Full Text Cases in Police Power

almost unimaginable proportions; the field and scope of police power has
become almost boundless, just as the fields of public interest and public
welfare have become almost all-embracing and have transcended human
foresight.
EN BANC
[G.R. No. L-7995. May 31, 1957.]
LAO H. ICHONG, in his own behalf and in behalf of other alien
residents, corporations and partnerships adversely affected by
Republic Act No. 1180, Petitioner, v. JAIME HERNANDEZ, Secretary
of Finance, and MARCELINO SARMIENTO, City Treasuer of
Manila, Respondent.
Ozaeta, Lichauco & Picazo and Sycip, Quisumbing, Salazar &
Associates for Petitioner.
Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de
Castro for respondent Secretary of Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S.
Serrano for respondent City Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.
SYLLABUS
1. CONSTITUTIONAL LAW; POLICE POWER; NATURE AND SCOPE. Police

power is far-reaching in scope, and it is almost impossible to limit its
sweep. It derives its existence from the very existence of the State itself,
and does not need to be expressed or defined in its scope. It is said to be
co-extensive with self - protection and survival, and as such it is the most
positive and active of all governmental processes, the most essential,
insistent and illimitable. Especially is it so under a modern democratic
framework where the demands of society and of nations have multiplied to
2. ID.; GUARANTEES IN SECTION I, ARTICLE III OF THE CONSTITUTION;

UNIVERSALITY OF APPLICATION. The constitutional guarantees in
Section I, Article III, of the Constitution, which embody the essence of
individual liberty and freedom in democracies, are not limited to citizens
alone but are admittedly universal in their application, without regard to
any differences of race, of color, or of nationality (Yiek Wo v. Hopkins, 30 L.
ed., 220, 226).
3. ID.; LAW DEPRIVATION OF LIFE, LIBERTY OR PROPERTY; TEST OR
STANDARD. The conflict between police power and the guarantees of
due process and equal protection of the laws is more apparent than real.
Properly related, the power and the guarantees are supposed to coexist.
The balancing is the essence, or the indispensable means for the
attainment of legitimate aspirations of any democratic society. There can
be no absolute power, whoever exercises it, for that would be tyranny. Yet
there can neither be absolute liberty, for that would mean license and
anarchy. So the State can deprive persons of life, liberty or property,
provided there is due process of law; and persons may be classified into
classes and groups, provided everyone is given the equal protection of the
law. The test or standard, as always, is reason. The police power legislation
must be firmly grounded on public interest and welfare, and a reasonable
relation must exist between purposes and means. And if disctinction or
classification has been made, there must be a reasonable basis for said
distinction.
4. ID.; EQUAL PROTECTION OF THE LAW CLAUSE; WHEN NOT DEEMED
INFRINGED BY LEGISLATION. The equal protection of the law clause is
against undue favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality. It is not intended to prohibit
legislation, which is limited either in the object to which it is directed or by
territory within which it is to operate. It does not demand absolute equality
among residents; it merely requires that all persons shall be treated alike,
under like circumstances and conditions both as to privileges conferred and
liabilities enforced. The equal protection clause is not infringed by
legislation which applies only to those persons falling within a specified
class, if it applies alike to all persons within such class, and reasonable
grounds exist for making a distinction between those who fall within such
class and those who do not (2 Cooley, Constitutional Limitations, 824825).
5. ID.; ID.; LEGISLATIVE POWER TO MAKE DISTINCTION AND

CLASSIFICATION AMONG PERSONS; CITIZENSHIP AS GROUND FOR
CLASSIFICATION. The Power of the legislature to make distinctions and
classifications among persons is not curtailed or denied by the equal
protection of the laws clause. The legislative power admits of a wide scope
of discretion, and a law can be violative of the constitutional limitation only
when the classification is without reasonable basis. Citizenship is a legal
and valid ground for classification.
6. ID.; ID.; NATIONALIZATION OF RETAIL TRADE; CLASSIFICATION IN
REPUBLIC ACT NO. 1180 ACTUAL, REAL AND REASONABLE. The
classification in the law of retail traders into nationals and aliens is actual,
real and reasonable. All persons of one class are treated alike, and it
cannot be said that the classification is patently unreasonable and
unfounded. Hence, it is the duty of this Court to declare that the legislature
acted within its legitimate prerogative and it cannot declare that the act
transcends the limits of equal protection established by the Constitution.
7. ID.; ID.; ID.; ID.; TEST OF REASONABLENESS. The law in question is
deemed absolutely necessary to bring about the desired legislative
objective, i.e., to free the national economy from alien control and
dominance. It is not necessarily unreasonable because it affects private
rights and privileges (II Am. Jur., pp. 1080-1081). The test of
reasonableness of a law is the appropriateness or adequacy under all
circumstances of the means adopted to carry out its purpose into effect.
Judged by this test, the disputed legislation, which is not merely
reasonable but actually necessary, must be considered not to have
infringed the constitutional limitation of reasonableness.
8. ID.; ID.; ID.; ID.; ID.; REPUBLIC ACT NO. 1180 TOLERANT AND
REASONABLE. A cursory study of the provisions of the law immediately
reveals how tolerant and reasonable the Legislature has been. The law is
made prospective and recognizes the right and privilege of those already
engaged in the occupation to continue therein during the rest of their lives;
and similar recognition of the right to continue is accorded associations of
aliens. The right or privilege is denied only to persons upon conviction of
certain offenses.
9. ID.; ID.; ID.; ATTAINMENT OF LEGISLATIVE ASPIRATIONS OF A PEOPLE
NOT BEYOND THE LIMITS OF LEGISLATIVE AUTHORITY. If political
independence is a legitimate aspiration of a people, then economic
independence is none of less legitimate. Freedom and liberty are not real
and positive if the people are subject to the economic control and
domination of others, especially if not of their own race or country. The
removal and eradication of the shackles of foreign economic control and
domination is one of the noblest motives that a national legislature may

pursue. It is impossible to conceive that legislation that seeks to bring it
about can infringe the constitutional limitation of due process. The
attainment of a legitimate aspiration of a people can never be beyond the
limits of legislative authority.
10. ID.; ID.; ID.; NATIONALISTIC TENDENCY MANIFESTED IN THE
CONSTITUTION. Nationalistic tendency is manifested in various
provisions of the Constitution. The nationalization of the retail trade is only
a continuance of the nationalistic protective policy laid down as a primary
objective of the Constitution. It cannot therefore be said that a law imbued
with the same purpose and spirit underlying many of the provisions of the
Constitution is unreasonable, invalid or unconstitutional.
11. ID.; LEGISLATIVE DEPARTMENT; EXERCISE OF LEGISLATIVE
DISCRETION NOT SUBJECT TO JUDICIAL REVIEW. The exercise of
legislative discretion is not subject to judicial review. The Court will not
inquire into the motives of the Legislature, nor pass upon general matters
of legislative judgment. The Legislature is primarily the judge of the
necessity of an enactment or of any of its provisions, and every
presumption is in favor of its validity, and though the Court may hold views
inconsistent with the wisdom of the law, it may not annul the legislation if
not palpably in excess of the legislative power.
12. ID.; TITLES OF BILLS; PROHIBITION AGAINST DUPLICITY; PRESENCE
OF DUPLICITY NOT SHOWN IN TITLE OR PROVISIONS OF REPUBLIC ACT
NO. 1180. What Section 21(1) of Article VI of the Constitution prohibits
is duplicity, that is, if its title completely fails to apprise the legislators or
the public of the nature, scope and consequences of the law or its
operation (I Sutherland, Statutory Construction, Sec. 1707, p. 297). A
cursory consideration of the title and the provisions of the bill fails to show
the presence of duplicity. It is true that the term "regulate" does not and
may not readily and at first glance convey the idea of "nationalization" and
"prohibition", which terms express the two main purposes and objectives
of the law. But "regulate" is a broader term than either prohibition or
nationalization. Both of these have always been included within the term
"regulation."
13. ID.; ID.; ID.; ID.; USE OF GENERAL TERMS IN TITLE OF BILL. The
general rule is for the use of general terms in the title of a bill; the title
need not be an index to the entire contents of the law (I Sutherland,
Statutory Construction, Sec. 4803, p. 345). The above rule was followed
when the title of the Act in question adopted the more general term
"regulate" instead of "nationalize" or "prohibit."
14. ID.; ID.; ID.; ID.; PURPOSE OF CONSTITUTIONAL DIRECTIVE

REGARDING SUBJECT OF A BILL. One purpose of the constitutional
directive that the subject of a bill should be embraced in its title is to
apprise the legislators of the purposes, the nature and scope of its
provisions, and prevent the enactment into law of matters which have not
received the notice, action and study of the legislators or of the public. In
case at bar it cannot be claimed that the legislators have not been apprised
of the nature of the law, especially the nationalization and prohibition
provisions. The legislators took active interest in the discussion of the law,
and a great many of the persons affected by the prohibition in the law
conducted a campaign against its approval. It cannot be claimed,
therefore, that the reasons for declaring the law invalid ever existed.
15. ID.; INTERNATIONAL TREATIES AND OBLIGATIONS NOT VIOLATED BY
REPUBLIC ACT No. 1180; TREATIES SUBJECT TO QUALIFICATION OR
AMENDMENT BY SUBSEQUENT LAW. The law does not violate
international treaties and obligations. The United Nations Charter imposes
no strict or legal obligations regarding the rights and freedom of their
subjects (Jans Kelsen, The Law of the United Nations, 1951 ed., pp. 2932), and the Declaration of Human Rights contains nothing more than a
mere recommendation, or a common standard of achievement for all
peoples and all nations. The Treaty of Amity between the Republic of the
Philippines and the Republic of China of April 18, 1947 guarantees equality
of treatment to the Chinese nationals "upon the same terms as the
nationals of any other country." But the nationals of China are not
discriminated against because nationals of all other countries, except those
of the United States, who are granted special rights by the Constitution,
are all Prohibited from engaging in the retail trade. But even supposing
that the law infringes upon the said treaty, the treaty is always subject to
qualification or amendment by a subsequent law (U.S. v. Thompson, 258,
Fed. 257, 260), and the same may never curtail or restrict the scope of the
police power of the State (Palston v. Pennsylvania 58 L. ed., 539).
DECISION
LABRADOR, J.:
I. The case and the issue, in general

This Court has before it the delicate task of passing upon the validity and
constitutionality of a legislative enactment, fundamental and far-reaching
in significance The enactment poses questions of due process, police power

and equal protection of the laws. It also poses an important issue of fact,
that is whether the conditions which the disputed law purports to remedy
really or actually exist. Admittedly springing from a deep, militant, and
positive nationalistic impulse, the law purports to protect citizen and
country from the alien retailer. Through it, and within the field of economy
it regulates, Congress attempts to translate national aspirations for
economic independence and national security, rooted in the drive and urge
for national survival and welfare, into a concrete and tangible measures
designed to free the national retailer from the competing dominance of the
alien, so that the country and the nation may be free from a supposed
economic dependence and bondage. Do the facts and circumstances justify
the enactment?
II. Pertinent provisions of Republic Act No. 1180
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business."
In effect it nationalizes the retail trade business. The main provisions of
the Act are: (1) a prohibition against persons, not citizens of the
Philippines, and against associations, partnerships, or corporations the
capital of which are not wholly owned by citizens of the Philippines, from
engaging directly or indirectly in the retail trade; (2) an exception from the
above prohibition in favor of aliens actually engaged in said business on
May 15, 1954, who are allowed to continue to engage therein, unless their
licenses are forfeited in accordance with the law, until their death or
voluntary retirement in case of natural persons, and for ten years after the
approval of the Act or until the expiration of term in case of juridical
persons; (3) an exception therefrom in favor of citizens and juridical
entities of the United States; (4) a provision for the forfeiture of licenses
(to engage in the retail business) for violation of the laws on
nationalization, economic control weights and measures and labor and
other laws relating to trade, commerce and industry; (5) a prohibition
against the establishment or opening by aliens actually engaged in the
retail business of additional stores or branches of retail business, (6) a
provision requiring aliens actually engaged in the retail business to present
for registration with the proper authorities a verified statement concerning
their businesses, giving, among other matters, the nature of the business,
their assets and liabilities and their offices and principal offices of juridical
entities; and (7) a provision allowing the heirs of aliens now engaged in
the retail business who die, to continue such business for a period of six
months for purposes of liquidation.
III. Grounds upon which petition is based Answer thereto

Petitioner, for and in his own behalf and on behalf of other alien residents,
corporations and partnerships adversely affected by the provisions of
Republic Act No. 1180, brought this action to obtain a judicial declaration
that said Act is unconstitutional, and to enjoin the Secretary of Finance and
all other persons acting under him, particularly city and municipal
treasurers, from enforcing its provisions. Petitioner attacks the
constitutionality of the Act, contending that: (1) it denies to alien residents
the equal protection of the laws and deprives them of their liberty and
property without due process of law; (2) the subject of the Act is not
expressed or comprehended in the title thereof; (3) the Act violates
international and treaty obligations of the Republic of the Philippines; (4)
the provisions of the Act against the transmission by aliens of their retail
business thru hereditary succession, and those requiring 100% Filipino
capitalization for a corporation or entity to entitle it to engage in the retail
business, violate the spirit of Sections 1 and 5, Article XIII and Section 8 of
Article XIV of the Constitution.
In answer, the Solicitor-General and the Fiscal of the City of Manila contend
that: (1) the Act was passed in the valid exercise of the police power of the
State, which exercise is authorized in the Constitution in the interest of
national economic survival; (2) the Act has only one subject embraced in
the title; (3) no treaty or international obligations are infringed; (4) as
regards hereditary succession, only the form is affected but the value of
the property is not impaired, and the institution of inheritance is only of
statutory origin.
IV. Preliminary consideration of legal principles involved
a. The police power.
There is no question that the Act was approved in the exercise of the police
power, but petitioner claims that its exercise in this instance is attended by
a violation of the constitutional requirements of due process and equal
protection of the laws. But before proceeding to the consideration and
resolution of the ultimate issue involved, it would be well to bear in mind
certain basic and fundamental, albeit preliminary, considerations in the
determination of the ever recurrent conflict between police power and the
guarantees of due process and equal protection of the laws. What is the
scope of police power and how are the due process and equal protection
clauses related to it? What is the province and power of the legislature,
and what is the function and duty of the courts? These consideration must
be clearly and correctly understood that their application to the facts of the
case may be brought forth with clarity and the issue accordingly resolved.
It has been said that police power is so far-reaching in scope, that it has
become almost impossible to limit its sweep. As it derives its existence
from the very existence of the State itself, it does not need to be
expressed or defined in its scope; it is said to be coextensive with selfprotection and survival, and as such it is the most positive and active of all
governmental processes, the most essential, insistent and illimitable.
Especially is it so under a modern democratic framework where the
demands of society and of nations have multiplied to almost unimaginable
proportions; the field and scope of police power has become almost
boundless, just as the fields of public interest and public welfare have
become almost all- embracing and have transcended human foresight.
Otherwise stated, as we cannot foresee the needs and demands of public
interest and welfare in this constantly changing and progressive world, so
we cannot delimit beforehand the extent or scope of police power by which
and through which the State seeks to attain or achieve public interest or
welfare. So it is that Constitutions do not define the scope or extent of the
police power of the State; what they do is to set forth the limitations
thereof. The most important of these are the due process clause and the
equal protection clause.
b. Limitations on police power.
The basic limitations of due process and equal protection are found in the
following provisions of our Constitution:
jgc:chanroble s.com.ph
"SECTION 1. (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 the laws." (Article III, Phil. Constitution)
These constitutional guarantees which embody the essence of individual
liberty and freedom in democracies, are not limited to citizens alone but
are admittedly universal in their application, without regard to any
differences of race, of color, or of nationality. (Yick Wo v. Hopkins, 30, L.
ed. 220, 226.)
c. The equal protection clause.
The equal protection of the law clause is against undue favor and individual
or class privilege, as well as hostile discrimination or the oppression of
inequality. It is not intended to prohibit legislation, which is limited either
in the object to which it is directed or by territory within which it is to
operate. It does not demand absolute equality among residents; it merely
requires that all persons shall be treated alike, under like circumstances
and conditions both as to privileges conferred and liabilities enforced. The
equal protection clause is not infringed by legislation which applies only to

those persons falling within a specified class, if it applies alike to all
persons within such class, and reasonable grounds exists for making a
distinction between those who fall within such class and those who do not.
(2 Cooley, Constitutional Limitations, 824-825.)
d. The due process clause.
The due process clause has to do with the reasonableness of legislation
enacted in pursuance of the police power, Is there public interest, a public
purpose; is public welfare involved? Is the Act reasonably necessary for the
accomplishment of the legislatures purpose; is it not unreasonable,
arbitrary or oppressive? Is there sufficient foundation or reason in
connection with the matter involved; or has there not been a capricious
use of the legislative power? Can the aims conceived be achieved by the
means used, or is it not merely an unjustified interference with private
interest? These are the questions that we ask when the due process test is
applied.
The conflict, therefore, between police power and the guarantees of due
process and equal protection of the laws is more apparent than real.
Properly related, the power and the guarantees are supposed to coexist.
The balancing is the essence or, shall it be said, the indispensable means
for the attainment of legitimate aspirations of any democratic society.
There can be no absolute power, whoever exercise it, for that would be
tyranny. Yet there can neither be absolute liberty, for that would mean
license and anarchy. So the State can deprive persons of life, liberty and
property, provided there is due process of law; and persons may be
classified into classes and groups, provided everyone is given the equal
protection of the law. The test or standard, as always, is reason. The police
power legislation must be firmly grounded on public interest and welfare,
and a reasonable relation must exist between purposes and means. And if
distinction and classification has been made, there must be a reasonable
basis for said distinction.
e. Legislative discretion not subject to judicial review.
Now, in this matter of equitable balancing, what is the proper place and
role of the courts? It must not be overlooked, in the first place, that the
legislature, which is the constitutional repository of police power and
exercises the prerogative of determining the policy of the State, is by force
of circumstances primarily the judge of necessity, adequacy or
reasonableness and wisdom, of any law promulgated in the exercise of the
police power, or of the measures adopted to implement the public policy or
to achieve public interest. On the other hand, courts, although zealous
guardians of individual liberty and right, have nevertheless evinced a

reluctance to interfere with the exercise of the legislative prerogative. They
have done so early where there has been a clear, patent or palpable
arbitrary and unreasonable abuse of the legislative prerogative. Moreover,
courts are not supposed to override legitimate policy, and courts never
inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve
directly into the issue involved. If the disputed legislation were merely a
regulation, as its title indicates, there would be no question that it falls
within the legitimate scope of legislative power. But it goes further and
prohibits a group of residents, the aliens, from engaging therein. The
problem becomes more complex because its subject is a common, trade or
occupation, as old as society itself, which from time immemorial has
always been open to residents, irrespective of race, color or citizenship.
a. Importance of retail trade in the economy of the nation.
In a primitive economy where families produce all that they consume and
consume all that they produce, the dealer, of course, is unknown. But as
group life develops and families begin to live in communities producing
more than what they consume and needing an infinite number of things
they do not produce, the dealer comes into existence. As villages develop
into big communities and specialization in production begins, the dealers
importance is enhanced. Under modern conditions and standards of living,
in which mans needs have multiplied and diversified to unlimited extents
and proportions, the retailer comes as essential as the producer, because
thru him the infinite variety of articles, goods and commodities needed for
daily life are placed within the easy reach of consumers. Retail dealers
perform the functions of capillaries in the human body, thru which all the
needed food and supplies are ministered to members of the communities
comprising the nation.
There cannot be any question about the importance of the retailer in the
life of the community. He ministers to the residents daily needs, food in all
its increasing forms, and the various little gadgets and things needed for
home and daily life. He provides his customers around his store with the
rice or corn, the fish, the salt, the vinegar, the spices needed for the daily
cooking. He has cloths to sell, even the needle and the thread to sew them
or darn the clothes that wear out. The retailer, therefore, from the lowly
peddler, the owner of a small sari-sari store, to the operator of a
department store or a supermarket is so much a part of day-to-day
existence.
b. The alien retailers traits.

The alien retailer must have started plying his trade in this country in the
bigger centers of population (Time there was when he was unknown in
provincial towns and villages). Slowly but gradually he invaded towns and
villages; now he predominates in the cities and big centers of population.
He even pioneers in far away nooks where the beginnings of community
life appear, ministering to the daily needs of the residents and purchasing
their agricultural produce for sale in the towns. It is an undeniable fact that
in many communities the alien has replaced the native retailer. He has
shown in this trade, industry without limit, and the patience and
forbearance of a slave. Derogatory epithets are hurled at him, but he
laughs these off without murmur; insults of ill-bred and insolent neighbors
and customers are made in his face, but he heeds them not, and he
forgets and forgives. The community takes no note of him, as he appears
to be harmless and extremely useful.
already filled the minds of our leaders with fears and misgivings, and the
year of the enactment of the nationalization of the retail trade act (1954),
official statistics unmistakably point out to the ever-increasing dominance
and control by the alien of the retail trade, as witness the following
tables:
chanrob1es virtual 1aw library
Assets Gross Sales

Year and Retailers No. -Estab- Per cent Per cent
Nationality ishments Pesos Distri- Pesos Distribution bution
1941:
Filipino 106,671 200,323,138 55.82 174,181,924 5174
c. Alleged alien control and dominance.
Chinese 15,356 118,348,692 32.98 148,813,239 44.21
There is a general feeling on the part of the public, which appears to be

true to fact, about the controlling and dominant position that the alien
retailer holds in the nations economy. Food and other essentials, clothing,
almost all articles of daily life reach the residents mostly through him. In
big cities and centers of population he has acquired not only
predominance, but apparent control over distribution of almost all kinds of
goods, such as lumber, hardware, textiles, groceries, drugs, sugar, flour,
garlic, and scores of other goods and articles. And were it not for some
national corporations like the Naric, the Namarco, the Facomas and the
Accfa, his control over principal foods and products would easily become
full and complete.
Others 1,646 40,187,090 11.20 13,630,239 4.05
Petitioner denies that there is alien predominance and control in the retail
trade. In one breath it is said that the fear is unfounded and the threat is
imagined; in another, it is charged that the law is merely the result of
racialism and pure and unabashed nationalism. Alienage, it is said, is not
an element of control; also so many unmanageable factors in the retail
business make control virtually impossible. The first argument which brings
up an issue of fact merits serious consideration. The others are matters of
opinion within the exclusive competence of the legislature and beyond our
prerogative to pass upon and decide.
Filipino 113,631 213,342,264 67.30 467,161,667 60.51
The best evidence are the statistics on the retail trade, which put down the
figures in black and white. Between the constitutional convention year
(1935), when the fear of alien domination and control of the retail trade
Chinese 16,248 125,223,336 35.72 392,414,875 45.36
1947:
Filipino 111,107 208,658,946 65.05 279,583,333 57.03

Chinese 13,774 106,156,218 33.56 205,701,134 41.96
Others 354 8,761,260 .49 4,927,168 1.01
1948:
Chinese 12,087 93,155,459 29.38 294,894,227 38.20

Others 422 10,514,675 3.32 9,995,402 1.29
1949:
Filipino 113,659 213,451,602 60.89 462,532,901 53.47
Others 486 12,056,365 3.39 10,078,364 1.17
1951:
Filipino 1,878 4,069

Filipino 119,352 224,053,620 61.09 466,058,052 53.07

Chinese 17,429 134,325,303 36.60 404,481,384 46.06
Others 347 8,614,025 2.31 7,645,327 .87
AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Item Gross Sales
Year and Retailers Assets (Pesos)
Nationality (Pesos)
1941:

Chinese 7,707 9,691
Others 24,415 8,281
1947:

Chinese 7,707 14,934
Others 24,749 13,919
1948: (Census)
Chinese 7,707 24,398
Others 24,916 23,686
1949:
Chinese 7,707 24,152

Others 24,807 20,737
1951:

Chinese 7,707 33,207
Others 24,824 22,033
(Estimates Assets and Gross Sales of Retail Establishments, By year and
Nationality of Owners, Benchmark: 1948 Census, issued by the Bureau of
Census and Statistics, Department of Commerce and Industry; pp. 18-19
of Answer.)
The above statistics do not include corporations and partnerships, while the
figures on Filipino establishments already include mere market vendors,
whose capital is necessarily small.
The above figures reveal that in percentage distribution of assets and of
gross sales, alien participation has steadily increased during the years. It is
true, of course, that Filipinos have the edge in the number of retailers, but
aliens more than make up for the numerical gap through their assets and
gross sales which average between six and seven times those of the very
many Filipino retailers Numbers in retailers, here, do not imply superiority;
the alien invests more capital, buys and sells six to seven times more, and
gains much more. The same of official report, pointing out to the known
predominance of foreign elements in the retail trade, remarks that the
Filipino retailers were largely engaged in minor retailer enterprises. As
observed by respondents, the native investment is thinly spread, and the
Filipino retailer is practically helpless in matters of capital, credit, price and
supply.
d. Alien control and threat, subject of apprehension in Constitutional
Convention.
It is this domination and control, which we believe has been sufficiently
shown to exist, that is the legislatures target in the enactment of the
disputed nationalization law. If they did not exist as a fact the sweeping
remedy of nationalization would never have been adopted. The framers of
our Constitution also believed in the existence of this alien dominance and
control when they approved a resolution categorically declaring among

other things, that "it is the sense of the Convention that the public interest
requires the nationalization of the retail trade; . . ." (II Aruego, The
Framing of the Philippine Constitution, 662-663, quoted on page 67 of
Petitioner.) That was twenty-two years ago; and the events since then
have not been either pleasant or comforting. Dean Since of the University
of the Philippines College of Law, commenting on the patrimony clause of
the Preamble opines that the fathers of our Constitution were merely
translating the general preoccupation of Filipinos "of the dangers from alien
interests that had already brought under their control the commercial and
other economic activities of the country" (Sinco, Phil. Political Law, 10th
ed., p. 114); and analyzing the concern of the members of the
constitutional convention for the economic life of the citizens, in connection
with the nationalistic provisions of the Constitution, he says:
"But there has been a general feeling that alien dominance over the
economic life of the country is not desirable and that if such a situation
should remain, political independence alone is no guarantee to national
stability and strength. Filipino private capital is not big enough to wrest
from alien hands the control of the national economy. Moreover, it is but of
recent formation and hence, largely inexperienced, timid and hesitant.
Under such conditions, the government as the instrumentality of the
national will, has to step in and assume the initiative, if not the leadership,
in the struggle for the economic freedom of the nation in somewhat the
same way that it did in the crusade for political freedom. Thus . . . It (the
Constitution) envisages an organized movement for the protection of the
nation not only against the possibilities of armed invasion but also against
its economic subjugation by alien interests in the economic field." (Phil.
Political Law by Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other
quarters. Filipino business men, manufacturers and producers believe so;
they fear the business coming from alien control, and they express
sentiments of economic independence. Witness thereto is Resolution No. 1,
approved on July 18, 1953, of the Fifth National Convention of Filipino
Businessmen, and a similar resolution, approved on March 20, 1954, of the
Second National Convention of Manufacturers and Producers. The man in
the street also believes, and fears, alien predominance and control; so our
newspapers, which have editorially pointed out not only to control but to
alien stranglehold. We, therefore, find alien domination and control to be a
fact, a reality proved by official statistics, and felt by all the sections and
groups that compose the Filipino community.
e. Dangers of alien control and dominance in retail.
But the dangers arising from alien participation in the retail trade does not
seem to lie in the predominance alone; there is a prevailing feeling that
such predominance may truly endanger the national interest. With ample
capital, unity of purpose and action and thorough organization, alien
retailers and merchants can act in such complete unison and concert on
such vital matters as the fixing of prices, the determination of the amount
of goods or articles to be made available in the market, and even the
choice of the goods or articles they would or would not patronize or
distribute, that fears of dislocation of the national economy and of the
complete subservience of national retailers and of the consuming public
are not entirely unfounded. Nationals, producers and consumers alike, can
be placed completely at their mercy. This is easily illustrated. Suppose an
article of daily use is desired to be prescribed by the aliens, because the
producer or importer does not offer them sufficient profits, or because a
new competing article offers bigger profits for its introduction. All that
aliens would do is to agree to refuse to sell the first article, eliminating it
from their stocks, offering the new one as a substitute. Hence, the
producers or importers of the prescribed article, or its consumers, find the
article suddenly out of circulation. Freedom of trade is thus curtailed and
free enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious
influences of alien domination. Grave abuses have characterized the
exercise of the retail trade by aliens. It is a fact within judicial notice,
which courts of justice may not properly overlook or ignore in the interests
of truth and justice, that there exists a general feeling on the part of the
public that alien participation in the retail trade has been attended by a
pernicious and intolerable practices, the mention of a few of which would
suffice for our purposes; that at some time or other they have cornered
the market of essential commodities, like corn and rice, creating artificial
scarcities to justify and enhance profits to unreasonable proportions; that
they have hoarded essential foods to the inconvenience and prejudice of
the consuming public, so much so that the Government has had to
establish the National Rice and Corn Corporation to save the public from
their continuous hoarding practices and tendencies; that they have violated
price control laws, especially on foods and essential commodities, such
that the legislature had to enact a law (Sec. 9, Republic Act No. 1168),
authorizing their immediate and automatic deportation for price control
convictions; that they have secret combinations among themselves to
control prices, cheating the operation of the law of supply and demand;
that they have connived to boycott honest merchants and traders who
would not cater or yield to their demands, in unlawful restraint of freedom
of trade and enterprise. They are believed by the public to have evaded tax
laws, smuggled goods and money into and out of the land, violated import
and export prohibitions, control laws and the like, in derision and contempt
of lawful authority. It is also believed that they have engaged in corrupting

public officials with fabulous bribes, indirectly causing the prevalence of
graft and corruption in the Government. As a matter of fact appeals to
unscrupulous aliens have been made both by the Government and by their
own lawful diplomatic representatives, action which impliedly admits a
prevailing feeling about the existence of many of the above practices.
The circumstances above set forth create well founded fears that worse
things may come in the future. The present dominance of the alien retailer,
especially in the big centers of population, therefore, becomes a potential
source of danger on occasions of war or other calamity. We do not have
here in this country isolated groups of harmless aliens retailing goods
among nationals; what we have are well organized and powerful groups
that dominate the distribution of goods and commodities in the
communities and big centers of population. They owe no allegiance or
loyalty to the State, and the State cannot rely upon them in times of crisis
or emergency. While the national holds his life, his person and his property
subject to the needs of his country, the alien may even become the
potential enemy of the State.
f. Law enacted in interest of national economic survival and security.
We are fully satisfied upon a consideration of all the facts and
circumstances that the disputed law is not the product of racial hostility,
prejudice or discrimination, but the expression of the legitimate desire and
determination of the people, thru their authorized representatives, to free
the nation from the economic situation that has unfortunately been
saddled upon it rightly or wrongly, to its disadvantage. The law is clearly in
the interest of the public, any of the national security itself, and
indisputably falls within the scope of police power, thru which and by which
the State insures its existence and security and the supreme welfare of its
citizens.
VI. The Equal Protection Limitation
a. Objections to alien participation in retail trade.
The next question that now poses solution is, Does the law deny the equal
protection of the laws? As pointed out above, the mere fact of alienage is
the root and cause of the distinction between the alien and the national as
a trader. The alien resident owes allegiance to the country of his birth or
his adopted country; his stay here is for personal convenience; he is
attracted by the lure of gain and profit. His aim or purpose of stay, we
admit, is neither illegitimate nor immoral, but he is naturally lacking in that
spirit of loyalty and enthusiasm for this country where he temporarily stays
and makes his living, or of that spirit of regard, sympathy and

consideration for his Filipino customers as would prevent him from taking
advantage of their weakness and exploiting them. The faster he makes his
pile, the earlier can the alien go back to his beloved country and his
beloved kin and country men. The experience of the country is that the
alien retailer has shown such utter disregard for his customers and the
people on whom he makes his profit, that it has been found necessary to
adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really
makes a genuine contribution to national income and wealth. He
undoubtedly contributes to general distribution, but the gains and profits
he makes are not invested in industries that would help the countrys
economy and increase national wealth. The aliens interest in this country
being merely transient and temporary, it would indeed be ill-advised to
continue entrusting the very important function of retail distribution to his
hands.
The practices resorted to by aliens in the control of distribution, as already
pointed out above, their secret manipulations of stocks of commodities and
prices, their utter disregard of the welfare of their customers and of the
ultimate happiness of the people of the nation of which they are mere
guests, which practices, manipulations and disregard do not attend the
exercise of the trade by the nationals, show the existence of real and
actual, positive and fundamental differences between an alien and a
national which fully justify the legislative classification adopted in the retail
trade measure. These differences are certainly a valid reason for the State
to prefer the national over the alien in the retail trade. We would be doing
violence to fact and reality were we to hold that no reason or ground for a
legitimate distinction can be found between one and the other.
b. Difference in alien aims and purposes sufficient basis for distinction.
The above objectionable characteristics of the exercise of the retail trade
by the aliens, which are actual and real, furnish sufficient grounds for
legislative classification of retail traders into nationals and aliens. Some
may disagree with the wisdom of the legislatures classification. To this we
answer, that this is the prerogative of the law-making power. Since the
Court finds that the classification is actual, real and reasonable, and all
persons of one class are treated alike, and as it cannot be said that the
classification is patently unreasonable and unfounded, it is in duty bound
to declare that the legislature acted within its legitimate prerogative and it
cannot declare that the act transcends the limit of equal protection
established by the Constitution.
Broadly speaking, the power of the legislature to make distinctions and

classifications among persons is not curtailed or denied by the equal
protection of the laws clause. The legislative power admits of a wide scope
of discretion, and a law can be violative of the constitutional limitation only
when the classification is without reasonable basis. In addition to the
authorities we have earlier cited, we can also refer to the case of Lindsley
v. Natural Carbonic Gas Co. (1911), 55 L. ed., 369, which clearly and
succinctly defined the application of equal protection clause to a law sought
to be voided as contrary thereto:
jgc:chanrobles.com .ph
". . .1. The equal protection clause of the Fourteenth Amendment does not
take from the state the power to classify in the adoption of police laws, but
admits of the exercise of the wide scope of discretion in that regard, and
avoids what is done only when it is without any reasonable basis, and
therefore is purely arbitrary. 2. A classification having some reasonable
basis does not offend against that clause merely because it is not made
with mathematical nicety, or because in practice it results in some
inequality. 3. When the classification in such a law is called in question, if
any state of facts reasonably can be conceived that would sustain it, the
existence of that state of facts at the time the law was enacted must be
assumed. 4. One who assails the classification in such a law must carry the
burden of showing that it does not rest upon any reasonable basis, but is
essentially arbitrary."
c. Authorities recognizing citizenship as basis for classification.
The question as to whether or not citizenship is a legal and valid ground for
classification has already been affirmatively decided in this jurisdiction as
well as in various courts in the United States. In the case of Smith Bell &
Co. v. Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the
Philippine Legislature was in issue, because of a condition therein limiting
the ownership of vessels engaged in coastwise trade to corporations
formed by citizens of the Philippine Islands or the United States, thus
denying the right to aliens, it was held that the Philippine Legislature did
not violate the equal protection clause of the Philippine Bill of Rights. The
Legislature in enacting the law had as ultimate purpose the encouragement
of Philippine shipbuilding and the safety for these Islands from foreign
interlopers. We held that this was a valid exercise of the police power, and
all presumptions are in favor of its constitutionality. In substance, we held
that the limitation of domestic ownership of vessels engaged in coastwise
trade to citizens of the Philippines does not violate the equal protection of
the law and due process of law clauses of the Philippine Bill of Rights. In
rendering said decision we quoted with approval the concurring opinion of
Justice Johnson in the case of Gibbons v. Ogden, 9 Wheat., I, as follows:
"Licensing acts, in fact, in legislation, are universally restraining acts; as,

for example, acts licensing gaming houses, retailers of spirituous liquors,
etc. The act, in this instance, is distinctly of that character, and forms part
of an extensive system, the object of which is to encourage American
shipping, and place them on an equal footing with the shipping of other
nations. Almost every commercial nation reserves to its own subjects a
monopoly of its coasting trade; and a countervailing privilege in favor of
American shipping is contemplated, in the whole legislation of the United
States on this subject. It is not to give the vessel an American character,
that the license is granted; that effect has been correctly attributed to the
act of her enrollment. But it is to confer on her American privileges, as
contra distinguished from foreign; and to preserve the Government from
fraud by foreigners; in surreptitiously intruding themselves into the
American commercial marine, as well as frauds upon the revenue in the
trade coastwise, that this whole system is projected."
The rule in general is as follows:
"Aliens are under no special constitutional protection which forbids a

classification otherwise justified simply because the limitation of the class
falls along the lines of nationality. That would be requiring a higher degree
of protection for aliens as a class than for similar classes of American
citizens. Broadly speaking, the difference in status between citizens and
aliens constitutes a basis for reasonable classification in the exercise of
police power." (2 Am. Jur. 468-469.)
In Commonwealth v. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute
on the licensing of hawkers and peddlers, which provided that no one can
obtain a license unless he is, or has declared his intention, to become a
citizen of the United States, was held valid, for the following reason: It
may seem wise to the legislature to limit the business of those who are
supposed to have regard for the welfare, good order and happiness of the
community, and the court cannot question this judgment and conclusion.
In Bloomfield v. State, 99 N.E. 309 (Ohio, 1912), a statute which
prevented certain persons, among them aliens, from engaging in the traffic
of liquors, was found not to be the result of race hatred, or in hospitality,
or a deliberate purpose to discriminate, but was based on the belief that an
alien cannot be sufficiently acquainted with our institutions and our life as
to enable him to appreciate the relation of this particular business to our
entire social fabric", and was not, therefore, invalid. In Ohio ex rel. Clarke
v. Deckebach, 274 U.S. 392, 71 L. ed. 1115 (1926), the U. S. Supreme
Court had under consideration an ordinance of the city of Cincinnati
prohibiting the issuance of licenses (pools and billiard rooms) to aliens. It
held that plainly irrational discrimination against aliens is prohibited, but it
does not follow that alien race and allegiance may not bear in some
instances such a relation to a legitimate object of legislation as to be made

the basis of permitted classification, and that it could not state that the
legislation is clearly wrong; and that latitude must be allowed for the
legislative appraisement of local conditions and for the legislative choice of
methods for controlling an apprehended evil. The case of State v. Carrol,
124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura
v. City of Seattle, 210 P. 30 (Washington, 1922), the business of
pawnbroking was considered as having tendencies injuring public interest,
and limiting it to citizens is within the scope of police power. A similar
statute denying aliens the right to engage in auctioneering was also
sustained in Wright v. May, L. R. A., 1915 P. 151 (Minnesota, 1914). So
also in Anton v. Van Winkle, 297 F. 340 (Oregon, 1924), the court said that
aliens are judicially known to have different interests, knowledge, attitude,
psychology and loyalty, hence the prohibition of issuance of licenses to
them for the business of pawnbroker, pool, billiard, card room, dance hall,
is not an infringement of constitutional rights. In Templar v. Michigan State
Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting the
licensing of aliens as barbers was held void, but the reason for the decision
was the courts finding that the exercise of the business by the aliens does
not in any way affect the morals, the health, or even the convenience of
the community. In Takahashi v. Fish and Game Commission, 92 L. ed.
1479 (1947), a California statute banning the issuance of commercial
fishing licenses to persons ineligible to citizenship was held void, because
the law conflicts with Federal power over immigration, and because there is
no public interest in the mere claim of ownership of the waters and the fish
in them, so there was no adequate justification for the discrimination. It
further added that the law was the outgrowth of antagonism toward
persons of Japanese ancestry. However, two Justices dissented on the
theory that fishing rights have been treated traditionally as natural
resources. In Fraser v. McConway & Tarley Co., 82 Fed. 257 (Pennsylvania,
1897), a state law which imposed a tax on every employer of foreign-born
unnaturalized male persons over 21 years of age, was declared void
because the court found that there was no reason for the classification and
the tax was an arbitrary deduction from the daily wage of an employee.
d. Authorities contra explained.
It is true that some decisions of the Federal court and of the State courts
in the United States hold that the distinction between aliens and citizens is
not a valid ground for classification. But in these decisions the laws
declared invalid were found to be either arbitrary, unreasonable or
capricious, or were the result or product of racial antagonism and hostility,
and there was no question of public interest involved or pursued. In Yu
Cong Eng v. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme
Court declared invalid a Philippine law making unlawful the keeping of
books of account in any language other than English, Spanish or any other
local dialect, but the main reasons for the decisions are: (1) that if Chinese
were driven out of business there would be no other system of distribution,
and (2) that the Chinese would fall prey to all kinds of fraud, because they
would be deprived of their right to be advised of their business and to
direct its conduct. The real reason for the decision, therefore, is the courts
belief that no public benefit would be derived from the operation of the law
and on the other hand it would deprive Chinese of something indispensable
for carrying on their business. In Yick Wo v. Hopkins, 30 L. ed. 220 (1885)
an ordinance conferring power on officials to withhold consent in the
operation of laundries both as to persons and place, was declared invalid,
but the court said that the power granted was arbitrary, that there was no
reason for the discrimination which attended the administration and
implementation of the law, and that the motive thereof was mere racial
hostility. In State v. Montgomery, 47 A. 165 (Maine, 1900), a law
prohibiting aliens to engage as hawkers and peddlers was declared void,
because the discrimination bore no reasonable and just relation to the act
in respect to which the classification was proposed.
The case at bar is radically different, and the facts make them so. As we
already have said, aliens do not naturally possess the sympathetic
consideration and regard for customers with whom they come in daily
contact, nor the patriotic desire to help bolster the nations economy,
except in so far as it enhances their profit, nor the loyalty and allegiance
which the national owes to the land. These limitations on the qualifications
of aliens have been shown on many occasions and instances, especially in
times of crisis and emergency. We can do no better than borrow the
language of Anton v. Van Winkle, 297 F. 340, 342, to drive home the
reality and significance of the distinction between the alien and the
national, thus:
". . . It may be judicially known, however, that aliens coming into this
country are without the intimate knowledge of our laws, customs, and
usages that our own people have. So it is likewise known that certain
classes of aliens are of different psychology from our fellow countrymen.
Furthermore, it is natural and reasonable to suppose that the foreign born,
whose allegiance is first to their own country, and whose ideals of
governmental environment and control have been engendered and formed
under entirely different regimes and political systems, have not the same
inspiration for the public weal, nor are they as well disposed toward the
United States, as those who by citizenship, are a part of the government
itself. Further enlargement, is unnecessary. I have said enough so that
obviously it cannot be affirmed with absolute confidence that the
Legislature was without plausible reason for making the classification, and
therefore appropriate discrimination against aliens as it relates to the
subject of legislation. . . ."
annoyance of a particular class, and must not be unduly oppressive." (11

Am. Jur. Sec. 302, pp. 1074-1075.)
cralaw virtua1aw library
VII. The Due Process of Law Limitation
In the case of Lawton v. Steele, 38 L. ed. 385, 388, it was also held:
a. Reasonability, the test of the limitation; determination by legislature

decisive.
We now come to due process as a limitation on the exercise of the police
power. It has been stated by the highest authority in the United States
that:
". . . To justify the state in thus interposing its authority in behalf of the
public, it must appear, first, that the interests of the public generally, as
distinguished from those of a particular class, require such interference;
and second, that the means are reasonably necessary for the
accomplishment of the purpose, and not unduly oppressive upon
individuals. . . ."
". . . And the guaranty of due process, as has often been held, demands
only that the law shall not be unreasonable, arbitrary or capricious, and
that the means selected shall have a real and substantial relation to the
subject sought to be attained. . . ."
Prata Undertaking Co. v. State Board of Embalming, 104 ALR, 389, 395,
fixes this test of constitutionality:
"So far as the requirement of due process is concerned and in the absence
of other constitutional restriction a state is free to adopt whatever
economic policy may reasonably be deemed to promote public welfare, and
to enforce that policy by legislation adapted to its purpose. The courts are
without authority either to declare such policy, or, when it is declared by
the legislature, to override it. If the laws passed are seen to have a
reasonable relation to a proper legislative purpose, and are neither
arbitrary nor discriminatory, the requirements of due process are satisfied,
and judicial determination to that effect renders a court functus
officio. . . ." (Nebbia v. New York, 78 L. ed. 940, 950, 957.)
Another authority states the principle thus:
". . . Too much significance cannot be given to the word reasonable in

considering the scope of the police power in a constitutional sense, for the
test used to determine the constitutionality of the means employed by the
legislature is to inquire whether the restrictions it imposes on rights
secured to individuals by the Bill of Rights are unreasonable, and not
whether it imposes any restrictions on such rights. . . ."
". . . A statute to be within this power must also be reasonable in its

operation upon the persons whom it affects, must not be for the
"In determining whether a given act of the Legislature, passed in the

exercise of the police power to regulate the operation of a business, is or is
not constitutional, one of the first questions to be considered by the court
is whether the power as exercised has a sufficient foundation in reason in
connection with the matter involved, or is an arbitrary, oppressive, and
capricious use of that power, without substantial relation to the health,
safety, morals, comfort, and general welfare of the public."
b. Petitioners argument considered.

Petitioners main argument is that retail is a common, ordinary occupation,
one of those privileges long ago recognized as essential to the orderly
pursuit of happiness by free men; that it is a gainful and honest occupation
and therefore beyond the power of the legislature to prohibit and penalize.
This argument overlooks fact and reality and rests on an incorrect
assumption and premise, i.e., that in this country where the occupation is
engaged in by petitioner, it has been so engaged by him, by the alien, in
an honest creditable and unimpeachable manner, without harm or injury to
the citizens and without ultimate danger to their economic peace,
tranquility and welfare. But the Legislature has found, as we have also
found and indicated, that the privilege has been so grossly abused by the
alien, thru the illegitimate use of pernicious designs and practices, that he
now enjoys a monopolistic control of the occupation and threatens a
deadly stranglehold on the nations economy endangering the national
security in times of crisis and emergency.
The real question at issue, therefore, is not that posed by petitioner, which
overlooks and ignores the facts and circumstances, but this, Is the
exclusion in the future of aliens from the retail trade unreasonable,
arbitrary and capricious, taking into account the illegitimate and pernicious
form and manner in which the aliens have heretofore engaged therein? As
thus correctly stated the answer is clear. The law in question is deemed
absolutely necessary to bring about the desired legislative objective, i.e.,
to free national economy from alien control and dominance. It is not
necessarily unreasonable because it affects private rights and privileges
(11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is the
appropriateness or adequacy under all circumstances of the means
adopted to carry out its purpose into effect (Id.) Judged by this test,
disputed legislation, which is not merely reasonable but actually necessary,
must be considered not to have infringed the constitutional limitation of
reasonableness.
of legislative action.
The framers of the Constitution could not have intended to impose the
constitutional restrictions of due process on the attainment of such a noble
motive as freedom from economic control and domination, thru the
exercise of the police power. The fathers of the Constitution must have
given to the legislature full authority and power to enact legislation that
would promote the supreme happiness of the people, their freedom and
liberty. On the precise issue now before us, they expressly made their
voice clear; they adopted a resolution expressing their belief that the
legislation in question is within the scope of the legislative power. Thus
they declared in their Resolution:
The necessity of the law in question is explained in the explanatory note

that accompanied the bill, which later was enacted into law:
"This bill proposes to regulate the retail business. Its purpose is to prevent
persons who are not citizens of the Philippines from having a strangle hold
upon our economic life. If the persons who control this vital artery of our
economic life are the ones who owe no allegiance to this Republic, who
have no profound devotion to our free institutions, and who have no
permanent stake in our peoples welfare, we are not really the masters of
our own destiny. All aspects of our life, even our national security, will be
at the mercy of other people.
"In seeking to accomplish the foregoing purpose, we do not propose to
deprive persons who are not citizens of the Philippines of their means of
livelihood. While this bill seeks to take away from the hands of persons
who are not citizens of the Philippines a power that can be wielded to
paralyze all aspects of our national life and endanger our national security
it respects existing rights.
"The approval of this bill is necessary for our national survival."
If political independence is a legitimate aspiration of a people, then

economic independence is none the less legitimate. Freedom and liberty
are not real and positive if the people are subject to the economic control
and domination of others, especially if not of their own race or country. The
removal and eradication of the shackles of foreign economic control and
domination, is one of the noblest motives that a national legislature may
pursue. It is impossible to conceive that legislation that seeks to bring it
about can infringe the constitutional limitation of due process. The
attainment of a legitimate aspiration of a people can never be beyond the
limits of legislative authority.
c. Law expressly held by Constitutional Convention to be within the sphere
"That it is the sense of the Convention that the public interest requires the
nationalization of retail trade; but it abstains from approving the
amendment introduced by the Delegate for Manila, Mr. Araneta, and others
on this matter because it is convinced that the National Assembly is
authorized to promulgate a law which limits to Filipino and American
citizens the privilege to engage in the retail trade." (II Aruego, The
Framing of the Philippine Constitution, 662- 663, quoted on pages 66 and
67 of the Memorandum for the Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various
provisions of the Constitution. Thus in the preamble, a principal objective
is the conservation of the patrimony of the nation and as corollary thereto
the provision limiting to citizens of the Philippines the exploitation,
development and utilization of its natural resources. And in Section 8 of
Article XIV, it is provided that "no franchise, certificate, or any other form
of authorization for the operation of a public utility shall be granted except
to citizens of the Philippines." The nationalization of the retail trade is only
a continuance of the nationalistic protective policy laid down as a primary
objective of the Constitution. Can it be said that a law imbued with the
same purpose and spirit underlying many of the provisions of the
Constitution is unreasonable, invalid and unconstitutional?
The seriousness of the Legislatures concern for the plight of the nationals
as manifested in the approval of the radical measure is, therefore, fully
justified. It would have been recreant to its duties towards the country and
its people would it view the sorry plight of the nationals with complacency
and refuse or neglect to adopt a remedy commensurate with the demands
of public interest and national survival. As the repository of the sovereign
power of legislation, the Legislature was in duty bound to face the problem
and meet, through adequate measures, the danger and threat that alien
domination of retail trade poses to national economy.
d. Provisions of law not unreasonable.

A cursory study of the provisions of the law immediately reveals how
tolerant, how reasonable the Legislature has been. The law is made
prospective and recognizes the right and privilege of those already
engaged in the occupation to continue therein during the rest of their lives;
and similar recognition of the right to continue is accorded associations of
aliens. The right or privilege is denied to those only upon conviction of
certain offenses. In the deliberations of the Court on this case, attention
was called to the fact that the privilege should not have been denied to
children and heirs of aliens now engaged in the retail trade. Such provision
would defeat the law itself, its aims and purposes. Besides, the exercise of
legislative discretion is not subject to judicial review It is well settled that
the Court will not inquire into the motives of the Legislature, nor pass upon
general matters of legislative judgment. The Legislature is primarily the
judge of the necessity of an enactment or of any of its provisions, and
every presumption is in favor of its validity, and though the Court may hold
views inconsistent with the wisdom of the law, it may not annul the
legislation if not palpably in excess of the legislative power. Furthermore,
the test of the validity of a law attacked as a violation of due process, is
not its reasonableness, but its unreasonableness, and we find the
provisions are not unreasonable. These principles also answer various
other arguments raised against the law, some of which are: that the law
does not promote general welfare; that thousands of aliens would be
thrown out of employment; that prices will increase because of the
elimination of competition; that there is no need for the legislation; that
adequate replacement is problematical; that there may be general
breakdown; that there would be repercussions from foreigners; etc. Many
of these arguments are directed against the supposed wisdom of the law
which lies solely within the legislative prerogative; they do not import
invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the
claim that the title thereof is misleading or deceptive, as it conceals the
real purpose of the bill, which is to nationalize the retail business and
prohibit aliens from engaging therein. The constitutional provision which is
claimed to be violated in Section 21 (1) of Article VI, which reads:
"No bill which may be enacted into law shall embrace more then one
subject which shall be expressed in the title of the bill."
What the above provision prohibits is duplicity, that is, if its title completely
fails to apprise the legislators or the public of the nature, scope and
consequences of the law or its operation (I Sutherland, Statutory

Construction, Sec. 1707, p. 297.) A cursory consideration of the title and
the provisions of the bill fails to show the presence of duplicity. It is true
that the term "regulate" does not and may not readily and at first glance
convey the idea of "nationalization" and "prohibition", which terms express
the two main purposes and objectives of the law. But "regulate" is a
broader term than either prohibition or nationalization. Both of these have
always been included within the term regulation.
"Under the title of an act to regulate, the sale of intoxicating liquors, the
Legislature may prohibit the sale of intoxicating liquors." (Sweet v. City of
Wabash, 41 Ind., 7; quoted in page 41 of Answer.)
"Within the meaning of the Constitution requiring that the subject of every
act of the Legislature shall be stated in the title, the title To regulate the
sale of intoxicating liquors, etc." sufficiently expresses the subject of an act
prohibiting the sale of such liquors to minors and to persons in the habit of
getting intoxicated; such matters being properly included within the
subject of regulating the sale." (Williams v. State, 48 Ind. 306, 308,
quoted in p. 42 of Answer.)
"The word regulate is of broad import, and necessarily implies some
degree of restraint and prohibition of acts usually done in connection with
the thing to be regulated. While word regulate does not ordinarily convey
meaning of prohibit, there is no absolute reason why it should not have
such meaning when used in delegating police power in connection with a
thing the best or only efficacious regulation of which involves suppression."
(State v. Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)
The general rule is for the use of general terms in the title of a bill; it has
also been said that the title need not be an index to the entire contents of
the law (I Sutherland, Statutory Construction, Sec. 4803, p. 345.) The
above rule was followed when the title of the Act in question adopted the
more general term "regulate" instead of "nationalize" or "prohibit."
Furthermore, the law also contains other rules for the regulation of the
retail trade, which may not be included in the terms "nationalization" or
"prohibition" ; so were the title changed from "regulate" to "nationalize" or
"prohibit", there would have been many provisions not falling within the
scope of the title which would have made the Act invalid. The use of the
term "regulate", therefore, is in accord with the principle governing the
drafting of statutes, under which a simple or general term should be
adopted in the title, which would include all other provisions found in the
body of the Act.
One purpose of the constitutional directive that the subject of a bill should
be embraced in its title is to apprise the legislators of the purposes, the

nature and scope of its provisions, and prevent the enactment into law of
matters which have not received the notice, action and study of the
legislators or of the public. In the case at bar it cannot be claimed that the
legislators have not been apprised of the nature of the law, especially the
nationalization and prohibition provisions. The legislators took active
interest in the discussion of the law, and a great many of the persons
affected by the prohibition in the law conducted a campaign against its
approval. It cannot be claimed, therefore, that the reasons for declaring
the law invalid ever existed. The objection must therefore, be overruled.
IX. Alleged violation of international treaties and obligations
Another subordinate argument against the validity of the law is the
supposed violation thereby of the Charter of the United Nations and of the
Declaration of Human Rights adopted by the United Nations General
Assembly. We find no merit in the above contention. The United Nations
Charter imposes no strict or legal obligations regarding the rights and
freedom of their subjects (Hans Kelsen, The Law of the United Nations,
1951 ed. pp. 29-32), and the Declaration of Human Rights contains
nothing more than a mere recommendation, or a common standard of
achievement for all peoples and all nations (Id. p. 39.) That such is the
import of the United Nations Charter aid of the Declaration of Human
Rights can be inferred from the fact that members of the United Nations
Organization, such as Norway and Denmark, prohibit foreigners from
engaging in retail trade, and in most nations of the world laws against
foreigners engaged in domestic trade are adopted.
The Treaty of Amity between the Republic of the Philippines and the
Republic of China of April 18, 1947 is also claimed to be violated by the law
in question. All that the treaty guarantees is equality of treatment to the
Chinese nationals "upon the same terms as the nationals of any other
country." But the nationals of China are not discriminated against because
nationals of all other countries, except those of the United States, who are
granted special rights by the Constitution, are all prohibited from engaging
in the retail trade. But even supposing that the law infringes upon the said
treaty, the treaty is always subject to qualification or amendment by a
subsequent law (U. S. v. Thompson, 258, Fed. 257, 260), and the same
may never curtail or restrict the scope of the police power of the State
(Palston v. Pennsylvania, 58 L. ed. 539.) .
X. Conclusion
Resuming what we have set forth above we hold that the disputed law was
enacted to remedy a real actual threat and danger to national economy
posed by alien dominance and control of the retail business and free
citizens and country from such dominance and control; that the enactment
clearly falls within the scope of the police power of the State, thru which
and by which it protects its own personality and insures its security and
future; that the law does not violate the equal protection clause of the
Constitution because sufficient grounds exist for the distinction between
alien and citizen in the exercise of the occupation regulated, nor the due
process of law clause, because the law is prospective in operation and
recognizes the privilege of aliens already engaged in the occupation and
reasonably protects their privilege; that the wisdom and efficacy of the law
to carry out its objectives appear to us to be plainly evident as a matter
of fact it seems not only appropriate but actually necessary and that in
any case such matter falls within the prerogative of the Legislature, with
whose power and discretion the Judicial department of the Government
may not interfere; that the provisions of the law are clearly embraced in
the title, and this suffers from no duplicity and has not misled the
legislators or the segment of the population affected; and that it cannot be
said to be void for supposed conflict with treaty obligations because no
treaty has actually been entered into on the subject and the police power
may not be curtailed or surrendered by any treaty or any other
conventional agreement.
Some members of the Court are of the opinion that the radical effects of
the law could have been made less harsh in its impact on the aliens. Thus
it is stated that more time should have been given in the law for the
liquidation of existing businesses when the time comes for them to close.
Our legal duty, however, is merely to determine if the law falls within the
scope of legislative authority and does not transcend the limitations of due
process and equal protection guaranteed in the Constitution. Remedies
against the harshness of the law should be addressed to the Legislature;
they are beyond our power and jurisdiction.
The petition is hereby denied, with costs against petitioner
EN BANC
[G.R. No. 177807 : October 11, 2011]
EMILIO GANCAYCO, PETITIONER, VS. CITY GOVERNMENT OF
QUEZON CITY AND METRO MANILA DEVELOPMENT AUTHORITY,
RESPONDENTS.
[G.R. NO. 177933]
METRO MANILA DEVELOPMENT AUTHORITY, PETITIONER, VS.
JUSTICE EMILIO A. GANCAYCO (RETIRED), RESPONDENT,
DECISION
SERENO, J.:
Before us are consolidated Petitions for Review under Rule 45 of the Rules
of Court assailing the Decision[1] promulgated on 18 July 2006 and the
Resolution[2] dated 10 May 2007 of the Court of Appeals in CA-G.R. SP No.
84648.
The Facts
In the early 1950s, retired Justice Emilio A. Gancayco bought a parcel of
land located at 746 Epifanio delos Santos Avenue (EDSA), [3] Quezon City
with an area of 375 square meters and covered by Transfer Certificate of
Title (TCT) No. RT114558.
On 27 March 1956, the Quezon City Council issued Ordinance No. 2904,
entitled "An Ordinance Requiring the Construction of Arcades, for
Commercial Buildings to be Constructed in Zones Designated as Business
Zones in the Zoning Plan of Quezon City, and Providing Penalties in
Violation Thereof."[4]
An arcade is defined as any portion of a building above the first floor
projecting over the sidewalk beyond the first storey wall used as protection
for pedestrians against rain or sun.[5]
Ordinance No. 2904 required the relevant property owner to construct an
arcade with a width of 4.50 meters and height of 5.00 meters along EDSA,
from the north side of Santolan Road to one lot after Liberty Avenue, and
from one lot before Central Boulevard to the Botocan transmission line.
At the outset, it bears emphasis that at the time Ordinance No. 2904 was
passed by the city council, there was yet no building code passed by the
national legislature. Thus, the regulation of the construction of buildings
was left to the discretion of local government units. Under this particular
ordinance, the city council required that the arcade is to be created by
constructing the wall of the ground floor facing the sidewalk a few meters
away from the property line. Thus, the building owner is not allowed to
construct his wall up to the edge of the property line, thereby creating a
space or shelter under the first floor. In effect, property owners relinquish
the use of the space for use as an arcade for pedestrians, instead of using
it for their own purposes.
The ordinance was amended several times. On 8 August 1960, properties
located at the Quezon City-San Juan boundary were exempted by
Ordinance No. 60-4477 from the construction of arcades. This ordinance
was further amended by Ordinance No. 60-4513, extending the exemption
to commercial buildings from Balete Street to Seattle Street. Ordinance
No. 6603 dated 1 March 1966 meanwhile reduced the width of the arcades
to three meters for buildings along V. Luna Road, Central District, Quezon
City.
The ordinance covered the property of Justice Gancayco. Subsequently,
sometime in 1965, Justice Gancayco sought the exemption of a two-storey
building being constructed on his property from the application of
Ordinance No. 2904 that he be exempted from constructing an arcade on
his property.
On 2 February 1966, the City Council acted favorably on Justice Gancayco's
request and issued Resolution No. 7161, S-66, "subject to the condition
that upon notice by the City Engineer, the owner shall, within reasonable
time, demolish the enclosure of said arcade at his own expense when
public interest so demands."[6]
Decades after, in March 2003, the Metropolitan Manila Development
Authority (MMDA) conducted operations to clear obstructions along the
sidewalk of EDSA in Quezon City pursuant to Metro Manila Council's (MMC)
Resolution No. 02-28, Series of 2002.[7] The resolution authorized the
MMDA and local government units to "clear the sidewalks, streets,
avenues, alleys, bridges, parks and other public places in Metro Manila of
all illegal structures and obstructions."[8]
On 28 April 2003, the MMDA sent a notice of demolition to Justice
Gancayco alleging that a portion of his building violated the National
Building Code of the Philippines (Building Code) [9] in relation to Ordinance
No. 2904. The MMDA gave Justice Gancayco fifteen (15) days to clear the
portion of the building that was supposed to be an arcade along EDSA. [10]
Justice Gancayco did not comply with the notice. Soon after the lapse of
the fifteen (15) days, the MMDA proceeded to demolish the party wall, or
what was referred to as the "wing walls," of the ground floor structure. The
records of the present case are not entirely clear on the extent of the
demolition; nevertheless, the fact of demolition was not disputed. At the
time of the demolition, the affected portion of the building was being used
as a restaurant.
On 29 May 2003, Justice Gancayco filed a Petition [11] with prayer for a
temporary restraining order and/or writ of preliminary injunction before the
Regional Trial Court (RTC) of Quezon City, docketed as Civil Case No. Q0349693, seeking to prohibit the MMDA and the City Government of Quezon
City from demolishing his property. In his Petition,[12] he alleged that the
ordinance authorized the taking of private property without due process of
law and just compensation, because the construction of an arcade will
require 67.5 square meters from the 375 square meter property. In
addition, he claimed that the ordinance was selective and discriminatory in
its scope and application when it allowed the owners of the buildings
located in the Quezon City-San Juan boundary to Cubao Rotonda, and
Balete to Seattle Streets to construct arcades at their option. He thus
sought the declaration of nullity of Ordinance No. 2904 and the payment of
damages. Alternately, he prayed for the payment of just compensation
should the court hold the ordinance valid.
The City Government of Quezon City claimed that the ordinance was a
valid exercise of police power, regulating the use of property in a business
zone. In addition, it pointed out that Justice Gancayco was already barred
by estoppel, laches and prescription.
Similarly, the MMDA alleged that Justice Gancayco could not seek the
nullification of an ordinance that he had already violated, and that the
ordinance enjoyed the presumption of constitutionality. It further stated
that the questioned property was a public nuisance impeding the safe
passage of pedestrians. Finally, the MMDA claimed that it was merely
implementing the legal easement established by Ordinance No. 2904. [13]
The RTC rendered its Decision on 30 September 2003 in favor of Justice
Gancayco.[14] It held that the questioned ordinance was unconstitutional,
ruling that it allowed the taking of private property for public use without
just compensation. The RTC said that because 67.5 square meters out of
Justice Gancayco's 375 square meters of property were being taken
without compensation for the public's benefit, the ordinance was
confiscatory and oppressive. It likewise held that the ordinance violated
owners' right to equal protection of laws. The dispositive portion thus

states:
WHEREFORE, the petition is hereby granted and the Court hereby
declares Quezon City Ordinance No. 2094,[15] Series of 1956 to be
unconstitutional, invalid and void ab initio. The respondents are hereby
permanently enjoined from enforcing and implementing the said ordinance,
and the respondent MMDA is hereby directed to immediately restore the
portion of the party wall or wing wall of the building of the petitioner it
destroyed to its original condition.
IT IS SO ORDERED.
The MMDA thereafter appealed from the Decision of the trial court. On 18
July 2006, the Court of Appeals (CA) partly granted the appeal. [16] The CA
upheld the validity of Ordinance No. 2904 and lifted the injunction against
the enforcement and implementation of the ordinance. In so doing, it held
that the ordinance was a valid exercise of the right of the local government
unit to promote the general welfare of its constituents pursuant to its
police powers. The CA also ruled that the ordinance established a valid
classification of property owners with regard to the construction of arcades
in their respective properties depending on the location. The CA further
stated that there was no taking of private property, since the owner still
enjoyed the beneficial ownership of the property, to wit:
Even with the requirement of the construction of arcaded sidewalks within
his commercial lot, appellee still retains the beneficial ownership of the
said property. Thus, there is no "taking" for public use which must be
subject to just compensation. While the arcaded sidewalks contribute to
the public good, for providing safety and comfort to passersby, the
ultimate benefit from the same still redounds to appellee, his commercial
establishment being at the forefront of a busy thoroughfare like EDSA. The
arcaded sidewalks, by their nature, assure clients of the commercial
establishments thereat some kind of protection from accidents and other
hazards. Without doubt, this sense of protection can be a boon to the
business activity therein engaged. [17]
Nevertheless, the CA held that the MMDA went beyond its powers when it
demolished the subject property. It further found that Resolution No. 02-28
only refers to sidewalks, streets, avenues, alleys, bridges, parks and other
public places in Metro Manila, thus excluding Justice Gancayco's private
property. Lastly, the CA stated that the MMDA is not clothed with the
authority to declare, prevent or abate nuisances. Thus, the dispositive
portion stated:
WHEREFORE, the appeals are PARTLY GRANTED. The Decision dated

September 30, 2003 of the Regional Trial Court, Branch 224, Quezon City,
is MODIFIED, as follows:
1) The validity and constitutionality of Ordinance No. 2094, [18] Series of
1956, issued by the City Council of Quezon City, is UPHELD; and
2) The injunction against the enforcement and implementation of the said
Ordinance is LIFTED.
SO ORDERED.
This ruling prompted the MMDA and Justice Gancayco to file their
respective Motions for Partial Reconsideration.[19]
On 10 May 2007, the CA denied the motions stating that the parties did
not present new issues nor offer grounds that would merit the
reconsideration of the Court.[20]
Dissatisfied with the ruling of the CA, Justice Gancayco and the MMDA filed
their respective Petitions for Review before this Court. The issues raised by
the parties are summarized as follows:
I.
II.
WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM

ASSAILING THE VALIDITY OF ORDINANCE NO. 2904.
WHETHER OR NOT ORDINANCE NO. 2904 IS CONSTITUTIONAL.
III.
WHETHER OR NOT THE WING WALL OF JUSTICE GANCAYCO'S

BUILDING IS A PUBLIC NUISANCE.
IV.
WHETHER OR NOT THE MMDA LEGALLY DEMOLISHED THE

PROPERTY OF JUSTICE GANCAYCO.
The Court's Ruling

Estoppel
The MMDA and the City Government of Quezon City both claim that Justice
Gancayco was estopped from challenging the ordinance, because, in 1965,
he asked for an exemption from the application of the ordinance.
According to them, Justice Gancayco thereby recognized the power of the
city government to regulate the construction of buildings.
To recall, Justice Gancayco questioned the constitutionality of the
ordinance on two grounds: (1) whether the ordinance "takes" private
property without due process of law and just compensation; and (2)
whether the ordinance violates the equal protection of rights because it
allowed exemptions from its application.
On the first ground, we find that Justice Gancayco may still question the
constitutionality of the ordinance to determine whether or not the
ordinance constitutes a "taking" of private property without due process of
law and just compensation. It was only in 2003 when he was allegedly
deprived of his property when the MMDA demolished a portion of the
building. Because he was granted an exemption in 1966, there was no
"taking" yet to speak of.
Moreover, in Acebedo Optical Company, Inc. v. Court of Appeals,[21] we
held:
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.
(Emphasis supplied.)
Recently, in British American Tobacco v. Camacho,[22] we likewise held:
We find that petitioner was not guilty of estoppel. When it made the
undertaking to comply with all issuances of the BIR, which at that time it
considered as valid, petitioner did not commit any false misrepresentation
or misleading act. Indeed, petitioner cannot be faulted for initially
undertaking to comply with, and subjecting itself to the operation of
Section 145(C), and only later on filing the subject case praying for the
declaration of its unconstitutionality when the circumstances change and
the law results in what it perceives to be unlawful discrimination. The
mere fact that a law has been relied upon in the past and all that
time has not been attacked as unconstitutional is not a ground for

considering petitioner estopped from assailing its validity. For
courts will pass upon a constitutional question only when
presented before it in bonafide cases for determination, and the
fact that the question has not been raised before is not a valid
reason for refusing to allow it to be raised later. (Emphasis supplied.)
Anent the second ground, we find that Justice Gancayco may not question
the ordinance on the ground of equal protection when he also benefited
from the exemption. It bears emphasis that Justice Gancayco himself
requested for an exemption from the application of the ordinance in 1965
and was eventually granted one. Moreover, he was still enjoying the
exemption at the time of the demolition as there was yet no valid notice
from the city engineer. Thus, while the ordinance may be attacked with
regard to its different treatment of properties that appears to be similarly
situated, Justice Gancayco is not the proper person to do so.
Zoning and the regulation of the
construction of buildings are valid
exercises of police power .
In MMDA v. Bel-Air Village Association,[23] we discussed the nature of police
powers exercised by local government units, to wit:
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. 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.
It bears stressing that police power is lodged primarily in the National
Legislature. It cannot be exercised by any group or body of individuals not
possessing legislative power. The National Legislature, however, may
delegate this power to the President and administrative boards as well as
the lawmaking bodies of municipal corporations or local government units.
Once delegated, the agents can exercise only such legislative powers as
are conferred on them by the national lawmaking body.
To resolve the issue on the constitutionality of the ordinance, we must first
determine whether there was a valid delegation of police power. Then we
can determine whether the City Government of Quezon City acted within
the limits of the delegation.
It is clear that Congress expressly granted the city government, through

the city council, police power by virtue of Section 12(oo) of Republic Act
No. 537, or the Revised Charter of Quezon City,[24] which states:
To make such further ordinances and regulations not repugnant to law as
may be necessary to carry into effect and discharge the powers and duties
conferred by this Act and such as it shall deem necessary and proper to
provide for the health and safety, promote the prosperity, improve the
morals, peace, good order, comfort, and convenience of the city and the
inhabitants thereof, and for the protection of property therein; and enforce
obedience thereto with such lawful fines or penalties as the City Council
may prescribe under the provisions of subsection (jj) of this section.
Specifically, on the powers of the city government to regulate the
construction of buildings, the Charter also expressly provided that the city
government had the power to regulate the kinds of buildings and
structures that may be erected within fire limits and the manner of
constructing and repairing them.[25]
With regard meanwhile to the power of the local government units to issue
zoning ordinances, we apply Social Justice Society v. Atienza.[26] In that
case, the Sangguniang Panlungsod of Manila City enacted an ordinance on
28 November 2001 reclassifying certain areas of the city from industrial to
commercial. As a result of the zoning ordinance, the oil terminals located
in those areas were no longer allowed. Though the oil companies
contended that they stood to lose billions of pesos, this Court upheld the
power of the city government to pass the assailed ordinance, stating:
In the exercise of police power, property rights of individuals may be
subjected to restraints and burdens in order to fulfil the objectives of the
government. Otherwise stated, the government may enact legislation
that may interfere with personal liberty, property, lawful
businesses and occupations to promote the general
welfare. However, the interference must be reasonable and not
arbitrary. And to forestall arbitrariness, the methods or means
used to protect public health, morals, safety or welfare must have
a reasonable relation to the end in view.
The means adopted by the Sanggunian was the enactment of a zoning
ordinance which reclassified the area where the depot is situated from
industrial to commercial. A zoning ordinance is defined as a local city
or municipal legislation which logically arranges, prescribes,
defines and apportions a given political subdivision into specific
land uses as present and future projection of needs. As a result of

the zoning, the continued operation of the businesses of the oil companies
in their present location will no longer be permitted. The power to
establish zones for industrial, commercial and residential uses is
derived from the police power itself and is exercised for the
protection and benefit of the residents of a locality. Consequently,
the enactment of Ordinance No. 8027 is within the power of
theSangguniang Panlungsod of the City of Manila and any resulting burden
on those affected cannot be said to be unjust... (Emphasis supplied)
In Carlos Superdrug v. Department of Social Welfare and Development,
[27]
we also held:
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.
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. (Emphasis supplied.)
In the case at bar, it is clear that the primary objectives of the city council
of Quezon City when it issued the questioned ordinance ordering the
construction of arcades were the health and safety of the city and its
inhabitants; the promotion of their prosperity; and the improvement of
their morals, peace, good order, comfort, and the convenience. These
arcades provide safe and convenient passage along the sidewalk for
commuters and pedestrians, not just the residents of Quezon City. More
especially so because the contested portion of the building is located on a
busy segment of the city, in a business zone along EDSA.
Corollarily, the policy of the Building Code,[28] which was passed after the
Quezon City Ordinance, supports the purpose for the enactment of
Ordinance No. 2904. The Building Code states:
Section 102. Declaration of Policy. - It is hereby declared to be the policy
of the State to safeguard life, health, property, and public welfare,
consistent with the principles of sound environmental management and
control; and to this end, make it the purpose of this Code to provide for all
buildings and structures, a framework of minimum standards and

requirements to regulate and control their location, site, design quality of
materials, construction, occupancy, and maintenance.
Section 1004 likewise requires the construction of arcades whenever
existing or zoning ordinances require it. Apparently, the law allows the
local government units to determine whether arcades are necessary within
their respective jurisdictions.
Justice Gancayco argues that there is a three-meter sidewalk in front of his
property line, and the arcade should be constructed above that sidewalk
rather than within his property line. We do not need to address this
argument inasmuch as it raises the issue of the wisdom of the city
ordinance, a matter we will not and need not delve into.
To reiterate, at the time that the ordinance was passed, there was no
national building code enforced to guide the city council; thus, there was
no law of national application that prohibited the city council from
regulating the construction of buildings, arcades and sidewalks in their
jurisdiction.
The "wing walls" of the building are not
nuisances per se.
The MMDA claims that the portion of the building in question is a
nuisance per se.
We disagree.
The fact that in 1966 the City Council gave Justice Gancayco an exemption
from constructing an arcade is an indication that the wing walls of the
building are not nuisances per se. The wing walls do not per
se immediately and adversely affect the safety of persons and property.
The fact that an ordinance may declare a structure illegal does not
necessarily make that structure a nuisance.
Article 694 of the Civil Code defines nuisance as any act, omission,
establishment, business, condition or property, or anything else that (1)
injures or endangers the health or safety of others; (2) annoys or offends
the senses; (3) shocks, defies or disregards decency or morality; (4)
obstructs or interferes with the free passage of any public highway or
street, or any body of water; or, (5) hinders or impairs the use of property.
A nuisance may be per se or per accidens. A nuisance per se is that which
affects the immediate safety of persons and property and may summarily
be abated under the undefined law of necessity.[29]
Clearly, when Justice Gancayco was given a permit to construct the

building, the city council or the city engineer did not consider the building,
or its demolished portion, to be a threat to the safety of persons and
property. This fact alone should have warned the MMDA against summarily
demolishing the structure.
Neither does the MMDA have the power to declare a thing a nuisance. Only
courts of law have the power to determine whether a thing is a nuisance.
In AC Enterprises v. Frabelle Properties Corp.,[30] we held:
We agree with petitioner's contention that, under Section 447(a)(3)(i) of
R.A. No. 7160, otherwise known as the Local Government Code,
the Sangguniang Panglungsod is empowered to enact ordinances
declaring, preventing or abating noise and other forms of nuisance. It
bears stressing, however, that the Sangguniang Bayan cannot declare a
particular thing as a nuisance per se and order its condemnation. It does
not have the power to find, as a fact, that a particular thing is a
nuisance when such thing is not a nuisance per se; nor can it
authorize the extrajudicial condemnation and destruction of that as
a nuisance which in its nature, situation or use is not such. Those
things must be determined and resolved in the ordinary courts of
law. If a thing be in fact, a nuisance due to the manner of its operation,
that question cannot be determined by a mere resolution of
the Sangguniang Bayan. (Emphasis supplied.)
MMDA illegally demolished
the property of Justice Gancayco.
MMDA alleges that by virtue of MMDA Resolution No. 02-28, Series of
2002, it is empowered to demolish Justice Gancayco's property. It insists
that the Metro Manila Council authorized the MMDA and the local
government units to clear the sidewalks, streets, avenues, alleys, bridges,
parks and other public places in Metro Manila of all illegal structures and
obstructions. It further alleges that it demolished the property pursuant to
the Building Code in relation to Ordinance No. 2904 as amended.
this Code in the field as well as the enforcement of orders and decisions
made pursuant thereto.
Due to the exigencies of the service, the Secretary may designate
incumbent Public Works District Engineers, City Engineers and Municipal
Engineers act as Building Officials in their respective areas of jurisdiction.
The designation made by the Secretary under this Section shall continue
until regular positions of Building Official are provided or unless sooner
terminated for causes provided by law or decree.
xxx xxx xxx
SECTION 207. Duties of a Building Official. -- In his respective territorial
jurisdiction, the Building Official shall be primarily responsible for the
enforcement of the provisions of this Code as well as of the implementing
rules and regulations issued therefor. He is the official charged with the
duties of issuing building permits.
In the performance of his duties, a Building Official may enter any building
or its premises at all reasonable times to inspect and determine
compliance with the requirements of this Code, and the terms and
conditions provided for in the building permit as issued.
When any building work is found to be contrary to the provisions of
this Code, the Building Official may order the work stopped and
prescribe the terms and/or conditions when the work will be
allowed to resume. Likewise, the Building Official is authorized to
order the discontinuance of the occupancy or use of any building or
structure or portion thereof found to be occupied or used contrary
to the provisions of this Code.
xxx xxx xxx
However, the Building Code clearly provides the process by which a

building may be demolished. The authority to order the demolition of any
structure lies with the Building Official. The pertinent provisions of the
Building Code provide:
SECTION 215. Abatement of Dangerous Buildings. -- When any

building or structure is found or declared to be dangerous or
ruinous, the Building Official shall order its repair, vacation or
demolition depending upon the degree of danger to life, health, or
safety. This is without prejudice to further action that may be
taken under the provisions of Articles 482 and 694 to 707 of the
Civil Code of the Philippines. (Emphasis supplied.)
SECTION 205. Building Officials. -- Except as otherwise provided herein,

the Building Official shall be responsible for carrying out the provisions of
MMDA v. Trackworks Rail Transit Advertising, Vending and Promotions,

Inc.[31] is applicable to the case at bar. In that case, MMDA, invoking its
charter and the Building Code, summarily dismantled the advertising

media installed on the Metro Rail Transit (MRT) 3. This Court held:
It is futile for MMDA to simply invoke its legal mandate to justify the
dismantling of Trackworks' billboards, signages and other advertising
media. MMDA simply had no power on its own to dismantle, remove, or
destroy the billboards, signages and other advertising media installed on
the MRT3 structure by Trackworks. In Metropolitan Manila Development
Authority v. Bel-Air Village Association, Inc., Metropolitan Manila
Development Authority v. Viron Transportation Co., Inc., and Metropolitan
Manila Development Authority v. Garin,the Court had the occasion to
rule that MMDA's powers were limited to the formulation,
coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installing a system,
and administration. Nothing in Republic Act No. 7924 granted
MMDA police power, let alone legislative power.
Clarifying the real nature of MMDA, the Court held:
...The MMDA is, as termed in the charter itself, a "development
authority". 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.- xxx.
The MMDA shall perform planning, monitoring and coordinative functions,
and in the process exercise regulatory and supervisory authority over the
delivery of metro-wide services within Metro Manila, without diminution of
the autonomy of local government units concerning purely local matters.
The Court also agrees with the CA's ruling that MMDA Regulation No. 96009 and MMC Memorandum Circular No. 88-09 did not apply to
Trackworks' billboards, signages and other advertising media. The
prohibition against posting, installation and display of billboards, signages
and other advertising media applied only to public areas, but MRT3,being
private property pursuant to the BLT agreement between the
Government and MRTC, was not one of the areas as to which the
prohibition applied. Moreover, MMC Memorandum Circular No. 88-09 did
not apply to Trackworks' billboards, signages and other advertising media
in MRT3, because it did not specifically cover MRT3, and because it was
issued a year prior to the construction of MRT3 on the center island of
EDSA. Clearly, MMC Memorandum Circular No. 88-09 could not have
included MRT3 in its prohibition.
MMDA's insistence that it was only implementing Presidential Decree No.
1096 (Building Code) and its implementing rules and regulations is not
persuasive. The power to enforce the provisions of the Building
Code was lodged in the Department of Public Works and Highways
(DPWH), not in MMDA, considering the law's following provision,
thus:
Sec. 201. Responsibility for Administration and Enforcement. - The
administration and enforcement of the provisions of this Code including the
imposition of penalties for administrative violations thereof is hereby
vested in the Secretary of Public Works, Transportation and
Communications, hereinafter referred to as the "Secretary."
There is also no evidence showing that MMDA had been delegated
by DPWH to implement the Building Code. (Emphasis supplied.)
Additionally, the penalty prescribed by Ordinance No. 2904 itself does not
include the demolition of illegally constructed buildings in case of
violations. Instead, it merely prescribes a punishment of "a fine of not
more than two hundred pesos (P200.00) or by imprisonment of not more
than thirty (30) days, or by both such fine and imprisonment at the
discretion of the Court, Provided, that if the violation is committed by a
corporation, partnership, or any juridical entity, the Manager, managing
partner, or any person charged with the management thereof shall be held
responsible therefor." The ordinance itself also clearly states that it is the
regular courts that will determine whether there was a violation of the
ordinance.
As pointed out in Trackworks, the MMDA does not have the power to enact
ordinances. Thus, it cannot supplement the provisions of Quezon City
Ordinance No. 2904 merely through its Resolution No. 02-28.
Lastly, the MMDA claims that the City Government of Quezon City may be
considered to have approved the demolition of the structure, simply
because then Quezon City Mayor Feliciano R. Belmonte signed MMDA
Resolution No. 02-28. In effect, the city government delegated these
powers to the MMDA. The powers referred to are those that include the
power to declare, prevent and abate a nuisance[32] and to further impose
the penalty of removal or demolition of the building or structure by the
owner or by the city at the expense of the owner.[33]
MMDA's argument does not hold water. There was no valid delegation of
powers to the MMDA. Contrary to the claim of the MMDA, the City
Government of Quezon City washed its hands off the acts of the former. In
its Answer,[34] the city government stated that "the demolition was
undertaken by the MMDA only, without the participation and/or consent of
Quezon City." Therefore, the MMDA acted on its own and should be held
solely liable for the destruction of the portion of Justice Gancayco's
building.
WHEREFORE, in view of the foregoing, the Decision of the Court of
Appeals in CA-G.R. SP No. 84648 isAFFIRMED.
City of Manila is a manifestation of a police power measure specifically

aimed to safeguard public morals. As such it is immune from any
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 extending as
it does "to all the great public needs."
EN BANC
[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, v.
THE HONORABLE CITY MAYOR OF MANILA, respondent-appellant,
VICTOR ALABANZA, Intervenor-Appellee.
Panganiban, Abad & Associates and Asst. City Fiscal L.L. Arguelles
for Appellant.
Jose M . Aruego, Arsenio Tenchavez and Luis Go for Appellees.
Alfreo Concepcion for intervenor.
SYLLABUS
1. CONSTITUTIONAL LAW; MUNICIPAL ORDINANCES; VALIDITY,

PRESUMPTION OF. An ordinance, having been enacted by councilors who
must, in the very nature of things, be familiar with the necessities of their
particular municipality or city and with all the facts and circumstances
which surround the subject and necessitate action, must be presumed to
be valid and should not be set aside unless there is a clear invasion of
personal property rights under the guise of police regulation. Unless,
therefore, the ordinance is void on its face, the necessity for evidence to
rebut its validity is unavoidable. In the case at bar, there being no factual
foundation laid for overthrowing Ord. No. 4760 of Manila as void on its
face, the presumption of constitutionality must prevail.
2. ID.; POLICE POWER; MANIFESTATION OF. Ordinance No. 4760 of the
3. ID.; ID.; JUDICIAL INQUIRY. On the legislative organs of the

government, whether national or local, primarily rests the exercise of the
police power, which 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 certain constitutional guaranties,
the exercise of such police power, however, 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.
4. ID.; ID.; LICENSES INCIDENTAL TO. Municipal license fees can 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. Licenses for non-useful
occupations are incidental to the police power, and the right to exact a fee
may be implied from the power to license and regulate, but in taking the
amount of license fees the municipal corporations are allowed a wide
discretion in this class of cases. 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. (Cu Unjieng v. Patstone [1922], 42 Phil,, 818,
828).
5. ID.; ID.; EXERCISE OF. Much discretion is given to municipal
corporations in determining the amount of license fees to be imposed for
revenue. 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. Persons licensed to pursue
occupations which may in the public need and interest be affected by the
exercise of the police power embark in those occupations subject to the
disadvantages which may result from the exercise of that power.
6. ID.; DUE PROCESS; STANDARDS OF LEGAL INFIRMITY. 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.
The standard of due process which must exist both as a procedural and as
substantive requisite to free the challenged ordinance, or any
governmental action for that matter, from imputation of legal infirmity, is
responsiveness to the supremacy of reason, obedience to the dictates of
justice. It would 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.
What should be deemed unreasonable and what would amount to be an
abdication of the power to govern is inaction in the face of an admitted
deterioration of the state of public morals.
7. ID.; ID.; MUNICIPAL ORDINANCES; PROHIBITIONS IN. The provision
in Ordinance No. 4760 of the City of Manila making 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 any
room or portion thereof more than twice every 24 hours, with a proviso
that in all cases full payment shall be charged, cannot be viewed as
transgression against the command of due process. The prohibition is
neither unreasonable nor arbitrary, because there appears a
correspondence between the undeniable existence of an undesirable
situation and the legislative attempt at correction. Moreover, every
regulation of conduct amounts to curtailment of liberty, which cannot be
absolute.
8. ID.; ID.; PUBLIC INTEREST; GOVERNMENT INTERFERENCE. 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.
9. ID.; ID.; ID.; ID.; SCOPE. If the liberty invoked 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 measures
is wider.
10. ID.; DUE PROCESS REQUIREMENT; AMBIGUITY OF STATUTES AS
DENIAL OF DUE PROCESS. What makes a statute susceptible to a
charge that it is void on its face for alleged vagueness or uncertainty is an
enactment either for bidding or requiring the doing of an act that men of
common intelligence must necessarily guess at its meaning and differ as to
its application.
DECISION
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 persons 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 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 c]ass 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 selfincrimination; 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 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
selfincrimination, 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 Chiu 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 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 his 4th Indorsement dated February 15, 1963 (Annex B);
"5. That the explanatory noted 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."
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 . . . The action of the elected
representatives of the people cannot be lightly set aside. The councilors

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 . . . 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 OGorman &
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 presumption 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 general welfare. 6 Negatively put, police power is "that inherent
and plenary power in the State which enables it to prohibit all that is
hurtful 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 then 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 license 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 providing a license tax for and regulating the
maintenance or operation of public dance hall; 9 prohibiting gambling; 10
prohibiting jueteng; 11 and monte; 12 prohibiting 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 of 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
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 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 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 as substantive requisite to free the challenged ordinance,
or any government 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 reasons and result in sheer oppression. Due process is thus
hostile to any official action marred by lack of reasonableness. Correctly
has it 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 both 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 nonuseful occupations or enterprise 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 cases 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. Araneta 24 this Court
affirmed the doctrine earlier announced by the American Supreme Court
that taxation may be made to implement the states 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 purpose, just and uniform.25
cralaw:re d
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
would deprive them of their lawful occupation and means of livehood
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 . . .
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 those
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 any 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 . . . 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 . . . 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 cannot 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 measures 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 principle 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 days or merely a half-days 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 to Adderley 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
constructing 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.
Reyes, J .B.L., Makalintal, Bengzon, J .P., Zaldivar, Sanchez, Castro and

Angeles, JJ., concur.
Concepcion, C.J. and Dizon, J., are on official leave.
EN BANC
On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into
law the Ordinance.4 The Ordinance is reproduced in full, hereunder:
[G.R. NO. 122846 : January 20, 2009]

WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA.
MESA TOURIST & DEVELOPMENT CORPORATION, Petitioners, v. CITY
OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S.
LIM, Respondent.
DECISION
TINGA, J.:
With another city ordinance of Manila also principally involving the tourist
district as subject, the Court is confronted anew with the incessant clash
between government power and individual liberty in tandem with the
archetypal tension between law and morality.
In City of Manila v. Laguio, Jr.,1 the Court affirmed the nullification of a city
ordinance barring the operation of motels and inns, among other
establishments, within the Ermita-Malate area. The petition at bar assails a
similarly-motivated city ordinance that prohibits those same
establishments from offering short-time admission, as well as pro-rated or
"wash up" rates for such abbreviated stays. Our earlier decision tested the
city ordinance against our sacred constitutional rights to liberty, due
process and equal protection of law. The same parameters apply to the
present petition.
This Petition2 under Rule 45 of the Revised Rules on Civil Procedure, which
seeks the reversal of the Decision3 in C.A.-G.R. S.P. No. 33316 of the Court
of Appeals, challenges the validity of Manila City Ordinance No. 7774
entitled, "An Ordinance Prohibiting Short-Time Admission, Short-Time
Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns,
Lodging Houses, Pension Houses, and Similar Establishments in the City of
Manila" (the Ordinance).
I.
The facts are as follows:
SECTION 1. Declaration of Policy. It is hereby the declared policy of the

City Government to protect the best interest, health and welfare, and the
morality of its constituents in general and the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting
short time admission in hotels, motels, lodging houses, pension houses
and similar establishments in the City of Manila.
SEC. 3. Pursuant to the above policy, short-time admission and rate [sic],
wash-up rate or other similarly concocted terms, are hereby prohibited in
hotels, motels, inns, lodging houses, pension houses and similar
establishments in the City of Manila.
SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance
and charging of room rate for less than twelve (12) hours at any given
time or the renting out of rooms more than twice a day or any other term
that may be concocted by owners or managers of said establishments but
would mean the same or would bear the same meaning.
SEC. 5. Penalty Clause. Any person or corporation who shall violate any
provision of this ordinance shall upon conviction thereof be punished by a
fine of Five Thousand (P5,000.00) Pesos or imprisonment for a period of
not exceeding one (1) year or both such fine and imprisonment at the
discretion of the court; Provided, That in case of [a] juridical person, the
president, the manager, or the persons in charge of the operation thereof
shall be liable: Provided, further, That in case of subsequent conviction for
the same offense, the business license of the guilty party shall
automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of City ordinances not
consistent with or contrary to this measure or any portion hereof are
hereby deemed repealed.
SEC. 7. Effectivity. This ordinance shall take effect immediately upon
approval.
Enacted by the city Council of Manila at its regular session today,

November 10, 1992.
month later, on March 8, 1993, the Solicitor General filed his Comment
arguing that the Ordinance is constitutional.
Approved by His Honor, the Mayor on December 3, 1992.
During the pre-trial conference, the WLC, TC and STDC agreed to submit
the case for decision without trial as the case involved a purely legal
question.16 On October 20, 1993, the RTC rendered a decision declaring the
Ordinance null and void. The dispositive portion of the decision reads:
On December 15, 1992, the Malate Tourist and Development Corporation

(MTDC) filed a complaint for declaratory relief with prayer for a writ of
preliminary injunction and/or temporary restraining order ( TRO) 5 with the
Regional Trial Court (RTC) of Manila, Branch 9 impleading as defendant,
herein respondent City of Manila (the City) represented by Mayor
Lim.6 MTDC prayed that the Ordinance, insofar as it includes motels and
inns as among its prohibited establishments, be declared invalid and
unconstitutional. MTDC claimed that as owner and operator of the Victoria
Court in Malate, Manila it was authorized by Presidential Decree (P.D.) No.
259 to admit customers on a short time basis as well as to charge
customers wash up rates for stays of only three hours.
On December 21, 1992, petitioners White Light Corporation (WLC),
Titanium Corporation (TC) and Sta. Mesa Tourist and Development
Corporation (STDC) filed a motion to intervene and to admit attached
complaint-in-intervention7 on the ground that the Ordinance directly affects
their business interests as operators of drive-in-hotels and motels in
Manila.8 The three companies are components of the Anito Group of
Companies which owns and operates several hotels and motels in Metro
Manila.9
On December 23, 1992, the RTC granted the motion to intervene. 10 The
RTC also notified the Solicitor General of the proceedings pursuant to then
Rule 64, Section 4 of the Rules of Court. On the same date, MTDC moved
to withdraw as plaintiff.11
On December 28, 1992, the RTC granted MTDC's motion to withdraw.12 The
RTC issued a TRO on January 14, 1993, directing the City to cease and
desist from enforcing the Ordinance.13 The City filed an Answer dated
January 22, 1993 alleging that the Ordinance is a legitimate exercise of
police power.14
On February 8, 1993, the RTC issued a writ of preliminary injunction
ordering the city to desist from the enforcement of the Ordinance. 15 A
WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City
of Manila is hereby declared null and void.
Accordingly, the preliminary injunction heretofor issued is hereby made
permanent.
SO ORDERED.17
The RTC noted that the ordinance "strikes at the personal liberty of the
individual guaranteed and jealously guarded by the
Constitution."18 Reference was made to the provisions of the Constitution
encouraging private enterprises and the incentive to needed investment,
as well as the right to operate economic enterprises. Finally, from the
observation that the illicit relationships the Ordinance sought to dissuade
could nonetheless be consummated by simply paying for a 12-hour stay,
the RTC likened the law to the ordinance annulled in Ynot v. Intermediate
Appellate Court,19 where the legitimate purpose of preventing
indiscriminate slaughter of carabaos was sought to be effected through an
inter-province ban on the transport of carabaos and carabeef.
The City later filed a Petition for Review on Certiorariwith the Supreme
Court.20 The petition was docketed as G.R. No. 112471. However in a
resolution dated January 26, 1994, the Court treated the petition as a
Petition for Certiorariand referred the petition to the Court of Appeals. 21
Before the Court of Appeals, the City asserted that the Ordinance is a valid
exercise of police power pursuant to Section 458 (4)(iv) of the Local
Government Code which confers on cities, among other local government
units, the power:
[To] 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.22
The Ordinance, it is argued, is also a valid exercise of the power of the City
under Article III, Section 18(kk) of the Revised Manila Charter, thus:
"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 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.23
Petitioners argued that the Ordinance is unconstitutional and void since it
violates the right to privacy and the freedom of movement; it is an invalid
exercise of police power; and it is an unreasonable and oppressive
interference in their business.
The Court of Appeals reversed the decision of the RTC and affirmed the
constitutionality of the Ordinance.24 First, it held that the Ordinance did not
violate the right to privacy or the freedom of movement, as it only
penalizes the owners or operators of establishments that admit individuals
for short time stays. Second, the virtually limitless reach of police power is
only constrained by having a lawful object obtained through a lawful
method. The lawful objective of the Ordinance is satisfied since it aims to
curb immoral activities. There is a lawful method since the establishments
are still allowed to operate. Third, the adverse effect on the establishments
is justified by the well-being of its constituents in general. Finally, as held
in Ermita-Malate Motel Operators Association v. City Mayor of
Manila, liberty is regulated by law.
TC, WLC and STDC come to this Court via Petition for Review
on Certiorari .25 In their petition and Memorandum, petitioners in essence
repeat the assertions they made before the Court of Appeals. They contend
that the assailed Ordinance is an invalid exercise of police power.
II.
We must address the threshold issue of petitioners' standing. Petitioners

allege that as owners of establishments offering "wash-up" rates, their
business is being unlawfully interfered with by the Ordinance. However,
petitioners also allege that the equal protection rights of their clients are
also being interfered with. Thus, the crux of the matter is whether or not
these establishments have the requisite standing to plead for protection of
their patrons' equal protection rights.
Standing or locus standi is the ability of a party to demonstrate to the
court sufficient connection to and harm from the law or action challenged
to support that party's participation in the case. More importantly, the
doctrine of standing is built on the principle of separation of
powers,26 sparing as it does unnecessary interference or invalidation by the
judicial branch of the actions rendered by its co-equal branches of
government.
The requirement of standing is a core component of the judicial system
derived directly from the Constitution.27 The constitutional component of
standing doctrine incorporates concepts which concededly are not
susceptible of precise definition.28 In this jurisdiction, the extancy of "a
direct and personal interest" presents the most obvious cause, as well as
the standard test for a petitioner's standing.29 In a similar vein, the United
States Supreme Court reviewed and elaborated on the meaning of the
three constitutional standing requirements of injury, causation, and
redressability in Allen v. Wright.30
Nonetheless, the general rules on standing admit of several exceptions
such as the overbreadth doctrine, taxpayer suits, third party standing and,
especially in the Philippines, the doctrine of transcendental importance. 31
For this particular set of facts, the concept of third party standing as an
exception and the overbreadth doctrine are appropriate. In Powers v.
Ohio,32 the United States Supreme Court wrote that: "We have recognized
the right of litigants to bring actions on behalf of third parties, provided
three important criteria are satisfied: the litigant must have suffered an
'injury-in-fact,' thus giving him or her a "sufficiently concrete interest" in
the outcome of the issue in dispute; the litigant must have a close relation
to the third party; and there must exist some hindrance to the third party's
ability to protect his or her own interests."33 Herein, it is clear that the
business interests of the petitioners are likewise injured by the Ordinance.
They rely on the patronage of their customers for their continued viability
which appears to be threatened by the enforcement of the Ordinance. The

relative silence in constitutional litigation of such special interest groups in
our nation such as the American Civil Liberties Union in the United States
may also be construed as a hindrance for customers to bring suit. 34
American jurisprudence is replete with examples where parties-in-interest
were allowed standing to advocate or invoke the fundamental due process
or equal protection claims of other persons or classes of persons injured by
state action. In Griswold v. Connecticut,35 the United States Supreme Court
held that physicians had standing to challenge a reproductive health
statute that would penalize them as accessories as well as to plead the
constitutional protections available to their patients. The Court held that:
"The rights of husband and wife, pressed here, are likely to be diluted or
adversely affected unless those rights are considered in a suit involving
those who have this kind of confidential relation to them." 36
An even more analogous example may be found in Craig v.
Boren,37 wherein the United States Supreme Court held that a licensed
beverage vendor has standing to raise the equal protection claim of a male
customer challenging a statutory scheme prohibiting the sale of beer to
males under the age of 21 and to females under the age of 18. The United
States High Court explained that the vendors had standing "by acting as
advocates of the rights of third parties who seek access to their market or
function."38
Assuming arguendo that petitioners do not have a relationship with their
patrons for the former to assert the rights of the latter, the overbreadth
doctrine comes into play. In overbreadth analysis, challengers to
government action are in effect permitted to raise the rights of third
parties. Generally applied to statutes infringing on the freedom of speech,
the overbreadth doctrine applies when a statute needlessly restrains even
constitutionally guaranteed rights.39 In this case, the petitioners claim that
the Ordinance makes a sweeping intrusion into the right to liberty of their
clients. We can see that based on the allegations in the petition, the
Ordinance suffers from overbreadth.
We thus recognize that the petitioners have a right to assert the
constitutional rights of their clients to patronize their establishments for a
"wash-rate" time frame.
III.
To students of jurisprudence, the facts of this case will recall to mind not
only the recent City of Manilaruling, but our 1967 decision in Ermita-Malate
Hotel and Motel Operations Association, Inc., v. Hon. City Mayor of
Manila.40 Ermita-Malate concerned the City ordinance requiring patrons to
fill up a prescribed form stating personal information such as name,
gender, nationality, age, address and occupation before they could be
admitted to a motel, hotel or lodging house. This earlier ordinance was
precisely enacted to minimize certain practices deemed harmful to public
morals. A purpose similar to the annulled ordinance in City of Manila which
sought a blanket ban on motels, inns and similar establishments in the
Ermita-Malate area. However, the constitutionality of the ordinance
in Ermita-Malate was sustained by the Court.
The common thread that runs through those decisions and the case at bar
goes beyond the singularity of the localities covered under the respective
ordinances. All three ordinances were enacted with a view of regulating
public morals including particular illicit activity in transient lodging
establishments. This could be described as the middle case, wherein there
is no wholesale ban on motels and hotels but the services offered by these
establishments have been severely restricted. At its core, this is another
case about the extent to which the State can intrude into and regulate the
lives of its citizens.
The test of a valid ordinance is well established. A long line of decisions
including City of Manila 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 pass 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.41
The Ordinance prohibits two specific and distinct business practices,
namely wash rate admissions and renting out a room more than twice a
day. The ban is evidently sought to be rooted in the police power as
conferred on local government units by the Local Government Code
through such implements as the general welfare clause.
A.
Police power, while incapable of an exact definition, 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
as the conditions warrant.42 Police power is based upon the concept of
necessity of the State and its corresponding right to protect itself and its
people.43 Police power has been used as justification for numerous and
varied actions by the State. These range from the regulation of dance
halls,44 movie theaters,45 gas stations46 and cockpits.47 The awesome scope
of police power is best demonstrated by the fact that in its hundred or so
years of presence in our nation's legal system, its use has rarely been
denied.
The apparent goal of the Ordinance is to minimize if not eliminate the use
of the covered establishments for illicit sex, prostitution, drug use and
alike. These goals, by themselves, are unimpeachable and certainly fall
within the ambit of the police power of the State. Yet the desirability of
these ends do not sanctify any and all means for their achievement. Those
means must align with the Constitution, and our emerging sophisticated
analysis of its guarantees to the people. The Bill of Rights stands as a
rebuke to the seductive theory of Macchiavelli, and, sometimes even, the
political majorities animated by his cynicism.
Even as we design the precedents that establish the framework for
analysis of due process or equal protection questions, the courts are
naturally inhibited by a due deference to the co-equal branches of
government as they exercise their political functions. But when we are
compelled to nullify executive or legislative actions, yet another form of
caution emerges. If the Court were animated by the same passing fancies
or turbulent emotions that motivate many political decisions, judicial
integrity is compromised by any perception that the judiciary is merely the
third political branch of government. We derive our respect and good
standing in the annals of history by acting as judicious and neutral arbiters
of the rule of law, and there is no surer way to that end than through the
development of rigorous and sophisticated legal standards through which
the courts analyze the most fundamental and far-reaching constitutional
questions of the day.
B.
The primary constitutional question that confronts us is one of due

process, as guaranteed under Section 1, Article III of the Constitution. Due
process evades a precise definition.48 The purpose of the guaranty is to
prevent arbitrary governmental encroachment against the life, liberty and
property of individuals. The due process guaranty serves as a protection
against arbitrary regulation or seizure. Even corporations and partnerships
are protected by the guaranty insofar as their property is concerned.
The due process guaranty has traditionally been interpreted as imposing
two related but distinct restrictions on government, "procedural due
process" and "substantive due process." Procedural due process refers to
the procedures that the government must follow before it deprives a
person of life, liberty, or property.49 Procedural due process concerns itself
with government action adhering to the established process when it makes
an intrusion into the private sphere. Examples range from the form of
notice given to the level of formality of a hearing.
If due process were confined solely to its procedural aspects, there would
arise absurd situation of arbitrary government action, provided the proper
formalities are followed. Substantive due process completes the protection
envisioned by the due process clause. It inquires whether the government
has sufficient justification for depriving a person of life, liberty, or
property.50
The question of substantive due process, moreso than most other fields of
law, has reflected dynamism in progressive legal thought tied with the
expanded acceptance of fundamental freedoms. Police power, traditionally
awesome as it may be, is now confronted with a more rigorous level of
analysis before it can be upheld. The vitality though of constitutional due
process has not been predicated on the frequency with which it has been
utilized to achieve a liberal result for, after all, the libertarian ends should
sometimes yield to the prerogatives of the State. Instead, the due process
clause has acquired potency because of the sophisticated methodology
that has emerged to determine the proper metes and bounds for its
application.
C.
The general test of the validity of an ordinance on substantive due process
grounds is best tested when assessed with the evolved footnote 4 test laid
down by the U.S. Supreme Court in U.S. v. Carolene Products. 51 Footnote 4

of the Carolene Products case acknowledged that the judiciary would defer
to the legislature unless there is a discrimination against a "discrete and
insular" minority or infringement of a "fundamental right." 52 Consequently,
two standards of judicial review were established: strict scrutiny for laws
dealing with freedom of the mind or restricting the political process, and
the rational basis standard of review for economic legislation.
A third standard, denominated as heightened or immediate scrutiny, was
later adopted by the U.S. Supreme Court for evaluating classifications
based on gender53 and legitimacy.54 Immediate scrutiny was adopted by
the U.S. Supreme Court in Craig,55 after the Court declined to do so in
Reed v. Reed.56 While the test may have first been articulated in equal
protection analysis, it has in the United States since been applied in all
substantive due process cases as well.
We ourselves have often applied the rational basis test mainly in analysis
of equal protection challenges.57 Using the rational basis examination, laws
or ordinances are upheld if they rationally further a legitimate
governmental interest.58 Under intermediate review, governmental interest
is extensively examined and the availability of less restrictive measures is
considered.59 Applying strict scrutiny, the focus is on the presence of
compelling, rather than substantial, governmental interest and on the
absence of less restrictive means for achieving that interest.
In terms of judicial review of statutes or ordinances, strict scrutiny refers
to the standard for determining the quality and the amount of
governmental interest brought to justify the regulation of fundamental
freedoms.60 Strict scrutiny is used today to test the validity of laws dealing
with the regulation of speech, gender, or race as well as other fundamental
rights as expansion from its earlier applications to equal protection. 61 The
United States Supreme Court has expanded the scope of strict scrutiny to
protect fundamental rights such as suffrage,62 judicial access63 and
interstate travel.64
If we were to take the myopic view that an Ordinance should be analyzed
strictly as to its effect only on the petitioners at bar, then it would seem
that the only restraint imposed by the law which we are capacitated to act
upon is the injury to property sustained by the petitioners, an injury that
would warrant the application of the most deferential standard - the
rational basis test. Yet as earlier stated, we recognize the capacity of the
petitioners to invoke as well the constitutional rights of their patrons those persons who would be deprived of availing short time access or
wash-up rates to the lodging establishments in question.
Viewed cynically, one might say that the infringed rights of these
customers were are trivial since they seem shorn of political consequence.
Concededly, these are not the sort of cherished rights that, when
proscribed, would impel the people to tear up their cedulas. Still, the Bill of
Rights does not shelter gravitas alone. Indeed, it is those "trivial" yet
fundamental freedoms - which the people reflexively exercise any day
without the impairing awareness of their constitutional consequence - that
accurately reflect the degree of liberty enjoyed by the people. Liberty, as
integrally incorporated as a fundamental right in the Constitution, is not a
Ten Commandments-style enumeration of what may or what may not be
done; but rather an atmosphere of freedom where the people do not feel
labored under a Big Brother presence as they interact with each other,
their society and nature, in a manner innately understood by them as
inherent, without doing harm or injury to others.
D.
The rights at stake herein fall within the same fundamental rights to liberty
which we upheld in City of Manila v. Hon. Laguio, Jr. We expounded on that
most primordial of rights, thus:
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."[65] 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.[66]
The U.S. Supreme Court in the case of Roth v. Board of Regents, 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 recognized . . . as 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.67 [Citations omitted]
It cannot be denied that the primary animus behind the ordinance is the
curtailment of sexual behavior. The City asserts before this Court that the
subject establishments "have gained notoriety as venue of 'prostitution,
adultery and fornications' in Manila since they 'provide the necessary
atmosphere for clandestine entry, presence and exit and thus became the
'ideal haven for prostitutes and thrill-seekers.' "68 Whether or not this
depiction of a mise-en-scene of vice is accurate, it cannot be denied that
legitimate sexual behavior among willing married or consenting single
adults which is constitutionally protected69 will be curtailed as well, as it
was in the City of Manila case. Our holding therein retains significance for
our purposes:
The concept of liberty compels respect for the individual whose claim to
privacy and interference demands respect. As the case of Morfe v. Mutuc,
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.70
We cannot discount other legitimate activities which the Ordinance would
proscribe or impair. There are very legitimate uses for a wash rate or
renting the room out for more than twice a day. Entire families are known
to choose pass the time in a motel or hotel whilst the power is
momentarily out in their homes. In transit passengers who wish to wash
up and rest between trips have a legitimate purpose for abbreviated stays
in motels or hotels. Indeed any person or groups of persons in need of
comfortable private spaces for a span of a few hours with purposes other
than having sex or using illegal drugs can legitimately look to staying in a
motel or hotel as a convenient alternative.
E.
That the Ordinance prevents the lawful uses of a wash rate depriving
patrons of a product and the petitioners of lucrative business ties in with
another constitutional requisite for the legitimacy of the Ordinance as a
police power measure. It must appear that the interests of the public
generally, as distinguished from those of a particular class, require an
interference with private rights and the means must be reasonably
necessary for the accomplishment of the purpose and not unduly
oppressive of private rights.71 It must also be evident that no other
alternative for the accomplishment of the purpose less intrusive of private
rights can work. More importantly, a reasonable relation must exist
between the purposes of the 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.72
Lacking a concurrence of these requisites, the police measure shall be
struck down as an arbitrary intrusion into private rights. As held in Morfe v.
Mutuc, the exercise of police power is subject to judicial review when life,
liberty or property is affected.73 However, this is not in any way meant to
take it away from the vastness of State police power whose exercise
enjoys the presumption of validity.74
Similar to the Comelec resolution requiring newspapers to donate
advertising space to candidates, this Ordinance is a blunt and heavy
instrument.75 The Ordinance makes no distinction between places

frequented by patrons engaged in illicit activities and patrons engaged in
legitimate actions. Thus it prevents legitimate use of places where illicit
activities are rare or even unheard of. A plain reading of section 3 of the
Ordinance shows it makes no classification of places of lodging, thus
deems them all susceptible to illicit patronage and subject them without
exception to the unjustified prohibition.
-intentioned the Ordinance may be, it is in effect an arbitrary and

whimsical intrusion into the rights of the establishments as well as their
patrons. The Ordinance needlessly restrains the operation of the
businesses of the petitioners as well as restricting the rights of their
patrons without sufficient justification. The Ordinance rashly equates wash
rates and renting out a room more than twice a day with immorality
without accommodating innocuous intentions.
The Court has professed its deep sentiment and tenderness of the ErmitaMalate area, its longtime home,76 and it is skeptical of those who wish to
depict our capital city - the Pearl of the Orient - as a modern-day Sodom or
Gomorrah for the Third World set. Those still steeped in Nick Joaquindreams of the grandeur of Old Manila will have to accept that Manila like all
evolving big cities, will have its problems. Urban decay is a fact of mega
cities such as Manila, and vice is a common problem confronted by the
modern metropolis wherever in the world. The solution to such perceived
decay is not to prevent legitimate businesses from offering a legitimate
product. Rather, cities revive themselves by offering incentives for new
businesses to sprout up thus attracting the dynamism of individuals that
would bring a new grandeur to Manila.
The promotion of public welfare and a sense of morality among citizens

deserves the full endorsement of the judiciary provided that such
measures do not trample rights this Court is sworn to protect. 77 The notion
that the promotion of public morality is a function of the State is as old as
Aristotle.78 The advancement of moral relativism as a school of philosophy
does not de-legitimize the role of morality in law, even if it may foster
wider debate on which particular behavior to penalize. It is conceivable
that a society with relatively little shared morality among its citizens could
be functional so long as the pursuit of sharply variant moral perspectives
yields an adequate accommodation of different interests. 79
The behavior which the Ordinance seeks to curtail is in fact already

prohibited and could in fact be diminished simply by applying existing laws.
Less intrusive measures such as curbing the proliferation of prostitutes and
drug dealers through active police work would be more effective in easing
the situation. So would the strict enforcement of existing laws and
regulations penalizing prostitution and drug use. These measures would
have minimal intrusion on the businesses of the petitioners and other
legitimate merchants. Further, it is apparent that the Ordinance can easily
be circumvented by merely paying the whole day rate without any
hindrance to those engaged in illicit activities. Moreover, drug dealers and
prostitutes can in fact collect "wash rates" from their clientele by charging
their customers a portion of the rent for motel rooms and even
apartments.
IV.
We reiterate that individual rights may be adversely affected only to the
extent that may fairly be required by the legitimate demands of public
interest or public welfare. The State is a leviathan that must be restrained
from needlessly intruding into the lives of its citizens. However well'
To be candid about it, the oft-quoted American maxim that "you cannot
legislate morality" is ultimately illegitimate as a matter of law, since as
explained by Calabresi, that phrase is more accurately interpreted as
meaning that efforts to legislate morality will fail if they are widely at
variance with public attitudes about right and wrong. 80 Our penal laws, for
one, are founded on age-old moral traditions, and as long as there are
widely accepted distinctions between right and wrong, they will remain so
oriented.
Yet the continuing progression of the human story has seen not only the
acceptance of the right-wrong distinction, but also the advent of
fundamental liberties as the key to the enjoyment of life to the fullest. Our
democracy is distinguished from non-free societies not with any more
extensive elaboration on our part of what is moral and immoral, but from
our recognition that the individual liberty to make the choices in our lives is
innate, and protected by the State. Independent and fair-minded judges
themselves are under a moral duty to uphold the Constitution as the
embodiment of the rule of law, by reason of their expression of consent to
do so when they take the oath of office, and because they are entrusted by
the people to uphold the law.81
Even as the implementation of moral norms remains an indispensable

complement to governance, that prerogative is hardly absolute, especially
in the face of the norms of due process of liberty. And while the tension
may often be left to the courts to relieve, it is possible for the government
to avoid the constitutional conflict by employing more judicious, less
drastic means to promote morality.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of
Appeals is REVERSED, and the Decision of the Regional Trial Court of
Manila, Branch 9, is REINSTATED. Ordinance No. 7774 is hereby declared
UNCONSTITUTIONAL. No pronouncement as to costs.
SO ORDERED
[G.R. NO. 118127 : April 12, 2005]

CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of
Manila, HON. JOSELITO L. ATIENZA, in his capacity as Vice-Mayor
of the City of Manila and Presiding Officer of the City Council of
Manila, HON. ERNESTO A. NIEVA, HON. GONZALO P. GONZALES,
HON. AVELINO S. CAILIAN, HON. ROBERTO C. OCAMPO, HON.
ALBERTO DOMINGO, HON. HONORIO U. LOPEZ, HON. FRANCISCO
G. VARONA, JR., HON. ROMUALDO S. MARANAN, HON. NESTOR C.
PONCE, JR., HON. HUMBERTO B. BASCO, HON. FLAVIANO F.
CONCEPCION, JR., HON. ROMEO G. RIVERA, HON. MANUEL M.
ZARCAL, HON. PEDRO S. DE JESUS, HON. BERNARDITO C. ANG,
HON. MANUEL L. QUIN, HON. JHOSEP Y. LOPEZ, HON. CHIKA G. GO,
HON. VICTORIANO A. MELENDEZ, HON. ERNESTO V.P. MACEDA, JR.,
HON. ROLANDO P. NIETO, HON. DANILO V. ROLEDA, HON. GERINO
A. TOLENTINO, JR., HON. MA. PAZ E. HERRERA, HON. JOEY D.
HIZON, HON. FELIXBERTO D. ESPIRITU, HON. KARLO Q. BUTIONG,
HON. ROGELIO P. DELA PAZ, HON. BERNARDO D. RAGAZA, HON.
MA. CORAZON R. CABALLES, HON. CASIMIRO C. SISON, HON.
BIENVINIDO M. ABANTE, JR., HON. MA. LOURDES M. ISIP, HON.
ALEXANDER S. RICAFORT, HON. ERNESTO F. RIVERA, HON.
LEONARDO L. ANGAT, and HON. JOCELYN B. DAWIS, in their
capacity as councilors of the City of Manila, Petitioner, v.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.
EN BANC
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 Petition 1 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 theOrdinance, 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 said Ordinance is entitled'
AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF
BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT,
ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE
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. 499be 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
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)
rllbrr
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
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 Ordinance violates
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
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
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,16which 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)
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 factoas 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 Ordinance contravenes 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 the Ordinance 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 viresand 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 Ordinanceabsent 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 Ordinanceis 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
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:
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
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.
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
Local government units exercise police power through their respective

legislative bodies; in this case, the sangguniang 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. 43 In
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. 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. 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 Ermita-Malate 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 Ermita-Malate 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 not per 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
seoffensive 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 anduniversality 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 theOrdinance 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
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.
The U.S. Supreme Court in the case of Roth v. Board of Regents,70 sought
to clarify the meaning of "liberty." It said:
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
freedomit is the most comprehensive of rights and the right most
valued by civilized men.74
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 recognized as 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 theOrdinance may 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
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.84 A 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 ErmitaMalate 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 ill-considered 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. 103The
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.
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 prostitutionone 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.
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 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:
.
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 . . . .
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
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:
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
shall:
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
(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 in Kwong Sing v. City of Manila106 that:
These doctrines still hold contrary to petitioners' assertion110 that they were
modified by the Code vesting upon City Councils prohibitory powers.
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:

(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;
.
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 reddendo 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
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 Ordinancenow 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.
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
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
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 theOrdinance void is AFFIRMED. Costs
against petitioners.
SO ORDERED.
EN BANC
[G.R. Nos. L-42571-72. July 25, 1983.]
ROMDINA, ANGELINA OBLIGACION, CONRADO GREGORIO,

TEODORO REYES, LYDIA ATRACTIVO, NAPOLEON MENDOZA,
PERFECTO GUMATAY, ANDRES SABANGAN, ROSITA DURAN,
SOCORRO BERNARDEZ, and PEDRO GABRIEL, Petitioners, v. THE
HONORABLE EDGARDO L. PARAS, MATIAS RAMIREZ as the
Municipal Mayor, MARIO MENDOZA as the Municipal Vice-Mayor,
and THE MUNICIPAL COUNCIL OF BOCAUE,
BULACAN, Respondents.
Federico N. Alday, for Petitioners.
Dakila F. Castro for Respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; POLICE POWER OF THE STATE; POWER OF

MUNICIPAL CORPORATIONS TO ENACT LEGISLATION PURSUANT THERETO.
Police power is granted to municipal corporations in general terms as
follows: General power of council to enact ordinances and make
regulations. The municipal council shall enact such ordinances and make
such regulations, not repugnant to law, as may be necessary to carry into
effect and discharge the powers and duties conferred upon it by law and
such as shall seem necessary and proper to provide for the health and
safety, promote the prosperity, improve the morals, peace, good order,
comfort, and convenience of the municipality and the inhabitants thereof,
and for the protection of property therein." (Sec. 2238, Revised
Administrative Code of the Philippines, (1917).
2. ID; ID.; ID.; WHEN ORDINANCES MAY BE PRONOUNCED INVALID. An
ordinance enacted by virtue thereof, according to Justice Moreland,
speaking for the Court in the leading case of United States v Phil. 165
(1913) "is valid, unless contravenes the fundamental law of the Philippine
Island, or an Act of the Philippines Legislature, or unless it is against public
policy, or is unreasonable, oppressive, partial, discriminating, or in
derogation of common right. Where the power to legislate upon a given
subject, and the mode of its exercise and the details of such legislation are
not prescribed, the ordinance passed pursuant thereto must be a
reasonable exercise of the power, or it will be pronounced invalid."
VICENTE DE LA CRUZ, RENATO ALIPIO, JOSE TORRES III, LEONCIO

CORPUZ, TERESITA CALOT, ROSALIA FERNANDEZ, ELIZABETH
VELASCO, NANETTE VILLANUEVA, HONORATO BUENAVENTURA,
RUBEN DE CASTRO, VICENTE ROXAS, RICARDO DAMIAN, DOMDINO
3. ID.; ID.; ID.; LEGISLATION BY VIRTUE OF THE GENERAL WELFARE

CLAUSE. The general welfare clause authorizes such ordinances "as shall
seem necessary and proper to provide for the health and safety, promote
the prosperity, improve the morals, peace, good order, comfort, and
convenience of the municipality and the inhabitants thereof, and for the
protection of property therein. "It is a general rule that ordinances passed
by virtue of the implied power found in the general welfare clause must be
reasonable, consonant with the general powers and purposes of the
corporation, and not inconsistent with the laws or policy of the State.
4. ID.; ID.; ID.; MUNICIPAL ORDINANCE NO. 84 OF BOCAUE BULACAN;
TEST OF REASONABLENESS TO UPHOLD IT VALIDITY, NOT MET. In two
leading cases, this Court had stressed reasonableness, consonant with the
general powers and purposes of municipal corporations, as well as
consistency with the laws or policy of the sate. It cannot be said that such
a sweeping exercise of a lawmaking power by Bocaue could qualify under
the term reasonable. The objective of fostering public morals, a worthy and
desirable end can be attained by a measure that does not encompass too
wide a field. Certainly the ordinance on its face is characterized by
overbreadth. The purpose sought to be achieved could have been attained
by reasonable restriction rather than by an absolute prohibition. The
admonition in U.S. v. Salavaria, 39 Phil. 102 (1918) should be heeded:
"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 ." It is clear that in the guise of police regulation, there was in
this instance a clear invasion of personal or property rights, personal in the
case of those individuals desirous of patronizing those night clubs and
property in terms of the investment made and salaries to be earned by
those therein employed.
5. ID.; ID.; ID.; REPUBLIC ACT NO. 938; POWER GRANTED TO MUNICIPAL
CORPORATIONS IS THAT OF REGULATION, NOT PROHIBITION. The first
Section of R.A. No 938 was amended to include not merely "the power of
regulate, but likewise prohibit . . ." The title, however, remained the same.
It is worded exactly as Republic Act No. 938. It is to be admitted that as
thus amended, if only the above portion of the Act were considered, a
municipal council way go as far as to prohibit the operation of night clubs.
If that were all, then the appealed decision is not devoid if support in law.
That is not all, however. The title was not in any altered. It was not change
one with. The exact wording was followed. The power granted remains that
or regulation, not prohibition. There is thus Act No. 938 as allowing the
prohibition of the operation of night clubs would give rise to a
constitutional question.
6. ID.; ID.; ID.; ID.; ID.; STATUTE TO BE CONSTRUED TO FREE IT FROM
CONSTITUTIONAL INFIRMITY. Since there is no dispute as the title limits
the power to regulating, not prohibiting, it would result the statute being
invalid if, as was done by the Municipality of Bocaue, the operation of a
night club was prohibited. There is a wide gap between the exercise power
"to provide for the health and safety, promote the prosperity, improve the
morals." in the language of the Administrative Code, such competence
extending to all "the great public needs." to quote from Holmes, and to
interdict any calling, occupation, or enterprise. In accordance with the
well-settled principle of constitutional construction that between two
possible interpretations by one of which it will be free from constitutional
infirmity and by the other tainted by such grave defect, the former is to be
preferred. A construction that would save rather than one that would affix
the seal of doom certainly commends itself.
7. ID.; ID.; ID.; JUDGMENT UPHOLDING THE VALIDITY OF MUNICIPAL
ORDINANCE NO. 84 CANNOT BE SUSTAINED. It is clear that municipal
corporations cannot prohibit the operation of night clubs. They may be
regulated, but not prevented from carrying on their business. It would he,
therefore, an exercise in futility if the decision under review were
sustained. All that petitioners would have to do so is to apply once more
for licenses to operate night clubs. A refusal to grant licenses, because no
such businesses could legally open. would he subject to judicial correction.
That is to comply with the legislative will to allow the operation and
continued existence of night clubs subject to appropriate regulations. In
the meanwhile, to compel petitioners so close their establishments, the
necessary, result of an affirmance, would amount to no more than a
temporary termination of their business. During such time, their employees
would undergo a period of deprivation. Certainly, if such an undesirable
outcome can be avoided. it should be. The law should not be susceptible to
the reproach that it displays less than sympathetic concern for the plight of
those who, under a mistaken appreciation of a municipal power, were thus
left without employment. Such a deplorable consequence is to be avoided.
If it were not thus, then the element of arbitrariness enters the picture.
That it to pay lets, very much less, than full deference to the due process
clause with its mandate of fairness and reasonableness.
DECISION
FERNANDO, J.:
The crucial question posed by this certiorari proceeding is whether or not a

municipal corporation, Bocaue, Bulacan, represented by respondents, 1
can, prohibit the exercise of a lawful trade, the operation of night clubs,
and the pursuit of a lawful occupation, such clubs employing hostesses. It
is contended that the ordinance assailed as invalid is tainted with nullity,

the municipality being devoid of power to prohibit a lawful business,
occupation or calling, petitioners at the same time alleging that their rights
to due process and equal protection of the laws were violated as the
licenses previously given to them was in effect withdrawn without judicial
hearing. 2
The assailed ordinance 3 is worded as follows: "Section 1. Title of
Ordinance. This Ordinance shall be known and may be cited as the
[Prohibition and Closure Ordinance] of Bocaue, Bulacan. Section 2.
Definitions of Terms (a) Night Club shall include any place or
establishment selling to the public food or drinks where customers are
allowed to dance. (b) Cabaret or Dance Hall shall include any place or
establishment where dancing is permitted to the public and where
professional hostesses or hospitality girls and professional dancers are
employed. (c) Professional hostesses or hospitality girls shall include any
woman employed by any of the establishments herein defined to entertain
guests and customers at their table or to dance with them. (d)
Professional dancer shall include any woman who dances at any of the
establishments herein defined for a fee or remuneration paid directly or
indirectly by the operator or by the persons she dances with. (e) Operator
shall include the owner, manager, administrator or any person who
operates and is responsible for the operation of any night club, cabaret or
dance hall. Section 3. Prohibition in the Issuance and Renewal of
Licenses, Permits. Being the principal cause in the decadence of morality
and because of their other adverse effects on this community as explained
above, no operator of night clubs, cabarets or dance halls shall henceforth
be issued permits/licenses to operate within the jurisdiction of the
municipality and no license/permit shall be issued to any professional
hostess, hospitality girls and professional dancer for employment in any of
the aforementioned establishments. The prohibition in the issuance of
licenses/permits to said persons and operators of said establishments shall
include prohibition in the renewal thereof. Section 4. Revocation of
Permits and Licenses. The licenses and permits issued to operators of
night clubs, cabarets or dance halls which are now in operation including
permits issued to professional hostesses, hospitality girls and professional
dancers are hereby revoked upon the expiration of the thirty-day period
given them as provided in Section 8 hereof and thenceforth, the operation
of these establishments within the jurisdiction of the municipality shall be
illegal. Section 5. Penalty in case of violation. Violation of any of the
provisions of this Ordinance shall be punishable by imprisonment not
exceeding three (3) months or a fine not exceeding P200.00 or both at the
discretion of the Court. If the offense is committed by a juridical entity, the
person charged with the management and/or operation thereof shall be
liable for the penalty provided herein. Section 6. Separability Clause. If,
for any reason, any section or provision of this Ordinance is held

unconstitutional or invalid, no other section or provision hereof shall be
affected thereby. Section 7. Repealing Clause. All ordinance,
resolutions, circulars, memoranda or parts thereof that are inconsistent
with the provisions of this Ordinance are hereby repealed. Section 8.
Effectivity. This Ordinance shall take effect immediately upon its
approval; provided, however, that operators of night clubs, cabarets and
dance halls now in operation including professional hostesses, hospitality
girls and professional dancers are given a period of thirty days from the
approval hereof within which to wind up their businesses and comply with
the provisions of this Ordinance." 4
On November 5, 1975, two cases for prohibition with preliminary injunction
were filed with the Court of First Instance of Bulacan. 5 The grounds
alleged follow: "1. Ordinance No. 84 is null and void as a municipality has
no authority to prohibit a lawful business, occupation or calling. 2.
Ordinance No. 84 is violative of the petitioners right to due process and
the equal protection of the law, as the license previously given to
petitioners was in effect withdrawn without judicial hearing. 3. That under
Presidential Decree No. 189, as amended, by Presidential Decree No. 259,
the power to license and regulate tourist-oriented businesses including
night clubs, has been transferred to the Department of Tourism." 6 The
cases were assigned to respondent Judge, now Associate Justice Paras of
the Intermediate Appellate Court, who issued a restraining order on
November 7, 1975. The answers were thereafter filed. It was therein
alleged: "1. That the Municipal Council is authorized by law not only to
regulate but to prohibit the establishment, maintenance and operation of
night clubs invoking Section 2243 of the RAC, CA 601, Republic Acts Nos.
938, 978 and 1224. 2. The Ordinance No. 84 is not violative of petitioners
right to due process and the equal protection of the law, since property
rights are subordinate to public interests. 3. That Presidential Decree No.
189, as amended, did not deprive Municipal Councils of their jurisdiction to
regulate or prohibit night clubs." 7 There was the admission of the
following facts as having been established: "1. That petitioners Vicente de
la Cruz, Et. Al. in Civil Case No. 4755-M had been previously issued
licenses by the Municipal Mayor of Bocaue petitioner Jose Torres III,
since 1958; petitioner Vicente de la Cruz, since 1960; petitioner Renato
Alipio, since 1961 and petitioner Leoncio Corpuz, since 1972; 2. That
petitioners had invested large sums of money in their businesses; 3. That
the night clubs are well-lighted and have no partitions, the tables being
near each other; 4. That the petitioners owners/operators of these clubs
do not allow the hospitality girls therein to engage in immoral acts and to
go out with customers; 5. That these hospitality girls are made to go
through periodic medical check-ups and not one of them is suffering from
any venereal disease and that those who fail to submit to a medical check-
up or those who are found to be infected with venereal disease are not
allowed to work; 6. That the crime rate there is better than in other parts
of Bocaue or in other towns of Bulacan." 8 Then came on January 15, 1976
the decision upholding the constitutionality and validity of Ordinance No.
84 and dismissing the cases. Hence this petition forcertiorari by way of
appeal.
chanrobles lawlibrary : rednad
In an exhaustive as well as scholarly opinion, the lower court dismissed the

petitions. Its rationale is set forth in the opening paragraph thus: "Those
who lust cannot last. This in essence is why the Municipality of Bocaue,
Province of Bulacan, stigmatized as it has been by innuendos of sexual
titillation, and fearful of what the awesome future holds for it, had no
alternative except to order thru its legislative machinery, and even at the
risk of partial economic dislocation, the closure of its night clubs and/or
cabarets. This in essence is also why this Court, obedient to the mandates
of good government, and cognizant of the categorical imperatives of the
current legal and social revolution, hereby [upholds] in the name of police
power the validity and constitutionality of Ordinance No. 84, Series of
1975, of the Municipal Council of Bocaue, Bulacan. The restraining orders
heretofore issued in these two cases are therefore hereby lifted, effective
the first day of February, 1976, the purpose of the grace period being to
enable the petitioners herein to apply to the proper appellate tribunals for
any contemplated redress." 9 This Court is, however, unable to agree with
such a conclusion and for reasons herein set forth, holds that reliance on
the police power is insufficient to justify the enactment of the assailed
ordinance. It must be declared null and void.
1. Police power is granted to municipal corporations in general terms as
follows: "General power of council to enact ordinances and make
regulations. The municipal council shall enact such ordinances and make
such regulations, not repugnant to law, as may be necessary to carry into
effect and discharge the powers and duties conferred upon it by law and
such as shall seem necessary and proper to provide for the health and
safety, promote the prosperity, improve the morals, peace, good order,
comfort, and convenience of the municipality and the inhabitants thereof,
and for the protection of property therein." 10 It is practically a
reproduction of the former Section 39 of Municipal Code. 11 An ordinance
enacted by virtue thereof, according to Justice Moreland, speaking for the
Court in the leading case of United States v. Abendan 12 "is valid, unless it
contravenes the fundamental law of the Philippine Islands, or an Act of the
Philippine Legislature, or unless it is against public policy, or is
unreasonable, oppressive, partial, discriminating, or in derogation of
common right. Where the power to legislate upon a given subject, and the
mode of its exercise and the details of such legislation are not prescribed,
the ordinance passed pursuant thereto must be a reasonable exercise of
the power, or it will be pronounced invalid." 13 In another leading case,

United States v. Salaveria, 14 the ponente this time being Justice Malcolm,
where the present Administrative Code provision was applied, it was stated
by this Court: "The general welfare clause has two branches: One branch
attaches itself to the main trunk of municipal authority, and relates to such
ordinances and regulations as may be necessary to carry into effect and
discharge the powers and duties conferred upon the municipal council by
law. With this class we are not here directly concerned. The second branch
of the clause is much more independent of the specific functions of the
council which are enumerated by law. It authorizes such ordinances as
shall seem necessary and proper to provide for the health and safety,
promote the prosperity, improve the morals, peace, good order, comfort,
and convenience of the municipality and the inhabitants thereof, and for
the protection of property therein. It is a general rule that ordinances
passed by virtue of the implied power found in the general welfare clause
must be reasonable, consonant with the general powers and purposes of
the corporation, and not inconsistent with the laws or policy of the State."
15 If night clubs were merely then regulated and not prohibited, certainly
the assailed ordinance would pass the test of validity. In the two leading
cases above set forth, this Court had stressed reasonableness, consonant
with the general powers and purposes of municipal corporations, as well as
consistency with the laws or policy of the State. It cannot be said that such
a sweeping exercise of a lawmaking power by Bocaue could qualify under
the term reasonable. The objective of fostering public morals, a worthy and
desirable end can be attained by a measure that does not encompass too
wide a field. Certainly the ordinance on its face is characterized by
overbreadth. The purpose sought to be achieved could have been attained
by reasonable restrictions rather than by an absolute prohibition. The
admonition in Salaveria should be heeded: "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." 16 It is clear that in
the guise of a police regulation, there was in this instance a clear invasion
of personal or property rights, personal in the case of those individuals
desirous of patronizing those night clubs and property in terms of the
investments made and salaries to be earned by those therein employed.
chanroble svirtualawlibrary
2. The decision now under review refers to Republic Act No. 938 as
amended. 17 It was originally enacted on June 20, 1953. It is entitled: "AN
ACT GRANTING MUNICIPAL OR CITY BOARDS AND COUNCILS THE POWER
TO REGULATE THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF
CERTAIN PLACES OF AMUSEMENT WITHIN THEIR RESPECTIVE
TERRITORIAL JURISDICTIONS." 18 Its first section insofar as pertinent
reads: "The municipal or city board or council of each chartered city shall
have the power to regulate by ordinance the establishment, maintenance
and operation of night clubs, cabarets, dancing schools, pavilions, cockpits,
bars, saloons, bowling alleys, billiard pools, and other similar places of
amusement within its territorial jurisdiction: . . . 19 Then on May 21, 1954,
the first section was amended to include not merely "the power to
regulate, but likewise "prohibit . . ." 20 The title, however, remained the
same. It is worded exactly as Republic Act No, 938. It is to be admitted
that as thus amended, if only the above portion of the Act were
considered, a municipal council may go as far as to prohibit the operation
of night clubs. If that were all, then the appealed decision is not devoid of
support in law. That is not all, however. The title was not in any way
altered. It was not changed one whit. The exact wording was followed. The
power granted remains that of regulation, not prohibition. There is thus
support for the view advanced by petitioners that to construe Republic Act
No. 938 as allowing the prohibition of the operation of night clubs would
give rise to a constitutional question. The Constitution mandates: "Every
bill shall embrace only one subject which shall be expressed in the title
thereof." 21 Since there is no dispute as the title limits the power to
regulating, not prohibiting, it would result in the statute being invalid if, as
was done by the Municipality of Bocaue, the operation of a night club was
prohibited. There is a wide gap between the exercise of a regulatory power
"to provide for the health and safety, promote the prosperity, improve the
morals, "22 in the language of the Administrative Code, such competence
extending to all "the great public needs," 23 to quote from Holmes, and to
interdict any calling, occupation, or enterprise. In accordance with the
well-settled principle of constitutional construction that between two
possible interpretations by one of which it will be free from constitutional
infirmity and by the other tainted by such grave defect, the former is to be
preferred. A construction that would save rather than one that would affix
the seal of doom certainly commends itself. We have done so before We do
so again. 24
3. There is reinforcement to the conclusion reached by virtue of a specific
provision of the recently-enacted Local Government Code. 25 The general
welfare clause, a reiteration of the Administrative Code provision, is set
forth in the first paragraph of Section 149 defining the powers and duties
of the sangguniang bayan. It read as follows:" (a) 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; . . . ." 26 There are
in addition provisions that may have a bearing on the question now before
this Court. Thus the sangguniang bayan shall" (rr) Regulate cafes,
restaurants, beer-houses, hotels, motels, inns, pension houses and lodging
houses, except travel agencies, tourist guides, tourist transports, hotels,
resorts, de luxe restaurants, and tourist inns of international standards

which shall remain under the licensing and regulatory power of the Ministry
of Tourism which shall exercise such authority without infringing on the
taxing or regulatory powers of the municipality; (ss) Regulate public
dancing schools, public dance halls, and sauna baths or massage parlors;
(tt) Regulate the establishment and operation of billiard pools, theatrical
performances, circuses and other forms of entertainment; . . . ." 27 It is
clear that municipal corporations cannot prohibit the operation of might
clubs. They may be regulated, but not prevented from carrying on their
business. It would be, therefore, an exercise in futility if the decision under
review were sustained. All that petitioners would have to do is to apply
once more for licenses to operate night clubs. A refusal to grant licenses,
because no such businesses could legally open, would be subject to judicial
correction. That is to comply with the legislative will to allow the operation
and continued existence of night clubs subject to appropriate regulations.
In the meanwhile, to compel petitioners to close their establishments, the
necessary result of an affirmance, would amount to no more than a
temporary termination of their business. During such time, their employees
would undergo a period of deprivation. Certainly, if such an undesirable
outcome can be avoided, it should be. The law should not be susceptible to
the reproach that it displays less than sympathetic concern for the plight of
those who, under a mistaken appreciation of a municipal power, were thus
left without employment. Such a deplorable consequence is to be avoided.
If it were not thus, then the element of arbitrariness enters the picture.
That is to pay less, very much less, than full deference to the due process
clause with its mandate of fairness and reasonableness.
cralawnad
4. The conclusion reached by this Court is not to be interpreted as a

retreat from its resolute stand sustaining police power legislation to
promote public morals. The commitment to such an ideal forbids such a
backward step. Legislation of that character is deserving of the fullest
sympathy from the judiciary. Accordingly, the judiciary has not been
hesitant to lend the weight of its support to measures that can be
characterized as falling within that aspect of the police power. Reference is
made by respondents to Ermita-Malate Hotel and Motel Operators
Association, Inc. v. City Mayor of Manila. 28 There is a misapprehension as
to what was decided by this Court. That was a regulatory measure.
Necessarily, there was no valid objection on due process or equal
protection grounds. It did not prohibit motels. It merely regulated the
mode in which it may conduct business in order precisely to put an end to
practices which could encourage vice and immorality, This is an entirely
different case. What was involved is a measure not embraced within the
regulatory power but an exercise of an assumed power to prohibit.
Moreover, while it was pointed out in the aforesaid Ermita-Malate Hotel and
Motel Operators Association, Inc. decision that there must be a factual
foundation of invalidity, it was likewise made clear that there is no need to

satisfy such a requirement if a statute were void on its face. That it
certainly is if the power to enact such ordinance is at the most dubious and
under the present Local Government Code non-existent.
WHEREFORE, the writ of certiorari is granted and the decision of the lower
court dated January 15, 1976 reversed, set aside, and nullied. Ordinance
No. 84, Series of 1975 of the Municipality of Bocaue is declared void and
unconstitutional. The temporary restraining order issued by this Court is
hereby made permanent. No costs.
Teehankee, Aquino, Concepcion, Jr., Guerrero, Abad Santos, Plana, Escolin,
Relova and Gutierrez, Jr.,JJ., concur.
Makasiar, J., reserves his right to file a dissent.
Melencio-Herrera and Vasquez, JJ., are on official leave.
De Castro, J., is on sick leave.
Highways, Respondents.
Leovillo C. Agustin Law Office for Petitioner.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General
Ruben E. Agpalo and Solicitor Amado D. Aquino for Respondents.
SYNOPSIS
Letter of Instruction No. 229 (1974) as amended by Letter of Instruction
No. 479 (1976) required every motor vehicle owner to procure and use one
pair of a reflectorized triangular early warning device whenever any vehicle
is stalled or disabled or is parked for thirty (30) minutes or more on any
street, or highway, including expressways or limited access roads. The
implementing rules and regulations prepared by the respondent Land
Transportation Commissioner on December 10, 1976 were not enforced as
President Marcos, on January 25, 1977, ordered a six-month period of
suspension insofar as the installation of early warning device (EWD) as a
pre-registration requirement for motor vehicles was concerned. Letter of
Instruction No. 716, issued on June 30, 1978 lifted such suspension and in
pursuance thereof, the rules and regulations prepared by respondent
Commission were approved for immediate implementation by respondent
Minister of Public Works and Communication.
[G.R. No. L-49112. February 2, 1979.]
Petitioner came to court alleging that Letter of Instruction 229, as

amended, clearly violates the provisions of the New Constitution on due
process, equal protection and delegation of police power. That it is
oppressive, unreasonable, arbitrary, confiscatory and contrary to the
precepts of our compassionate New Society. The respondents Answer
demonstrated that the assailed Letter of Instruction was a valid exercise of
the police power; that the implementing rules and regulations of
respondent Land Transportation Commissioner do not constitute unlawful
delegation of legislative power and that the hazards posed by such
obstructions to traffic have been recognized by international bodies
concerned with traffic safety, the 1968 Vienna Convention on Road Signs
and Signals of which Philippines was a signatory and which was duly
ratified and the United Nations Organization.
LEOVILLO C. AGUSTIN, Petitioner, v. HON. ROMEO F. EDU, in his

capacity as Land Transportation Commissioner; HON. JUAN PONCE
ENRILE, in his capacity as Minister of National Defense; HON.
ALFREDO L. JUINIO, in his capacity as Minister of Public Works,
Transportation and Communications; and HON: BALTAZAR
AQUINO, in his capacity as Minister of Public
The Court dismissed the petition for prohibition ruling that the Letter of
Instruction in question was issued in the exercise of the States police
power intended to promote public safety; that there has been no undue
delegation of legislative power as a standard has been set; and that the
country cannot repudiate its commitment to international bodies and the
accepted principles of international law.
EN BANC
SYLLABUS
1. CONSTITUTIONAL LAW; POLICE POWER OF THE STATE; ENACTMENT OF

LEGISLATION TO PROMOTE GENERAL WELFARE; JURISPRUDENCE. The
broad and expansive scope of the police power, which was originally
identified by Chief Justice Taney of the American Supreme Court in an
1847 decision, as "nothing more or less than the powers of government
inherent in every sovereignty" was stressed in the case of Edu v. Ericta, (L32096, Oct. 24, 1970), thus: "Justice Laurel, in the first leading decision
after the Constitution came into force, Calalang v. Williams, (70 Phil. 720)
[1940] identified police power with the state authority to enact legislation
that may interfere with personal liberty or property in order to promote the
general welfare. Persons and property could thus be subjected to all kinds
of restraints and burdens in order to secure the general comfort, health
and prosperity of the state. Shortly after independence in 1948, Primicias
v. Fugoso (80 Phil. 71) reiterated the doctrine, such a competence being
referred to as the power to prescribe regulations to promote the health,
morals, peace, education, good order or safety, and general welfare of the
people. The concept was set forth in negative terms by Justice Malcolm in
a pre-Commonwealth decision as that inherent and plenary power in the
State which enables it to prohibit all things hurtful to the comfort, safety
and welfare of society. In the sense it could be hardly distinguishable as
noted in Morfe v. Mutuc (L-20387 Jan. 31, 1969) with the totality of
legislative power. It is in the above sense the greatest and most powerful
attribute of government. It is, to quote Justice Malcolm, the most
essential, insistent, and at least illimitable powers, extending as Justice
Holmes, aptly pointed out to all the great public needs. Its scope, overexpanding 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. In the language of Justice Cardozo: Needs that were
narrow or parochial in the past may be interwoven in the present with the
well-being of the nation. What is critical or urgent changes with the time.
The police power is thus a dynamic agency, suitably vague and far from
precisely defined, rooted in the conception that men in organizing the state
and imposing upon its government limitations to safeguard constitutional
rights did not intend thereby to enable an individual citizen or a group of
citizens to obstruct unreasonably the enactments of such salutary
measures calculated to insure communal peace, safety, good order, and
welfare."
2. ID.; ID.; ID.; LETTER OF INSTRUCTION NO. 229; INTENDED TO
PROMOTE PUBLIC SAFETY. Letter of Instruction 229 is a police measure
clearly intended to promote public safety. It would be rare occurrence for
the Court to invalidate a legislative or executive act of that character. The

latest decision in point, Edu v. Ericta, sustained the validity of the Reflector
Law, R.A. No. 5715 (1969), an enactment conceived with the same end in
view. Calalang v. Williams found nothing objectionable in a statute, the
purpose of which was: "To promote safe transit upon, and avoid
obstruction on roads and streets designated as national roads . . . ."
3. ID.; ID.; ID.; ID.; ISSUED AFTER CAREFUL STUDY BY THE EXECUTIVE
DEPARTMENT. The issuance of Letter of Instruction No. 229 is encased in
the armor of prior, careful study by the Executive Department. The
President had in his possession the necessary statistical information and
data at the time he issued said letter of instruction and such factual
foundation cannot be defeated by petitioners naked assertion, not backed
up by demonstrable data on record, that early warning devices are not too
vital to the prevention of nighttime vehicular accidents. To set it aside for
alleged repugnancy to the due process clause is to give sanction to
conjectural claims that exceeded even the broadest permissible limits of a
pleaders well-known penchant for exaggeration.
4. ID.; ID.; ID.; ID.; EARLY WARNING DEVICE REQUIREMENT NOT
OPPRESSIVE AND CONFISCATORY. There is nothing in the questioned
Letter of Instruction No. 229, as amended, or in the implementing rules
and regulations in Administrative Order No. 1 issued by the Land
Transportation Commission, which requires or compels motor vehicle
owners to purchase the early warning device prescribed thereby. All that is
required is for motor vehicle owners concerned to equip their motor
vehicles with a pair of this early warning device in question, procuring or
obtaining the same from whatever source. With a little of industry and
practical ingenuity, motor vehicle owners can even personally make or
produce this early warning device so long as the same substantially
conforms with the specifications laid down in said letter of instruction and
administrative order. Accordingly, the early warning device requirement
can neither be oppressive, onerous, immoral, nor confiscatory, much less
does it make manufacturers and dealers of said devices instant millionaries
at the expense of car owners as petitioner so sweepingly concludes.
5. ID.; ID.; ID.; ID.; ATTACK ON THE WISDOM THEREOF CANNOT BE
SUSTAINED. The attack on the validity of the challenged provision
insofar as there may be objections, even if valid and cogent, on its wisdom
cannot be sustained. That approach is distinguished by its unorthodoxy. It
bears repeating "that this Court, in the language of Justice Laurel, does
not pass upon questions of wisdom, justice or expediency of legislation. As
expressed by Justice Tuason: It is not the province of the courts to
supervise legislation and keep it within the bounds of propriety and
common sense. That is primarily and exclusively a legislative concern.
There can be no possible objection then to the observation of Justice

Montemayor: As long as laws do not violate any constitutional provision,
the Courts merely interpret and apply them regardless of whether or not
they are wise or salutary. For they, according to Justice Labrador, are not
supposed to override legitimate policy and . . . never inquire into the
wisdom of the law. It is thus settled, to paraphrase Chief Justice
Concepcion in Gonzales v. Commission on Elections, that only
congressional power or competence, not the wisdom of the action taken,
may be the basis for declaring a statute invalid. This is as it ought to be.
The principle of separation of powers has in the main wisely allocated the
respective authority of each department and confined its jurisdiction to
such a sphere. There would then be intrusion not allowable under the
Constitution if on a matter left to the discretion of a coordinate branch, the
judiciary would substitute its own. If there be adherence to the rule of law,
as there ought to be, the last offender should be courts of justice, to which
rightly litigants submit their controversy precisely to maintain unimpaired
the supremacy of legal norms and prescriptions. . . ."
6. ID.; ID.; ID.; NO INFRINGEMENT OF THE PRINCIPLE OF NONDELEGATION OF LEGISLATIVE POWER. The alleged infringement of the
principle of non-delegation of legislative power is without any support in
well-settled legal doctrines. An excerpt from the aforecited decision of Edu
v. Ericta sheds light on the matter: "To avoid the taint of unlawful
delegation, there must be a standard, which implies at the very least that
the legislature itself determines matters of principle and lays down
fundamental policy. Otherwise, the charge of complete abdication may be
hard to repel. A standard thus defines legislative policy, marks its limits,
maps out its boundaries and specifies the public agency to apply it. It
indicates the circumstances under which the legislative command is to be
effected. It is the criterion by which legislative purpose may be carried out.
Thereafter, the executive or administrative office designated may in
pursuance of the above guidelines promulgate supplemental rules and
regulations. The standard may be either express or implied. If the former,
the non-delegation is easily met. The standard though does not have to be
spelled out specifically. It could be implied from the policy and purpose of
the act considered as a whole. . . ."
7. ID.; ID.; ID.; ID.; STATE RECOGNITION OF INTERNATIONAL

AGREEMENTS. Where the two whereas clauses of the assailed Letter of
Instruction read:" (Whereas), the hazards posed by such obstructions to
traffic have been recognized by international bodies concerned with traffic
safety, the 1968 Vienna Convention on Road Signs and Signals and the
United Nations Organization (U.N.); (Whereas), the said Vienna
Convention, which was ratified by the Philippine Government under P.D.
No. 207, recommended the enactment of local legislation for the
installation of road safety signs and devices; . . .", it cannot be disputed

then that this Declaration of Principle found in the Constitution possesses
relevance: "The Philippines . . . adopts the generally accepted principles of
international law as part of the law of the land, . . ." The 1968 Vienna
Convention on Road Signs and Signals is impressed with such a character.
It is not for this country to repudiate a commitment to which it had
pledged its word. The concept of Pacta sunt servanda stands in the way of
such an attitude, which is, moreover, at war with the principle of
international morality.
TEEHANKEE, J., dissenting:
1. STATUTES; LETTER OF INSTRUCTION NO. 229; EARLY WARNING

DEVICE REQUIREMENT; OPPRESSIVE, ARBITRARY AND DISCRIMINATORY.
It is oppressive, arbitrary and discriminatory to require owners of motor
vehicles with built-in and more effective and efficient early warning devices
(E.W.D.s) such as" (a) blinking lights in the fore and aft of said motor
vehicles, (b) battery-powered blinking lights inside motor vehicles, (c)
built-in reflectorized tapes on front and rear bumpers of motor vehicles . . .
." to purchase the E.W.D. specified in the challenged order, whose
effectivity and utility have yet to be demonstrated.
2. ID.; ID.; ID.; NO PUBLIC NECESSITY THEREFOR. The public necessity
for the challenged order has yet to be shown. No valid refutation has been
made of petitioners assertion that the "E.W.D.s" are not too vital to the
prevention of nighttime vehicular accidents. Statistics show that the
26,000 motor vehicle accidents that occurred in 1976, only 390 or 1.5
percent involved rear-end collisions, "as to require the purchase and
installation of the questioned E.W.D. for almost 900,000 vehicles
throughout the country. There is no imperative need for imposing such a
blanket requirement on all vehicles. The respondents have not shown that
they have availed of the powers and prerogatives vested in their offices
such as ridding the country of dilapitated trucks and vehicles which are the
main cause of the deplorable highway accidents due to stalled vehicles,
establishing an honest and fool-proof system of examination and licensing
of motor vehicle drivers so as to ban the reckless and irresponsible and a
sustained education campaign to install safe driving habits and attitudes
that can be carried out for much less than the P50 million burden that
would be imposed by the challenged order.
DECISION
FERNANDO, J.:
The validity of a Letter of Instruction 1 providing for an early warning

device for motor vehicles is assailed in this prohibition proceeding as being
violative of the constitutional guarantee of due process and, insofar as the
rules and regulations for its implementation are concerned, for
transgressing the fundamental principle of non-delegation of legislative
power. The Letter of Instruction is stigmatized by petitioner, who is
possessed of the requisite standing, as being arbitrary and oppressive. A
temporary restraining order as issued and respondents Romeo F. Edu, Land
Transportation Commissioner; Juan Ponce Enrile, Minister of National
Defense; Alfredo L. Juinio, Minister of Public Works, Transportation and
Communications; and Baltazar Aquino, Minister of Public Highways; were
required to answer. That they did in a pleading submitted by Solicitor
General Estelito P. Mendoza. 2 Impressed with a highly persuasive quality,
it makes quite clear that the imputation of a constitutional infirmity is
devoid of justification. The challenged Letter of Instruction is a valid police
power measure. Nor could the implementing rules and regulations issued
by respondent Edu be considered as amounting to an exercise of legislative
power. Accordingly, the petition must be dismissed.
chanroble s lawlibrary : rednad
The facts are undisputed. The assailed Letter of Instruction No. 229 of
President Marcos, issued on December 2, 1974, reads in full:" [Whereas],
statistics show that one of the major causes of fatal or serious accidents in
land transportation is the presence of disabled, stalled, or parked motor
vehicles along streets or highways without any appropriate early warning
device to signal approaching motorists of their presence; [Whereas], the
hazards posed by such obstructions to traffic have been recognized by
international bodies concerned with traffic safety, the 1968 Vienna
Convention on Road Signs and Signals and the United Nations Organization
(U.N.); [Whereas], the said Vienna Convention which was ratified by the
Philippine Government under P.D. No. 207, recommended the enactment of
local legislation for the installation of road safety signs and devices; [Now,
therefore, I, Ferdinand E. Marcos], President of the Philippines, in the
interest of safety on all streets and highways, including expressways or
limited access roads, do hereby direct: 1. That all owners, users or drivers
of motor vehicles shall have at all times in their motor vehicles at least one
(1) pair of early warning device consisting of triangular, collapsible
reflectorized plates in red and yellow colors at least 15 cms. at the base
and 40 cms. at the sides. 2. Whenever any motor vehicle is stalled or
disabled or is parked for thirty (30) minutes or more on any street or
highway, including expressways or limited access roads, the owner, user or
driver thereof shall cause the warning device mentioned herein to be
installed at least four meters away to the front and rear of the motor
vehicle stalled, disabled or parked. 3. The Land Transportation
Commissioner shall cause Reflectorized Triangular Early Warning Devices,
as herein described, to be prepared and issued to registered owners of
motor vehicles, except motorcycles and trailers, charging for each piece
not more than 15% of the acquisition cost. He shall also promulgate such
rules and regulations as are appropriate to effectively implement this
order. 4. All hereby concerned shall closely coordinate and take such
measures as are necessary or appropriate to carry into effect these
instructions." 3 Thereafter, on November 15, 1976, it was amended by
Letter of Instruction No. 479 in this wise: "Paragraph 3 of Letter of
Instructions No. 229 is hereby amended to read as follows: 3. The Land
Transportation Commissioner shall require every motor vehicle owner to
procure from any source and present at the registration of his vehicle, one
pair of a reflectorized triangular early warning device, as described herein,
of any brand or make chosen by said motor vehicle owner. The Land
Transportation Commissioner shall also promulgate such rules and
regulations as are appropriate to effectively implement this order." 4 There
was issued accordingly, by respondent Edu, the implementing rules and
regulations on December 10, 1976. 5 They were not enforced as President
Marcos, on January 25, 1977, ordered a six-month period of suspension
insofar as the installation of early warning device as a pre-registration
requirement for motor vehicles was concerned. 6 Then on June 30, 1978,
another Letter of Instruction 7 ordered the lifting of such suspension and
directed the immediate implementation of Letter of Instruction No. 229 as
amended. 8 It was not until August 29, 1978 that respondent Edu issued
Memorandum Circular No. 32, worded thus: "In pursuance of Letter of
Instructions No. 716, dated June 30, 1978, directing the implementation of
Letter of Instructions No. 229, as amended by Letter of Instructions No.
479, requiring the use of Early Warning Devices (EWD) on motor vehicles,
the following rules and regulations are hereby issued: 1. LTC
Administrative Order No. 1, dated December 10, 1976; shall now be
implemented provided that the device may come from whatever source
and that it shall have substantially complied with the EWD specifications
contained in Section 2 of said administrative order; 2. In order to insure
that every motor vehicle, except motorcycles, is equipped with the device,
a pair of serially numbered stickers, to be issued free of charge by this
Commission, shall be attached to each EWD. The EWD serial number shall
be indicated on the registration certificate and official receipt of payment of
current registration fees of the motor vehicle concerned. All Orders,
Circulars, and Memoranda in conflict herewith are hereby superseded, This
Order shall take effect immediately." 9 It was for immediate
implementation by respondent Alfredo L. Juinio, as Minister of Public
Works, Transportation, and Communications. 10
Petitioner, after setting forth that he "is the owner of a Volkswagen Beetle
Car, Model 13035, already properly equipped when it came out from the
assembly lines with blinking lights fore and aft, which could very well serve
as an early warning device in case of the emergencies mentioned in Letter
of Instructions No. 229, as amended, as well as the implementing rules
and regulations in Administrative Order No. 1 issued by the Land
Transportation Commission," 11 alleged that said Letter of Instruction No.
229, as amended, "clearly violates the provisions and delegation of police
power, [sic] . . .:" For him, they are "oppressive, unreasonable, arbitrary,
confiscatory, nay unconstitutional and contrary to the precepts of our
compassionate New Society." 12 He contended that they are "infected with
arbitrariness because it is harsh, cruel and unconscionable to the motoring
public;" 13 are "one-sided, onerous and patently illegal and immoral
because [they] will make manufacturers and dealers instant millionaires at
the expense of car owners who are compelled to buy a set of the so-called
early warning device at the rate of P56.00 to P72.00 per set." 14 are
unlawful and unconstitutional and contrary to the precepts of a
compassionate New Society [as being] compulsory and confiscatory on the
part of the motorists who could very well provide a practical alternative
road safety device, or a better substitute to the specified set of EWDs." 15
He therefore prayed for a judgment declaring both the assailed Letters of
Instructions and Memorandum Circular void and unconstitutional and for a
restraining order in the meanwhile.
A resolution to this effect was handed down by this Court on October 19,
1978: "L-49112 (Leovillo C. Agustin v. Hon. Romeo F. Edu, etc., Et. Al.)
Considering the allegations contained, the issues raised and the arguments
adduced in the petition for prohibition with writ of preliminary prohibitory
and/or mandatory injunction, the Court Resolved to [require] the
respondents to file an answer thereto within ten (10) days from notice and
not to move to dismiss the petition. The Court further Resolved to [issue] a
[temporary restraining order] effective as of this date and continuing until
otherwise ordered by this Court." 16
Two motions for extension were filed by the Office of the Solicitor General
and granted. Then on November 15, 1978, he Answer for respondents was
submitted. After admitting the factual allegations and stating that they
lacked knowledge or information sufficient to form a belief as to petitioner
owning a Volkswagen Beetle car, 17 they "specifically deny the allegations
in paragraphs X and XI (including its subparagraphs 1, 2, 3, 4) of Petition
to the effect that Letter of Instruction No. 229 as amended by Letters of
Instructions Nos. 479 and 716 as well as Land Transportation Commission
Administrative Order No. 1 and its Memorandum Circular No. 32 violates
the constitutional provisions on due process of law, equal protection of law
and undue delegation of police power, and that the same are likewise
oppressive, arbitrary, confiscatory, one-sided, onerous, immoral,

unreasonable and illegal, the truth being that said allegations are without
legal and factual basis and for the reasons alleged in the Special and
Affirmative Defenses of this Answer." 18 Unlike petitioner who contented
himself with a rhetorical recital of his litany of grievances and merely
invoked the sacramental phrases of constitutional litigation, the Answer, in
demonstrating that the assailed Letter of Instruction was a valid exercise
of the police power and implementing rules and regulations of respondent
Edu not susceptible to the charge that there was unlawful delegation of
legislative power, there was in the portion captioned Special and
Affirmative Defenses, a citation of what respondents believed to be the
authoritative decisions of this Tribunal calling for application. They are
Calalang v. Williams, 19 Morfe v. Mutuc, 20 and Edu v. Ericta. 21 Reference
was likewise made to the 1968 Vienna Conventions of the United Nations
on road traffic, road signs, and signals, of which the Philippines was a
signatory and which was duly ratified. 22 Solicitor General Mendoza took
pains to refute in detail, in language calm and dispassionate, the vigorous,
at times intemperate, accusation of petitioner that the assailed Letter of
Instruction and the implementing rules and regulations cannot survive the
test of rigorous scrutiny. To repeat, its highly-persuasive quality cannot be
denied.
cralawnad
This Court thus considered the petition submitted for decision, the issues
being clearly joined. As noted at the outset, it is far from meritorious and
must be dismissed.
1. The Letter of Instruction in question was issued in the exercise of the
police power. That is conceded by petitioner and is the main reliance of
respondents. It is the submission of the former, however, that while
embraced in such a category, it has offended against the due process and
equal protection safeguards of the Constitution, although the latter point
was mentioned only in passing. The broad and expansive scope of the
police power which was originally identified by Chief Justice Taney of the
American Supreme Court in an 1847 decision, as "nothing more or less
than the powers of government inherent in every sovereignty" 23 was
stressed in the aforementioned case of Edu v. Ericta thus: "Justice Laurel,
in the first leading decision after the Constitution came into force, Calalang
v. Williams, identified police power with state authority to enact legislation
that may interfere with personal liberty or property in order to promote the
general welfare. Persons and property could thus be subjected to all kinds
of restraints and burdens in order to secure the general comfort, health
and prosperity of the state. Shortly after independence in 1948, Primicias
v. Fugoso reiterated the doctrine, such a competence being referred to as
the power to prescribe regulations to promote the health, morals, peace,
education, good order or safety, and general welfare of the people. The
concept was set forth in negative terms by Justice Malcolm in a preCommonwealth decision as that inherent and plenary power in the State
which enables it to prohibit all things hurtful to the comfort, safety and
welfare of society. In that sense it could be hardly distinguishable as noted
by this Court in Morfe v. Mutuc with the totality of legislative power. It is in
the above sense the greatest and most powerful attribute of government.
It is, to quote Justice Malcolm anew, the most essential, insistent, and at
least illimitable powers, extending as Justice Holmes aptly pointed out to
all the great public needs. Its scope, ever 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. In the
language of Justice Cardozo: Needs that were narrow or parochial in the
past may be interwoven in the present with the well-being of the nation.
What is critical or urgent changes with the time. The police power is thus a
dynamic agency, suitably vague and far from precisely defined, rooted in
the conception that men in organizing the state and imposing upon its
government limitations to safeguard constitutional rights did not intend
thereby to enable an individual citizen or a group of citizens to obstruct
unreasonably the enactment of such salutary measures calculated to
insure communal peace, safety, good order, and welfare." 24
2. It was thus a heavy burden to be shouldered by petitioner, compounded
by the fact that the particular police power measure challenged was clearly
intended to promote public safety. It would be a rare occurrence indeed for
this Court to invalidate a legislative or executive act of that character. None
has been called to our attention, an indication of its being non-existent.
The latest decision in point, Edu v. Ericta, sustained the validity of the
Reflector Law, 25 an enactment conceived with the same end in view.
Calalang v. Williams found nothing objectionable in a statute, the purpose
of which was: "To promote safe transit upon, and avoid obstruction on
roads and streets designated as national roads . . ." 26 As a matter of fact,
the first law sought to be nullified after the effectivity of the 1935
Constitution, the National Defense Act, 27 with petitioner failing in his
quest, was likewise prompted by the imperative demands of public safety.
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3. The futility of petitioners effort to nullify both the Letter of Instruction

and the implementing rules and regulations becomes even more apparent
considering his failure to lay the necessary factual foundation to rebut the
presumption of validity. So it was held in Ermita-Malate Hotel and Motel
Operators Association, Inc. v. City Mayor of Manila. 28 The rationale was
clearly set forth in an excerpt from a decision of Justice Brandeis of the
American Supreme Court, quoted in the opinion: "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
presumption of constitutionality must prevail in the absence of some
factual foundation of record in overthrowing the statute." 29
4. Nor did the Solicitor General, as he very well could, rely solely on such
rebutted presumption of validity. As was pointed out in his Answer: "The
President certainly bad in his possession the necessary statistical
information and data at the time he issued said letter of instructions, and
such factual foundation cannot be defeated by petitioners naked assertion
that early warning devices are not too vital to the prevention of nighttime
vehicular accidents because allegedly only 390 or 1.5 per cent of the
supposed 26,000 motor vehicle accidents that occurred in 1976 involved
rear-end collisions (p. 12 of petition). Petitioners statistics is not backed
up by demonstrable data on record. As aptly stated by this Honorable
Court: Further: "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" . . . But even assuming the verity of petitioners
statistics, is that not reason enough to require the installation of early
warning devices to prevent another 390 rear-end collisions that could
mean the death of 390 or more Filipinos and the deaths that could likewise
result from head-on or frontal collisions with stalled vehicles?" 30 It is
quite manifest then that the issuance of such Letter of Instruction is
encased in the armor of prior, careful study by the Executive Department.
To set it aside for alleged repugnancy to the due process clause is to give
sanction to conjectural claims that exceeded even the broadest permissible
limits of a pleaders well-known penchant for exaggeration.
5. The rather wild and fantastic nature of the charge of oppressiveness of
this Letter of Instruction was exposed in the Answer of the Solicitor
General thus: "Such early warning device requirement is not an expensive
redundancy, nor oppressive, for car owners whose cars are already
equipped with 1) blinking-lights in the fore and aft of said motor vehicles,
2) battery-powered blinking lights inside motor vehicles, 3) built-in
reflectorized tapes on front and rear bumpers of motor vehicles, or 4)
well-lighted two (2) petroleum lamps (the Kinke) . . . because: Being
universal among the signatory countries to the said 1968 Vienna
Conventions, and visible even under adverse conditions at a distance of at
least 400 meters, any motorist from this country or from any part of the
world, who sees a reflectorized rectangular early warning device installed
on the roads, highways or expressways, will conclude, without thinking,
that somewhere along the travelled portion of that road, highway, or
expressway, there is a motor vehicle which is stationary, stalled or disabled
which obstructs or endangers passing traffic. On the other hand, a motorist

who sees any of the aforementioned other built-in warning devices or the
petroleum lamps will not immediately get adequate advance warning
because he will still think what that blinking light is all about. Is it an
emergency vehicle? Is it a law enforcement car? Is it an ambulance? Such
confusion or uncertainty in the mind of the motorist will thus increase,
rather than decrease, the danger of collision." 31
6. Nor did the other extravagant assertions of constitutional deficiency go
unrefuted in the Answer of the Solicitor General: "There is nothing in the
questioned Letter of Instruction No. 229, as amended, or in Administrative
Order No. 1, which requires or compels motor vehicle owners to purchase
the early warning device prescribed thereby. All that is required is for
motor vehicle owners concerned like petitioner, to equip their motor
vehicles with a pair of this early warning device in question, procuring or
obtaining the same from whatever source. In fact, with a little of industry
and practical ingenuity, motor vehicle owners can even personally make or
produce this early warning device so long as the same substantially
conforms with the specifications laid down in said letter of instruction and
administrative order. Accordingly, the early warning device requirement
can neither be oppressive, onerous, immoral, nor confiscatory, much less
does it make manufacturers and dealers of said devices instant
millionaires at the expense of car owners as petitioner so sweepingly
concludes . . . Petitioners fear that with the early warning device
requirement a more subtle racket may be committed by those called upon
to enforce it . . . is an unfounded speculation. Besides, that unscrupulous
officials may try to enforce said requirement in an unreasonable manner or
to an unreasonable degree, does not render the same illegal or immoral
where, as in the instant case, the challenged Letter of Instruction No. 229
and implementing order disclose none of the constitutional defects alleged
against it." 32
7. It does appear clearly that petitioners objection to this Letter of
Instruction is not premised on lack of power, the justification for a finding
of unconstitutionality, but on the pessimistic, not to say negative, view he
entertains as to its wisdom. That approach, it put it at its mildest, is
distinguished, if that is the appropriate word, by its unorthodoxy. It bears
repeating "that this Court, in the language of Justice Laurel, does not pass
upon questions of wisdom, justice or expediency of legislation. As
expressed by Justice Tuason: It is not the province of the courts to
supervise legislation and keep it within the bounds of propriety and
common sense. That is primarily and exclusively a legislative concern.
There can be no possible objection then to the observation of Justice
Montemayor: As long as laws do not violate any Constitutional provision,
the Courts merely interpret and apply them regardless of whether or not
they are wise or salutary. For they, according to Justice Labrador, are not
supposed to override legitimate policy and . . . never inquire into the
wisdom of the law. It is thus settled, to paraphrase Chief Justice
Concepcion in Gonzales v. Commission on Elections, that only
congressional power or competence, not the wisdom of the action taken,
may be the basis for declaring a statute invalid. This is as it ought to be.
The principle of separation of powers has in the main wisely allocated the
respective authority of each department and confined its jurisdiction to
such a sphere. There would then be intrusion not allowable under the
Constitution if on a matter left to the discretion of a coordinate branch, the
judiciary would substitute its own. If there be adherence to the rule of law,
as there ought to be, the last offender should be courts of justice, to which
rightly litigants submit their controversy precisely to maintain unimpaired
the supremacy of legal norms and prescriptions. The attack on the validity
of the challenged provision likewise insofar as there may be objections,
even if valid and cogent, on is wisdom cannot be sustained." 33
8. The alleged infringement of the fundamental principle of non-himself
with authoritative pronouncements from this Tribunal, he would not have
the temerity to make such an assertion. An excerpt from the aforecited
decision of Edu v. Ericta sheds light on the matter: "To avoid the taint of
unlawful delegation, there must be a standard, which implies at the very
least that the legislature itself determines matters of principle and lays
down fundamental policy. Otherwise, the charge of complete abdication
may be hard to repel. A standard thus defines legislative policy, marks its
limits, maps out its boundaries and specifies the public agency to apply it.
It indicates the circumstances under which the legislative command is to
be effected. It is the criterion by which legislative purpose may be carried
out. Thereafter, the executive or administrative office designated may in
pursuance of the above guidelines promulgate supplemental rules and
regulations. The standard may be either express or implied. If the former,
the non-delegation objection is easily met. The standard though does not
have to be spelled out specifically. It could be implied from the policy and
purpose of the act considered as a whole. In the Reflector Law, clearly, the
legislative objective is public safety. What is sought to be attained as in
Calalang v. Williams is "safe transit upon the roads." This is to adhere to
the recognition given expression by Justice Laurel in a decision announced
not too long after the Constitution came into force and effect that the
principle of non-delegation "has been made to adapt itself to the
complexities of modern governments, giving rise to the adoption, within
certain limits, of the principle of "subordinate legislation" not only in the
United States and England but in practically all modern governments. He
continued: Accordingly, with the growing complexity of modern life, the
multiplication of the subjects of governmental regulation, and the
increased difficulty of administering the laws, there is a constantly growing
tendency toward the delegation of greater powers by the legislature and

toward the approval of the practice by the courts. Consistency with the
conceptual approach requires the reminder that what is delegated is
authority non-legislative in character, the completeness of the statute
when it leaves the hands of Congress being assumed." 34
9. The conclusion reached by this Court that this petition must be
dismissed is reinforced by this consideration. The petition itself quoted
these two whereas clauses of the assailed Letter of Instruction:"
[Whereas], the hazards posed by such obstructions to traffic have been
recognized by international bodies concerned with traffic safety, the 1968
Vienna Convention on Road Signs and Signals and the United Nations
Organization (U.N.); [Whereas], the said Vienna Convention, which was
ratified by the Philippine Government under P.D. No. 207, recommended
the enactment of local legislation for the installation of road safety signs
and devices; . . ." 35 It cannot be disputed then that this Declaration of
Principle found in the Constitution possesses relevance: "The Philippines . .
. adopts the generally accepted principles of international law as part of
the law of the land, . . ." 36 The 1968 Vienna Convention on Road Signs
and Signals is impressed with such a character. It is not for this country to
repudiate a commitment to which it had pledged its word. The concept of
Pacta sunt servanda stands in the way of such an attitude, which is,
moreover, at war with the principle of international morality.
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10. That is about all that needs be said. The rather court reference to
equal protection did not even elicit any attempt on the part of petitioner to
substantiate in a manner clear, positive, and categorical, why such a casual
observation should be taken seriously. In no case is there a more
appropriate occasion for insistence on what was referred to as "the general
rule" in Santiago v. Far Eastern Broadcasting Co., 37 namely, "that the
constitutionality of a law will not be considered unless the point is specially
pleaded, insisted upon, and adequately argued." 38 "Equal protection" is
not a talismanic formula at the mere invocation of which a party to a
lawsuit can rightfully expect that success will crown his efforts. The law is
anything but that.
WHEREFORE, this petition is dismissed. The restraining order is lifted. This
decision is immediately executory. No costs
Petitioners who are taxicab operators assail the constitutionality of

Memorandum Circular No. 77-42 issued by the Board of Transportation
(BOT) providing for the phasing out and replacement of old and dilapidated
taxicabs; as well as Implementing Circular No. 52 issued pursuant thereto
by the Bureau of Land Transportation (BLT) instructing personnel of the
BLT within the National Capital Region to implement the said BOT Circular,
and formulating a schedule of phase-out of vehicles to be allowed and
accepted for registration as public conveyances. Petitioners allege that the
questioned Circulars did not afford them procedural and substantive due
process, equal protection of the law, and protection against arbitrary and
unreasonable classification and standard. Among others, they question the
issuance of the Circulars without first calling them to a conference or
requiring them to submit position papers or other documents enforceability
thereof only in Metro Manila; and their being applicable only to taxicabs
and not to other transportation services.
EN BANC
[G.R. No. L-59234. September 30, 1982.]
TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO
CABIGAO and ACE TRANSPORTATION CORPORATION, Petitioners,
v. THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE
BUREAU OF LAND TRANSPORTATION, Respondents.
Mariano P. Brion, Jr., for Petitioners.
The Solicitor General for Respondents.
SYNOPSIS
The Supreme Court held that there was no denial of due process since
calling the taxicab operators or persons who may be affected by the
questioned Circulars to a conference or requiring them to submit position
papers or other documents is only one of the options open to the BOT
which is given wide discretionary authority under P.D. No. 101; and fixing a
six- year ceiling for a car to be operated as taxicab is a reasonable
standard adopted to apply to all vehicles affected uniformly, fairly, and
justly. The Court also ruled that neither has the equal protection clause
been violated by initially enforcing the Circulars only in Metro Manila since
it is of common knowledge that taxicabs in this city, compared to those of
other places, are subjected to heavier traffic pressure and more constant
use, thus making for a substantial distinction; nor by non-application of the
Circulars to other transportation services because the said Circulars satisfy
the criteria required under the equal protection clause, which is the
uniform operation by legal means so that all persons under identical or
similar circumstances would be accorded the same treatment both in
privilege conferred and the liabilities imposed.
SYLLABUS
1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF LAWS; MEMORANDUM

CIRCULAR PROVIDING FOR PHASING-OUT AND REPLACEMENT OF OLD
AND DILAPIDATED TAXICABS; ISSUANCE NOT VIOLATIVE OF DUE
PROCESS; CALLING TAXICAB OPERATORS TO CONFERENCE OR
REQUIRING SUBMISSION OF POSITION PAPERS OR DOCUMENTS, ONLY
ONE OF OPTIONS GIVEN TO BOARD OF TRANSPORTATION IN
FORMULATING POLICIES. It is clear from the provision of Section 2 of

P.D. 101 aforequoted, 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 maybe 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.
2. ID.; ID.; ID.; ID.; PUBLIC HEARING, NOT A DUE PROCESS
REQUIREMENT. Dispensing with a public hearing prior to the issuance of
the Circulars is neither violative of procedural due process. As held in
Central Bank v. Hon. Cloribel and Banco Filipino, 44 SCRA 307(1972);
"Previous 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 limitations or loss takes place in consequence
of a judicial or quasi-judicial proceedings, generally dependent upon a past
act or even which has to be established or ascertained. It is nor 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.
3. ID.; ID.; ID.; ID.; SIX-YEAR CEILING FOR CARS TO OPERATE AS
TAXICAB, MEETS DUE PROCESS REQUIREMENT FOR SUPPLYING
REASONABLE STANDARD. Petitioners farther take the position that fixing
the ceiling at six (6) years is arbitrary and oppressive because of
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 respondents 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 evens graft and corruption. A reasonable standard must be
adopted to apply to all 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.
4. ID.; ID.; ID.; ISSUANCE NOT VIOLATIVE Of EQUAL PROTECTION
CLAUSE; ENFORCING ClRCULLAR INITIALLY IN METRO MANILA ONLY. At
the outset it should be pointed out that implementation outside Metro

Manila is also envisioned in Memorandum Circular No. 77-42. The Boards
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 exist so that infringement of the equal protection
clause can hardly be successfully claimed.
5. ID.; ID.; ID.; ID.; ID.; A VALID EXERCISE OF POLICE POWER. 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. (Edu v.
Ericta, 35 SCRA 48 [1970]. It may also regulate property rights. (Samson
v. Mayor of Bacolod City, 60 SCRA 267 [1974]. 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." (The Constitution of the Philippines, Second Edition, p. 548.)
6. ID.; ID.; ID.; ID.; NONE APPLICATION TO OTHER TRANSPORTATION
SERVICES. 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. (People v. Vera, 65 Phil. 56; People v. Cayat, 68 Phil.
12; Central Bank v. Cloribel, 44 SCRA 307 [1972]; Anucension v. National
Labor Union, 80 SCRA 350 [1977] citing Victoriano v. Elizalde Rope
Workers Union, 59 SCRA 54 [1974] & Basa v. Federacion Obrera de la
Industria Tabaquera y Otros Trabajadores de Filipinas, 61 SCRA 93
[1974]). 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. (Gumabon v. Director of Prisons, 37
SCRA 420 [1971]). The challenged Circulars satisfy the foregoing criteria.
7. ID., ID., DECLARATION OF UNCONSTITUTIONALITY REQUIRES CLEAR
AND CATEGORICAL INFRINGEMENT OF RIGHT. 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.
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:
DECISION
MELENCIO-HERRERA, J.:
This Petition for" Certiorari, Prohibition and Mandamus with Preliminary

Injunction and Temporary Restraining Order" filed by the Taxicab Operators
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 16, 1980, of the Bureau of Land Transportation.
Petitioner Taxicab Operators of Metro Manila, Inc. (TOMMI) is a domestic
corporation composed of taxicab operators, who are grantees of
Certificates 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;
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:
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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:
WHEREAS, after studies and inquiries made by the Board of Transportation,
"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
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:
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
"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 shall proceed promptly along the method of
legislative inquiry.
conduct of a class or persons or enterprises, unless the law provides

otherwise." (Emphasis supplied)
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.
Petitioners further take the position that fixing the ceiling at six (6) years is
arbitrary and oppressive because the road-worthiness 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 respondents 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 all 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.
The Board may also call 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 called 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 v. Hon.
Cloribel and Banco Filipino, 44 SCRA 307 (1972):
"Previous 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
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 Boards 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. Thus 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
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.
Fernando, C.J., Barredo, Makasiar, Concepcion Jr., Guerrero, Abad Santos,
De Castro, Plana, Escolin, Vasquez, Relova and Gutierrez, Jr., JJ., concur.
Teehankee and Aquino, JJ., in the result.
ARSENIO AL. ACUA, NEWTON JISON, VICTORINO FERRARIS,

DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D.
TOLENTINO and PLANTERS COMMITTEE, INC., Victorias Mill
District, Victorias, Negros Occidental, Petitioners, v. JOKER
ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, Respondents.
[G.R. No. 79744. July 14, 1989.]
INOCENTES PABICO, Petitioner, v. HON. PHILIP E. JUICO,
SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON.
JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE
PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO,
CONRADO AVANCEA, and ROBERTO TAAY, Respondents.
[G.R. No. 79777. July 14, 1989.]
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., Petitioners, v.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and
LAND BANK OF THE PHILIPPINES, Respondents.
SYLLABUS
EN BANC
[G.R. No. 78742. July 14, 1989.]
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC.,
JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIFE A. GUICO, JR.,
BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T.
GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G.
ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B.
MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA,
FELICISIMA C. APRESTO, CONSUELO M. MORALES, BENJAMIN R.
SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S.
FERRER, Petitioners, v. HONORABLE SECRETARY OF AGRARIAN
REFORM, Respondent.
[G.R. No. 79310. July 14, 1989.]
1. CONSTITUTIONAL LAW; SUPREME COURT; ROLE. Although holding

neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with
the power to annul the acts of either the legislative or the executive or of
both when not conformable to the fundamental law. This is the reason for
what some quarters call the doctrine of judicial supremacy.
2. ID.; SEPARATION OF POWERS; CONSTRUED. The doctrine of
separation of powers imposes upon the courts a proper restraint, born of
the nature of their functions and of their respect for the other
departments, in striking down the acts of the legislative and the executive
as unconstitutional. The policy, indeed, is a blend of courtesy and caution.
To doubt is to sustain. The theory is that before the act was done or the
law was enacted, earnest studies were made by Congress or the President,
or both, to insure that the Constitution would not be breached.
3. ID.; SUPREME COURT; POWER TO DECLARE AN ACT OR LAW
UNCONSTITUTIONAL; CONSTITUTIONS. The Constitution itself lays
down stringent conditions for a declaration of unconstitutionality, requiring
therefor the concurrence of a majority of the members of the Supreme

Court who took part in the deliberations and voted on the issue during
their session en banc.
4. ID.; ID.; ID.; JUDICIAL INQUIRY; REQUISITES. The Court will assume
jurisdiction over a constitutional question only if it is shown that the
essential requisites of a judicial inquiry into such a question are first
satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the
constitutional question must have been opportunely raised by the proper
party, and the resolution of the question is unavoidably necessary to the
decision of the case itself.
5. REMEDIAL LAW; ACTIONS; PROPER PARTY; CASE AT BAR. With
particular regard to the requirement of proper party as applied in the cases
before us, we hold that the same is satisfied by the petitioners and
intervenors because each of them has sustained or is in danger of
sustaining an immediate injury as a result of the acts or measures
complained of.
No. 131 and E.O. Nos. 228 and 229, the same was authorized under
Section 6 of the Transitory Provisions of the 1987 Constitution, quoted
above. The said measures were issued by President Aquino before July 27,
1987, when the Congress of the Philippines was formally convened and
took over legislative power from her. They are not "midnight" enactments
intended to pre-empt the legislature because E.O. No. 228 was issued on
July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No.
229, were both issued on July 22, 1987.
10. ID.; ID.; ID.; MEASURES PROMULGATED REMAINS VALID EVEN AFTER
LOST OF LEGISLATIVE POWER; RATIONALE. Neither is it correct to say
that these measures ceased to be valid when she lost her legislative power
for, like any statute, they continue to be in force unless modified or
repealed by subsequent law or declared invalid by the courts. A statute
does not ipso facto become inoperative simply because of the dissolution of
the legislature that enacted it. By the same token, President Aquinos loss
of legislative power did not have the effect of invalidating all the measures
enacted by her when and as long as she possessed it.
6. CONSTITUTIONAL LAW; SUPREME COURT; POWER TO DECLARE AN ACT

OR LAW UNCONSTITUTIONAL; TRIBUNAL WITH WIDE DISCRETION TO
WAIVE REQUIREMENT. Even if, strictly speaking, they are not covered
by the definition, it is still within the wide discretion of the Court to waive
the requirement and so remove the impediment to its addressing and
resolving the serious constitutional questions raised.
11. ID.; STATUTES; PROCLAMATION REMAINS VALID EVEN AFTER LOST

OF LEGISLATIVE POWER; RATIONALE. Proc. No. 131 is not an
appropriation measure even if it does provide for the creation of said fund,
for that is not its principal purpose. An appropriation law is one the primary
and specific purpose of which is to authorize the release of public funds
from the treasury. The creation of the fund is only incidental to the main
objective of the proclamation, which is agrarian reform.
7. ID.; ID.; JUDICIAL SUPREMACY. . . . When the judiciary mediates to

allocate constitutional boundaries, it does not assert any superiority over
the other departments; it does not in reality nullify or invalidate an act of
the Legislature, but only asserts the solemn and sacred obligation assigned
to it by the Constitution to determine conflicting claims of authority under
the Constitution and to establish for the parties in an actual controversy
the rights which that instrument secures and guarantees to them. This is in
truth all that is involved in what is termed "judicial supremacy" which
properly is the power of judicial review under the Constitution.
12. ID.; ID.; PROCLAMATION NO. 131 AND EXECUTIVE ORDER NO. 229;
ABSENCE OF RETENTION LIMIT PROVIDED FOR IN REPUBLIC ACT NO.
6657. The argument of some of the petitioners that Proc. No. 131 and
E.O. No. 229 should be invalidated because they do not provide for
retention limits as required by Article XIII, Section 4 of the Constitution is
no longer tenable. R.A. No. 6657 does provide that in no case shall
retention by the landowner exceed five (5) hectares. three (3) hectares
may be awarded to each child of the landowner, subject to two (2)
qualification which is now in Section 6 of the law.
8. ID.; 1973 CONSTITUTION; PRESIDENT; EXERCISE OF LEGISLATIVE

POWER DURING MARTIAL LAW, SUSTAINED. The promulgation of P.D.
No. 27 by President Marcos in the exercise of his powers under martial law
has already been sustained in Gonzales v. Estrella and we find no reason to
modify or reverse it on that issue.
13. ID.; ID.; TITLE OF A BILL NEED NOT BE CATALOGUED. The title of
the bill does not have to be a catalogue of its contents and will suffice if
the matters embodied in the text are relevant to each other and may be
inferred from the title.
9. ID.; 1987 CONSTITUTION; PRESIDENT; LEGISLATIVE POWER,

AUTHORIZED. As for the power of President Aquino to promulgate Proc.
14. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; ISSUANCES FROM

THE PRESIDENT REQUIRE PUBLICATION FOR EFFECTIVITY. But for all
their peremptoriness, these issuances from the President Marcos still had
to comply with the requirement for publication as this Court held in Taada
v. Tuvera. Hence, unless published in the Official Gazette in accordance
with Article 2 of the Civil Code, they could not have any force and effect if
they were among those enactments successfully challenged in that case.
(LOI 474 was published, though, in the Official Gazette dated November
29, 1976.)
15. REMEDIAL LAW; SPECIAL CIVIL ACTION; MANDAMUS; OFFICE.
Mandamus will lie to compel the discharge of the discretionary duty itself
but not to control the discretion to be exercised. In other words,
mandamus can issue to require action only but not specific action.
16. ID.; ID.; ID.; GENERALLY NOT AVAILABLE WHERE THERE IS A PLAIN,
SPEEDY REMEDY; EXCEPTION. While it is true that as a rule the writ will
not be proper as long as there is still a plain, speedy and adequate remedy
available from the administrative authorities, resort to the courts may still
be permitted if the issue raised is a question of law.
17. POLITICAL LAW; POLICE POWER AND EMINENT DOMAIN;
TRADITIONAL DISTINCTIONS. There are traditional distinctions between
the police power and the power of eminent domain that logically preclude
the application of both powers at the same time on the same subject. The
cases before us present no knotty complication insofar as the question of
compensable taking is concerned. To the extent that the measures under
challenge merely prescribe retention limits for landowners, there is an
exercise of the police power for the regulation of private property in
accordance with the Constitution. But where, to carry out such regulation,
it becomes necessary to deprive such owners of whatever lands they may
own in excess of the maximum area allowed, there is definitely a taking
under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the
title to and the physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer-beneficiary. This is
definitely an exercise not of the police power but of the power of eminent
domain.
18. BILL OF RIGHTS; EQUAL PROTECTION CLAUSE; CLASSIFICATION;
DEFINED. Classification has been defined as the grouping of persons or
things similar to each other in certain particulars and different from each
other in these same particulars.
19. ID.; ID.; ID.; REQUISITES.; EQUAL PROTECTION CLAUSE;
CLASSIFICATION; DEFINED. 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; and (4) it must apply equally to all the
members of the class.
20. ID.; ID.; ID.; MEANING. Equal protection simply means that all
persons or things similarly situated must be treated alike both as to the
rights conferred and the liabilities imposed.
21. POLITICAL LAW; EMINENT DOMAIN; NATURE. Eminent domain is an
inherent power of the State that enables it to forcibly acquire private lands
intended for public use upon payment of just compensation to the owner.
22. ID.; ID.; WHEN AVAILED OF. Obviously, there is no need to
expropriate where the owner is willing to sell under terms also acceptable
to the purchaser, in which case an ordinary deed of sale may be agreed
upon by the parties. It is only where the owner is unwilling to sell, or
cannot accept the price or other conditions offered by the vendee, that the
power of eminent domain will come into play to assert the paramount
authority of the State over the interests of the property owner. Private
rights must then yield to the irresistible demands of the public interest on
the time-honored justification, as in the case of the police power, that the
welfare of the people is the supreme law.
23. ID.; ID.; REQUIREMENTS. Basically, the requirements for a proper
exercise of the power are: (1) public use and (2) just compensation.
24. ID.; POLITICAL QUESTION; DEFINED. The term "political question"
connotes what it means in ordinary parlance, namely, a question of policy.
It refers to "those questions which, under the Constitution, are to be
decided by the people in their sovereign capacity; or in regard to which full
discretionary authority has been delegated to the legislative or executive
branch of the government." It is concerned with issues dependent upon
the wisdom, not legality, of a particular measure. (Taada v. Cuenco, 100
Phil. 1101)
25. ID.; EMINENT DOMAIN JUST COMPENSATION; DEFINED. Just
compensation is defined as the full and fair equivalent of the property
taken from its owner by the expropriator.
26. ID.; ID.; ID.; WORD "JUST", EXPLAINED. It has been repeatedly
stressed by this Court that the measure is not the takers gain but the
owners loss. The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for
the property to be taken shall be real, substantial, full, ample.
27. ID.; ID.; ID.; COMPENSABLE TAKING; CONDITIONS. There is

compensable taking when the following conditions concur: (1) the
expropriator must enter a private property; (2) the entry must be for more
than a momentary period; (3) the entry must be under warrant or color of
legal authority; (4) the property must be devoted to public use or
otherwise informally appropriated or injuriously affected; and (5) the
utilization of the property for public use must be in such a way as to oust
the owner and deprive him of beneficial enjoyment of the property.
28. ID.; ID.; ID.; DEPOSIT NOT NECESSARY WHERE THE EXPROPRIATOR
IS THE ESTATE. Where the State itself is the expropriator, it is not
necessary for it to make a deposit upon its taking possession of the
condemned property, as "the compensation is a public charge, the good
faith of the public is pledged for its payment, and all the resources of
taxation may be employed in raising the amount."
29. ID.; ID.; ID.; DETERMINATION THEREOF, ADDRESSED TO THE COURTS

OF JUSTICE. The determination of just compensation is a function
addressed to the courts of justice and may not be usurped by any other
branch or official of the government.
30. ID.; ID.; ID.; EMINENT DOMAIN UNDER THE COMPREHENSIVE
AGRARIAN REFORM LAW; DETERMINATION MADE BY THE DEPARTMENT OF
AGRARIAN RELATIONS, ONLY PRELIMINARY. The determination of the
just compensation by the DAR is not by any means final and conclusive
upon the landowner or any other interested party, for Section 16 (f) clearly
provides: Any party who disagrees with the decision may bring the matter
to the court of proper jurisdiction for final determination of just
compensation. The determination made by the DAR is only preliminary
unless accepted by all parties concerned. Otherwise, the courts of justice
will still have the right to review with finality the said determination in the
exercise of what is admittedly a judicial function.
31. ID.; ID.; ID.; PAYMENT IN MONEY ONLY NOT APPLICABLE IN
REVOLUTIONARY KIND OF EXPROPRIATION. We do not deal here with
the traditional exercise of the power of eminent domain. This is not an
ordinary expropriation where only a specific property of relatively limited
area is sought to be taken by the State from its owner for a specific and
perhaps local purpose. What we deal with here is a revolutionary kind of
expropriation. The expropriation before us affects all private agricultural
lands whenever found and of whatever kind as long as they are in excess
of the maximum retention limits allowed their owners. Such a program will
involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws
before us, we estimate that hundreds of billions of pesos will be needed,
far more indeed than the amount of P50 billion initially appropriated, which
is already staggering as it is by our present standards. The Court has not
found in the records of the Constitutional Commission any categorial
agreement among the members regarding the meaning to be given the
concept of just compensation as applied to the comprehensive agrarian
reform program being contemplated. On the other hand, there is nothing
in the records either that militates against the assumptions we are making
of the general sentiments and intention of the members on the content
and manner of the payment to be made to the landowner in the light of
the magnitude of the expenditure and the limitations of the expropriator.
Therefore, payment of the just compensation is not always required to be
made fully in money.
32. ID.; ID.; ID.; PRINCIPLE THAT TITLE SHALL PASS ONLY UPON FULL
PAYMENT OF JUST COMPENSATION, NOT APPLICABLE. Title to the
property expropriated shall pass from the owner to the expropriator only
upon full payment of the just compensation. The CARP Law, for its part,
conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or
the deposit by the DAR of the compensation in cash or LBP bonds with an
accessible bank. Until then, title also remains with the landowner. No
outright change of ownership is contemplated either. Hence, that the
assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.
33. ADMINISTRATIVE LAW; EXHAUSTION OF ADMINISTRATIVE REMEDIES;
CASE AT BAR. It does not appear in G.R. No. 78742 that the appeal filed
by the petitioners with the Office of the President has already been
resolved. Although we have said that the doctrine of exhaustion of
administrative remedies need not preclude immediate resort to judicial
action, there are factual issues that have yet to be examined on the
administrative level, especially the claim that the petitioners are not
covered by LOI 474 because they do not own other agricultural lands than
the subjects of their petition. Obviously, the Court cannot resolve these
issues.
DECISION
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and

challenged Hercules for his life on his way to Mycenae after performing his
eleventh labor. The two wrestled mightily and Hercules flung his adversary
to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules increasing
amazement. Finally, as they continued grappling, it dawned on Hercules
that Antaeus was the son of Gaea and could never die as long as any part
of his body was touching his Mother Earth. Thus forewarned, Hercules then
held Antaeus up in the air, beyond the reach of the sustaining soil, and
crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose
invigorating touch even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also
tell of the elemental forces of life and death, of men and women who, like
Antaeus, need the sustaining strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in
the distribution of this precious resource among our people. But it is more
than a slogan. Through the brooding centuries, it has become a battlecry
dramatizing the increasingly urgent demand of the dispossessed among us
for a plot of earth as their place in the sun.
chanroble svirtuallawlibrary
Recognizing this need, the Constitution in 1935 mandated the policy of

social justice to "insure the well-being and economic security of all the
people, "1 especially the less privileged. In 1973, the new Constitution
affirmed this goal, adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property
and equitably diffuse property ownership and profits. 2 Significantly, there
was also the specific injunction to "formulate and implement an agrarian
reform program aimed at emancipating the tenant from the bondage of the
soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these
sentiments, it also adopted one whole and separate Article XIII on Social
Justice and Human Rights, containing grandiose but undoubtedly sincere
provisions for the uplift of the common people. These include a call in the
following words for the adoption by the State of an agrarian reform
program:
SEC. 4. The State shall, by law, undertake an agrarian reform program

founded on the right of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. To this end,
the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits
as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the payment of just
compensation. In determining retention limits, the State shall respect the
right of small landowners. The State shall further provide incentives for
voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land
Reform Code, had already been enacted by the Congress of the Philippines
on August 8, 1963, in line with the above-stated principles. This was
substantially superseded almost a decade later by P.D. No. 27, which was
promulgated on October 21, 1972, along with martial law, to provide for
the compulsory acquisition of private lands for distribution among tenantfarmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even
energized the thrust for agrarian reform. Thus, on July 17, 1987, President
Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in
favor of the beneficiaries of P.D. No. 27 and providing for the valuation of
still unvalued lands covered by the decree as well as the manner of their
payment. This was followed on July 22, 1987 by Presidential Proclamation
No. 131, instituting a comprehensive agrarian reform program (CARP), and
E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the
Philippines took over legislative power from the President and started its
own deliberations, including extensive public hearings, on the improvement
of the interests of farmers. The result, after almost a year of spirited
debate, was the enactment of R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, which President Aquino
signed on June 10, 1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect insofar
as they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve
common legal questions, including serious challenges to the
constitutionality of the several measures mentioned above. They will be
the subject of one common discussion and resolution. The different
antecedents of each case will require separate treatment, however, and will
must be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O.
Nos. 228 and 229, and R.A. No. 6657.

The subjects of this petition are a 9-hectare riceland worked by four
tenants and owned by petitioner Nicolas Manaay and his wife and a 5hectare riceland worked by four tenants and owned by petitioner Augustin
Hermano, Jr. The tenants were declared full owners of these lands by E.O.
No. 228 as qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on
grounds inter alia of separation of powers, due process, equal protection
and the constitutional limitation that no private property shall be taken for
public use without just compensation.
They contend that President Aquino usurped legislative power when she
promulgated E.O. No. 228. The said measure is invalid also for violation of
Article XIII, Section 4, of the Constitution, for failure to provide for
retention limits for small landowners. Moreover, it does not conform to
Article VI, Section 25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners
argue that the same may be made only by a court of justice and not by the
President of the Philippines. They invoke the recent cases of EPZA v. Dulay
5 and Manotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in
cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive
order also deprives the petitioners of their property rights as protected by
due process. The equal protection clause is also violated because the order
places the burden of solving the agrarian problems on the owners only of
agricultural lands. No similar obligation is imposed on the owners of other
properties.
The petitioners also maintain that in declaring the beneficiaries under P.D.
No. 27 to be the owners of the lands occupied by them, E.O. No. 228
ignored judicial prerogatives and so violated due process. Worse, the
measure would not solve the agrarian problem because even the small
farmers are deprived of their lands and the retention rights guaranteed by
the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already
been upheld in the earlier cases of Chavez v. Zobel, 7 Gonzales v. Estrella,
8 and Association of Rice and Corn Producers of the Philippines, Inc. v. the
National Land Reform council 9 The determination of just compensation by
the executive authorities conformably to the formula prescribed under the
questioned order is at best initial or preliminary only. It does not foreclose

judicial intervention whenever sought or warranted. At any rate, the
challenge to the order is premature because no valuation of their property
has as yet been made by the Department of Agrarian Reform. The
petitioners are also not proper parties because the lands owned by them
do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27
does not provide for retention limits on tenanted lands and that in any
event their petition is a class suit brought in behalf of landowners with
landholdings below 24 hectares. They maintain that the determination of
just compensation by the administrative authorities is a final
ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what
was decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1988, it is contended that
P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have been
impliedly repealed by R.A. No. 6657. Nevertheless, this statute should
itself also be declared unconstitutional because it suffers from substantially
the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by
Vicente Cruz, owner of a 1.83-hectare land, who complained that the DAR
was insisting on the implementation of P.D. No. 27 and E.O. No. 228
despite a compromise agreement he had reached with his tenant on the
payment of rentals. In a subsequent motion dated April 10, 1989, he
adopted the allegations in the basic amended petition that the abovementioned enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias
Mill District, Victorias, Negros Occidental. Co-petitioner Planters
Committee, Inc. is an organization composed of 1,400 planter-members.
This petition seeks to prohibit the implementation of Proc. No. 131 and
E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive
Agrarian Reform Program as decreed by the Constitution belongs to
Congress and not the President. Although they agree that the President
could exercise legislative power until the Congress was convened, she
could do so only to enact emergency measures during the transition
period. At that, even assuming that the interim legislative power of the
President was properly exercised, Proc. No. 131 and E.O. No. 229 would
still have to be annulled for violating the constitutional provisions on just

compensation, due process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
10, 1987, another motion for intervention was filed, this time by Manuel
Barcelona, Et Al., representing coconut and riceland owners. Both motions
were granted by the Court.
Agrarian Reform Fund. There is hereby created a special fund, to be

known as the Agrarian Reform Fund, an initial amount of FIFTY BILLION
PESOS (P50,000,000,000.00) to cover the estimated cost of the
Comprehensive Agrarian Reform Program from 1987 to 1992 which shall
be sourced from the receipts of the sale of the assets of the Asset
Privatization Trust and Receipts of sale of ill-gotten wealth received
through the Presidential Commission on Good Government and such other
sources as government may deem appropriate. The amounts collected and
accruing to this special fund shall be considered automatically appropriated
for the purpose authorized in this Proclamation.
the amount appropriated is in futuro, not in esse. The money needed to
cover the cost of the contemplated expropriation has yet to be raised and
cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment
of just compensation as it is traditionally understood, i.e., with money and
in full, but no such payment is contemplated in Section 5 of the E.O. No.
229. On the contrary, Section 6, thereof provides that the Land Bank of the
Philippines "shall compensate the landowner in an amount to be
established by the government, which shall be based on the owners
declaration of current fair market value as provided in Section 4 hereof,
but subject to certain controls to be defined and promulgated by the
Presidential Agrarian Reform Council." This compensation may not be paid
fully in money but in any of several modes that may consist of part cash
and part bond, with interest, maturing periodically, or direct payment in
cash or bond as may be mutually agreed upon by the beneficiary and the
landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no
effort was made to make a careful study of the sugar planters situation.
There is no tenancy problem in the sugar areas that can justify the
application of the CARP to them. To the extent that the sugar planters have
been lumped in the same legislation with other farmers, although they are
a separate group with problems exclusively their own, their right to equal
protection has been violated.
A motion for intervention was filed on August 27, 1987 by the National
Federation of Sugarcane Planters (NASP) which claims a membership of at
least 20,000 individual sugar planters all over the country. On September
NASP alleges that President Aquino had no authority to fund the Agrarian
Reform Program and that, in any event, the appropriation is invalid
because of uncertainty in the amount appropriated. Section 2 of Proc. No.
131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the minimum rather
than the maximum authorized amount. This is not allowed. Furthermore,
the stated initial amount has not been certified to by the National
Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to
establish by clear and convincing evidence the necessity for the exercise of
the powers of eminent domain, and the violation of the fundamental right
to own property.
The petitioners also decry the penalty for non-registration of the lands,
which is the expropriation of the said land for an amount equal to the
government assessors valuation of the land for tax purposes. On the other
hand, if the landowner declares his own valuation, he is unjustly required
to immediately pay the corresponding taxes on the land, in violation of the
uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the
presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229.
He also justifies the necessity for the expropriation as explained in the
"whereas" clauses of the Proclamation and submits that, contrary to the
petitioners contention, a pilot project to determine the feasibility of CARP
and a general survey on the peoples opinion thereon are not indispensable
prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters
have failed to show that they belong to a different class and should be
differently treated. The Comment also suggests the possibility of Congress
first distributing public agricultural lands and scheduling the expropriation
of private agricultural lands later. From this viewpoint, the petition for
prohibition would be premature.
The public respondent also points out that the constitutional prohibition is
against the payment of public money without the corresponding
appropriation. There is no rule that only money already in existence can be
the subject of an appropriation law. Finally, the earmarking of fifty billion
pesos as Agrarian Reform Fund, although denominated as an initial
amount, is actually the maximum sum appropriated. The word "initial"

simply means that additional amounts may be appropriated later when
necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on
his own behalf, assailing the constitutionality of E.O. No. 229. In addition
to the arguments already raised, Serrano contends that the measure is
unconstitutional because:
(1) Only public lands should be included in the CARP;

(2) E.O. No. 229 embraces more than one subject which is not expressed
in the title;
(3) The power of the President to legislate was terminated on July 2, 1987;
and
(4) The appropriation of a P50 billion special fund from the National
Treasury did not originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian
Reform, in violation of due process and the requirement for just
compensation, placed his landholding under the coverage of Operation
Land Transfer. Certificates of Land Transfer were subsequently issued to
the private respondents, who then refused payment of lease rentals to
him.
On September 3, 1986, the petitioner protested the erroneous inclusion of
his small landholding under Operation Land Transfer and asked for the
recall and cancellation of the Certificates of Land Transfer in the name of
the private respondents. He claims that on December 24, 1986, his
petition was denied without hearing. On February 17, 1987, he filed a
motion for reconsideration, which had not been acted upon when E.O. Nos.
228 and 229 were issued. These orders rendered his motion moot and
academic because they directly effected the transfer of his land to the
private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the
Philippines.
(2) The said executive orders are violative of the constitutional provision
that no private property shall be taken without due process or just

compensation.
(3) The petitioner is denied the right of maximum retention provided for
under the 1987 Constitution.
The petitioner contends that the issuance of E.O Nos. 228 and 229 shortly
before Congress convened is anomalous and arbitrary, besides violating
the doctrine of separation of powers. The legislative power granted to the
President under the Transitory Provisions refers only to emergency
measures that may be promulgated in the proper exercise of the police
power.
The petitioner also invokes his rights not to be deprived of his property
without due process of law and to the retention of his small parcels of
riceholding as guaranteed under Article XIII, Section 4 of the Constitution.
He likewise argues that, besides denying him just compensation for his
land, the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after

October 21, 1972 shall be considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his
contention that the inclusion of even small landowners in the program
along with other landowners with lands consisting of seven hectares or
more is undemocratic.
In his Comment, the Solicitor General submits that the petition is
premature because the motion for reconsideration filed with the Minister of
Agrarian Reform is still unresolved. As for the validity of the issuance of
E.O. Nos. 228 and 229, he argues that they were enacted pursuant to
Section 6, Article XVIII of the Transitory Provisions of the 1987
Constitution which reads:
The incumbent president shall continue to exercise legislative powers until

the first Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27
was promulgated on October 21, 1972, the tenant-farmer of agricultural
land was deemed the owner of the land he was tilling. The leasehold
rentals paid after that date should therefore be considered amortization
payments.
In his Reply to the public respondents, the petitioner maintains that the
motion he filed was resolved on December 14, 1987. An appeal to the
Office of the President would be useless with the promulgation of E.O. Nos.
228 and 229, which in effect sanctioned the validity of the public
respondents acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D.
No. 27 to owners of rice and corn lands not exceeding seven hectares as
long as they are cultivating or intend to cultivate the same. Their
respective lands do not exceed the statutory limit but are occupied by
tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of
P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn

shall be ejected or removed from his farmholding until such time as the
respective rights of the tenant-farmers and the landowner shall have been
determined in accordance with the rules and regulations implementing P.D.
No. 27.
The petitioners claim they cannot eject their tenants and so are unable to
enjoy their right of retention because the Department of Agrarian Reform
has so far not issued the implementing rules required under the abovequoted decree. They therefore ask the Court for a writ of mandamus to
compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been
amended by LOI 474 removing any right of retention from persons who
own other agricultural lands of more than 7 hectares in aggregate area or
lands used for residential, commercial, industrial or other purposes from
which they derive adequate income for their family. And even assuming
that the petitioners do not fall under its terms, the regulations
implementing P.D. No. 27 have already been issued, to wit, the
Memorandum dated July 10, 1975 (Interim Guidelines on Retention by
Small Landowners, with an accompanying Retention Guide Table),
Memorandum Circular No. 11 dated April 21, 1978, (Implementation
Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated
December 29, 1981 (Clarificatory Guidelines on Coverage of P.D. No. 27
and Retention by Small Landowners), and DAR Administrative Order No. 1,
series of 1985 (Providing for a Cut-off Date for Landowners to Apply for
Retention and/or to Protest the Coverage of their Landholdings under
Operation Land Transfer pursuant to P.D. No. 27). For failure to file the
corresponding applications for retention under these measures, the
petitioners are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely
initiated this case notwithstanding the pendency of their appeal to the
President of the Philippines. Moreover, the issuance of the implementing
rules, assuming this has not yet been done, involves the exercise of
discretion which cannot be controlled through the writ of mandamus. This
is especially true if this function is entrusted, as in this case, to a separate
department of the government.
In their Reply, the petitioners insist that the above-cited measures are not
applicable to them because they do not own more than seven hectares of
agricultural land. Moreover, assuming arguendo that the rules were
intended to cover them also, the said measures are nevertheless not in
force because they have not been published as required by law and the
ruling of this Court in Taada v. Tuvera. 10 As for LOI 474, the same is
ineffective for the additional reason that a mere letter of instruction could
not have repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest
of the three departments of the government, the judiciary is nonetheless
vested with the power to annul the acts of either the legislative or the
executive or of both when not conformable to the fundamental law. This is
the reason for what some quarters call the doctrine of judicial supremacy.
Even so, this power is not lightly assumed or readily exercised. The
doctrine of separation of powers imposes upon the courts a proper
restraint, born of the nature of their functions and of their respect for the
other departments, in striking down the acts of the legislative and the
executive as unconstitutional. The policy, indeed, is a blend of courtesy and
caution. To doubt is to sustain. The theory is that before the act was done
or the law was enacted, earnest studies were made by Congress or the
President, or both, to insure that the Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a
declaration of unconstitutionality, requiring therefor the concurrence of a
majority of the members of the Supreme Court who took part in the
deliberations and voted on the issue during their session en banc. 11 And
as established by judge-made doctrine, the Court will assume jurisdiction
over a constitutional question only if it is shown that the essential
requisites of a judicial inquiry into such a question are first satisfied. Thus,
there must be an actual case or controversy involving a conflict of legal
rights susceptible of judicial determination, the constitutional question
must have been opportunely raised by the proper party, and the resolution
of the question is unavoidably necessary to the decision of the case itself.

12
With particular regard to the requirement of proper party as applied in the
cases before us, we hold that the same is satisfied by the petitioners and
intervenors because each of them has sustained or is in danger of
sustaining an immediate injury as a result of the acts or measures
complained of. 13 And even if, strictly speaking, they are not covered by
the definition, it is still within the wide discretion of the Court to waive the
requirement and so remove the impediment to its addressing and resolving
the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers
were allowed to question the constitutionality of several executive orders
issued by President Quirino although they were invoking only an indirect
and general interest shared in common with the public. The Court
dismissed the objection that they were not proper parties and ruled that
"the transcendental importance to the public of these cases demands that
they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure." We have since then applied this exception in
many other cases. 15
The other above-mentioned requisites have also been met in the present
petitions.
In must be stressed that despite the inhibitions pressing upon the Court
when confronted with constitutional issues like the ones now before it, it
will not hesitate to declare a law or act invalid when it is convinced that
this must be done. In arriving at this conclusion, its only criterion will be
the Constitution as God and its conscience give it the light to probe its
meaning and discover its purpose. Personal motives and political
considerations are irrelevancies that cannot influence its decision.
Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court
will not hesitate to "make the hammer fall, and heavily," to use Justice
Laurels pithy language, where the acts of these departments, or of any
public official, betray the peoples will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
. . . when the judiciary mediates to allocate constitutional boundaries, it
does not assert any superiority over the other departments; it does not in
reality nullify or invalidate an act of the Legislature, but only asserts the
solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to

establish for the parties in an actual controversy the rights which that
instrument secures and guarantees to them. This is in truth all that is
involved in what is termed "judicial supremacy" which properly is the
power of judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that this
Court must categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before
resolving the more serious challenges to the constitutionality of the several
measures involved in these petitions.
chanroblesvirtual|awlibrary
The promulgation of P.D. No. 27 by President Marcos in the exercise of his

powers under martial law has already been sustained in Gonzales v.
Estrella and we find no reason to modify or reverse it on that issue. As for
the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos.
228 and 229, the same was authorized under Section 6 of the Transitory
Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987,
when the Congress of the Philippines was formally convened and took over
legislative power from her. They are not "midnight" enactments intended to
pre-empt the legislature because E.O. No. 228 was issued on July 17,
1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were
both issued on July 22, 1987. Neither is it correct to say that these
measures ceased to be valid when she lost her legislative power for, like
any statute, they continue to be in force unless modified or repealed by
subsequent law or declared invalid by the courts. A statute does not ipso
facto become inoperative simply because of the dissolution of the
legislature that enacted it. By the same token, President Aquinos loss of
legislative power did not have the effect of invalidating all the measures
enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected
but in fact substantially affirmed the challenged measures and has
specifically provided that they shall be suppletory to R.A. No. 6657
whenever not inconsistent with its provisions. 17 Indeed, some portions of
the said measures, like the creation of the P50 billion fund in Section 2 of
Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been
incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it
does not conform to the requirements of a valid appropriation as specified
in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation
measure even if it does provide for the creation of said fund, for that is not
its principal purpose. An appropriation law is one the primary and specific
purpose of which is to authorize the release of public funds from the
treasury. 19 The creation of the fund is only incidental to the main
objective of the proclamation, which is agrarian reform.
the text are relevant to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every
presidential issuance, by whatever name it was called, had the force and
effect of law because it came from President Marcos. Such are the ways of
despots. Hence, it is futile to argue, as the petitioners do in G.R. No.
79744, that LOI 474 could not have repealed P.D. No. 27 because the
former was only a letter of instruction. The important thing is that it was
issued by President Marcos, whose word was law during that time.
cralawnad
It should follow that the specific constitutional provisions invoked, to wit,

Section 24 and Section 25(4) of Article VI, are not applicable. With
particular reference to Section 24, this obviously could not have been
complied with for the simple reason that the House of Representatives,
which now has the exclusive power to initiate appropriation measures, had
not yet been convened when the proclamation was issued. The legislative
power was then solely vested in the President of the Philippines, who
embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No.
229 should be invalidated because they do not provide for retention limits
as required by Article XIII, Section 4 of the Constitution is no longer
tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the
law, which in fact is one of its most controversial provisions. This section
declares:
Retention Limits. Except as otherwise provided in this Act, no person

may own or retain, directly or indirectly, any public or private agricultural
land, the size of which shall vary according to factors governing a viable
family-sized farm, such as commodity produced, terrain, infrastructure,
and soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner
exceed five (5) hectares. Three (3) hectares may be awarded to each child
of the landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the land or
directly managing the farm; Provided, That landowners whose lands have
been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement
that a bill shall have only one subject, to be expressed in its title, deserves
only short attention. It is settled that the title of the bill does not have to
be a catalogue of its contents and will suffice if the matters embodied in
But for all their peremptoriness, these issuances from the President Marcos
still had to comply with the requirement for publication as this Court held
in Taada v. Tuvera. 21 Hence, unless published in the Official Gazette in
accordance with Article 2 of the Civil Code, they could not have any force
and effect if they were among those enactments successfully challenged in
that case. (LOI 474 was published, though, in the Official Gazette dated
November 29, 1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742
that the writ of mandamus cannot issue to compel the performance of a
discretionary act, especially by a specific department of the government.
That is true as a general proposition but is subject to one important
qualification. Correctly and categorically stated, the rule is that mandamus
will lie to compel the discharge of the discretionary duty itself but not to
control the discretion to be exercised. In other words, mandamus can issue
to require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty
imposed by law, the courts will intervene by the extraordinary legal
remedy of mandamus to compel action. If the duty is purely ministerial,
the courts will require specific action. If the duty is purely discretionary,
the courts by mandamus will require action only. For example, if an inferior
court, public official, or board should, for an unreasonable length of time,
fail to decide a particular question to the great detriment of all parties
concerned, or a court should refuse to take jurisdiction of a cause when
the law clearly gave it jurisdiction, mandamus will issue, in the first case to
require a decision, and in the second to require that jurisdiction be taken
of the cause.22
And while it is true that as a rule the writ will not be proper as long as
there is still a plain, speedy and adequate remedy available from the
administrative authorities, resort to the courts may still be permitted if the
issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power
of eminent domain that logically preclude the application of both powers at
the same time on the same subject. In the case of City of Baguio v.
NAWASA, 24 for example, where a law required the transfer of all
municipal waterworks systems to the NAWASA in exchange for its assets of
equivalent value, the Court held that the power being exercised was
eminent domain because the property involved was wholesome and
intended for a public use. Property condemned under the police power is
noxious or intended for a noxious purpose, such as a building on the verge
of collapse, which should be demolished for the public safety, or obscene
materials, which should be destroyed in the interest of public morals. The
confiscation of such property is not compensable, unlike the taking of
property under the power of expropriation, which requires the payment of
just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid
down the limits of the police power in a famous aphorism: "The general
rule at least is that while property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking." The regulation
that went "too far" was a law prohibiting mining which might cause the
subsidence of structures for human habitation constructed on the land
surface. This was resisted by a coal company which had earlier granted a
deed to the land over its mine but reserved all mining rights thereunder,
with the grantee assuming all risks and waiving any damage claim. The
Court held the law could not be sustained without compensating the
grantor. Justice Brandeis filed a lone dissent in which he argued that there
was a valid exercise of the police power. He said:
Recent trends, however, would indicate not a polarization but a mingling of

the police power and the power of eminent domain, with the latter being
used as an implement of the former like the power of taxation. The
employment of the taxing power to achieve a police purpose has long been
accepted. 26 As for the power of expropriation, Prof. John J. Costonis of
the University of Illinois College of Law (referring to the earlier case of
Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law
under the police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the police and
eminent domain powers on different planets. Generally speaking, they
viewed eminent domain as encompassing public acquisition of private
property for improvements that would be available for "public use," literally
construed. To the police power, on the other hand, they assigned the less
intrusive task of preventing harmful externalities, a point reflected in the
Euclid opinions reliance on an analogy to nuisance law to bolster its
support of zoning. So long as suppression of a privately authored harm
bore a plausible relation to some legitimate "public purpose," the pertinent
measure need have afforded no compensation whatever. With the
progressive growth of governments involvement in land use, the distance
between the two powers has contracted considerably. Today government
often employs eminent domain interchangeably with or as a useful
complement to the police power a trend expressly approved in the
Supreme Courts 1954 decision in Berman v. Parker, which broadened the
reach of eminent domains "public use" test to match that of the police
powers standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement
of blighted areas in the District of Columbia as a proper exercise of the
police power. On the role of eminent domain in the attainment of this
purpose, Justice Douglas declared:
Every restriction upon the use of property imposed in the exercise of the
police power deprives the owner of some right theretofore enjoyed, and is,
in that sense, an abridgment by the State of rights in property without
making compensation. But restriction imposed to protect the public health,
safety or morals from dangers threatened is not a taking. The restriction
here in question is merely the prohibition of a noxious use. The property so
restricted remains in the possession of its owner. The state does not
appropriate it or make any use of it. The state merely prevents the owner
from making a use which interferes with paramount rights of the public.
Whenever the use prohibited ceases to be noxious as it may because of
further changes in local or social conditions the restriction will have to
be removed and the owner will again be free to enjoy his property as
heretofore.
If those who govern the District of Columbia decide that the Nations
Capital should be beautiful as well as sanitary, there is nothing in the Fifth
Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it
through the exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3
vote in 1978, the U.S. Supreme Court sustained the respondents
Landmarks Preservation Law under which the owners of the Grand Central
Terminal had not been allowed to construct a multi-story office building
over the Terminal, which had been designated a historic landmark.

Preservation of the landmark was held to be a valid objective of the police
power. The problem, however, was that the owners of the Terminal would
be deprived of the right to use the airspace above it although other
landowners in the area could do so over their respective properties. While
insisting that there was here no taking, the Court nonetheless recognized
certain compensatory rights accruing to Grand Central Terminal which it
said would "undoubtedly mitigate" the loss caused by the regulation. This
"fair compensation," as he called it, was explained by Prof. Costonis in this
wise:
In return for retaining the Terminal site in its pristine landmark status,
Penn Central was authorized to transfer to neighboring properties the
authorized but unused rights accruing to the site prior to the Terminals
designation as a landmark the rights which would have been exhausted
by the 59-story building that the city refused to countenance atop the
Terminal. Prevailing bulk restrictions on neighboring sites were
proportionately relaxed, theoretically enabling Penn Central to recoup its
losses at the Terminal site by constructing or selling to others the right to
construct larger, hence more profitable buildings on the transferee sites.
30
The cases before us present no knotty complication insofar as the question
of compensable taking is concerned. To the extent that the measures
under challenge merely prescribe retention limits for landowners, there is
an exercise of the police power for the regulation of private property in
accordance with the Constitution. But where, to carry out such regulation,
it becomes necessary to deprive such owners of whatever lands they may
own in excess of the maximum area allowed, there is definitely a taking
under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the
title to and the physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer-beneficiary. This is
definitely an exercise not of the police power but of the power of eminent
domain.
Whether as an exercise of the police power or of the power of eminent
domain, the several measures before us are challenged as violative of the
due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground
that no retention limits are prescribed has already been discussed and
dismissed. It is noted that although they excited many bitter exchanges
during the deliberation of the CARP Law in Congress, the retention limits
finally agreed upon are, curiously enough, not being questioned in these
petitions. We therefore do not discuss them here. The Court will come to
the other claimed violations of due process in connection with our
examination of the adequacy of just compensation as required under the
power of expropriation.
The argument of the small farmers that they have been denied equal
protection because of the absence of retention limits has also become
academic under Section 6 of R.A. No. 6657. Significantly, they too have not
questioned the area of such limits. There is also the complaint that they
should not be made to share the burden of agrarian reform, an objection
also made by the sugar planters on the ground that they belong to a
particular class with particular interests of their own. However, no evidence
has been submitted to the Court that the requisites of a valid classification
have been violated.
Classification has been defined as the grouping of persons or things similar
to each other in certain particulars and different from each other in these
same particulars. 31 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; and (4) it must apply equally to all the members
of the class. 32 The Court finds that all these requisites have been met by
the measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated
must be treated alike both as to the rights conferred and the liabilities
imposed.33 The petitioners have not shown that they belong to a different
class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected. There is a
substantial distinction between these two classes of owners that is clearly
visible except to those who will not see. There is no need to elaborate on
this matter. In any event, the Congress is allowed a wide leeway in
providing for a valid classification. Its decision is accorded recognition and
respect by the courts of justice except only where its discretion is abused
to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained
under the police power only if there is a concurrence of the lawful subject
and the lawful method. Put otherwise, the interests of the public generally
as distinguished from those of a particular class require the interference of
the State and, no less important, the means employed are reasonably
necessary for the attainment of the purpose sought to be achieved and not
unduly oppressive upon individuals. 34 As the subject and purpose of
agrarian reform have been laid down by the Constitution itself, we may say
that the first requirement has been satisfied. What remains to be examined
is the validity of the method employed to achieve the constitutional goal.
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One of the basic principles of the democratic system is that where the
rights of the individual are concerned, the end does not justify the means.
It is not enough that there be a valid objective; it is also necessary that
the means employed to pursue it be in keeping with the Constitution. Mere
expediency will not excuse constitutional shortcuts. There is no question
that not even the strongest moral conviction or the most urgent public
need, subject only to a few notable exceptions, will excuse the bypassing
of an individuals rights. It is no exaggeration to say that a person invoking
a right guaranteed under Article III of the Constitution is a majority of one
even as against the rest of the nation who would deny him that right.
That right covers the persons life, his liberty and his property under
Section 1 of Article III of the Constitution. With regard to his property, the
owner enjoys the added protection of Section 9, which reaffirms the
familiar rule that private property shall not be taken for public use without
just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to
forcibly acquire private lands intended for public use upon payment of just
compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the
purchaser, in which case an ordinary deed of sale may be agreed upon by
the parties. 35 It is only where the owner is unwilling to sell, or cannot
accept the price or other conditions offered by the vendee, that the power
of eminent domain will come into play to assert the paramount authority of
the State over the interests of the property owner. Private rights must then
yield to the irresistible demands of the public interest on the time-honored
justification, as in the case of the police power, that the welfare of the
people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no
means absolute (as indeed no power is absolute). The limitation is found in
the constitutional injunction that "private property shall not be taken for
public use without just compensation" and in the abundant jurisprudence
that has evolved from the interpretation of this principle. Basically, the
requirements for a proper exercise of the power are: (1) public use and (2)
just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No.
79310 that the State should first distribute public agricultural lands in the
pursuit of agrarian reform instead of immediately disturbing property rights
by forcibly acquiring private agricultural lands. Parenthetically, it is not
correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural
lands." In any event, the decision to redistribute private agricultural lands
in the manner prescribed by the CARP was made by the legislative and
executive departments in the exercise of their discretion. We are not
justified in reviewing that discretion in the absence of a clear showing that
it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political
departments when they decide what is known as the political question. As
explained by Chief Justice Concepcion in the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance,
namely, a question of policy. It refers to "those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity;
or in regard to which full discretionary authority has been delegated to the
legislative or executive branch of the government." It is concerned with
issues dependent upon the wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted
with the enlargement of judicial power, which now includes the authority of
the courts "to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." 37 Even so, this should not
be construed as a license for us to reverse the other departments simply
because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to
include in the CARP the redistribution of private landholdings (even as the
distribution of public agricultural lands is first provided for, while also
continuing space under the Public Land Act and other cognate laws). The
Court sees no justification to interpose its authority, which we may assert
only if we believe that the political decision is not unwise, but illegal. We do
not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3, 1909 that the
entire St. Marys river between the American bank and the international
line, as well as all of the upland north of the present ship canal, throughout
its entire length, was "necessary for the purpose of navigation of said
waters, and the waters connected therewith," that determination is
conclusive in condemnation proceedings instituted by the United States
under that Act, and there is no room for judicial review of the judgment of
Congress . . .
Where the State itself is the expropriator, it is not necessary for it to make
a deposit upon its taking possession of the condemned property, as "the
compensation is a public charge, the good faith of the public is pledged for
its payment, and all the resources of taxation may be employed in raising
the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides
that:
As earlier observed, the requirement for public use has already been
settled for us by the Constitution itself. No less than the 1987 Charter calls
for agrarian reform, which is the reason why private agricultural lands are
to be taken from their owners, subject to the prescribed maximum
retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and
R.A. No. 6657 are only an elaboration of the constitutional injunction that
the State adopt the necessary measures "to encourage and undertake the
just distribution of all agricultural lands to enable farmers who are landless
to own directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on us.
Upon receipt by the landowner of the corresponding payment or, in case of

rejection or no response from the landowner, upon the deposit with an
accessible bank designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to
issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the redistribution of the
land to the qualified beneficiaries.
The second requirement, i.e., the payment of just compensation, needs a

longer and more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property
taken from its owner by the expropriator. 39 It has been repeatedly
stressed by this Court that the measure is not the takers gain but the
owners loss. 40 The word "just" is used to intensify the meaning of the
word "compensation" to convey the idea that the equivalent to be rendered
for the property to be taken shall be real, substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions
contemplate more than a mere regulation of the use of private lands under
the police power. We deal here with an actual taking of private agricultural
lands that has dispossessed the owners of their property and deprived
them of all its beneficial use and enjoyment, to entitle them to the just
compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable
taking when the following conditions concur: (1) the expropriator must
enter a private property; (2) the entry must be for more than a
momentary period; (3) the entry must be under warrant or color of legal
authority; (4) the property must be devoted to public use or otherwise
informally appropriated or injuriously affected; and (5) the utilization of
the property for public use must be in such a way as to oust the owner and
deprive him of beneficial enjoyment of the property. All these requisites are
envisioned in the measures before us.
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Objection is raised, however, to the manner of fixing the just

compensation, which it is claimed is entrusted to the administrative
authorities in violation of judicial prerogatives. Specific reference is made
to Section 16(d), which provides that in case of the rejection or disregard
by the owner of the offer of the government to buy his land
. . . the DAR shall conduct summary administrative proceedings to
determine the compensation for the land by requiring the landowner, the
LBP and other interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days from the receipt of the
notice. After the expiration of the above period, the matter is deemed
submitted for decision. The DAR shall decide the case within thirty (30)
days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed
to the courts of justice and may not be usurped by any other branch or
official of the government. EPZA v. Dulay 44 resolved a challenge to
several decrees promulgated by President Marcos providing that the just
compensation for property under expropriation should be either the
assessment of the property by the government or the sworn valuation
thereof by the owner, whichever was lower. In declaring these decrees
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
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The method of ascertaining just compensation under the aforecited

decrees constitutes impermissible encroachment on judicial prerogatives.
It tends to render this Court inutile in a matter which under this
Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would
still have the power to determine the just compensation for the property,
following the applicable decrees, its task would be relegated to simply
stating the lower value of the property as declared either by the owner or
the assessor. As a necessary consequence, it would be useless for the
court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of
private property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the strict
application of the decrees during the proceedings would be nothing short
of a mere formality or charade as the court has only to choose between
the valuation of the owner and that of the assessor, and its choice is
always limited to the lower of the two. The court cannot exercise its
discretion or independence in determining what is just or fair. Even a grade
school pupil could substitute for the judge insofar as the determination of
constitutional just compensation is concerned.
x
allowed an opportunity to submit evidence on the real value of the

property. But more importantly, the determination of the just
compensation by the DAR is not by any means final and conclusive upon
the landowner or any other interested party, for Section 16(f) clearly
provides:
Any party who disagrees with the decision may bring the matter to the
court of proper jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by
all parties concerned. Otherwise, the courts of justice will still have the
right to review with finality the said determination in the exercise of what
is admittedly a judicial function.
The second and more serious objection to the provisions on just
compensation is not as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
In the present petition, we are once again confronted with the same
question of whether the courts under P.D. No. 1533, which contains the
same provision on just compensation as its predecessor decrees, still have
the power and authority to determine just compensation, independent of
what is stated by the decree and to this effect, to appoint commissioners
for such purpose.
SEC. 18. Valuation and Mode of Compensation. The LBP shall

compensate the landowner in such amount as may be agreed upon by the
landowner and the DAR and the LBP, in accordance with the criteria
provided for in Sections 16 and 17, and other pertinent provisions hereof,
or as may be finally determined by the court, as the just compensation for
the land.
This time, we answer in the affirmative.
The compensation shall be paid in one of the following modes, at the

option of the landowner:
It is violative of due process to deny the owner the opportunity to prove

that the valuation in the tax documents is unfair or wrong. And it is
repulsive to the basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to absolutely prevail over
the judgment of a court promulgated only after expert commissioners have
actually viewed the property, after evidence and arguments pro and con
have been presented, and after all factors and considerations essential to a
fair and just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not
suffer from the arbitrariness that rendered the challenged decrees
constitutionally objectionable. Although the proceedings are described as
summary, the landowner and other interested parties are nevertheless
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is
concerned Twenty-five percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares
Thirty percent (30%) cash, the balance to be paid in government
financial instruments negotiable at any time.
(c) For lands twenty-four (24) hectares and below Thirty-five percent
(35%) cash, the balance to be paid in government financial instruments
negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP
preferred shares, physical assets or other qualified investments in
accordance with guidelines set by the PARC;
(viii) Such other uses as the PARC may from time to time allow.
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten
percent (10%) of the face value of the bonds shall mature every year from
the date of issuance until the tenth (10th) year: Provided, That should the
landowner choose to forego the cash portion, whether in full or in part, he
shall be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the
landowner, his successors-in-interest or his assigns, up to the amount of
their face value, for any of the following:
(i) Acquisition of land or other real properties of the government, including

assets under the Asset Privatization Program and other assets foreclosed
by government financial institutions in the same province or region where
the lands for which the bonds were paid are situated;
(ii) Acquisition of shares of stock of government owned or controlled
corporations or shares of stock owned by the government in private
corporations;
(iii) Substitution for surety or bail bonds for the provisional release of
accused persons, or for performance bonds;
(iv) Security for loans with any government financial institution, provided
the proceeds of the loans shall be invested in an economic enterprise,
preferably in a small and medium-scale industry, in the same province or
region as the land for which the bonds are paid;
(v) Payment for various taxes and fees to government: Provided, That the
use of these bonds for these purposes will be limited to a certain
percentage of the outstanding balance of the financial instruments;
Provided, further, That the PARC shall determine the percentages
mentioned above;
(vi) Payment for tuition fees of the immediate family of the original
bondholder in government universities, colleges, trade schools, and other
institutions;
(vii) Payment for fees of the immediate family of the original bondholder in
government hospital; and
The contention of the petitioners in G.R. No. 79777 is that the above
provision is unconstitutional insofar as it requires the owners of the
expropriated properties to accept just compensation therefor in less than
money, which is the only medium of payment allowed. In support of this
contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the

property expropriated is entitled to a just compensation, which should be
neither more nor less, whenever it is possible to make the assessment,
than the money equivalent of said property. Just compensation has always
been understood to be the just and complete equivalent of the loss which
the owner of the thing expropriated has to suffer by reason of the
expropriation. 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the value
of the property at the time of its taking. Anything beyond that is more, and
anything short of that is less, than just compensation. It means a fair and
full equivalent for the loss sustained, which is the measure of the
indemnity, not whatever gain would accrue to the expropriating entity. The
market value of the land taken is the just compensation to which the
owner of condemned property is entitled, the market value being that sum
of money which a person desirous, but not compelled to buy, and an
owner, willing, but not compelled to sell, would agree on as a price to be
given and received for such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has
been derived, the weight of authority is also to the effect that just
compensation for property expropriated is payable only in money and not
otherwise. Thus
The medium of payment of compensation is ready money or cash. The
condemnor cannot compel the owner to accept anything but money, nor
can the owner compel or require the condemnor to pay him on any other
basis than the value of the property in money at the time and in the
manner prescribed by the Constitution and the statutes. When the power
of eminent domain is resorted to, there must be a standard medium of
payment, binding upon both parties, and the law has fixed that standard
as money in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of
things, be regarded as a reliable and constant standard of compensation.

48
"Just compensation" for property taken by condemnation means a fair
equivalent in money, which must be paid at least within a reasonable time
after the taking, and it is not within the power of the Legislature to
substitute for such payment future obligations, bonds, or other valuable
advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the
payment of just compensation is money and no other. And so,
conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional exercise of the
power of eminent domain. This is not an ordinary expropriation where only
a specific property of relatively limited area is sought to be taken by the
State from its owner for a specific and perhaps local purpose. What we
deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever
found and of whatever kind as long as they are in excess of the maximum
retention limits allowed their owners. This kind of expropriation is intended
for the benefit not only of a particular community or of a small segment of
the population but of the entire Filipino nation, from all levels of our
society, from the impoverished farmer to the land-glutted owner. Its
purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and
edify with the vision and the sacrifice of the present generation of Filipinos.
Generations yet to come are as involved in this program as we are today,
although hopefully only as beneficiaries of a richer and more fulfilling life
we will guarantee to them tomorrow through our thoughtfulness today.
And, finally, let it not be forgotten that it is no less than the Constitution
itself that has ordained this revolution in the farms, calling for "a just
distribution" among the farmers of lands that have heretofore been the
prison of their dreams but can now become the key at least to their
deliverance.
Such a program will involve not mere millions of pesos. The cost will be
tremendous. Considering the vast areas of land subject to expropriation
under the laws before us, we estimate that hundreds of billions of pesos
will be needed, far more indeed than the amount of P50 billion initially
appropriated, which is already staggering as it is by our present standards.
Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this
difficulty when they called for agrarian reform as a top priority project of
the government. It is a part of this assumption that when they envisioned

the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less
conventional if more practical method. There can be no doubt that they
were aware of the financial limitations of the government and had no
illusions that there would be enough money to pay in cash and in full for
the lands they wanted to be distributed among the farmers. We may
therefore assume that their intention was to allow such manner of
payment as is now provided for by the CARP Law, particularly the payment
of the balance (if the owner cannot be paid fully with money), or indeed of
the entire amount of the just compensation, with other things of value. We
may also suppose that what they had in mind was a similar scheme of
payment as that prescribed in P.D. No. 27, which was the law in force at
the time they deliberated on the new Charter and with which they
presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission
any categorial agreement among the members regarding the meaning to
be given the concept of just compensation as applied to the comprehensive
agrarian reform program being contemplated. There was the suggestion to
"fine tune" the requirement to suit the demands of the project even as it
was also felt that they should "leave it to Congress" to determine how
payment should be made to the landowner and reimbursement required
from the farmer-beneficiaries. Such innovations as "progressive
compensation" and "State-subsidized compensation" were also proposed.
In the end, however, no special definition of the just compensation for the
lands to be expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates
against the assumptions we are making of the general sentiments and
intention of the members on the content and manner of the payment to be
made to the landowner in the light of the magnitude of the expenditure
and the limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and
manner of the just compensation provided for in the afore-quoted Section
18 of the CARP Law is not violative of the Constitution. We do not mind
admitting that a certain degree of pragmatism has influenced our decision
on this issue, but after all this Court is not a cloistered institution removed
from the realities and demands of society or oblivious to the need for its
enhancement. The Court is as acutely anxious as the rest of our people to
see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the
nullification of the entire program, killing the farmers hopes even as they
approach realization and resurrecting the spectre of discontent and dissent

in the restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always
required to be made fully in money, we find further that the proportion of
cash payment to the other things of value constituting the total payment,
as determined on the basis of the areas of the lands expropriated, is not
unduly oppressive upon the landowner. It is noted that the smaller the
land, the bigger the payment in money, primarily because the small
landowner will be needing it more than the big landowners, who can afford
a bigger balance in bonds and other things of value. No less importantly,
the government financial instruments making up the balance of the
payment are "negotiable at any time." The other modes, which are likewise
available to the landowner at his option, are also not unreasonable
because payment is made in shares of stock, LBP bonds, other properties
or assets, tax credits, and other things of value equivalent to the amount
of just compensation.
Admittedly, the compensation contemplated in the law will cause the
landowners, big and small, not a little inconvenience. As already remarked,
this cannot be avoided. Nevertheless, it is devoutly hoped that these
countrymen of ours, conscious as we know they are of the need for their
forebearance and even sacrifice, will not begrudge us their indispensable
share in the attainment of the ideal of agrarian reform. Otherwise, our
pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O.
No. 229 does not seem to be viable any more as it appears that Section 4
of the said Order has been superseded by Section 14 of the CARP Law.
This repeats the requisites of registration as embodied in the earlier
measure but does not provide, as the latter did, that in case of failure or
refusal to register the land, the valuation thereof shall be that given by the
provincial or city assessor for tax purposes. On the contrary, the CARP Law
says that the just compensation shall be ascertained on the basis of the
factors mentioned in its Section 17 and in the manner provided for in
Section 16.
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The last major challenge to CARP is that the landowner is divested of his
property even before actual payment to him in full of just compensation, in
contravention of a well-accepted principle of eminent domain.
The recognized rule, indeed, is that title to the property expropriated shall
pass from the owner to the expropriator only upon full payment of the just
compensation. Jurisprudence on this settled principle is consistent both
here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does

not vest the condemnor until the judgment fixing just compensation is
entered and paid, but the condemnors title relates back to the date on
which the petition under the Eminent Domain Act, or the commissioners
report under the Local Improvement Act, is filed. 51
. . . although the right to appropriate and use land taken for a canal is
complete at the time of entry, title to the property taken remains in the
owner until payment is actually made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases
holding that title to property does not pass to the condemnor until just
compensation had actually been made. In fact, the decisions appear to be
uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was
held that "actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the
State" albeit "not to the appropriation of it to public use." In Rexford v.
Knight, 55 the Court of Appeals of New York said that the construction
upon the statutes was that the fee did not vest in the State until the
payment of the compensation although the authority to enter upon and
appropriate the land was complete prior to the payment. Kennedy further
said that "both on principle and authority the rule is . . . that the right to
enter on and use the property is complete, as soon as the property is
actually appropriated under the authority of law for a public use, but that
the title does not pass from the owner without his consent, until just
compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford absolute reassurance that
no piece of land can be finally and irrevocably taken from an unwilling
owner until compensation is paid . . . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenantfarmer as October 21, 1972 and declared that he shall "be deemed the
owner" of a portion of land consisting of a family-sized farm except that
"no title to the land owned by him was to be actually issued to him unless
and until he had become a full-fledged member of a duly recognized
farmers cooperative." It was understood, however, that full payment of the
just compensation also had to be made first, conformably to the
constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October

21, 1972 of the land they acquired by virtue of Presidential Decree No. 27.
(Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said
decree, after proof of full-fledged membership in the farmers cooperatives
and full payment of just compensation. Hence, it was also perfectly proper
for the Order to also provide in its Section 2 that the "lease rentals paid to
the landowner by the farmer-beneficiary after October 21, 1972 (pending
transfer of ownership after full payment of just compensation), shall be
considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and
ownership of the land to the government on receipt by the landowner of
the corresponding payment or the deposit by the DAR of the compensation
in cash or LBP bonds with an accessible bank. Until then, title also remains
with the landowner. 57 No outright change of ownership is contemplated
either.
Hence, the argument that the assailed measures violate due process by
arbitrarily transferring title before the land is fully paid for must also be
rejected.
It is worth stressing at this point that all rights acquired by the tenantfarmer under P.D. No. 27, as recognized under E.O. No. 228, are retained
by him even now under R.A. No. 6657. This should counterbalance the
express provision in Section 6 of the said law that "the landowners whose
lands have been covered by Presidential Decree No. 27 shall be allowed to
keep the area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No.
78742 that the appeal filed by the petitioners with the Office of the
President has already been resolved. Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude
immediate resort to judicial action, there are factual issues that have yet
to be examined on the administrative level, especially the claim that the
petitioners are not covered by LOI 474 because they do not own other
agricultural lands than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming
that the petitioners have not yet exercised their retention rights, if any,
under P.D. No. 27, the Court holds that they are entitled to the new
retention rights provided for by R.A. No. 6657, which in fact are on the
whole more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have
been the subject of bitter attack from those who point to the shortcomings
of these measures and ask that they be scrapped entirely. To be sure,
these enactments are less than perfect; indeed, they should be
continuously re-examined and rehoned, that they may be sharper
instruments for the better protection of the farmers rights. But we have to
start somewhere. In the pursuit of agrarian reform, we do not tread on
familiar ground but grope on terrain fraught with pitfalls and expected
difficulties. This is inevitable. The CARP Law is not a tried and tested
project. On the contrary, to use Justice Holmess words, "it is an
experiment, as all life is an experiment," and so we learn as we venture
forward, and, if necessary, by our own mistakes. We cannot expect
perfection although we should strive for it by all means. Meantime, we
struggle as best we can in freeing the farmer from the iron shackles that
have unconscionably, and for so long, fettered his soul to the soil.
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By the decision we reach today, all major legal obstacles to the

comprehensive agrarian reform program are removed, to clear the way for
the true freedom of the farmer. We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of
the past and from his own feelings of inadequacy and helplessness. At last
his servitude will be ended forever. At last the farm on which he toils will
be his farm. It will be his portion of the Mother Earth that will give him not
only the staff of life but also the joy of living. And where once it bred for
him only deep despair, now can he see in it the fruition of his hopes for a
more fulfilling future. Now at last can he banish from his small plot of earth
his insecurities and dark resentments and "rebuild in it the music and the
dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229
are SUSTAINED against all the constitutional objections raised in the herein
petitions.
2. Title to all expropriated properties shall be transferred to the State only

upon full payment of compensation to their respective owners.
3. All rights previously acquired by the tenant-farmers under P.D. No. 27
are retained and recognized.
4. Landowners who were unable to exercise their rights of retention under
P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under
the conditions therein prescribed.
5. Subject to the above-mentioned rulings, all the petitions are
DISMISSED, without pronouncement as to costs.
There is in the vicinity of the public market of San Fernando, Pampanga,

along Mercado Street, a strip of land measuring 12 by 77 meters on which
stands a conglomeration of vendors stalls together forming what is
commonly known as a talipapa. This is the subject of the herein petition.
The petitioners claim they have a right to remain in and conduct business
in this area by virtue of a previous authorization granted to them by the
municipal government. The respondents deny this and justify the
demolition of their stalls as illegal constructions on public property. At the
petitioners behest, we have issued a temporary restraining order to
preserve the status quo between the parties pending our decision. 1 Now
we shall rule on the merits.
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This dispute goes back to November 7, 1961, when the municipal council
of San Fernando adopted Resolution No. 218 authorizing some 24
members of the Fernandino United Merchants and Traders Association to
construct permanent stalls and sell in the above-mentioned place. 2 The
action was protested on November 10, 1961, in Civil Case No. 2040, where
the Court of First Instance of Pampanga, Branch 2, issued a writ of
preliminary injunction that prevented the defendants from constructing the
said stalls until final resolution of the controversy. 3 On January 18, 1964,
while this case was pending, the municipal council of San Fernando
adopted Resolution No. 29, which declared the subject area as "the parking
place and as the public plaza of the municipality, "4 thereby impliedly
revoking Resolution No. 218, series of 1961. Four years later, on November
2, 1968, Judge Andres C. Aguilar decided the aforesaid case and held that
the land occupied by the petitioners, being public in nature, was beyond
the commerce of man and therefore could not be the subject of private
occupancy. 5 The writ of preliminary injunction was made permanent. 6
SO ORDERED
FIRST DIVISION
[G.R. No. L-61311. September 21, 1987.]
FELICIDAD VILLANUEVA, FERNANDO CAISIP, ANTONIO LIANG,
FELINA MIRANDA, RICARDO PUNO, FLORENCIO LAXA, and RENE
OCAMPO, Petitioners, v. HON. MARIANO CASTAEDA, JR., Presiding
Judge of the Court of First Instance of Pampanga, Branch III,
VICENTE A. MACALINO, Officer-in-Charge, Office of the Mayor, San
Fernando, Pampanga, Respondents.
DECISION
CRUZ, J.:
The decision was apparently not enforced, for the petitioners were not
evicted from the place; in fact, according to them, they and the 128 other
persons were in 1971 assigned specific areas or space allotments therein
for which they paid daily fees to the municipal government. 7 The problem
appears to have festered for some more years under a presumably uneasy
truce among the protagonists, none of whom made any move, for some
reason that does not appear in the record. Then, on January 12, 1982, the
Association of Concerned Citizens and Consumers of San Fernando filed a
petition for the immediate implementation of Resolution No. 29, to restore
the subject property "to its original and customary use as a public plaza."
8
Acting thereon after an investigation conducted by the municipal attorney,9
respondent Vicente A. Macalino, as officer in-charge of the office of the
mayor of San Fernando, issued on June 14, 1982, a resolution requiring
the municipal treasurer and the municipal engineer to demolish the stalls
in the subject place beginning July 1, 1982. 10 The reaction of the

petitioners was to file a petition for prohibition with the Court of First
Instance of Pampanga, docketed as Civil Case No. 6470, on June 26, 1982.
The respondent judge denied the petition on July 19, 1982, 11 and the
motion for reconsideration on August 5, 1982, 12 prompting the
petitioners to come to this Court on certiorari to challenge his decision. 13
As required, respondent Macalino filed his comment 14 on the petition, and
the petitioners countered with their reply. 15 In compliance with our
resolution of February 2, 1983, the petitioners submitted their
memorandum 16 and respondent Macalino, for his part, asked that his
comment be considered his memorandum. 17 On July 28, 1986, the new
officer-in-charge of the office of the mayor of San Fernando, Paterno S.
Guevarra, was impleaded in lieu of Virgilio Sanchez, who had himself
earlier replaced the original respondent Macalino. 18
After considering the issues and the arguments raised by the parties in
their respective pleadings, we rule for the respondents. The petition must
be dismissed.
There is no question that the place occupied by the petitioners and from
which they are sought to be evicted is a public plaza, as found by the trial
court in Civil Case No. 2040. This finding was made after consideration of
the antecedent facts as especially established by the testimony of former
San Fernando Mayor Rodolfo Hizon, who later became governor of
Pampanga, that the National Planning Commission had reserved the area
for a public plaza as early as 1951. This intention was reiterated in 1964
through the adoption of Resolution No. 29.19
It does not appear that the decision in this case was appealed or has been
reversed. In Civil Case No. 6740, which is the subject of this petition, the
respondent judge saw no reason to disturb the finding in Civil Case No.
2040 and indeed used it as a basis for his own decision sustaining the
questioned order. 20
The basic contention of the petitioners is that the disputed area is under
lease to them by virtue of contracts they had entered into with the
municipal government, first in 1961 insofar as the original occupants were
concerned, and later with them and the other petitioners by virtue of the
space allocations made in their favor in 1971 for which they saw they are
paying daily fees. 21 The municipal government has denied making such
agreements. In any case, they argue, since the fees were collected daily,
the leases, assuming their validity, could be terminated at will, or any day,
as the claimed rentals indicated that the period of the leases was from day
to day. 22
The parties belabor this argument needlessly.

A public plaza is beyond the commerce of man and so cannot be the
subject of lease or any other contractual undertaking. This is elementary.
Indeed, this point was settled as early as in Municipality of Cavite v. Rojas,
23 decided in 1915, where the Court declared as null and void the lease of
a public plaza of the said municipality in favor of a private person.
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Justice Torres said in that case:
"According to article 344 of the Civil Code: `Property for public use in
provinces and in towns comprises the provincial and town roads, the
squares, streets, fountains, and public waters, the promenades, and public
works of general service supported by said towns or provinces.
"The said Plaza Soledad being a promenade for public use, the municipal
council of Cavite could not in 1907 withdraw or exclude from public use a
portion thereof in order to lease it for the sole benefit of the defendant
Hilaria Rojas. In leasing a portion of said plaza or public place to the
defendant for private use the plaintiff municipality exceeded its authority in
the exercise of its powers by executing a contract over a thing of which it
could not dispose, nor is it empowered so to do.
"The Civil Code, article 1271, prescribes that everything which is not
outside the commerce of man may be the object of a contract, and plazas
and streets are outside of this commerce, as was decided by the supreme
court of Spain in its decision of February 12, 1895, which says: Communal
things that cannot be sold because they are by their very nature outside of
commerce are those for public use, such as the plazas, streets, common
lands, rivers, fountains, etc.
"Therefore, it must be concluded that the contract, Exhibit C, whereby the
municipality of Cavite leased to Hilaria Rojas a portion of the Plaza Soledad
is null and void and of no force or effect, because it is contrary to the law
and the thing leased cannot be the object of a contract."
In Muyot v. de la Fuente, 24 it was held that the City of Manila could not
lease a portion of a public sidewalk on Plaza Sta. Cruz, being likewise
beyond the commerce of man.
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Echoing Rojas, the decision said:
"Appellants claim that they had obtained permit from the government of
the City of Manila, to construct booths Nos. 1 and 2, along the premises in
question, and for the use of spaces where the booths were constructed,
they had paid and continued paying the corresponding rentals. Granting
this claim to be true, one should not entertain any doubt that such permit
was not legal, because the City of Manila does not have any power or
authority at all to lease a portion of a public sidewalk. The sidewalk in
question, forming part of the public plaza of Sta. Cruz, could not be a
proper subject matter of the contract, as it was not within the commerce of
man (Article 1347, new Civil Code, and article 1271, old Civil Code). Any
contract entered into by the City of Manila in connection with the sidewalk,
is ipso facto null and ultra vires. (Municipality of Cavite v. Roxas, Et Al., 30
Phil. 603.) The sidewalk in question was intended for and was used by the
public, in going from one place to another. `The streets and public places
of the city shall be kept free and clear for the use of the public, and the
sidewalks and crossings for the pedestrians, and the same shall only be
used or occupied for other purposes as provided by ordinance or
regulation; . . .. (Sec. 1119, Revised Ordinances of the City of Manila.) The
booths in question served as fruit stands for their owners and often, if not
always, blocked the free passage of pedestrians who had to take the plaza
itself which used to be clogged with vehicular traffic."
Exactly in point is Espiritu v. Municipal Council of Pozorrubio, 25 where the

Supreme Court declared:
aforementioned orders from the court and the council. It is, therefore, not
correct to say that he had acted without authority or taken the law into his
hands in issuing his order.
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Neither can it be said that he acted whimsically in exercising his authority

for it has been established that he directed the demolition of the stalls only
after, upon his instructions, the municipal attorney had conducted an
investigation, to look into the complaint filed by the Association of
Concerned Citizens and Consumers of San Fernando. 26 There is evidence
that the petitioners were notified of this hearing, 27 which they chose to
disregard. Photographs of the disputed area, 28 which does look congested
and ugly, show that the complaint was valid and that the area really
needed to be cleared, as recommended by the municipal attorney.
The Court observes that even without such investigation and
recommendation, the respondent mayor was justified in ordering the area
cleared on the strength alone of its status as a public plaza as declared by
the judicial and legislative authorities. In calling first for the investigation
(which the petitioner saw fit to boycott), he was just scrupulously paying
deference to the requirements of due process, to remove all taint of
arbitrariness in the action he was called upon to take.
"There is absolutely no question that the town plaza cannot be used for the
construction of market stalls, specially of residences, and that such
structures constitute a nuisance subject to abatement according to law.
Town plazas are properties of public dominion, to be devoted to public use
and to be made available to the public in general. They are outside the
commerce of man and cannot be disposed of or even leased by the
municipality to private parties."
Applying this well-settled doctrine, we rule that the petitioners had no right
in the first place to occupy the disputed premises and cannot insist in
remaining there now on the strength of their alleged lease contracts. They
should have realized and accepted this earlier, considering that even before
Civil Case No. 2040 was decided, the municipal council of San Fernando
had already adopted Resolution No. 29, series of 1964, declaring the area
as the parking place and public plaza of the municipality.
It is the decision in Civil Case No. 2040 and the said resolution of the
municipal council of San Fernando that respondent Macalino was seeking to
enforce when he ordered the demolition of the stalls constructed in the
disputed area. As officer-in-charge of the office of the mayor, he had the
duty to clear the area and restore it to its intended use as a parking place
and public plaza of the municipality of San Fernando, conformably to the
Since the occupation of the place in question in 1961 by the original 24

stallholders (whose number later ballooned to almost 200), it has
deteriorated increasingly to the great prejudice of the community in
general. The proliferation of stalls therein, most of them makeshift and of
flammable materials, has converted it into a veritable fire trap, which,
added to the fact that it obstructs access to and from the public market
itself, has seriously endangered public safety. The filthy condition of the
talipapa, where fish and other wet items are sold, has aggravated health
and sanitation problems, besides pervading the place with a foul odor that
has spread into the surrounding areas. The entire place is unsightly, to the
dismay and embarrassment of the inhabitants, who want it converted into
a showcase of the town of which they can all be proud. The vendors in the
talipapa have also spilled into the street and obstruct the flow of traffic,
thereby impairing the convenience of motorists and pedestrians alike. The
regular stallholders in the public market, who pay substantial rentals to the
municipality, are deprived of a sizable volume of business from prospective
customers who are intercepted by the talipapa vendors before they can
reach the market proper. On top of all these, the people are denied the
proper use of the place as a public plaza, where they may spend their
leisure in a relaxed and even beautiful environment and civic and other
communal activities of the town can be held.
The problems caused by the usurpation of the place by the petitioners are
covered by the police power as delegated to the municipality under the

general welfare clause. 29 This authorizes the municipal council "to enact
such ordinances and make such regulations, not repugnant to law, as may
be necessary to carry into effect and discharge the powers and duties
conferred upon it by law and such as shall seem necessary and proper to
provide for the health and safety, promote the prosperity, improve the
morals, peace, good order, comfort, and convenience of the municipality
and the inhabitants thereof, and for the protection of property therein."
This authority was validly exercised in this case through the adoption of
Resolution No. 29, series of 1964, by the municipal council of San
Fernando.
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Even assuming a valid lease of the property in dispute, the resolution could
have effectively terminated the agreement for it is settled that the police
power cannot be surrendered or bargained away through the medium of a
contract. 30 In fact, every contract affecting the public interest suffers a
congenital infirmity in that it contains an implied reservation of the police
power as a postulate of the existing legal order. 31 This power can be
activated at any time to change the provisions of the contract, or even
abrogate it entirely, for the promotion or protection of the general welfare.
Such an act will not militate against the impairment clause, which is
subject to and limited by the paramount police power. 32
We hold that the respondent judge did not commit grave abuse of
discretion in denying the petition for prohibition. On the contrary, he acted
correctly in sustaining the right and responsibility of the mayor to evict the
petitioners from the disputed area and clear it of all the structures illegally
constructed therein.
The Court feels that it would have been far more amiable if the petitioners
themselves, recognizing their own civic duty, had at the outset desisted
from their original stance and withdrawn in good grace from the disputed
area to permit its peaceful restoration as a public plaza and parking place
for the benefit of the whole municipality. They owned this little sacrifice to
the community in general, which has suffered all these many years
because of their intransigence. Regrettably, they have refused to recognize
that in the truly democratic society, the interests of the few should yield to
those of the greater number in deference to the principles that the welfare
of the people is the supreme law and overriding purpose. We do not see
any altruism here. The traditional ties of sharing are absent here. What we
find, sad to say, is a cynical disdaining of the spirit of "bayanihan", a selfish
rejection of the cordial virtues of "pakikisama" and "pagbibigayan" which
are the hallmarks of our people.
WHEREFORE, the petition is DISMISSED. The decision dated July 19, 1982,
and the order dated August 5, 1982, are AFFIRMED. The temporary
restraining order dated August 9, 1982, is LIFTED. This decision is
immediately executory. Costs against the petitioners.
SO ORDERED
VALENTINO P. ARBOLEDA, EVELYN O. RAMOS, ACHILLES J.

PERALTA, CORAZON M. CRUZ, LEUVINA P. CHICO, JOSEPH A. JAO,
MA. LUISA S. GUTIERREZ, LYDIA C. CHAN, OPHELIA C. HIDALGO,
FERNANDO T. CRUZ, MELVIN M. USITA, RAFAEL I. TOLENTINO,
GRACE E. UY, CHERYL R. TRIGUERO, MICHAEL L. SERRANO,
FEDERICO L. CASTILLO, MELITA J. CAEDO, SAMUEL B. BANGOY,
BERNARDITA B. SY, GLORIA T. JULARBAL, FREDERICK D.
FRANCISCO, CARLOS M. BERNARDO, JR., HUBERT S. NAZARENO,
CLARISSA B. BACLIG, DAYMINDA G. BONTUYAN, BERNADETTE H.
CABUHAT, NANCY J. CHAVEZ, MARIO D. CUARESMA, ERNESTO L.
CUE, EVELYN C. CUNDANGAN, RHONEIL R. DEVERATURDA,
DERILEEN D. DORADO, SAIBZUR N. EDDING, VIOLETA C. FELIPE,
HERMINIO V. FERNANDEZ, JR., MARIA VICTORIA M. LACSAMANA,
NORMA G. LAFAVILLA, RUBY B. LANTIN, MA. ELOISA Q. MALLARI,
CLARISA SJ. NICOLAS, PERCIVAL H. PANGILINAN, ARNULFO A.
SALVADOR, ROBERT B. SANCHEZ, MERLY D. STA. ANA and
YOLANDA P. UNICA, Respondents.
DECISION
TINGA, J.:
SECOND DIVISION
[G.R. NO. 144681 : June 21, 2004]
PROFESSIONAL REGULATION COMMISSION (PRC), CHAIRMAN
HERMOGENES P. POBRE, ASSOCIATE COMMISSIONER ARMANDO
PASCUAL, BOARD OF MEDICINE, CHAIRMAN RODOLFO P. DE
GUZMAN, JOSE S. RAMIREZ, JUANITO B. BILLOTE, RUBEN R.
POLICARPIO, EDGARDO T. FERNANDO and RICARDO D. FULGENCIO
II, Petitioners, v. ARLENE V. DE GUZMAN, VIOLETA V. MENESES,
CELERINA S. NAVARRO, JOSE RAMONCITO P. NAVARRO, ARNEL V.
HERRERA and GERALDINE ELIZABETH M. PAGILAGAN, ELNORA R.
RAQUENO, MARISSA A. REGODON, LAURA M. SANTOS,
KARANGALAN D. SERRANO, DANILO A. VILLAVER, MARIA ROSARIO
L. LEONOR, ALICIA S. LIZANO, MARITEL M. ECHIVERRI,
BERNADETTE T. MENDOZA, FERNANDO F. MANDAPAT, ALELI A.
GOLLAYAN, ELCIN C. ARRIOLA, HERMINIGILDA E. CONEJOS, SALLY
B. BUNAGAN, ROGELIO B. ANCHETA, OSCAR H. PADUA, JR., EVELYN
D. GRAJO, EVELYN S. ACOSTA, MARGARITA BELINDA L. VICENCIO,
This Petition for Review under Rule 45 of the 1997 Rules of Civil Procedure
seeks to nullify theDecision,1 dated May 16, 2000, of the Court of Appeals
in CA-G.R. SP No. 37283.The appellate court affirmed the judgment 2 dated
December 19, 1994, of the Regional Trial Court (RTC) of Manila, Branch 52,
in Civil Case No. 93-66530. The trial court allowed the respondents to take
their physicians oath and to register as duly licensed physicians. Equally
challenged is the Resolution3 promulgated on August 25, 2000 of the Court
of Appeals, denying petitioners Motion for Reconsideration.
The facts of this case are as follows:
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The respondents are all graduates of the Fatima College of Medicine,

Valenzuela City, Metro Manila. They passed the Physician Licensure
Examination conducted in February 1993 by the Board of Medicine (Board).
Petitioner Professional Regulation Commission (PRC) then released their
names as successful examinees in the medical licensure examination.
Shortly thereafter, the Board observed that the grades of the seventy-nine
successful examinees from Fatima College in the two most difficult subjects
in the medical licensure exam, Biochemistry (Bio-Chem) and Obstetrics
and Gynecology (OB-Gyne), were unusually and exceptionally high. Eleven
Fatima examinees scored 100% in Bio-Chem and ten got 100% in OBGyne, another eleven got 99% in Bio-Chem, and twenty-one scored 99%
in OB-Gyne. The Board also observed that many of those who passed from
Fatima got marks of 95% or better in both subjects, and no one got a
mark lower than 90%. A comparison of the performances of the candidates
from other schools was made. The Board observed that strangely, the
unusually high ratings were true only for Fatima College examinees. It was
a record-breaking phenomenon in the history of the Physician Licensure
Examination.
On July 5, 1993, respondents Arlene V. De Guzman, Violeta V. Meneses,

Celerina S. Navarro, Jose Ramoncito P. Navarro, Arnel V. Herrera, and
Geraldine Elizabeth M. Pagilagan (Arlene V. De Guzman et al., for brevity)
filed a special civil action for mandamus, with prayer for preliminary
mandatory injunction docketed as Civil Case No. 93-66530 with the
Regional Trial Court (RTC) of Manila, Branch 52. Their petition was adopted
by the other respondents as intervenors.
On June 7, 1993, the Board issued Resolution No. 19, withholding the
registration as physicians of all the examinees from the Fatima College of
Medicine.4 The PRC asked the National Bureau of Investigation (NBI) to
investigate whether any anomaly or irregularity marred the February 1993
Physician Licensure Examination.
On July 28, 1993, the RTC issued an Order in Civil Case No. 93-66530
granting the preliminary mandatory injunction sought by the
respondents.It ordered the petitioners to administer the physicians oath to
Arlene V. De Guzman et al., and enter their names in the rolls of the PRC.
Prior to the NBI investigation, the Board requested Fr. Bienvenido F.

Nebres, S.J., an expert mathematician and authority in statistics, and later
president of the Ateneo de Manila University, to conduct a statistical
analysis of the results in Bio-Chem and Ob-Gyne of the said examination.
On June 10, 1993, Fr. Nebres submitted his report.He reported that a
comparison of the scores in Bio-Chem and Ob-Gyne, of the Fatima College
examinees with those of examinees from De La Salle University and
Perpetual Help College of Medicine showed that the scores of Fatima
College examinees were not only incredibly high but unusually clustered
close to each other. He concluded that there must be some unusual reason
creating the clustering of scores in the two subjects.It must be a cause
strong enough to eliminate the normal variations that one should expect
from the examinees [of Fatima College] in terms of talent, effort, energy,
etc.5
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For its part, the NBI found that the questionable passing rate of Fatima
examinees in the [1993] Physician Examination leads to the conclusion
that the Fatima examinees gained early access to the test questions. 6
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Meanwhile, the Board issued Resolution No. 26, dated July 21, 1993,
charging respondents with immorality, dishonest conduct, fraud, and deceit
in connection with the Bio-Chem and Ob-Gyne examinations.It
recommended that the test results of the Fatima examinees be nullified.
The case was docketed as Adm. Case No. 1687 by the PRC.
The petitioners then filed a special civil action for certiorari with the Court
of Appeals to set aside the mandatory injunctive writ, docketed as CA-G.R.
SP No. 31701.
On October 21, 1993, the appellate court decided CA-G.R. SP No. 31701,
with the dispositive portion of the Decision ordaining as follows:
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WHEREFORE, this petition is GRANTED. Accordingly, the writ of preliminary

mandatory injunction issued by the lower court against petitioners is
hereby nullified and set aside.
SO ORDERED.7
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Arlene V. de Guzman, et al., then elevated the foregoing Decision to this

Court in G.R. No. 112315.In our Resolution dated May 23, 1994, we denied
the petition for failure to show reversible error on the part of the appellate
court.
Meanwhile, on November 22, 1993, during the pendency of the instant
petition, the pre-trial conference in Civil Case No. 93-66530 was held.
Then, the parties, agreed to reduce the testimonies of their respective
witnesses to sworn questions-and-answers. This was without prejudice to

cross-examination by the opposing counsel.
On December 13, 1993, petitioners counsel failed to appear at the trial in
the mistaken belief that the trial was set for December 15. The trial court
then ruled that petitioners waived their right to cross-examine the
witnesses.
On January 27, 1994, counsel for petitioners filed a Manifestation and
Motion stating the reasons for her non-appearance and praying that the
cross-examination of the witnesses for the opposing parties be reset. The
trial court denied the motion for lack of notice to adverse counsel.It also
denied the Motion for Reconsideration that followed on the ground that
adverse counsel was notified less than three (3) days prior to the hearing.
Meanwhile, to prevent the PRC and the Board from proceeding with Adm.
Case No. 1687, the respondents herein moved for the issuance of a
restraining order, which the lower court granted in itsOrder dated April 4,
1994.
The petitioners then filed with this Court a petition for certiorari docketed
as G.R. No. 115704, to annul the Orders of the trial court dated November
13, 1993, February 28, 1994, and April 4, 1994.We referred the petition to
the Court of Appeals where it was docketed as CA-G.R. SP No. 34506.
On August 31, 1994, the appellate court decided CA-G.R. SP No. 34506 as
follows:
WHEREFORE, the present petition for certiorari with prayer for temporary
restraining order/preliminary injunction is GRANTED and the Orders of
December 13, 1993, February 7, 1994, February 28, 1994, and April 4,
1994 of the RTC-Manila, Branch 52, and all further proceedings taken by it
in Special Civil Action No. 93-66530 are hereby DECLARED NULL and
VOID. The said RTC-Manila is ordered to allow petitioners counsel to crossexamine the respondents witnesses, to allow petitioners to present their
evidence in due course of trial, and thereafter to decide the case on the
merits on the basis of the evidence of the parties. Costs against
Respondents.
IT IS SO ORDERED.8
cralawred
The trial was then set and notices were sent to the parties.
A day before the first hearing, on September 22, 1994, the petitioners filed
an Urgent Ex-Parte Manifestation and Motion praying for the partial
reconsideration of the appellate courts decision in CA-G.R. SP No. 34506,
and for the outright dismissal of Civil Case No. 93-66530. The petitioners
asked for the suspension of the proceedings.
In its Order dated September 23, 1994, the trial court granted the
aforesaid motion, cancelled the scheduled hearing dates, and reset the
proceedings to October 21 and 28, 1994.
Meanwhile, on October 25, 1994, the Court of Appeals denied the partial
motion for reconsideration in CA-G.R. SP No. 34506.Thus, petitioners filed
with the Supreme Court a Petition for Review docketed as G.R. No.
117817, entitled Professional Regulation Commission, et al. v. Court of
Appeals, et al.
On November 11, 1994, counsel for the petitioners failed to appear at the
trial of Civil Case No. 93-66530. Upon motion of the respondents herein,
the trial court ruled that herein petitioners waived their right to crossexamine the herein respondents. Trial was reset to November 28, 1994.
On November 25, 1994, petitioners counsel moved for the inhibition of the
trial court judge for alleged partiality. On November 28, 1994, the day
the Motion to Inhibit was to be heard, petitioners failed to appear.Thus, the
trial court denied the Motion to Inhibit and declared Civil Case No. 9366530 deemed submitted for decision.
On December 19, 1994, the trial court handed down its judgment in Civil
Case No. 93-66530, the falloof which reads:
WHEREFORE, judgment is rendered ordering the respondents to allow the

petitioners and intervenors (except those with asterisks and footnotes in
pages 1 & 2 of this decision) [sic],9 to take the physicians oath and to
register them as physicians.
It should be made clear that this decision is without prejudice to any
administrative disciplinary action which may be taken against any of the
petitioners for such causes and in the manner provided by law and
consistent with the requirements of the Constitution as any other

professionals.
No costs.
SO ORDERED.10
cralawred
As a result of these developments, petitioners filed with this Court a

Petition for Review on Certioraridocketed as G.R. No. 118437,
entitled Professional Regulation Commission v. Hon. David G. Nitafan,
praying inter alia, that (1) G.R. No. 118437 be consolidated with G.R. No.
117817; (2) the decision of the Court of Appeals dated August 31, 1994 in
CA-G.R. SP No. 34506 be nullified for its failure to decree the dismissal of
Civil Case No. 93-66530, and in the alternative, to set aside the decision of
the trial court in Civil Case No. 93-66530, order the trial court judge to
inhibit himself, and Civil Case No. 93-66530 be re-raffled to another
branch.
On December 26, 1994, the petitioners herein filed their Notice of
Appeal11 in Civil Case No. 93-66530, thereby elevating the case to the
Court of Appeals, where it was docketed as CA-G.R. SP No. 37283.
66530, joined by twenty-seven intervenors, to wit: Fernando F. Mandapat,

Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando
T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-Largoza, Cheryl R.
Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes,
Laura M. Santos, Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C.
Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur N. Edding,
Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario L. LeonorLacandula, Geraldine Elizabeth M. Pagilagan-Palma, Margarita Belinda L.
Vicencio-Gamilla, Herminigilda E. Conejos, Leuvina P. Chico-Paguio, Elcin
C. Arriola-Ocampo, and Jose Ramoncito P. Navarro, manifested that they
were no longer interested in proceeding with the case and moved for its
dismissal. A similar manifestation and motion was later filed by intervenors
Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo
A. Salvador, Belinda C. Rabara, Yolanda P. Unica, Dayminda G. Bontuyan,
Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A.
Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses,
Melita J. Caedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D.
Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M.
Usita. The Court of Appeals ruled that its decision in CA-G.R. SP No. 37283
would not apply to them.
On May 16, 2000, the Court of Appeals decided CA-G.R. SP No. 37283,
with the following fallo, to wit:
In our Resolution of June 7, 1995, G.R. No. 118437 was consolidated with
G.R. No. 117817.
On July 9, 1998, we disposed of G.R. NOS. 117817 and 118437 in this
wise:
WHEREFORE, the petition in G.R. No. 117817 is DISMISSED for being

moot. The petition in G.R. No. 118437 is likewise DISMISSED on the
ground that there is a pending appeal before the Court of Appeals.
Assistant Solicitor General Amparo M. Cabotaje-Tang is advised to be more
circumspect in her dealings with the courts as a repetition of the same or
similar acts will be dealt with accordingly.
SO ORDERED.12
cralawred
While CA-G.R. SP No. 37283 was awaiting disposition by the appellate

court, Arnel V. Herrera, one of the original petitioners in Civil Case No. 93-
WHEREFORE, finding no reversible error in the decision appealed from, We

hereby AFFIRM the same and DISMISS the instant appeal.
No pronouncement as to costs.
SO ORDERED.13
cralawred
In sustaining the trial courts decision, the appellate court ratiocinated that
the respondents complied with all the statutory requirements for admission
into the licensure examination for physicians in February 1993. They all
passed the said examination. Having fulfilled the requirements of Republic
Act No. 2382,14 they should be allowed to take their oaths as physicians
and be registered in the rolls of the PRC.
Hence, this petition raising the following issues:
I
WHETHER OR NOT RESPONDENTS HAVE A VALID CAUSE OF ACTION FOR
MANDAMUS AGAINST PETITIONERS IN THE LIGHT OF THE RESOLUTION
OF THIS HONORABLE COURT IN G.R. NO. 112315 AFFIRMING THE COURT
OF APPEALS DECISION DECLARING THAT IF EVER THERE IS SOME DOUBT
AS TO THE MORAL FITNESS OF EXAMINEES, THE ISSUANCE OF LICENSE
TO PRACTICE MEDICINE IS NOT AUTOMATICALLY GRANTED TO THE
SUCCESSFUL EXAMINEES.
II
WHETHER OR NOT THE PETITION FOR MANDAMUS COULD PROCEED
DESPITE THE PENDENCY OF ADMINISTRATIVE CASE NO. 1687, WHICH
WAS PRECISELY LODGED TO DETERMINE THE MORAL FITNESS OF
RESPONDENTS TO BECOME DOCTORS.15
cralawred
To our mind, the only issue is: Did the Court of Appeals commit a
reversible error of law in sustaining the judgment of the trial court that
respondents are entitled to a writ of mandamus ?
The petitioners submit that a writ of mandamus will not lie in this case.
They point out that for a writ ofmandamus to issue, the applicant must
have a well-defined, clear and certain legal right to the thing demanded
and it is the duty of the respondent to perform the act required.
Thus, mandamus may be availed of only when the duty sought to be
performed is a ministerial and not a discretionary one. The petitioners
argue that the appellate courts decision in CA-G.R. SP No. 37283
upholding the decision of the trial court in Civil Case No. 93-66530
overlooked its own pronouncement in CA-G.R. SP No. 31701. The Court of
Appeals held in CA-G.R. SP No. 31701 that the issuance of a license to
engage in the practice of medicine becomes discretionary on the PRC if
there exists some doubt that the successful examinee has not fully met the
requirements of the law. The petitioners stress that this Courts Resolution
dated May 24, 1994 in G.R. No. 112315 held that there was no showing
that the Court of Appeals had committed any reversible error in rendering
the questioned judgment in CA-G.R. SP No. 31701. The petitioners point
out that our Resolution in G.R. No. 112315 has long become final and
executory.
Respondents counter that having passed the 1993 licensure examinations

for physicians, the petitioners have the obligation to administer to them
the oath as physicians and to issue their certificates of registration as
physicians pursuant to Section 2016 of Rep. Act No. 2382. The Court of
Appeals in CA-G.R. SP No. 37283, found that respondents complied with all
the requirements of Rep. Act No. 2382.Furthermore, respondents were
admitted by the Medical Board to the licensure examinations and had
passed the same. Hence, pursuant to Section 20 of Rep. Act No. 2382, the
petitioners had the obligation to administer their oaths as physicians and
register them.
Mandamus is a command issuing from a court of competent jurisdiction, in
the name of the state or the sovereign, directed to some inferior court,
tribunal, or board, or to some corporation or person requiring the
performance of a particular duty therein specified, which duty results from
the official station of the party to whom the writ is directed, or from
operation of law.17 Section 3 of Rule 6518 of the 1997 Rules of Civil
Procedure outlines two situations when a writ of mandamus may issue,
when any tribunal, corporation, board, officer or person unlawfully (1)
neglects the performance of an act which the law specifically enjoins as a
duty resulting from an office, trust, or station; or (2) excludes another
from the use and enjoyment of a right or office to which the other is
entitled.
We shall discuss the issues successively.
1.On The Existence of a Duty of the Board of Medicine To Issue Certificates
of Registration as Physicians under Rep. Act No. 2382.
For mandamus to prosper, there must be a showing that the officer, board,
or official concerned, has a clear legal duty, not involving
discretion.19 Moreover, there must be statutory authority for the
performance of the act,20 and the performance of the duty has been
refused.21 Thus, it must be pertinently asked now: Did petitioners have the
duty to administer the Hippocratic Oath and register respondents as
physicians under the Medical Act of 1959?
As found by the Court of Appeals, on which we agree on the basis of the

records:
It bears emphasizing herein that petitioner-appellees and intervenorappellees have fully complied with all the statutory requirements for
admission into the licensure examinations for physicians conducted and
administered by the respondent-appellants on February 12, 14, 20 and 21,
1993. Stress, too, must be made of the fact that all of them successfully
passed the same examinations.22
cralawred
The crucial query now is whether the Court of Appeals erred in concluding
that petitioners should allow the respondents to take their oaths as
physicians and register them, steps which would enable respondents to
practice the medical profession23 pursuant to Section 20 of the Medical Act
of 1959?
The appellate court relied on a single provision, Section 20 of Rep. Act No.
2382, in concluding that the petitioners had the ministerial obligation to
administer the Hippocratic Oath to respondents and register them as
physicians. But it is a basic rule in statutory construction that each part of
a statute should be construed in connection with every other part to
produce a harmonious whole, not confining construction to only one
section.24 The intent or meaning of the statute should be ascertained from
the statute taken as a whole, not from an isolated part of the provision.
Accordingly, Section 20 of Rep. Act No. 2382, as amended should be read
in conjunction with the other provisions of the Act. Thus, to determine
whether the petitioners had the ministerial obligation to administer the
Hippocratic Oath to respondents and register them as physicians, recourse
must be had to the entirety of the Medical Act of 1959.
A careful reading of Section 20 of the Medical Act of 1959 discloses that
the law uses the word shall with respect to the issuance of certificates of
registration.Thus, the petitioners shall sign and issue certificates of
registration to those who have satisfactorily complied with the
requirements of the Board. In statutory construction the term shall is a
word of command.It is given imperative meaning. Thus, when an examinee
satisfies the requirements for the grant of his physicians license, the Board
is obliged to administer to him his oath and register him as a physician,
pursuant to Section 20 and par. (1) of Section 2225 of the Medical Act of
1959.
However, the surrounding circumstances in this case call for serious inquiry
concerning the satisfactory compliance with the Board requirements by the
respondents.The unusually high scores in the two most difficult subjects
was phenomenal, according to Fr. Nebres, the consultant of PRC on the

matter, and raised grave doubts about the integrity, if not validity, of the
tests. These doubts have to be appropriately resolved.
Under the second paragraph of Section 22, the Board is vested with the
power to conduct administrative investigations and disapprove applications
for examination or registration, pursuant to the objectives of Rep. Act No.
2382 as outlined in Section 126 thereof. In this case, after the investigation,
the Board filed before the PRC, Adm. Case No. 1687 against the
respondents to ascertain their moral and mental fitness to practice
medicine, as required by Section 927 of Rep. Act No. 2382. In
its Decision dated July 1, 1997, the Board ruled:
WHEREFORE, the BOARD hereby CANCELS the respondents[] examination

papers in the Physician Licensure Examinations given in February 1993 and
further DEBARS them from taking any licensure examination for a period of
ONE (1) YEAR from the date of the promulgation of this DECISION. They
may, if they so desire, apply for the scheduled examinations for physicians
after the lapse of the period imposed by the BOARD.
SO ORDERED.28
cralawred
Until the moral and mental fitness of the respondents could be ascertained,
according to Petitioners, the Board has discretion to hold in abeyance the
administration of the Hippocratic Oath and the issuance of the certificates
to them. The writ of mandamus does not lie to compel performance of an
act which is not duly authorized.
The respondents nevertheless argue that under Section 20, the Board shall
not issue a certificate of registration only in the following instances: (1) to
any candidate who has been convicted by a court of competent jurisdiction
of any criminal offense involving moral turpitude; (2) or has been found
guilty of immoral or dishonorable conduct after the investigation by the
Board; or (3) has been declared to be of unsound mind.They aver that
none of these circumstances are present in their case.
Petitioners reject respondents argument.We are informed that in Board
Resolution No. 26,29 dated July 21, 1993, the Board resolved to file charges
against the examinees from Fatima College of Medicine for immorality,
dishonesty, fraud, and deceit in the Obstetrics-Gynecology and
Biochemistry examinations. It likewise sought to cancel the examination

results obtained by the examinees from the Fatima College.
another case worth noting, we upheld the power of the State to upgrade
the selection of applicants into medical schools through admission tests. 39
Section 830 of Rep. Act No. 2382 prescribes, among others, that a person
who aspires to practice medicine in the Philippines, must have satisfactorily
passed the corresponding Board Examination. Section 22, in turn, provides
that the oath may only be administered to physicians who qualified in the
examinations. The operative word here is satisfactorily, defined as
sufficient to meet a condition or obligation or capable of dispelling doubt or
ignorance.31 Gleaned from Board Resolution No. 26, the licensing authority
apparently did not find that the respondents satisfactorily passed the
licensure examinations. The Board instead sought to nullify the
examination results obtained by the Respondents.
It must be stressed, nevertheless, that the power to regulate the exercise

of a profession or pursuit of an occupation cannot be exercised by the
State or its agents in an arbitrary, despotic, or oppressive manner. A
political body that regulates the exercise of a particular privilege has the
authority to both forbid and grant such privilege in accordance with certain
conditions.Such conditions may not, however, require giving up ones
constitutional rights as a condition to acquiring the license. 40 Under the
view that the legislature cannot validly bestow an arbitrary power to grant
or refuse a license on a public agency or officer, courts will generally strike
down license legislation that vests in public officials discretion to grant or
refuse a license to carry on some ordinarily lawful business, profession, or
activity without prescribing definite rules and conditions for the guidance of
said officials in the exercise of their power.41
2.On the Right Of The Respondents To Be Registered As Physicians
cralawred
cralawred
The function of mandamus is not to establish a right but to enforce one

that has been established by law. If no legal right has been violated, there
can be no application of a legal remedy, and the writ ofmandamus is a
legal remedy for a legal right.32 There must be a well-defined, clear and
certain legal right to the thing demanded.33 It is long established rule that
a license to practice medicine is a privilege or franchise granted by the
government.34
cralawred
It is true that this Court has upheld the constitutional right 35 of every
citizen to select a profession or course of study subject to a fair,
reasonable, and equitable admission and academic requirements.36 But like
all rights and freedoms guaranteed by the Charter, their exercise may be
so regulated pursuant to the police power of the State to safeguard health,
morals, peace, education, order, safety, and general welfare of the
people.37 Thus, persons who desire to engage in the learned professions
requiring scientific or technical knowledge may be required to take an
examination as a prerequisite to engaging in their chosen careers.This
regulation takes particular pertinence in the field of medicine, to protect
the public from the potentially deadly effects of incompetence and
ignorance among those who would practice medicine.In a previous case, it
may be recalled, this Court has ordered the Board of Medical Examiners to
annul both its resolution and certificate authorizing a Spanish subject, with
the degree of Licentiate in Medicine and Surgery from the University of
Barcelona, Spain, to practice medicine in the Philippines, without first
passing the examination required by the Philippine Medical Act. 38 In
In the present case, the aforementioned guidelines are provided for in Rep.
Act No. 2382, as amended, which prescribes the requirements for
admission to the practice of medicine, the qualifications of candidates for
the board examinations, the scope and conduct of the examinations, the
grounds for denying the issuance of a physicians license, or revoking a
license that has been issued. Verily, to be granted the privilege to practice
medicine, the applicant must show that he possesses all the qualifications
and none of the disqualifications.Furthermore, it must appear that he has
fully complied with all the conditions and requirements imposed by the law
and the licensing authority. Should doubt taint or mar the compliance as
being less than satisfactory, then the privilege will not issue. For said
privilege is distinguishable from a matter of right, which may be demanded
if denied. Thus, without a definite showing that the aforesaid requirements
and conditions have been satisfactorily met, the courts may not grant the
writ of mandamus to secure said privilege without thwarting the legislative
will.
3.On the Ripeness of the Petition for Mandamus
Lastly, the petitioners herein contend that the Court of Appeals should
have dismissed the petition formandamus below for being premature.They
argue that the administrative remedies had not been exhausted. The
records show that this is not the first time that petitioners have sought the
dismissal of Civil Case No. 93-66530. This issue was raised in G.R. No.
115704, which petition we referred to the Court of Appeals, where it was

docketed as CA-G.R. SP No. 34506. On motion for reconsideration in CAG.R. SP No. 34506, the appellate court denied the motion to dismiss on the
ground that the prayers for the nullification of the order of the trial court
and the dismissal of Civil Case No. 93-66530 were inconsistent reliefs. In
G.R. No. 118437, the petitioners sought to nullify the decision of the Court
of Appeals in CA-G.R. SP No. 34506 insofar as it did not order the
dismissal of Civil Case No. 93-66530. In our consolidated decision, dated
July 9, 1998, in G.R. NOS. 117817 & 118437, this Court speaking through
Justice Bellosillo opined that:
Indeed, the issue as to whether the Court of Appeals erred in not ordering
the dismissal of Civil Case No. 93-66530 sought to be resolved in the
instant petition has been rendered meaningless by an event taking place
prior to the filing of this petition and denial thereof should follow as a
logical consequence.42 There is no longer any justiciable controversy so
that any declaration thereon would be of no practical use or value. 43 It
should be recalled that in its decision of 19 December 1994 the trial court
granted the writ of mandamus prayed for by private respondents, which
decision was received by petitioners on 20 December 1994. Three (3) days
after, or on 23 December 1994, petitioners filed the instant petition. By
then, the remedy available to them was to appeal the decision to the Court
of Appeals, which they in fact did, by filing a notice of appeal on 26
December 1994.44
cralawred
The petitioners have shown no cogent reason for us to reverse the

aforecited ruling. Nor will their reliance upon the doctrine of the exhaustion
of administrative remedies in the instant case advance their cause any.
Section 2645 of the Medical Act of 1959 provides for the administrative and
judicial remedies that respondents herein can avail to question Resolution
No. 26 of the Board of Medicine, namely: (a) appeal the unfavorable
judgment to the PRC; (b) should the PRC ruling still be unfavorable, to
elevate the matter on appeal to the Office of the President; and (c) should
they still be unsatisfied, to ask for a review of the case or to bring the case
to court via a special civil action of certiorari .Thus, as a
rule,mandamus will not lie when administrative remedies are still
available.46 However, the doctrine of exhaustion of administrative remedies
does not apply where, as in this case, a pure question of law is raised. 47 On
this issue, no reversible error may, thus, be laid at the door of the
appellate court in CA-G.R. SP No. 37283, when it refused to dismiss Civil
Case No. 93-66530.
As we earlier pointed out, herein respondents Arnel V. Herrera, Fernando F.
Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan,
Fernando T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-Largoza,
Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S.
Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette C.
Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino,
Saibzur N. Edding, Derileen D. Dorado-Edding, Robert B. Sanchez, Maria
Rosario Leonor-Lacandula, Geraldine Elizabeth M. Pagilagan-Palma,
Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos, Leuvina P.
Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro
manifested to the Court of Appeals during the pendency of CA-G.R. SP No.
37283, that they were no longer interested in proceeding with the case
and moved for its dismissal insofar as they were concerned. A similar
manifestation and motion were later filed by intervenors Mary Jean I.
Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A. Salvador,
Belinda C. Rabarra, Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B.
Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan,
Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J.
Caedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D. Serrano,
Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M. Usita.
Following these manifestations and motions, the appellate court in CA-G.R.
SP No. 37283 decreed that its ruling would not apply to them. Thus,
inasmuch as the instant case is a Petition for Review of the appellate
courts ruling in CA-G.R. SP No. 37283, a decision which is inapplicable to
the aforementioned respondents will similarly not apply to them.
As to Achilles J. Peralta, Evelyn O. Ramos, Sally B. Bunagan, Rogelio B.

Ancheta, Oscar H. Padua, Jr., Evelyn D. Grajo, Valentino P. Arboleda, Carlos
M. Bernardo, Jr., Mario D. Cuaresma, Violeta C. Felipe, Percival H.
Pangilinan, Corazon M. Cruz and Samuel B. Bangoy, herein decision shall
not apply pursuant to the Orders of the trial court in Civil Case No. 9366530, dropping their names from the suit.
Consequently, this Decision is binding only on the remaining respondents,
namely: Arlene V. de Guzman, Celerina S. Navarro, Rafael I. Tolentino,
Bernardita B. Sy, Gloria T. Jularbal, Hubert S. Nazareno, Nancy J. Chavez,
Ernesto L. Cue, Herminio V. Fernandez, Jr., Maria Victoria M. Lacsamana
and Merly D. Sta. Ana, as well as the petitioners.
WHEREFORE, the instant petition is GRANTED.Accordingly,(1) the assailed
decision dated May 16, 2000, of the Court of Appeals, in CA-G.R. SP No.
37283, which affirmed the judgment dated December 19, 1994, of the
Regional Trial Court of Manila, Branch 52, in Civil Case No. 93-66530,
ordering petitioners to administer the physicians oath to herein
respondents as well as the resolution dated August 25, 2000, of the
appellate court, denying the petitioners motion for reconsideration, are
REVERSED and SET ASIDE;and (2) the writ of mandamus, issued in Civil
Case No. 93-66530, and affirmed by the appellate court in CA-G.R. SP No.
37283 is NULLIFIED AND SET ASIDE.
SO ORDERED
FIRST DIVISION
[G.R. No. L-34915. June 24, 1983.]
CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF
QUEZON CITY, Petitioners, v. HON. JUDGE VICENTE G. ERICTA as
Judge of the Court of First Instance of Rizal, Quezon City, Branch
XVIII; HIMLAYANG PILIPINO, INC., Respondents.
City Fiscal, for Petitioners.
Manuel Villaruel, Jr. and Feliciano Tumale for Respondents.
regulation but an outright confiscation. It deprives a person of his private

property without due process of law, nay, even without compensation."
SYLLABUS
1. ADMINISTRATIVE LAW; CITY ORDINANCE; REGULATING THE

ESTABLISHMENT, MAINTENANCE AND OPERATION OF PRIVATE MEMORIAL
TYPE CEMETERIES; NOT JUSTIFIABLE; CASE AT BAR. We find the stand
of the private respondent as well as the decision of the respondent Judge
to be well-founded. We quote with approval the lower courts ruling which
declared null and void Section 9 of the questioned city ordinance: "The
issue is: Is Section 9 of the ordinance in question a valid exercise of the
police power? An examination of the Charter of Quezon City (Rep. Act No.
537), does not reveal any provision that would justify the ordinance in
question except the provision granting police power to the City. Section 9
cannot be justified under the power granted to Quezon City to tax, fix the
license fee, and regulate such other business, trades, and occupation as
may he established or practised in the City (Sub-sections C, Sec. 12, R.A.
537). The power to regulate does not include the power to prohibit (People
v. Esguerra, 81 Phil. 33 Vega v. Municipal Board of Iloilo, L-6765, May 12,
1954; 39 N.J. Law, 70, Mich. 396). A fortiori, the power to regulate does
not include the power to confiscate. The ordinance in question not only
confiscates but also prohibits the operation of a memorial park cemetery,
because under Section 13 of said ordinance, Violation of the provision
thereof is punishable with a fine and/or imprisonment and that upon
conviction thereof the permit to operate and maintain a private cemetery
shall be revoked or cancelled. The confiscatory clause and the penal
provision in effect deter one from operating a memorial park cemetery.
Neither can the ordinance in question be justified under sub-section t,
Section 12 of Republic Act 537. There is nothing in the above provision
which authorizes confiscation."
2. ID.; ID.; NOT A VALID EXERCISE OF POLICE POWER. We now come

to the question whether or not Section 9 of the ordinance in question is a
valid exercise of police power. The police power of Quezon City is defined in
sub-section 00, Sec. 12, Rep. Act 537. Police power is usually exercised in
the form of mere regulation or restriction in the use of liberty or property
for the promotion of the general welfare. It does not involve the taking or
confiscation of property with the exception of a few cases where there is a
necessity to confiscate private property in order to destroy it for the
purpose of protecting the peace and order and of promoting the general
welfare as for instance, the confiscation of an illegally possessed article,
such as opium and firearms. "It seems to the court that Section 9 of
Ordinance No. 6118, Series of 1964 of Quezon City is not a mere police
3. POLITICAL LAW; POLICE POWER; DEFINITION AND CONCEPT. Police

power is defined by Freund as the power of promoting the public welfare
by restraining and regulating the use of liberty and property (Quoted in
Political Law by Taada and Carreon, V-II, p. 50). It is usually exerted in
order to merely regulate the use and enjoyment of property of the owner.
If he is deprived of his property outright, it is not taken for public use but
rather to destroy in order to promote the general welfare. In police power,
the owner does not recover from the government for injury sustained in
consequence thereof.
4. ADMINISTRATIVE LAW; CITY ORDINANCE; LACK OF REASONABLE
RELATION BETWEEN SETTING ASIDE OF 6% OF THE TOTAL AREA OF ALL
PRIVATE CEMETERIES AND THE GENERAL WELFARE. There is no
reasonable relation between the setting aside of at least six (6) percent of
the total area of all private cemeteries for charity burial grounds of
deceased paupers and the promotion of health, morals. good order, safety,
or the general welfare of the people. The ordinance is actually a taking
without compensation of a certain area from a private cemetery to benefit
paupers who are charges of the municipal corporation. Instead of building
or maintaining a public cemetery for this purpose, the city passes the
burden to private cemeteries.
5. ID.; ID.; AUTHORITY OF CITY TO PROVIDE ITS OWN PUBLIC
CEMETERIES; LAW AND PRACTICE. The expropriation without
compensation of a portion of private cemeteries is not covered by Section
12(t) of Republic Act 537, the Revised Charter of Quezon City which
empowers the city council to prohibit the burial of the dead within the
center of population of the city and to provide for their burial in a proper
place subject to the provisions of general law regulating burial grounds and
cemeteries. When the Local Government Code, Batas Pambansa Blg. 337
provides in Section 177(g) that a sangguniang panlungsod may "provide
for the burial of the dead in such place and in such manner as prescribed
by law or ordinance" it simply authorizes the city to provide its own city
owned land or to buy or expropriate private properties to construct public
cemeteries. This has been the law and practice in the past. It continues to
the present.
6. ID.; MUNICIPAL CORPORATION; GENERAL WELFARE CLAUSE; BROAD
AND LIBERAL INTERPRETATION; STRETCH INTERPRETATION NO LONGER
FEASIBLE IN THE CASE AT BAR. As a matter of fact, the petitioners rely
solely on the general welfare clause or on implied powers of the municipal
corporation, not on any express provision of law as statutory basis of their
exercise of power. The clause has always received broad and liberal
interpretation but we cannot stretch it to cover this particular taking.
Moreover, the questioned ordinance was passed after Himlayang Pilipino,
Inc. had incorporated, received necessary licenses and permits, and
commenced operating. The sequestration of six percent of the cemetery
cannot even be considered as having been impliedly acknowledged by the
private respondent when it accepted the permits to commence operations.
DECISION
GUTIERREZ, JR., J.:
This is a petition for review which seeks the reversal of the decision of the
Court of First Instance of Rizal, Branch XVIII declaring Section 9 of
Ordinance No. 6118, S-64, of the Quezon City Council null and void.
Section 9 of Ordinance No. 6118, S-64, entitled "ORDINANCE REGULATING
THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF PRIVATE
MEMORIAL TYPE CEMETERY OR BURIAL GROUND WITHIN THE
JURISDICTION OF QUEZON CITY AND PROVIDING PENALTIES FOR THE
VIOLATION THEREOF" provides:
"Sec. 9. At least six (6) percent of the total area of the memorial park
cemetery shall be set aside for charity burial of deceased persons who are
paupers and have been residents of Quezon City for at least 5 years prior
to their death, to be determined by competent City Authorities. The area
so designated shall immediately be developed and should be open for
operation not later than six months from the date of approval of the
application."
For several years, the aforequoted section of the Ordinance was not
enforced by city authorities but seven years after the enactment of the
ordinance, the Quezon City Council passed the following resolution:
Himlayang Pilipino, Inc. in writing that Section 9 of Ordinance No. 6118, S64 would be enforced.
Respondent Himlayang Pilipino reacted by filing with the Court of First
Instance of Rizal, Branch XVIII at Quezon City, a petition for declaratory
relief, prohibition and mandamus with preliminary injunction (Sp. Proc. No.
Q-16002) seeking to annul Section 9 of the Ordinance in question. The
respondent alleged that the same is contrary to the Constitution, the
Quezon City Charter, the Local Autonomy Act, and the Revised
Administrative Code.
There being no issue of fact and the questions raised being purely legal,
both petitioners and respondent agreed to the rendition of a judgment on
the pleadings. The respondent court, therefore, rendered the decision
declaring Section 9 of Ordinance No. 6118, S-64 null and void.
A motion for reconsideration having been denied, the City Government and
City Council filed the instant petition.
Petitioners argue that the taking of the respondents property is a valid and
reasonable exercise of police power and that the land is taken for a public
use as it is intended for the burial ground of paupers. They further argue
that the Quezon City Council is authorized under its charter, in the exercise
of local police power, "to make such further ordinances and resolutions not
repugnant to law as may be necessary to carry into effect and discharge
the powers and duties conferred by this Act and such as it shall deem
necessary and proper to provide for the health and safety, promote the
prosperity, improve the morals, peace, good order, comfort and
convenience of the city and the inhabitants thereof, and for the protection
of property therein."
On the other hand, respondent Himlayang Pilipino, Inc. contends that the
taking or confiscation of property is obvious because the questioned
ordinance permanently restricts the use of the property such that it cannot
be used for any reasonable purpose and deprives the owner of all
beneficial use of his property.
cralawnad
"RESOLVED by the council of Quezon assembled, to request, as it does

hereby request the City Engineer, Quezon City, to stop any further selling
and/or transaction of memorial park lots in Quezon City where the owners
thereof have failed to donate the required 6% space intended for paupers
burial."
Pursuant to this petition, the Quezon City Engineer notified respondent
The respondent also stresses that the general welfare clause is not
available as a source of power for the taking of the property in this case
because it refers to "the power of promoting the public welfare by
restraining and regulating the use of liberty and property." The respondent
points out that if an owner is deprived of his property outright under the
States police power, the property is generally not taken for public use but
is urgently and summarily destroyed in order to promote the general
welfare. The respondent cites the case of a nuisance per se or the
destruction of a house to prevent the spread of a conflagration.
cralawnad
We find the stand of the private respondent as well as the decision of the
respondent Judge to be well-founded. We quote with approval the lower
courts ruling which declared null and void Section 9 of the questioned city
ordinance:
"The issue is: Is Section 9 of the ordinance in question a valid exercise of

the police power?
"An examination of the Charter of Quezon City (Rep. Act No. 5371), does
not reveal any provision that would justify the ordinance in question except
the provision granting police power to the City. Section 9 cannot be
justified under the power granted to Quezon City to tax, fix the license fee,
and regulate such other business, trades, and occupation as may be
established or practiced in the City. (Sub-sections C, Sec. 12, R.A. 537).
"The power to regulate does not include the power to prohibit (People v.
Esguerra, 81 Phil. 33, Vega v. Municipal Board of Iloilo, L-6765, May 12,
1954; 39 N.J. Law, 70, Mich. 396). A fortiori, the power to regulate does
not include the power to confiscate. The ordinance in question not only
confiscates but also prohibits the operation of a memorial park cemetery,
because under Section 13 of said ordinance, Violation of the provision
thereof is punishable with a fine and/or imprisonment and that upon
conviction thereof the permit to operate and maintain a private cemetery
shall be revoked or cancelled. The confiscatory clause and the penal
provision in effect deter one from operating a memorial park cemetery.
Neither can the ordinance in question be justified under sub-section t,
Section 12 of Republic Act 537 which authorizes the City Council to
"prohibit the burial of the dead within the center of population of the city
and provide for their burial in such proper place and in such manner as the
council may determine, subject to the provisions of the general law
regulating burial grounds and cemeteries and governing funerals and
disposal of the dead.(Sub-sec. (t), Sec. 12, Rep. Act No. 537).
There is nothing in the above provision which authorizes confiscation or as
euphemistically termed by the respondents, donation.
We now come to the question whether or not Section 9 of the ordinance in
question is a valid exercise of police power. The police power of Quezon
City is defined in sub-section 00, Sec. 12, Rep. Act 537 which reads as
follows:
"(00) To make such further ordinance and regulations not repugnant to law
as may be necessary to carry into effect and discharge the powers and
duties conferred by this act and such as it shall deem necessary and
proper to provide for the health and safety, promote, the prosperity,
improve the morals, peace, good order, comfort and convenience of the
city and the inhabitants thereof, and for the protection of property therein;
and enforce obedience thereto with such lawful fines or penalties as the
City Council may prescribe under the provisions of subsection (jj) of this
section.
"We start the discussion with a restatement of certain basic principles.
Occupying the forefront in the bill of rights is the provision which states
that no person shall be deprived of life, liberty or property without due
process of law (Art. III, Section 1 subparagraph 1, Constitution).
"On the other hand, there are three inherent powers of government by
which the state interferes with the property rights, namely (1) police
power, (2) eminent domain, (3) taxation. These are said to exist
independently of the Constitution as necessary attributes of sovereignty.
"Police power is defined by Freund as the power of promoting the public
welfare by restraining and regulating the use of liberty and property
(Quoted in Political Law by Taada and Carreon, V-II, p. 50). It is usually
exerted in order to merely regulate the use and enjoyment of property of
the owner. If he is deprived of his property outright, it is not taken for
public use but rather to destroy in order to promote the general welfare. In
police power, the owner does not recover from the government for injury
sustained in consequence thereof. (12 C.J. 623). It has been said that
police power is the most essential of government powers, at times the
most insistent, and always one of the least limitable of the powers of
government (Ruby v. Provincial Board, 39 Phil. 660; Ichong v. Hernandez,
L-7995, May 31, 1957). This power embraces the whole system of public
regulation (U.S. v. Linsuya Fan, 10 Phil. 104). The Supreme Court has said
that police power is so far-reaching in scope that it has almost become
impossible to limit its sweep. As it derives its existence from the very
existence of the state itself, it does not need to be expressed or defined in
its scope. Being coextensive with self-preservation and survival itself, it is
the most positive and active of all governmental processes, the most
essential, insistent and illimitable. Especially it is so under the modern
democratic framework where the demands of society and nations have
multiplied to almost unimaginable proportions. The field and scope of
police power have become almost boundless, just as the fields of public
interest and public welfare have become almost all embracing and have
transcended human foresight. Since the Courts cannot foresee the needs
and demands of public interest and welfare, they cannot delimit
beforehand the extent or scope of the police power by which and through
which the state seeks to attain or achieve public interest and welfare.
(Ichong v. Hernandez, L-7995, May 31, 1957).
"The police power being the most active power of the government and the
due process clause being the broadest limitation on governmental power,
the conflict between this power of government and the due process clause
of the Constitution is oftentimes inevitable.
lightly set aside legislative action when there is not a clear invasion of
personal or property rights under the guise of police regulation. (U.S. v.
Salaveria [1918], 39 Phil. 102, at p. 111. There was an affirmation of the
presumption of validity of municipal ordinance as announced in the leading
Salaveria decision in Eboa v. Daet, [1950] 85 Phil. 369.).
We have likewise considered the principles earlier stated in Case v. Board
of Health supra:
"It will be seen from the foregoing authorities that police power is usually
exercised in the form of mere regulation or restriction in the use of liberty
or property for the promotion of the general welfare. It does not involve
the taking or confiscation of property with the exception of a few cases
where there is a necessity to confiscate private property in order to destroy
it for the purpose of protecting the peace and order and of promoting the
general welfare as for instance, the confiscation of an illegally possessed
article, such as opium and firearms.
"It seems to the court that Section 9 of Ordinance No. 6118, Series of
1964 of Quezon City is not a mere police regulation but an outright
confiscation. It deprives a person of his private property without due
process of law, nay, even without compensation."
In sustaining the decision of the respondent court, we are not unmindful of

the heavy burden shouldered by whoever challenges the validity of duly
enacted legislation, whether national or local. As early as 1913, this Court
ruled in Case v. Board of Health (24 Phil. 250) that the courts resolve
every presumption in favor of validity and, more 90, where the municipal
corporation asserts that the ordinance was enacted to promote the
common good and general welfare.
chanroble s law library : red
". . . Under the provisions of municipal charters which are known as the
general welfare clauses, a city, by virtue of its police power, may adopt
ordinances to secure the peace, safety, health, morals and the best and
highest interests of the municipality. It is a well-settled principle, growing
out of the nature of well-ordered and civilized society, that every holder of
property, however absolute and unqualified may be his title, holds it under
the implied liability that his use of it shall not be injurious to the equal
enjoyment of others having an equal right to the enjoyment of their
property, nor injurious to the rights of the community. All property in the
state is held subject to its general regulations, which are necessary to the
common good and general welfare. Rights of property, like all other social
and conventional rights, are subject to such reasonable limitations in their
enjoyment as shall prevent them from being injurious, and to such
reasonable restraints and regulations, established by law, as the
legislature, under the governing and controlling power vested in them by
the constitution, may think necessary and expedient. The state, under the
police power, is possessed with plenary power to deal with all matters
relating to the general health, morals, and safety of the people, so long as
it does not contravene any positive inhibition of the organic law and
providing that such power is not exercised in such a manner as to justify
the interference of the courts to prevent positive wrong and oppression."
cralaw virtua1aw
In the leading case of Ermita-Malate Hotel and Motel Operators Association

Inc. v. City Mayor of Manila (20 SCRA 849) the Court speaking through the
then Associate Justice and now Chief Justice Enrique M. Fernando
stated:
"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. . . . The action of the elected
representatives of the people cannot be lightly set aside. The councilors
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. . . . The Judiciary should not
library
but find them not applicable to the facts of this case.

There is no reasonable relation between the setting aside of at least six (6)
percent of the total area of all private cemeteries for charity burial grounds
of deceased paupers and the promotion of health, morals, good order,
safety, or the general welfare of the people. The ordinance is actually a
taking without compensation of a certain area from a private cemetery to
benefit paupers who are charges of the municipal corporation. Instead of
building or maintaining a public cemetery for this purpose, the city passes
the burden to private cemeteries.
chanrobles law library
The expropriation without compensation of a portion of private cemeteries

is not covered by Section 12(t) of Republic Act 537, the Revised Charter of
Quezon City which empowers the city council to prohibit the burial of the
dead within the center of population of the city and to provide for their
burial in a proper place subject to the provisions of general law regulating
burial grounds and cemeteries. When the Local Government Code, Batas
Pambansa Blg. 337 provides in Section 177 (q) that a Sangguniang
panlungsod may "provide for the burial of the dead in such place and in
such manner as prescribed by law or ordinance" it simply authorizes the
city to provide its own city owned land or to buy or expropriate private
properties to construct public cemeteries. This has been the law and
practice in the past. It continues to the present. Expropriation, however,
requires payment of just compensation. The questioned ordinance is
different from laws and regulations requiring owners of subdivisions to set
aside certain areas for streets, parks, playgrounds, and other public
facilities from the land they sell to buyers of subdivision lots. The
necessities of public safety, health, and convenience are very clear from
said requirements which are intended to insure the development of
communities with salubrious and wholesome environments. The
beneficiaries of the regulation, in turn, are made to pay by the subdivision
developer when individual lots are sold to homeowners.
As a matter of fact, the petitioners rely solely on the general welfare clause
or on implied powers of the municipal corporation, not on any express
provision of law as statutory basis of their exercise of power. The clause
has always received broad and liberal interpretation but we cannot stretch
it to cover this particular taking. Moreover, the questioned ordinance was
passed after Himlayang Pilipino, Inc. had incorporated, received necessary
licenses and permits, and commenced operating. The sequestration of six
percent of the cemetery cannot even be considered as having been
impliedly acknowledged by the private respondent when it accepted the
permits to commence operations.
WHEREFORE, the petition for review is hereby DISMISSED. The decision of
the respondent court is affirmed.
SO ORDERED
EN BANC
[G.R. No. 74457. March 20, 1987.]
RESTITUTO YNOT, Petitioner, v. INTERMEDIATE APPELLATE
COURT, THE STATION COMMANDER, INTEGRATED NATIONAL
POLICE, BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR,
BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO
CITY,Respondents.
Ramon A. Gonzales for petitioner.
DECISION
"Done in the City of Manila, this 25th day of October, in the year of Our
Lord, nineteen hundred and eighty.
CRUZ, J.:
The essence of due process is distilled in the immortal cry of Themistocles

to Alcibiades: "Strike but hear me first!" It is this cry that the petitioner
in effect repeats here as he challenges the constitutionality of Executive
Order No. 626-A.
The said executive order reads in full as follows:
"WHEREAS, the President has given orders prohibiting the interprovincial

movement of carabaos and the slaughtering of carabaos not complying
with the requirements of Executive Order No. 626 particularly with respect
to age;
"WHEREAS, it has been observed that despite such orders the violators still
manage to circumvent the prohibition against interprovincial movement of
carabaos by transporting carabeef instead; and.
"WHEREAS, in order to achieve the purposes and objectives of Executive
Order No. 626 and the prohibition against interprovincial movement of
carabaos, it is necessary to strengthen the said Executive Order and
provide for the disposition of the carabaos and carabeef subject of the
violation;.
"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do
hereby promulgate the following:
"SECTION 1. Executive Order No. 626 is hereby amended such that

henceforth, no carabao regardless of age, sex, physical condition or
purpose and no carabeef shall be transported from one province to
another. The carabao or carabeef transported in violation of this Executive
Order as amended shall be subject to confiscation and forfeiture by the
government, to be distributed to charitable institutions and other similar
institutions as the Chairman of the National Meat Inspection Commission
may see fit, in the case of carabeef, and to deserving farmers through
dispersal as the Director of Animal Industry may see fit, in the case of
carabaos.
"SECTION 2. This Executive Order shall take effect immediately.
(SGD.) FERDINAND E. MARCOS

President
Republic of the Philippines"
The petitioner had transported six carabaos in a pump boat from Masbate
to Iloilo on January 13, 1984, when they were confiscated by the police
station commander of Barotac Nuevo, Iloilo, for violation of the above
measure. 1 The petitioner sued for recovery, and the Regional Trial Court
of Iloilo City issued a writ of replevin upon his filing of a supersedeas bond
of P12,000.00. After considering the merits of the case, the court
sustained the confiscation of the carabaos and, since they could no longer
be produced, ordered the confiscation of the bond. The court also declined
to rule on the constitutionality of the executive order, as raised by the
petitioner, for lack of authority and also for its presumed validity. 2
The petitioner appealed the decision to the Intermediate Appellate Court, *
3 which upheld the trial court, ** and he has now come before us in this
petition for review on certiorari.
chanroble s.com : virtual law library
The thrust of his petition is that the executive order is unconstitutional

insofar as it authorizes outright confiscation of the carabao or carabeef
being transported across provincial boundaries. His claim is that the
penalty is invalid because it is imposed without according the owner a right
to be heard before a competent and impartial court as guaranteed by due
process. He complains that the measure should not have been presumed,
and so sustained, as constitutional. There is also a challenge to the
improper exercise of the legislative power by the former President under
Amendment No. 6 of the 1973 Constitution. 4
While also involving the same executive order, the case of Pesigan v.
Angeles 5 is not applicable here. The question raised there was the
necessity of the previous publication of the measure in the Official Gazette
before it could be considered enforceable. We imposed the requirement
then on the basis of due process of law. In doing so, however, this Court
did not, as contended by the Solicitor General, impliedly affirm the
constitutionality of Executive Order No. 626-A. That is an entirely different
matter.
This Court has declared that while lower courts should observe a becoming
modesty in examining constitutional questions, they are nonetheless not
prevented from resolving the same whenever warranted, subject only to

review by the highest tribunal. 6 We have jurisdiction under the
Constitution to "review, revise, reverse, modify or affirm on appeal
or certiorari, as the law or rules of court may provide," final judgments and
orders of lower courts in, among others, all cases involving the
constitutionality of certain measures. 7 This simply means that the
resolution of such cases may be made in the first instance by these lower
courts.
be cast in precise and unmistakable language to avoid controversies that

might arise on their correct interpretation. That is the ideal. In the case of
the due process clause, however, this rule was deliberately not followed
and the wording was purposely kept ambiguous. In fact, a proposal to
delineate it more clearly was submitted in the Constitutional Convention of
1934, but it was rejected by Delegate Jose P. Laurel, Chairman of the
Committee on the Pill of Rights, who forcefully argued against it. He was
sustained by the body. 10
And while it is true that laws are presumed to be constitutional, that

presumption is not by any means conclusive and in fact may be rebutted.
Indeed, if there be a clear showing of their invalidity, and of the need to
declare them so, then "will be the time to make the hammer fall, and
heavily," 8 to recall Justice Laurels trenchant warning. Stated otherwise,
courts should not follow the path of least resistance by simply presuming
the constitutionality of a law when it is questioned. On the contrary, they
should probe the issue more deeply, to relieve the abscess, paraphrasing
another distinguished jurist, 9 and so heal the wound or excise the
affliction.
The due process clause was kept intentionally vague so it would remain
also conveniently resilient. This was felt necessary because due process is
not, like some provisions of the fundamental law, an "iron rule" laying
down an implacable and immutable command for all seasons and all
persons. Flexibility must be the best virtue of the guaranty. The very
elasticity of the due process clause was meant to make it adapt easily to
every situation, enlarging or constricting its protection as the changing
times and circumstances may require.
Judicial power authorizes this; and when the exercise is demanded, there
should be no shirking of the task for fear of retaliation, or loss of favor, or
popular censure, or any other similar inhibition unworthy of the bench,
especially this Court.
chanroble s virtualawlibrary chanrobles.com:chanrobles.com.ph
The challenged measure is denominated an executive order but it is really

presidential decree, promulgating a new rule instead of merely
implementing an existing law. It was issued by President Marcos not for
the purpose of taking care that the laws were faithfully executed but in the
exercise of his legislative authority under Amendment No. 6. It was
provided thereunder that whenever in his judgment there existed a grave
emergency or a threat or imminence thereof or whenever the legislature
failed or was unable to act adequately on any matter that in his judgment
required immediate action, he could, in order to meet the exigency, issue
decrees, orders or letters of instruction that were to have the force and
effect of law. As there is no showing of any exigency to justify the exercise
of that extraordinary power then, the petitioner has reason, indeed, to
question the validity of the executive order. Nevertheless, since the
determination of the grounds was supposed to have been made by the
President "in his judgment," a phrase that will lead to protracted discussion
not really necessary at this time, we reserve resolution of this matter until
a more appropriate occasion. For the nonce, we confine ourselves to the
more fundamental question of due process.
It is part of the art of constitution-making that the provisions of the charter
Aware of this, the courts have also hesitated to adopt their own specific
description of due process lest they confine themselves in a legal
straitjacket that will deprive them of the elbow room they may need to
vary the meaning of the clause whenever indicated. Instead, they have
preferred to leave the import of the protection open-ended, as it were, to
be "gradually ascertained by the process of inclusion and exclusion in the
course of the decision of cases as they arise." 11 Thus, Justice Felix
Frankfurter of the U.S. Supreme Court, for example, would go no farther
than to define due process - and in so doing sums it all up as nothing
more and nothing less than "the embodiment of the sporting idea of fair
play." 12
When the barons of England extracted from their sovereign liege the
reluctant promise that that Crown would thenceforth not proceed against
the life, liberty or property of any of its subjects except by the lawful
judgment of his peers or the law of the land, they thereby won for
themselves and their progeny that splendid guaranty of fairness that is
now the hallmark of the free society. The solemn vow that King John made
at Runnymede in 1215 has since then resounded through the ages, as a
ringing reminder to all rulers, benevolent or base, that every person, when
confronted by the stern visage of the law, is entitled to have his say in a
fair and open hearing of his cause.
chanrobles.com .ph : virtual law library
The closed mind has no place in the open society. It is part of the sporting
idea of fair play to hear "the other side" before an opinion is formed or a
decision is made by those who sit in judgment. Obviously, one side is only
one-half of the question; the other half must also be considered if an
impartial verdict is to be reached based on an informed appreciation of the

issues in contention. It is indispensable that the two sides complement
each other, as unto the bow the arrow, in leading to the correct ruling after
examination of the problem not from one or the other perspective only but
in its totality. A judgment based on less that this full appraisal, on the
pretext that a hearing is unnecessary or useless, is tainted with the vice of
bias or intolerance or ignorance, or worst of all, in repressive regimes, the
insolence of power.
The minimum requirements of due process are notice and hearing 13
which, generally speaking, may not be dispensed with because they are
intended as a safeguard against official arbitrariness. It is a gratifying
commentary on our judicial system that the jurisprudence of this country is
rich with applications of this guaranty as proof of our fealty to the rule of
law and the ancient rudiments of fair play. We have consistently declared
that every person, faced by the awesome power of the State, is entitled to
"the law of the land," which Daniel Webster described almost two hundred
years ago in the famous Dartmouth College Case, 14 as "the law which
hears before it condemns, which proceeds upon inquiry and renders
judgment only after trial." It has to be so if the rights of every person are
to be secured beyond the reach of officials who, out of mistaken zeal or
plain arrogance, would degrade the due process clause into a worn and
empty catchword.
This is not to say that notice and hearing are imperative in every case for,
to be sure, there are a number of admitted exceptions. The conclusive
presumption, for example, bars the admission of contrary evidence as long
as such presumption is based on human experience or there is a rational
connection between the fact proved and the fact ultimately presumed
therefrom. 15 There are instances when the need for expeditious action
will justify omission of these requisites, as in the summary abatement of a
nuisance per se, like a mad dog on the loose, which may be killed on sight
because of the immediate danger it poses to the safety and lives of the
people. Pornographic materials, contaminated meat and narcotic drugs are
inherently pernicious and may be summarily destroyed. The passport of a
person sought for a criminal offense may be cancelled without hearing, to
compel his return to the country he has fled. 16 Filthy restaurants may be
summarily padlocked in the interest of the public health and bawdy houses
to protect the public morals. 17 In such instances, previous judicial hearing
may be omitted without violation of due process in view of the nature of
the property involved or the urgency of the need to protect the general
welfare from a clear and present danger.
power is simply defined as the power inherent in the State to regulate

liberty and property for the promotion of the general welfare. 18 By reason
of its function, it extends to all the great public needs and is described as
the most pervasive, the least limitable and the most demanding of the
three inherent powers of the State, far outpacing taxation and eminent
domain. The individual, as a member of society, is hemmed in by the police
power, which affects him even before he is born and follows him still after
he is dead from the womb to beyond the tomb in practically
everything he does or owns. Its reach is virtually limitless. It is a
ubiquitous and often unwelcome intrusion. Even so, as long as the activity
or the property has some relevance to the public welfare, its regulation
under the police power is not only proper but necessary. And the
justification is found in the venerable Latin maxims, Salus populi est
suprema lex and Sic utere tuo ut alienum non laedas, which call for the
subordination of individual interests to the benefit of the greater number.
It is this power that is now invoked by the government to justify Executive
Order No. 626-A, amending the basic rule in Executive Order No. 626,
prohibiting the slaughter of carabaos except under certain conditions. The
original measure was issued for the reason, as expressed in one of its
Whereases, that "present conditions demand that the carabaos and the
buffaloes be conserved for the benefit of the small farmers who rely on
them for energy needs." We affirm at the outset the need for such a
measure. In the face of the worsening energy crisis and the increased
dependence of our farms on these traditional beasts of burden, the
government would have been remiss, indeed, if it had not taken steps to
protect and preserve them.
A similar prohibition was challenged in United States v. Toribio, 19 where a
law regulating the registration, branding and slaughter of large cattle was
claimed to be a deprivation of property without due process of law. The
defendant had been convicted thereunder for having slaughtered his own
carabao without the required permit, and he appealed to the Supreme
Court. The conviction was affirmed. The law was sustained as a valid police
measure to prevent the indiscriminate killing of carabaos, which were then
badly needed by farmers. An epidemic had stricken many of these animals
and the reduction of their number had resulted in an acute decline in
agricultural output, which in turn had caused an incipient famine.
Furthermore, because of the scarcity of the animals and the consequent
increase in their price, cattle-rustling had spread alarmingly, necessitating
more effective measures for the registration and branding of these
animals. The Court held that the questioned statute was a valid exercise of
the police power and declared in part as follows:
The protection of the general welfare is the particular function of the police
power which both restraints and is restrained by due process. The police
"To justify the State in thus interposing its authority in behalf of the public,
it must appear, first, that the interests of the public generally, as

distinguished from those of a particular class, require such interference;
and second, that the means are reasonably necessary for the
accomplishment of the purpose, and not unduly oppressive upon
individuals. . . .
"From what has been said, we think it is clear that the enactment of the
provisions of the statute under consideration was required by `the
interests of the public generally, as distinguished from those of a particular
class and that the prohibition of the slaughter of carabaos for human
consumption, so long as these animals are fit for agricultural work or draft
purposes was a `reasonably necessary limitation on private ownership, to
protect the community from the loss of the services of such animals by
their slaughter by improvident owners, tempted either by greed of
momentary gain, or by a desire to enjoy the luxury of animal food, even
when by so doing the productive power of the community may be
measurably and dangerously affected."
In the light of the tests mentioned above, we hold with the Toribio Case
that the carabao, as the poor mans tractor, so to speak, has a direct
relevance to the public welfare and so is a lawful subject of Executive
Order No. 626. The method chosen in the basic measure is also reasonably
necessary for the purpose sought to be achieved and not unduly
oppressive upon individuals, again following the above-cited doctrine.
There is no doubt that by banning the slaughter of these animals except
where they are at least seven years old if male and eleven years old if
female upon issuance of the necessary permit, the executive order will be
conserving those still fit for farm work or breeding and preventing their
improvident depletion.
chanrobles lawlibrary : rednad
But while conceding that the amendatory measure has the same lawful
subject as the original executive order, we cannot say with equal certainty
that it complies with the second requirement, viz., that there be a lawful
method. We note that to strengthen the original measure, Executive Order
No. 626-A imposes an absolute ban not on the slaughter of the carabaos
but on their movement, providing that "no carabao regardless of age, sex,
physical condition or purpose (sic) and no carabeef shall be transported
from one province to another." The object of the prohibition escapes us.
The reasonable connection between the means employed and the purpose
sought to be achieved by the questioned measure is missing.
We do not see how the prohibition of the interprovincial transport of
carabaos can prevent their indiscriminate slaughter, considering that they
can be killed anywhere, with no less difficulty in one province than in
another. Obviously, retaining the carabaos in one province will not prevent
their slaughter there, any more than moving them to another province will
make it easier to kill them there. As for the carabeef, the prohibition is
made to apply to it as otherwise, so says executive order, it could be easily
circumvented by simply killing the animal. Perhaps so. However, if the
movement of the live animals for the purpose of preventing their slaughter
cannot be prohibited, it should follow that there is no reason either to
prohibit their transfer as, not to be flippant, dead meat.
Even if a reasonable relation between the means and the end were to be
assumed, we would still have to reckon with the sanction that the measure
applies for violation of the prohibition. The penalty is outright confiscation
of the carabao or carabeef being transported, to be meted out by the
executive authorities, usually the police only. In the Toribio Case, the
statute was sustained because the penalty prescribed was fine and
imprisonment, to be imposed by the court after trial and conviction of the
accused. Under the challenged measure, significantly, no such trial is
prescribed, and the property being transported is immediately impounded
by the police and declared, by the measure itself, as forfeited to the
government.
In the instant case, the carabaos were arbitrarily confiscated by the police
station commander, were returned to the petitioner only after he had filed
a complaint for recovery and given a supersedeas bond of P12,000.00,
which was ordered confiscated upon his failure to produce the carabaos
when ordered by the trial court. The executive order defined the
prohibition, convicted the petitioner and immediately imposed punishment,
which was carried out forthright. The measure struck at once and pounced
upon the petitioner without giving him a chance to be heard, thus denying
him the centuries-old guaranty of elementary fair play.
It has already been remarked that there are occasions when notice and
hearing may be validly dispensed with notwithstanding the usual
requirement for these minimum guarantees of due process. It is also
conceded that summary action may be validly taken in administrative
proceedings as procedural due process is not necessarily judicial only. 20
In the exceptional cases accepted, however, there is a justification for the
omission of the right to a previous hearing, to wit, the immediacy of the
problem sought to be corrected and the urgency of the need to correct it.
chanrobles
virtual lawlibrary
In the case before us, there was no such pressure of time or action calling
for the petitioners peremptory treatment. The properties involved were
not even inimical per se as to require their instant destruction. There
certainly was no reason why the offense prohibited by the executive order
should not have been proved first in a court of justice, with the accused
being accorded all the rights safeguarded to him under the Constitution.
Considering that, as we held in Pesigan v. Angeles, 21 Executive Order No.

626-A is penal in nature, the violation thereof should have been
pronounced not by the police only but by a court of justice, which alone
would have had the authority to impose the prescribed penalty, and only
after trial and conviction of the accused.
We also mark, on top of all this, the questionable manner of the disposition
of the confiscated property as prescribed in the questioned executive order.
It is there authorized that the seized property shall "be distributed to
charitable institutions and other similar institutions as the Chairman of the
National Meat Inspection Commission may see fit, in the case of carabeef,
and to deserving farmers through dispersal as the Director of Animal
Industry may see fit, in the case of carabaos." (Emphasis supplied.) The
phrase "may see fit" is an extremely generous and dangerous condition, if
condition it is. It is laden with perilous opportunities for partiality and
abuse, and even corruption. One searches in vain for the usual standard
and the reasonable guidelines, or better still, the limitations that the said
officers must observe when they make their distribution. There is none.
Their options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be chosen?
Only the officers named can supply the answer, they and they alone may
choose the grantee as they see fit, and in their own exclusive discretion.
Definitely, there is here a "roving commission," a wide and sweeping
authority that is not "canalized within banks that keep it from overflowing,"
in short, a clearly profligate and therefore invalid delegation of legislative
powers.
To sum up then, we find that the challenged measure is an invalid exercise
of the police power because the method employed to conserve the
carabaos is not reasonably necessary to the purpose of the law and, worse,
is unduly oppressive. Due process is violated because the owner of the
property confiscated is denied the right to be heard in his defense and is
immediately condemned and punished. The conferment on the
administrative authorities of the power to adjudge the guilt of the
supposed offender is a clear encroachment on judicial functions and
militates against the doctrine of separation of powers. There is, finally, also
an invalid delegation of legislative powers to the officers mentioned therein
who are granted unlimited discretion in the distribution of the properties
arbitrarily taken. For these reasons, we hereby declare Executive Order No.
626-A unconstitutional.
We agree with the respondent court, however, that the police station
commander who confiscated the petitioners carabaos is not liable in
damages for enforcing the executive order in accordance with its mandate.
The law was at that time presumptively valid, and it was his obligation, as
a member of the police, to enforce it. It would have been impertinent of

him, being a mere subordinate of the President, to declare the executive
order unconstitutional and, on his own responsibility alone, refuse to
execute it. Even the trial court, in fact, and the Court of Appeals itself did
not feel they had the competence, for all their superior authority, to
question the order we now annul.
The Court notes that if the petitioner had not seen fit to assert and protect
his rights as he saw them, this case would never have reached us and the
taking of his property under the challenged measure would have become a
fait accompli despite its invalidity. We commend him for his spirit. Without
the present challenge, the matter would have ended in that pump boat in
Masbate and another violation of the Constitution, for all its obviousness,
would have been perpetrated, allowed without protest, and soon forgotten
in the limbo of relinquished rights.
chanrobles law library : red
The strength of democracy lies not in the rights it guarantees but in the
courage of the people to invoke them whenever they are ignored or
violated. Rights are but weapons on the wall if, like expensive tapestry, all
they do is embellish and impress. Rights, as weapons, must be a promise
of protection. They become truly meaningful, and fulfill the role assigned to
them in the free society, if they are kept bright and sharp with use by
those who are not afraid to assert them.
WHEREFORE, Executive Order No. 626-A is hereby declared
unconstitutional. Except as affirmed above, the decision of the Court of
Appeals is reversed. The supersedeas bond is cancelled and the amount
thereof is ordered restored to the petitioner. No costs.
SO ORDERED
EN BANC
[G.R. No. 118295. May 2, 1997.]
WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as
members of the Philippine Senate and as taxpayers; GREGORIO
ANDOLANA and JOKER ARROYO as members of the House of
Representatives and as taxpayers; NICANOR P. PERLAS and
HORACIO R. MORALES, both as taxpayers: CIVIL LIBERTIES
UNION, NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION,
CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, LIKASKAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL
RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG
MAGBUBUKID NG PILIPINAS, INC., and PHILIPPINE PEASANT
INSTITUTE, in representation of various taxpayers and as nongovernmental organizations, Petitioners, v. EDGARDO ANGARA,
ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON
ALVAREZ, AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI
GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA MACAPAGALARROYO, ORLANDO MERCADO, BLAS OPLE, JOHN OSMEA,
SANTANINA RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO
TATAD and FREDDIE WEBB, in their respective capacities as
members of the Philippine Senate who concurred in the ratification
by the President of the Philippines of the Agreement Establishing
the World Trade Organization; SALVADOR ENRIQUEZ, in his
capacity as Secretary of Budget and Management; CARIDAD
VALDEHUESA, in her capacity as National Treasurer; RIZALINO
NAVARRO, in his capacity as Secretary of Trade and Industry;
ROBERTO SEBASTIAN, in his capacity as Secretary of Agriculture;
ROBERTO DE OCAMPO, in his capacity as Secretary of Finance;
ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs;
and TEOFISTO T. GUINGONA, in his capacity as Executive
Secretary,Respondents.
Abelardo T . Domondon, for Petitioners.
The Solicitor General for Respondents.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; ESTOPPEL, SUBJECT TO WAIVER. The

matter of estoppel will not be taken up because this defense is waivable
and the respondents have effectively, waived it by not pursuing it in any of
their pleadings; in any event, this issue, even if ruled in respondents favor,
will not cause the petitions dismissal as there are petitioners other than
the two senators, who are not vulnerable to the defense of estoppel.
2. ID.; ID.; PARTIES; LOCUS PROBANDI; SUBJECT TO WAIVER. During
its deliberations on the case, the Court noted that the respondents did not
question the locus standi of petitioners. Hence, they are also deemed to
have waived the benefit of such issue. They probably realized that grave
constitutional issues, expenditures of public funds and serious international
commitments of the nation are involved here, and that transcendental
public interest requires that the substantive issues be met head on and
decided on the merits, rather than skirted or deflected by procedural
matters.
3. ID.; ID.; PETITION SEEKING TO NULLIFY ACT OF SENATE ON GROUND

THAT IT CONTRAVENES THE CONSTITUTION, A JUSTICIABLE QUESTION.
In seeking to nullify an act of the Philippine Senate on the ground that it
contravenes the Constitution, the petition no doubt raises a justiciable
controversy. Where an action of the legislative branch is seriously alleged
to have infringed the Constitution, it becomes not only the right but in fact
the duty of the judiciary to settle the dispute. "The question thus posed is
judicial rather than political. The duty (to adjudicate) remains to assure
that the supremacy of the Constitution is upheld." Once a "controversy as
to the application or interpretation of a constitutional provision is raised
before this Court (as in the instant case), it becomes a legal issue which
the Court is bound by constitutional mandate to decide."
4. ID.; SUPREME COURT; JUDICIAL POWER; SCOPE. The jurisdiction of

this Court to adjudicate the matters raised in the petition is clearly set out
in the 1987 Constitution, as follows: "Judicial power includes the duty of
the courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality, of the
government." The foregoing text emphasizes the judicial departments
duty and power to strike down grave abuse of discretion on the part of any
branch or instrumentality, of government including Congress. It is an
innovation in our political law. As explained by former Chief Justice Roberto
Concepcion, "the judiciary is the final arbiter on the question of whether or
not a branch of government or any of its officials has acted without
jurisdiction or in excess of jurisdiction or so capriciously, as to constitute an
abuse of discretion amounting to excess of jurisdiction. This is not only a
judicial power but a duty to pass judgment on matters of this nature." As
this Court has repeatedly and firmly emphasized in many cases, it will not
shirk, digress from or abandon its sacred duty and authority to uphold the
Constitution in matters that involve grave abuse of discretion brought
before it in appropriate cases, committed by any officer, agency,
instrumentality or department of the government.
5. ID.; SPECIAL CIVIL ACTIONS; CERTIORARI, PROHIBITION AND
MANDAMUS; APPROPRIATE REMEDIES TO REVIEW ACTS OF LEGISLATIVE
AND EXECUTIVE OFFICIALS. Certiorari, prohibition and mandamus are
appropriate remedies to raise constitutional issues and to review and/or
prohibit/nullify, when proper, acts of legislative and executive officials.
6. POLITICAL LAW; CONSTITUTION; DECLARATION OF PRINCIPLES AND
STATE POLICIES; AIDS OR GUIDES IN THE EXERCISE OF JUDICIAL AND
LEGISLATIVE POWERS. By its very title, Article II of the Constitution is a
"declaration of principles and state policies." The counterpart of this article

in the 1935 Constitution is called the "basic political creed of the nation" by
Dean Vicente Sinco. These principles in Article II are not intended to be
self-executing principles ready for enforcement through the courts. They
are used by the judiciary as aids or as guides in the exercise of its power
of judicial review, and by the legislature in its enactment of laws. As held
in the leading case of Kilosbayan, Incorporated v. Morato, the principles
and state policies enumerated in Article II and some sections of Article XII
are not "self-executing provisions, the disregard of which can give rise to a
cause of action in the courts. They do not embody judicially enforceable
constitutional rights but guidelines for legislation."
7. ID.; ID.; THOUGH IT MANDATES A BIAS IN FAVOR OF FILIPINO GOODS,

SERVICES, LABOR AND ENTERPRISES, IT RECOGNIZES THE NEED FOR
BUSINESS EXCHANGE WITH THE REST OF THE WORLD. While the
Constitution indeed mandates a bias in favor of Filipino goods, services,
labor and enterprises, at the same time, it recognizes the need for
business exchange with the rest of the world on the bases of equality and
reciprocity and limits protection of Filipino enterprises only against foreign
competition and trade practices that are unfair. In other words, the
Constitution did not intend to pursue an isolationist policy. It did not shut
out foreign investments, goods and services in the development of the
Philippine economy. While the Constitution does not encourage the
unlimited entry of foreign goods, services and investments into the
country, it does not prohibit them either. In fact, it allows an exchange on
the basis of equality and reciprocity, frowning only on foreign competition
that is unfair.
8. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; JOINING THE
WORLD TRADE ORGANIZATION, NOT A GRAVE ABUSE OF DISCRETION.
The basic principles underlying the WTO Agreement recognize the need of
developing countries like the Philippines to "share in the growth in
international trade commensurate with the needs of their economic
development." GATT has provided built-in protection from unfair foreign
competition and trade practices including anti-dumping measures,
countervailing measures and safeguards against import surges. Where
local businesses are jeopardized by unfair foreign competition, the
Philippines can avail of these measures. There is hardly therefore any basis
for the statement that under the WTO, local industries and enterprises will
all be wiped out and that Filipinos will be deprived of control of the
economy. Quite the contrary, the weaker situations of developing nations
like the Philippines have been taken into account; thus, there would be no
basis to say that in joining the WTO, the respondents have gravely abused
their discretion. True, they have made a bold decision to steer the ship of
state into the yet uncharted sea of economic liberalization. But such
decision cannot be set aside on the ground of grave abuse of discretion

simply because we disagree with it or simply because we believe only in
other economic policies. As earlier stated, the Court in taking jurisdiction of
this case will not pass upon the advantages and disadvantages of trade
liberalization as an economic policy. It will only, perform its constitutional
duty of determining whether the Senate committed grave abuse of
discretion.
9. POLITICAL LAW; CONSTITUTION; DECLARATION OF PRINCIPLES AND
STATE POLICIES; POLICE OF "SELF-RELIANT AND INDEPENDENT
NATIONAL ECONOMY" DOES NOT RULE OUT ENTRY OF FOREIGN
INVESTMENTS, GOODS AND SERVICES. The constitutional policy of a
"self-reliant and independent national economy" does not necessarily rule
out the entry, of foreign investments, goods and services. It contemplates
neither "economic seclusion" nor "mendicancy in the international
community."
10. POLITICAL LAW; INTERNATIONAL LAW; WORLD TRADE LAW

ORGANIZATION/GENERAL AGREEMENT ON TARIFFS AND TRADE;
RELIANCE ON "MOST FAVORED NATIONS", CONSTITUTIONAL. The WTO
reliance on "most favored nation", "national treatment", and "trade without
discrimination" cannot be struck down as unconstitutional as in fact they
are rules of equality and reciprocity, that apply to all WTO members. Aside
from envisioning a trade policy based on "equality and reciprocal", the
fundamental law encourages industries that are "competitive in both
domestic and foreign markets," thereby demonstrating a clear policy
against a sheltered domestic trade environment, but one in favor of the
gradual development of robust industries that can compete with the best in
the foreign markets. Indeed, Filipino managers and Filipino enterprises
have shown capability and tenacity to compete internationally. And given a
free trade environment, Filipino entrepreneurs and managers in Hongkong
have demonstrated the Filipino capacity to grow and to prosper against the
best offered under a policy of laissez faire.
11. REMEDIAL LAW; ACTIONS; QUESTIONS INVOLVING "JUDGMENT
CALLS", NOT SUBJECT TO JUDICIAL REVIEW. Will adherence to the WTO
treaty bring this ideal (of favoring the general welfare) to reality? Will
WTO/GATT succeed in promoting the Filipinos general welfare because it
will as promised by its promoters expand the countrys exports and
generate more employment? Will it bring more prosperity, employment,
purchasing power and quality products at the most reasonable rates to the
Filipino public? The responses to these questions involve "judgment calls"
by our policy makers, for which they are answerable to our people during
appropriate electoral exercises. Such questions and the answers thereto
are not subject to judicial pronouncements based on grave abuse of
discretion.
12. POLITICAL LAW; SOVEREIGNTY; SUBJECT TO RESTRICTIONS AND
LIMITATIONS VOLUNTARILY AGREED TO BY THE STATE; CASE AT BAR.
While sovereignty has traditionally been deemed absolute and allencompassing on the domestic level, it is however subject to restrictions
and limitations voluntarily agreed to by the Philippines, expressly or
impliedly, as a member of the family of nations. In its Declaration of
Principles and State Policies, the Constitution "adopts the generally
accepted principles of international law as part of the law of the land, and
adheres to the policy of peace, equality, justice, freedom, cooperation and
amity, with all nations." By the doctrine of incorporation, the country is
bound by generally accepted principles of international law, which are
considered to be automatically part of our own laws. One of the oldest and
most fundamental rules in international law is pacta sunt servanda
international agreements must be performed in good faith. "A treaty
engagement is not a mere moral obligation but creates a legally binding
obligation on the parties . . . A state which has contracted valid
international obligations is bound to make in its legislations such
modifications as may be necessary to ensure the fulfillment of the
obligations undertaken."
13. ID.; ID.; ID.; ID. When the Philippines joined the United Nations as
one of its 51 charter members, it consented to restrict its sovereign rights
under the "concept of sovereignty as auto-limitation." Under Article 2 of
the UN Charter," (a)ll members shall give the United Nations every
assistance in any action it takes in accordance with the present Charter,
and shall refrain from giving assistance to any state against which the
United Nations is taking preventive or enforcement action." Apart from the
UN Treaty, the Philippines has entered into many other international pacts
both bilateral and multilateral that involve limitations on Philippine
sovereignty the Philippines has effectively agreed to limit the exercise of its
sovereign powers of taxation, eminent domain and police power. The
underlying consideration in this partial surrender of sovereignty is the
reciprocal commitment of the other contracting states in granting the same
privilege and immunities to the Philippines, its officials and its citizens. The
same reciprocity characterizes the Philippine commitments under WTOGATT. The point is that, as shown by the foregoing treaties, a portion of
sovereignty may be waived without violating the Constitution, based on the
rationale that the Philippines "adopts the generally accepted principles of
international law as part of the law of the land and adheres to the policy of
. . . cooperation and amity with all nations."
14. ID.; ID.; ID.; WORLD TRADE ORGANIZATION; PARAGRAPH 1, ARTICLE

34 OF THE GENERAL PROVISIONS AND BASIC PRINCIPLES OF THE
AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY

RIGHTS (TRIPS); DOES NOT INTRUDE ON THE POWER OF THE SUPREME
COURT TO PROMULGATE RULES ON PLEADING, PRACTICE AND
PROCEDURES. Petitioners aver that paragraph 1, Article 34 (Process
Patents: Burden of Proof) of the General Provisions and Basic Principles of
the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) intrudes on the power of the Supreme Court to promulgate rules
concerning pleading, practice and procedures. A WTO Member is required
to provide a rule of disputable (note the words "in the absence of proof to
the contrary") presumption that a product shown to be identical to one
produced with the use of a patented process shall be deemed to have been
obtained by the (illegal) use of the said patented process, (1) where such
product obtained by the patented product is new, or (2) where there is
"substantial likelihood" that the identical product was made with the use of
the said patented process but the owner of the patent could not determine
the exact process used in obtaining such identical product. Hence, the
"burden of proof" contemplated by Article 34 should actually be understood
as the duty of the alleged patent infringer to overthrow such presumption.
Such burden, properly understood, actually refers to the "burden of
evidence" (burden of going forward) placed on the producer of the identical
(or fake) product to show that his product was produced without the use of
the patented process. The foregoing notwithstanding, the patent owner still
has the "burden of proof" since, regardless of the presumption provided
under paragraph 1 of Article 34, such owner still has to introduce evidence
of the existence of the alleged identical product, the fact that it is
"identical" to the genuine one produced by the patented process and the
fact of "newness" of the genuine product was made by the patented
process. Moreover, it should be noted that the requirement of Article 34 to
provide a disputable presumption applies only if (1) the product obtained
by the patented process is NEW or (2) there is a substantial likelihood that
the identical product was made by the process and the process owner has
not been able through reasonable effort to determine the process used.
Where either of these two provisos does not obtain, members shall be free
to determine the appropriate method of implementing the provisions of
TRIPS within their own internal systems and processes. By and large, the
arguments adduced in connection with our disposition of the third issue
derogation of a legislative power will apply to this fourth issue also.
Suffice it to say that the reciprocity clause more than justifies such
intrusion, if any actually exists. Besides, Article 34 does not contain an
unreasonable burden, consistent as it is with due process and the concept
of adversarial dispute settlement inherent in our judicial system. So too,
since the Philippine is a signatory to most international conventions on
patents, trademarks and copyrights, the adjustments in legislation and
rules of procedure will not be substantial.
15. ID.; ID.; ID.; ID.; MINISTERIAL DECLARATION AND DECISIONS AND
THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES, NOT
SUBJECT TO CONCURRENCE BY THE SENATE. "A final act, sometimes
called protocol de cloture, is an instrument which records the winding up of
the proceedings of a diplomatic conference and usually includes a
reproduction of the texts of treaties, conventions, recommendations and
other acts agreed upon and signed by the plenipotentiaries attending the
conference." It is not the treaty itself. It is rather a summary of the
proceedings of a protracted conference which may have taken place over
several years. The assailed Senate Resolution No. 97 expressed
concurrence in exactly what the Final Act required from its signatories,
namely, concurrence of the Senate in the WTO Agreement. The Ministerial
Declarations and Decisions were deemed adopted without need for
ratification. They were approved by the ministers by virtue of Article XXV:
1 of GATT which provides that representatives of the members can meet
"to give effect to those provision of this Agreement which invoke joint
action, and generally with a view to facilitating the operation and
furthering the objectives of this Agreement." The Understanding on
Commitments in Financial Services also approved in Marrakesh does not
apply to the Philippines. It applies only to those 27 Members which "have
indicated in their respective schedules of commitments on standstill,
elimination of monopoly, expansion of operation of existing financial
service suppliers, temporary entry of personnel, free transfer and
processing of information, and national treatment with respect to access to
payment, clearing systems and refinancing available in the normal course
of business."
16. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; RESORT

THERETO ON GROUND OF GRAVE ABUSE OF DISCRETION AVAILABLE
ONLY WHERE THERE IS NO PLAIN, SPEEDY AND ADEQUATE REMEDY IN
THE ORDINARY COURSE OF LAW. Procedurally. a writ
of certiorari grounded on grave abuse of discretion may be issued by the
Court under Rule 65 of the Rules of Court when it is amply shown that
petitioners have no other plain, speedy and adequate remedy in the
ordinary course of law.
17. ID.; ID.; ID.; GRAVE ABUSE OF DISCRETION, CONSTRUED. By
grave abuse of discretion is meant such capricious and whimsical exercise
of judgment as is equivalent to lack of jurisdiction. Mere abuse of
discretion is not enough. It must be grave abuse of discretion as when the
power is exercised in an arbitrary or despotic manner by reason of passion
or personal hostility, and must be so patent and so gross as to amount to
an evasion of a positive duty or to a virtual refusal to perform the duty,
enjoined or to act at all in contemplation of law. Failure on the part of the
petitioner to show grave abuse of discretion will result in the dismissal of
the petition.
18. ID.; ID.; ID.; CONCURRENCE BY THE SENATE IN THE WORLD TRADE
ORGANIZATION, NOT A GRAVE ABUSE OF DISCRETION. In rendering
this Decision, this Court never forgets that the Senate, whose act is under
review, is one of two sovereign houses of Congress and is thus entitled to
great respect in its actions. It is itself a constitutional body independent
and coordinate, and thus its actions are presumed regular and done in
good faith. Unless convincing proof and persuasive arguments are
presented to overthrow such presumptions, this Court will resolve every
doubt in its favor. Using the foregoing well-accepted definition of grave
abuse of discretion and the presumption of regularity in the Senates
processes, this Court cannot find any cogent reason to impute grave abuse
of discretion to the Senates exercise of its power of concurrence in the
WTO Agreement granted it by Sec. 21 of Article VII of the Constitution.
That the Senate, after deliberation and voting, voluntarily and
overwhelmingly gave its consent to the WTO Agreement thereby making it
"a part of the law of the land" is a legitimate exercise of its sovereign duty
and power. We find no "patent and gross" arbitrariness or despotism "by
reason of passion or personal hostility" in such exercise. It is not
impossible to surmise that this Court, or at least some of its members,
may even agree with petitioners that it is more advantageous to the
national interest to strike down Senate Resolution No. 97. But that is not a
legal reason to attribute grave abuse of discretion to the Senate and to
nullify its decision. To do so would constitute grave abuse in the exercise of
our own judicial power and duty. Ineludably, what the Senate did was a
valid exercise of its authority. As to whether such exercise was wise,
beneficial or viable is outside the realm of judicial inquiry and review. That
is a matter between the elected policy makers and the people. As to
whether the nation should join the worldwide march toward trade
liberalization and economic globalization is a matter that our people should
determine in electing their policy makers. After all, the WTO Agreement
allows withdrawal of membership, should this be the political desire of a
member.
DECISION
PANGANIBAN, J.:
The emergence on January 1, 1995 of the World Trade Organization,

abetted by the membership thereto of the vast majority of countries, has
revolutionized international business and economic relations amongst

states. It has irreversibly propelled the world towards trade liberalization
and economic globalization. Liberalization, globalization, deregulation and
privatization, the third-millennium buzz words, are ushering in a new
borderless world of business by sweeping away as mere historical relics the
heretofore traditional modes of promoting and protecting national
economies like tariffs, export subsidies, import quotas, quantitative
restrictions, tax exemptions and currency controls. Finding market niches
and becoming the best in specific industries in a market-driven and exportoriented global scenario are replacing age-old "beggar-thy-neighbor"
policies that unilaterally protect weak and inefficient domestic producers of
goods and services. In the words of Peter Drucker, the well-known
management guru, "Increased participation in the world economy has
become the key to domestic economic growth and prosperity."
products." The President also saw in the WTO the opening of "new
opportunities for the services sector . . ., (the reduction of) costs and
uncertainty associated with exporting . . ., and (the attraction of) more
investments into the country." Although the Chief Executive did not
expressly mention it in his letter, the Philippines and this is of special
interest to the legal profession will benefit from the WTO system of
dispute settlement by judicial adjudication through the independent WTO
settlement bodies called (1) Dispute Settlement Panels and (2) Appellate
Tribunal. Heretofore, trade disputes were settled mainly through
negotiations where solutions were arrived at frequently on the basis of
relative bargaining strengths, and where naturally, weak and
underdeveloped countries were at a disadvantage.
Brief Historical Background
Arguing mainly (1) that the WTO requires the Philippines "to place
nationals and products of member-countries on the same footing as
Filipinos and local products" and (2) that the WTO "intrudes, limits and/or
impairs" the constitutional powers of both Congress and the Supreme
Court, the instant petition before this Court assails the WTO Agreement for
violating the mandate of the 1987 Constitution to "develop a self-reliant
and independent national economy effectively controlled by Filipinos . . .
(to) give preference to qualified Filipinos (and to) promote the preferential
use of Filipino labor, domestic materials and locally produced goods."
chanroble s.com : virtual law library
To hasten worldwide recovery from the devastation wrought by the Second

World War, plans for the establishment of three multilateral institutions
inspired by that grand political body, the United Nations were discussed
at Dumbarton Oaks and Bretton Woods. The first was the World Bank (WB)
which was to address the rehabilitation and reconstruction of war-ravaged
and later developing countries; the second, the International Monetary
Fund (IMF) which was to deal with currency problems; and the third, the
International Trade Organization (ITO), which was to foster order and
predictability in world trade and to minimize unilateral protectionist policies
that invite challenge, even retaliation, from other states. However, for a
variety of reasons, including its non-ratification by the United States, the
ITO, unlike the IMF and WB, never took off. What remained was only GATT
the General Agreement on Tariffs and Trade. GATT was a collection of
treaties governing access to the economies of treaty adherents with no
institutionalized body administering the agreements or dependable system
of dispute settlement.
After half a century and several dizzying rounds of negotiations, principally
the Kennedy Round, the Tokyo Round and the Uruguay Round, the world
finally gave birth to that administering body the World Trade
Organization with the signing of the "Final Act" in Marrakesh, Morocco
and the ratification of the WTO Agreement by its members. 1 1a 1b 1c
Like many other developing countries, the Philippines joined WTO as a
founding member with the goal, as articulated by President Fidel V. Ramos
in two letters to the Senate (infra), of improving "Philippine access to
foreign markets, especially its major trading partners, through the
reduction of tariffs on its exports, particularly agricultural and industrial
The Petition in Brief
Simply stated, does the Philippine Constitution prohibit Philippine

participation in worldwide trade liberalization and economic globalization?
Does it proscribe Philippine integration into a global economy that is
liberalized, deregulated and privatized? These are the main questions
raised in this petition forcertiorari, prohibition and mandamus under Rule
65 of the Rules of Court praying (1) for the nullification, on constitutional
grounds, of the concurrence of the Philippine Senate in the ratification by
the President of the Philippines of the Agreement Establishing the World
Trade Organization (WTO Agreement, for brevity) and (2) for the
prohibition of its implementation and enforcement through the release and
utilization of public funds, the assignment of public officials and employees,
as well as the use of government properties and resources by respondentheads of various executive offices concerned therewith. This concurrence is
embodied in Senate Resolution No. 97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of the
Department of Trade and Industry (Secretary Navarro, for brevity),
representing the Government of the Republic of the Philippines, signed in

Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay
Round of Multilateral Negotiations (Final Act, for brevity).
By signing the Final Act, 2 Secretary Navarro on behalf of the Republic of
the Philippines, agreed:
General Agreement on Tariffs and Trade 1994

Agreement on Agriculture
Agreement on the Application of Sanitary and Phytosanitary
"(a) to submit, as appropriate, the WTO Agreement for the consideration of

their respective competent authorities, with a view to seeking approval of
the Agreement in accordance with their procedures; and
Measures
(b) to adopt the Ministerial Declarations and Decisions."
Agreement on Technical Barriers to Trade
Agreement on Textiles and Clothing
On August 12, 1994, the members of the Philippine Senate received a

letter dated August 11, 1994 from the President of the Philippines, 3
stating among others that "the Uruguay Round Final Act is hereby
submitted to the Senate for its concurrence pursuant to Section 21, Article
VII of the Constitution."
Agreement on Trade-Related Investment Measures
On August 13, 1994, the members of the Philippine Senate received

another letter from the President of the Philippines 4 likewise dated August
11, 1994, which stated among others that "the Uruguay Round Final Act,
the Agreement Establishing the World Trade Organization, the Ministerial
Declarations and Decisions, and the Understanding on Commitments in
Financial Services are hereby submitted to the Senate for its concurrence
pursuant to Section 21, Article VII of the Constitution."
Agreement on Implementation of Article VII of the General
On December 9, 1994, the President of the Philippines certified the

necessity of the immediate adoption of P.S. 1083, a resolution entitled
"Concurring in the Ratification of the Agreement Establishing the World
Trade Organization." 5
Agreement on Imports Licensing Procedures
On December 14, 1994, the Philippine Senate adopted Resolution No. 97

which "Resolved, as it is hereby resolved, that the Senate concur, as it
hereby concurs, in the ratification by the President of the Philippines of the
Agreement Establishing the World Trade Organization." 6 The text of the
WTO Agreement is written on pages 137 et seq. of Volume I of the 36volume Uruguay Round of Multilateral Trade Negotiations and includes
various agreements and associated legal instruments (identified in the said
Agreement as Annexes 1, 2 and 3 thereto and collectively referred to as
Multilateral Trade Agreements, for brevity) as follows:
Agreement on Implementation of Article VI of the General

Agreement on Tariffs and Trade 1994
on Tariffs and Trade 1994

Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Subsidies and Coordinating Measures

Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual
Property Rights
ANNEX 2
"ANNEX I
Annex 1A: Multilateral Agreement on Trade in Goods
Understanding on Rules and Procedures Governing the

Settlement of Disputes
ANNEX 3
hereafter referred to as "Bautista Paper," 9 for brevity, (1) providing a

historical background of and (2) summarizing the said agreements.
Trade Policy Review Mechanism"
During the Oral Argument held on August 27, 1996, the Court directed:
On December 16, 1994, the President of the Philippines signed 7 the

Instrument of Ratification, declaring:
"NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the

Republic of the Philippines, after having seen and considered the
aforementioned Agreement Establishing the World Trade Organization and
the agreements and associated legal instruments included in Annexes one
(1), two (2) and three (3) of that Agreement which are integral parts
thereof, signed at Marrakesh, Morocco on 15 April 1994, do hereby ratify
and confirm the same and every Article and Clause thereof."
To emphasize, the WTO Agreement ratified by the President of the

Philippines is composed of the Agreement Proper and "the associated legal
instruments included in Annexes one (1), two (2) and three (3) of that
Agreement which are integral parts thereof."
On the other hand, the Final Act signed by Secretary Navarro embodies not
only the WTO Agreement (and its integral annexes aforementioned) but
also (1) the Ministerial Declarations and Decisions and (2) the
Understanding on Commitments in Financial Services. In his Memorandum
dated May 13, 1996, 8 the Solicitor General describes these two latter
documents as follows:
"(a) the petitioners to submit the (1) Senate Committee Report on the
matter in controversy and (2) the transcript of proceedings/hearings in the
Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1) a list of
Philippine treaties signed prior to the Philippine adherence to the WTO
Agreement, which derogate from Philippine sovereignty and (2) copies of
the multi-volume WTO Agreement and other documents mentioned in the
Final Act, as soon as possible."
After receipt of the foregoing documents, the Court said it would consider
the case submitted for resolution. In a Compliance dated September 16,
1996, the Solicitor General submitted a printed copy of the 36-volume
Uruguay Round of Multilateral Trade Negotiations, and in another
Compliance dated October 24, 1996, he listed the various "bilateral or
multilateral treaties or international instruments involving derogation of
Philippine sovereignty." Petitioners, on the other hand, submitted their
Compliance dated January 28, 1997, on January 30, 1997.
The Issues
"The Ministerial Decisions and Declarations are twenty-five declarations

and decisions on a wide range of matters, such as measures in favor of
least developed countries, notification procedures, relationship of WTO with
the International Monetary Fund (IMF), and agreements on technical
barriers to trade and on dispute settlement.
In their Memorandum dated March 11, 1996, petitioners summarized the

issues as follows:
The Understanding on Commitments in Financial Services dwell on, among

other things, standstill or limitations and qualifications of commitments to
existing non-conforming measures, market access, national treatment, and
definitions of non-resident supplier of financial services, commercial
presence and new financial service." cdti
B. Whether the petitioner members of the Senate who participated in the

deliberations and voting leading to the concurrence are estopped from
impugning the validity of the Agreement Establishing the World Trade
Organization or of the validity or of the concurrence.
On December 29, 1994, the present petition was filed. After careful
deliberation on respondents comment and petitioners reply thereto, the
Court resolved on December 12, 1995, to give due course to the petition,
and the parties thereafter filed their respective memoranda. The Court also
requested the Honorable Lilia R. Bautista, the Philippine Ambassador to the
United Nations stationed in Geneva, Switzerland, to submit a paper,
"A. Whether the petition presents a political question or is otherwise not

justiciable.
C. Whether the provisions of the Agreement Establishing the World Trade

Organization contravene the provisions of Sec. 19, Article II, and Secs. 10
and 12, Article XII, all of the 1987 Philippine Constitution.
D. Whether provisions of the Agreement Establishing the World Trade
Organization unduly limit, restrict and impair Philippine sovereignty
specifically the legislative power which, under Sec. 2, Article VI, 1987
Philippine Constitution is vested in the Congress of the Philippines;
abuse of discretion when they voted for concurrence in the ratification of

the WTO Agreement. The foregoing notwithstanding, this Court resolved to
deal with these three issues thus:
E. Whether provisions of the Agreement Establishing the World Trade

Organization interfere with the exercise of judicial power.
F. Whether the respondent members of the Senate acted in grave abuse of

discretion amounting to lack or excess of jurisdiction when they voted for
concurrence in the ratification of the constitutionally-infirm Agreement
Establishing the World Trade Organization.
G. Whether the respondent members of the Senate acted in grave abuse of
discretion amounting to lack or excess of jurisdiction when they concurred
only in the ratification of the Agreement Establishing the World Trade
Organization, and not with the Presidential submission which included the
Final Act, Ministerial Declaration and Decisions, and the Understanding on
Commitments in Financial Services."
(1) The "political question" issue being very fundamental and vital, and
being a matter that probes into the very jurisdiction of this Court to hear
and decide this case was deliberated upon by the Court and will thus be
ruled upon as the first issue;
(2) The matter of estoppel will not be taken up because this defense is
waivable and the respondents have effectively waived it by not pursuing it
in any of their pleadings; in any event, this issue, even if ruled in
respondents favor, will not cause the petitions dismissal as there are
petitioners other than the two senators, who are not vulnerable to the
defense of estoppel; and
On the other hand, the Solicitor General as counsel for respondents

"synthesized the several issues raised by petitioners into the following" :
10
"1. Whether or not the provisions of the Agreement Establishing the World
Trade Organization and the Agreements and Associated Legal Instruments
included in Annexes one (1), two (2) and three (3) of that agreement
cited by petitioners directly contravene or undermine the letter, spirit and
intent of Section 19, Article II and Sections 10 and 12, Article XII of the
1987 Constitution.
(3) The issue of alleged grave abuse of discretion on the part of the
respondent senators will be taken up as an integral part of the disposition
of the four issues raised by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents
did not question the locus standi of petitioners. Hence, they are also
deemed to have waived the benefit of such issue. They probably realized
that grave constitutional issues, expenditures of public funds and serious
international commitments of the nation are involved here, and that
transcendental public interest requires that the substantive issues be met
head on and decided on the merits, rather than skirted or deflected by
procedural matters. 11
2. Whether or not certain provisions of the Agreement unduly limit, restrict

or impair the exercise of legislative power by Congress.
To recapitulate, the issues that will be ruled upon shortly are:
3. Whether or not certain provisions of the Agreement impair the exercise

of judicial power by this Honorable Court in promulgating the rules of
evidence.
(1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY?

OTHERWISE STATED, DOES THE PETITION INVOLVE A POLITICAL
QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION?
4. Whether or not the concurrence of the Senate in the ratification by the

President of the Philippines of the Agreement establishing the World Trade
Organization implied rejection of the treaty embodied in the Final Act."
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE

ANNEXES CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12,
ARTICLE XII, OF THE PHILIPPINE CONSTITUTION?
By raising and arguing only four issues against the seven presented by
petitioners, the Solicitor General has effectively ignored three, namely: (1)
whether the petition presents a political question or is otherwise not
justiciable; (2) whether petitioner-members of the Senate (Wigberto E.
Taada and Anna Dominique Coseteng) are estopped from joining this suit;
and (3) whether the respondent-members of the Senate acted in grave
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT,

RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY
CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE

EXERCISE OF JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES
ON EVIDENCE?
The First Issue: Does the Court Have Jurisdiction Over the Controversy?
As the petition alleges grave abuse of discretion and as there is no other

plain, speedy or adequate remedy in the ordinary course of law, we have
no hesitation at all in holding that this petition should be given due course
and the vital questions raised therein ruled upon under Rule 65 of the
Rules of Court. Indeed, certiorari, prohibition and mandamus are
appropriate remedies to raise constitutional issues and to review and/or
prohibit/nullify, when proper, acts of legislative and executive officials. On
this, we have no equivocation.
In seeking to nullify an act of the Philippine Senate on the ground that it

contravenes the Constitution, the petition no doubt raises a justiciable
controversy. Where an action of the legislative branch is seriously alleged
to have infringed the Constitution, it becomes not only the right but in fact
the duty of the judiciary to settle the dispute. "The question thus posed is
judicial rather than political. The duty (to adjudicate) remains to assure
that the supremacy of the Constitution is upheld." 12 Once a "controversy
as to the application or interpretation of a constitutional provision is raised
before this Court (as in the instant case), it becomes a legal issue which
the Court is bound by constitutional mandate to decide." 13
We should stress that, in deciding to take jurisdiction over this petition,

this Court will not review the wisdom of the decision of the President and
the Senate in enlisting the country into the WTO, or pass upon the merits
of trade liberalization as a policy espoused by said international body.
Neither will it rule on the propriety of the governments economic policy of
reducing/removing tariffs, taxes, subsidies, quantitative restrictions, and
other import/trade barriers. Rather, it will only exercise its constitutional
duty "to determine whether or not there had been a grave abuse of
discretion amounting to lack or excess of jurisdiction" on the part of the
Senate in ratifying the WTO Agreement and its three annexes.
The jurisdiction of this Court to adjudicate the matters 14 raised in the

petition is clearly set out in the 1987 Constitution, 15 as follows:
Second Issue: The WTO Agreement and Economic Nationalism
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT

AND ITS ANNEXES SUFFICIENT AND/OR VALID, CONSIDERING THAT IT
DID NOT INCLUDE THE FINAL ACT, MINISTERIAL DECLARATIONS AND
DECISIONS, AND THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL
SERVICES?
"Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the government."
The foregoing text emphasizes the judicial departments duty and power to
strike down grave abuse of discretion on the part of any branch or
instrumentality of government including Congress. It is an innovation in
our political law. 16 As explained by former Chief Justice Roberto
Concepcion, 17 "the judiciary is the final arbiter on the question of whether
or not a branch of government or any of its officials has acted without
jurisdiction or in excess of jurisdiction or so capriciously as to constitute an
abuse of discretion amounting to excess of jurisdiction. This is not only a
judicial power but a duty to pass judgment on matters of this nature."
As this Court has repeatedly and firmly emphasized in many cases, 18 it

will not shirk, digress from or abandon its sacred duty and authority to
uphold the Constitution in matters that involve grave abuse of discretion
brought before it in appropriate cases, committed by any officer, agency,
instrumentality or department of the government.
chanroble s.com:cralaw:red
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the "letter, spirit and intent" of the
Constitution mandating "economic nationalism" are violated by the socalled "parity provisions" and "national treatment" clauses scattered in
various parts not only of the WTO Agreement and its annexes but also in
the Ministerial Decisions and Declarations and in the Understanding on
Commitments in Financial Services.
Specifically, the "flagship" constitutional provisions referred to are Sec. 19,
Article II, and Secs. 10 and 12, Article XII, of the Constitution, which are
worded as follows:
"Article II
DECLARATION OF PRINCIPLES AND STATE POLICIES
x
Sec. 19. The State shall develop a self-reliant and independent national
economy effectively controlled by Filipinos.
The Annex referred to reads as follows:
Article XII
"ANNEX
NATIONAL ECONOMY AND PATRIMONY
Illustrative List
Sec. 10 . . . The Congress shall enact measures that will encourage the
formation and operation of enterprises whose capital is wholly owned by
Filipinos.
In the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified
Filipinos.
x
1. TRIMS that are inconsistent with the obligation of national treatment

provided for in paragraph 4 of Article III of GATT 1994 include those which
are mandatory or enforceable under domestic law or under administrative
rulings, or compliance with which is necessary to obtain an advantage, and
which require:
(a) the purchase or use by an enterprise of products of domestic origin or

from any domestic source, whether specified in terms of particular
products, in terms of volume or value of products, or in terms of
proportion of volume or value of its local production; or
(b) that an enterprises purchases or use of imported products be limited
to an amount related to the volume or value of local products that it
exports.
chanroble s virtualawlibrary chanrobles.com:chanrobles.com.ph
Sec. 12. The State shall promote the preferential use of Filipino labor,
domestic materials and locally produced goods, and adopt measures that
help make them competitive."
Petitioners aver that these sacred constitutional principles are desecrated
by the following WTO provisions quoted in their memorandum: 19
2. TRIMS that are inconsistent with the obligations of general elimination of

quantitative restrictions provided for in paragraph 1 of Article XI of GATT
1994 include those which are mandatory or enforceable under domestic
laws or under administrative rulings, or compliance with which is necessary
to obtain an advantage, and which restrict:
"a) In the area of investment measures related to trade in goods (TRIMS,

for brevity):
(a) the importation by an enterprise of products used in or related to the

local production that it exports;
"Article 2
(b) the importation by an enterprise of products used in or related to its

local production by restricting its access to foreign exchange inflows
attributable to the enterprise; or
National Treatment and Quantitative Restrictions.

1. Without prejudice to other rights and obligations under GATT 1994. No
Member shall apply any TRIM that is inconsistent with the provisions of
Article III or Article XI of GATT 1994.
2. An Illustrative list of TRIMS that are inconsistent with the obligations of
general elimination of quantitative restrictions provided for in paragraph I
of Article XI of GATT 1994 is contained in the Annex to this Agreement."
(Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay
Round, Legal Instruments, p. 22121, Emphasis supplied).
(c) the exportation or sale for export specified in terms of particular

products, in terms of volume or value of products, or in terms of a
preparation of volume or value of its local production." (Annex to the
Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay
Round Legal Documents, p. 22125, Emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as
follows:
The products of the territory of any contracting party imported into the
territory of any other contracting party shall be accorded treatment no less

favorable than that accorded to like products of national origin in respect of
laws, regulations and requirements affecting their internal sale, offering for
sale, purchase, transportation, distribution or use. The provisions of this
paragraph shall not prevent the application of differential internal
transportation charges which are based exclusively on the economic
operation of the means of transport and not on the nationality of the
product." (Article III, GATT 1947, as amended by the Protocol Modifying
Part II, and Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in
relation to paragraph 1 (a) of the General Agreement on Tariffs and Trade
1994, Vol. 1, Uruguay Round, Legal Instruments p. 177, Emphasis
supplied).
"parity provisions" of the WTO Agreement "place nationals and products of

member countries on the same footing as Filipinos and local products," in
contravention of the "Filipino First" policy of the Constitution. They
allegedly render meaningless the phrase "effectively controlled by
Filipinos." The constitutional conflict becomes more manifest when viewed
in the context of the clear duty imposed on the Philippines as a WTO
member to ensure the conformity of its laws, regulations and
administrative procedures with its obligations as provided in the annexed
agreements. 20 Petitioners further argue that these provisions contravene
constitutional limitations on the role exports play in national development
and negate the preferential treatment accorded to Filipino labor, domestic
materials and locally produced goods.
"b) In the area of trade-related aspects of intellectual property rights

(TRIPS, for brevity):
On the other hand, respondents through the Solicitor General counter (1)
that such Charter provisions are not self-executing and merely set out
general policies; (2) that these nationalistic portions of the Constitution
invoked by petitioners should not be read in isolation but should be related
to other relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof;
(3) that read properly, the cited WTO clauses do not conflict with the
Constitution; and (4) that the WTO Agreement contains sufficient
provisions to protect developing countries like the Philippines from the
harshness of sudden trade liberalization.
Each Member shall accord to the nationals of other Members treatment no

less favourable than that it accords to its own nationals with regard to the
protection of intellectual property . . . (par. 1, Article 3, Agreement on
Trade-Related Aspect of Intellectual Property rights, Vol. 31, Uruguay
Round, Legal Instruments, p. 25432 (Emphasis supplied)
"(c) In the area of the General Agreement on Trade in Services:
National Treatment
We shall now discuss and rule on these arguments.

Declaration of Principles Not Self-Executing
1. In the sectors inscribed in its schedule, and subject to any conditions

and qualifications set out therein, each Member shall accord to services
and service suppliers of any other Member, in respect of all measures
affecting the supply of services, treatment no less favourable than it
accords to its own like services and service suppliers.
2. A Member may meet the requirement of paragraph I by according to
services and service suppliers of any other Member, either formally
identical treatment or formally different treatment to that it accords to its
own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to
be less favourable if it modifies the conditions of completion in favour of
services or service suppliers of the Member compared to like services or
service suppliers of any other Member. (Article XVII, General Agreement on
Trade in Services, Vol. 28, Uruguay Round Legal Instruments, p.
22610 Emphasis supplied)."
By its very title, Article II of the Constitution is a "declaration of principles

and state policies." The counterpart of this article in the 1935 Constitution
21 is called the "basic political creed of the nation" by Dean Vicente Sinco.
22 These principles in Article II are not intended to be self-executing
principles ready for enforcement through the courts. 23 They are used by
the judiciary as aids or as guides in the exercise of its power of judicial
review, and by the legislature in its enactment of laws. As held in the
leading case of Kilosbayan, Incorporated v. Morato, 24 the principles and
state policies enumerated in Article II and some sections of Article XII are
not "self-executing provisions, the disregard of which can give rise to a
cause of action in the courts. They do not embody judicially enforceable
constitutional rights but guidelines for legislation."
In the same light, we held in Basco v. Pagcor 25 that broad constitutional

principles need legislative enactments to implement them, thus:
It is petitioners position that the foregoing "national treatment" and
"On petitioners allegation that P.D. 1869 violates Sections 11 (Personal

Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social
Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of

the 1987 Constitution, suffice it to state also that these are merely
statements of principles and policies. As such, they are basically not selfexecuting, meaning a law should be passed by Congress to clearly define
and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be selfexecuting principles ready for enforcement through the courts. They were
rather directives addressed to the executive and to the legislature. If the
executive and the legislature failed to heed the directives of the article, the
available remedy was not judicial but political. The electorate could express
their displeasure with the failure of the executive and the legislature
through the language of the ballot. (Bernas, Vol. II, p. 2)."
The reasons for denying a cause of action to an alleged infringement of

broad constitutional principles are sourced from basic considerations of due
process and the lack of judicial authority to wade "into the uncharted
ocean of social and economic policy making." Mr. Justice Florentino P.
Feliciano in his concurring opinion in Oposa v. Factoran, Jr., 26 explained
these reasons as follows:
"My suggestion is simply that petitioners must, before the trial court, show
a more specific legal right a right cast in language of a significantly
lower order of generality than Article II (15) of the Constitution that is
or may be violated by the actions, or failures to act, imputed to the public
respondent by petitioners so that the trial court can validly render
judgment granting all or part of the relief prayed for. To my mind, the court
should be understood as simply saying that such a more specific legal right
or rights may well exist in our corpus of law, considering the general policy
principles found in the Constitution and the existence of the Philippine
Environment Code, and that the trial court should have given petitioners
an effective opportunity so to demonstrate, instead of aborting the
proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential
component of a cause of action be a specific, operable legal right, rather
than a constitutional or statutory policy, for at least two (2) reasons. One
is that unless the legal right claimed to have been violated or disregarded
is given specification in operational terms, defendants may well be unable
to defend themselves intelligently and effectively; in other words, there are
due process dimensions to this matter.
The second is a broader-gauge consideration where a specific violation
of law or applicable regulation is not alleged or proved, petitioners can be
expected to fall back on the expanded conception of judicial power in the
second paragraph of Section 1 of Article VIII of the Constitution which

reads:
Section 1. . . .
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the Government. (Emphasis supplied)
When substantive standards as general as the right to a balanced and
healthy ecology and the right to health are combined with remedial
standards as broad ranging as a grave abuse of discretion amounting to
lack or excess of jurisdiction, the result will be, it is respectfully submitted,
to propel courts into the uncharted ocean of social and economic policy
making. At least in respect of the vast area of environmental protection
and management, our courts have no claim to special technical
competence and experience and professional qualification. Where no
specific, operable norms and standards are shown to exist, then the policy
making departments the legislative and executive departments must
be given a real and effective opportunity to fashion and promulgate those
norms and standards, and to implement them before the courts should
intervene."
chanroblesvirtuallawlibrary
Economic Nationalism Should Be Read with Other Constitutional Mandates

to Attain Balanced Development of Economy
On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying
down general principles relating to the national economy and patrimony,
should be read and understood in relation to the other sections in said
article, especially Secs. 1 and 13 thereof which read:
"Section 1. The goals of the national economy are a more equitable

distribution of opportunities, income, and wealth; a sustained increase in
the amount of goods and services produced by the nation for the benefit of
the people; and an expanding productivity as the key to raising the quality
of life for all, especially the underprivileged.
The State shall promote industrialization and full employment based on
sound agricultural development and agrarian reform, through industries
that make full and efficient use of human and natural resources, and which
are competitive in both domestic and foreign markets. However, the State
shall protect Filipino enterprises against unfair foreign competition and
trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of
the country shall be given optimum opportunity to develop. . .
x
Sec. 13. The State shall pursue a trade policy that serves the general
welfare and utilizes all forms and arrangements of exchange on the basis
of equality and reciprocity."
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of
national economic development, as follows:
1. A more equitable distribution of opportunities, income and wealth;

2. A sustained increase in the amount of goods and services provided by
the nation for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all
especially the underprivileged.
With these goals in context, the Constitution then ordains the ideals of
economic nationalism (1) by expressing preference in favor of qualified
Filipinos "in the grant of rights, privileges and concessions covering the
national economy and patrimony" 27 and in the use of "Filipino labor,
domestic materials and locally-produced goods" ; (2) by mandating the
State to "adopt measures that help make them competitive; 28 and (3) by
requiring the State to "develop a self-reliant and independent national
economy effectively controlled by Filipinos." 29 In similar language, the
Constitution takes into account the realities of the outside world as it
requires the pursuit of "a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality
and reciprocity" ; 30 and speaks of industries "which are competitive in
both domestic and foreign markets" as well as of the protection of "Filipino
enterprises against unfair foreign competition and trade practices."
It is true that in the recent case of Manila Prince Hotel v. Government

Service Insurance System, Et Al., 31 this Court held that "Sec. 10, second
par., Art. XII of the 1987 Constitution is a mandatory, positive command
which is complete in itself and which needs no further guidelines or
implementing laws or rules for its enforcement. From its very words the
provision does not require any legislation to put it in operation. It is per se
judicially enforceable." However, as the constitutional provision itself
states, it is enforceable only in regard to "the grants of rights, privileges
and concessions covering national economy and patrimony" and not to

every aspect of trade and commerce. It refers to exceptions rather than
the rule. The issue here is not whether this paragraph of Sec. 10 of Art. XII
is self-executing or not. Rather, the issue is whether, as a rule, there are
enough balancing provisions in the Constitution to allow the Senate to
ratify the Philippine concurrence in the WTO Agreement. And we hold that
there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino
goods, services, labor and enterprises, at the same time, it recognizes the
need for business exchange with the rest of the world on the bases of
equality and reciprocity and limits protection of Filipino enterprises only
against foreign competition and trade practices that are unfair. 32 In other
words, the Constitution did not intend to pursue an isolationist policy. It did
not shut out foreign investments, goods and services in the development
of the Philippine economy. While the Constitution does not encourage the
unlimited entry of foreign goods, services and investments into the
country, it does not prohibit them either. In fact, it allows an exchange on
the basis of equality and reciprocity, frowning only on foreign competition
that is unfair.
WTO Recognizes Need to Protect Weak Economies
Upon the other hand, respondents maintain that the WTO itself has some
built-in advantages to protect weak and developing economies, which
comprise the vast majority of its members. Unlike in the UN where major
states have permanent seats and veto powers in the Security Council, in
the WTO, decisions are made on the basis of sovereign equality, with each
members vote equal in weight to that of any other. There is no WTO
equivalent of the UN Security Council.
chanroble s.com : virtual lawlibrary
"WTO decides by consensus whenever possible, otherwise, decisions of the

Ministerial Conference and the General Council shall be taken by the
majority of the votes cast, except in cases of interpretation of the
Agreement or waiver of the obligation of a member which would require
three fourths vote. Amendments would require two thirds vote in general.
Amendments to MFN provisions and the Amendments provision will require
assent of all members. Any member may withdraw from the Agreement
upon the expiration of six months from the date of notice of withdrawals."
33
Hence, poor countries can protect their common interests more effectively
through the WTO than through one-on-one negotiations with developed
countries. Within the WTO, developing countries can form powerful blocs to
push their economic agenda more decisively than outside the Organization.
This is not merely a matter of practical alliances but a negotiating strategy

rooted in law. Thus, the basic principles underlying the WTO Agreement
recognize the need of developing countries like the Philippines to "share in
the growth in international trade commensurate with the needs of their
economic development." These basic principles are found in the preamble
34 of the WTO Agreement as follows:
reduction is to be spread out. Specifically, GATT requires an average tariff

reduction rate of 36% for developed countries to be effected within a
period of six (6) years while developing countries including the
Philippines are required to effect an average tariff reduction of only 24%
within ten (10) years.
"The Parties to this Agreement,

Recognizing that their relations in the field of trade and economic
endeavour should be conducted with a view to raising standards of living,
ensuring full employment and a large and steadily growing volume of real
income and effective demand, and expanding the production of and trade
in goods and services, while allowing for the optimal use of the worlds
resources in accordance with the objective of sustainable development,
seeking both to protect and preserve the environment and to enhance the
means for doing so in a manner consistent with their respective needs and
concerns at different levels of economic development,
Recognizing further that there is need for positive efforts designed to
ensure that developing countries, and especially the least developed
among them, secure a share in the growth in international trade
commensurate with the needs of their economic development,
Being desirous of contributing to these objectives by entering into
reciprocal and mutually advantageous arrangements directed to the
substantial reduction of tariffs and other barriers to trade and to the
elimination of discriminatory treatment in international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable
multilateral trading system encompassing the General Agreement on Tariffs
and Trade, the results of past trade liberalization efforts, and all of the
results of the Uruguay Round of Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further the objectives
underlying this multilateral trading system, . . ." (Emphasis supplied.)
In respect to domestic subsidy, GATT requires developed countries to

reduce domestic support to agricultural products by 20% over six (6)
years, as compared to only 13% for developing countries to be effected
within ten (10) years.
In regard to export subsidy for agricultural products, GATT requires
developed countries to reduce their budgetary outlays for export subsidy
by 36% and export volumes receiving export subsidy by 21% within a
period of six (6) years. For developing countries, however, the reduction
rate is only two-thirds of that prescribed for developed countries and a
longer period of ten (10) years within which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign
competition and trade practices including anti-dumping measures,
countervailing measures and safeguards against import surges. Where
local businesses are jeopardized by unfair foreign competition, the
Philippines can avail of these measures. There is hardly therefore any basis
for the statement that under the WTO, local industries and enterprises will
all be wiped out and that Filipinos will be deprived of control of the
economy. Quite the contrary, the weaker situations of developing nations
like the Philippines have been taken into account; thus, there would be no
basis to say that in joining the WTO, the respondents have gravely abused
their discretion. True, they have made a bold decision to steer the ship of
state into the yet uncharted sea of economic liberalization. But such
decision cannot be set aside on the ground of grave abuse of discretion,
simply because we disagree with it or simply because we believe only in
other economic policies. As earlier stated, the Court in taking jurisdiction of
this case will not pass upon the advantages and disadvantages of trade
liberalization as an economic policy. It will only perform its constitutional
duty of determining whether the Senate committed grave abuse of
discretion.
chanroble svirtual|awlibrary
Specific WTO Provisos Protect Developing Countries

So too, the Solicitor General points out that pursuant to and consistent
with the foregoing basic principles, the WTO Agreement grants developing
countries a more lenient treatment, giving their domestic industries some
protection from the rush of foreign competition. Thus, with respect to
tariffs in general, preferential treatment is given to developing countries in
terms of the amount of tariff reduction and the period within which the
Constitution Does Not Rule Out Foreign Competition

Furthermore, the constitutional policy of a "self-reliant and independent
national economy" 35 does not necessarily rule out the entry of foreign
investments, goods and services. It contemplates neither "economic
seclusion" nor "mendicancy in the international community." As explained
by Constitutional Commissioner Bernardo Villegas, sponsor of this
constitutional policy:
"Economic self reliance is a primary objective of a developing country that

is keenly aware of overdependence on external assistance for even its
most basic needs. It does not mean autarky or economic seclusion; rather,
it means avoiding mendicancy in the international community.
Independence refers to the freedom from undue foreign control of the
national economy, especially in such strategic industries as in the
development of natural resources and public utilities." 36
The WTO reliance on "most favored nation," "national treatment," and
"trade without discrimination" cannot be struck down as unconstitutional as
in fact they are rules of equality and reciprocity that apply to all WTO
members. Aside from envisioning a trade policy based on "equality and
reciprocity," 37 the fundamental law encourages industries that are
"competitive in both domestic and foreign markets," thereby
demonstrating a clear policy against a sheltered domestic trade
environment, but one in favor of the gradual development of robust
industries that can compete with the best in the foreign markets. Indeed,
Filipino managers and Filipino enterprises have shown capability and
tenacity to compete internationally. And given a free trade environment,
Filipino entrepreneurs and managers in Hongkong have demonstrated the
Filipino capacity to grow and to prosper against the best offered under a
policy of laissez faire.
Constitution Favors Consumers, Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor of any
business or enterprise, nor does it contain any specific pronouncement that
Filipino companies should be pampered with a total proscription of foreign
competition. On the other hand, respondents claim that WTO/GATT aims to
make available to the Filipino consumer the best goods and services
obtainable anywhere in the world at the most reasonable prices.
Consequently, the question boils down to whether WTO/GATT will favor the
general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general
welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos general welfare because
it will as promised by its promoters expand the countrys exports and
generate more employment?
Will it bring more prosperity, employment, purchasing power and quality
products at the most reasonable rates to the Filipino public?
The responses to these questions involve "judgment calls" by our policy

makers, for which they are answerable to our people during appropriate
electoral exercises. Such questions and the answers thereto are not
subject to judicial pronouncements based on grave abuse of discretion.
Constitution Designed to Meet Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence when the
Constitution was drafted and ratified in 1987. That does not mean however
that the Charter is necessarily flawed in the sense that its framers might
not have anticipated the advent of a borderless world of business. By the
same token, the United Nations was not yet in existence when the 1935
Constitution became effective. Did that necessarily mean that the then
Constitution might not have contemplated a diminution of the absoluteness
of sovereignty when the Philippines signed the UN Charter, thereby
effectively surrendering part of its control over its foreign relations to the
decisions of various UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are designed to
meet not only the vagaries of contemporary events. They should be
interpreted to cover even future and unknown circumstances. It is to the
credit of its drafters that a Constitution can withstand the assaults of
bigots and infidels but at the same time bend with the refreshing winds of
change necessitated by unfolding events. As one eminent political law
writer and respected jurist 38 explains:
"The Constitution must be quintessential rather than superficial, the root

and not the blossom, the base and framework only of the edifice that is yet
to rise. It is but the core of the dream that must take shape, not in a
twinkling by mandate of our delegates, but slowly in the crucible of Filipino
minds and hearts, where it will in time develop its sinews and gradually
gather its strength and finally achieve its substance. In fine, the
Constitution cannot, like the goddess Athena, rise full-grown from the brow
of the Constitutional Convention, nor can it conjure by mere fiat an instant
Utopia. It must grow with the society it seeks to re-structure and march
apace with the progress of the race, drawing from the vicissitudes of
history the dynamism and vitality that will keep it, far from becoming a
petrified rule, a pulsing, living law attuned to the heartbeat of the nation."
cdtech
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that" (e)ach Member shall ensure the
conformity of its laws, regulations and administrative procedures with its
obligations as provided in the annexed Agreements." 39 Petitioners

maintain that this undertaking "unduly limits, restricts and impairs
Philippine sovereignty, specifically the legislative power which under Sec.
2, Article VI of the 1987 Philippine Constitution is vested in the Congress of
the Philippines. It is an assault on the sovereign powers of the Philippines
because this means that Congress could not pass legislation that will be
good for our national interest and general welfare if such legislation will not
conform with the WTO Agreement, which not only relates to the trade in
goods . . . but also to the flow of investments and money . . . as well as to
a whole slew of agreements on socio-cultural matters . . ." 40
More specifically, petitioners claim that said WTO proviso derogates from
the power to tax, which is lodged in the Congress. 41 And while the
Constitution allows Congress to authorize the President to fix tariff rates,
import and export quotas, tonnage and wharfage dues, and other duties or
imposts, such authority is subject to "specified limits and . . . such
limitations and restrictions" as Congress may provide, 42 as in fact it did
under Sec. 401 of the Tariff and Customs Code.
Sovereignty Limited by International Law and Treaties
This Court notes and appreciates the ferocity and passion by which
petitioners stressed their arguments on this issue. However, while
sovereignty has traditionally been deemed absolute and all-encompassing
on the domestic level, it is however subject to restrictions and limitations
voluntarily agreed to by the Philippines, expressly or impliedly, as a
member of the family of nations. Unquestionably, the Constitution did not
envision a hermit-type isolation of the country from the rest of the world.
In its Declaration of Principles and State Policies, the Constitution "adopts
the generally accepted principles of international law as part of the law of
the land, and adheres to the policy of peace, equality, justice, freedom,
cooperation and amity, with all nations." 43 By the doctrine of
incorporation, the country is bound by generally accepted principles of
international law, which are considered to be automatically part of our own
laws. 44 One of the oldest and most fundamental rules in international law
is pacta sunt servanda international agreements must be performed in
good faith. "A treaty engagement is not a mere moral obligation but
creates a legally binding obligation on the parties . . . A state which has
contracted valid international obligations is bound to make in its
legislations such modifications as may be necessary to ensure the
fulfillment of the obligations undertaken." 45
By their inherent nature, treaties really limit or restrict the absoluteness of
sovereignty. By their voluntary act, nations may surrender some aspects of
their state power in exchange for greater benefits granted by or derived
from a convention or pact. After all, states, like individuals, live with
coequals, and in pursuit of mutually covenanted objectives and benefits,
they also commonly agree to limit the exercise of their otherwise absolute
rights. Thus, treaties have been used to record agreements between
States concerning such widely diverse matters as, for example, the lease
of naval bases, the sale or cession of territory, the termination of war, the
regulation of conduct of hostilities, the formation of alliances, the
regulation of commercial relations, the settling of claims, the laying down
of rules governing conduct in peace and the establishment of international
organizations. 46 The sovereignty of a state therefore cannot in fact and in
reality be considered absolute. Certain restrictions enter into the picture:
(1) limitations imposed by the very nature of membership in the family of
nations and (2) limitations imposed by treaty stipulations. As aptly put by
John F. Kennedy, "Today, no nation can build its destiny alone. The age of
self-sufficient nationalism is over. The age of interdependence is here." 47
UN Charter and Other Treaties Limit Sovereignty
Thus, when the Philippines joined the United Nations as one of its 51
charter members, it consented to restrict its sovereign rights under the
"concept of sovereignty as auto-limitation." 47-A Under Article 2 of the UN
Charter," (a)ll members shall give the United Nations every assistance in
any action it takes in accordance with the present Charter, and shall refrain
from giving assistance to any state against which the United Nations is
taking preventive or enforcement action." Such assistance includes
payment of its corresponding share not merely in administrative expenses
but also in expenditures for the peace-keeping operations of the
organization. In its advisory opinion of July 20, 1961, the International
Court of Justice held that money used by the United Nations Emergency
Force in the Middle East and in the Congo were "expenses of the United
Nations" under Article 17, paragraph 2, of the UN Charter. Hence, all its
members must bear their corresponding share in such expenses. In this
sense, the Philippine Congress is restricted in its power to appropriate. It is
compelled to appropriate funds whether it agrees with such peace-keeping
expenses or not. So too, under Article 105 of the said Charter, the UN and
its representatives enjoy diplomatic privileges and immunities, thereby
limiting again the exercise of sovereignty of members within their own
territory. Another example: although "sovereign equality" and "domestic
jurisdiction" of all members are set forth as underlying principles in the UN
Charter, such provisos are however subject to enforcement measures
decided by the Security Council for the maintenance of international peace
and security under Chapter VII of the Charter. A final example: under
Article 103," (i)n the event of a conflict between the obligations of the
Members of the United Nations under the present Charter and their
obligations under any other international agreement, their obligation under
the present charter shall prevail," thus unquestionably denying the

Philippines as a member the sovereign power to make a choice as to
which of conflicting obligations, if any, to honor.
chanroble svirtuallawlibrary:red
Apart from the UN Treaty, the Philippines has entered into many other
international pacts both bilateral and multilateral that involve
limitations on Philippine sovereignty. These are enumerated by the Solicitor
General in his Compliance dated October 24, 1996, as follows:
"(a) Bilateral convention with the United States regarding taxes on income,
where the Philippines agreed, among others, to exempt from tax, income
received in the Philippines by, among others, the Federal Reserve Bank of
the United States, the Export/Import Bank of the United States, the
Overseas Private Investment Corporation of the United States. Likewise, in
said convention, wages, salaries and similar remunerations paid by the
United States to its citizens for labor and personal services performed by
them as employees or officials of the United States are exempt from
income tax by the Philippines.
(b) Bilateral agreement with Belgium, providing, among others, for the
avoidance of double taxation with respect to taxes on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of
double taxation.
(d) Bilateral convention with the French Republic for the avoidance of
double taxation.
(e) Bilateral air transport agreement with Korea where the Philippines
agreed to exempt from all customs duties, inspection fees and other duties
or taxes aircrafts of South Korea and the regular equipment, spare parts
and supplies arriving with said aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines agreed
to exempt from customs duties, excise taxes, inspection fees and other
similar duties, taxes or charges fuel, lubricating oils, spare parts, regular
equipment, stores on board Japanese aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines
granted Belgian air carriers the same privileges as those granted to
Japanese and Korean air carriers under separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and visitor visas
where the Philippines exempted Israeli nationals from the requirement of
obtaining transit or visitor visas for a sojourn in the Philippines not
exceeding 59 days.
(i) Bilateral agreement with France exempting French nationals from the
requirement of obtaining transit and visitor visa for a sojourn not
exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the Philippines
agreed that premises of Special Missions in the Philippines are inviolable
and its agents can not enter said premises without consent of the Head of
Mission concerned. Special Missions are also exempted from customs
duties, taxes and related charges.
(k) Multilateral Convention on the Law of Treaties. In this convention, the
Philippines agreed to be governed by the Vienna Convention on the Law of
Treaties.
(l) Declaration of the President of the Philippines accepting compulsory
jurisdiction of the International Court of Justice. The International Court of
Justice has jurisdiction in all legal disputes concerning the interpretation of
a treaty, any question of international law, the existence of any fact which,
if established, would constitute a breach of international obligation."
In the foregoing treaties, the Philippines has effectively agreed to limit the
exercise of its sovereign powers of taxation, eminent domain and police
power. The underlying consideration in this partial surrender of sovereignty
is the reciprocal commitment of the other contracting states in granting the
same privilege and immunities to the Philippines, its officials and its
citizens. The same reciprocity characterizes the Philippine commitments
under WTO-GATT.
"International treaties, whether relating to nuclear disarmament, human
rights, the environment, the law of the sea, or trade, constrain domestic
political sovereignty through the assumption of external obligations. But
unless anarchy in international relations is preferred as an alternative, in
most cases we accept that the benefits of the reciprocal obligations
involved outweigh the costs associated with any loss of political
sovereignty. (T)rade treaties that structure relations by reference to
durable, well-defined substantive norms and objective dispute resolution
procedures reduce the risks of larger countries exploiting raw economic
power to bully smaller countries, by subjecting power relations to some
form of legal ordering. In addition, smaller countries typically stand to gain
disproportionately from trade liberalization. This is due to the simple fact
that liberalization will provide access to a larger set of potential new
trading relationship than in case of the larger country gaining enhanced
success to the smaller countrys market." 48
The point is that, as shown by the foregoing treaties, a portion of

sovereignty may be waived without violating the Constitution, based on the
rationale that the Philippines "adopts the generally accepted principles of
international law as part of the law of the land and adheres to the policy of
. . . cooperation and amity with all nations." casia
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General Provisions and
Basic Principles of the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS) 49 intrudes on the power of the Supreme Court to
promulgate rules concerning pleading, practice and procedures. 50
To understand the scope and meaning of Article 34, TRIPS, 51 it will be
fruitful to restate its full text as follows:
"Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the infringement of
the rights of the owner referred to in paragraph 1 (b) of Article 28, if the
subject matter of a patent is a process for obtaining a product, the judicial
authorities shall have the authority to order the defendant to prove that
the process to obtain an identical product is different from the patented
process. Therefore, Members shall provide, in at least one of the following
circumstances, that any identical product when produced without the
consent of the patent owner shall, in the absence of proof to the contrary,
be deemed to have been obtained by the patented process:
(a) if the product obtained by the patented process is new;

(b) if there is a substantial likelihood that the identical product was made
by the process and the owner of the patent has been unable through
reasonable efforts to determine the process actually used.
2. Any Member shall be free to provide that the burden of proof indicated
in paragraph 1 shall be on the alleged infringer only if the condition
referred to in subparagraph (a) is fulfilled or only if the condition referred
to in subparagraph (b) is fulfilled.
3. In the adduction of proof to the contrary, the legitimate interests of
defendants in protecting their manufacturing and business secrets shall be
taken into account."
From the above, a WTO Member is required to provide a rule of disputable

(note the words "in the absence of proof to the contrary") presumption
that a product shown to be identical to one produced with the use of a
patented process shall be deemed to have been obtained by the (illegal)
use of the said patented process, (1) where such product obtained by the
patented product is new, or (2) where there is "substantial likelihood" that
the identical product was made with the use of the said patented process
but the owner of the patent could not determine the exact process used in
obtaining such identical product. Hence, the "burden of proof"
contemplated by Article 34 should actually be understood as the duty of
the alleged patent infringer to overthrow such presumption. Such burden,
properly understood, actually refers to the "burden of evidence" (burden of
going forward) placed on the producer of the identical (or fake) product to
show that his product was produced without the use of the patented
process.
The foregoing notwithstanding, the patent owner still has the "burden of
proof" since, regardless of the presumption provided under paragraph 1 of
Article 34, such owner still has to introduce evidence of the existence of
the alleged identical product, the fact that it is "identical" to the genuine
one produced by the patented process and the fact of "newness" of the
genuine product or the fact of "substantial likelihood" that the identical
product was made by the patented process.
The foregoing should really present no problem in changing the rules of
evidence as the present law on the subject, Republic Act No. 165, as
amended, otherwise known as the Patent Law, provides a similar
presumption in cases of infringement of patented design or utility model,
thus:
"SEC. 60. Infringement. Infringement of a design patent or of a patent

for utility model shall consist in unauthorized copying of the patented
design or utility model for the purpose of trade or industry in the article or
product and in the making, using or selling of the article or product
copying the patented design or utility model. Identity or substantial
identity with the patented design or utility model shall constitute evidence
of copying." (Emphasis supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a
disputable presumption applies only if (1) the product obtained by the
patented process is NEW or (2) there is a substantial likelihood that the
identical product was made by the process and the process owner has not
been able through reasonable effort to determine the process used. Where
either of these two provisos does not obtain, members shall be free to
determine the appropriate method of implementing the provisions of TRIPS

within their own internal systems and processes.
By and large, the arguments adduced in connection with our disposition of
the third issue derogation of legislative power will apply to this fourth
issue also. Suffice it to say that the reciprocity clause more than justifies
such intrusion, if any actually exists. Besides, Article 34 does not contain
an unreasonable burden, consistent as it is with due process and the
concept of adversarial dispute settlement inherent in our judicial system.
So too, since the Philippine is a signatory to most international conventions
on patents, trademarks and copyrights, the adjustment in legislation and
rules of procedure will not be substantial. 52
Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other
Documents Contained in the Final Act
Petitioners allege that the Senate concurrence in the WTO Agreement and
its annexes but not in the other documents referred to in the Final Act,
namely the Ministerial Declaration and Decisions and the Understanding on
Commitments in Financial Services is defective and insufficient and thus
constitutes abuse of discretion. They submit that such concurrence in the
WTO Agreement alone is flawed because it is in effect a rejection of the
Final Act, which in turn was the document signed by Secretary Navarro, in
representation of the Republic upon authority of the President. They
contend that the second letter of the President to the Senate 53 which
enumerated what constitutes the Final Act should have been the subject of
concurrence of the Senate.
(b) to adopt the Ministerial Declarations and Decisions."
The assailed Senate Resolution No. 97 expressed concurrence in exactly

what the Final Act required from its signatories, namely, concurrence of the
Senate in the WTO Agreement.
The Ministerial Declarations and Decisions were deemed adopted without
need for ratification. They were approved by the ministers by virtue of
Article XXV: 1 of GATT which provides that representatives of the members
can meet "to give effect to those provisions of this Agreement which
invoke joint action, and generally with a view to facilitating the operation
and furthering the objectives of this Agreement." 56
The Understanding on Commitments in Financial Services also approved in
Marrakesh does not apply to the Philippines. It applies only to those 27
Members which "have indicated in their respective schedules of
commitments on standstill, elimination of monopoly, expansion of
operation of existing financial service suppliers, temporary entry of
personnel, free transfer and processing of information, and national
treatment with respect to access to payment, clearing systems and
refinancing available in the normal course of business." 57
On the other hand, the WTO Agreement itself expresses what multilateral
agreements are deemed included as its integral parts, 58 as follows:
"Article II
"A final act, sometimes called protocol de clture, is an instrument which

records the winding up of the proceedings of a diplomatic conference and
usually includes a reproduction of the texts of treaties, conventions,
recommendations and other acts agreed upon and signed by the
plenipotentiaries attending the conference." 54 It is not the treaty itself. It
is rather a summary of the proceedings of a protracted conference which
may have taken place over several years. The text of the "Final Act
Embodying the Results of the Uruguay Round of Multilateral Trade
Negotiations" is contained in just one page 55 in Vol. I of the 36-volume
Uruguay Round of Multilateral Trade Negotiations. By signing said Final Act,
Secretary Navarro as representative of the Republic of the Philippines
undertook:
"(a) to submit, as appropriate, the WTO Agreement for the consideration of

their respective competent authorities with a view to seeking approval of
the Agreement in accordance with their procedures; and
Scope of the WTO

1. The WTO shall provide the common institutional framework for the
conduct of trade relations among its Members in matters to the
agreements and associated legal instruments included in the Annexes to
this Agreement.
2. The Agreements and associated legal instruments included in Annexes
1, 2, and 3 (hereinafter referred to as "Multilateral Agreements") are
integral parts of this Agreement, binding on all Members.
3. The Agreements and associated legal instruments included in Annex 4
(hereinafter referred to as "Plurilateral Trade Agreements") are also part of
this Agreement for those Members that have accepted them, and are
binding on those Members. The Plurilateral Trade Agreements do not create
either obligation or rights for Members that have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as specified in annex

1A (hereinafter referred to as "GATT 1994") is legally distinct from the
General Agreement on Tariffs and Trade, dated 30 October 1947, annexed
to the Final Act adopted at the conclusion of the Second Session of the
Preparatory Committee of the United Nations Conference on Trade and
Employment, as subsequently rectified, amended or modified (hereinafter
referred to as "GATT 1947").
It should be added that the Senate was well-aware of what it was
concurring in as shown by the members deliberation on August 25, 1994.
After reading the letter of President Ramos dated August 11, 1994, 59 the
senators of the Republic minutely dissected what the Senate was
concurring in, as follows: 60
"THE CHAIRMAN: Yes. Now, the question of the validity of the submission
came up in the first day hearing of this Committee yesterday. Was the
observation made by Senator Taada that what was submitted to the
Senate was not the agreement on establishing the World Trade
Organization by the final act of the Uruguay Round which is not the same
as the agreement establishing the World Trade Organization? And on that
basis, Senator Tolentino raised a point of order which, however, he agreed
to withdraw upon understanding that his suggestion for an alternative
solution at that time was acceptable. That suggestion was to treat the
proceedings of the Committee as being in the nature of briefings for
Senators until the question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President submitting a new. . .
is he making a new submission which improves on the clarity of the first
submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there
should be no misunderstanding, it was his intention to clarify all matters by
giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Taada and later on Senator
Tolentino since they were the ones that raised this question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now clearly appear
that what is being submitted to the Senate for ratification is not the Final
Act of the Uruguay Round, but rather the Agreement on the World Trade
Organization as well as the Ministerial Declarations and Decisions, and the
Understanding and Commitments in Financial Services.
I am now satisfied with the wording of the new submission of President
Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator
Tolentino? And after him Senator Neptali Gonzales and Senator Lina.
SEN. TOLENTINO, Mr. Chairman, I have not seen the new submission
actually transmitted to us but I saw the draft of his earlier, and I think it
now complies with the provisions of the Constitution, and with the Final Act
itself . The Constitution does not require us to ratify the Final Act. It
requires us to ratify the Agreement which is now being submitted. The
Final Act itself specifies what is going to be submitted to with the
governments of the participants.
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In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit
as appropriate the WTO Agreement for the consideration of the respective
competent authorities with a view of seeking approval of the Agreement in
accordance with their procedures.
In other words, it is not the Final Act that was agreed to be submitted to
the governments for ratification or acceptance as whatever their
constitutional procedures may provide but it is the World Trade
Organization Agreement. And if that is the one that is being submitted
now, I think it satisfies both the Constitution and the Final Act itself .
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator
Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a
matter of record. And they had been adequately reflected in the journal of
yesterdays session and I dont see any need for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want
to make any comment on this?

SEN. LINA, Mr. President, I agree with the observation just made by
Senator Gonzales out of the abundance of question. Then the new
submission is, I believe, stating the obvious and therefore I have no
further comment to make."
Epilogue
In praying for the nullification of the Philippine ratification of the WTO
Agreement, petitioners are invoking this Courts constitutionally imposed
duty "to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction" on the part of the
Senate in giving its concurrence therein via Senate Resolution No. 97.
Procedurally, a writ of certiorari grounded on grave abuse of discretion may
be issued by the Court under Rule 65 of the Rules of Court when it is
amply shown that petitioners have no other plain, speedy and adequate
remedy in the ordinary course of law.
By grave abuse of discretion is meant such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction. 61 Mere abuse
of discretion is not enough. It must be grave abuse of discretion as when
the power is exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, and must be so patent and so gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform
the duty enjoined or to act at all in contemplation of law. 62 Failure on the
part of the petitioner to show grave abuse of discretion will result in the
dismissal of the petition. 63
In rendering this Decision, this Court never forgets that the Senate, whose
act is under review, is one of two sovereign houses of Congress and is thus
entitled to great respect in its actions. It is itself a constitutional body
independent and coordinate, and thus its actions are presumed regular and
done in good faith. Unless convincing proof and persuasive arguments are
presented to overthrow such presumptions, this Court will resolve every
doubt in its favor. Using the foregoing well-accepted definition of grave
abuse of discretion and the presumption of regularity in the Senates
processes, this Court cannot find any cogent reason to impute grave abuse
of discretion to the Senates exercise of its power of concurrence in the
WTO Agreement granted it by Sec. 21 of Article VII of the Constitution. 64
It is true, as alleged by petitioners, that broad constitutional principles
require the State to develop an independent national economy effectively
controlled by Filipinos; and to protect and/or prefer Filipino labor, products,
domestic materials and locally produced goods. But it is equally true that
such principles while serving as judicial and legislative guides are not
in themselves sources of causes of action. Moreover, there are other
equally fundamental constitutional principles relied upon by the Senate
which mandate the pursuit of a "trade policy that serves the general
welfare and utilizes all forms and arrangements of exchange on the basis
of equality and reciprocity" and the promotion of industries "which are
competitive in both domestic and foreign markets," thereby justifying its
acceptance of said treaty. So too, the alleged impairment of sovereignty in
the exercise of legislative and judicial powers is balanced by the adoption
of the generally accepted principles of international law as part of the law
of the land and the adherence of the Constitution to the policy of
cooperation and amity with all nations.
chanroblesvirtuallawlibrary
That the Senate, after deliberation and voting, voluntarily and

overwhelmingly gave its consent to the WTO Agreement thereby making it
"a part of the law of the land" is a legitimate exercise of its sovereign duty
and power. We find no "patent and gross" arbitrariness or despotism "by
reason of passion or personal hostility" in such exercise. It is not
impossible to surmise that this Court, or at least some of its members,
may even agree with petitioners that it is more advantageous to the
national interest to strike down Senate Resolution No. 97. But that is not a
legal reason to attribute grave abuse of discretion to the Senate and to
nullify its decision. To do so would constitute grave abuse in the exercise of
our own judicial power and duty. Ineludably, what the Senate did was a
valid exercise of its authority. As to whether such exercise was wise,
beneficial or viable is outside the realm of judicial inquiry and review. That
is a matter between the elected policy makers and the people. As to
whether the nation should join the worldwide march toward trade
liberalization and economic globalization is a matter that our people should
determine in electing their policy makers. After all, the WTO Agreement
allows withdrawal of membership, should this be the political desire of a
member.
The eminent futurist John Naisbitt, author of the best seller Megatrends,
predicts an Asian Renaissance 65 where "the East will become the
dominant region of the world economically, politically and culturally in the
next century." He refers to the "free market" espoused by WTO as the
"catalyst" in this coming Asian ascendancy. There are at present about 31
countries including China, Russia and Saudi Arabia negotiating for
membership in the WTO. Notwithstanding objections against possible
limitations on national sovereignty, the WTO remains as the only viable
structure for multilateral trading and the veritable forum for the
development of international trade law. The alternative to WTO is isolation,
stagnation, if not economic self-destruction. Duly enriched with original
membership, keenly aware of the advantages and disadvantages of
globalization with its on-line experience, and endowed with a vision of the
future, the Philippines now straddles the crossroads of an international
strategy for economic prosperity and stability in the new millennium. Let
the people, through their duly authorized elected officers, make their free
choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
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SO ORDERED
FIRST DIVISION
G.R. No. 188550, August 19, 2013
DEUTSCHE BANK AG MANILA BRANCH, Petitioner, v. COMMISSIONER
OF INTERNAL REVENUE,Respondent.
DECISION
SERENO, C.J.:
This is a Petition for Review1 filed by Deutsche Bank AG Manila Branch

(petitioner) under Rule 45 of the 1997 Rules of Civil Procedure assailing
the Court of Tax Appeals En Banc (CTA En Banc) Decision2 dated 29 May
2009 and Resolution3 dated 1 July 2009 in C.T.A. EB No. 456.
THE FACTS
In accordance with Section 28(A)(5)4 of the National Internal Revenue
Code (NIRC) of 1997, petitioner withheld and remitted to respondent on 21
October 2003 the amount of PHP 67,688,553.51, which represented the
fifteen percent (15%) branch profit remittance tax (BPRT) on its regular
banking unit (RBU) net income remitted to Deutsche Bank Germany (DB
Germany) for 2002 and prior taxable years. 5
mandated under Section III paragraph (2) of Revenue Memorandum Order

(RMO) No. 1-2000.
Further, the CTA Second Division relied on Mirant (Philippines) Operations
Corporation (formerly Southern Energy Asia-Pacific Operations [Phils.],
Inc.) v. Commissioner of Internal Revenue 9(Mirant)where the CTA En
Banc ruled that before the benefits of the tax treaty may be extended to a
foreign corporation wishing to avail itself thereof, the latter should first
invoke the provisions of the tax treaty and prove that they indeed apply to
the corporation.
THE CTA EN BANC RULING10
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Believing that it made an overpayment of the BPRT, petitioner filed with

the BIR Large Taxpayers Assessment and Investigation Division on 4
October 2005 an administrative claim for refund or issuance of its tax
credit certificate in the total amount of PHP 22,562,851.17. On the same
date, petitioner requested from the International Tax Affairs Division
(ITAD) a confirmation of its entitlement to the preferential tax rate of 10%
under the RP-Germany Tax Treaty.6
Alleging the inaction of the BIR on its administrative claim, petitioner filed
a Petition for Review7 with the CTA on 18 October 2005. Petitioner
reiterated its claim for the refund or issuance of its tax credit certificate for
the amount of PHP 22,562,851.17 representing the alleged excess BPRT
paid on branch profits remittance to DB Germany.
THE CTA SECOND DIVISION RULING8
After trial on the merits, the CTA Second Division found that petitioner
indeed paid the total amount of PHP 67,688,553.51 representing the 15%
BPRT on its RBU profits amounting to PHP 451,257,023.29 for 2002 and
prior taxable years. Records also disclose that for the year 2003, petitioner
remitted to DB Germany the amount of EURO 5,174,847.38 (or PHP
330,175,961.88 at the exchange rate of PHP 63.804:1 EURO), which is net
of the 15% BPRT.
However, the claim of petitioner for a refund was denied on the ground
that the application for a tax treaty relief was not filed with ITAD prior to
the payment by the former of its BPRT and actual remittance of its branch
profits to DB Germany, or prior to its availment of the preferential rate of
ten percent (10%) under the RP-Germany Tax Treaty provision. The
court a quo held that petitioner violated the fifteen (15) day period
The CTA En Banc affirmed the CTA Second Divisions Decision dated 29
August 2008 and Resolution dated 14 January 2009. Citing Mirant, the
CTA En Banc held that a ruling from the ITAD of the BIR must be secured
prior to the availment of a preferential tax rate under a tax treaty. Applying
the principle ofstare decisis et non quieta movere, the CTA En Banc took
into consideration that this Court had denied the Petition in G.R. No.
168531 filed by Mirant for failure to sufficiently show any reversible error
in the assailed judgment.11 The CTA En Banc ruled that once a case has
been decided in one way, any other case involving exactly the same point
at issue should be decided in the same manner.
The court likewise ruled that the 15-day rule for tax treaty relief
application under RMO No. 1-2000 cannot be relaxed for petitioner, unlike
in CBK Power Company Limited v. Commissioner of Internal Revenue.12 In
that case, the rule was relaxed and the claim for refund of excess final
withholding taxes was partially granted. While it issued a ruling to CBK
Power Company Limited after the payment of withholding taxes, the ITAD
did not issue any ruling to petitioner even if it filed a request for
confirmation on 4 October 2005 that the remittance of branch profits to DB
Germany is subject to a preferential tax rate of 10% pursuant to Article 10
of the RP-Germany Tax Treaty.
ISSUE
This Court is now confronted with the issue of whether the failure to
strictly comply with RMO No. 1-2000 will deprive persons or corporations
of the benefit of a tax treaty.
THE COURTS RULING
The Petition is meritorious.
Under Section 28(A)(5) of the NIRC, any profit remitted to its head office
shall be subject to a tax of 15% based on the total profits applied for or
earmarked for remittance without any deduction of the tax component.
However, petitioner invokes paragraph 6, Article 10 of the RP-Germany Tax
Treaty, which provides that where a resident of the Federal Republic of
Germany has a branch in the Republic of the Philippines, this branch may
be subjected to the branch profits remittance tax withheld at source in
accordance with Philippine law but shall not exceed 10% of the gross
amount of the profits remitted by that branch to the head office.
By virtue of the RP-Germany Tax Treaty, we are bound to extend to a
branch in the Philippines, remitting to its head office in Germany, the
benefit of a preferential rate equivalent to 10% BPRT.
On the other hand, the BIR issued RMO No. 1-2000, which requires that
any availment of the tax treaty relief must be preceded by an application
with ITAD at least 15 days before the transaction. The Order was issued to
streamline the processing of the application of tax treaty relief in order to
improve efficiency and service to the taxpayers. Further, it also aims to
prevent the consequences of an erroneous interpretation and/or
application of the treaty provisions (i.e., filing a claim for a tax
refund/credit for the overpayment of taxes or for deficiency tax liabilities
for underpayment).13
The crux of the controversy lies in the implementation of RMO No. 1-2000.
Petitioner argues that, considering that it has met all the conditions under
Article 10 of the RP-Germany Tax Treaty, the CTA erred in denying its claim
solely on the basis of RMO No. 1-2000. The filing of a tax treaty relief
application is not a condition precedent to the availment of a preferential
tax rate. Further, petitioner posits that, contrary to the ruling of the
CTA, Mirant is not a binding judicial precedent to deny a claim for refund
solely on the basis of noncompliance with RMO No. 1-2000.
Respondent counters that the requirement of prior application under RMO
No. 1-2000 is mandatory in character. RMO No. 1-2000 was issued
pursuant to the unquestioned authority of the Secretary of Finance to
promulgate rules and regulations for the effective implementation of the
NIRC. Thus, courts cannot ignore administrative issuances which partakes
the nature of a statute and have in their favor a presumption of legality.
The CTA ruled that prior application for a tax treaty relief is mandatory,
and noncompliance with this prerequisite is fatal to the taxpayers
availment of the preferential tax rate.
We disagree.
A minute resolution is not a binding precedent
At the outset, this Courts minute resolution on Mirant is not a binding
precedent. The Court has clarified this matter in Philippine Health Care
Providers, Inc. v. Commissioner of Internal Revenue 14 as follows:
It is true that, although contained in a minute resolution, our dismissal of
the petition was a disposition of the merits of the case. When we dismissed
the petition, we effectively affirmed the CA ruling being questioned. As a
result, our ruling in that case has already become final. When a minute
resolution denies or dismisses a petition for failure to comply with formal
and substantive requirements, the challenged decision, together with its
findings of fact and legal conclusions, are deemed sustained. But what is
its effect on other cases?
With respect to the same subject matter and the same issues
concerning the same parties, it constitutes res judicata. However,
if other parties or another subject matter (even with the same
parties and issues) is involved, the minute resolution is not binding
precedent. Thus, in CIR v. Baier-Nickel, the Court noted that a previous
case, CIR v. Baier-Nickel involving the same parties and the same issues,
was previously disposed of by the Court thru a minute resolution dated
February 17, 2003 sustaining the ruling of the CA. Nonetheless, the Court
ruled that the previous case ha(d) no bearing on the latter case because
the two cases involved different subject matters as they were concerned
with the taxable income of different taxable years.
Besides, there are substantial, not simply formal, distinctions between a
minute resolution and a decision. The constitutional requirement under the
first paragraph of Section 14, Article VIII of the Constitution that the facts
and the law on which the judgment is based must be expressed clearly and
distinctly applies only to decisions, not to minute resolutions. A minute
resolution is signed only by the clerk of court by authority of the justices,
unlike a decision. It does not require the certification of the Chief Justice.
Moreover, unlike decisions, minute resolutions are not published in the
Philippine Reports. Finally, the proviso of Section 4(3) of Article VIII speaks
of a decision. Indeed, as a rule, this Court lays down doctrines or principles
of law which constitute binding precedent in a decision duly signed by the
members of the Court and certified by the Chief Justice. (Emphasis
supplied)
Even if we had affirmed the CTA in Mirant, the doctrine laid down in that
Decision cannot bind this Court in cases of a similar nature. There are
differences in parties, taxes, taxable periods, and treaties involved; more
importantly, the disposition of that case was made only through a minute
resolution.
Tax Treaty vs. RMO No. 1-2000
Our Constitution provides for adherence to the general principles
of international law as part of the law of the land.15 The timehonored international principle of pacta sunt servandademands the
performance in good faith of treaty obligations on the part of the
states that enter into the agreement. Every treaty in force is
binding upon the parties, and obligations under the treaty must be
performed by them in good faith.16 More importantly, treaties have
the force and effect of law in this jurisdiction.17
Tax treaties are entered into to reconcile the national fiscal

legislations of the contracting parties and, in turn, help the
taxpayer avoid simultaneous taxations in two different
jurisdictions.18CIR v. S.C. Johnson and Son, Inc. further clarifies
that tax conventions are drafted with a view towards the
elimination of international juridical double taxation, which is
defined as the imposition of comparable taxes in two or more
states on the same taxpayer in respect of the same subject matter
and for identical periods. The apparent rationale for doing away
with double taxation is to encourage the free flow of goods and
services and the movement of capital, technology and persons
between countries, conditions deemed vital in creating robust and
dynamic economies. Foreign investments will only thrive in a fairly
predictable and reasonable international investment climate and
the protection against double taxation is crucial in creating such a
climate.19
Simply put, tax treaties are entered into to minimize, if not

eliminate the harshness of international juridical double taxation,
which is why they are also known as double tax treaty or double
tax agreements.
A state that has contracted valid international obligations is
bound to make in its legislations those modifications that may be
necessary to ensure the fulfillment of the obligations
undertaken.20 Thus, laws and issuances must ensure that the
reliefs granted under tax treaties are accorded to the parties
entitled thereto. The BIR must not impose additional requirements
that would negate the availment of the reliefs provided for under
international agreements. More so, when the RP-Germany Tax
Treaty does not provide for any pre-requisite for the availment of
the benefits under said agreement.

Likewise, it must be stressed that there is nothing in RMO No. 12000 which would indicate a deprivation of entitlement to a tax
treaty relief for failure to comply with the 15-day period. We
recognize the clear intention of the BIR in implementing RMO No.
1-2000, but the CTAs outright denial of a tax treaty relief for
failure to strictly comply with the prescribed period is not in
harmony with the objectives of the contracting state to ensure that
the benefits granted under tax treaties are enjoyed by duly entitled
persons or corporations.
Bearing in mind the rationale of tax treaties, the period of
application for the availment of tax treaty relief as required by
RMO No. 1-2000 should not operate to divest entitlement to the
relief as it would constitute a violation of the duty required by
good faith in complying with a tax treaty. The denial of the
availment of tax relief for the failure of a taxpayer to apply within
the prescribed period under the administrative issuance would
impair the value of the tax treaty. At most, the application for a tax
treaty relief from the BIR should merely operate to confirm the
entitlement of the taxpayer to the relief.
The obligation to comply with a tax treaty must take precedence
over the objective of RMO No. 1-2000. Logically, noncompliance
with tax treaties has negative implications on international
relations, and unduly discourages foreign investors. While the
consequences sought to be prevented by RMO No. 1-2000 involve
an administrative procedure, these may be remedied through other
system management processes, e.g., the imposition of a fine or
penalty. But we cannot totally deprive those who are entitled to
the benefit of a treaty for failure to strictly comply with an
administrative issuance requiring prior application for tax treaty
relief.
Prior Application vs. Claim for Refund
Again, RMO No. 1-2000 was implemented to obviate any erroneous
interpretation and/or application of the treaty provisions. The
objective of the BIR is to forestall assessments against
corporations who erroneously availed themselves of the benefits of
the tax treaty but are not legally entitled thereto, as well as to
save such investors from the tedious process of claims for a refund
due to an inaccurate application of the tax treaty provisions.
However, as earlier discussed, noncompliance with the 15-day
period for prior application should not operate to automatically

divest entitlement to the tax treaty relief especially in claims for
refund.
The underlying principle of prior application with the BIR becomes
moot in refund cases, such as the present case, where the very
basis of the claim is erroneous or there is excessive payment
arising from non-availment of a tax treaty relief at the first
instance. In this case, petitioner should not be faulted for not
complying with RMO No. 1-2000 prior to the transaction. It could
not have applied for a tax treaty relief within the period
prescribed, or 15 days prior to the payment of its BPRT, precisely
because it erroneously paid the BPRT not on the basis of the
preferential tax rate under
b. That on October 21, 2003, it filed its Monthly Remittance Return

of Final Income Taxes Withheld under BIR Form No. 1601-F and
remitted the amount of P67,688,553.51 as branch profits
remittance tax with the BIR; and
c. That on October 29, 2003, the Bangko Sentral ng
Pilipinas having issued a clearance, petitioner remitted to
Frankfurt Head Office the amount of EUR5,174,847.38 (or
P330,175,961.88 at 63.804 Peso/Euro) representing its 2002
profits remittance.22
The amount of PHP 67,688,553.51 paid by petitioner represented
the 15% BPRT on its RBU net income, due for remittance to DB
Germany amounting to PHP 451,257,023.29 for 2002 and prior
taxable years.23
the RP-Germany Tax Treaty, but on the regular rate as prescribed

by the NIRC. Hence, the prior application requirement becomes
illogical. Therefore, the fact that petitioner invoked the provisions
of the RP-Germany Tax Treaty when it requested for a confirmation
from the ITAD before filing an administrative claim for a refund
should be deemed substantial compliance with RMO No. 1-2000.
Corollary thereto, Section 22921 of the NIRC provides the taxpayer
a remedy for tax recovery when there has been an erroneous
payment of tax. The outright denial of petitioners claim for a
refund, on the sole ground of failure to apply for a tax treaty relief
prior to the payment of the BPRT, would defeat the purpose of
Section 229.
Petitioner is entitled to a refund
It is significant to emphasize that petitioner applied though
belatedly for a tax treaty relief, in substantial compliance with
RMO No. 1-2000. A ruling by the BIR would have confirmed
whether petitioner was entitled to the lower rate of 10% BPRT
pursuant to the RP-Germany Tax Treaty.
Nevertheless, even without the BIR ruling, the CTA Second Division
found as follows:
Based on the evidence presented, both documentary and
testimonial, petitioner was able to establish the following facts:
cralawlibrary
a. That petitioner is a branch office in the Philippines of Deutsche

Bank AG, a corporation organized and existing under the laws of
the Federal Republic of Germany;
chanr0blesvirtualawlibrary
Likewise, both the administrative and the judicial actions were

filed within the two-year prescriptive period pursuant to Section
229 of the NIRC.24
Clearly, there is no reason to deprive petitioner of the benefit of a

preferential tax rate of 10% BPRT in accordance with the RPGermany Tax Treaty.
Petitioner is liable to pay only the amount of PHP 45,125,702.34 on
its RBU net income amounting to PHP 451,257,023.29 for 2002 and
prior taxable years, applying the 10% BPRT. Thus, it is proper to
grant petitioner a refund ofthe difference between the PHP
67,688,553.51 (15% BPRT) and PHP 45,125,702.34 (10% BPRT)
or a total of PHP 22,562,851.17.
WHEREFORE, premises considered, the instant Petition
is GRANTED. Accordingly, the Court of Tax Appeals En
Banc Decision dated 29 May 2009 and Resolution dated 1 July
2009 areREVERSED and SET ASIDE. A new one is hereby entered
ordering respondent Commissioner of Internal Revenue to refund
or issue a tax credit certificate in favor of petitioner Deutsche Bank
AG Manila Branch the amount of TWENTY TWO MILLION FIVE
HUNDRED SIXTY TWO THOUSAND EIGHT HUNDRED FIFTY ONE
PESOS AND SEVENTEEN CENTAVOS (PHP 22,562,851.17),
Philippine currency, representing the erroneously paid BPRT for
2002 and prior taxable years.
SO ORDERED.
U.S. Supreme Court

Stone v. Mississippi, 101 U.S. 814 (1879)
Stone v. Mississippi
101 U.S. 814
ERROR TO THE SUPREME COURT
OF THE STATE OF MISSISSIPPI
Syllabus
1. In 1867, the Legislature of Mississippi granted a charter to a lottery
company for twenty-five years in consideration of a stipulated sum in
cash, an annual payment of a further sum, and a percentage of
receipts from the sale of tickets. A provision of the constitution

adopted in 1868 declares that
the most deserving works of art executed by citizens of Mississippi, or

the most useful inventions in mechanics, science, or art, mane by
citizens of Mississippi."
"The legislature shall never authorize any lottery, nor shall the sale of
lottery tickets be allowed, nor shall any lottery heretofore authorized
be permitted to be drawn, or tickets therein to be sold."
Sec. 7 provides that the articles to be distributed or awarded may

consist of lands, books, paintings, statues, antiques, scientific
Held:
Page 101 U. S. 815
1. That this provision is not in conflict with sec. 10, art. 1, of the
Constitution of the United States, which prohibits a State from
"passing a law impairing the obligation of contracts."
instruments or apparatus, or any other property or thing that may be

ornamental, valuable, or useful.
2. That such a charter is in legal effect nothing more than a license to

enjoy the privilege conferred for the time, and on the terms specified,
subject to future legislative or constitutional control or withdrawal.
2. Trustees of Dartmouth College v. Woodward, 4 Wheat. 518,
commented upon and explained.
3. The legislature cannot, by chartering a lottery company, defeat the
will of the people of the state authoritatively expressed, in relation to
the continuance of such business in their midst.
The Legislature of Mississippi passed an Act, approved Feb. 16, 1867,
entitled "An Act incorporating the Mississippi Agricultural and
Manufacturing Aid Society." Its provisions, so far as they bear upon the
questions involved, are as follows:
"The corporation shall have power to receive subscriptions, and sell
and dispose of certificates of subscriptions which shall entitle the
holders thereof to any articles that may be awarded to them, and the
distribution of the awards shall be fairly made in public, after
advertising, by the casting of lots, or by lot, chance, or otherwise, in
such manner as shall be directed by the bylaws of said
corporation; . . . and the said corporation shall have power to offer
premiums or prizes in money, for the best essays on agriculture,
manufactures, and education, written by a citizen of Mississippi, or to
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Sect. 8 requires the corporation to pay, before the commencement of

business, to the treasurer of the state for the use of the university the
sum of $5,000, and to give bond and security for the annual payment
of $1,000, together with one-half percent on the amount of receipts
derived from the sale of certificates.
Sect. 9 declares that any neglect or refusal to comply with the
provisions of the act shall work a forfeiture of all the privileges
granted, and subject any officer or agent failing to carry out its
provisions or committing any fraud in selling tickets at drawing of
lottery to indictment, the penalty being a "fine not less than $1,000,
and imprisonment not less than six months."
Sect. 11 enacts that as soon as the sum of $100,000 is subscribed and
the sum of $25,000 paid into the capital stock, the company shall go
into operation under their charter and not before, and the act of
incorporation shall continue and be in force for the space of twentyfive years from its passage, and that all laws and parts of laws in
conflict with its provisions be repealed, and that the act shall take
effect from and after its passage.
The constitution of the state, adopted in convention May 15, 1868, and
ratified by the people Dec. 1, 1869, declares that
1870, adjudged that the respondents be ousted of and from all the
liberties and privileges, franchises and emoluments, exercised by them
under and by virtue of the said act.
The legislature passed an act, approved July 16, 1870, entitled
The judgment was, on error, affirmed by the supreme court, and Stone
and others sued out this writ.
"An Act enforcing the provisions of the Constitution of the State of

Mississippi, prohibiting all kinds of lotteries within said State, and
making it unlawful to conduct one in this state."
MR. CHIEF, JUSTICE WAITE delivered the opinion of the Court.
The Attorney-General of Mississippi filed, March 17, 1874, in the

Circuit Court of Warren County in that state, an information in the
nature of a quo warranto, against John B. Stone and others, alleging
that, without authority or warrant of law, they were then, and for the
preceding twelve months had been, carrying on a lottery or gift
enterprise within said county and state under the name of "The
Mississippi Agricultural, Educational,
It is now too late to contend that any contract which a state actually
enters into when granting a charter to a private corporation is not
within the protection of the clause in the Constitution of the United
states that prohibits states from passing laws impairing the obligation
of contracts. Art. 1, sec. 10. The doctrines of Trustees of Dartmouth
College v. Woodward, 4 Wheat. 518, announced by this court more
than sixty years ago, have become so imbedded in the jurisprudence
of the United states as to make them to all intents and purposes a part
of the Constitution itself. In this connection, however,
chanroblesvirtualawlibrarychanroblesvirtualawlibrary
Page 101 U. S. 816

Page 101 U. S. 817
and Manufacturing Aid Society." The information alleges that said
society obtained from the legislature a charter, but sets up the
aforesaid constitutional provision and the act of July 16, 1870, and
avers that the charter was thereby virtually and in effect repealed.
By their answer the respondents admit that they were carrying on a
lottery enterprise under the name mentioned. They aver that in so
doing they were exercising the rights, privileges, and franchises
conferred by their charter, and that they have in all things complied
with its provisions. They further aver that their rights and franchises
were not impaired by the constitutional provision and legislative
enactment aforesaid.
The state replied to the answer by admitting that the respondents had
in every particular conformed to the provisions of their charter.
The court, holding that the act of incorporation had been abrogated
and annulled by the constitution of 1868 and the legislation of July 16,
it is to be kept in mind that it is not the charter which is protected, but

only any contract the charter may contain. If there is no contract,
there is nothing in the grant on which the Constitution can act.
Consequently the first inquiry in this class of cases always is, whether
a contract has in fact been entered into, and if so, what its obligations
are.
In the present case, the question is whether the State of Mississippi, in
its sovereign capacity, did by the charter now under consideration bind
itself irrevocably by a contract to permit "the Mississippi Agricultural,
Educational, and Manufacturing Aid Society," for twenty-five years, "to
receive subscriptions, and sell and dispose of certificates of
subscription which shall entitle the holders thereof to" "any lands,
books, paintings, antiques, scientific instruments or apparatus, or any
other property or thing that may be ornamental, valuable, or useful,"
"awarded to them" "by the casting of lots, or by lot, chance, or
otherwise." There can be no dispute but that under this form of words
the legislature of the state chartered a lottery company, having all the
powers incident to such a corporation, for twenty-five years, and that
in consideration thereof the company paid into the state treasury
$5,000 for the use of a university, and agreed to pay, and until the
commencement of this suit did pay, an annual tax of $1,000 and "onehalf of one percent on the amount of receipts derived from the sale of
certificates or tickets." If the legislature that granted this charter had
the power to bind the people of the state and all succeeding
legislatures to allow the corporation to continue its corporate business
during the whole term of its authorized existence, there is no doubt
about the sufficiency of the language employed to effect that object,
although there was an evident purpose to conceal the vice of the
transaction by the phrases that were used. Whether the alleged
contract exists, therefore, or not depends on the authority of the
legislature to bind the state and the people of the state in that way.
All agree that the legislature cannot bargain away the police power of
a state.
"Irrevocable grants of property and franchises may be made if they do
not impair the supreme authority to make laws for the right
government of the state, but
Page 101 U. S. 818
no legislature can curtail the power of its successors to make such
laws as they may deem proper in matters of police."
Metropolitan Board of Excise v. Barrie, 34 N.Y. 657; Boyd v.
Alabama, 94 U. S. 645. Many attempts have been made in this court
and elsewhere to define the police power, but never with entire
success. It is always easier to determine whether a particular case
comes within the general scope of the power, than to give an abstract
definition of the power itself which will be in all respects accurate. No
one denies, however, that it extends to all matters affecting the public
health or the public morals. Beer Company v. Massachusetts, 97 U. S.
25; Patterson v. Kentucky, 97 U. S. 501. Neither can it be denied that
lotteries are proper subjects for the exercise of this power. We are
aware that formerly, when the sources of public revenue were fewer
than now, they were used in some or all of the states, and even in the
District of Columbia, to raise money for the erection of public
buildings, making public improvements, and not unfrequently for
educational and religious purposes; but this Court said, more than
thirty years ago, speaking through Mr. Justice Grier, in @ 49 U. S. 168,
that
"experience has shown that the common forms of gambling are
comparatively innocuous when placed in contrast with the widespread
pestilence of lotteries. The former are confined to a few persons and
places, but the latter infests the whole community; it enters every
dwelling; it reaches every class; it preys upon the hard earnings of the
poor; and it plunders the ignorant and simple."
Happily, under the influence of restrictive legislation, the evils are not
so apparent now, but we very much fear that with the same
opportunities of indulgence the same results would be manifested.
If lotteries are to be tolerated at all, it is no doubt better that they
should be regulated by law, so that the people may be protected as far
as possible against the inherent vices of the system; but that they are
demoralizing in their effects, no matter how carefully regulated, cannot
admit of a doubt. When the government is untrammeled by any claim
of vested rights or chartered privileges, no one has ever supposed that
lotteries could not lawfully be suppressed, and those who manage
them punished severely as violators of the rules of social
Page 101 U. S. 819

morality. From 1822 to 1867, without any constitutional requirement,
they were prohibited by law in Mississippi, and those who conducted
them punished as a kind of gamblers. During the provisional
government of that state, in 1867, at the close of the late civil war, the
present act of incorporation, with more of like character, was passed.
The next year, 1868, the people, in adopting a new constitution with a
view to the resumption of their political rights as one of the United
states, provided that
Art. 12, sec. 15. There is now scarcely a state in the Union where
lotteries are tolerated, and Congress has enacted a special statute, the
object of which is to close the mails against them. Rev.Stat., sec.
3894; 19 Stat. 90, sec. 2.
The question is therefore directly presented, whether, in view of these
facts, the legislature of a state can, by the charter of a lottery
company, defeat the will of the people, authoritatively expressed, in
relation to the further continuance of such business in their midst. We
think it cannot. No legislature can bargain away the public health or
the public morals. The people themselves cannot do it, much less their
servants. The supervision of both these subjects of governmental
power is continuing in its nature, and they are to be dealt with as the
special exigencies of the moment may require. Government is
organized with a view to their preservation, and cannot divest itself of
the power to provide for them. For this purpose, the largest legislative
discretion is allowed, and the discretion cannot be parted with any
more than the power itself. Beer Company v. Massachusetts, supra.
In Trustees of Dartmouth College v. Woodward, 4 Wheat. 518, it was
argued that the contract clause of the Constitution, if given the effect
contended for in respect to corporate franchises,
"would be an unprofitable and vexatious interference with the internal
concerns of a state, would unnecessarily and unwisely embarrass its
legislation, and render immutable those civil institutions which are
established for the purpose of internal government, and which, to
subserve those purposes, ought
Page 101 U. S. 820
to vary with varying circumstances,"
p. 17 U. S. 628); but Mr. Chief Justice Marshall, when he announced

the opinion of the Court, was careful to say (p. 17 U. S. 629),
"that the framers of the Constitution did not intend to restrain states in
the regulation of their civil institutions, adopted for internal
government, and that the instrument they have given us is not to be
so construed."
The present case, we think, comes within this limitation. We have held,
not, however, without strong opposition at times, that this clause
protected a corporation in its charter exemptions from taxation. While
taxation is in general necessary for the support of government, it is
not part of the government itself. Government was not organized for
the purposes of taxation, but taxation may be necessary for the
purposes of government. As such, taxation becomes an incident to the
exercise of the legitimate functions of government, but nothing more.
No government dependent on taxation for support can bargain away
its whole power of taxation, for that would be substantially abdication.
All that has been determined thus far is, that for a consideration it
may, in the exercise of a reasonable discretion, and for the public
good, surrender a part of its powers in this particular.
But the power of governing is a trust committed by the people to the
government, no part of which can be granted away. The people, in
their sovereign capacity, have establish d their agencies for the
preservation of the public health and the public morals, and the
protection of public and private rights. These several agencies can
govern according to their discretion, if within the scope of their general
authority, while in power; but they cannot give away nor sell the
discretion of those that are to come after them, in respect to matters
the government of which, from the very nature of things, must "vary
with varying circumstances." They may create corporations, and give
them, so to speak, a limited citizenship; but as citizens, limited in their
privileges, or otherwise, these creatures of the government creation
are subject to such rules and regulations as may from time to time be
ordained and established for the preservation of health and morality.
The contracts which the Constitution protects are those that relate to
property rights, not governmental. It is not always
Page 101 U. S. 821

easy to tell on which side of the line which separates governmental
from property rights a particular case is to be put, but in respect to
lotteries there can be no difficulty. They are not, in the legal
acceptation of the term, mala in se, but, as we have just seen, may
properly be made mala prohibita. They are a species of gambling, and
wrong in their influences. They disturb the checks and balances of a
well ordered community. Society built on such a foundation would
almost of necessity bring forth a population of speculators and
gamblers, living on the expectation of what, "by the casting of lots, or
by lot, chance, or otherwise," might be "awarded" to them from the
accumulations of others. Certainly the right to suppress them is
governmental, to be exercised at all times by those in power, at their
discretion. Anyone, therefore, who accepts a lottery charter does so
with the implied understanding that the people, in their sovereign
capacity and through their properly constituted agencies, may resume
it at any time when the public good shall require, whether it be paid
for or not. All that one can get by such a charter is a suspension of
certain governmental rights in his favor, subject to withdrawal at will.
He has in legal effect nothing more than a license to enjoy the
privilege on the terms named for the specified time, unless it be
sooner abrogated by the sovereign power of the state. It is a permit,
good as against existing laws, but subject to future legislative and
constitutional control or withdrawal.
On the whole, we find no error in the record.
Judgment affirmed.
Within such bounds the wisdom, expediency, or necessity of the law does
not concern the courts.
EN BANC
[G.R. No. 10572. December 21, 1915. ]
FRANCIS A. CHURCHILL and STEWART TAIT, Plaintiffs-Appellees, v.
JAMES J. RAFFERTY, Collector of Internal Revenue, DefendantAppellant.
Attorney-General Avancena for Appellant.
Aitken & DeSelms for Appellees.
SYLLABUS
1. CONSTITUTIONAL LAW; SCOPE OF INQUIRY IN TESTING VALIDITY OF A
LAW. Unless a law be so repugnant to the supreme law that it appears
clearly that constitutional limitations have been overstepped by the
legislature, courts should not declare a legislative enactment invalid.
Merely to doubt its validity is to resolve the doubt in favor of its validity.
2. ID.; INTERNAL REVENUE; INJUNCTION TO RESTRAIN COLLECTION OF A
TAX. A provision in an internal revenue law prohibiting the courts from
enjoining the collection of an internal revenue tax is not invalid as opposed
to the "due process" and "equal protection of the law" clauses of the bill of
rights of the Organic Act. Such legislation, both Federal and State, has
been upheld by the United States Supreme Court.
3. ID.; ID.; ID.; JURISDICTION OF COURTS. Nor is such a provision of
law invalid as curtailing the jurisdiction of the courts of the Philippine
Islands as fixed by section 9 of the Organic Act: (a) because jurisdiction
was never conferred upon Philippine courts to enjoin the collection of taxes
imposed by the Philippine Commission; and (b) because, in the present
case, another adequate remedy has been provided by payment and
protest.
4. ID.; POLICE POWER; NATURE AND SCOPE IN GENERAL. If a law
relates to the public health, safety, morals, comfort, or general welfare of
the community, it is within the scope of the police power of the State.
5. ID.; ID.; NOT LIMITED TO ANY PARTICULAR SUBJECT. From whatever

direction the social, economic, or general welfare of the people is menaced,
there is legal justification for the exercise of the police power; and the use
of private property may be regulated or restricted to whatever extent may
be necessary to preserve inviolate these declared essentials to the well
being of the public.
6. ID.; ID.; THINGS OFFENSIVE TO THE SENSES OF SMELL OR HEARING.
It has long been recognized that uses of private property which are
offensive to the senses of smell of hearing may be so regulated or
segregated as to disturb as little as possible the pursuits of other persons.
7. ID., ID.; SIGHT. It is not the adoption of a new principle but simply
the extension of a well established principle to hold that the police power
may also regulate and restrict uses of private property when devoted to
advertising which is offensive to the sight.
8. ID.; ID.; ID.; BILLBOARDS. The indiscriminate use of outdoor
advertising tends to mar not only natural outdoor landscapes but whatever
of civic beauty has been attained by the expenditure of public moneys for
parks, boulevards, and buildings. The widespread agitation in many
European countries, as well as in the United States, against the so-called
billboards the most common form of this kind of advertising shows
that they are a source of annoyance and irritation to the public and
interfere with the proper enjoyment of outdoor life by the general public.
This justifies their suppression or regulation to the extent that they
interfere with the right of the public.
DECISION
TRENT, J. :
The judgment appealed from in this case perpetually restrains and

prohibits the defendant and his deputies from collecting and enforcing
against the plaintiffs and their property the annual tax mentioned and
described in subsection (b) of section 100 of Act No. 2339, effective July 1,
19]4, and from destroying or removing any sign, signboard, or billboard,
the property of the plaintiffs, for the sole reason that such sign, signboard,
or billboard is, or may be offensive to the sight; and decrees the

cancellation of the bond given by the plaintiffs to secure the issuance of
the preliminary injunction granted soon after the commencement of this
action.
This case divides itself into two parts and gives rise to two main questions;
(1) that relating to the power of the court to restrain by injunction the
collection of the tax complained of, and (2) that relating to the validity of
those provisions of subsection (b) of section 100 of Act No. 2339,
conferring power upon the Collector of Internal Revenue to remove any
sign, signboard, or billboard upon the ground that the same is offensive to
the sight or is otherwise nuisance.
The first question is one of jurisdiction and is of vital importance to the
Government. The sections of Act No. 2339, which bear directly upon the
subject, are 139 and 140. The first expressly forbids the use of an
injunction to stay the collection of any internal revenue tax; the second
provides a remedy for any wrong in connection with such taxes, and this
remedy was intended to be exclusive, thereby precluding the remedy by
injunction, which remedy is claimed to be constitutional. The two sections,
then, involve the right of a dissatisfied taxpayer to use an exceptional
remedy to test the validity of any tax or to determine any other question
connected therewith, and the question whether the remedy by injunction is
exceptional.
Preventive remedies of the courts are extraordinary and are not the usual
remedies. The origin and history of the writ of injunction show that it has
always been regarded as an extraordinary, preventive remedy, as
distinguished from the common course of the law to redress evils after
they have been consummated. No injunction issues as of course, but is
granted only upon the oath of a party and when there is no adequate
remedy at law. The Government does, by sections 139 and 140, take away
the preventive remedy of injunction, if it ever existed, and leaves the
taxpayer, in a contest with it, to the same ordinary remedial actions which
prevail between citizen and citizen. The Attorney-General, on behalf of the
defendant, contends that there is no provisions of the paramount law
which prohibits such a course. While, on the other hand, counsel for
plaintiffs urge that the two sections are unconstitutional because (a) they
attempt to deprive aggrieved taxpayers of all substantial remedy for the
protection of their property, thereby, in effect, depriving them of their
property without due process of law; and (b) they attempt to diminish the
jurisdiction of the courts, as conferred upon them by Acts Nos. 136 and
190, which jurisdiction was ratified and confirmed by the Act of Congress
of July 1, 1902.
In the first place, it has been suggested that section 139 does not apply to
the tax in question because the section, in speaking of a "tax," means only
legal taxes; and that an illegal tax (the one complained of) is not a tax,
and, therefore, does not fall within the inhibition of the section, and may
be restrained by injunction. There is no force in this suggestion. The
inhibition applies to all internal revenue taxes imposed, or authorized to be
imposed, by Act No. 2339. (Snyder v. Marks, 109 U. S., 189.) And,
furthermore, the mere fact that a tax is illegal, or that the law, by virtue of
which it is imposed, is unconstitutional, does not authorize a court of
equity to restrain its collection by injunction. There must be a further
showing that there are special circumstances which bring the case under
some well recognized head of equity jurisprudence, such as that
irreparable injury, multiplicity of suits, or a cloud upon title to real estate
will result, and also that there is, as we have indicated, no adequate
remedy at law. This is the settled law in the United States, even in the
absence of statutory enactments such as sections 139 and 140.
(Hannewinkle v. Mayor, etc., of Georgetown, 82 U. S., 547; Indiana Mfg.
Co. v. Koehne 188 U. S., 681; Ohio Tax Cases, 232 U. S., 576, 587;
Pittsburgh C. C. & St. L. R. Co. v. Board of Public Works, 172 U. S., 32;
Shelton v. Platt, 139 U. S., 591; State Railroad Tax Cases, 92 U. S., 575.)
Therefore, this branch of the case must be controlled by sections 139 and
140, unless the same be held unconstitutional, and consequently, null and
void.
"The right and power of judicial tribunals to declare whether enactments of
the legislature exceed the constitutional limitations and are invalid has
always been considered a grave responsibility, as well as a solemn duty.
The courts invariably give the most careful consideration to questions
involving the interpretation and application of the Constitution, and
approach constitutional questions with great deliberation, exercising their
power in this respect with the greatest possible caution and even
reluctance; and they should never declare a statute void, unless its
invalidity is, in their judgment, beyond reasonable doubt. To justify a court
in pronouncing a legislative act unconstitutional, or a provision of a state
constitution to be in contravention of the Constitution of the United States,
the case must be so clear as to be free from doubt, and the conflict of the
statute with the constitution must be irreconcilable, because it is but a
decent respect to the wisdom, the integrity, and the patriotism of the
legislative body by which any law is passed to presume in favor of its
validity until the contrary is shown beyond reasonable doubt. Therefore, in
no doubtful case will the judiciary pronounce a legislative act to be
contrary to the constitution. To doubt the constitutionality of a law is to
resolve the doubt in favor of its validity." (6 Ruling Case Law, secs. 71, 72,
and 73, and cases cited therein.)
It is also the settled law in the United States that "due process of law"
does not always require, in respect to the Government, the same process
that is required between citizens, though it generally implies and includes
regular allegations, opportunity to answer, and a trial according to some
well settled course of judicial proceedings. The case with which we are
dealing is in point. A citizens property, both real and personal, may be
taken, and usually is taken, by the government in payment of its taxes
without any judicial proceedings whatever. In this country, as well as in the
United States, the officer charged with the collection of taxes is authorized
to seize and sell the property of delinquent taxpayers without applying to
the courts for assistance, and the constitutionality of the law authorizing
this procedure never has been seriously questioned. (City of Philadelphia v.
[Diehl] The Collector, 5 Wall., 720; Nicholl v. U. S., 7 Wall., 122, and cases
cited.) This must necessarily be the course, because it is upon taxation
that the Government chiefly relies to obtain the means to carry on its
operations, and it is of the utmost importance that the modes adopted to
enforce the collection of the taxes levied should be summary and
interfered with as little as possible. No government could exist if every
litigious man were permitted to delay the collection of its taxes. This
principle of public policy must be constantly borne in mind in determining
cases such as the one under consideration.
With these principles to guide us, we will proceed to inquire whether there
is any merit in the two propositions insisted upon by counsel for the
plaintiffs. Section 5 of the Philippine Bill provides: "That no law shall be
enacted in said Islands which shall deprive any person of life, liberty, or
property without due process of law, or deny to any person therein the
equal protection of the law."
"equal protection of the law" clauses in the Constitution, we would be

going too far to hold that section 139 violates those same provisions in the
Philippine Bill. That the Supreme Court of the United States has so held,
cannot be doubted.
In Cheatham v. United States (92 U. S., 85, 89) which involved the validity
of an income tax levied by an act of Congress prior to the one in issue in
the case of Pollock v. Farmers Loan & Trust Co. (157 U. S., 429) the court,
through Mr. Justice Miller, said: "If there existed in the courts, state or
National, any general power of impeding or controlling the collection of
taxes, or relieving the hardship incident to taxation, the very existence of
the government might be placed in the power of a hostile judiciary. (Dows
v. The City of Chicago, 11 Wall., 108.) While a free course of remonstrance
and appeal is allowed within the departments before the money is finally
exacted, the General Government has wisely made the payment of the tax
claimed, whether of customs or of internal revenue, a condition precedent
to a resort to the courts by the parts against whom the tax is assessed. In
the internal revenue branch it has further prescribed that no such suit shall
be brought until the remedy by appeal has been tried; and, if brought after
this, it must be within six months after the decision on the appeal. We
regard this as a condition on which alone the government consents to
litigate the lawfulness of the original tax. It is not a hard condition. Few
governments have conceded such a right on any condition. If the
compliance with this condition requires the party aggrieved to pay the
money, he must do it."
Section 139, with which we have been dealing, reads: "No court shall have
authority to grant an injunction to restrain the collection of any internalrevenue tax."
Again, in State Railroad Tax Cases (92 U. S., 575, 613), the court said:
"That there might be no misunderstanding of the universality of this
principle, it was expressly enacted, in 1867, that no suit for the purpose of
restraining the assessment or collection of any tax shall be maintained in
any court. (Rev. Stat., sec. 3224.) And though this was intended to apply
alone to taxes levied by the United States, it shows the sense of Congress
of the evils to be feared if courts of justice could, in any case, interfere
with the process of collecting taxes on which the government depends for
its continued existence. It is a wise policy. It is founded in the simple
philosophy derived from the experience of ages, that the payment of taxes
has to be enforced by summary and stringent means against a reluctant
and often adverse sentiment; and to do this successfully, other
instrumentalities and other modes of procedure are necessary, than those
which belong to courts of justice."
A comparison of these two sections show that they are essentially the
same. Both expressly prohibit the restraining of taxes by injunction. If the
Supreme Court of the United States has clearly and definitely held that the
provisions of section 3224 do not violate the "due process of law" and
And again, in Snyder v. Marks (109 U. S., 189), the court said: "The
remedy of a suit to recover back the tax after it is paid is provided by
statute, and a suit to restrain its collection i,. forbidden. The remedy so
given is exclusive, and no other remedy can be substituted for it. Such has
The origin and history of these provisions are well-known. They are found
in substance in the Constitution of the United States and in that of every
state in the Union.
Section 3224 of the Revised Statutes of the United States, effective since
1867, provides that: "No suit for the purpose of restraining the assessment
or collection of any tax shall be maintained in any court."
been the current of decisions in the Circuit Courts of the United States, and
we are satisfied it is a correct view of the law."
In the consideration of the plaintiffs second proposition, we will attempt to

show (1) that the Philippine courts never have had, since the American
occupation, the power to restrain by injunction the collection of any tax
imposed by the Insular Government for its own purpose and benefit, and
(2) that assuming that our courts had or have such power, this power has
not been diminished or curtailed by sections 139 and 140.
We will first review briefly the former and present systems of taxation.
Upon the American occupation of the Philippines, there was found a fairly
complete system of taxation. This system was continued in force by the
mili- tary authorities, with but few changes, until the Civil Government
assumed charge of the subject. The principal sources of revenue under the
Spanish regime were derived from customs receipts, the so-called
industrial taxes, the urbana taxes, the stamp tax, the personal cedula tax,
and the sale of the public domain. The industrial and urbana taxes
constituted practically an income tax of some 5 per cent on the net income
of persons engaged in industrial and commercial pursuits and on the
income of owners of improved city property. The sale of stamped paper
and adhesive stamps, which the law required to be used, constituted the
stamp tax. The cedula tax was a graduated tax, ranging from nothing up to
P37.50. The revenue derived from the sale of the public domain was not
considered a tax. The American authorities at once abolished the cedula
tax, but later restored it in a modified form, charging for each cedula
twenty centavos, an amount which was supposed to be just sufficient to
cover the cost of issuance. The urbana tax was abolished by Act No. 223,
effective September 6, 1901.
The "Municipal Code" (Act No. 82) and the Provincial Government Act (No.
83), both enacted in 1901, authorize municipal councils and provincial
boards to impose an ad valorem tax on real estate. The Municipal Code did
not apply to the city of Manila. This city was given a special charter (Act
No. 183), effective August 30, 1901. Under this charter the Municipal
Board of Manila is authorized and empowered to impose taxes upon real
estate and, like municipal councils, to license and regulate certain
occupations. Customs matters were completely reorganized by Act No.
355, effective at the port of Manila on February 7, 1902, and at other ports
in the Philippine Islands the day after the receipt of a certified copy of the
Act. The Internal Revenue Law of 1904 (Act No. 1189), repealed all
existing laws, ordinances, etc., imposing taxes upon the persons, objects,
or occupations taxed under that act, and all industrial taxes and stamp
taxes imposed under the Spanish regime were eliminated, but the
industrial tax was continued in force until January 1, 1905. This Internal
Revenue Law did not take away from municipal councils, provincial boards,
and the Municipal Board of the city of Manila the power to impose taxes
upon real estate. This Act (No. 1189), with its amendments, was repealed
by Act No. 2339, an act "revising and consolidating the laws relative to
internal revenue."
Section 84 of Act No. 82 provides that "No court shall entertain any suit
assailing the validity of a tax assessed under this act until the taxpayer
shall have paid, under protest, the taxes assessed against him, . . . ."
This inhibition was inserted in section 17 of Act No. 83 and applies to taxes
imposed by provincial boards. The inhibition was not inserted in the Manila
Charter until the passage of Act No. 1793, effective October 12, 1907. Act
No. 355 expressly makes the payment of the exactions claimed a condition
precedent to a resort to the courts by dissatisfied importers. Section 52 of
Act No. 1189 provides "That no courts shall have authority to grant an
injunction restraining the collection of any taxes imposed by virtue of the
provisions of this Act, but the remedy of the taxpayer who claims that he is
unjustly assessed or taxed shall be by payment under protest of the sum
claimed from him by the Collector of Internal Revenue and by action to
recover back the sum claimed to have been illegally collected."
Sections 139 and 140 of Act No. 2339 contain, as we have indicated, the
same prohibition and remedy. The result is that the courts have been
expressly forbidden, in every act creating or imposing taxes or imposts
enacted by the legislative body of the Philippines since the American
occupation, to entertain any suit assailing the validity of any tax or impost
thus imposed until the tax shall have been paid under protest. The only
taxes which have not been brought within the express inhibition were
those included in that part of the old Spanish system which completely
disappeared on or before January 1, 1905, and possibly the old customs
duties which disappeared in February, 1902.
Section 56 of the Organic Act (No. 136), effective June 16, 19019 provides
that "Courts of First Instance shall have original jurisdiction:
"2. In all civil actions which involve the . . . legality of any tax, impost, or
assessment, . . .
"7. Said courts and their judges, or any of them, shall have power to issue
writs of injunction, mandamus, certiorary, prohibition, quo warranto,
and habeas corpus in their respective provinces and districts, in the
manner provided in the Code of Civil Procedure."
The provisions of the Code of Civil Procedure (Act No. 190), effective
October 1, 1901, which deals with the subject of injunctions, are sections
162 to 172, inclusive. Injunctions, as here defined, are of two kinds;
preliminary and final. The former may be granted at any time after the
commencement of the action and before final judgment, and the latter at
the termination of the trial as the relief or part of the relief prayed for (sec.
162). Any judge of the Supreme Court may grant a preliminary injunction
in any action pending in that court or in any Court of First Instance. A
preliminary injunction may also be granted by a judge of the Court of First
Instance in actions pending in his district in which he has original
jurisdiction (sec. 163). But such injunctions may be granted only when the
complaint shows facts entitling the plaintiff to the relief demanded (sec.
166), and before a final or permanent injunction can be granted, it must
appear upon the trial of the action that the plaintiff is entitled to have
commission or continuance of the acts complained of perpetually
restrained (sec. 171). These provisions authorize the institution in Courts
of First Instance of what are known as "injunction suits," the sole object of
which is to obtain the issuance of final injunction. They alos authorize the
granting of injunctions as aiders in ordinary civil actions. We have defined
in Devesa v. Arbes (13 Phil Rep., 273), an injunction to be "A special
remedy adopted in that code (Act 190) from American practice, and
originally borrowed from English legal procedure, which was there issued
by the authority and under the seal of a court of equity, and limited, as in
other cases where equitable relief is sought, to those cases where there is
no plain, adequate, and complete remedy at law, which will not be
granted while the rights between the parties are undetermined, except in
extraordinary cases where material and irreparable injury will be done,
which cannot be compensated in damages . . ."
By paragraph 2 of section 56 of Act No. 136, supra, and the provisions of

the various subsequent Acts heretofore mentioned, the Insular
Government has consented to litigate with aggrieved persons the validity
of any original tax or impost imposed by it on condition that this be done in
ordinary civil actions after the taxes or exactions shall have been paid. But
it is said that paragraph 2 confers original jurisdiction upon Courts of First
Instance to hear and determine "all civil actions" which involve the validity
of any tax, impost or assessment, and that if the all-inclusive words "all"
and "any" be given their natural and unrestricted meaning, no action
wherein that question is involved can arise over which such courts do not
have jurisdiction. (Barrameda v. Moir, 25 Phil. Rep., 44.) This is true. But
the term "civil actions" had its well defined meaning at the time the
paragraph was enacted. The same legislative body which enacted
paragraph 2 on June 16, 1901, had, just a few months prior to that time,
defined the only kind of action in which the legality of any tax imposed by
it might be assailed. (Sec. 84, Act 82, enacted January 31, 1901, and sec.
17, Act No. 83, enacted February 6, 1901.) That kind of action being
payment of the tax under protest and an ordinary suit to recover and no
other, there can be no doubt that Courts of First Instance have jurisdiction
over all such actions. The subsequent legislation on the same subject
shows clearly that the Commission, in enacting paragraph 2, supra, did not
intend to change or modify in any way section 84 of Act No. 82 and section
17 of Act No. 83, but, on the contrary, it was intended that "civil actions,"
mentioned in said paragraph, should be understood to mean, in so far as
testing the legality of taxes were concerned, only those of the kind and
character provided for in two sections above mentioned. It is also urged
that the power to restrain by injunction the collection of taxes of imposts is
conferred upon Courts of First Instance by paragraph 7 of section 56,
supra. This paragraph does empower those courts to grant injunctions,
both preliminary and final, in any civil action pending in their districts,
provided always, that the complaint shows facts entitling the plaintiff to the
relief demanded. injunction suits, such as the one at bar, are "civil
actions," but of a special or extraordinary character. It cannot be said that
the Commission intended to give a broader or different meaning to the
word "action," used in Chapter 9 of the Code of Civil Procedure in
connection with injunctions, than it gave to the same word found in
paragraph 2 of section 56 of the Organic Act. The Insular Government, in
exercising the power conferred upon it by the Congress of the United
States, has declared that the citizens and residents of this country shall
pay certain specified taxes and imposts. The power to tax necessarily
carries with it the power to collect the taxes. This being true, the weight of
authority supports the proposition that the Government may fix the
conditions upon which it will consent to litigate the validity of its original
taxes. (Tenessee v. Sneed, 96 U.S., 69.)
We must, therefore, conclude that paragraphs 2 and 7 of section 56 of Act
No. 136, construed in the light of the prior and subsequent legislation to
which we have referred, and the legislative and judicial history of the same
subject in the United States with which the Commission was familiar, do
not empower Courts of First Instance to interfere by injunction with the
collection of the taxes in question in this case.
If we are in error as to the scope of paragraphs 2 and 7, supra, and the
Commission did intend to confer the power upon the courts to restrain the
collection of taxes, it does not necessarily follow that this power or
jurisdiction has been taken away by section 139 of Act No. 2339, for the
reason that all agree that an injunction will not issue in any case if there is
an adequate remedy at law. The very nature of the writ itself prevents its
issuance under such circumstances. Legislation forbidding the issuing of
injunctions in such cases is unnecessary. So the only to be here

determined is whether the remedy provided for in section 140 of Act 2339
is adequate. If it is, the writs which form the basis of this appeal should
not have been issued. If this is the correct view, the authority to issue
injunctions will not have been taken away by section 139, but rendered
inoperative only by reason of an adequate remedy having been made
available.
The legislative body of the Philippine Islands has declared from the
beginning (Act No. 82) that payment under protest and suit to recover is
an adequate remedy to test the legality of any tax or impost, and that this
remedy is exclusive. Can we say that the remedy is not adequate or that it
is not exclusive, or both? The plaintiffs in the case at bar are the first, in so
far as we are, to question either the adequacy or exclusiveness of this
remedy. We will refer to a few cases in the United States where statutes
similar to sections 139 and 140 have been construed and applied.
In May, 1874, one Bloomstein presented a petition to the circuit court,
sitting in Nashville, Tennessee, stating that his real and personal property
had been assessed for state taxes in the year 1872 to the amount of
$132.60; that he tendered to the collector this amount in "funds receivable
by law for such purposes; and that the collector refused to receive the
same. He prayed for an alternative writ of mandamus to compel the
collector to receive the bills in payment for such taxes, or to show cause to
the contrary. To this petition the collector, in his answer, set up the defense
that the petitioners suit was expressly prohibited by the Act of the General
Assembly of the State of Tennessee, passed in 1873. The petition was
dismissed and the relief prayed for refused. An appeal to the supreme
court of the State resulted in the affirmance of the judgment of the lower
court. The case was then carried to the Supreme Court of the United
States (Tennessee v. Sneed,96 U. S., 69), where the judgment was again
affirmed.
party paying said revenue may, at any time within thirty days after making
said payment, and not longer thereafter, sue the said officer having
collected said sum, for the recovery thereof. And the same may be tried in
any court having the jurisdiction of the amount and parties; and, if it be
determined that the same was wrongfully collected, as not being due from
said party to the State, for any reason going to the merits of the same,
then the court trying the case may certify of record that the same was
wrongfully paid and ought to be refunded; and thereupon the Comptroller
shall issue his warrant for the same, which shall be paid in preference to
other claims on the Treasury.
"2. That there shall be no other remedy, in any case of the collection of
revenue, or attempt to collect revenue illegally, or attempt to collect
revenue in funds only receivable by said officer under the law, the same
being other or different funds than such as the tax payer may tender, or
claim the right to pay, than that above provided; and no writ for the
prevention of the collection of any revenue claimed, or to hinder or delay
the collection of the game, shall in anywise issue, either injunction,
supersedeas, prohibition, or any other writ or process whatever; but in all
cases in which, for any reason, any person shall claim that the tax so
collected was wrongfully or illegally collected, the remedy for said party
shall be as above provided, and in no other manner."
The two sections of the Act of [March 21,] 1873, drawn in question in that
case, read as follows:
In discussing the adequacy of the remedy provided by the Tennessee

Legislature, as above set forth, the Supreme Court of the United States, in
the case just cited, said: "This remedy is simple and effective. A suit at law
to recover money unlawfully exacted is as speedy, as easily tried, and less
complicated than a proceeding by mandamus. . . . In revenue cases,
whether arising upon its (United States) Internal Revenue Laws or those
providing for the collection of duties upon foreign imports, it (United
States) adopts the rule prescribed by the State of Tennes- see. It requires
the contestant to pay the amount as fixed by the Government, and gives
him power to sue the collector, and in such suit to test the legality of the
tax. There is nothing illegal or even harsh in this. It is a wise and
reasonable precaution for the security of the Government."
"1. That in all cases in which an officer, charged by law with the collection
of revenue due the State, shall institute any proceeding, or take any steps
for the collection of the same, alleged or claimed to be due by said officer
from any citizen, the party against whom the proceeding or step is taken
shall, if he conceives the same to be unjust or illegal, or against any
statute or clause of the Constitution of the State, pay the same under
protest; and, upon his making said payment, the officer or collector shall
pay such revenue into the State Treasury, giving notice at the time of
payment to the Comptroller that the same was paid under protest; and the
Thomas C. Platt commenced an action in the Circuit Court of the United

States for the Eastern District of Tennessee to restrain the collection of a
license tax from the company which he represented. The defense was that
sections 1 and 2 of the Act of 1873, supra, prohibited the bringing of that
suit. This case also reached the Supreme Court of the United States.
(Shelton v. Platt, 159 U. S., 591.) In speaking of the inhibitory provisions
of sections 1 and 2 of the Act of 1873, the court said: "This Act has been
sanctioned and applied by the Courts of Tennessee. (Nashville v. Smith, 86
Tenn., 213; Louisville & N. R. Co. v. State, 8 Heisk., 663, 804.) It is, as
counsel observe, similar to the Act of Congress forbidding suit for the
purpose of restraining the assessment or collection of taxes under the
Internal Revenue Laws, in respect to which this court held that the remedy
by suit to recover back the tax after payment, provided for by the Statute,
was exclusive, (Snyder v. Marks, 109 U. S., 189 [27:901]; 14 Stat., 152,
475.) Legislation of this character has been called for by the
embarrassments resulting from the improvident employment of the writ of
injunction in arresting the collection of the public revenue; and, even in its
absence, the strong arm of the court of chancery ought not to be
interposed in that direction except where resort to that court is grounded
upon the settled principles which govern its jurisdiction."
the Legislature has the constitutional authority, where it has provided a

plain, adequate, and complete remedy at law to recover back taxes
illegally assessed and collected, to take away the remedy by injunction to
restrain their collection."
In Louisville & N. R. R. Co. v. State (8 Heisk. [64 Tenn. ], 663, 804), cited
by the Supreme Court of the United States in Shelton v. Platt, supra, the
court said: "It was urged that this statute (sections 1 and 2 of the Act of
1873, supra) is unconstitutional and void, as it deprives the citizen of the
remedy bycertiorari, guaranteed by the organic law."
It will be seen that this section has not taken away from the Philippine
Government the power to change the practice and method of procedure. If
sections 139 and 140, considered together, and this must always be done,
are nothing more than a mode of procedure, then it would seem that he
Legislature did not exceed its constitutional authority in enacting them.
Conceding for the moment that the duly authorized procedure for the
determination of the validity of any tax, impost, or assessment was by
injunction suits and that this method was available to aggrieved taxpayers
prior to the passage of Act No. 2339, may the Legislature change this
method of procedure? That the Legislature has the power to do this, there
can be no doubt, provided some other adequate remedy is substituted in
lieu thereof. In speaking of the modes of enforcing rights created by
contracts, the Supreme Court of the United States, in Tennessee v. Sneed.
supra, said: "The rule seems to be that in modes of proceeding and of
forms to enforce the contract the Legislature has the control, and may
enlarge, limit or alter them, provided that it does not deny a remedy, or so
embarrass it with conditions and restrictions as seriously to impair the
value of the right."
By the 10th section of the sixth article of the Constitution, [Tennessee] it is

provided that: "The judges or justices of inferior courts of law and equity
shall have power in all civil cases to issue writs ofcertiorari, to remove any
cause, or the transcript of the record thereof, from any inferior jurisdiction
into such court of law, on sufficient cause, supported by oath or
affirmation."
The court held the act valid as not being in conflict with these provisions of
the State constitution.
In Eddy v. The Township of Lee (73 Mich., 123), the complainants sought
to enjoin the collection of certain taxes for the year 1886. The defendants,
in support of their demurrer, insisted that the remedy by injunction had
been taken away by section 107 of the Act of 1885, which section reads as
follows: "No injunction shall issue to stay proceedings for the assessment
or collection of taxes under this Act."
It was claimed by the complainants that the above quoted provisions of the
Act of 1885 were unconstitutional and void as being in conflict with article
6, sec. 8, of the Constitution. which provides that: "The circuit courts shall
have original jurisdiction in all matters, civil and criminal, not excepted in
this Constitution, and not prohibited by law. . . . They shall also have
power to issue writs of habeas corpus, mandamus, injunction, quo
warranto, certiorari, and other writs necessary to carry into effect their
orders, judgments, and decrees."
Mr. Justice Champlin, speaking for the court, said: "I have no doubt that
Section 9 of the Philippine Bill reads in part as follows: "That the Supreme
Court and the Courts of First Instance of the Philippine Islands shall
possess and exercise jurisdiction as heretofore provided and such
additional jurisdiction as shall hereafter be prescribed by the Government
of said Islands, subject to the power of said Government to change the
practice and method of procedure."
In that case the petitioner urged that the Acts of 1873 were laws impairing
the obligation of the contract contained in the charter of the Bank of
Tennessee, which contract was entered into with the State in 1838. It was
claimed that this was done by placing such impediments and obstructions
in the way of its enforcement, thereby so impairing the remedies as
practically to render the obligation of no value. In disposing of this
contention, the court said: "If we assume that prior to 1873 the relator had
authority to prosecute his claim against the State by mandamus, and that
by the statutes of that year the further use of that form was prohibited to
him, the question remains, whether an effectual remedy was left to him or
provided for him. We think the regulation of the statute gave him an
abundant means of enforcing such right as he possessed. It provided that
he might pay his claim to the collector under protest, giving notice thereof
to the Comptroller of the Treasury; that at any time within thirty days
thereafter he might sue the officer making the collection; that the case
should be tried by any court having jurisdiction and, if found in favor of the
plaintiff on the merits, the court should certify that the same was
wrongfully paid and ought to be refunded and the Comptroller should
thereupon issue his warrant therefor, which should be paid in preference to
other claims on the Treasury."
a bona fide controversy. The legal points involved in the merits have been
presented with force, clearness, and great ability by the learned counsel of
both sides. If the law assailed were still in force, we would feel that an
opinion on its validity would be justifiable, but, as the amendment became
effective on January 1, 1915, we think it advisable to proceed no further
with this branch of the case.
But great stress is laid upon the fact that the plaintiffs in the case under
consideration are unable to pay the taxes assessed against them and that
if the law is enforced, they will be compelled to suspend business. This
point may be best answered by quoting from the case of Youngblood v.
Sexton (32 Mich., 406), wherein Judge Cooley, speaking for the court,
said: "But if this consideration is sufficient to justify the transfer of a
controversy from a court of law a court of equity, then every controversy
where money is demanded may be made the subject of equitable
cognizance. To enforce against a dealer a promissory note may in some
cases as effectually break up his business as to collect from him a tax of
equal amount. This is not what is known to the law as irreparable injury.
The courts have never recognized the consequences of the mere
enforcement of a money demand as falling within that category."
The next question arises in connection with the supplementary complaint,

the object of which is to enjoin the Collector of Internal Revenue from
removing certain billboards, the property of the plaintiffs located upon
private lands in the Province of Rizal. The plaintiffs allege that the billboards here in question "in no sense constitute a nuisance and are not
deleterious to the health, morals, or general welfare of the community, or
of any persons." The defendant denies these allegations in his answer and
claims that after due investigation made upon the complaints of the British
and German Consuls, he "decided that the billboard complained of was and
still is offensive to the sight, and is otherwise a nuisance." The plaintiffs
proved by Mr. Churchill that the "billboards were quite a distance from the
road and that they were strongly built, not dangerous to the safety of the
people, and contained no advertising matter which is filthy, indecent, or
deleterious to the morals of the community." The defendant presented no
testimony upon this point. In the agreed statement of facts submitted by
the parties, the plaintiffs "admit that the billboards mentioned were and
still are offensive to the sight."
Certain specified sections of Act No. 2339 were amended by Act No. 2432,
enacted December 23, 1914, effective January 1, 1915, by imposing
increased and additional taxes. Act No. 2432 was amended by Act No.
2445. Taxes imposed by Act No. 2432, as amended, were ratified by the
Congress of the United States on March 4, 1915. The opposition
manifested against the taxes imposed by Acts Nos. 2339 and 2432 is a
matter of local history. A great many businessmen thought the taxes thus
imposed were too high. If the collection of the new taxes on signs,
signboards, and billboards may be restrained, we see no well-founded
reason why injunctions cannot be granted restraining the collection of all or
at least a number of the other increased taxes. The fact that this may be
done, shows the wisdom of the Legislature in denying the use of the writ of
injunction to restrain the collection of any tax imposed by the Acts. When
this was done, an equitable remedy was made available to all dissatisfied
taxpayers.
The question now arises whether, the case being one of which the court
below had no jurisdiction, this court, on appeal, shall proceed to express
an opinion upon the validity of provisions of subsection (b) of section 100
of Act No. 2339, imposing the taxes complained of. As a general rule, an
opinion of the merits of a controversy ought to be declined when the court
is powerless to give the relief demanded. But it is claimed that this case is,
in many particulars, exceptional. It is true that it has been argued on the
merits, and there is no reason for any suggestion or suspicion that it is not
The pertinent provisions of subsection (b) of section 100 of Act No. 2339
read: "If after due investigation the Collector of Internal Revenue shall
decide that any sign, signboard, or billboard displayed or exposed to public
view is offensive to the sight or is otherwise a nuisance, he may by
summary order direct the removal of such sign, signboard, or billboard,
and if same is not removed within ten days after he has issued such order
he may himself cause its removal, and the sign, signboard, or billboard
shall thereupon be forfeited to the Government, and the owner thereof
charged with the expenses of the removal so effected. When the sign,
signboard, or billboard ordered to be removed as herein provided shall not
comply with the provisions of the general regulations of the Collector of
Internal Revenue, no rebate or refund shall be allowed for any portion of a
year for which the taxes may have been paid. Otherwise, the Collector of
Internal Revenue may in his discretion make a proportionate refund of the
tax for the portion of the year remaining for which the taxes were paid. An
appeal may be had from the order of the Collector of Internal Revenue to
the Secretary of Finance and Justice whose decision thereon shall be
final."
The Attorney-General, on behalf of the defendant, says: "The question
which the case presents under this head for determination, resolves itself
into this inquiry: Is the suppression of advertising signs displayed or
exposed to public view, which are admittedly offensive to the sight,
conducive to the public interest?"
And counsel for the plaintiffs states the question thus: "We contend that
portion of section 100 of Act No. 2339, empowering the Collector of
Internal Revenue to remove billboards as nuisances, if objectionable to the
sight, is unconstitutional, as constituting a deprivation of property without
due process of law."
From the position taken by counsel for both sides, it is clear that our
inquiry is limited to the question whether the enactment assailed by the
plaintiffs was a legitimate exercise of the police power of the Government;
for all property is held subject to that power.
As a consequence of the foregoing, all discussion and authorities cited,
which go to the power of the state to authorize administrative officers to
find, as a fact, that legitimate trades, callings, and businesses are, under
certain circumstances, statutory nuisances, and whether the procedure
prescribed for this purpose is due process of law, are foreign to the issue
here presented.
There can be no doubt that the exercise of the police power of the
Philippine Government belongs to the Legislature and that this power is
limited only by the Acts of Congress and those fundamental principles
which lie at the foundation of all republican forms of government. An Act of
the Legislature which is obviously and undoubtedly foreign to any of the
purposes of the police power and interferes with the ordinary enjoyment of
property would, without doubt, be held to be invalid. But where the Act is
reasonably within a proper consideration of and care for the public health,
safety, or comfort, it should not be disturbed by the courts. The courts
cannot substitute their own views for what is proper in the premises for
those of the Legislature. In Munn v. Illinois (94 U. S., 113), the United
States Supreme Court states the rule thus: "If no state of circumstances
could exist to justify such statute, then we may declare this one void
because in excess of the legislative power of this state; but if it could, we
must presume it did. Of the propriety of legislative interference, within the
scope of the legislative power, a legislature is the exclusive judge."
This rule is very fully discussed and declared in Powell v. Pennsylvania (127
U. S., 678) the "oleo-margarine" case. (See also Crowley v. Christensen,
137 U. S., 86, 87; Camfield v. U. S., 167 U. S., 518.) While the state may
interfere wherever the public interests demand it, and in this particular a
large discretion is necessarily vested in the legislature to determine, not
only what the interest of the public require, but what measures are
necessary for the protection of such interests; yet, its determination in
these matters is not final or conclusive, but is subject to the supervision of
the courts. (Lawton v. Steele, 152 U. S., 133.) Can it be said judicially that
signs, signboards, and billboards, which are admittedly offensive to the
sight, are not with the category of things which interfere with the public
safety, welfare, and comfort, and therefore beyond the reach of the police
power of the Philippine Government?
The numerous attempts which have been made to limit by definition the
scope of the police power are only interesting as illustrating its rapid
extension within comparatively recent years to points heretofore deemed
entirely within the field of private liberty and property rights. Blackstones
definition of the police power was as follows: "The due regulation and
domestic order of the kingdom, whereby the individuals of the state, like
members of a well governed family, are bound to conform their general
behavior to the rules of propriety, good neighborhood, and good manners,
to be decent, industrious, and inoffensive in their respective stations."
(Commentaries, vol. 4, p. 162.)
Chanceller Kent considered the police power the authority of the state "to
regulate unwholesome trades, slaughter houses, operations offensive to
the senses." Chief Justice Shaw of Massachusetts defined it as follows:
"The 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." (Com. v. Alger, 7 Cush.,
53.)
In the case of Butchers Union Slaughter-house, etc. Co. v. Crescent City
Live Stock Landing, etc. Co. (111 U. S., 746), it was suggested that the
public health and public morals are matters of legislative concern of which
the legislature cannot divest itself. (See State v. Mountain Timber Co.
[1913], 75 Wash., 581, where these definitions are collated.)
In Champer v. Greencastle (138 Ind., 339), it was said: "The police power
of the State, so far, has not received a full and complete definition. It may
be said, however, to be the right of the State, or state functionary, to
prescribe regulations for the good order, peace, health, protection,
comfort, convenience and morals of the community, which do not . . .
violate any of the provisions of the organic law." (Quoted with approval in
Hopkins v. Rich- mond [Va., 1915], 86 S. E., 139.)
In Com. v. Plymouth Coal Co. ([1911] 232 Pa., 141), it was said: "The
police power of the state is difficult of definition, but it has been held by
the courts to be the right to prescribe regulations for the good order,
peace, health, protection, comfort, convenience and morals of the
community, which does not encroach on a like power vested in congress or
state legislatures by the federal constitution, or does not violate the
provisions of the organic law; and it has been expressly held that the
fourteenth amendment to the federal constitution was not designed to
interfere with the exercise of that power by the state."
In People v. Brazee ([Mich., 1914], 149 N. W., 1053), it was said: "It [the
police power] has for its object the improvement of social and economic
conditions affecting the community at large and collectively with a view to
bring about the greatest good of the greatest number. Courts have
consistently and wisely declined to set any fixed limitations upon subjects
calling for the exercise of this power. It is elastic and is exercised from time
to time as varying social conditions demand correction."
In 8 Cyc., 863, it is said: "Police power is the name given to that inherent
sovereignty which it is the right and duty of the government or its agents
to exercise whenever public policy, in a broad sense, demands, for the
benefit of society at large, regulations to guard its morals, safety, health,
order or to insure in any respect such economic conditions as an advancing
civilization of a high complex character requires." (As quoted with approval
in Stettler v. OHara [19141, 69 Ore, 519.)
Finally, the Supreme Court of the United States has said in Noble State
Bank v. Haskell (219 U. S. C1911], 575): "It may be said in a general way
that the police power extends to all the great public needs. It may be put
forth in aid of what is sanctioned by usage, or held by the prevailing
morality or strong and preponderart opinion to be greatly and immediately
necessary to the public welfare."
This statement, recent as it is, has been quoted with approval by several
courts. (Cunningham v. Northwestern Imp. Co. [1911], 44 Mont., 180;
State v. Mountain Timber Co. [1913], 75 Wash, 581; McDavid v. Bank of
Bas Minette [Ala., 1915], 69 Sou., 452; Hopkins v. City of Richmond [Va.,
1915], 86 S. E., 139; State v. Philipps [Miss. 1915], 67 Sou., 651.)
It was said in Com. v. Alger (7 Cush., 53, 85), per Shaw, C.J., that: "It is
much easier to perceive and realize the existence and sources of this police
power than to mark its boundaries, or to prescribe limits to its exercise." In
Stone v. Mississippi (101 U. S., 814), it was said: "Many attempts have
been made in this court and elsewhere to define the police power, but
never with entire success. It is always easier to determine whether a
particular case comes within the general scope of the power, than to give
an abstract definition of the power itself, which will be in all respects

accurate."
Other courts have held the same view of efforts to evolve a satisfactory
definition of the police power. Manifestly, definitions which fail to anticipate
cases properly within the scope of the police power are deficient. It is
necessary, therefore, to confine our discussion to the principle involved and
determine whether the cases as they come up are within that principle.
The basic idea of civil polity in the United States is that government should
interfere with individual effort only to the extent necessary to preserve a
healthy social and economic condition of the country. State interference
with the use of private property may be exercised in three ways. First,
through the power of taxation, second, through the power of eminent
domain, and third, through the police power. By the first method it is
assumed that the individual receives the equivalent of the tax in the form
of protection and benefit he receives from the government as such. By the
second method he receives the market value of the property taken from
him. But under the third method the benefits he derives are only such as
may arise from the maintenance of a healthy economic standard of society
and is often referred to as damnum absgue injuria. (Com. v. Plymouth Coal
Co. 232 Pa., 141, Bemis v. Guirl Drainage Co., 182 Ind., 36.) There was a
time when state interference with the use of private property under the
guise of the police power was practically confined to the suppression of
common nuisances. At the present day, however, industry is organized
along lines which make it possible for large combinations of capital to profit
at the expense of the socio-economic progress of the nation by controlling
prices and dictating to industrial workers wages and conditions of labor.
Not only this but the universal use of mechanical contrivances by
producers and common carriers has enormously increased the toll of
human life and limb in the production and distribution of consumption
goods. To the extent that these businesses affect not only the public
health, safety, and morals, but also the general social and economic life of
the nation, it has been and will continue to be necessary for the state to
interfere by regulation. By so doing, it is true that the enjoyment of private
property is interfered with in no small degree and in ways that would have
been considered entirely unnecessary in years gone by. The regulation of
rates charged by common carriers, for instance, or the limitation of hours
of work in industrial establishments have only a very indirect bearing upon
the public health, safety, and morals, but do bear directly upon social and
economic conditions. To permit each individual unit of society to feel that
his industry will bring a fair return; to see that his work shall be done
under conditions that will not either immediately or eventually ruin his
health; to prevent the artificial inflation of prices of the things which are
necessary for his physical well being are matters which the individual is no
longer capable of attending to himself. It is within the province of the
police power to render assistance to the people to the extent that may be
necessary to safeguard these rights. Hence, laws providing for the
regulation of wages and hours of labor of coal miners (Rail & River Coal Co.
v. Ohio Industrial Commission, 236 U. S., 338); prohibiting the payment of
wages in company store orders (Keokee Coke Co. v. Taylor, 234 U. S.,
224); requiring payment of employees of railroads and other industrial
concerns in legal tender and requiring salaries to be paid semimonthly
(Erie R. R. Co. v. Williams, 233 U. S., 685); providing a maximum number
of hours of labor for women (Miller v. Wilson, U. S. Sup. Ct. [Feb.23,
1915], Adv. Opns., p. 342); prohibiting child labor (Sturges & Burn v.
Beauchamp, 231 U. S., 320); restricting the hours of labor in public
laundries (In re Wong Wing, 167 Cal., 109); limiting hours of labor in
industrial establishment generally (State v. Bunting, 71 Ore., 259); Sunday
Closing Laws (State v. Nicholls [Ore., 1915], 151 Pac., 473; People v. C.
Klinck Packing Co. [N. Y., 1915], 108 N. E., 278; Hiller v. State [Md.,
1914], 92 Atl., 842; State v. Penny, 42 Mont., 118; City of Springfield v.
Richter, 257 Ill., 578, 580; State v. Hondros [S. C., 1915], 84 S. E., 781);
have all been upheld as a valid exercise of the police power. Again,
workmens compensation laws have been quite generally upheld. These
statutes discard the common law theory that employers are not liable for
industrial accidents and make them responsible for all accidents resulting
from trade risks, it being considered that such accidents are a legitimate
charge against production and that the employer by controlling the prices
of his product may shift the burden to the community. Laws requiring state
banks to join in establishing a depositors guarantee fund have also been
upheld by the Federal Supreme Court in Noble State Bank v. Haskell (219
U. S., 104), and Assaria State Bank v. Dolley (219 U. S., 121).
Offensive noises and smells have been for a long time considered
susceptible of suppression in thickly populated districts. Barring livery
stables from such locations was approved of in Reinman v. Little Rock (U.
S. Sup. Ct. [Apr. 5, 1915], U. S. Adv. Opns., p. 511). And a municipal
ordinance was recently upheld (People v. Ericsson, 263 Ill., 368), which
prohibited the location of garages within two hundred feet of any hospital,
church, or school, or in any block used exclusively for residential purposes,
unless the consent of the majority of the property owners be obtained.
Such statutes as these are usually upheld on the theory of safeguarding
the public health. But we apprehend that in point of fact they have little
bearing upon the health of the normal person, but a great deal to do with
his physical comfort and convenience and not a little to do with his peace
of mind. Without entering into the realm of psychology, we think it quite
demonstrable that sight is as valuable to a human being as any of his
other senses, and that the proper ministration to this sense conduces as
much to his contentment as the care bestowed upon the senses of hearing
or smell, and probably as much as both together. Objects may be offensive
to the eye as well as to the nose or ear. Mans esthetic feelings are
constantly being appealed to through his sense of sight. Large investments
have been made in theaters and other forms of amusement, in paintings
and spectacular displays, the success of which depends in great part upon
the appeal made through the sense of sight. Moving picture shows could
not be possible without the sense of sight. Governments have spent
millions on parks and boulevards and other forms of civic beauty, the first
aim of which is to appeal to the sense of sight. Why, then, should the
Government not interpose to protect from annoyance this most valuable of
mans senses as readily as to protect him from offensive noises and
smells?
The advertising industry is a legitimate one. It is at the same time a cause
and an effect of the great industrial age through which the worid is now
passing. Millions are spent each year in this manner to guide the consumer
to the articles which he needs. The sense of sight is the primary essential
to advertising success. Billboard advertising, as it is now conducted, is a
comparatively recent form of advertising. It is conducted out of doors and
along the arteries of travel, and compels attention by the strategic
locations of the boards, which obstruct the range of vision at points where
travelers are most likely to direct their eyes. Beautiful landscapes are
marred or may not be seen at all by the traveler because of the gaudy
array of posters announcing a particular kind of breakfast food, or
underwear, the coming of a circus, an incomparable soap, nostrums or
medicines for the curing of all the ills to which the flesh is heir, etc., etc. It
is quite natural for people to protest against this indiscriminate and
wholesale use of the landscape by advertisers and the intrusion of
tradesmen upon their hours of leisure and relaxation from work. Outdoor
life must lose much of its charm and pleasure if this form of advertising is
permitted to continue unhampered until it converts the streets and
highways into veritable canyons through which the world must travel in
going to work or in search of outdoor pleasure.
The success of billboard advertising depends not so much upon the use of
private property as it does upon the use f the channels of travel used by
the general public. Suppose that the owner of private property, who so
vigorously objects to the restriction of this form of advertising, should
require the advertiser to paste his posters upon the billboards so that they
would face the interior of the property instead of the exterior. Billboard
advertising would die a natural death if this were done, and its real
dependency not upon the unrestricted use of private property but upon the
unrestricted use of the public highways is at once apparent. Ostensibly
located on private property, the real and sole value of the billboard is its
proximity to the public thoroughfares. Hence, we conceive that the
regulation of billboards and their restriction is not so much a regulation of
private property as it is a regulation of the use of the streets and other

public thoroughfares.
We would not be understood as saying that billboard advertising is not a
legitimate business any more than we would say that a livery stable or an
automobile garage is not. Even a billboard is more sightly than piles of
rubbish or an open sewer. But all these businesses are offensive to the
senses under certain conditions.
It has been urged against ministering to the sense of sight that tastes are
so diversified that there is no safe standard of legislation in this direction.
We answer in the language of the Supreme Court in Noble State Bank v.
Haskell (219 U. S., 104), and which has already been adopted by several
state courts (see supra), that "the prevailing morality or strong and
preponderating opinions demands such legislation. The agitation against
the unrestrained development of the billboard business has produced
results in nearly all the countries of Europe. (Ency. Britannica, vol. 1, pp.
237-240.) Many drastic ordinances and state laws have been passed in the
United States seeking to make the business amenable to regulation. But
their regulation in the United States is hampered by what we conceive an
unwarranted restriction upon the scope of the police power by the courts.
If the police power may be exercised to encourage a healthy social and
economic condition in the country, and if the comfort and convenience of
the people are included within those subjects, everything which encroaches
upon such territory is amenable to the police power. A source of annoyance
and irritation to the public does not minister to the comfort and
convenience of the public. And we are of the opinion that the prevailing
sentiment is manifestly against the erection of billboards which are
offensive to the sight.
We do not consider that we are in conflict with the decision in Eubank v.
Richmond (226 U. S., 137), where a municipal ordinance establishing a
building line to which property owners must conform was held
unconstitutional. As we have pointed out, billboard advertising is not so
much a use of private property as it is a use of the public thoroughfares. It
derives its value to the owner solely because the posters are exposed to
the public gaze. It may well be that the state may not require private
property owners to conform to a building line, but may prescribe the
conditions under which they shall make use of the adjoining streets and
highways. Nor is the law in question to be held invalid as denying equal
protection of the laws. In Keokee Coke Co. v. Taylor (234 U. S., 224), it
was said: "It is more pressed that the act discriminates unconstitutionally
against certain classes. But while there are differences of opinion as to the
degree and kind of discrimination permitted by the Fourteenth
Amendment, it is established by repeated decisions that a statute aimed at
what is deemed an evil, and hitting it presumably where experience shows

it to be most felt, is not to be upset by thinking up and enumerating other
instances to which it might have been applied equally well, so far as the
court can see. That is for the legislature to judge unless the case is very
clear."
But we have not overlooked the fact that we are not in harmony with the
highest courts of a number of the states in the American Union upon this
point. Those courts being of the opinion that statutes which are prompted
and inspired by esthetic considerations merely, having for their sole
purpose the promotion and gratification of the esthetic sense, and not the
promotion or protection of the public safety, the public peace and good
order of society, must be held invalid and contrary to constitutional
provisions holding inviolate the rights of private property. Or, in other
words, the police power cannot interfere with private property rights for
purely esthetic purposes. The courts, taking this view, rest their decisions
upon the proposition that the esthetic sense is disassociated entirely from
any relation to the public health, morals, comfort, or general welfare and
is, therefore, beyond the police power of the state. But we are of the
opinion, as above indicated, that unsightly advertisements or signs,
signboards, or billboards which are offensive to the sight, are not
disassociated from the general welfare of the public. This is not
establishing a new principle, but carrying 2 well recognized principle to
further application. (Fruend on Police Power, p. 166.)
For the foregoing reasons the judgment appealed from is hereby reversed
and the action dismissed upon the merits, with costs. So ordered.
Arellano, C.J., Torres, Carson and Araullo, JJ., concur.
DECISION ON THE MOTION FOR A REHEARING, JANUARY 24, 1916.
TRENT, J. :
Counsel for the plaintiffs call our attention to the case of Ex parte Young
(209 U. S., 123); and say that they are of the opinion that this case "is the
absolutely determinative of the question of jurisdiction in injunctions of this
kind. We did not refer to this case in our former opinion because we were
satisfied that the reasoning of the case is not applicable to sections 100(b),
139 and 140 of Act No. 2339. The principles announced in the Young case
are stated as follows: "It may therefore be said that when the penalties for
disobedience are by fines so enormous and imprisonment so severe as to
intimidate the company and its officers from resorting to the courts to test
the validity of the legislation, the result is the same as if the law in terms
prohibited the company from seeking judicial construction of laws which
deeply affect its rights.
"It is urged that there is no principle upon which to base the claim that a
person is entitled to disobey a statute at least once, for the purpose of
testing its validity without subjecting himself to the penalties for
disobedience provided by the statute in case it is valid. This is not an
accurate statement of the case. Ordinarily a law creating offenses in the
nature of misdemeanors or felonies relates to a subject over which the
jurisdiction of the legislature is complete in any event. In the case,
however, of the establishment of certain rates without any hearing, the
validity of such rates necessarily depends upon whether they are high
enough to permit at least sorne return upon the investment (how much it
is not now necessary to state), and an inquiry as to that fact is a proper
subject of judicial investigation. If it turns out that the rates are too low for
that purpose, then they are illegal. Now, to impose upon a party interested
the burden of obtaining a judicial decision of such a question (no prior
hearing having ever been given) only upon the condition that, if
unsuccessful, he must suffer imprisonment and pay fines as provided in
these acts, is, in effect, to close up all approaches to the courts, and thus
prevent any hearing upon the question whether the rates as provided by
the acts are not too low, and therefore invalid. The distinction is obvious
between a case where the validity of the act depends upon the existence of
a fact which can be determined only after investigation of a very
complicated and technical character, and the ordinary case of a statute
upon a subject requiring no such investigation and over which the
jurisdiction of the legislature is complete in any event."
An examination of the sections of our Internal Revenue Law and of the

circumstances under which and the purposes for which they were enacted,
will show that, unlike the statutes under consideration in the above cited
case, their enactment involved no attempt on the part of the Legislature to
prevent dissatisfied taxpayers "from resorting to the courts to test the
validity of the legislation;" no effort to prevent any inquiry as to their
validity. While section 139 does prevent the testing of the validity of
subsection (b) of section 100 in injunction suits instituted for the purpose
of restraining the collection of internal revenue taxes, section 140 provides
a complete remedy for that purpose. And furthermore, the validity of
subsection (b) does not depend upon "the existence of a fact which can be
determined only after investigation of a very complicated and technical
character," but the jurisdiction of the Legislature over the subject with
which the subsection deals is complete in any event." The judgment of the
court in the Young case rests upon the proposition that the aggrieved
parties had no adequate remedy at law.
Neither did we overlook the case of General Oil Co. v. Crain (209 U. S.j
211), decided the same day and citing Ex parte Young, supra. In that case
the plaintiff was a Tennessee corporation, with its principal place of
business in Memphis, Tennessee. It was engaged in the manufacture and
sale of coal- oil, etc. Its wells and plant were located in Pennsylvania and
Ohio. Memphis was not only its place of business, at which place it sold oil
to the residents of Tennessee, but also a distributing point to which oils
were shipped from Pennsylvania and Ohio and unloaded into various tanks
for the purpose of being forwarded to the Arkansas. Louisiana. and
Mississippi customers. Notwithstanding the fact that the company
separated its oils,which were designated to meet the requirements of the
orders from those States, from the oils for sale in Tennessee, the
defendant insisted that he had a right, under the Act of the Tennessee
Legislature, approved April 21, 1899, to inspect all the oils unlocated in
Memphis, whether for sale in that State or not, and charge and collect for
such inspection a regular fee of twenty-five cents per barrel. The company,
being advised that the defendant had no such right, instituted this action in
the inferior State court for the purpose of enjoining the defendant, upon
the grounds stated in the bill, from inspecting or attempting to inspect its
oils. Upon trial, the preliminary injunction which had been granted at the
commencement of the action, was continued in force. Upon appeal, the
supreme court of the State of Tennessee decided that the suit was one
against the State and reversed the judgment of the Chancellor. In the
Supreme Court of the United States, where the case was reviewed upon a
writ of error, the contentions of the parties were stated by the court as
follows: "It is contended by defendant in error that this court is without
jurisdiction because no matter sought to be litigated by plaintiff in error
was determined by the Supreme Court of Tennessee. The court simply
held, it is said, that, under the laws of the State, it had no jurisdiction to
entertain the suit for any purpose. And it is insisted that this holding
involved no Federal question, but only the powers and jurisdiction of the
courts of the State of Tennessee, in respect to which the Supreme Court of
Tennessee is the final arbiter.
"Opposing these contentions, plaintiff in error urges that whether a suit is
one against a State cannot depend upon the declaration of a statute, but
depends upon the essential nature of the suit, and that the Supreme Court
recognized that the statute added nothing to the axiomatic principle that
the State, as a sovereign, is not subject to suit save by its own consent.
And it is hence insisted that the court by dismissing the bill gave effect to
the law which was attacked. It is further insisted that the bill undoubtedly
present rights under the Constitution of the United States and conditions
which entitle plaintiff in error to an injunction for the protection of such
rights, and that a statute of the State which operates to deny such rights,
or such relief, is itself in conflict with the Constitution of the United

States."
That statute of Tennessee, which the supreme court of that State
construed and held to be prohibitory of the suit, was an act passed
February 28, 1873, which provides: "That no court in the State of
Tennessee has, nor shall hereafter have, any power, jurisdiction, or
authority to entertain any suit against the State, or any officer acting by
the authority of the State, with a view to reach the State, its treasury,
funds or property; and all such suits now pending, or hereafter brought,
shall be dissmissed as to the State, or such officer, on motion, plea or
demurrer of the law officer of the State, or counsel employed by the
State."
The Supreme Court of the United States, after reviewing many cases, said:
"Necessarily, to give adequate protection to constitutional rights a
distinction must be made between valid and invalid state laws, as
determining the character of the suit against state officers. And the suit at
bar illustrates the necessity. If a suit against state officers is precluded in
the national courts by the Eleventh Amendment to the Constitution, and
may be forbidden by a State to its courts, as it is contended in the case at
bar that it may be, without power of review by this court, it must be
evident that an easy way is open to prevent the enforcement of many
provisions of the Constitution; and the Fourteenth Amendment, which is
directed at state action, could be nullified as to much of its operation. . . .
It being then the right of a party to be protected against a law which
violates a constitutional right, whether by its terms or the manner of its
enforcement, it is manifest that a decision which denies such protection
gives effect to the law, and the decision is reviewable by this court."
The court then proceeded to consider whether the law of 1899 would, if
administered against the oils in question, violate any constitutional right of
the plaintiff and after finding and adjudging that the oils were not in
movement through the States, that they had reached the destination of
their first shipment, and were held there, not in necessary delay of means
of transportation but for the business purposes and profit of the company,
and resting its judgment upon the taxing power of the State, affirmed the
decree of the supreme court of the State of Tennessee.
From the foregoing it will be seen that the Supreme Court of Tennessee
dismissed the case for want of jurisdiction because the suit was one
against the State, which was prohibited by the Tennessee Legislature. The
Supreme Court of the United States took jurisdiction of the controversy for
the reasons above quoted and sustained the Act of 1899 as a revenue law.
The case of Tennessee v. Sneed (96 U. S., 69), and helton v. Platt (139 U.
S., 591), relied upon in our former opinion, were not cited in General Oil
Co. v. Crain, supra, because the questions presented and the statutes
under consideration were entirely different. The Act approved March 31,
1873, expressly prohibits the courts from restraining the collection of any
tax, leaving the dissatisfied taxpayer to his exclusive remedy payment
under protest and suit to recover while the Act approved February 28,
1873, prohibits suits against the State.
In upholding the statute which authorizes the removal of signboards or
billboards upon the sole ground that they are offensive to the sight, we
recognized the fact that we are not in harmony with various state courts in
the American Union. We have just examined the decision of the Supreme
Court of the State of Illinois in the recent case (October [December],
1914) of The Thomas Cusack Co. v. City of Chicago (267 Ill., 344), wherein
the court upheld the validity of a municipal ordinance, which reads as
follows: "707. Frontage consents required. It shall be unlawful for any
person, firm or corporation to erect or construct any bill-board or signboard in any block on any public street in which one-half of the buildings
on both sides of the street are used exclusively for residence purposes,
without first obtaining the consent, in writing, of the owners or duly
authorized agents of said owners owning a majority of the frontage of the
property, on both sides of the street, in the block in which such bill-board
or signboard is to be erected, constructed or located. Such written consent
shall be filed with the commissioner of buildings before a permit shall be
issued for the erection, construction or location of such bill-board or signboard."
The evidence which the Illinois court relied upon was the danger of fires,
the fact that billboards promote the commission of various immoral and
filthy acts by disorderly persons, and the inadequate police protection
furnished to residential districts. The last objection has no virtue unless
one or the other of the other objections are valid. If the billboard industry
does, in fact, promote such municipal evils to a noticeable extent, it seems
a curious inconsistency that a majority of the property owners on a given
block may legalize the business. However, the decision is undoubtedly a
considerable advance over the views taken by other high courts in the
United States and distinguishes several Illinois decisions. It is an advance
because it permits the supression of billboards where they are
undesirable. The ordinance which the court approved will no doubt cause
the virtual suppression of the business in the residential districts. Hence, it
is recognized that under certain circumstances billboards may be
suppressed as an unlawful use of private property. Logically, it would seem
that the premise of fact relied upon is not very solid. Objections to the
billboard upon police, sanitary, and moral grounds have been, as pointed
out by counsel for Churchill and Tait, duly considered by numerous high
courts in the United States, and, with one exception, have been rejected as
without foundation. The exception is the Supreme Court of Missouri, which
advances practically the same line of reasoning as has the Illinois court in
Ihis recent case. (St. Louis Gunning Advt. Co. v. City of St. Louis, 137 S.
W., 929.) In fact, the Illinois court, in Haller Sign Works v. Physical Culture
Training School (249 Ill., 436), "distinguished" in the recent case, said:
"There is nothing inherently dangerous to the health or safety of the public
in structures that are properly erected for advertising purposes."
If a billboard is so constructed as to offer no room for objections on

sanitary or moral grounds, it would seem that the ordinance above quoted
would have to be sustained upon the very grounds which we have
advanced in sustaining our own statute.
It might be well to note that billboard legislation in the United States is
attempting to eradicate a business which has already been firmly
established. This business was allowed to expand unchecked until its very
extent called attention to its objectionable features. In the Philippine
Islands such legislation has almost anticipated the business, which is not
yet of such proportions that it can be said to be fairly established. It may
be that the courts in the United States have committed themselves to a
course of decisions with respect to billboard advertising, the full
consequences of which were not perceived for the reason that the
development of the business has been so recent that the objectionable
features of it did not present themselves clearly to the courts nor to the
people. We, in this country, have the benefit of the experience of the
people of the United States and may make our legislation preventive rather
than corrective. There are in this country, moreover, on every hand in
those districts where Spanish civilization has held sway for so many
centuries, examples of architecture now belonging to a past age, and
which are attractive not only to the residents of the country but to visitors.
If the billboard industry is permitted without constraint or control to hide
these historic sites from the passerby, the country will be less attractive to
the tourist and the people will suffer a distinct economic loss.
The motion for a rehearing is therefore denied
The petitioners are the officials of the City Government of Marikina. On

September 30, 1994, theSangguniang Panlungsod of Marikina City enacted
Ordinance No. 192,4 entitled Regulating the Construction of Fences and
Walls in the Municipality of Marikina. In 1995 and 1998, Ordinance Nos.
2175 and 2006 were enacted to amend Sections 7 and 5, respectively.
Ordinance No. 192, as amended, is reproduced hereunder, as follows:
EN BANC
ORDINANCE No. 192

Series of 1994
[G.R. No. 161107, March 12, 2013]

HON. MA. LOURDES C. FERNANDO, IN HER CAPACITY AS CITY
MAYOR OF MARIKINA CITY, JOSEPHINE C. EVANGELISTA, IN HER
CAPACITY AS CHIEF, PERMIT DIVISION, OFFICE OF THE CITY
ENGINEER, AND ALFONSO ESPIRITU, IN HIS CAPACITY AS CITY
ENGINEER OF MARIKINA CITY, Petitioners, v. ST. SCHOLASTICA'S
COLLEGE AND ST. SCHOLASTICA'S ACADEMY-MARIKINA,
INC., Respondents.
DECISION
MENDOZA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court, which seeks to set aside the December 1, 2003 Decision 1 of
the Court of Appeals (CA) in CA-G.R. SP No. 75691.
The Facts
Respondents St. Scholasticas College (SSC) and St. Scholasticas
Academy-Marikina, Inc. (SSA-Marikina)are educational institutions
organized under the laws of the Republic of the Philippines, with principal
offices and business addresses at Leon Guinto Street, Malate, Manila, and
at West Drive, Marikina Heights, Marikina City, respectively.2
Respondent SSC is the owner of four (4) parcels of land measuring a total
of 56,306.80 square meters, located in Marikina Heights and covered by
Transfer Certificate Title (TCT) No. 91537. Located within the property are
SSA-Marikina, the residence of the sisters of the Benedictine Order, the
formation house of the novices, and the retirement house for the elderly
sisters. The property is enclosed by a tall concrete perimeter fence built
some thirty (30) years ago. Abutting the fence along the West Drive are
buildings, facilities, and other improvements.3
ORDINANCE REGULATING THE CONSTRUCTION OF FENCES AND WALLS IN

THE MUNICIPALITY OF MARIKINA
WHEREAS, under Section 447.2 of Republic Act No. 7160 otherwise known
as the Local Government Code of 1991 empowers the Sangguniang
Bayan as the local legislative body of the municipality to x x x Prescribe
reasonable limits and restraints on the use of property within the
jurisdiction of the municipality, x x x;
WHEREAS the effort of the municipality to accelerate its economic and
physical development, coupled with urbanization and modernization,
makes imperative the adoption of an ordinance which shall embody up-todate and modern technical design in the construction of fences of
residential, commercial and industrial buildings;
WHEREAS, Presidential Decree No. 1096, otherwise known as the National
Building Code of the Philippines, does not adequately provide technical
guidelines for the construction of fences, in terms of design, construction,
and criteria;
WHEREAS, the adoption of such technical standards shall provide more
efficient and effective enforcement of laws on public safety and security;
WHEREAS, it has occurred in not just a few occasions that high fences or
walls did not actually discourage but, in fact, even protected burglars,
robbers, and other lawless elements from the view of outsiders once they
have gained ingress into these walls, hence, fences not necessarily
providing security, but becomes itself a security problem;
WHEREAS, to discourage, suppress or prevent the concealment of
prohibited or unlawful acts earlier enumerated, and as guardian of the
people of Marikina, the municipal government seeks to enact and
implement rules and ordinances to protect and promote the health, safety
and morals of its constituents;
WHEREAS, consistent too, with the Clean and Green Program of the
government, lowering of fences and walls shall encourage people to plant
more trees and ornamental plants in their yards, and when visible, such
trees and ornamental plants are expected to create an aura of a clean,
green and beautiful environment for Marikeos;
WHEREAS, high fences are unsightly that, in the past, people planted on
sidewalks to beautify the faade of their residences but, however,
become hazards and obstructions to pedestrians;
WHEREAS, high and solid walls as fences are considered un- neighborly
preventing community members to easily communicate and socialize and
deemed to create boxed-in mentality among the populace;
WHEREAS, to gather as wide-range of opinions and comments on this
proposal, and as a requirement of the Local Government Code of 1991
(R.A. 7160), the Sangguniang Bayanof Marikina invited presidents or
officers of homeowners associations, and commercial and industrial
establishments in Marikina to two public hearings held on July 28, 1994
and August 25, 1994;
WHEREAS, the rationale and mechanics of the proposed ordinance were
fully presented to the attendees and no vehement objection was presented
to the municipal government;
NOW, THEREFORE, BE IT ORDAINED BY THE SANGGUINANG BAYAN OF
MARIKINA IN SESSION DULY ASSEMBLED:
Section 1. Coverage: This Ordinance regulates the construction of all
fences, walls and gates on lots classified or used for residential,
commercial, industrial, or special purposes.
Section 2. Definition of Terms:
a.
Front Yard refers to the area of the lot fronting a street, alley or
public thoroughfare.
b.
Back Yard the part of the lot at the rear of the structure
constructed therein.
c.
Open fence type of fence which allows a view of thru-see of

the inner yard and the improvements therein. (Examples: wrought
iron, wooden lattice, cyclone wire)
d.
Front gate refers to the gate which serves as a passage of

persons or vehicles fronting a street, alley, or public thoroughfare.
Section 3. The standard height of fences or walls allowed under

this ordinance are as follows:
(1 Fences on the front yard shall be no more

) than one (1) meter in height. Fences in
excess of one (1) meter shall be of an open
fence type, at least eighty percent (80%)
see-thru; and
(2 Fences on the side and back yard shall be in
) accordance with the provisions of P.D. 1096
otherwise known as the National Building Code.
Section 4. No fence of any kind shall be allowed in areas specifically
reserved or classified as parks.
Section 5. In no case shall walls and fences be built within the five
(5) meter parking area allowance located between the front
monument line and the building line of commercial and industrial
establishments and educational and religious institutions.7
Section 6. Exemption.
(1 The Ordinance does not cover perimeter walls of

) residential subdivisions.
(2 When public safety or public welfare requires,
) the Sangguniang Bayan may allow the
construction and/or maintenance of walls higher
than as prescribed herein and shall issue a special
permit or exemption.
Section 7. Transitory Provision. Real property owners whose existing fences
and walls do not conform to the specifications herein are allowed adequate
period of time from the passage of this Ordinance within which to conform,
as follows:
(1) Residential houses eight (8) years

(2) Commercial establishments five (5) years
(3) Industrial establishments three (3) years
(4) Educational institutions five (5) years 8
(public and privately owned)
Section 8. Penalty. Walls found not conforming to the provisions of this
Ordinance shall be demolished by the municipal government at the
expense of the owner of the lot or structure.
Section 9. The Municipal Engineering Office is tasked to strictly implement
this ordinance, including the issuance of the necessary implementing
guidelines, issuance of building and fencing permits, and demolition of
non-conforming walls at the lapse of the grace period herein provided.
Section 10. Repealing Clause. All existing Ordinances and Resolutions,
Rules and Regulations inconsistent with the foregoing provisions are
hereby repealed, amended or modified.
Section 11. Separability Clause. If for any reason or reasons, local
executive orders, rules and regulations or parts thereof in conflict with this
Ordinance are hereby repealed and/or modified accordingly.
Section 12. Effectivity. This ordinance takes effect after publication.
APPROVED: September 30, 1994
(Emphases supplied)
On April 2, 2000, the City Government of Marikina sent a letter to the
respondents ordering them to demolish and replace the fence of their
Marikina property to make it 80% see-thru, and, at the same time, to
move it back about six (6) meters to provide parking space for vehicles to
park.9 On April 26, 2000, the respondents requested for an extension of
time to comply with the directive.10 In response, the petitioners, through
then City Mayor Bayani F. Fernando, insisted on the enforcement of the
subject ordinance.
Not in conformity, the respondents filed a petition for prohibition with an
application for a writ of preliminary injunction and temporary restraining
order before the Regional Trial Court, Marikina, Branch 273 (RTC),
docketed as SCA Case No. 2000-381-MK.11
The respondents argued that the petitioners were acting in excess of
jurisdiction in enforcing Ordinance No. 192, asserting that such
contravenes Section 1, Article III of the 1987 Constitution. That
demolishing their fence and constructing it six (6) meters back would
result in the loss of at least 1,808.34 square meters, worth about
P9,041,700.00, along West Drive, and at least 1,954.02 square meters,
worth roughly P9,770,100.00, along East Drive. It would also result in the
destruction of the garbage house, covered walk, electric house, storage
house, comfort rooms, guards room, guards post, waiting area for
visitors, waiting area for students, Blessed Virgin Shrine, P.E. area, and the
multi-purpose hall, resulting in the permanent loss of their beneficial use.
The respondents, thus, asserted that the implementation of the ordinance
on their property would be tantamount to an appropriation of property
without due process of law; and that the petitioners could only appropriate
a portion of their property through eminent domain. They also pointed out
that the goal of the provisions to deter lawless elements and criminality did
not exist as the solid concrete walls of the school had served as sufficient
protection for many years.12
The petitioners, on the other hand, countered that the ordinance was a
valid exercise of police power, by virtue of which, they could restrain
property rights for the protection of public safety, health, morals, or the
promotion of public convenience and general prosperity.13
On June 30, 2000, the RTC issued a writ of preliminary injunction,
enjoining the petitioners from implementing the demolition of the fence at
SSCs Marikina property.14
Ruling of the RTC
On the merits, the RTC rendered a Decision,15 dated October 2, 2002,
granting the petition and ordering the issuance of a writ of prohibition
commanding the petitioners to permanently desist from enforcing or
implementing Ordinance No. 192 on the respondents property.
The RTC agreed with the respondents that the order of the petitioners to
demolish the fence at the SSC property in Marikina and to move it back six
(6) meters would amount to an appropriation of property which could only
be done through the exercise of eminent domain. It held that the
petitioners could not take the respondents property under the guise of
police power to evade the payment of just compensation.
It did not give weight to the petitioners contention that the parking space
was for the benefit of the students and patrons of SSA-Marikina,
considering that the respondents were already providing for sufficient
parking in compliance with the standards under Rule XIX of the National
Building Code.
It further found that the 80% see-thru fence requirement could run
counter to the respondents right to privacy, considering that the property
also served as a residence of the Benedictine sisters, who were entitled to
some sense of privacy in their affairs. It also found that the respondents
were able to prove that the danger to security had no basis in their case.
Moreover, it held that the purpose of beautification could not be used to
justify the exercise of police power.
It also observed that Section 7 of Ordinance No. 192, as amended,
provided for retroactive application. It held, however, that such retroactive
effect should not impair the respondents vested substantive rights over
the perimeter walls, the six-meter strips of land along the walls, and the
building, structures, facilities, and improvements, which would be
destroyed by the demolition of the walls and the seizure of the strips of
land.
The CA reasoned out that the objectives stated in Ordinance No. 192 did
not justify the exercise of police power, as it did not only seek to regulate,
but also involved the taking of the respondents property without due
process of law. The respondents were bound to lose an unquantifiable
sense of security, the beneficial use of their structures, and a total of
3,762.36 square meters of property. It, thus, ruled that the assailed
ordinance could not be upheld as valid as it clearly invaded the personal
and property rights of the respondents and [f]or being unreasonable, and
undue restraint of trade.17
It noted that although the petitioners complied with procedural due
process in enacting Ordinance No. 192, they failed to comply with
substantive due process. Hence, the failure of the respondents to attend
the public hearings in order to raise objections did not amount to a waiver
of their right to question the validity of the ordinance.
The RTC also found untenable the petitioners argument that Ordinance No.
192 was a remedial or curative statute intended to correct the defects of
buildings and structures, which were brought about by the absence or
insufficiency of laws. It ruled that the assailed ordinance was neither
remedial nor curative in nature, considering that at the time the
respondents perimeter wall was built, the same was valid and legal, and
the ordinance did not refer to any previous legislation that it sought to
correct.
The CA also shot down the argument that the five-meter setback provision
for parking was a legal easement, the use and ownership of which would
remain with, and inure to, the benefit of the respondents for whom the
easement was primarily intended. It found that the real intent of the
setback provision was to make the parking space free for use by the
public, considering that such would cease to be for the exclusive use of the
school and its students as it would be situated outside school premises and
beyond the school administrations control.
The RTC noted that the petitioners could still take action to expropriate the
subject property through eminent domain.
In affirming the RTC ruling that the ordinance was not a curative statute,
the CA found that the petitioner failed to point out any irregularity or
invalidity in the provisions of the National Building Code that required
correction or cure. It noted that any correction in the Code should be
properly undertaken by the Congress and not by the City Council of
Marikina through an ordinance.
The RTC, thus, disposed:

WHEREFORE, the petition is GRANTED. The writ of prohibition is hereby
issued commanding the respondents to permanently desist from enforcing
or implementing Ordinance No. 192, Series of 1994, as amended, on
petitioners property in question located at Marikina Heights, Marikina,
Metro Manila.
The CA, thus, disposed:
SO ORDERED.16
WHEREFORE, all foregoing premises considered, the instant appeal is

DENIED. The October 2, 2002 Decision and the January 13, 2003 Order of
the Regional Trial Court (RTC) of Marikina City, Branch 273, granting
petitioners-appellees petition for Prohibition in SCA Case No. 2000-381-MK
are hereby AFFIRMED.
Ruling of the CA
SO ORDERED.18
In its December 1, 2003 Decision, the CA dismissed the petitioners appeal

and affirmed the RTC decision.
Aggrieved by the decision of the CA, the petitioners are now before this
Court presenting the following
ASSIGNMENT OF ERRORS
1.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS

ERRED IN DECLARING THAT CITY ORDINANCE NO. 192,
SERIES OF 1994 IS NOT A VALID EXERCISE OF POLICE
POWER;
2.

ERRED IN RULING THAT THE AFOREMENTIONED
ORDINANCE IS AN EXERCISE OF THE CITY OF THE POWER
OF EMINENT DOMAIN;
3.

ERRED IN DECLARING THAT THE CITY VIOLATED THE DUE
PROCESS CLAUSE IN IMPLEMENTING ORDINANCE NO. 192,
SERIES OF 1994; AND
4.

ERRED IN RULING THAT THE ABOVE-MENTIONED
ORDINANCE CANNOT BE GIVEN RETROACTIVE
APPLICATION.19
In this case, the petitioners admit that Section 5 of the assailed ordinance,
pertaining to the five-meter setback requirement is, as held by the lower
courts, invalid.20 Nonetheless, the petitioners argue that such invalidity was
subsequently cured by Zoning Ordinance No. 303, series of 2000. They
also contend that Section 3, relating to the 80% see-thru fence
requirement, must be complied with, as it remains to be valid.
Ruling of the Court
The ultimate question before the Court is whether Sections 3.1 and 5 of
Ordinance No. 192 are valid exercises of police power by the City
Government of Marikina.
Police power is the plenary power vested in the legislature to make
statutes and ordinances to promote the health, morals, peace, education,
good order or safety and general welfare of the people.21 The State,
through the legislature, has delegated the exercise of police power to local
government units, as agencies of the State. This delegation of police power
is embodied in Section 1622 of the Local Government Code of 1991 (R.A.
No. 7160), known as the General Welfare Clause,23 which has two
branches. The first, known as the general legislative power, authorizes the
municipal council to enact ordinances and make regulations not repugnant
to law, as may be necessary to carry into effect and discharge the powers
and duties conferred upon the municipal council by law. The second,
known as the police power proper, authorizes the municipality to enact
ordinances as may be necessary and proper for the health and safety,
prosperity, morals, peace, good order, comfort, and convenience of the
municipality and its inhabitants, and for the protection of their property.24
White Light Corporation v. City of Manila,25 discusses the test of a valid
ordinance:
The test of a valid ordinance is well established. A long line of decisions
including City of Manila 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 pass according to the procedure prescribed by law, it must also
Ordinance No. 192 was passed by the City Council of Marikina in the
apparent exercise of its police power. To successfully invoke the exercise of
police power as the rationale for the enactment of an ordinance and to free
it from the imputation of constitutional infirmity, two tests have been used
by the Court the rational relationship test and the strict scrutiny test:
We ourselves have often applied the rational basis test mainly in analysis
of equal protection challenges. Using the rational basis examination, laws
or ordinances are upheld if they rationally further a legitimate
governmental interest. Under intermediate review, governmental interest
is extensively examined and the availability of less restrictive measures is
considered. Applying strict scrutiny, the focus is on the presence of
compelling, rather than substantial, governmental interest and on the
absence of less restrictive means for achieving that interest. 27
Even without going to a discussion of the strict scrutiny test, Ordinance No.
192, series of 1994 must be struck down for not being reasonably
necessary to accomplish the Citys purpose. More importantly, it is
oppressive of private rights.
Under the rational relationship test, an ordinance must pass the following
requisites as discussed inSocial Justice Society (SJS) v. Atienza, Jr.:28
As with the State, local governments may be considered as having
properly exercised their police power only if the following requisites are
met: (1) the interests of the public generally, as distinguished from those
of a particular class, require its exercise and (2) the means employed are
reasonably necessary for the accomplishment of the purpose and not
unduly oppressive upon individuals. In short, there must be a concurrence
of a lawful subject and lawful method.29
Lacking a concurrence of these two requisites, the police power measure
shall be struck down as an arbitrary intrusion into private rights and a
violation of the due process clause.30
Section 3.1 and 5 of the assailed ordinance are pertinent to the issue at
hand, to wit:
Section 3. The standard height of fences of walls allowed under this
ordinance are as follows:
(1) Fences on the front yard shall be no more than one (1) meter in
height. Fences in excess of one (1) meter shall be an open fence type, at
least eighty percent (80%) see-thru;
xxx
xxx
xxx
Section 5. In no case shall walls and fences be built within the five (5)
meter parking area allowance located between the front monument line
and the building line of commercial and industrial establishments and
educational and religious institutions.
The respondents, thus, sought to prohibit the petitioners from requiring
them to (1) demolish their existing concrete wall, (2) build a fence (in
excess of one meter) which must be 80% see-thru, and (3) build the said
fence six meters back in order to provide a parking area.
Setback Requirement
The Court first turns its attention to Section 5 which requires the fivemeter setback of the fence to provide for a parking area. The petitioners
initially argued that the ownership of the parking area to be created would
remain with the respondents as it would primarily be for the use of its
students and faculty, and that its use by the public on non-school days
would only be incidental. In their Reply, however, the petitioners admitted

that Section 5 was, in fact, invalid for being repugnant to the
Constitution.31
The Court agrees with the latter position.
The Court joins the CA in finding that the real intent of the setback
requirement was to make the parking space free for use by the public,
considering that it would no longer be for the exclusive use of the
respondents as it would also be available for use by the general public.
Section 9 of Article III of the 1987 Constitution, a provision on eminent
domain, provides that private property shall not be taken for public use
without just compensation.
The petitioners cannot justify the setback by arguing that the ownership of
the property will continue to remain with the respondents. It is a settled
rule that neither the acquisition of title nor the total destruction of value is
essential to taking. In fact, it is usually in cases where the title remains
with the private owner that inquiry should be made to determine whether
the impairment of a property is merely regulated or amounts to a
compensable taking.32 The Court is of the view that the implementation of
the setback requirement would be tantamount to a taking of a total of
3,762.36 square meters of the respondents private property for public use
without just compensation, in contravention to the Constitution.
Anent the objectives of prevention of concealment of unlawful acts and
un-neighborliness, it is obvious that providing for a parking area has no
logical connection to, and is not reasonably necessary for, the
accomplishment of these goals.
Regarding the beautification purpose of the setback requirement, it has
long been settled that the State may not, under the guise of police power,
permanently divest owners of the beneficial use of their property solely to
preserve or enhance the aesthetic appearance of the community.33 The
Court, thus, finds Section 5 to be unreasonable and oppressive as it will
substantially divest the respondents of the beneficial use of their property
solely for aesthetic purposes. Accordingly, Section 5 of Ordinance No. 192
is invalid.
The petitioners, however, argue that the invalidity of Section 5 was
properly cured by Zoning Ordinance No. 303,34 Series of 2000, which
classified the respondents property to be within an institutional zone,
under which a five-meter setback has been required.
The petitioners are mistaken. Ordinance No. 303, Series of 2000, has no
bearing to the case at hand.

The Court notes with displeasure that this argument was only raised for
the first time on appeal in this Court in the petitioners Reply. Considering
that Ordinance No. 303 was enacted on December 20, 2000, the
petitioners could very well have raised it in their defense before the RTC in
2002. The settled rule in this jurisdiction is that a party cannot change the
legal theory of this case under which the controversy was heard and
decided in the trial court. It should be the same theory under which the
review on appeal is conducted. Points of law, theories, issues, and
arguments not adequately brought to the attention of the lower court will
not be ordinarily considered by a reviewing court, inasmuch as they cannot
be raised for the first time on appeal. This will be offensive to the basic
rules of fair play, justice, and due process. 35
Furthermore, the two ordinances have completely different purposes and
subjects. Ordinance No. 192 aims to regulate the construction of fences,
while Ordinance No. 303 is a zoning ordinance which classifies the city into
specific land uses. In fact, the five-meter setback required by Ordinance
No. 303 does not even appear to be for the purpose of providing a parking
area.
By no stretch of the imagination, therefore, can Ordinance No. 303, cure
Section 5 of Ordinance No. 192.
In any case, the clear subject of the petition for prohibition filed by the
respondents is Ordinance No. 192 and, as such, the precise issue to be
determined is whether the petitioners can be prohibited from enforcing the
said ordinance, and no other, against the respondents.
80% See-Thru Fence Requirement
The petitioners argue that while Section 5 of Ordinance No. 192 may be
invalid, Section 3.1 limiting the height of fences to one meter and requiring
fences in excess of one meter to be at least 80% see-thru, should remain
valid and enforceable against the respondents.
The Court cannot accommodate the petitioner.
For Section 3.1 to pass the rational relationship test, the petitioners must
show the reasonable relation between the purpose of the police power
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.36
The principal purpose of Section 3.1 is to discourage, suppress or prevent

the concealment of prohibited or unlawful acts. The ultimate goal of this
objective is clearly the prevention of crime to ensure public safety and
security. The means employed by the petitioners, however, is not
reasonably necessary for the accomplishment of this purpose and is unduly
oppressive to private rights.
The petitioners have not adequately shown, and it does not appear obvious
to this Court, that an 80% see-thru fence would provide better protection
and a higher level of security, or serve as a more satisfactory criminal
deterrent, than a tall solid concrete wall. It may even be argued that such
exposed premises could entice and tempt would-be criminals to the
property, and that a see-thru fence would be easier to bypass and breach.
It also appears that the respondents concrete wall has served as more
than sufficient protection over the last 40 years. `
As to the beautification purpose of the assailed ordinance, as previously
discussed, the State may not, under the guise of police power, infringe on
private rights solely for the sake of the aesthetic appearance of the
community. Similarly, the Court cannot perceive how a see-thru fence will
foster neighborliness between members of a community.
Compelling the respondents to construct their fence in accordance with the
assailed ordinance is, thus, a clear encroachment on their right to property,
which necessarily includes their right to decide how best to protect their
property.
It also appears that requiring the exposure of their property via a see- thru
fence is violative of their right to privacy, considering that the residence of
the Benedictine nuns is also located within the property. The right to
privacy has long been considered a fundamental right guaranteed by the
Constitution that must be protected from intrusion or constraint. The right
to privacy is essentially the right to be let alone,37 as governmental powers
should stop short of certain intrusions into the personal life of its citizens. 38
It is inherent in the concept of liberty, enshrined in the Bill of Rights
(Article III) in Sections 1, 2, 3(1), 6, 8, and 17, Article III of the 1987
Constitution.39
The enforcement of Section 3.1 would, therefore, result in an undue
interference with the respondents rights to property and privacy. Section
3.1 of Ordinance No. 192 is, thus, also invalid and cannot be enforced
against the respondents.
No Retroactivity
Ordinance No. 217 amended Section 7 of Ordinance No. 192 by including
the regulation of educational institutions which was unintentionally
omitted, and giving said educational institutions five (5) years from the
passage of Ordinance No. 192 (and not Ordinance No. 217) to conform to
its provisions.40 The petitioners argued that the amendment could be
retroactively applied because the assailed ordinance is a curative statute
which is retroactive in nature.
Considering that Sections 3.1 and 5 of Ordinance No. 192 cannot be
enforced against the respondents, it is no longer necessary to rule on the
issue of retroactivity. The Court shall, nevertheless, pass upon the issue for
the sake of clarity.
Curative statutes are enacted to cure defects in a prior law or to validate
legal proceedings which would otherwise be void for want of conformity
with certain legal requirements. They are intended to supply defects,
abridge superfluities and curb certain evils. They are intended to enable
persons to carry into effect that which they have designed or intended, but
has failed of expected legal consequence by reason of some statutory
disability or irregularity in their own action. They make valid that which,
before the enactment of the statute was invalid. Their purpose is to give
validity to acts done that would have been invalid under existing laws, as if
existing laws have been complied with. Curative statutes, therefore, by
their very essence, are retroactive.41
The petitioners argue that Ordinance No. 192 is a curative statute as it
aims to correct or cure a defect in the National Building Code, namely, its
failure to provide for adequate guidelines for the construction of fences.
They ultimately seek to remedy an insufficiency in the law. In aiming to
cure this insufficiency, the petitioners attempt to add lacking provisions to
the National Building Code. This is not what is contemplated by curative
statutes, which intend to correct irregularities or invalidity in the law. The
petitioners fail to point out any irregular or invalid provision. As such, the
assailed ordinance cannot qualify as curative and retroactive in nature.
At any rate, there appears to be no insufficiency in the National Building
Code with respect to parking provisions in relation to the issue of the
respondents. Paragraph 1.16.1, Rule XIX of the Rules and Regulations of
the said code requires an educational institution to provide one parking slot
for every ten classrooms. As found by the lower courts, the respondents
provide a total of 76 parking slots for their 80 classrooms and, thus, had
more than sufficiently complied with the law.
Ordinance No. 192, as amended, is, therefore, not a curative statute which
may be applied retroactively.
Separability
Sections 3.1 and 5 of Ordinance No. 192, as amended, are, thus, invalid
and cannot be enforced against the respondents. Nonetheless, "the general
rule is that where part of a statute is void as repugnant to the Constitution,
while another part is valid, the valid portion, if susceptible to being
separated from the invalid, may stand and be enforced." 42 Thus, the other
sections of the assailed ordinance remain valid and enforceable.
Conclusion
Considering the invalidity of Sections 3.1 and 5, it is clear that the
petitioners were acting in excess of their jurisdiction in enforcing Ordinance
No. 1 92 against the respondents. The CA was correct in affirming the
decision of the RTC in issuing the writ of prohibition. The petitioners must
permanently desist from enforcing Sections 3.1 and 5 of the assailed
ordinance on the respondents' property in Marikina City.
WHEREFORE, the petition is DENIED. The October 2, 2002 Decision of
the Regional Trial Court in SCA Case No. 2000-381-MK
is AFFIRMED but MODIFIED to read as follows:
WHEREFORE, the petition is GRANTED. The writ of prohibition is hereby
issued commanding the respondents to permanently desist from enforcing
or implementing Sections 3.1 and 5 of Ordinance No. 192, Series of 1994,
as amended, on the petitioners' property in question located in Marikina
Heights, Marikina, Metro Manila.
United States Supreme Court
YU CONG ENG v. TRINIDAD, (1926)

No. 623
Argued:
Decided: June 7, 1926
[271 U.S. 500, 501]

petitioners.
Mr. Frederic R. Coudert, of New York City, for
[271 U.S. 500, 503]

for respondents.
Mr. Paul Shipman Andrews, of Syracuse, N. Y.,
[271 U.S. 500, 506]

Mr. Chief Justice TAFT delivered the opinion of the Court. 1
This case comes here on a writ of certiorari to review a decision of the
Supreme Court of the Philippine Islands denying an original petition for
prohibition against the enforcement by criminal prosecution of Act No.
2972 of the Philippine Legislature, known as the Chinese Bookkeeping
Act, on the ground of its invalidity. The petitioner, Yu Cong Eng, was
charged by information in the court of first instance of Manila, with its
violation. He was arrested, his books were seized, and the trial was
about to proceed, when he and the other petitioner, Co Liam, on [271
U.S. 500, 507] their own behalf, and on behalf of all the other Chinese
merchants in the Philippines, filed the petition against the fiscal, or
prosecuting attorney of Manila, and the collector of internal revenue
engaged in the prosecution, and against the judge presiding.
By the Code of Civil Procedure of the Philippine Islands, 516, the
Philippine Supreme Court is granted concurrent jurisdiction in
prohibition with courts of first instance over inferior tribunals or
persons, and original jurisdiction over courts of first instance, when
such courts are exercising functions without or in excess of their
jurisdiction. It has been held by that court that the question of the
validity of a criminal statute must usually be raised by a defendant in
the trial court and be carried regularly in review to the Supreme Court.
Cadwallader-Gibson Lumber Company v. Del Rosario, 26 Philippine
Reports, 192. But in this case, where a new act seriously affected
numerous persons and extensive property rights, and was likely to
cause a multiplicity of actions, the Supreme Court exercised its

discretion to bring the issue of the act's validity promptly before it and
decide it in the interest of the orderly administration of justice. The
court relied by analogy upon the cases of Ex parte Young, 209 U.S.
123 , 28 S. Ct. 441, 13 L. R. A. ( N. S.) 932, 14 Ann. Cas. 764, Truax
v. Raich, 239 U.S. 33 , 36 S. Ct. 7, L. R. A. 1916D, 545, Ann. Cas.
1917B, 283, and Wilson v. New, 243 U.S. 332 , 37 S. Ct. 298, L. R. A.
1917E, 938, Ann. Cas. 1918A, 1024. Although objection to the
jurisdiction was raised by demurrer to the petition, this is now
disclaimed on behalf of the respondents, and both parties ask a
decision on the merits. In view of broad powers in prohibition granted
to that court under the Island Code, we acquiesce in the desire of the
parties.
Act No. 2972, the validity of which is attacked, was passed by the
Philippine Legislature, and approved February 21, 1921. It reads as
follows:
'No. 2972. An act to provide in what languages account books shall be
kept, and to establish penalties for its violation.
[271 U.S. 500, 508] 'Be it enacted by the Senate and House of
Representatives of the Philippines in Legislature assembled and by the
authority of the same:
'Section 1. It shall be unlawful for any person, company, or partnership
or corporation engaged in commerce, industry or any other activity for
the purpose of profit in the Philippine Islands, in accordance with
existing law, to keep its account books in any language other than
English, Spanish or any local dialect.
'Sec. 2. Any person violating the provisions of this act shall, upon
conviction, be punished by a fine of not more than ten thousand pesos,
or by imprisonment for not more than two years, or both.
'Sec. 3. This act shall take effect on November 1st, nineteen hundred
and twenty-one.'
This was amended as to its date by a subsequent act and it did not
take effect until January 1, 1923. Various efforts were made to repeal
the act or amend it, but they were defeated.
The petition, after setting out the prosecution in the court of first
instance, and the text of the act, avers that the petitioner Yu Cong Eng
is a chinese merchant engaged in the wholesale lumber business in
Manila; that he neither reads, writes nor understands the English or
Spanish language or any local dialect; that he keeps the books of
account of his business in Chinese characters; that by reason of his
ignorance of the English and Spanish languages and of all local dialects
he is unable to keep his books in any other language than his own;
that, even if he should employ a bookkeeper capable of keeping his
books in the English or Spanish language, he would have no means of
personally revising or ascertaining the contents or correctness of the
books thus kept; that the employment of such a bookkeeper, unless he
should be a linguist, would entail as a necessary consequence the
employment of a translator or interpreter familiar with the [271 U.S.
500, 509] Chinese language and the language or dialect in which
such books might be kept, in order to enable the petitioner to
ascertain by hearsay the contents thereof; that he would be
completely at the mercy of such employees, who, if dishonest, might
cheat and defraud him of the proceeds of his business, and involve him
in criminal or civil liability in its conduct; that under the provisions of
the act he is prohibited from even keeping a duplicate set of accounts
in his own language, and would, in the event of the enforcement of the
law, be compelled to remain in total ignorance of the status of his
business; and that the enforcement of the act would drive the
petitioner and many other Chinese merchants in the Philippines who
do 60 per cent. of the business of the Islands and who are in like
circumstance, out of business.
The petition avers that the other petitioner in this case, Co Liam, is a
Chinese person and conducts a small general merchandise business in
Manila, commonly known in the Philippines as a Chinese tienda; that
he carries a stock of goods of about 10,000 pesos, or $5,000; that his
sales taxes amount to from 40 to 60 pesos per quarter; that he neither
reads, writes, nor understands the English or Spanish language or any
local dialect; that he keeps books of account of his small business in
Chinese, the only language known to him, without the assistance of a
bookkeeper; that he has been losing money for some time in the
operation of his business, but that even in prosperous times his profits
could never be sufficient to justify the employment of a Filipino
bookkeeper, and that without the opportunity to keep Chinese books,
be would be kept completely ignorant of the changing condition of his

business, were he compelled to keep his books in English, Spanish, or
a local dialect; and that the enforcement of the act would drive him
and all the small merchants or tienda keepers in the Islands who are
Chinese out of business. [271 U.S. 500, 510] The petitioners aver
that the act, if enforced, will deprive the petitioners, and the 12,000
Chinese merchants whom they represent, of their liberty and property
without due process of law, and deny them the equal protection of the
laws, in violation of the Philippine Autonomy Act of Congress of August
29, 1916, c. 416, 3, 39 Stat. 546 (Comp. St. 3810).
An amendment to the petition set up the rights of the petitioners
under the treaty now in force between the United States and China,
alleging that under it the petitioners are entitled to the same rights,
privileges, and immunities as the citizens and subjects of Great Britain
and Spain, and that the treaty has the force and effect of a law of
Congress, which this law violates.
An answer was filed by the fiscal, which is a general denial of the
averments of the petition as to the effect of the law. He avers that the
law is valid and necessary, and is only the exercise of proper legislative
power, because the government of the Philippine Islands depends upon
the taxes and imposts which it may collect in order to carry out its
functions, and the determination of whether the mercantile operations
of the merchants are or are not subject to taxation, as well as the
fixing of its amount, cannot and ought not to be left to the mercy of
those who are to bear it; that due to the inability of the officials of the
internal revenue to revise and check up properly the correctness of the
books of account which the Chinese merchants keep in their own
language, the public treasury loses every year very large sums.
Evidence was taken on the issues made. A majority of the Supreme
Court held that, if the act were construed and enforced literally, it
would probably be invalid, but by giving it an interpretation different
from the usual meaning of the words employed it could stand. Two of
the justices dissented, on the ground that the [271 U.S. 500,
511] court had exceeded its powers and by legislation made it a
different act.
There are two tax laws from which a substantial part of the revenue of
the Islands is derived. There is a sales tax of 1 1/2 per cent. on the
gross sales of businesses and occupations for which a quarterly return

is required. Administrative Code, 1453, et seq., Act 3065. There is also
an income tax. The annual revenue accruing from the sales tax is
roughly 10, 000,000 pesos, and that from the income tax about
2,000,000 pesos.
Another statute is the so-called Code of Commerce, brought over from
the Spanish Code, the thirty-third article of which provides that all
merchants shall keep a book of inventories and balances, a day book,
a ledger, a copy book of telegrams, letters, etc., and such other books
as may be required by special laws. Under the provisions of that Code
and the internal revenue law, the colector of internal revenue is
authorized to require the keeping of daily records of sales, and makes
regulations prescribing the manner in which the proper books, invoices
and other papers should be kept and entries made therein by the
persons subject to the sales tax. R. 1164, Act No. 2339, 5, 6;
Administrative Code, 1424( j).
Chinese merchants are said to have been in the Philippines even
before the arrival of the Spaniards in 1520. The Chinese written
language is an ancient language, with a literature and with characters
quite different from those used in European languages. There are
many different native dialects in the Philippines. Forty-three is said to
be the number; but there are less than a dozen of these which may be
regarded as important-the Tagalog, the Visayan, with two distinct main
dialects, the Ilocano, the Bical, the Pampangan, the Ibanag, the
Pangasananian, and the Moro. Perhaps from 7 to 10 per cent. of the
Filipinos speak Spanish. A great many (how large the percentage one
cannot tell) of the younger people in the [271 U.S. 500, 512] Islands
speak English. It is a polygot situation, and presents many difficulties
in government. Comparatively few of the Chinese speak English or
Spanish, or the native dialects, with any facility at all, and less are
able to write or to read either. But with capacity and persistence in
trade, by signs and by a patois, they communicate with the Filipinos
and others with whom they do business, making their calculations with
the abacus, an instrument for mechanical calculation, and keeping
their books in Chinese characters in ink, applied by a brush to strong
paper, securely bound. They have a scientific system of double entry
bookkeeping.
There are 85,000 merchants in the Philippines to whom the

bookkeeping law applies. Of these, 71,000 are Filipinos, who may use
their own dialects; 1,500 are Americans, or British or Spanish
subjects; 500 are of other foreign nationalities, most of whom know
the Spanish or English language. The remainder, some 12,000 in
number, are Chinese. The aggregate commercial business transacted
by these is about 60 per cent. of the total business done by all the
merchants in the Islands. The total amount of their sales in 1923 was
more than 320 millions of pesos, distributed among 3,335 wholesale
merchants, of whom 50 did a business of 1,000,000 pesos each, 150
of 500,000 each, 400 of 100,000 each, and 2,735 of 40,000 each.
There were 8,445 retail merchants, whose annual incomes on the
average would not exceed 500 pesos each. In 1913, certain revenue
statistics were reported by the then collector of internal revenue to the
court of first instance in the case of Young v. Rafferty, 33 Philippine
Reports, 556, in which the validity of an order by the collector
requiring the keeping of certain books by taxpayers in Spanish and
English was at issue. The figures given above are based on this report.
The report showed that Chinese merchants paid about 60 per cent. of
the taxes, but this is [271 U.S. 500, 513] now in dispute, and
evidence was introduced by the present collector to show that the
proportion of taxes paid by them in 1918 and 1922 was much less,
and that examination of the books of 400 Chinese taxpayers showed a
very considerable loss, probably due to evasion and fraud.
The evidence of the president of the largest company in the Philippine
Islands, an American who has been 21 years in business in the
Philippines, as to the business activities of the Chinese, was accepted
by the court below as reliable. He says that the Chinese system of
distribution covers the Philippine Islands through the medium of
middlemen in the principal centers, and then by the small Chinese
storekeepers, throughout the Islads, extending even to the remotest
barrios or small settlements. The Chinese are the principal distributing
factors in the Philippines of imported goods, and the principal
gatherers of goods for exportation in the same remote places. He said
that if they were driven out of business there would be no other
system of distribution available throughout the Islands, for the reason
that there are not Filipino merchants sufficiently numerous, with
resources and experience, to provide a substitute.
The Chinese consul general testified that not more than eight Chinese
merchants in the Islands can read or write proficiently in any other
language than Chinese, and that the great majority of them could not
comply with the act. The merchants' establishments are made up of
young Chinese persons, who come from China, begin at the beginning,
and are promoted from time to time to become the head of the
business. The books are always kept in the Chinese language, and
each Chinese establishment is completely separated from the native
mode of living.
Apparently there has always been some complaint in respect to the
avoidance of taxes by the Chinese, because [271 U.S. 500, 514] of
the difficulty of determining what their sales tax should be. There has
always been a sales tax in the Philippines. It is a method of taxation to
which the people are used. Dr. Pardo de Tavera, the Philippine librarian
and historian, testified in this case that efforts to enforce such a law as
this in the Spanish times against the Chinese failed and became a
dead letter. Governor General Harrison made a general
recommendation looking to a law requiring the Chinese to keep books
in other than Chinese language, so that their business might be
investigated, saying that, until it was done, taxes would be evaded.
Since the passage of the law in 1921, as already said, its enforcement
has been postponed. Governor General Wood has sought to have the
law repealed or changed in such a way that exceptions might be made
to it, or that the books of the Chinese should be kept on stamped
paper with the pages registered, for the purpose of making it difficult
for the Chinese taxpayer to change the records of his business.
Protests from the Chinese government, from members of the insular
committee of the House of Representatives, from Chambers of
Commerce in the United States and elsewhere, were brought to the
attention of the Philippine Legislature, and the repeal or modification of
the law came up for discussion, but all proposed changes were
defeated. The great weight of the evidence sustains the view that the
enforcement by criminal punishment of an inhibition against the
keeping of any Chinese books of account by Chinese merchants in the
Islands would seriously embarrass all of them and would drive out of
business a great number.
Nor is there any doubt that the act as a fiscal measure was chiefly
directed against the Chinese merchants. The discussion over its repeal
in the Philippine Legislature leaves no doubt on this point. So far as

the other merchants in the Islands are concerned, its results would
be [271 U.S. 500, 515] negligible and would operate without especial
burden on other classes of foreign residents. The Supreme Court in its
opinion in this case refers to the act as popularly known as the Chinese
Bookkeeping Act.
Evidence was introduced on behalf of the defendants to show the
difficulty of securing competent Chinese bookkeepers who could act as
inspectors of Chinese books for the tax collecting authorities, and while
the failure of the government to employ a sufficient number was
charged to the fact that sufficient salaries were not paid to secure
them, it is undoubtedly true that a lack of proper and reliable Chinese
accountants presents a real difficulty in the examination of Chinese
merchants' books.
The majority of the Philippine court in its opinion, after quoting a
number of authorities showing the duty of a court in determining
whether a law is unconstitutional or not, first to give every intendment
possible to its validity, and second to reach a reasonable construction
by which it may be preserved, said:
'We come to the last question suggested, a construction of Act No.
2972 which allows the court legally to approve it.
'A literal application of the law would make it unlawful for any Chinese
merchant to keep his account books in any language other than
English, Spanish, or a local dialect. The petitioners say the law is
susceptible of that interpretation. But such interpretation might, and
probably would, cause us to hold the law unconstitutional.
'A second interpretation is that the Chinese merchant, while permitted
to keep his books of account in Chinese, must also keep another set of
books in either English, Spanish, or a native dialect. The respondents
claim the law is susceptible of such construction. It occurs to us,
however, that this construction might prove as unsatis- [271 U.S. 500,
516] factory as the first. Fraud is possible in any language. As
approximation to governmental convenience and an approximation to
equality in taxation is the most which may be expected.
'A third construction, which is permissible in view of the history of the

legislation and the wording of the statute, is that the law only intended
to require the keeping of such books as were necessary in order to
facilitate governmental inspection for tax purposes. It has not escaped
our notice that the law does not specify what books shall be kept. It is
stated by competent witnesses that a cash book, a journal, and a
ledger are indispensable books of account for an efficient system of
accounting, and that, in the smaller shops, even simpler entries
showing merely the daily records of sales and record of purchases of
merchandise would be sufficient. The keeping of records of sales, and
possibly further records of purchases, in English, Spanish, or a native
dialect, and the filling out of the necessary forms would serve the
purpose of the government while not being oppressive. Actually,
notations in English, Spanish, or a dialect of all sales in sales books,
and of data in other specified forms are insisted upon by the Bureau of
Internal Revenue, although as appears from Exhibit 2, it is doubtful if
all Chinese merchants have complied with these regulations. The
faithful observance of such rules by the Chinese is not far removed
from the offer of cooperation oft made for them by the petitioners of
the 'translation of the account books' oft mentioned and explained by
the respondents.
'The law, in speaking of any person, company, partnership or
corporation, makes use of the expression 'its account books.' Does the
phrase 'its account books' mean that all the account books of the
person, company, partnership or corporation must be kept exclusively
in English, Spanish, or any local dialect? The petitioners argue that the
law has this meaning. Or does the phrase 'its account books' mean
that the persons, company, partnership, or corporation shall keep
duplicate sets of account books, one set in Chinese and the other a
translation into English, Spanish or any local dialect? Counsel for the
respondents urge this construction of the law upon the court. [271
U.S. 500, 517] Or does the phrase 'its account books' mean that the
person, company, partnership, or corporation must keep such account
books as are necessary for taxation purposes? This latter
interpretation occurs to us as a reasonable one, and as best
safeguarding the rights of the accused.'
The court in effect concludes that what the Legislature meant to do
was to require the keeping of such account books in English, Spanish,
or the Filipino dialects as would be reasonably adapted to the needs of

the taxing officers in preventing and detecting evasion of taxes, and
that this might be determined from the statutes and regulations then
in force. What the court really does is to change the law from one
which by its plain terms forbids the Chinese merchants to keep their
account books in any language except English, Spanish, or the Filipino
dialects, and thus forbids them to keep account books in the Chinese,
into a law requiring them to keep certain undefined books in the
permitted languages. This is to change a penal prohibitive law to a
mandatory law of great indefiniteness, to conform to what the court
assumes was, or ought to have been, the purpose of the Legislature,
and which in the change would avoid a conflict with constitutional
restriction.
It would seem to us, from the history of the legislation and the efforts
for its repeal or amendment, that the Philippine Legislature knew the
meaning of the words it used, and intended that the act as passed
should be prohibitory, and should forbid the Chinese merchants from
keeping the account books of their business in Chinese. [271 U.S. 500,
518] Had the Legislature intended only what the Supreme Court has
construed it to mean, why should it not have amended it accordingly?
Apparently the Legislature thought the danger to the revenue was in
the secrecy of the Chinese books, and additional books in the
permitted languages would not solve the difficulty.
We fully concede that it is the duty of a court in considering the
validity of an act to give it such reasonable construction as can be
reached to bring it within the fundamental law. But it is very clear that
amendment may not be substituted for construction, and that a court
may not exercise legislative functions to save the law from conflict with
constitutional limitation.
One of the strongest reasons for not making this law a nose of wax, to
be changed from that which the plain language imports, is the fact
that it is a highly penal statute authorizing sentence of one convicted
under it to a fine of not more than 10,000 pesos, or by imprisonment
for not more than two years, or both. If we change it to meet the
needs suggested by other laws and fiscal regulations and by the
supposed general purpose of the legislation, we are creating by
construction a vague requirement, and one objectionable in a criminal
statute. We are likely thus to trespass on the provision of the Bill of

Rights that the accused is entitled to demand the nature and cause of
the accusation against him, and to violate the principle that a statute
which requires the doing of an act so indefinitely described that men
must guess at its meaning, violates due process of law. Connally v.
Construction Co., (decided January 4, 1926) 269 U.S. 385 , 46 S. Ct.
126; United States v. Cohen Grocery Co., 255 U.S. 81 , 41 S. Ct. 298,
14 A. L. R. 1045; International Harvester Co. v. Kentucky, 234 U.S.
216 , 34 S. Ct. 853; United States v. Reese, 92 U.S. 214 , 219.
The main objection to the construction given to the act by the court
below is that in making the act indefinitely mandatory instead of
broadly prohibitory it creates a [271 U.S. 500, 519] restriction upon
its operation to make it valid that is not in any way suggested by its
language. In several cases this court has pointed out that such
strained construction, in order to make a law conform to a
constitutional limitation, cannot be sustained.
In United States v. Reese, 92 U.S. 214 , the question for decision
arose on a demurrer to an indictment against inspectors of municipal
election for refusing to receive and count the vote of a colored man.
The power of Congress to forbid such an act was confined under the
Fifteenth Amendment to a refusal to receive such a vote from a
colored man on account of his race, color, or previous condition of
servitude, but the section under which the indictment was brought did
not specifically confine the offense to a refusal for such a reason or to
such discrimination, although in previous sections of the act there was
a general purpose disclosed in the act to enforce the Fifteenth
Amendment. The demurrer was sustained on the ground that the
section was invalid.
Chief Justice Waite, in delivering the opinion of the court, said at page
221:
'We are therefore directly called upon to decide whether a penal
statute enacted by Congress, with its limited powers, which is in
general language broad enough to cover wrongful acts without as well
as within the constitutional jurisdiction, can be limited by judicial
construction so as to make it operate only on that which Congress may
rightfully prohibit and punish. For this purpose, we must take these
sections of the statute as they are. We are not able to reject a part
which is unconstitutional, and retain the remainder, because it is not

possible to separate that which is unconstitutional, if there be any
such, from that which is not. The proposed effect is not to be attained
by striking out or disregarding words that are in the section, but by
inserting those that are not now there. Each of the sections must
stand as a [271 U.S. 500, 520] whole, or fall altogether. The
language is plain. There is no room for construction, unless it be as to
the effect of the Constitution. The question then to be determined is
whether we can introduce words of limitation into a penal statute, so
as to make it specific, when, as expressed, it is general only. It would
certainly be dangerous if the Legislature could set a net large enough
to catch all possible offenders, and leave it to the courts to step inside
and say who could be rightfully detained, and who should be set at
large. This would, to some extent, substitute the judicial for the
legislative department of the government.'
And again the Chief Justice said:
'To limit this statute in the manner now asked for would be to make a
new law, not to enforce an old one. This is no part of our duty.'
The same principle was laid down, and this language approved by this
court in the Trade-Mark Cases, 100 U.S. 82 , in which, to save the
validity of a general statute providing for trade-marks, the court was
asked to construe the statute to apply only to trade-marks in
interstate commerce. It was held this could not be done. Mr. Justice
Miller, speaking for the court, at page 98, said:
'It has been suggested that, if Congress has power to regulate trademarks used in commerce with foreign nations and among the several
states, these statutes shall be held valid in that class of cases, if no
further. To this there are two objections: First, the indictments in these
cases do not show that the trade-marks which are wrongfully used
were trade-marks used in that kind of commerce; secondly, while it
may be true that when one part of a statute is valid and constitutional,
and another part is unconstitutional and void, the court may enforce
the valid part where they are distinctly separable so that each can
stand alone, it is not within the judicial province to give to the words
used by Congress a narrower meaning [271 U.S. 500, 521] than they
are manifestly intended to bear in order that crimes may be punished
which are not described in language that brings them within the
constitutional power of that body.'
514 , 529-530, 27 S. Ct. 153; Karem v. United States, 121 F. 250,

259, 57 C. C. A. 486, 61 L. R. A. 437.
The case of Butts v. Merchants' & Miners' Transportation Co., 230 U.S.
126 , 33 S. Ct. 964, concerned the application of the Civil Rights Act of
March 1, 1875 (Comp. St. 3926-3930), to vessels of the United States
engaged in the coastwise trade. In the Civil Rights Cases, 109 U.S. 3 ,
3 S. Ct. 18, it was held that the Civil Rights Act of 1875, to protect all
citizens in their civil and legal rights, and in accordance with the terms
of which a defendant was indicted for denying the privileges and
accommodations of a theater in a state to a person on account of her
color, was unconstitutional because power to enact and enforce such
legislation in a state was in the state legislature only. The declaration
in the Butts Case was brought to recover penalties for violation of the
act against a corporation engaged in the transportation of passengers
and freight between Boston, Mass., and Norfolk, Va., and the
discrimination occurred on the high seas and in the jurisdiction of the
United States, and not within any state. It was contended that the
federal Civil Rights Act could, therefore, apply in such a case. The
court pointed out the all-inclusive words of the act of Congress and
held that they could not be cut down to include only what was strictly
within the federal jurisdiction. The court said:
The effect of the authorities we have quoted is clear to the point that
we may not in a criminal statute reduce its generally inclusive terms so
as to limit its application to only that class of cases which it was within
the power of the Legislature to enact, and thus save the statute from
invalidity. What it is proposed to do here is much more radical, for it is
to ignore and hold for naught a plain prohibition of the keeping of
account books in Chinese and insert in the act an affirmative
requirement that account books not definitely determined which are
adapted to the needs of the taxing officials be kept in the permitted
languages. This is quite beyond the judicial power.
'Only by reason of the general words indicative of the intended

uniformity can it be said that there was a purpose to embrace
American vessels upon the high seas, the District of Columbia and the
territories. But how can the manifest purpose to establish an uniform
law for the entire jurisdiction of the United States be converted into a
purpose to create a law for only a small fraction of that jurisdiction?
How can the use of general terms denoting an intention to enact a law
which should be appli- [271 U.S. 500, 522] cable alike in all places
within that jurisdiction be said to indicate a purpose to make a law
which should be applicable to a minor part of that jurisdiction and
inapplicable to the major part? Besides, it is not to be forgotten that
the intended law is both penal and criminal'-citing the case of United
States v. Reese, and the Trade-Mark Cases, supra, as well as United
States v. Harris, 106 U.S. 629, 642 , 1 S. Ct. 601; Baldwin v.
Franks, 120 U.S. 678, 685 , 7 S. Ct. 656, 763; James v. Bowman, 190
U.S. 127, 140 , 23 S. Ct. 678; United States v. Ju Toy, 198 U.S. 253,
262 , 25 S. Ct. 644; Illinois Central Railroad Co. v. McKendree,203 U.S.
The suggestion has been made in argument that we should accept the
construction put upon a statute of the Philippine Islands by their
Supreme Court as we would the construction of a state court in
passing upon the federal constitutionality of a state statute. The
analogy is not complete. The Philippines are within the exclusive
jurisdiction of the United States government, with complete power of
legislation in Congress over them, and when the interpretation of a
Philippine statute comes before us for review, we may, if there be need
therefor, re-examine it for ourselves as the court of last resort on [271
U.S. 500, 523] such a question. It is very true that with respect to
questions turning on questions of local law, or those properly affected
by custom inherited from the centuries of Spanish control, we defer
much to the judgment of the Philippine or Porto Rican courts. Cami v.
Central Victoria, Ltd., 268 U.S. 469 , 45 S. Ct. 570; Diaz v.
Gonzales, 261 U.S. 102 , 43 S. Ct. 286. But on questions of statutory
construction, as of the Philippine Code of Procedure adopted by the
United States Philippine Commission, this court may exercise an
independent judgment. In Philippine Sugar Co. v. Philippine
Islands, 247 U.S. 385 , at page 390, 38 S. Ct. 513, 515 (62 L. Ed.
1177), involving the effect of section 285 of that Code, this court said:
'It is also urged that, since the construction of section 285 is a matter
of purely local concern, we should not disturb the decision of the
Supreme Court of the Philippine Islands. This court is always disposed
to accept the construction which the highest court of a territory or
possession has placed upon a local statute. Phoenix Ry. Co. v.
Landis, 231 U.S. 578 (34 S. Ct. 179). But that disposition may not be
yielded to, where the lower court has clearly erred. Carrington v.
United States, 208 U.S. 1 (28 S. Ct. 203).'
what the like provisions meant at the time when Congress made them
applicable to the Philippine Islands. Kepner v. United States, 195 U.S.
100 (24 S. Ct. 797, 1 Ann. Cas. 655).
The question of applying American constitutional limitations to a

Philippine or Porto Rican statute, dealing, with the rights of persons
living under the government established by the United States, is not a
local one, especially when the persons affected are subjects of another
sovereignty, with which the United States has made a treaty promising
to make every effort to protect their rights. The fundamental law we
administer in the Philippine bill of rights was a marked change from
that which prevailed in the Islands before we took them over, and is to
be enforced in the light of the construction by this court of such
limitations as it has recognized them since the foundation of our own
government. In its application here, we must determine for ourselves
the necessary meaning of a statute officially enacted in English and its
conformity with fundamental limitations.
'For the purpose, therefore, of passing on the errors assigned we must

test the correctness of the action of the court below by substantially
the same criteria which we would apply to a case arising in the United
States and controlled by the bill of rights expressed in the
amendments to the Constitution of the United States.'
[271 U.S. 500, 524] We cannot give any other meaning to the
Bookkeeping Act than that which its plain language imports, making it
a crime for any one in the Philippine Islands engaged in business to
keep his account books in Chinese. This brings us to the question
whether the law thus construed to mean what it says is invalid.
The Philippine Bill of Rights, already referred to, provides that:
'No law shall be enacted in said Islands which shall deprive any person
of life, liberty, or property without due process of law, or deny to any
person therein the equal protection of the laws.'
In Serra v. Mortiga, 204 U.S. 470 , at page 474, 27 S. Ct. 343, 345
( 51 L. Ed. 571), this court said:
'It is settled that by virtue of the Bill of Rights, enacted by Congress
for the Philippine Islands (32 Stat. 691, 692), that guaranties
equivalent to the due process and equal protection of the law clause of
the Fourteenth Amendment, the twice in jeopardy clause of the Fifth
Amendment, and the substantial guaranties of the Sixth Amendment,
exclusive of the right to trial by jury, were extended to the Philippine
Islands. It is further settled that the guaranties which Congress has
extended to the Philippine Islands are to be interpreted as meaning
In view of the history of the Islands and of the conditions there

prevailing, we think the law to be invalid, because it deprives Chinese
persons situated as they are, [271 U.S. 500, 525] with their
extensive and important business long established, of their liberty and
property without due process of law, and denies them the equal
protection of the laws.
Of course the Philippine government may make every reasonable
requirement of its taxpayers to keep proper records of their business
transactions in English or Spanish or Filipino dialect by which an
adequate measure of what is due from them in meeting the cost of
government can be had. How detailed those records should be we
need not now discuss, for it is not before us. But we are clearly of
opinion that it is not within the police power of the Philippine
Legislature, because it would be oppressive and arbitrary, to prohibit
all Chinese merchants from maintaining a set of books in the Chinese
language, and in the Chinese characters, and thus prevent them from
keeping advised of the status of their business and directing its
conduct. As the petitioner, Yu Cong Eng, well said in his examination,
the Chinese books of those merchants who know only Chinese and do
not know English and Spanish (and they constitute a very large
majority of all of them in the Islands,) are their eyes in respect of their
business. Without them such merchants would be a prey to all kinds of
fraud and without possibility of adopting any safe policy. It would
greatly and disastrously curtail their liberty of action, and be
oppressive and damaging in the preservation of their property. We
agree with the Philippine Supreme Court in thinking that the statute
construed as we think it must be construed is invalid.
In Lawton v. Steele, 152 U.S. 133, 137 , 14 S. Ct. 499, 501 (38 L. Ed.
385), the court said:
'To justify the state in thus interposing its authority in behalf of the
public, it must appear, first, that the interests of the public generally,
as distinguished from those of a particular class, requires such
interference; and, second, that the means are reasonably necessary
for the accomplishment of the purpose, and not unduly
oppressive [271 U.S. 500, 526] upon individuals. The Legislature
may not, under the guise of protecting the public interests, arbitrarily
interfere with private business, or impose unusual and unnecessary
restrictions upon lawful occupations. In other words, its determination
as to what is a proper exercise of its police powers is not final or
conclusive, but is subject to the supervision of the courts.'
In Holden v. Hardy, 169 U.S. 366, 398 , 18 S. Ct. 383, 390 (42 L. Ed.
780), the court said:
'The question in each case is whether the legislature has adopted the
statute in exercise of a reasonable discretion, or whether its action be
a mere excuse for an unjust discrimination, or the oppression or
spoliation of a particular class.'
In the case of Meyer v. Nebraska, 262 U.S. 390 , 43 S. Ct. 625, 29 A.
L. R. 1446, this court considered the validity of state legislation
making it unlawful to teach a foreign language to children, adopted on
the theory that the state had the right to protect children likely to
become citizens from study of a particular language, in which they
might read and learn doctrine inimical to the Constitution of the United
States and to the nation, and forbidding the teachers of the language
from pursuing their occupation on this account, and held it invalid. The
court said:
'While this court has not attempted to define with exactness the liberty
thus guaranteed, the term has received much consideration and some
of the included things have been definitely stated. Without doubt, it
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 recognized at
common law as essential to the orderly pursuit of happiness by free
men. ... The established doctrine is that this liberty may not be
interfered with, under the guise of pro- [271 U.S. 500, 527] tecting
the public interest, by legislative action which is arbitrary or without

reasonable relation to some purpose within the competency of the
state to effect. Determination by the Legislature of what constitutes
proper exercise of police power is not final or conclusive but is subject
to supervision by the courts.'
The same principle is laid down in Pierce v. Society of Sisters, 268 U.S.
510 , 45 S. Ct. 571, 39 A. L. R. 468, in Truax v. Raich, 239 U.S. 33 ,
36 S. Ct. 7, L. R. A. 1916D, 545, Ann. Cas. 1917B, 283, and in Adams
v. Tanner, 244 U.S. 590 , 37 S. Ct. 662, L. R. A. 1917F, 1163, Ann.
Cas. 1917D, 973, in which this court has held legislative attempts
arbitrary and oppressively to interfere with the liberty of the individual
in the pursuit of lawful occupations to involve a lack of due process.
In Adams v. Tanner, supra, an act to restrict the maintenance of
employment agencies by forbidding the collection of fees from those
seeking work, to avoid the extortion to which such workers were often
subjected, was held unconstitutional. The court said at page 594 (37
S. Ct. 664):
'Because abuses may, and probably do, grow up in connection with
this business, is adequate reason for hedging it about by proper
regulations. But this is not enough to justify destruction of one's right
to follow a distinctly useful calling in an upright way. Certainly there is
no profession, possibly no business, which does not offer peculiar
opportunities for reprehensible practices; and as to every one of them,
no doubt, some can be found quite ready earnestly to maintain that its
suppression would be in the public interest. Skillfully directed agitation
might also bring about apparent condemnation of any one of them by
the public. Happily for all, the fundamental guaranties of the
Constitution cannot be freely submerged if and whenever some
ostensible justification is advanced and the police power invoked.'
In Truax v. Raich, supra, the people of the state of Arizona adopted an
act, entitled 'An act to protect the [271 U.S. 500, 528] citizens of the
United States in their employment against noncitizens of the United
States,' and provided that an employer of more than five workers at
any one time in that state should not employ less than 80 per cent.
qualified electors or native-born citizens, and that any employer who
did so should be subject upon conviction to the payment of a fine and
imprisonment. It was held that such a law denied aliens an opportunity
of earning a livelihood and deprived them of their liberty without due

process of law, and denied them the equal protection of the laws. As
against the Chinese merchants of the Philippines, we think the present
law which deprives them of something indispensable to the carrying on
of their business, and is obviously intended chiefly to affect them as
distinguished from the rest of the community, is a denial to them of
the equal protection of the laws.
We hold the law in question to be invalid.
Judgment reversed.

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almost unimaginable proportions; the field and scope of police power has

1. CONSTITUTIONAL LAW; POLICE POWER; NATURE AND SCOPE. Police

2. ID.; GUARANTEES IN SECTION I, ARTICLE III OF THE CONSTITUTION;

5. ID.; ID.; LEGISLATIVE POWER TO MAKE DISTINCTION AND

domination is one of the noblest motives that a national legislature may

14. ID.; ID.; ID.; ID.; PURPOSE OF CONSTITUTIONAL DIRECTIVE

I. The case and the issue, in general

in significance The enactment poses questions of due process, police power

III. Grounds upon which petition is based Answer thereto

"SECTION 1. (1) No person shall be deprived of life, liberty or property

equal protection clause is not infringed by legislation which applies only to

guardians of individual liberty and right, have nevertheless evinced a

b. The alien retailers traits.

Assets Gross Sales

chanrob1es virtual 1aw library

Filipino 106,671 200,323,138 55.82 174,181,924 5174

c. Alleged alien control and dominance.

Chinese 15,356 118,348,692 32.98 148,813,239 44.21

There is a general feeling on the part of the public, which appears to be

Others 1,646 40,187,090 11.20 13,630,239 4.05

Filipino 113,631 213,342,264 67.30 467,161,667 60.51

Chinese 16,248 125,223,336 35.72 392,414,875 45.36

chanrob1es virtual 1aw library

Filipino 111,107 208,658,946 65.05 279,583,333 57.03

chanrob1es virtual 1aw library

Chinese 12,087 93,155,459 29.38 294,894,227 38.20

chanrob1es virtual 1aw library

Filipino 113,659 213,451,602 60.89 462,532,901 53.47

Others 486 12,056,365 3.39 10,078,364 1.17

Filipino 1,878 4,069

Filipino 119,352 224,053,620 61.09 466,058,052 53.07

chanrob1es virtual 1aw library

Filipino 1,878 1,633

chanrob1es virtual 1aw library

Filipino 1,878 2,516

chanrob1es virtual 1aw library

Chinese 7,707 24,152

chanrob1es virtual 1aw library

Filipino 1,877 3,905

control when they approved a resolution categorically declaring among

of lawful authority. It is also believed that they have engaged in corrupting

and makes his living, or of that spirit of regard, sympathy and

Broadly speaking, the power of the legislature to make distinctions and

"Licensing acts, in fact, in legislation, are universally restraining acts; as,

"Aliens are under no special constitutional protection which forbids a

instances such a relation to a legitimate object of legislation as to be made

subject of legislation. . . ."

annoyance of a particular class, and must not be unduly oppressive." (11

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VII. The Due Process of Law Limitation

a. Reasonability, the test of the limitation; determination by legislature

cralaw virtua1aw library

". . . Too much significance cannot be given to the word reasonable in

". . . A statute to be within this power must also be reasonable in its

"In determining whether a given act of the Legislature, passed in the

b. Petitioners argument considered.

The necessity of the law in question is explained in the explanatory note

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If political independence is a legitimate aspiration of a people, then

d. Provisions of law not unreasonable.

consequences of the law or its operation (I Sutherland, Statutory

be embraced in its title is to apprise the legislators of the purposes, the

owners' right to equal protection of laws. The dispositive portion thus

WHEREFORE, the appeals are PARTLY GRANTED. The Decision dated