to be let alone is the beginning of all freedom it is the most
comprehensive of rights and the right most valued by civilized men.74
The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. As the
case of Morfe v. Mutuc,75 borrowing the words of Laski, so very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are indefeasible;
indeed, they are so fundamental that they are the basis on which his civic obligations are built. He cannot abandon
the consequences of his isolation, which are, broadly speaking, that his experience is private, and the will built out
of that experience personal to himself. If he surrenders his will to others, he surrenders himself. If his will is set by
the will of others, he ceases to be a master of himself. I cannot believe that a man no longer a master of himself is
in any real sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which should be justified by a
compelling state interest. Morfe accorded recognition to the right to privacy independently of its identification with liberty;
in itself it is fully deserving of constitutional protection. Governmental powers should stop short of certain intrusions into
the personal life of the citizen.76
There is a great temptation to have an extended discussion on these civil liberties but the Court chooses to exercise restraint
and restrict itself to the issues presented when it should. The previous pronouncements of the Court are not to be interpreted
as a license for adults to engage in criminal conduct. The reprehensibility of such conduct is not diminished. The Court only
reaffirms and guarantees their right to make this choice. Should they be prosecuted for their illegal conduct, they should
suffer the consequences of the choice they have made. That, ultimately, is their choice.
Modality employed is
unlawful taking
In addition, the Ordinance is unreasonable and oppressive as it substantially divests the respondent of the beneficial use of
its property.77 The Ordinance in Section 1 thereof forbids the running of the enumerated businesses in the Ermita-Malate
area and in Section 3 instructs its owners/operators to wind up business operations or to transfer outside the area or convert
said businesses into allowed businesses. An ordinance which permanently restricts the use of property that it can not be used
for any reasonable purpose goes beyond regulation and must be recognized as a taking of the property without just
compensation.78 It is intrusive and violative of the private property rights of individuals.
The Constitution expressly provides in Article III, Section 9, that "private property shall not be taken for public use without
just compensation." The provision is the most important protection of property rights in the Constitution. This is a
restriction on the general power of the government to take property. The constitutional provision is about ensuring that the
government does not confiscate the property of some to give it to others. In part too, it is about loss spreading. If the
government takes away a person's property to benefit society, then society should pay. The principal purpose of the
guarantee is "to bar the Government from forcing some people alone to bear public burdens which, in all fairness and
justice, should be borne by the public as a whole.79
There are two different types of taking that can be identified. A "possessory" taking occurs when the government confiscates
or physically occupies property. A "regulatory" taking occurs when the government's regulation leaves no reasonable
economically viable use of the property.80
In the landmark case of Pennsylvania Coal v. Mahon,81 it was held that a taking also could be found if government
regulation of the use of property went "too far." When regulation reaches a certain magnitude, in most if not in all cases
there must be an exercise of eminent domain and compensation to support the act. While property may be regulated to a
certain extent, if regulation goes too far it will be recognized as a taking.82

No formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking.
In Mahon, Justice Holmes recognized that it was "a question of degree and therefore cannot be disposed of by general
propositions." On many other occasions as well, the U.S. Supreme Court has said that the issue of when regulation
constitutes a taking is a matter of considering the facts in each case. The Court asks whether justice and fairness require that
the economic loss caused by public action must be compensated by the government and thus borne by the public as a whole,
or whether the loss should remain concentrated on those few persons subject to the public action.83
What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no
reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. 84A
regulation that permanently denies all economically beneficial or productive use of land is, from the owner's point of view,
equivalent to a "taking" unless principles of nuisance or property law that existed when the owner acquired the land make
the use prohibitable.85 When the owner of real property has been called upon to sacrifice all economically beneficial uses in
the name of the common good, that is, to leave his property economically idle, he has suffered a taking.86
A regulation which denies all economically beneficial or productive use of land will require compensation under the takings
clause. Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking
nonetheless may have occurred, depending on a complex of factors including the regulation's economic effect on the
landowner, the extent to which the regulation interferes with reasonable investment-backed expectations and the character
of government action. These inquiries are informed by the purpose of the takings clause which is to prevent the government
from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a
whole.87
A restriction on use of property may also constitute a "taking" if not reasonably necessary to the effectuation of a substantial
public purpose or if it has an unduly harsh impact on the distinct investment-backed expectations of the owner.88
The Ordinance gives the owners and operators of the "prohibited" establishments three (3) months from its approval within
which to "wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said
businesses to other kinds of business allowable within the area." The directive to "wind up business operations" amounts to
a closure of the establishment, a permanent deprivation of property, and is practically confiscatory. Unless the owner
converts his establishment to accommodate an "allowed" business, the structure which housed the previous business will be
left empty and gathering dust. Suppose he transfers it to another area, he will likewise leave the entire establishment idle.
Consideration must be given to the substantial amount of money invested to build the edifices which the owner reasonably
expects to be returned within a period of time. It is apparent that the Ordinance leaves no reasonable economically viable
use of property in a manner that interferes with reasonable expectations for use.
The second and third options to transfer to any place outside of the Ermita-Malate area or to convert into allowed
businessesare confiscatory as well. The penalty of permanent closure in cases of subsequent violations found in Section 4
of the Ordinance is also equivalent to a "taking" of private property.
The second option instructs the owners to abandon their property and build another one outside the Ermita-Malate area. In
every sense, it qualifies as a taking without just compensation with an additional burden imposed on the owner to build
another establishment solely from his coffers. The proffered solution does not put an end to the "problem," it merely
relocates it. Not only is this impractical, it is unreasonable, onerous and oppressive. The conversion into allowed enterprises
is just as ridiculous. How may the respondent convert a motel into a restaurant or a coffee shop, art gallery or music lounge
without essentially destroying its property? This is a taking of private property without due process of law, nay, even
without compensation.
The penalty of closure likewise constitutes unlawful taking that should be compensated by the government. The burden on
the owner to convert or transfer his business, otherwise it will be closed permanently after a subsequent violation should be
borne by the public as this end benefits them as a whole.
Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance, although a valid
exercise of police power, which limits a "wholesome" property to a use which can not reasonably be made of it constitutes

the taking of such property without just compensation. Private property which is not noxious nor intended for noxious
purposes may not, by zoning, be destroyed without compensation. Such principle finds no support in the principles of
justice as we know them. The police powers of local government units which have always received broad and liberal
interpretation cannot be stretched to cover this particular taking.
Distinction should be made between destruction from necessity and eminent domain. It needs restating that the property
taken in the exercise of police power is destroyed because it is noxious or intended for a noxious purpose while the property
taken under the power of eminent domain is intended for a public use or purpose and is therefore "wholesome."89 If it be of
public benefit that a "wholesome" property remain unused or relegated to a particular purpose, then certainly the public
should bear the cost of reasonable compensation for the condemnation of private property for public use.90
Further, the Ordinance fails to set up any standard to guide or limit the petitioners' actions. It in no way controls or guides
the discretion vested in them. It provides no definition of the establishments covered by it and it fails to set forth the
conditions when the establishments come within its ambit of prohibition. The Ordinance confers upon the mayor arbitrary
and unrestricted power to close down establishments. Ordinances such as this, which make possible abuses in its execution,
depending upon no conditions or qualifications whatsoever other than the unregulated arbitrary will of the city authorities as
the touchstone by which its validity is to be tested, are unreasonable and invalid. The Ordinance should have established a
rule by which its impartial enforcement could be secured.91
Ordinances placing restrictions upon the lawful use of property must, in order to be valid and constitutional, specify the
rules and conditions to be observed and conduct to avoid; and must not admit of the exercise, or of an opportunity for the
exercise, of unbridled discretion by the law enforcers in carrying out its provisions.92
Thus, in Coates v. City of Cincinnati,93 as cited in People v. Nazario,94 the U.S. Supreme Court struck down an
ordinance that had made it illegal for "three or more persons to assemble on any sidewalk and there conduct themselves in a
manner annoying to persons passing by." The ordinance was nullified as it imposed no standard at all "because one may
never know in advance what 'annoys some people but does not annoy others.' "
Similarly, the Ordinance does not specify the standards to ascertain which establishments "tend to disturb the community,"
"annoy the inhabitants," and "adversely affect the social and moral welfare of the community." The cited case supports the
nullification of the Ordinance for lack of comprehensible standards to guide the law enforcers in carrying out its provisions.
Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process clause.
These lawful establishments may be regulated, but not prevented from carrying on their business. This is a sweeping
exercise of police power that is a result of a lack of imagination on the part of the City Council and which amounts to an
interference into personal and private rights which the Court will not countenance. In this regard, we take a resolute stand to
uphold the constitutional guarantee of the right to liberty and property.
Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry from the illconsidered Ordinance enacted by the City Council.
In FW/PBS, INC. v. Dallas,95 the city of Dallas adopted a comprehensive ordinance regulating "sexually oriented
businesses," which are defined to include adult arcades, bookstores, video stores, cabarets, motels, and theaters as well as
escort agencies, nude model studio and sexual encounter centers. Among other things, the ordinance required that such
businesses be licensed. A group of motel owners were among the three groups of businesses that filed separate suits
challenging the ordinance. The motel owners asserted that the city violated the due process clause by failing to produce
adequate support for its supposition that renting room for fewer than ten (10) hours resulted in increased crime and other
secondary effects. They likewise argued than the ten (10)-hour limitation on the rental of motel rooms placed an
unconstitutional burden on the right to freedom of association. Anent the first contention, the U.S. Supreme Court held that
the reasonableness of the legislative judgment combined with a study which the city considered, was adequate to support the
city's determination that motels permitting room rentals for fewer than ten (10 ) hours should be included within the
licensing scheme. As regards the second point, the Court held that limiting motel room rentals to ten (10) hours will have no
discernible effect on personal bonds as those bonds that are formed from the use of a motel room for fewer than ten (10)

hours are not those that have played a critical role in the culture and traditions of the nation by cultivating and transmitting
shared ideals and beliefs.
The ordinance challenged in the above-cited case merely regulated the targeted businesses. It imposed reasonable
restrictions; hence, its validity was upheld.
The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila,96 it needs pointing out, is
also different from this case in that what was involved therein was a measure which regulated the mode in which motels
may conduct business in order to put an end to practices which could encourage vice and immorality. Necessarily, there was
no valid objection on due process or equal protection grounds as the ordinance did not prohibit motels. The Ordinance in
this case however is not a regulatory measure but is an exercise of an assumed power to prohibit.97
The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of property and personal rights
of citizens. For being unreasonable and an undue restraint of trade, it cannot, even under the guise of exercising police
power, be upheld as valid.
B. The Ordinance violates Equal
Protection Clause
Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred and
responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to
some and unjustly discriminate against others.98 The guarantee means that no person or class of persons shall be denied the
same protection of laws which is enjoyed by other persons or other classes in like circumstances. 99 The "equal protection of
the laws is a pledge of the protection of equal laws."100 It limits governmental discrimination. The equal protection clause
extends to artificial persons but only insofar as their property is concerned.101
The Court has explained the scope of the equal protection clause in this wise:
What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration: "The ideal situation is
for the law's benefits to be available to all, that none be placed outside the sphere of its coverage. Only thus could
chance and favor be excluded and the affairs of men governed by that serene and impartial uniformity, which is of
the very essence of the idea of law." There is recognition, however, in the opinion that what in fact exists "cannot
approximate the ideal. Nor is the law susceptible to the reproach that it does not take into account the realities of
the situation. The constitutional guarantee then is not to be given a meaning that disregards what is, what does in
fact exist. To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut
into the rights to liberty and property. Those adversely affected may under such circumstances invoke the equal
protection clause only if they can show that the governmental act assailed, far from being inspired by the
attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds
no support in reason." Classification is thus not ruled out, it being sufficient to quote from the Tuason decision
anew "that the laws operate equally and uniformly on all persons under similar circumstances or that all persons
must be treated in the same manner, the conditions not being different, both in the privileges conferred and the
liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection
and security shall be given to every person under circumstances which, if not identical, are analogous. If law be
looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion,
whatever restrictions cast on some in the group equally binding on the rest.102
Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may operate
only on some and not all of the people without violating the equal protection clause.103 The classification must, as an
indispensable requisite, not be arbitrary. To be valid, it must conform to the following requirements:
1) It must be based on substantial distinctions.
2) It must be germane to the purposes of the law.

3) It must not be limited to existing conditions only.

4) It must apply equally to all members of the class.104
In the Court's view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or
other similar establishments. By definition, all are commercial establishments providing lodging and usually meals and
other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses
or other similar establishments. The classification in the instant case is invalid as similar subjects are not similarly treated,
both as to rights conferred and obligations imposed. It is arbitrary as it does not rest on substantial distinctions bearing a just
and fair relation to the purpose of the Ordinance.
The Court likewise cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate area but
not outside of this area. A noxious establishment does not become any less noxious if located outside the area.
The standard "where women are used as tools for entertainment" is also discriminatory as prostitution one of the hinted
ills the Ordinance aims to banishis not a profession exclusive to women. Both men and women have an equal propensity
to engage in prostitution. It is not any less grave a sin when men engage in it. And why would the assumption that there is
an ongoing immoral activity apply only when women are employed and be inapposite when men are in harness? This
discrimination based on gender violates equal protection as it is not substantially related to important government
objectives.105 Thus, the discrimination is invalid.
Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency with prevailing laws.
C. The Ordinance is repugnant
to general laws; it is ultra vires
The Ordinance is in contravention of the Code as the latter merely empowers local government units to regulate, and not
prohibit, the establishments enumerated in Section 1 thereof.
The power of the City Council to regulate by ordinances the establishment, operation, and maintenance of motels, hotels
and other similar establishments is found in Section 458 (a) 4 (iv), which provides that:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative
body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the
city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the
city as provided for under Section 22 of this Code, and shall:
. . .
(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the
general welfare and for said purpose shall:
. . .
(iv) Regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels, motels, inns,
pension houses, lodging houses, and other similar establishments, including tourist guides and transports . . . .
While its power to regulate the establishment, operation and maintenance of any entertainment or amusement facilities, and
to prohibit certain forms of amusement or entertainment is provided under Section 458 (a) 4 (vii) of the Code, which reads
as follows:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative
body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the
city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the
city as provided for under Section 22 of this Code, and shall:
. . .

(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the
general welfare and for said purpose shall:
. . .
(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities,
including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls,
sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events
or activities for amusement or entertainment, particularly those which tend to disturb the community or
annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of
amusement or entertainment in order to protect the social and moral welfare of the community.
Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other
similar establishments, the only power of the City Council to legislate relative thereto is to regulate them to promote the
general welfare. The Code still withholds from cities the power to suppress and prohibit altogether the establishment,
operation and maintenance of such establishments. It is well to recall the rulings of the Court inKwong Sing v. City of
Manila106 that:
The word "regulate," as used in subsection (l), section 2444 of the Administrative Code, means and includes the
power to control, to govern, and to restrain; but "regulate" should not be construed as synonymous with "suppress"
or "prohibit." Consequently, under the power to regulate laundries, the municipal authorities could make proper
police regulations as to the mode in which the employment or business shall be exercised.107
And in People v. Esguerra,108 wherein the Court nullified an ordinance of the Municipality of Tacloban which prohibited
the selling, giving and dispensing of liquor ratiocinating that the municipality is empowered only to regulate the same and
not prohibit. The Court therein declared that:
(A)s a general rule when a municipal corporation is specifically given authority or power to regulate or to license
and regulate the liquor traffic, power to prohibit is impliedly withheld.109
These doctrines still hold contrary to petitioners' assertion110 that they were modified by the Code vesting upon City
Councils prohibitory powers.
Similarly, the City Council exercises regulatory powers over public dancing schools, public dance halls, sauna baths,
massage parlors, and other places for entertainment or amusement as found in the first clause of Section 458 (a) 4 (vii). Its
powers to regulate, suppress and suspend "such other events or activities for amusement or entertainment, particularly those
which tend to disturb the community or annoy the inhabitants" and to "prohibit certain forms of amusement or entertainment
in order to protect the social and moral welfare of the community" are stated in the second and third clauses, respectively of
the same Section. The several powers of the City Council as provided in Section 458 (a) 4 (vii) of the Code, it is pertinent
to emphasize, are separated by semi-colons (;), the use of which indicates that the clauses in which these powers are set
forth are independent of each other albeit closely related to justify being put together in a single enumeration or
paragraph.111 These powers, therefore, should not be confused, commingled or consolidated as to create a conglomerated
and unified power of regulation, suppression and prohibition.112
The Congress unequivocably specified the establishments and forms of amusement or entertainment subject to regulation
among which are beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments
(Section 458 (a) 4 (iv)), public dancing schools, public dance halls, sauna baths, massage parlors, and other places for
entertainment or amusement (Section 458 (a) 4 (vii)). This enumeration therefore cannot be included as among "other
events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the
inhabitants" or "certain forms of amusement or entertainment" which the City Council may suspend, suppress or prohibit.
The rule is that the City Council has only such powers as are expressly granted to it and those which are necessarily implied
or incidental to the exercise thereof. By reason of its limited powers and the nature thereof, said powers are to be
construed strictissimi juris and any doubt or ambiguity arising out of the terms used in granting said powers must be

construed against the City Council.113 Moreover, it is a general rule in statutory construction that the express mention of
one person, thing, or consequence is tantamount to an express exclusion of all others. Expressio unius est exclusio alterium.
This maxim is based upon the rules of logic and the natural workings of human mind. It is particularly applicable in the
construction of such statutes as create new rights or remedies, impose penalties or punishments, or otherwise come under
the rule of strict construction.114
The argument that the City Council is empowered to enact the Ordinance by virtue of the general welfare clause of the Code
and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila is likewise without merit. On the first point, the ruling of the
Court in People v. Esguerra,115 is instructive. It held that:
The powers conferred upon a municipal council in the general welfare clause, or section 2238 of the Revised
Administrative Code, refers to matters not covered by the other provisions of the same Code, and therefore it can
not be applied to intoxicating liquors, for the power to regulate the selling, giving away and dispensing thereof is
granted specifically by section 2242 (g) to municipal councils. To hold that, under the general power granted by
section 2238, a municipal council may enact the ordinance in question, notwithstanding the provision of section
2242 (g), would be to make the latter superfluous and nugatory, because the power to prohibit, includes the power
to regulate, the selling, giving away and dispensing of intoxicating liquors.
On the second point, it suffices to say that the Code being a later expression of the legislative will must necessarily prevail
and override the earlier law, the Revised Charter of Manila. Legis posteriores priores contrarias abrogant, or later statute
repeals prior ones which are repugnant thereto. As between two laws on the same subject matter, which are irreconcilably
inconsistent, that which is passed later prevails, since it is the latest expression of legislative will.116 If there is an
inconsistency or repugnance between two statutes, both relating to the same subject matter, which cannot be removed by
any fair and reasonable method of interpretation, it is the latest expression of the legislative will which must prevail and
override the earlier.117
Implied repeals are those which take place when a subsequently enacted law contains provisions contrary to those of an
existing law but no provisions expressly repealing them. Such repeals have been divided into two general classes: those
which occur where an act is so inconsistent or irreconcilable with an existing prior act that only one of the two can remain in
force and those which occur when an act covers the whole subject of an earlier act and is intended to be a substitute therefor.
The validity of such a repeal is sustained on the ground that the latest expression of the legislative will should prevail.118
In addition, Section 534(f) of the Code states that "All general and special laws, acts, city charters, decrees, executive
orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the
provisions of this Code are hereby repealed or modified accordingly." Thus, submitting to petitioners' interpretation that the
Revised Charter of Manila empowers the City Council to prohibit motels, that portion of the Charter stating such must be
considered repealed by the Code as it is at variance with the latter's provisions granting the City Council mere regulatory
powers.
It is well to point out that petitioners also cannot seek cover under the general welfare clause authorizing the abatement of
nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one which affects the immediate safety of
persons and property and may be summarily abated under the undefined law of necessity. It can not be said that motels are
injurious to the rights of property, health or comfort of the community. It is a legitimate business. If it be a nuisance per
accidens it may be so proven in a hearing conducted for that purpose. A motel is not per se a nuisance warranting its
summary abatement without judicial intervention.119
Notably, the City Council was conferred powers to prevent and prohibit certain activities and establishments in another
section of the Code which is reproduced as follows:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative
body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the
city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the
city as provided for under Section 22 of this Code, and shall:

(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this
connection, shall:
. . .
(v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in
public places, vagrancy, mendicancy, prostitution, establishment and maintenance of
houses of ill repute,
gambling and other prohibited games of chance, fraudulent devices and ways to obtain money or property, drug
addiction, maintenance of drug dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of
obscene or pornographic materials or publications, and such other activities inimical to the welfare and morals of
the inhabitants of the city;
. . .
If it were the intention of Congress to confer upon the City Council the power to prohibit the establishments enumerated in
Section 1 of the Ordinance, it would have so declared in uncertain terms by adding them to the list of the matters it may
prohibit under the above-quoted Section. The Ordinance now vainly attempts to lump these establishments with houses of
ill-repute and expand the City Council's powers in the second and third clauses of Section 458 (a) 4 (vii) of the Code in an
effort to overreach its prohibitory powers. It is evident that these establishments may only be regulated in their
establishment, operation and maintenance.
It is important to distinguish the punishable activities from the establishments themselves. That these establishments are
recognized legitimate enterprises can be gleaned from another Section of the Code. Section 131 under the Title on Local
Government Taxation expressly mentioned proprietors or operators of massage clinics, sauna, Turkish and Swedish baths,
hotels, motels and lodging houses as among the "contractors" defined in paragraph (h) thereof. The same Section also
defined "amusement" as a "pleasurable diversion and entertainment," "synonymous to relaxation, avocation, pastime or
fun;" and "amusement places" to include "theaters, cinemas, concert halls, circuses and other places of amusement where
one seeks admission to entertain oneself by seeing or viewing the show or performances." Thus, it can be inferred that the
Code considers these establishments as legitimate enterprises and activities. It is well to recall the maxim r eddendo singula
singulis which means that words in different parts of a statute must be referred to their appropriate connection, giving to
each in its place, its proper force and effect, and, if possible, rendering none of them useless or superfluous, even if strict
grammatical construction demands otherwise. Likewise, where words under consideration appear in different sections or are
widely dispersed throughout an act the same principle applies.120
Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D. 499. As correctly
argued by MTDC, the statute had already converted the residential Ermita-Malate area into a commercial area. The decree
allowed the establishment and operation of all kinds of commercial establishments except warehouse or open storage depot,
dump or yard, motor repair shop, gasoline service station, light industry with any machinery or funeral establishment. The
rule is that for an ordinance to be valid and to have force and effect, it must not only be within the powers of the council to
enact but the same must not be in conflict with or repugnant to the general law.121 As succinctly illustrated in Solicitor
General v. Metropolitan Manila Authority:122
The requirement that the enactment must not violate existing law explains itself. Local political subdivisions are
able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only
that the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself). They
are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the
local government units cannot contravene but must obey at all times the will of their principal. In the case before
us, the enactment in question, which are merely local in origin cannot prevail against the decree, which has the
force and effect of a statute.123
Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be the rule, it has already been
held that although the presumption is always in favor of the validity or reasonableness of the ordinance, such presumption
must nevertheless be set aside when the invalidity or unreasonableness appears on the face of the ordinance itself or is

established by proper evidence. The exercise of police power by the local government is valid unless it contravenes the
fundamental law of the land, or an act of the legislature, or unless it is against public policy or is unreasonable, oppressive,
partial, discriminating or in derogation of a common right.124

Conclusion
All considered, the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is
constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not
sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be forgotten, the City
Council under the Code had no power to enact the Ordinance and is therefore ultra vires, null and void.
Concededly, the challenged Ordinance was enacted with the best of motives and shares the concern of the public for the
cleansing of the Ermita-Malate area of its social sins. Police power legislation of such character deserves the full
endorsement of the judiciary we reiterate our support for it. But inspite of its virtuous aims, the enactment of
the Ordinance has no statutory or constitutional authority to stand on. Local legislative bodies, in this case, the City
Council, cannot prohibit the operation of the enumerated establishments under Section 1 thereof or order their transfer or
conversion without infringing the constitutional guarantees of due process and equal protection of laws not even under
the guise of police power.
WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court declaring the Ordinancevoid
is AFFIRMED. Costs against petitioners.
SO ORDERED.

G.R. No. 100152

March 31, 2000

ACEBEDO OPTICAL COMPANY, INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS, respondents.
PURISIMA, J.:
At bar is a petition for review under Rule 45 of the Rules of Court seeking to nullify the dismissal by the Court of Appeals
of the original petition for certiorari, prohibition and mandamus filed by the herein petitioner against the City Mayor and
City Legal Officer of Iligan and the Samahang Optometrist sa Pilipinas Iligan Chapter (SOPI, for brevity).
The antecedent facts leading to the filing of the instant petition are as follows:
Petitioner applied with the Office of the City Mayor of Iligan for a business permit. After consideration of petitioner's
application and the opposition interposed thereto by local optometrists, respondent City Mayor issued Business Permit No.
5342 subject to the following conditions:
1. Since it is a corporation, Acebedo cannot put up an optical clinic but only a commercial store;
2. Acebedo cannot examine and/or prescribe reading and similar optical glasses for patients, because these are
functions of optical clinics;
3. Acebedo cannot sell reading and similar eyeglasses without a prescription having first been made by an
independent optometrist (not its employee) or independent optical clinic. Acebedo can only sell directly to the
public, without need of a prescription, Ray-Ban and similar eyeglasses;
4. Acebedo cannot advertise optical lenses and eyeglasses, but can advertise Ray-Ban and similar glasses and
frames;
5. Acebedo is allowed to grind lenses but only upon the prescription of an independent optometrist. 1
On December 5, 1988, private respondent Samahan ng Optometrist Sa Pilipinas (SOPI), Iligan Chapter, through its Acting
President, Dr. Frances B. Apostol, lodged a complaint against the petitioner before the Office of the City Mayor, alleging
that Acebedo had violated the conditions set forth in its business permit and requesting the cancellation and/or revocation of
such permit.
Acting on such complaint, then City Mayor Camilo P. Cabili designated City Legal Officer Leo T. Cahanap to conduct an
investigation on the matter. On July 12, 1989, respondent City Legal Officer submitted a report to the City Mayor finding
the herein petitioner guilty of violating all the conditions of its business permit and recommending the disqualification of
petitioner from operating its business in Iligan City. The report further advised that no new permit shall be granted to
petitioner for the year 1989 and should only be given time to wind up its affairs.
On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of Business Permit effective as of
said date and giving petitioner three (3) months to wind up its affairs.
On October 17, 1989, petitioner brought a petition for certiorari, prohibition and mandamus with prayer for restraining
order/preliminary injunction against the respondents, City Mayor, City Legal Officer and Samahan ng Optometrists sa
Pilipinas-Iligan City Chapter (SOPI), docketed as Civil Case No. 1497 before the Regional Trial Court of Iligan City,
Branch I. Petitioner alleged that (1) it was denied due process because it was not given an opportunity to present its
evidence during the investigation conducted by the City Legal Officer; (2) it was denied equal protection of the laws as the

limitations imposed on its business permit were not imposed on similar businesses in Iligan City; (3) the City Mayor had no
authority to impose the special conditions on its business permit; and (4) the City Legal Officer had no authority to conduct
the investigation as the matter falls within the exclusive jurisdiction of the Professional Regulation Commission and the
Board of Optometry.
Respondent SOPI interposed a Motion to Dismiss the Petition on the ground of non-exhaustion of administrative remedies
but on November 24, 1989, Presiding Judge Mamindiara P. Mangotara deferred resolution of such Motion to Dismiss until
after trial of the case on the merits. However, the prayer for a writ of preliminary injunction was granted. Thereafter,
respondent SOPI filed its answer.1wphi1.nt
On May 30, 1990, the trial court dismissed the petition for failure to exhaust administrative remedies, and dissolved the writ
of preliminary injunction it earlier issued. Petitioner's motion for reconsideration met the same fate. It was denied by an
Order dated June 28, 1990.
On October 3, 1990, instead of taking an appeal, petitioner filed a petition for certiorari, prohibition and mandamus with the
Court of Appeals seeking to set aside the questioned Order of Dismissal, branding the same as tainted with grave abuse of
discretion on the part of the trial court.
On January 24, 1991, the Ninth Division 2 of the Court of Appeals dismissed the petition for lack of merit. Petitioner's
motion reconsideration was also denied in the Resolution dated May 15, 1991.
Undaunted, petitioner has come before this court via the present petition, theorizing that:
A.
THE RESPONDENT COURT, WHILE CORRECTLY HOLDING THAT THE RESPONDENT CITY MAYOR
ACTED BEYOND HIS AUTHORITY IN IMPOSING THE SPECIAL CONDITIONS IN THE PERMIT AS
THEY HAD NO BASIS IN ANY LAW OR ORDINANCE, ERRED IN HOLDING THAT THE SAID SPECIAL
CONDITIONS NEVERTHELESS BECAME BINDING ON PETITIONER UPON ITS ACCEPTANCE
THEREOF AS A PRIVATE AGREEMENT OR CONTRACT.
B.
THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE CONTRACT BETWEEN
PETITIONER AND THE CITY OF ILIGAN WAS ENTERED INTO BY THE LATTER IN THE
PERFORMANCE OF ITS PROPRIETARY FUNCTIONS.
The petition is impressed with merit.
Although petitioner agrees with the finding of the Court of Appeals that respondent City Mayor acted beyond the scope of
his authority in imposing the assailed conditions in subject business permit, it has excepted to the ruling of the Court of
Appeals that the said conditions nonetheless became binding on petitioner, once accepted, as a private agreement or
contract. Petitioner maintains that the said special conditions are null and void for being ultra vires and cannot be given
effect; and therefore, the principle of estoppel cannot apply against it.
On the other hand, the public respondents, City Mayor and City Legal Officer, private respondent SOPI and the Office of
the Solicitor General contend that as a valid exercise of police power, respondent City Mayor has the authority to impose, as
he did, special conditions in the grant of business permits.
Police power as an inherent attribute of sovereignty is the power to prescribe regulations to promote the health, morals,
peace, education, good order or safety and general welfare of the people. 9 The State, through the legislature, has delegated
the exercise of police power to local government units, as agencies of the State, in order to effectively accomplish and carry
out the declared objects of their creation. 4 This delegation of police power is embodied in the general welfare clause of the
Local Government Code which provides:
Sec. 6. General Welfare. Every local government unit shall exercise the powers expressly granted, those

necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and technological capabilities, improve public morals,
enhance economic prosperity and social justice, promote full employment among their residents, maintain peace
and order, and preserve the comfort and convenience of their inhabitants.
The scope of police power has been held to be so comprehensive as to encompass almost all matters affecting the health,
safety, peace, order, morals, comfort and convenience of the community. Police power is essentially regulatory in nature and
the power to issue licenses or grant business permits, if exercised for a regulatory and not revenue-raising purpose, is within
the ambit of this power. 5
The authority of city mayors to issue or grant licenses and business permits is beyond cavil. It is provided for by law.
Section 171, paragraph 2 (n) of Batas Pambansa Bilang 337 otherwise known as the Local Government Code of 1983,
reads:
Sec. 171. The City Mayor shall:
xxx

xxx

xxx

n) Grant or refuse to grant, pursuant to law, city licenses or permits, and revoke the same for violation of law or
ordinance or the conditions upon which they are granted.
However, the power to grant or issue licenses or business permits must always be exercised in accordance with law, with
utmost observance of the rights of all concerned to due process and equal protection of the law.
Succinct and in point is the ruling of this Court, that:
. . . While a business may be regulated, such regulation must, however, be within the bounds of reason, i.e., the
regulatory ordinance must be reasonable, and its provision cannot be oppressive amounting to an arbitrary
interference with the business or calling subject of regulation. A lawful business or calling may not, under the guise
of regulation, be unreasonably interfered with even by the exercise of police power. . . .
xxx

xxx

xxx

. . . The exercise of police power by the local government is valid unless it contravenes the fundamental law of the
land or an act of the legislature, or unless it is against public policy or is unreasonable, oppressive, partial,
discriminating or in derogation of a common right. 6
In the case under consideration, the business permit granted by respondent City Mayor to petitioner was burdened with
several conditions. Petitioner agrees with the holding by the Court of Appeals that respondent City Mayor acted beyond his
authority in imposing such special conditions in its permit as the same have no basis in the law or ordinance. Public
respondents and private respondent SOPI, on the other hand, are one in saying that the imposition of said special conditions
on petitioner's business permit is well within the authority of the City Mayor as a valid exercise of police power.
As aptly discussed by the Solicitor General in his Comment, the power to issue licenses and permits necessarily includes the
corollary power to revoke, withdraw or cancel the same. And the power to revoke or cancel, likewise includes the power to
restrict through the imposition of certain conditions. In the case of Austin-Hardware, Inc. vs.Court of Appeals, 7 it was held
that the power to license carries with it the authority to provide reasonable terms and conditions under which the licensed
business shall be conducted. As the Solicitor General puts it:
If the City Mayor is empowered to grant or refuse to grant a license, which is a broader power, it stands to reason
that he can also exercise a lesser power that is reasonably incidental to his express power, i.e. to restrict a license
through the imposition of certain conditions, especially so that there is no positive prohibition to the exercise of

such prerogative by the City Mayor, nor is there any particular official or body vested with such authority. 8
However, the present inquiry does not stop there, as the Solicitor General believes. The power or authority of the City
Mayor to impose conditions or restrictions in the business permit is indisputable. What petitioner assails are the conditions
imposed in its particular case which, it complains, amount to a confiscation of the business in which petitioner is engaged.
Distinction must be made between the grant of a license or permit to do business and the issuance of a license to engage in
the practice of a particular profession. The first is usually granted by the local authorities and the second is issued by the
Board or Commission tasked to regulate the particular profession. A business permit authorizes the person, natural or
otherwise, to engage in business or some form of commercial activity. A professional license, on the other hand, is the grant
of authority to a natural person to engage in the practice or exercise of his or her profession.
In the case at bar, what is sought by petitioner from respondent City Mayor is a permit to engage in the business of running
an optical shop. It does not purport to seek a license to engage in the practice of optometry as a corporate body or entity,
although it does have in its employ, persons who are duly licensed to practice optometry by the Board of Examiners in
Optometry.
The case of Samahan ng Optometrists sa Pilipinas vs. Acebedo International Corporation, G.R. No. 117097, 9promulgated
by this Court on March 21, 1997, is in point. The factual antecedents of that case are similar to those of the case under
consideration and the issue ultimately resolved therein is exactly the same issue posed for resolution by this Court en banc.
In the said case, the Acebedo International Corporation filed with the Office of the Municipal Mayor an application for a
business permit for the operation of a branch of Acebedo Optical in Candon, Ilocos Sur. The application was opposed by the
Samahan ng Optometrists sa Pilipinas-Ilocos Sur Chapter, theorizing that Acebedo is a juridical entity not qualified to
practice optometry. A committee was created by the Office of the Mayor to study private respondent's application. Upon
recommendation of the said committee, Acebedo's application for a business permit was denied. Acebedo filed a petition
with the Regional Trial Court but the same was dismissed. On appeal, however, the Court of Appeals reversed the trial
court's disposition, prompting the Samahan ng Optometrists to elevate the matter to this Court.
The First Division of this Court, then composed of Honorable Justice Teodoro Padilla, Josue Bellosillo, Jose Vitug and
Santiago Kapunan, with Honorable Justice Regino Hermosisima, Jr. as ponente, denied the petition and ruled in favor of
respondent Acebedo International Corporation, holding that "the fact that private respondent hires optometrists who practice
their profession in the course of their employment in private respondent's optical shops, does not translate into a practice of
optometry by private respondent itself," 10 The Court further elucidated that in both the old and new Optometry Law, R.A.
No. 1998, superseded by R.A. No. 8050, it is significant to note that there is no prohibition against the hiring by
corporations of optometrists. The Court concluded thus:
All told, there is no law that prohibits the hiring by corporations of optometrists or considers the hiring by
corporations of optometrists as a practice by the corporation itself of the profession of optometry.
In the present case, the objective of the imposition of subject conditions on petitioner's business permit could be attained by
requiring the optometrists in petitioner's employ to produce a valid certificate of registration as optometrist, from the Board
of Examiners in Optometry. A business permit is issued primarily to regulate the conduct of business and the City Mayor
cannot, through the issuance of such permit, regulate the practice of a profession, like that of optometry. Such a function is
within the exclusive domain of the administrative agency specifically empowered by law to supervise the profession, in this
case the Professional Regulations Commission and the Board of Examiners in Optometry.
It is significant to note that during the deliberations of the bicameral conference committee of the Senate and the House of
Representatives on R.A. 8050 (Senate Bill No. 1998 and House Bill No. 14100), the committee failed to reach a consensus
as to the prohibition on indirect practice of optometry by corporations. The proponent of the bill, former Senator Freddie
Webb, admitted thus:
Senator Webb: xxx xxx xxx

The focus of contention remains to be the proposal of prohibiting the indirect practice of optometry by
corporations.1wphi1 We took a second look and even a third look at the issue in the bicameral conference, but a
compromise remained elusive. 11
Former Senator Leticia Ramos-Shahani likewise voted her reservation in casting her vote:
Senator Shahani: Mr. President.
The optometry bills have evoked controversial views from the members of the panel. While we realize the need to
uplift the standards of optometry as a profession, the consesnsus of both Houses was to avoid touching sensitive
issues which properly belong to judicial determination. Thus, the bicameral conference committee decided to leave
the issue of indirect practice of optometry and the use of trade names open to the wisdom of the Courts which are
vested with the prerogative of interpreting the laws. 12
From the foregoing, it is thus evident that Congress has not adopted a unanimous position on the matter of prohibition of
indirect practice of optometry by corporations, specifically on the hiring and employment of licensed optometrists by optical
corporations. It is clear that Congress left the resolution of such issue for judicial determination, and it is therefore proper
for this Court to resolve the issue.
Even in the United States, jurisprudence varies and there is a conflict of opinions among the federal courts as to the right of
a corporation or individual not himself licensed, to hire and employ licensed optometrists. 13
Courts have distinguished between optometry as a learned profession in the category of law and medicine, and optometry as
a mechanical art. And, insofar as the courts regard optometry as merely a mechanical art, they have tended to find nothing
objectionable in the making and selling of eyeglasses, spectacles and lenses by corporations so long as the patient is actually
examined and prescribed for by a qualified practitioner. 14
The primary purpose of the statute regulating the practice of optometry is to insure that optometrical services are to be
rendered by competent and licensed persons in order to protect the health and physical welfare of the people from the
dangers engendered by unlicensed practice. Such purpose may be fully accomplished although the person rendering the
service is employed by a corporation. 15
Furthermore, it was ruled that the employment of a qualified optometrist by a corporation is not against public
policy. 16 Unless prohibited by statutes, a corporation has all the contractual rights that an individual has 17 and it does not
become the practice of medicine or optometry because of the presence of a physician or optometrist. 18The manufacturing,
selling, trading and bartering of eyeglasses and spectacles as articles of merchandise do not constitute the practice of
optometry. 19
In the case of Dvorine vs. Castelberg Jewelry Corporation, 20 defendant corporation conducted as part of its business, a
department for the sale of eyeglasses and the furnishing of optometrical services to its clients. It employed a registered
optometrist who was compensated at a regular salary and commission and who was furnished instruments and appliances
needed for the work, as well as an office. In holding that corporation was not engaged in the practice of optometry, the court
ruled that there is no public policy forbidding the commercialization of optometry, as in law and medicine, and recognized
the general practice of making it a commercial business by advertising and selling eyeglasses.
To accomplish the objective of the regulation, a state may provide by statute that corporations cannot sell eyeglasses,
spectacles, and lenses unless a duly licensed physician or a duly qualified optometrist is in charge of, and in personal
attendance at the place where such articles are sold. 21 In such a case, the patient's primary and essential safeguard lies in
the optometrist's control of the "treatment" by means of prescription and preliminary and final examination. 22
In analogy, it is noteworthy that private hospitals are maintained by corporations incorporated for the purpose of furnishing
medical and surgical treatment. In the course of providing such treatments, these corporations employ physicians, surgeons
and medical practitioners, in the same way that in the course of manufacturing and selling eyeglasses, eye frames and
optical lenses, optical shops hire licensed optometrists to examine, prescribe and dispense ophthalmic lenses. No one has

ever charged that these corporations are engaged in the practice of medicine. There is indeed no valid basis for treating
corporations engaged in the business of running optical shops differently.
It also bears stressing, as petitioner has pointed out, that the public and private respondents did not appeal from the ruling of
the Court of Appeals. Consequently, the holding by the Court of Appeals that the act of respondent City Mayor in imposing
the questioned special conditions on petitioner's business permit is ultra vires cannot be put into issue here by the
respondents. It is well-settled that:
A party who has not appealed from the decision may not obtain any affirmative relief from the appellate court other
than what he had obtain from the lower court, if any, whose decision is brought up on appeal. 23
. . . an appellee who is not an appellant may assign errors in his brief where his purpose is to maintain the judgment
on other grounds, but he cannot seek modification or reversal of the judgment or affirmative relief unless he has
also appealed. 24
Thus, respondents' submission that the imposition of subject special conditions on petitioner's business permit is not ultra
vires cannot prevail over the finding and ruling by the Court of Appeals from which they (respondents) did not appeal.
Anent the second assigned error, petitioner maintains that its business permit issued by the City Mayor is not a contract
entered into by Iligan City in the exercise of its proprietary functions, such that although petitioner agreed to such
conditions, it cannot be held in estoppel since ultra vires acts cannot be given effect.
Respondents, on the other hand, agree with the ruling of the Court of Appeals that the business permit in question is in the
nature of a contract between Iligan City and the herein petitioner, the terms and conditions of which are binding upon
agreement, and that petitioner is estopped from questioning the same. Moreover, in the Resolution denying petitioner's
motion for reconsideration, the Court of Appeals held that the contract between the petitioner and the City of Iligan was
entered into by the latter in the performance of its proprietary functions.
This Court holds otherwise. It had occasion to rule that a license or permit is not in the nature of a contract but a special
privilege.
. . . a license or a permit is not a contract between the sovereignty and the licensee or permitee, and is not a
property in the constitutional sense, as to which the constitutional proscription against impairment of the obligation
of contracts may extend. A license is rather in the nature of a special privilege, of a permission or authority to do
what is within its terms. It is not in any way vested, permanent or absolute. 25
It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner acquiesced in the special
conditions imposed by the City Mayor in subject business permit does not preclude it from challenging the said imposition,
which is ultra vires or beyond the ambit of authority of respondent City Mayor. Ultra vires acts or acts which are clearly
beyond the scope of one's authority are null and void and cannot be given any effect. The doctrine of estoppel cannot
operate to give effect to an act which is otherwise null and void or ultra vires.
The Court of Appeals erred in adjudging subject business permit as having been issued by responded City Mayor in the
performance of proprietary functions of Iligan City. As hereinabove elaborated upon, the issuance of business licenses and
permits by a municipality or city is essentially regulatory in nature. The authority, which devolved upon local government
units to issue or grant such licenses or permits, is essentially in the exercise of the police power of the State within the
contemplation of the general welfare clause of the Local Government Code.
WHEREFORE, the petition is GRANTED; the Decision of the Court of Appeals in CA-GR SP No. 22995 REVERSED: and
the respondent City Mayor is hereby ordered to reissue petitioner's business permit in accordance with law and with this
disposition. No pronouncement as to costs.
SO ORDERED.

G.R. No. L-59234 September 30, 1982

TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO CABIGAO and ACE TRANSPORTATION
CORPORATION, petitioners,
vs.
THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU OF LAND
TRANSPORTATION,respondents.
MELENCIO-HERRERA, J.:
This Petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction and Temporary Restraining Order"
filed by the Taxicab Oper
tors of Metro Manila, Inc., Felicisimo Cabigao and Ace Transportation, seeks to declare the nullity of Memorandum
Circular No. 77-42, dated October 10, 1977, of the Board of Transportation, and Memorandum Circular No. 52, dated
August 15, 1980, of the Bureau of Land Transportation.
Petitioner Taxicab Operators of Metro Manila

ates of Public Convenience to operate taxicabs within the City of Manila and to any other place in Luzon accessible to
vehicular traffic. Petitioners Ace Transportation Corporation and Felicisimo Cabigao are two of the members of TOMMI,
each being an operator and grantee of such certificate of public convenience.
On October 10, 1977, respondent Board of Transportation (BOT) issued Memorandum Circular No. 77-42 which reads:
SUBJECT: Phasing out and Replacement of
Old and Dilapidated Taxis
WHEREAS, it is the policy of the government to insure that only safe and comfortable units are used as
public conveyances;
WHEREAS, the riding public, particularly in Metro-Manila, has, time and again, complained against, and
condemned, the continued operation of old and dilapidated taxis;
WHEREAS, in order that the commuting public may be assured of comfort, convenience, and safety, a
program of phasing out of old and dilapidated taxis should be adopted;
WHEREAS, after studies and inquiries made by the Board of Transportation, the latter believes that in six
years of operation, a taxi operator has not only covered the cost of his taxis, but has made reasonable
profit for his investments;
NOW, THEREFORE, pursuant to this policy, the Board hereby declares that no car beyond six years shall
be operated as taxi, and in implementation of the same hereby promulgates the following rules and
regulations:
1. As of December 31, 1977, all taxis of Model 1971 and earlier are ordered withdrawn from public
service and thereafter may no longer be registered and operated as taxis. In the registration of cards for
1978, only taxis of Model 1972 and later shall be accepted for registration and allowed for operation;
2. As of December 31, 1978, all taxis of Model 1972 are ordered withdrawn from public service and
thereafter may no longer be registered and operated as taxis. In the registration of cars for 1979, only taxis
of Model 1973 and later shall be accepted for registration and allowed for operation; and every year
thereafter, there shall be a six-year lifetime of taxi, to wit:
1980 Model 1974
1981 Model 1975, etc.
All taxis of earlier models than those provided above are hereby ordered withdrawn from public service as
of the last day of registration of each particular year and their respective plates shall be surrendered
directly to the Board of Transportation for subsequent turnover to the Land Transportation Commission.
For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be
effective in Metro-Manila. Its implementation outside Metro- Manila shall be carried out only after the
project has been implemented in Metro-Manila and only after the date has been determined by the
Board. 1
Pursuant to the above BOT circular, respondent Director of the Bureau of Land Transportation (BLT) issued Implementing
Circular No. 52, dated August 15, 1980, instructing the Regional Director, the MV Registrars and other personnel of BLT,
all within the National Capitol Region, to implement said Circular, and formulating a schedule of phase-out of vehicles to
be allowed and accepted for registration as public conveyances. To quote said Circular:
Pursuant to BOT Memo-Circular No. 77-42, taxi units with year models over six (6) years old are now
banned from operating as public utilities in Metro Manila. As such the units involved should be considered
as automatically dropped as public utilities and, therefore, do not require any further dropping order from

the BOT.
Henceforth, taxi units within the National Capitol Region having year models over 6 years old shall be
refused registration. The following schedule of phase-out is herewith prescribed for the guidance of all
concerned:
Year Model

Automatic
Phase-Out Year

1980

1974

1981

1975

1982

1976

1983

1977

etc.

etc.

Strict compliance here is desired. 2

In accordance therewith, cabs of model 1971 were phase-out in registration year 1978; those of model 1972, in 1979; those
of model 1973, in 1980; and those of model 1974, in 1981.
On January 27, 1981, petitioners filed a Petition with the BOT, docketed as Case No. 80-7553, seeking to nullify MC No.
77-42 or to stop its implementation; to allow the registration and operation in 1981 and subsequent years of taxicabs of
model 1974, as well as those of earlier models which were phased-out, provided that, at the time of registration, they are
roadworthy and fit for operation.
On February 16, 1981, petitioners filed before the BOT a "Manifestation and Urgent Motion", praying for an early hearing
of their petition. The case was heard on February 20, 1981. Petitioners presented testimonial and documentary evidence,
offered the same, and manifested that they would submit additional documentary proofs. Said proofs were submitted on
March 27, 1981 attached to petitioners' pleading entitled, "Manifestation, Presentation of Additional Evidence and
Submission of the Case for Resolution." 3
On November 28, 1981, petitioners filed before the same Board a "Manifestation and Urgent Motion to Resolve or Decide
Main Petition" praying that the case be resolved or decided not later than December 10, 1981 to enable them, in case of
denial, to avail of whatever remedy they may have under the law for the protection of their interests before their 1975 model
cabs are phased-out on January 1, 1982.
Petitioners, through its President, allegedly made personal follow-ups of the case, but was later informed that the records of
the case could not be located.
On December 29, 1981, the present Petition was instituted wherein the following queries were posed for consideration by
this Court:
A. Did BOT and BLT promulgate the questioned memorandum circulars in accord with the manner

required by Presidential Decree No. 101, thereby safeguarding the petitioners' constitutional right to
procedural due process?
B. Granting, arguendo, that respondents did comply with the procedural requirements imposed by
Presidential Decree No. 101, would the implementation and enforcement of the assailed memorandum
circulars violate the petitioners' constitutional rights to.
(1) Equal protection of the law;
(2) Substantive due process; and
(3) Protection against arbitrary and unreasonable classification and
standard?
On Procedural and Substantive Due Process:
Presidential Decree No. 101 grants to the Board of Transportation the power
4. To fix just and reasonable standards, classification, regulations, practices, measurements, or service to
be furnished, imposed, observed, and followed by operators of public utility motor vehicles.
Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers:
Sec. 2. Exercise of powers. In the exercise of the powers granted in the preceding section, the Board
shag proceed promptly along the method of legislative inquiry.
Apart from its own investigation and studies, the Board, in its discretion, may require the cooperation and
assistance of the Bureau of Transportation, the Philippine Constabulary, particularly the Highway Patrol
Group, the support agencies within the Department of Public Works, Transportation and Communications,
or any other government office or agency that may be able to furnish useful information or data in the
formulation of the Board of any policy, plan or program in the implementation of this Decree.
The Board may also can conferences, require the submission of position papers or other documents,
information, or data by operators or other persons that may be affected by the implementation of this
Decree, or employ any other suitable means of inquiry.
In support of their submission that they were denied procedural due process, petitioners contend that they were not caged
upon to submit their position papers, nor were they ever summoned to attend any conference prior to the issuance of the
questioned BOT Circular.
It is clear from the provision aforequoted, however, that the leeway accorded the Board gives it a wide range of choice in
gathering necessary information or data in the formulation of any policy, plan or program. It is not mandatory that it should
first call a conference or require the submission of position papers or other documents from operators or persons who may
be affected, this being only one of the options open to the Board, which is given wide discretionary authority. Petitioners
cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can they state with certainty
that public respondents had not availed of other sources of inquiry prior to issuing the challenged Circulars. operators of
public conveyances are not the only primary sources of the data and information that may be desired by the BOT.
Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process. As held
in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972):
Pevious notice and hearing as elements of due process, are constitutionally required for the protection of
life or vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of
a judicial or quasi-judicial proceeding, generally dependent upon a past act or event which has to be
established or ascertained. It is not essential to the validity of general rules or regulations promulgated to
govern future conduct of a class or persons or enterprises, unless the law provides otherwise. (Emphasis

supplied)
Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the
roadworthiness of taxicabs depends upon their kind of maintenance and the use to which they are subjected, and, therefore,
their actual physical condition should be taken into consideration at the time of registration. As public contend, however, it
is impractical to subject every taxicab to constant and recurring evaluation, not to speak of the fact that it can open the door
to the adoption of multiple standards, possible collusion, and even graft and corruption. A reasonable standard must be
adopted to apply to an vehicles affected uniformly, fairly, and justly. The span of six years supplies that reasonable standard.
The product of experience shows that by that time taxis have fully depreciated, their cost recovered, and a fair return on
investment obtained. They are also generally dilapidated and no longer fit for safe and comfortable service to the public
specially considering that they are in continuous operation practically 24 hours everyday in three shifts of eight hours per
shift. With that standard of reasonableness and absence of arbitrariness, the requirement of due process has been met.
On Equal Protection of the Law:
Petitioners alleged that the Circular in question violates their right to equal protection of the law because the same is being
enforced in Metro Manila only and is directed solely towards the taxi industry. At the outset it should be pointed out that
implementation outside Metro Manila is also envisioned in Memorandum Circular No. 77-42. To repeat the pertinent
portion:
For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be
effective in Metro Manila. Its implementation outside Metro Manila shall be carried out only after the
project has been implemented in Metro Manila and only after the date has been determined by the
Board. 4
In fact, it is the understanding of the Court that implementation of the Circulars in Cebu City is already being effected, with
the BOT in the process of conducting studies regarding the operation of taxicabs in other cities.
The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs in this city, compared to those of
other places, are subjected to heavier traffic pressure and more constant use. This is of common knowledge. Considering
that traffic conditions are not the same in every city, a substantial distinction exists so that infringement of the equal
protection clause can hardly be successfully claimed.
As enunciated in the preambular clauses of the challenged BOT Circular, the overriding consideration is the safety and
comfort of the riding public from the dangers posed by old and dilapidated taxis. The State, in the exercise, of its police
power, can prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the people.
It can prohibit all things hurtful to comfort, safety and welfare of society. 5 It may also regulate property rights. 6 In the
language of Chief Justice Enrique M. Fernando "the necessities imposed by public welfare may justify the exercise of
governmental authority to regulate even if thereby certain groups may plausibly assert that their interests are disregarded". 7
In so far as the non-application of the assailed Circulars to other transportation services is concerned, it need only be
recalled that the equal protection clause does not imply that the same treatment be accorded all and sundry. It applies to
things or persons Identically or similarly situated. It permits of classification of the object or subject of the law provided
classification is reasonable or based on substantial distinction, which make for real differences, and that it must apply
equally to each member of the class. 8 What is required under the equal protection clause is the uniform operation by legal
means so that all persons under Identical or similar circumstance would be accorded the same treatment both in privilege
conferred and the liabilities imposed. 9 The challenged Circulars satisfy the foregoing criteria.
Evident then is the conclusion that the questioned Circulars do not suffer from any constitutional infirmity. To declare a law
unconstitutional, the infringement of constitutional right must be clear, categorical and undeniable.10
WHEREFORE, the Writs prayed for are denied and this Petition is hereby dismissed. No costs.
SO ORDERED.

G.R. No. L-24153 February 14, 1983

TOMAS VELASCO, petitioners-appellants,
vs.
HON. ANTONIO J. VILLEGAS, respondents-appellees.

FERNANDO, C.J.:
This is an appeal from an order of the lower court dismissing a suit for declaratory relief challenging the constitutionality
based on Ordinance No. 4964 of the City of Manila, the contention being that it amounts to a deprivation of property of
petitioners-appellants of their means of livelihood without due process of law. The assailed ordinance is worded thus: "It
shall be prohibited for any operator of any barber shop to conduct the business of massaging customers or other persons in
any adjacent room or rooms of said barber shop, or in any room or rooms within the same building where the barber shop is
located as long as the operator of the barber shop and the room where massaging is conducted is the same person." 1 As
noted in the appealed order, petitioners-appellants admitted that criminal cases for the violation of this ordinance had been
previously filed and decided. The lower court, therefore, held that a petition for declaratory relief did not lie, its availability
being dependent on there being as yet no case involving such issue having been filed. 2
Even if such were not the case, the attack against the validity cannot succeed. As pointed out in the brief of respondentsappellees, it is a police power measure. The objectives behind its enactment are: "(1) To be able to impose payment of the
license fee for engaging in the business of massage clinic under Ordinance No. 3659 as amended by Ordinance 4767, an
entirely different measure than the ordinance regulating the business of barbershops and, (2) in order to forestall possible
immorality which might grow out of the construction of separate rooms for massage of customers." 3 This Court has been
most liberal in sustaining ordinances based on the general welfare clause. As far back as U.S. v. Salaveria, 4 a 1918
decision, this Court through Justice Malcolm made clear the significance and scope of such a clause, which "delegates in
statutory form the police power to a municipality. As above stated, this clause has been given wide application by municipal
authorities and has in its relation to the particular circumstances of the case been liberally construed by the courts. Such, it is

well to really is the progressive view of Philippine jurisprudence." 5 As it was then, so it has continued to be. 6 There is no
showing, therefore, of the unconstitutionality of such ordinance.
WHEREFORE, the appealed order of the lower court is affirmed. No costs.

G.R. No. 111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION,respondents.

CRUZ, J.:
There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City. Civic
organizations angrily denounced the project. The religious elements echoed the objection and so did the women's groups
and the youth. Demonstrations were led by the mayor and the city legislators. The media trumpeted the protest, describing
the casino as an affront to the welfare of the city.
The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided to expand its
operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging to Pryce Properties Corporation,
Inc., one of the herein private respondents, renovated and equipped the same, and prepared to inaugurate its casino there
during the Christmas season.
The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7, 1992, it
enacted Ordinance No. 3353 reading as follows:
ORDINANCE NO. 3353
AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND CANCELLING
EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR THE USING AND ALLOWING
TO BE USED ITS PREMISES OR PORTION THEREOF FOR THE OPERATION OF CASINO.
BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in session assembled
that:

Sec. 1. That pursuant to the policy of the city banning the operation of casino within its territorial
jurisdiction, no business permit shall be issued to any person, partnership or corporation for the operation
of casino within the city limits.
Sec. 2. That it shall be a violation of existing business permit by any persons, partnership or
corporation to use its business establishment or portion thereof, or allow the use thereof by others for
casino operation and other gambling activities.
Sec. 3. PENALTIES. Any violation of such existing business permit as defined in the preceding
section shall suffer the following penalties, to wit:
a) Suspension of the business permit for sixty (60) days for the first
offense and a fine of P1,000.00/day
b) Suspension of the business permit for Six (6) months for the second
offense, and a fine of P3,000.00/day
c) Permanent revocation of the business permit and imprisonment of
One (1) year, for the third and subsequent offenses.
Sec. 4. This Ordinance shall take effect ten (10) days from publication thereof.
Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:
ORDINANCE NO. 3375-93
AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING PENALTY FOR
VIOLATION THEREFOR.
WHEREAS, the City Council established a policy as early as 1990 against CASINO under its Resolution
No. 2295;
WHEREAS, on October 14, 1992, the City Council passed another Resolution No. 2673, reiterating its
policy against the establishment of CASINO;
WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353, prohibiting the issuance of
Business Permit and to cancel existing Business Permit to any establishment for the using and allowing to
be used its premises or portion thereof for the operation of CASINO;
WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local Government Code of 1991
(Rep. Act 7160) and under Art. 99, No. (4), Paragraph VI of the implementing rules of the Local
Government Code, the City Council as the Legislative Body shall enact measure to suppress any activity
inimical to public morals and general welfare of the people and/or regulate or prohibit such activity
pertaining to amusement or entertainment in order to protect social and moral welfare of the community;
NOW THEREFORE,
BE IT ORDAINED by the City Council in session duly assembled that:
Sec. 1. The operation of gambling CASINO in the City of Cagayan de Oro is hereby prohibited.
Sec. 2. Any violation of this Ordinance shall be subject to the following penalties:
a) Administrative fine of P5,000.00 shall be imposed against the proprietor, partnership or corporation
undertaking the operation, conduct, maintenance of gambling CASINO in the City and closure thereof;
b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in the amount of
P5,000.00 or both at the discretion of the court against the manager, supervisor, and/or any person

responsible in the establishment, conduct and maintenance of gambling CASINO.

Sec. 3. This Ordinance shall take effect ten (10) days after its publication in a local newspaper of
general circulation.
Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and supplemental
petitioner. Their challenge succeeded. On March 31, 1993, the Court of Appeals declared the ordinances invalid and issued
the writ prayed for to prohibit their enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2
Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the Rules of
Court. 3 They aver that the respondent Court of Appeals erred in holding that:
1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro does not have the
power and authority to prohibit the establishment and operation of a PAGCOR gambling casino within the
City's territorial limits.
2. The phrase "gambling and other prohibited games of chance" found in Sec. 458, par. (a), sub-par. (1)
(v) of R.A. 7160 could only mean "illegal gambling."
3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that point.
4. The questioned Ordinances are discriminatory to casino and partial to cockfighting and are therefore
invalid on that point.
5. The questioned Ordinances are not reasonable, not consonant with the general powers and purposes of
the instrumentality concerned and inconsistent with the laws or policy of the State.
6. It had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R. No. 91649, May
14, 1991, 197 SCRA 53 in disposing of the issues presented in this present case.
PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of chance, including
casinos on land and sea within the territorial jurisdiction of the Philippines. In Basco v. Philippine Amusements and Gaming
Corporation, 4 this Court sustained the constitutionality of the decree and even cited the benefits of the entity to the national
economy as the third highest revenue-earner in the government, next only to the BIR and the Bureau of Customs.
Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in
the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare
Clause now embodied in Section 16 as follows:
Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted,
those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient
and effective governance, and those which are essential to the promotion of the general welfare. Within
their respective territorial jurisdictions, local government units shall ensure and support, among other
things, the preservation and enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of appropriate and self-reliant
scientific and technological capabilities, improve public morals, enhance economic prosperity and social
justice, promote full employment among their residents, maintain peace and order, and preserve the
comfort and convenience of their inhabitants.
In addition, Section 458 of the said Code specifically declares that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang Panlungsod, as the
legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the
general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper
exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:

(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and
in this connection, shall:
xxx xxx xxx
(v) Enact ordinances intended to prevent, suppress and impose
appropriate penalties for habitual drunkenness in public places,
vagrancy, mendicancy, prostitution, establishment and maintenance of
houses of ill repute,gambling and other prohibited games of chance,
fraudulent devices and ways to obtain money or property, drug
addiction, maintenance of drug dens, drug pushing, juvenile
delinquency, the printing, distribution or exhibition of obscene or
pornographic materials or publications, and such other activities
inimical to the welfare and morals of the inhabitants of the city;
This section also authorizes the local government units to regulate properties and businesses within their territorial limits in
the interest of the general welfare. 5
The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the operation of casinos
because they involve games of chance, which are detrimental to the people. Gambling is not allowed by general law and
even by the Constitution itself. The legislative power conferred upon local government units may be exercised over all kinds
of gambling and not only over "illegal gambling" as the respondents erroneously argue. Even if the operation of casinos
may have been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to prohibit them within
its territory pursuant to the authority entrusted to it by the Local Government Code.
It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in Article II, Section 25,
and Article X of the Constitution, as well as various other provisions therein seeking to strengthen the character of the
nation. In giving the local government units the power to prevent or suppress gambling and other social problems, the Local
Government Code has recognized the competence of such communities to determine and adopt the measures best expected
to promote the general welfare of their inhabitants in line with the policies of the State.
The petitioners also stress that when the Code expressly authorized the local government units to prevent and suppress
gambling and other prohibited games of chance, like craps, baccarat, blackjack and roulette, it meant allforms of gambling
without distinction. Ubi lex non distinguit, nec nos distinguere debemos. 6 Otherwise, it would have expressly excluded
from the scope of their power casinos and other forms of gambling authorized by special law, as it could have easily done.
The fact that it did not do so simply means that the local government units are permitted to prohibit all kinds of gambling
within their territories, including the operation of casinos.
The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter of the PAGCOR. The
Code is not only a later enactment than P.D. 1869 and so is deemed to prevail in case of inconsistencies between them. More
than this, the powers of the PAGCOR under the decree are expressly discontinued by the Code insofar as they do not
conform to its philosophy and provisions, pursuant to Par. (f) of its repealing clause reading as follows:
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this
Code are hereby repealed or modified accordingly.
It is also maintained that assuming there is doubt regarding the effect of the Local Government Code on P.D. 1869, the
doubt must be resolved in favor of the petitioners, in accordance with the direction in the Code calling for its liberal
interpretation in favor of the local government units. Section 5 of the Code specifically provides:
Sec. 5. Rules of Interpretation. In the interpretation of the provisions of this Code, the following rules
shall apply:

(a) Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in
case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower
local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted
in favor of the local government unit concerned;
xxx xxx xxx
(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local
government units in accelerating economic development and upgrading the quality of life for the people in
the community; . . . (Emphasis supplied.)
Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the Constitution and
several decisions of this Court expressive of the general and official disapprobation of the vice. They invoke the State
policies on the family and the proper upbringing of the youth and, as might be expected, call attention to the old case
of U.S. v. Salaveria, 7 which sustained a municipal ordinance prohibiting the playing of panguingue. The petitioners decry
the immorality of gambling. They also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument")
in creating PAGCOR and authorizing it to operate casinos "on land and sea within the territorial jurisdiction of the
Philippines."
This is the opportune time to stress an important point.
The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally considered inimical
to the interests of the people, there is nothing in the Constitution categorically proscribing or penalizing gambling or, for
that matter, even mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the exercise of its own
discretion, the legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some forms of
gambling and allow others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but
permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its own wisdom, which
this Court has no authority to review, much less reverse. Well has it been said that courts do not sit to resolve the merits of
conflicting theories. 8 That is the prerogative of the political departments. It is settled that questions regarding the wisdom,
morality, or practicibility of statutes are not addressed to the judiciary but may be resolved only by the legislative and
executive departments, to which the function belongs in our scheme of government. That function is exclusive. Whichever
way these branches decide, they are answerable only to their own conscience and the constituents who will ultimately judge
their acts, and not to the courts of justice.
The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and Ordinance No. 3375-93
as enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And we shall do so only by the criteria laid down by
law and not by our own convictions on the propriety of gambling.
The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid, an ordinance must
conform to the following substantive requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.
3) It must not be partial or discriminatory.
4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the Local Government Code, local government units are authorized to prevent
or suppress, among others, "gambling and other prohibited games of chance." Obviously, this provision excludes games of
chance which are not prohibited but are in fact permitted by law. The petitioners are less than accurate in claiming that the

Code could have excluded such games of chance but did not. In fact it does. The language of the section is clear and
unmistakable. Under the rule of noscitur a sociis, a word or phrase should be interpreted in relation to, or given the same
meaning of, words with which it is associated. Accordingly, we conclude that since the word "gambling" is associated with
"and other prohibited games of chance," the word should be read as referring to only illegal gambling which, like
the other prohibited games of chance, must be prevented or suppressed.
We could stop here as this interpretation should settle the problem quite conclusively. But we will not. The vigorous efforts
of the petitioners on behalf of the inhabitants of Cagayan de Oro City, and the earnestness of their advocacy, deserve more
than short shrift from this Court.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy embodied therein
insofar as they prevent PAGCOR from exercising the power conferred on it to operate a casino in Cagayan de Oro City. The
petitioners have an ingenious answer to this misgiving. They deny that it is the ordinances that have changed P.D. 1869 for
an ordinance admittedly cannot prevail against a statute. Their theory is that the change has been made by the Local
Government Code itself, which was also enacted by the national lawmaking authority. In their view, the decree has been, not
really repealed by the Code, but merely "modified pro tanto" in the sense that PAGCOR cannot now operate a casino over
the objection of the local government unit concerned. This modification of P.D. 1869 by the Local Government Code is
permissible because one law can change or repeal another law.
It seems to us that the petitioners are playing with words. While insisting that the decree has only been "modified pro tanto,"
they are actually arguing that it is already dead, repealed and useless for all intents and purposes because the Code has shorn
PAGCOR of all power to centralize and regulate casinos. Strictly speaking, its operations may now be not only prohibited
by the local government unit; in fact, the prohibition is not only discretionary but mandated by Section 458 of the Code if
the word "shall" as used therein is to be given its accepted meaning. Local government units have now no choice but to
prevent and suppress gambling, which in the petitioners' view includes both legal and illegal gambling. Under this
construction, PAGCOR will have no more games of chance to regulate or centralize as they must all be prohibited by the
local government units pursuant to the mandatory duty imposed upon them by the Code. In this situation, PAGCOR cannot
continue to exist except only as a toothless tiger or a white elephant and will no longer be able to exercise its powers as a
prime source of government revenue through the operation of casinos.
It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently discarding the rest of the
provision which painstakingly mentions the specific laws or the parts thereof which are repealed (or modified) by the Code.
Significantly, P.D. 1869 is not one of them. A reading of the entire repealing clause, which is reproduced below, will
disclose the omission:
Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as the "Local Government
Code," Executive Order No. 112 (1987), and Executive Order No. 319 (1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions, memoranda and
issuances related to or concerning the barangay are hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund; Section 3, a
(3) and b (2) of Republic Act. No. 5447 regarding the Special Education Fund; Presidential Decree No.
144 as amended by Presidential Decree Nos. 559 and 1741; Presidential Decree No. 231 as amended;
Presidential Decree No. 436 as amended by Presidential Decree No. 558; and Presidential Decree Nos.
381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded projects.
(e) The following provisions are hereby repealed or amended insofar as they are inconsistent with the
provisions of this Code: Sections 2, 16, and 29 of Presidential Decree No. 704; Sections 12 of Presidential
Decree No. 87, as amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree
No. 463, as amended; and Section 16 of Presidential Decree No. 972, as amended, and

(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this
Code are hereby repealed or modified accordingly.
Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear and unmistakable
showing of such intention. In Lichauco & Co. v. Apostol, 10 this Court explained:
The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of
later date clearly reveals an intention on the part of the lawmaking power to abrogate the prior law, this
intention must be given effect; but there must always be a sufficient revelation of this intention, and it has
become an unbending rule of statutory construction that the intention to repeal a former law will not be
imputed to the Legislature when it appears that the two statutes, or provisions, with reference to which the
question arises bear to each other the relation of general to special.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private respondent points out,
PAGCOR is mentioned as the source of funding in two later enactments of Congress, to wit, R.A. 7309, creating a Board of
Claims under the Department of Justice for the benefit of victims of unjust punishment or detention or of violent crimes, and
R.A. 7648, providing for measures for the solution of the power crisis. PAGCOR revenues are tapped by these two statutes.
This would show that the PAGCOR charter has not been repealed by the Local Government Code but has in fact been
improved as it were to make the entity more responsive to the fiscal problems of the government.
It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably destructive
confrontation, courts must exert every effort to reconcile them, remembering that both laws deserve a becoming respect as
the handiwork of a coordinate branch of the government. On the assumption of a conflict between P.D. 1869 and the Code,
the proper action is not to uphold one and annul the other but to give effect to both by harmonizing them if possible. This is
possible in the case before us. The proper resolution of the problem at hand is to hold that under the Local Government
Code, local government units may (and indeed must) prevent and suppress all kinds of gambling within their territories
except only those allowed by statutes like P.D. 1869. The exception reserved in such laws must be read into the Code, to
make both the Code and such laws equally effective and mutually complementary.
This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and those authorized by law.
Legalized gambling is not a modern concept; it is probably as old as illegal gambling, if not indeed more so. The petitioners'
suggestion that the Code authorizes them to prohibit all kinds of gambling would erase the distinction between these two
forms of gambling without a clear indication that this is the will of the legislature. Plausibly, following this theory, the City
of Manila could, by mere ordinance, prohibit the Philippine Charity Sweepstakes Office from conducting a lottery as
authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro Hippodrome as authorized by R.A. 309 and R.A.
983.
In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the petitioners that the
ordinances in question are valid. On the contrary, we find that the ordinances violate P.D. 1869, which has the character and
force of a statute, as well as the public policy expressed in the decree allowing the playing of certain games of chance
despite the prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are
only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by
Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than
those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they
have derived their power in the first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature.
It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. As
it may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the
legislature might, by a single act, and if we can suppose it capable of so great a folly and so great a wrong,

sweep from existence all of the municipal corporations in the State, and the corporation could not prevent
it. We know of no limitation on the right so far as to the corporation themselves are concerned. They are,
so to phrase it, the mere tenants at will of the legislature. 11
This basic relationship between the national legislature and the local government units has not been enfeebled by the new
provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy, we
here confirm that Congress retains control of the local government units although in significantly reduced degree now than
under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes
the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on
the local government units of the power to tax, 12which cannot now be withdrawn by mere statute. By and large, however,
the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.
The Court understands and admires the concern of the petitioners for the welfare of their constituents and their
apprehensions that the welfare of Cagayan de Oro City will be endangered by the opening of the casino. We share the view
that "the hope of large or easy gain, obtained without special effort, turns the head of the workman"13 and that "habitual
gambling is a cause of laziness and ruin." 14 In People v. Gorostiza, 15 we declared: "The social scourge of gambling must
be stamped out. The laws against gambling must be enforced to the limit." George Washington called gambling "the child of
avarice, the brother of iniquity and the father of mischief." Nevertheless, we must recognize the power of the legislature to
decide, in its own wisdom, to legalize certain forms of gambling, as was done in P.D. 1869 and impliedly affirmed in the
Local Government Code. That decision can be revoked by this Court only if it contravenes the Constitution as the
touchstone of all official acts. We do not find such contravention here.
We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos on land and sea within
the territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has not been modified by the Local Government
Code, which empowers the local government units to prevent or suppress only those forms of gambling prohibited by law.
Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a
mere ordinance. Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance
No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation
of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy announced
therein and are therefore ultra vires and void.
WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of Appeals is AFFIRMED,
with costs against the petitioners. It is so ordered.

G.R. No. 110249 August 21, 1997

ALFREDO TANO, petitioners,
vs.
HON. GOV. SALVADOR P. SOCRATES, respondents.
DAVIDE, JR., J.:

Petitioners caption their petition as one for "Certiorari, Injunction With Preliminary and Mandatory Injunction, with Prayer
for Temporary Restraining Order" and pray that this Court: (1) declare as unconstitutional: (a) Ordinance No. 15-92, dated
15 December 1992, of the Sangguniang Panglungsod of Puerto Princesa; (b) Office Order No. 23, Series of 1993, dated 22
January 1993, issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City; and (c) Resolution No. 33, Ordinance
No. 2, Series of 1993, dated 19 February 1993, of the Sangguniang Panlalawigan of Palawan; (2) enjoin the enforcement
thereof; and (3) restrain respondents Provincial and City Prosecutors of Palawan and Puerto Princesa City and Judges of the
Regional Trial Courts, Metropolitan Trial Courts 1 and Municipal Circuit Trial Courts in Palawan from assuming
jurisdiction over and hearing cases concerning the violation of the Ordinances and of the Office Order.
More appropriately, the petition is, and shall be treated as, a special civil action for certiorari and prohibition.
The following is petitioners' summary of the factual antecedents giving rise to the petition:
1. On December 15, 1992, the Sangguniang Panlungsod ng Puerto Princesa City enacted Ordinance No. 15-92
which took effect on January 1, 1993 entitled: "AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE
FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998
AND PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF", the full text of
which reads as follows:
Sec. 1. Title of the Ordinance. This Ordinance is entitled: AN ORDINANCE BANNING THE
SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY
FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING EXEMPTIONS,
PENALTIES AND FOR OTHER PURPOSES THEREOF.
Sec. 2. Purpose, Scope and Coverage. To effectively free our City Sea Waters from Cyanide
and other Obnoxious substance[s], and shall cover all persons and/or entities operating within and
outside the City of Puerto Princesa who is are (sic) directly or indirectly in the business or
shipment of live fish and lobster outside the City.
Sec. 3. Definition of terms. For purpose of this Ordinance the following are hereby defined:
A. SEA BASS A kind of fish under the family of
Centropomidae, better known as APAHAP;
B. CATFISH A kind of fish under the family of Plotosidae,
better known as HITO-HITO;
C. MUDFISH A kind of fish under the family of
Orphicaphalisae better known as DALAG;
D. ALL LIVE FISH All alive, breathing not necessarily
moving of all specie[s] use[d] for food and for aquarium
purposes.
E. LIVE LOBSTER Several relatively, large marine
crusteceans [sic] of the genus Homarus that are alive and
breathing not necessarily moving.
Sec. 4. It shall be unlawful [for] any person or any business enterprise or company to ship out
from Puerto Princesa City to any point of destination either via aircraft or seacraft of any live fish
and lobster except SEA BASS, CATFISH, MUDFISH, AND MILKFISH FRIES.
Sec. 5. Penalty Clause. Any person/s and or business entity violating this Ordinance shall be
penalized with a fine of not more than P5,000.00 or imprisonment of not more than twelve (12)
months, cancellation of their permit to do business in the City of Puerto Princesa or all of the

herein stated penalties, upon the discretion of the court.

Sec. 6. If the owner and/or operator of the establishment found violating the provisions of this
ordinance is a corporation or a partnership, the penalty prescribed in Section 5 hereof shall be
imposed upon its president and/or General Manager or Managing Partner and/or Manager, as the
case maybe [sic].
Sec. 7. Any existing ordinance or any provision of any ordinance inconsistent to [ sic] this
ordinance is deemed repealed.
Sec. 8. This Ordinance shall take effect on January 1, 1993.
SO ORDAINED.
xxx xxx xxx
2. To implement said city ordinance, then Acting City Mayor Amado L. Lucero issued Office Order No. 23, Series
of 1993 dated January 22, 1993 which reads as follows:
In the interest of public service and for purposes of City Ordinance No. PD 426-14-74, otherwise known as "AN
ORDINANCE REQUIRING ANY PERSON ENGAGED OR INTENDING TO ENGAGE IN ANY BUSINESS,
TRADE, OCCUPATION, CALLING OR PROFESSION OR HAVING IN HIS POSSESSION ANY OF THE
ARTICLES FOR WHICH A PERMIT IS REQUIRED TO BE HAD, TO OBTAIN FIRST A MAYOR'S PERMIT"
and "City Ordinance No. 15-92, AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND
LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998, you are
hereby authorized and directed to check or conduct necessary inspections on cargoes containing live fish and
lobster being shipped out from the Puerto Princesa Airport, Puerto Princesa Wharf or at any port within the
jurisdiction of the City to any point of destinations [sic] either via aircraft or seacraft.
The purpose of the inspection is to ascertain whether the shipper possessed the required Mayor's Permit issued by
this Office and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheries
and Aquatic Resources and as to compliance with all other existing rules and regulations on the matter.
Any cargo containing live fish and lobster without the required documents as stated herein must be held for proper
disposition.
In the pursuit of this Order, you are hereby authorized to coordinate with the PAL Manager, the PPA Manager, the
local PNP Station and other offices concerned for the needed support and cooperation. Further, that the usual
courtesy and diplomacy must be observed at all times in the conduct of the inspection.
Please be guided accordingly.
xxx xxx xxx
3. On February 19, 1993, the Sangguniang Panlalawigan, Provincial Government of Palawan enacted Resolution
No. 33 entitled: "A RESOLUTION PROHIBITING THE CATCHING, GATHERING, POSSESSING, BUYING,
SELLING AND SHIPMENT OF LIVE MARINE CORAL DWELLING AQUATIC ORGANISMS, TO WIT:
FAMILY: SCARIDAE (MAMENG), EPINE
PHELUS
FASCIATUS (SUNO). CROMILEPTES
ALTIVELIS(PANTHER OR SENORITA), LOBSTER BELOW 200 GRAMS AND SPAWNING, TRIDACNA
GIGAS(TAKLOBO), PINCTADA MARGARITEFERA (MOTHER PEARL, OYSTERS, GIANT CLAMS AND
OTHER SPECIES), PENAEUS MONODON (TIGER PRAWN-BREEDER SIZE OR MOTHER), EPINEPHELUS
SUILLUS (LOBA OR GREEN GROUPER) AND FAMILY: BALISTIDAE (TROPICAL AQUARIUM FISHES)
FOR A PERIOD FIVE (5) YEARS IN AND COMING FROM PALAWAN WATERS", the full text of which reads
as follows:
WHEREAS, scientific and factual researches [sic] and studies disclose that only five (5) percent

of the corals of our province remain to be in excellent condition as [a] habitat of marine coral
dwelling aquatic organisms;
WHEREAS, it cannot be gainsaid that the destruction and devastation of the corals of our
province were principally due to illegal fishing activities like dynamite fishing, sodium cyanide
fishing, use of other obnoxious substances and other related activities;
WHEREAS, there is an imperative and urgent need to protect and preserve the existence of the
remaining excellent corals and allow the devastated ones to reinvigorate and regenerate
themselves into vitality within the span of five (5) years;
WHEREAS, Sec. 468, Par. 1, Sub-Par. VI of the [sic] R.A. 7160 otherwise known as the Local
Government Code of 1991 empowers the Sangguniang Panlalawigan to protect the environment
and impose appropriate penalties [upon] acts which endanger the environment such as dynamite
fishing and other forms of destructive fishing, among others.
NOW, THEREFORE, on motion by Kagawad Nelson P. Peneyra and upon unanimous decision of
all the members present;
Be it resolved as it is hereby resolved, to approve Resolution No. 33, Series of 1993 of the
Sangguniang Panlalawigan and to enact Ordinance No. 2 for the purpose, to wit:
ORDINANCE NO. 2
Series of 1993
BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN IN SESSION ASSEMBLED:
Sec. 1. TITLE This Ordinance shall be known as an "Ordinance Prohibiting the catching,
gathering, possessing, buying, selling and shipment of live marine coral dwelling aquatic
organisms, to wit: 1. Family: Scaridae (Mameng), 2. Epinephelus Fasciatus (Suno) 3. Cromileptes
altivelis (Panther or Senorita), lobster below 200 grams and spawning), 4. Tridacna Gigas
(Taklobo), 5. Pinctada Margaretefera (Mother Pearl, Oysters, Giant Clams and other species), 6.
Penaeus Monodon (Tiger Prawn-breeder size or mother), 7. Epinephelus Suillus (Loba or Green
Grouper) and 8. Family: Balistidae (T[r]opical Aquarium Fishes) for a period of five (5) years in
and coming from Palawan Waters.
Sec. II. PRELIMINARY CONSIDERATIONS
1. Sec. 2-A (Rep. Act 7160). It is hereby declared, the policy of the state that the territorial and
political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable
them to attain their fullest development as self-reliant communities and make them more effective
partners in the attainment of national goals. Toward this end, the State shall provide for [a] more
responsive and accountable local government structure instituted through a system of
decentralization whereby local government units shall be given more powers, authority,
responsibilities and resources.
2. Sec. 5-A (R.A. 7160). Any provision on a power of [a] local Government Unit shall be liberally
interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of
devolution of powers and of the lower government units. "Any fair and reasonable doubts as to
the existence of the power shall be interpreted in favor of the Local Government Unit concerned."
3. Sec. 5-C (R.A. 7160). The general welfare provisions in this Code shall be liberally interpreted
to give more powers to local government units in accelerating economic development and
upgrading the quality of life for the people in the community.

4. Sec. 16 (R.A. 7160). General Welfare. Every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance; and those which are essential
to the promotion of the general welfare.
Sec. III. DECLARATION OF POLICY. It is hereby declared to be the policy of the Province
of Palawan to protect and conserve the marine resources of Palawan not only for the greatest
good of the majority of the present generation but with [the] proper perspective and consideration
of [sic] their prosperity, and to attain this end, the Sangguniang Panlalawigan henceforth declares
that is (sic) shall be unlawful for any person or any business entity to engage in catching,
gathering, possessing, buying, selling and shipment of live marine coral dwelling aquatic
organisms as enumerated in Section 1 hereof in and coming out of Palawan Waters for a period of
five (5) years;
Sec. IV. PENALTY CLAUSE. Any person and/or business entity violating this Ordinance
shall be penalized with a fine of not more than Five Thousand Pesos (P5,000.00), Philippine
Currency, and/or imprisonment of six (6) months to twelve (12) months and confiscation and
forfeiture of paraphernalias [sic] and equipment in favor of the government at the discretion of
the Court;
Sec. V. SEPARABILITY CLAUSE. If for any reason, a Section or provision of this Ordinance
shall be held as unconditional [sic] or invalid, it shall not affect the other provisions hereof.
Sec. VI. REPEALING CLAUSE. Any existing Ordinance or a provision of any ordinance
inconsistent herewith is deemed modified, amended or repealed.
Sec. VII. EFFECTIVITY This Ordinance shall take effect ten (10) days after its publication.
SO ORDAINED.
xxx xxx xxx
4. The respondents implemented the said ordinances, Annexes "A" and "C" hereof thereby depriving all the
fishermen of the whole province of Palawan and the City of Puerto Princesa of their only means of livelihood and
the petitioners Airline Shippers Association of Palawan and other marine merchants from performing their lawful
occupation and trade;
5. Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, and Felipe
Ongonion, Jr. were even charged criminally under criminal case no. 93-05-C in the 1st Municipal Circuit Trial
Court of Cuyo-Agutaya-Magsaysay, an original carbon copy of the criminal complaint dated April 12, 1993 is
hereto attached as Annex "D"; while xerox copies are attached as Annex "D" to the copies of the petition;
6. Petitioners Robert Lim and Virginia Lim, on the other hand, were charged by the respondent PNP with the
respondent City Prosecutor of Puerto Princess City, a xerox copy of the complaint is hereto attached as Annex "E";
Without seeking redress from the concerned local government units, prosecutor's office and courts, petitioners directly
invoked our original jurisdiction by filing this petition on 4 June 1993. In sum, petitioners contend that:
First, the Ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the practice of
their trade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution.
Second, Office Order No. 23 contained no regulation nor condition under which the Mayor's permit could be granted or
denied; in other words, the Mayor had the absolute authority to determine whether or not to issue the permit.
Third, as Ordinance No. 2 of the Province of Palawan "altogether prohibited the catching, gathering, possession, buying,
selling and shipping of live marine coral dwelling organisms, without any distinction whether it was caught or gathered

through lawful fishing method," the Ordinance took away the right of petitioners-fishermen to earn their livelihood in lawful
ways; and insofar as petitioners-members of Airline Shippers Association are concerned, they were unduly prevented from
pursuing their vocation and entering "into contracts which are proper, necessary, and essential to carry out their business
endeavors to a successful conclusion."
Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and void, the criminal cases based thereon against
petitioners Tano and the others have to be dismissed.
In the Resolution of 15 June 1993 we required respondents to comment on the petition, and furnished the Office of the
Solicitor General with a copy thereof.
In their comment filed on 13 August 1993, public respondents Governor Socrates and Members of the Sangguniang
Panlalawigan of Palawan defended the validity of Ordinance No. 2, Series of 1993, as a valid exercise of the Provincial
Government's power under the general welfare clause (Section 16 of the Local Government Code of 1991 [hereafter,
LGC]), and its specific power to protect the environment and impose appropriate penalties for acts which endanger the
environment, such as dynamite fishing and other forms of destructive fishing under Section 447 (a) (1) (vi), Section 458 (a)
(1) (vi), and Section 468 (a) (1) (vi), of the LGC. They claimed that in the exercise of such powers, the Province of Palawan
had "the right and responsibility . . . to insure that the remaining coral reefs, where fish dwells [sic], within its territory
remain healthy for the future generation." The Ordinance, they further asserted, covered only live marine coral dwelling
aquatic organismswhich were enumerated in the ordinance and excluded other kinds of live marine aquatic organisms not
dwelling in coral reefs; besides the prohibition was for only five (5) years to protect and preserve the pristine coral and
allow those damaged to regenerate.
Aforementioned respondents likewise maintained that there was no violation of the due process and equal protection clauses
of the Constitution. As to the former, public hearings were conducted before the enactment of the Ordinance which,
undoubtedly, had a lawful purpose and employed reasonable means; while as to the latter, a substantial distinction existed
"between a fisherman who catches live fish with the intention of selling it live, and a fisherman who catches live fish with
no intention at all of selling it live," i.e., "the former uses sodium cyanide while the latter does not." Further, the Ordinance
applied equally to all those belonging to one class.
On 25 October 1993 petitioners filed an Urgent Plea for the Immediate Issuance of a Temporary Restraining Order, claiming
that despite the pendency of this case, Branch 50 of the Regional Trial Court of Palawan was bent on proceeding with
Criminal Case No. 11223 against petitioners Danilo Tano, Alfredo Tano, Eulogio Tremocha, Romualdo Tano, Baldomero
Tano, Andres Linijan and Angel de Mesa for violation of Ordinance No. 2 of the Sangguniang Panlalawigan of Palawan.
Acting on said plea, we issued on 11 November 1993 a temporary restraining order directing Judge Angel Miclat of said
court to cease and desist from proceeding with the arraignment and pre-trial of Criminal Case No. 11223.
On 12 July 1994, we excused the Office of the Solicitor General from filing a comment, considering that as claimed by said
office in its Manifestation of 28 June 1994, respondents were already represented by counsel.
The rest of the respondents did not file any comment on the petition.
In the resolution of 15 September 1994, we resolved to consider the comment on the petition as the Answer, gave due
course to the petition and required the parties to submit their respective memoranda. 2
On 22 April 1997 we ordered impleaded as party respondents the Department of Agriculture and the Bureau of Fisheries and
Aquatic Resources and required the Office of the Solicitor General to comment on their behalf. But in light of the latter's
motion of 9 July 1997 for an extension of time to file the comment which would only result in further delay, we dispensed
with said comment.
After due deliberation on the pleadings filed, we resolved to dismiss this petition for want of merit, and on 22 July 1997,
assigned it to the ponente to write the opinion of the Court.
I

There are actually two sets of petitioners in this case. The first is composed of Alfredo Tano, Baldomero Tano, Danilo Tano,
Romualdo Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, Felipe Ongonion, Jr., Andres Linijan, and Felimon
de Mesa, who were criminally charged with violating Sangguniang Panlalawigan Resolution No. 33 and Ordinance No. 2,
Series of 1993, of the Province of Palawan, in Criminal Case No. 93-05-C of the 1st Municipal Circuit Trial Court (MCTC)
of Palawan; 3 and Robert Lim and Virginia Lim who were charged with violating City Ordinance No. 15-92 of Puerto
Princesa City and Ordinance No. 2, Series of 1993, of the Province of Palawan before the Office of the City Prosecutor of
Puerto Princesa. 4 All of them, with the exception of Teocenes Midello, Felipe Ongonion, Jr., Felimon de Mesa, Robert Lim
and Virginia Lim, are likewise the accused in Criminal Case No. 11223 for the violation of Ordinance No. 2 of the
Sangguniang Panlalawigan of Palawan, pending before Branch 50 of the Regional Trial Court of Palawan. 5
The second set of petitioners is composed of the rest of the petitioners numbering seventy-seven (77), all of whom, except
the Airline Shippers Association of Palawan an alleged private association of several marine merchants are natural
persons who claim to be fishermen.
The primary interest of the first set of petitioners is, of course, to prevent the prosecution, trial and determination of the
criminal cases until the constitutionality or legality of the Ordinances they allegedly violated shall have been resolved. The
second set of petitioners merely claim that being fishermen or marine merchants, they would be adversely affected by the
ordinance's.
As to the first set of petitioners, this special civil for certiorari must fail on the ground of prematurity amounting to a lack of
cause of action. There is no showing that said petitioners, as the accused in the criminal cases, have filed motions to quash
the informations therein and that the same were denied. The ground available for such motions is that the facts charged
therein do not constitute an offense because the ordinances in question are unconstitutional. 6 It cannot then be said that the
lower courts acted without or in excess of jurisdiction or with grave abuse of discretion to justify recourse to the
extraordinary remedy of certiorari or prohibition. It must further be stressed that even if petitioners did file motions to
quash, the denial thereof would not forthwith give rise to a cause of action under Rule 65 of the Rules of Court. The general
rule is that where a motion to quash is denied, the remedy therefrom is not certiorari, but for the party aggrieved thereby to
go to trial without prejudice to reiterating special defenses involved in said motion, and if, after trial on the merits an
adverse decision is rendered, to appeal therefrom in the manner authorized by law. 7 And, even where in an exceptional
circumstance such denial may be the subject of a special civil action for certiorari, a motion for reconsideration must have
to be filed to allow the court concerned an opportunity to correct its errors, unless such motion may be dispensed with
because of existing exceptional circumstances. 8Finally, even if a motion for reconsideration has been filed and denied, the
remedy under Rule 65 is still unavailable absent any showing of the grounds provided for in Section 1 thereof. 9 For
obvious reasons, the petition at bar does not, and could not have, alleged any of such grounds.
As to the second set of petitioners, the instant petition is obviously one for DECLARATORY RELIEF, i.e., for a declaration
that the Ordinances in question are a "nullity . . . for being unconstitutional." 10 As such, their petition must likewise fail, as
this Court is not possessed of original jurisdiction over petitions for declaratory relief even if only questions of law are
involved, 11 it being settled that the Court merely exercises appellate jurisdiction over such petitions. 12
II
Even granting arguendo that the first set of petitioners have a cause of action ripe for the extraordinary writ of certiorari,
there is here a clear disregard of the hierarchy of courts, and no special and important reason or exceptional and compelling
circumstance has been adduced why direct recourse to us should be allowed. While we have concurrent jurisdiction with
Regional Trial courts and with the Court of Appeals to issue writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus and injunction, such concurrence gives petitioners no unrestricted freedom of choice of court
forum, so we held in People v. Cuaresma. 13
This concurrence of jurisdiction is not . . . to be taken as according to parties seeking any of the writs an absolute
unrestrained freedom of choice of the court to which application therefor will be directed. There is after all
hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general

determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial
hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level
("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of
Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed
only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is
established policy. It is a policy necessary to prevent inordinate demands upon the Court's time and attention which
are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the
Court's docket. . . .
The Court feels the need to reaffirm that policy at this time, and to enjoin strict adherence thereto in the light of
what it perceives to be a growing tendency on the part of litigants and lawyers to have their applications for the socalled extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and
immediately by the highest tribunal of the land. . . .
In Santiago v. Vasquez, 14 this Court forcefully expressed that the propensity of litigants and lawyers to disregard the
hierarchy of courts must be put to a halt, not only because of the imposition upon the precious time of this Court, but also
because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be
remanded or referred to the lower court, the proper forum under the rules of procedure, or as better equipped to resolve the
issues since this Court is not a trier of facts. We reiterated "the judicial policy that this Court will not entertain direct resort
to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of [its] primary jurisdiction."
III
Notwithstanding the foregoing procedural obstacles against the first set of petitioners, we opt to resolve this case on its
merits considering that the lifetime of the challenged Ordinances is about to end. Ordinance No. 15-92 of the City of Puerto
Princesa is effective only up to 1 January 1998, while Ordinance No. 2 of the Province of Palawan, enacted on 19 February
1993, is effective for only five (5) years. Besides, these Ordinances were undoubtedly enacted in the exercise of powers
under the new LGC relative to the protection and preservation of the environment and are thus novel and of paramount
importance. No further delay then may be allowed in the resolution of the issues raised.
It is of course settled that laws (including ordinances enacted by local government units) enjoy the presumption of
constitutionality. 15 To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution, not
merely a doubtful or argumentative contradiction. In short, the conflict with the Constitution must be shown beyond
reasonable doubt. 16 Where doubt exists, even if well-founded, there can be no finding of unconstitutionality. To doubt is to
sustain. 17
After a scrutiny of the challenged Ordinances and the provisions of the Constitution petitioners claim to have been violated,
we find petitioners' contentions baseless and so hold that the former do not suffer from any infirmity, both under the
Constitution and applicable laws.
Petitioners specifically point to Section 2, Article XII and Sections 2 and 7, Article XIII of the Constitution as having been
transgressed by the Ordinances.
The pertinent portion of Section 2 of Article XII reads:
Sec. 2. . . .
The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic
zone, and reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons.
Sections 2 and 7 of Article XIII provide:

Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities
based on freedom of initiative and self-reliance.
xxx xxx xxx
Sec. 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the
preferential use of the communal marine and fishing resources, both inland and offshore. It shall provide
support to such fishermen through appropriate technology and research, adequate financial, production,
and marketing assistance, and other services. The State shall also protect, develop, and conserve such
resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign
intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing
resources.
There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. In their
petition, petitioner Airline Shippers Association of Palawan is self-described as "a private association composed of
Marine Merchants;" petitioners Robert Lim and Virginia Lim, as "merchants;" while the rest of the petitioners
claim to be "fishermen," without any qualification, however, as to their status.
Since the Constitution does not specifically provide a definition of the terms "subsistence" or "marginal"
fishermen, 18 they should be construed in their general and ordinary sense. A marginal fisherman is an individual
engaged in fishing whose margin of return or reward in his harvest of fish as measured by existing price levels is
barely sufficient to yield a profit or cover the cost of gathering the fish, 19 while a subsistence fisherman is one
whose catch yields but the irreducible minimum for his livelihood. 20 Section 131(p) of the LGC (R.A. No. 7160)
defines a marginal farmer or fisherman as "an individual engaged in subsistence farming or fishing which shall be
limited to the sale, barter or exchange of agricultural or marine products produced by himself and his immediate
family." It bears repeating that nothing in the record supports a finding that any petitioner falls within these
definitions.
Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress
on the duty of the State to protect the nation's marine wealth. What the provision merely recognizes is that the State
may allow, by law, cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes,
bays and lagoons. Our survey of the statute books reveals that the only provision of law which speaks of a
preferential right of marginal fishermen is Section 149 of the LGC, which pertinently provides:
Sec. 149. Fishery Rentals, Fees and Charges. . . .
(b) The sangguniang bayan may:
(1) Grant fishery privileges to erect fish corrals, oyster, mussels or
other aquatic beds or bangus fry areas, within a definite zone of the
municipal waters, as determined by it: Provided, however, That duly
registered organizations and cooperatives of marginal fishermen shall
have the preferential right to such fishery privileges . . . .
In a Joint Administrative Order No. 3 dated 25 April 1996, the Secretary of the Department of Agriculture and the
Secretary of the Department of Interior and Local Government prescribed guidelines concerning the preferential
treatment of small fisherfolk relative to the fishery right mentioned in Section 149. This case, however, does not
involve such fishery right.
Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing resources, but of
their protection, development and conservation. As hereafter shown, the ordinances in question are meant precisely
to protect and conserve our marine resources to the end that their enjoyment may be guaranteed not only for the
present generation, but also for the generations to come.

The so-called "preferential right" of subsistence or marginal fishermen to the use of marine resources is not at all
absolute. In accordance with the Regalian Doctrine, marine resources belong to the State, and, pursuant to the first
paragraph of Section 2, Article XII of the Constitution, their "exploration, development and utilization . . . shall be
under the full control and supervision of the State." Moreover, their mandated protection, development and
conservation as necessarily recognized by the framers of the Constitution, imply certain restrictions on whatever
right of enjoyment there may be in favor of anyone. Thus, as to the curtailment of the preferential treatment of
marginal fishermen, the following exchange between Commissioner Francisco Rodrigo and Commissioner Jose
F.S. Bengzon, Jr., took place at the plenary session of the Constitutional Commission:
MR. RODRIGO:
Let us discuss the implementation of this because I would not raise the hopes of our
people, and afterwards fail in the implementation. How will this be implemented? Will
there be a licensing or giving of permits so that government officials will know that one
is really a marginal fisherman? Or if policeman say that a person is not a marginal
fisherman, he can show his permit, to prove that indeed he is one.
MR. BENGZON:
Certainly, there will be some mode of licensing insofar as this is concerned and this
particular question could be tackled when we discuss the Article on Local Governments
whether we will leave to the local governments or to Congress on how these things
will be implemented. But certainly, I think our congressmen and our local officials will
not be bereft of ideas on how to implement this mandate.
xxx xxx xxx
MR. RODRIGO:
So, once one is licensed as a marginal fisherman, he can go anywhere in the Philippines
and fish in any fishing grounds.
MR. BENGZON:
Subject to whatever rules and regulations and local laws that may be passed, may be
existing or will be passed. 21 (emphasis supplied)
What must likewise be borne in mind is the state policy enshrined in the Constitution regarding the duty of the
State to protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm
and harmony of nature. 22 On this score, in Oposa v. Factoran, 23 this Court declared:
While the right to a balanced and healthful ecology is to be found under the Declaration of Principles the
State Policies and not under the Bill of Rights, it does not follow that it is less important than any of the
civil and political rights enumerated in the latter. Such a right belongs to a different category of rights
altogether for it concerns nothing less than self-preservation and self-perpetuation aptly and fittingly
stressed by the petitioners the advancement of which may even be said to predate all governments and
constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for they
are assumed to exist from the inception of humankind. If they are now explicitly mentioned in the
fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a
balanced and healthful ecology and to health are mandated as state policies by the Constitution itself,
thereby highlighting their continuing importance and imposing upon the state a solemn obligation to
preserve the first and protect and advance the second, the day would not be too far when all else would be
lost not only for the present generation, but also for those to come generations which stand to inherit
nothing but parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing
the environment. . . .
The LGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the people
to a balanced and healthful ecology. In fact, the General Welfare Clause, expressly mentions this right:
Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted,
those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient
and effective governance, and those which are essential to the promotion of the general welfare. Within
their respective territorial jurisdictions, local government units shall ensure and support, among other
things, the preservation and enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of appropriate and self-reliant
scientific and technological capabilities, improve public morals, enhance economic prosperity and social
justice, promote full employment among their residents, maintain peace and order, and preserve the
comfort and convenience of their inhabitants. (emphasis supplied).
Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC "shall be
liberally interpreted to give more powers to the local government units in accelerating economic development and
upgrading the quality of life for the people of the community."
The LGC vests municipalities with the power to grant fishery privileges in municipal waters and impose rentals,
fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous
substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the
provisions of applicable fishery laws. 24 Further, the sangguniang bayan, the sangguniang panlungsod and the
sangguniang panlalawigan are directed to enact ordinances for the general welfare of the municipality and its
inhabitants, which shall include, inter alia, ordinances that "[p]rotect the environment and impose appropriate
penalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing .
. . and such other activities which result in pollution, acceleration of eutrophication of rivers and lakes, or of
ecological
imbalance." 25
Finally, the centerpiece of LGC is the system of decentralization 26 as expressly mandated by the
Constitution.27 Indispensable to decentralization is devolution and the LGC expressly provides that "[a]ny
provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any
question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any
fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit
concerned." 28 Devolution refers to the act by which the National Government confers power and authority upon
the various local government units to perform specific functions and responsibilities. 29
One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of fishery laws
in municipal waters including the conservation of mangroves. 30 This necessarily includes the enactment of
ordinances to effectively carry out such fishery laws within the municipal waters.
The term "municipal waters," in turn, includes not only streams, lakes, and tidal waters within the municipality, not
being the subject of private ownership and not comprised within the national parks, public forest, timber lands,
forest reserves, or fishery reserves, but also marine waters included between two lines drawn perpendicularly to the
general coastline from points where the boundary lines of the municipality or city touch the sea at low tide and a
third
line
parallel
with
the
general
coastline
and
fifteen
kilometers
from
it. 31 Under P.D. No. 704, the marine waters included in municipal waters is limited to three nautical miles from
the general coastline using the above perpendicular lines and a third parallel line.
These "fishery laws" which local government units may enforce under Section 17(b)(2)(i) in municipal waters
include: (1) P.D. No. 704; (2) P.D. No. 1015 which, inter alia, authorizes the establishment of a "closed season" in

any Philippine water if necessary for conservation or ecological purposes; (3) P.D. No. 1219 which provides for the
exploration, exploitation, utilization and conservation of coral resources; (4) R.A. No. 5474, as amended by B.P.
Blg. 58, which makes it unlawful for any person, association or corporation to catch or cause to be caught, sell,
offer to sell, purchase, or have in possession any of the fish specie calledgobiidae or "ipon" during closed season;
and (5) R.A. No. 6451 which prohibits and punishes electrofishing, as well as various issuances of the BFAR.
To those specifically devolved insofar as the control and regulation of fishing in municipal waters and the
protection of its marine environment are concerned, must be added the following:
1. Issuance of permits to construct fish cages within municipal waters;
2. Issuance of permits to gather aquarium fishes within municipal waters;
3. Issuance of permits to gather kapis shells within municipal waters;
4. Issuance of permits to gather/culture shelled mollusks within municipal waters;
5. Issuance of licenses to establish seaweed farms within municipal waters;
6. Issuance of licenses to establish culture pearls within municipal waters;
7. Issuance of auxiliary invoice to transport fish and fishery products; and
8. Establishment of "closed season" in municipal waters.
These functions are covered in the Memorandum of Agreement of 5 April 1994 between the Department of
Agriculture and the Department of Interior and Local Government.
In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted
therein to local government units under Section 16 (the General Welfare Clause), and under Sections 149, 447(a)
(1) (vi), 458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity
of the questioned Ordinances cannot be doubted.
Parenthetically, we wish to add that these Ordinances find full support under R.A. No. 7611, otherwise known as
the Strategic Environmental Plan (SEP) for Palawan Act, approved on 19 June 1992. This statute adopts a
"comprehensive framework for the sustainable development of Palawan compatible with protecting and enhancing
the natural resources and endangered environment of the province," which "shall serve to guide the local
government of Palawan and the government agencies concerned in the formulation and implementation of plans,
programs and projects affecting said province." 32
At this time then, it would be appropriate to determine the relation between the assailed Ordinances and the
aforesaid powers of the Sangguniang Panlungsod of the City of Puerto Princesa and the Sangguniang Panlalawigan
of the Province of Palawan to protect the environment. To begin, we ascertain the purpose of the Ordinances as set
forth in the statement of purposes or declaration of policies quoted earlier.
It is clear to the Court that both Ordinances have two principal objectives or purposes: (1) to establish a "closed
season" for the species of fish or aquatic animals covered therein for a period of five years; and (2) to protect the
coral in the marine waters of the City of Puerto Princesa and the Province of Palawan from further destruction due
to illegal fishing activities.
The accomplishment of the first objective is well within the devolved power to enforce fishery laws in municipal
waters, such as P.D. No. 1015, which allows the establishment of "closed seasons." The devolution of such power
has been expressly confirmed in the Memorandum of Agreement of 5 April 1994 between the Department of
Agriculture and the Department of Interior and Local Government.
The realization of the second objective clearly falls within both the general welfare clause of the LGC and the
express mandate thereunder to cities and provinces to protect the environment and impose appropriate penalties for

acts which endanger the environment. 33

The destruction of coral reefs results in serious, if not irreparable, ecological imbalance, for coral reefs are among
nature's life-support systems. 34 They collect, retain and recycle nutrients for adjacent nearshore areas such as
mangroves, seagrass beds, and reef flats; provide food for marine plants and animals; and serve as a protective
shelter for aquatic organisms. 35 It is said that "[e]cologically, the reefs are to the oceans what forests are to
continents: they are shelter and breeding grounds for fish and plant species that will disappear without them." 36
The prohibition against catching live fish stems, in part, from the modern phenomenon of live-fish trade which
entails the catching of so-called exotic species of tropical fish, not only for aquarium use in the West, but also for
"the market for live banquet fish [which] is virtually insatiable in ever more affluent Asia. 37 These exotic species
are coral-dwellers, and fishermen catch them by "diving in shallow water with corraline habitats and squirting
sodium cyanide poison at passing fish directly or onto coral crevices; once affected the fish are immobilized
[merely stunned] and then scooped by hand." 38 The diver then surfaces and dumps his catch into a submerged net
attached to the skiff. Twenty minutes later, the fish can swim normally. Back on shore, they are placed in holding
pens, and within a few weeks, they expel the cyanide from their system and are ready to be hauled. They are then
placed in saltwater tanks or packaged in plastic bags filled with seawater for shipment by air freight to major
markets for live food fish. 39 While the fish are meant to survive, the opposite holds true for their former home as
"[a]fter the fisherman squirts the cyanide, the first thing to perish is the reef algae, on which fish feed. Days later,
the living coral starts to expire. Soon the reef loses its function as habitat for the fish, which eat both the algae and
invertebrates that cling to the coral. The reef becomes an underwater graveyard, its skeletal remains brittle,
bleached of all color and vulnerable to erosion from the pounding of the waves." 40 It has been found that cyanide
fishing kills most hard and soft corals within three months of repeated application. 41
The nexus then between the activities barred by Ordinance No. 15-92 of the City of Puerto Princesa and the
prohibited acts provided in Ordinance No. 2, Series of 1993 of the Province of Palawan, on one hand, and the use
of sodium cyanide, on the other, is painfully obvious. In sum, the public purpose and reasonableness of the
Ordinances may not then be controverted.
As to Office Order No. 23, Series of 1993, issued by Acting City Mayor Amado L. Lucero of the City of Puerto
Princesa, we find nothing therein violative of any constitutional or statutory provision. The Order refers to the
implementation of the challenged ordinance and is not the Mayor's Permit.
The dissenting opinion of Mr. Justice Josue N. Bellosillo relies upon the lack of authority on the part of the
Sangguniang Panglungsod of Puerto Princesa to enact Ordinance No. 15, Series of 1992, on the theory that the
subject thereof is within the jurisdiction and responsibility of the Bureau of Fisheries and Aquatic Resources
(BFAR) under P.D. No. 704, otherwise known as the Fisheries Decree of 1975; and that, in any event, the
Ordinance is unenforceable for lack of approval by the Secretary of the Department of Natural Resources (DNR),
likewise in accordance with P.D. No. 704.
The majority is unable to accommodate this view. The jurisdiction and responsibility of the BFAR under P.D. No.
704, over the management, conservation, development, protection, utilization and disposition of all fishery and
aquatic resources of the country is not all-encompassing. First, Section 4 thereof excludes from such jurisdiction
and responsibility municipal waters, which shall be under the municipal or city government concerned, except
insofar as fishpens and seaweed culture in municipal centers are concerned. This section provides, however, that all
municipal or city ordinances and resolutions affecting fishing and fisheries and any disposition thereunder shall be
submitted to the Secretary of the Department of Natural Resources for appropriate action and shall have full force
and effect only upon his approval. 42
Second, it must at once be pointed out that the BFAR is no longer under the Department of Natural Resources (now
Department of Environment and Natural Resources). Executive Order No. 967 of 30 June 1984 transferred the
BFAR from the control and supervision of the Minister (formerly Secretary) Of Natural Resources to the Ministry

of Agriculture and Food (MAF) and converted it into a mere staff agency thereof, integrating its functions with the
regional offices of the MAF.
In Executive Order No. 116 of 30 January 1987, which reorganized the MAF, the BFAR was retained as an
attached agency of the MAF. And under the Administrative Code of 1987, 43 the BFAR is placed under the Title
concerning the Department of Agriculture. 44
Therefore, it is incorrect to say that the challenged Ordinance of the City of Puerto Princesa is invalid or
unenforceable because it was not approved by the Secretary of the DENR. If at all, the approval that should be
sought would be that of the Secretary of the Department of Agriculture. However, the requirement of approval by
the Secretary of the Department of Agriculture (not DENR) of municipal ordinances affecting fishing and fisheries
in municipal waters has been dispensed with in view of the following reasons:
(1) Section 534 (Repealing Clause) of the LGC expressly repeals or amends Sections 16 and 29 of P.D. No.
704 45 insofar as they are inconsistent with the provisions of the LGC.
(2) As discussed earlier, under the general welfare clause of the LGC, local government units have the power, inter
alia, to enact ordinances to enhance the right of the people to a balanced ecology. It likewise specifically vests
municipalities with the power to grant fishery privileges in municipal waters, and impose rentals, fees or charges
therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances,
electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of
applicable fishery laws. 46 Finally, it imposes upon the sangguniang bayan, the sangguniang panlungsod, and the
sangguniang panlalawigan the duty to enact ordinances to "[p]rotect the environment and impose appropriate
penalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing .
. . and such other activities which result in pollution, acceleration of eutrophication of rivers and lakes or of
ecological imbalance." 47
In closing, we commend the Sangguniang Panlungsod of the City of Puerto Princesa and Sangguniang
Panlalawigan of the Province of Palawan for exercising the requisite political will to enact urgently needed
legislation to protect and enhance the marine environment, thereby sharing in the herculean task of arresting the
tide of ecological destruction. We hope that other local government units shall now be roused from their lethargy
and adopt a more vigilant stand in the battle against the decimation of our legacy to future generations. At this time,
the repercussions of any further delay in their response may prove disastrous, if not, irreversible.
WHEREFORE, the instant petition is DISMISSED for lack of merit and the temporary restraining order issued on
11 November 1993 is LIFTED.
No pronouncement as to costs.
SO ORDERED.

G.R. No. L-24693

July 31, 1967

ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC., HOTEL DEL MAR INC. and GO
CHIU, petitioners-appellees,
vs.
THE HONORABLE CITY MAYOR OF MANILA, respondent-appellant.
VICTOR ALABANZA, intervenor-appellee.
FERNANDO, J.:
The principal question in this appeal from a judgment of the lower court in an action for prohibition is whether Ordinance
No. 4760 of the City of Manila is violative of the due process clause. The lower court held that it is and adjudged it
"unconstitutional, and, therefore, null and void." For reasons to be more specifically set forth, such judgment must be
reversed, there being a failure of the requisite showing to sustain an attack against its validity.
The petition for prohibition against Ordinance No. 4760 was filed on July 5, 1963 by the petitioners, Ermita-Malate Hotel
and Motel Operators Association, one of its members, Hotel del Mar Inc., and a certain Go Chiu, who is "the president and
general manager of the second petitioner" against the respondent Mayor of the City of Manila who was sued in his capacity
as such "charged with the general power and duty to enforce ordinances of the City of Manila and to give the necessary
orders for the faithful execution and enforcement of such ordinances." (par. 1). It was alleged that the petitioner non-stock
corporation is dedicated to the promotion and protection of the interest of its eighteen (18) members "operating hotels and
motels, characterized as legitimate businesses duly licensed by both national and city authorities, regularly paying taxes,
employing and giving livelihood to not less than 2,500 person and representing an investment of more than P3
million."1 (par. 2). It was then alleged that on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance
No. 4760, approved on June 14, 1963 by the then Vice-Mayor Herminio Astorga, who was at the time acting as Mayor of
the City of Manila. (par. 3).
After which the alleged grievances against the ordinance were set forth in detail. There was the assertion of its being beyond
the powers of the Municipal Board of the City of Manila to enact insofar as it would regulate motels, on the ground that in
the revised charter of the City of Manila or in any other law, no reference is made to motels; that Section 1 of the challenged
ordinance is unconstitutional and void for being unreasonable and violative of due process insofar as it would impose
P6,000.00 fee per annum for first class motels and P4,500.00 for second class motels; that the provision in the same section
which would require the owner, manager, keeper or duly authorized representative of a hotel, motel, or lodging house to
refrain from entertaining or accepting any guest or customer or letting any room or other quarter to any person or persons
without his filling up the prescribed form in a lobby open to public view at all times and in his presence, wherein the
surname, given name and middle name, the date of birth, the address, the occupation, the sex, the nationality, the length of
stay and the number of companions in the room, if any, with the name, relationship, age and sex would be specified, with
data furnished as to his residence certificate as well as his passport number, if any, coupled with a certification that a person
signing such form has personally filled it up and affixed his signature in the presence of such owner, manager, keeper or
duly authorized representative, with such registration forms and records kept and bound together, it also being provided that
the premises and facilities of such hotels, motels and lodging houses would be open for inspection either by the City Mayor,
or the Chief of Police, or their duly authorized representatives is unconstitutional and void again on due process grounds,
not only for being arbitrary, unreasonable or oppressive but also for being vague, indefinite and uncertain, and likewise for
the alleged invasion of the right to privacy and the guaranty against self-incrimination; that Section 2 of the challenged
ordinance classifying motels into two classes and requiring the maintenance of certain minimum facilities in first class
motels such as a telephone in each room, a dining room or, restaurant and laundry similarly offends against the due process
clause for being arbitrary, unreasonable and oppressive, a conclusion which applies to the portion of the ordinance requiring
second class motels to have a dining room; that the provision of Section 2 of the challenged ordinance prohibiting a person
less than 18 years old from being accepted in such hotels, motels, lodging houses, tavern or common inn unless
accompanied by parents or a lawful guardian and making it unlawful for the owner, manager, keeper or duly authorized
representative of such establishments to lease any room or portion thereof more than twice every 24 hours, runs counter to

the due process guaranty for lack of certainty and for its unreasonable, arbitrary and oppressive character; and that insofar as
the penalty provided for in Section 4 of the challenged ordinance for a subsequent conviction would, cause the automatic
cancellation of the license of the offended party, in effect causing the destruction of the business and loss of its investments,
there is once again a transgression of the due process clause.
There was a plea for the issuance of preliminary injunction and for a final judgment declaring the above ordinance null and
void and unenforceable. The lower court on July 6, 1963 issued a writ of preliminary injunction ordering respondent Mayor
to refrain from enforcing said Ordinance No. 4760 from and after July 8, 1963.
In the a answer filed on August 3, 1963, there was an admission of the personal circumstances regarding the respondent
Mayor and of the fact that petitioners are licensed to engage in the hotel or motel business in the City of Manila, of the
provisions of the cited Ordinance but a denial of its alleged nullity, whether on statutory or constitutional grounds. After
setting forth that the petition did fail to state a cause of action and that the challenged ordinance bears a reasonable relation,
to a proper purpose, which is to curb immorality, a valid and proper exercise of the police power and that only the guests or
customers not before the court could complain of the alleged invasion of the right to privacy and the guaranty against self
incrimination, with the assertion that the issuance of the preliminary injunction ex parte was contrary to law, respondent
Mayor prayed for, its dissolution and the dismissal of the petition.
Instead of evidence being offered by both parties, there was submitted a stipulation of facts dated September 28, 1964,
which reads:
1. That the petitioners Ermita-Malate Hotel and Motel Operators Association, Inc. and Hotel del Mar Inc. are duly
organized and existing under the laws of the Philippines, both with offices in the City of Manila, while the
petitioner Go Chin is the president and general manager of Hotel del Mar Inc., and the intervenor Victor Alabanza
is a resident of Baguio City, all having the capacity to sue and be sued;
2. That the respondent Mayor is the duly elected and incumbent City Mayor and chief executive of the City of
Manila charged with the general power and duty to enforce ordinances of the City of Manila and to give the
necessary orders for the faithful execution and enforcement of such ordinances;
3. That the petitioners are duly licensed to engage in the business of operating hotels and motels in Malate and
Ermita districts in Manila;
4. That on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No. 4760, which was
approved on June 14, 1963, by Vice-Mayor Herminio Astorga, then the acting City Mayor of Manila, in the
absence of the respondent regular City Mayor, amending sections 661, 662, 668-a, 668-b and 669 of the
compilation of the ordinances of the City of Manila besides inserting therein three new sections. This ordinance is
similar to the one vetoed by the respondent Mayor (Annex A) for the reasons stated in its 4th Indorsement dated
February 15, 1963 (Annex B);
5. That the explanatory note signed by then Councilor Herminio Astorga was submitted with the proposed
ordinance (now Ordinance 4760) to the Municipal Board, copy of which is attached hereto as Annex C;
6. That the City of Manila derived in 1963 an annual income of P101,904.05 from license fees paid by the 105
hotels and motels (including herein petitioners) operating in the City of Manila.1wph1.t
Thereafter came a memorandum for respondent on January 22, 1965, wherein stress was laid on the presumption of the
validity of the challenged ordinance, the burden of showing its lack of conformity to the Constitution resting on the party
who assails it, citing not only U.S. v. Salaveria, but likewise applicable American authorities. Such a memorandum likewise
refuted point by point the arguments advanced by petitioners against its validity. Then barely two weeks later, on February
4, 1965, the memorandum for petitioners was filed reiterating in detail what was set forth in the petition, with citations of
what they considered to be applicable American authorities and praying for a judgment declaring the challenged ordinance
"null and void and unenforceable" and making permanent the writ of preliminary injunction issued.

After referring to the motels and hotels, which are members of the petitioners association, and referring to the alleged
constitutional questions raised by the party, the lower court observed: "The only remaining issue here being purely a
question of law, the parties, with the nod of the Court, agreed to file memoranda and thereafter, to submit the case for
decision of the Court." It does appear obvious then that without any evidence submitted by the parties, the decision passed
upon the alleged infirmity on constitutional grounds of the challenged ordinance, dismissing as is undoubtedly right and
proper the untenable objection on the alleged lack of authority of the City of Manila to regulate motels, and came to the
conclusion that "the challenged Ordinance No. 4760 of the City of Manila, would be unconstitutional and, therefore, null
and void." It made permanent the preliminary injunction issued against respondent Mayor and his agents "to restrain him
from enforcing the ordinance in question." Hence this appeal.
As noted at the outset, the judgment must be reversed. A decent regard for constitutional doctrines of a fundamental
character ought to have admonished the lower court against such a sweeping condemnation of the challenged ordinance. Its
decision cannot be allowed to stand, consistently with what has hitherto been the accepted standards of constitutional
adjudication, in both procedural and substantive aspects.
Primarily what calls for a reversal of such a decision is the absence of any evidence to offset the presumption of validity that
attaches to a challenged statute or ordinance. As was expressed categorically by Justice Malcolm: "The presumption is all in
favor of validity x x x . The action of the elected representatives of the people cannot be lightly set aside. The councilors
must, in the very nature of things, be familiar with the necessities of their particular municipality and with all the facts and
circumstances which surround the subject and necessitate action. The local legislative body, by enacting the ordinance, has
in effect given notice that the regulations are essential to the well being of the people x x x . The Judiciary should not lightly
set aside legislative action when there is not a clear invasion of personal or property rights under the guise of police
regulation.2
It admits of no doubt therefore that there being a presumption of validity, the necessity for evidence to rebut it is
unavoidable, unless the statute or ordinance is void on its face which is not the case here. The principle has been nowhere
better expressed than in the leading case of O'Gorman & Young v. Hartford Fire Insurance Co.,3 where the American
Supreme Court through Justice Brandeis tersely and succinctly summed up the matter thus: The statute here questioned
deals with a subject clearly within the scope of the police power. We are asked to declare it void on the ground that the
specific method of regulation prescribed is unreasonable and hence deprives the plaintiff of due process of law. As
underlying questions of fact may condition the constitutionality of legislation of this character, the resumption of
constitutionality must prevail in the absence of some factual foundation of record for overthrowing the statute." No such
factual foundation being laid in the present case, the lower court deciding the matter on the pleadings and the stipulation of
facts, the presumption of validity must prevail and the judgment against the ordinance set aside.
Nor may petitioners assert with plausibility that on its face the ordinance is fatally defective as being repugnant to the due
process clause of the Constitution. The mantle of protection associated with the due process guaranty does not cover
petitioners. This particular manifestation of a police power measure being specifically aimed to safeguard public morals is
immune from such imputation of nullity resting purely on conjecture and unsupported by anything of substance. To hold
otherwise would be to unduly restrict and narrow the scope of police power which has been properly characterized as the
most essential, insistent and the least limitable of powers,4 extending as it does "to all the great public needs."5 It would be,
to paraphrase another leading decision, to destroy the very purpose of the state if it could be deprived or allowed itself to be
deprived of its competence to promote public health, public morals, public safety and the genera welfare.6 Negatively put,
police power is "that inherent and plenary power in the State which enables it to prohibit all that is hurt full to the comfort,
safety, and welfare of society.7
There is no question but that the challenged ordinance was precisely enacted to minimize certain practices hurtful to public
morals. The explanatory note of the Councilor Herminio Astorga included as annex to the stipulation of facts, speaks of the
alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to the existence of
motels, which "provide a necessary atmosphere for clandestine entry, presence and exit" and thus become the "ideal haven
for prostitutes and thrill-seekers." The challenged ordinance then proposes to check the clandestine harboring of transients

and guests of these establishments by requiring these transients and guests to fill up a registration form, prepared for the
purpose, in a lobby open to public view at all times, and by introducing several other amendatory provisions calculated to
shatter the privacy that characterizes the registration of transients and guests." Moreover, the increase in the licensed fees
was intended to discourage "establishments of the kind from operating for purpose other than legal" and at the same time, to
increase "the income of the city government." It would appear therefore that the stipulation of facts, far from sustaining any
attack against the validity of the ordinance, argues eloquently for it.
It is a fact worth noting that this Court has invariably stamped with the seal of its approval, ordinances punishing vagrancy
and classifying a pimp or procurer as a vagrant;8 provide a license tax for and regulating the maintenance or operation of
public dance halls;9 prohibiting gambling;10 prohibiting jueteng;11 and monte;12prohibiting playing of panguingui on days
other than Sundays or legal holidays;13 prohibiting the operation of pinball machines;14 and prohibiting any person from
keeping, conducting or maintaining an opium joint or visiting a place where opium is smoked or otherwise used,15 all of
which are intended to protect public morals.
On the legislative organs of the government, whether national or local, primarily rest the exercise of the police power,
which, it cannot be too often emphasized, is the power to prescribe regulations to promote the health, morals, peace, good
order, safety and general welfare of the people. In view of the requirements of due process, equal protection and other
applicable constitutional guaranties however, the exercise of such police power insofar as it may affect the life, liberty or
property of any person is subject to judicial inquiry. Where such exercise of police power may be considered as either
capricious, whimsical, unjust or unreasonable, a denial of due process or a violation of any other applicable constitutional
guaranty may call for correction by the courts.
We are thus led to considering the insistent, almost shrill tone, in which the objection is raised to the question of due
process.16 There is no controlling and precise definition of due process. It furnishes though a standard to which the
governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid.
What then is the standard of due process which must exist both as a procedural and a substantive requisite to free the
challenged ordinance, or any governmental action for that matter, from the imputation of legal infirmity sufficient to spell
its doom? It is responsiveness to the supremacy of reason, obedience to the dictates of justice. Negatively put, arbitrariness
is ruled out and unfairness avoided. To satisfy the due process requirement, official action, to paraphrase Cardozo, must not
outrun the bounds of reason and result in sheer oppression. Due process is thus hostile to any official action marred by lack
of reasonableness. Correctly it has been identified as freedom from arbitrariness. It is the embodiment of the sporting idea of
fair play.17 It exacts fealty "to those strivings for justice" and judges the act of officialdom of whatever branch "in the light
of reason drawn from considerations of fairness that reflect [democratic] traditions of legal and political thought."18 It is not
a narrow or "technical conception with fixed content unrelated to time, place and circumstances,"19 decisions based on such
a clause requiring a "close and perceptive inquiry into fundamental principles of our society."20 Questions of due process
are not to be treated narrowly or pedantically in slavery to form or phrases.21
It would thus be an affront to reason to stigmatize an ordinance enacted precisely to meet what a municipal lawmaking body
considers an evil of rather serious proportion an arbitrary and capricious exercise of authority. It would seem that what
should be deemed unreasonable and what would amount to an abdication of the power to govern is inaction in the face of an
admitted deterioration of the state of public morals. To be more specific, the Municipal Board of the City of Manila felt the
need for a remedial measure. It provided it with the enactment of the challenged ordinance. A strong case must be found in
the records, and, as has been set forth, none is even attempted here to attach to an ordinance of such character the taint of
nullity for an alleged failure to meet the due process requirement. Nor does it lend any semblance even of deceptive
plausibility to petitioners' indictment of Ordinance No. 4760 on due process grounds to single out such features as the
increased fees for motels and hotels, the curtailment of the area of freedom to contract, and, in certain particulars, its alleged
vagueness.
Admittedly there was a decided increase of the annual license fees provided for by the challenged ordinance for hotels and
motels, 150% for the former and over 200% for the latter, first-class motels being required to pay a P6,000 annual fee and
second-class motels, P4,500 yearly. It has been the settled law however, as far back as 1922 that municipal license fees

could be classified into those imposed for regulating occupations or regular enterprises, for the regulation or restriction of
non-useful occupations or enterprises and for revenue purposes only.22 As was explained more in detail in the above Cu
Unjieng case: (2) Licenses for non-useful occupations are also incidental to the police power and the right to exact a fee
may be implied from the power to license and regulate, but in fixing amount of the license fees the municipal corporations
are allowed a much wider discretion in this class of cases than in the former, and aside from applying the well-known legal
principle that municipal ordinances must not be unreasonable, oppressive, or tyrannical, courts have, as a general rule,
declined to interfere with such discretion. The desirability of imposing restraint upon the number of persons who might
otherwise engage in non-useful enterprises is, of course, generally an important factor in the determination of the amount of
this kind of license fee. Hence license fees clearly in the nature of privilege taxes for revenue have frequently been upheld,
especially in of licenses for the sale of liquors. In fact, in the latter cases the fees have rarely been declared unreasonable.23
Moreover in the equally leading case of Lutz v. Araneta24 this Court affirmed the doctrine earlier announced by the
American Supreme Court that taxation may be made to implement the state's police power. Only the other day, this Court
had occasion to affirm that the broad taxing authority conferred by the Local Autonomy Act of 1959 to cities and
municipalities is sufficiently plenary to cover a wide range of subjects with the only limitation that the tax so levied is for
public purposes, just and uniform.25
As a matter of fact, even without reference to the wide latitude enjoyed by the City of Manila in imposing licenses for
revenue, it has been explicitly held in one case that "much discretion is given to municipal corporations in determining the
amount," here the license fee of the operator of a massage clinic, even if it were viewed purely as a police power
measure.26 The discussion of this particular matter may fitly close with this pertinent citation from another decision of
significance: "It is urged on behalf of the plaintiffs-appellees that the enforcement of the ordinance could deprive them of
their lawful occupation and means of livelihood because they can not rent stalls in the public markets. But it appears that
plaintiffs are also dealers in refrigerated or cold storage meat, the sale of which outside the city markets under certain
conditions is permitted x x x . And surely, the mere fact, that some individuals in the community may be deprived of their
present business or a particular mode of earning a living cannot prevent the exercise of the police power. As was said in a
case, persons licensed to pursue occupations which may in the public need and interest be affected by the exercise of the
police power embark in these occupations subject to the disadvantages which may result from the legal exercise of that
power."27
Nor does the restriction on the freedom to contract, insofar as the challenged ordinance makes it unlawful for the owner,
manager, keeper or duly authorized representative of any hotel, motel, lodging house, tavern, common inn or the like, to
lease or rent room or portion thereof more than twice every 24 hours, with a proviso that in all cases full payment shall be
charged, call for a different conclusion. Again, such a limitation cannot be viewed as a transgression against the command
of due process. It is neither unreasonable nor arbitrary. Precisely it was intended to curb the opportunity for the immoral or
illegitimate use to which such premises could be, and, according to the explanatory note, are being devoted. How could it
then be arbitrary or oppressive when there appears a correspondence between the undeniable existence of an undesirable
situation and the legislative attempt at correction. Moreover, petitioners cannot be unaware that every regulation of conduct
amounts to curtailment of liberty which as pointed out by Justice Malcolm cannot be absolute. Thus: "One thought which
runs through all these different conceptions of liberty is plainly apparent. It is this: 'Liberty' as understood in democracies, is
not license; it is 'liberty regulated by law.' Implied in the term is restraint by law for the good of the individual and for the
greater good of the peace and order of society and the general well-being. No man can do exactly as he pleases. Every man
must renounce unbridled license. The right of the individual is necessarily subject to reasonable restraint by general law for
the common good x x x The liberty of the citizen may be restrained in the interest of the public health, or of the public order
and safety, or otherwise within the proper scope of the police power."28
A similar observation was made by Justice Laurel: "Public welfare, then, lies at the bottom of the enactment of said law, and
the state in order to promote the general welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to secure the general
comfort, health, and prosperity of the state x x x To this fundamental aim of our Government the rights of the individual are
subordinated. Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over authority

because then society will fall into anarchy. Neither should authority be made to prevail over liberty because then the
individual will fall into slavery. The citizen should achieve the required balance of liberty and authority in his mind through
education and personal discipline, so that there may be established the resultant equilibrium, which means peace and order
and happiness for all.29
It is noteworthy that the only decision of this Court nullifying legislation because of undue deprivation of freedom to
contract, People v. Pomar,30 no longer "retains its virtuality as a living principle. The policy of laissez faire has to some
extent given way to the assumption by the government of the right of intervention even in contractual relations affected with
public interest.31 What may be stressed sufficiently is that if the liberty involved were freedom of the mind or the person,
the standard for the validity of governmental acts is much more rigorous and exacting, but where the liberty curtailed affects
at the most rights of property, the permissible scope of regulatory measure is wider.32 How justify then the allegation of a
denial of due process?
Lastly, there is the attempt to impugn the ordinance on another due process ground by invoking the principles of vagueness
or uncertainty. It would appear from a recital in the petition itself that what seems to be the gravamen of the alleged
grievance is that the provisions are too detailed and specific rather than vague or uncertain. Petitioners, however, point to
the requirement that a guest should give the name, relationship, age and sex of the companion or companions as indefinite
and uncertain in view of the necessity for determining whether the companion or companions referred to are those arriving
with the customer or guest at the time of the registry or entering the room With him at about the same time or coming at any
indefinite time later to join him; a proviso in one of its sections which cast doubt as to whether the maintenance of a
restaurant in a motel is dependent upon the discretion of its owners or operators; another proviso which from their
standpoint would require a guess as to whether the "full rate of payment" to be charged for every such lease thereof means a
full day's or merely a half-day's rate. It may be asked, do these allegations suffice to render the ordinance void on its face for
alleged vagueness or uncertainty? To ask the question is to answer it. From Connally v. General Construction
Co.33 toAdderley v. Florida,34 the principle has been consistently upheld that what makes a statute susceptible to such a
charge is an enactment either forbidding or requiring the doing of an act that men of common intelligence must necessarily
guess at its meaning and differ as to its application. Is this the situation before us? A citation from Justice Holmes would
prove illuminating: "We agree to all the generalities about not supplying criminal laws with what they omit but there is no
canon against using common sense in construing laws as saying what they obviously mean."35
That is all then that this case presents. As it stands, with all due allowance for the arguments pressed with such vigor and
determination, the attack against the validity of the challenged ordinance cannot be considered a success. Far from it.
Respect for constitutional law principles so uniformly held and so uninterruptedly adhered to by this Court compels a
reversal of the appealed decision.
Wherefore, the judgment of the lower court is reversed and the injunction issued lifted forthwith. With costs.