CASE TITLE: 118127

CASE NUMBER:

Nature of the Case: Validity of Ordinance No. 7783 & The Exercise of Police Power
PETITIONER: City of Manila, Hon. Alfredo S. Lim et al enacted the 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.
RESPONDENT: Hon. Perfecto A.S. Laguio, Jr., as presiding judge of RTC Manila and Malate
Tourist Development Corporation. MTDC is a corporation engaged in the business of operating
hotels, motels, hostels and lodging houses. 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.
Defense of the Petitioner: On the other hand, the petitioners 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. Citing
Kwong Sing v. City of Manila, petitioners insisted that the power of regulation spoken in the LGC
included the power to control, to govern and to restrain places of exhibition and amusement.
Petitioners also assailed that the said ordinance cannot be assailed as an ex post facto law is it
was prospective in application.
Allegations of the Respondent: MTDC 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) 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. 499 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.

Facts: On March 30, 1993, ordinance number 7783 was enacted by the city mayor

SECTION 1. Any provision of existing laws and ordinances to the contrary notwithstanding, no
person, partnership, corporation or entity shall, in the Ermita- Malate area bounded by
Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the East, Vito Cruz Street in the South
and Roxas Boulevard in the West, pursuant to P.D. 499 be allowed or authorized to contract
and engage in, any business providing certain forms of amusement, entertainment,
services and facilities where women are used as tools in entertainment and which tend to
disturb the community, annoy the inhabitants, and adversely affect the social and moral
welfare of the community, such as but not limited to: Sauna Parlors, Massage Parlors, Karaoke
Bars, Beerhouses, Night Clubs, Day Clubs, Super Clubs, Discotheques, Cabarets, Dance Halls,
Motels, 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: Curio or antique shop, souvenir shops,
handicrafts display centers, art galleries, records and music shops, restaurants, coffee shops,
flower shops, music lounge and sing along restaurants with well defined activities for wholesome
family entertainment that cater to both local and foreign clientele, theatres and businesses
allowable within the law.

SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction, be
punished by imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00) PESOS,
or both, at the discretion of the Court, PROVIDED, that in case of juridical person, the President,
the General Manager, or person-in- charge of operation shall be liable thereof; PROVIDED
FURTHER, that in case of subsequent violation and conviction, the premises of the erring
establishment shall be closed and padlocked permanently.

SEC. 5. This ordinance shall take effect upon approval. Enacted by the City Council of Manila at
its regular session today, March 9, 1993.

The lower court declared the said ordinance as null and void and made the permanent writ of
preliminary injunction that had been issued by this Court against the defendant.

On Appeal, the petitioners maintain their assertions made before the lower court. They allege that
the ordinance is a valid exercise of police power and it does not in any way contravene P.D. 499;
and that it enjoys the presumption of validity.

Issue: Whether or not ordinance no. 7783 is a valid exercise of police power?
Fallo: WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court
declaring the Ordinance void is AFFIRMED. Costs against petitioners. SO ORDERED.

Held: The Supreme Court held that Ordinance No. 7783 is not a valid exercise of police power for
many reasons. First, the ordinance is so replete with constitutional infirmities that almost every
sentence thereof violates a constitutional provision.

First, it did not meet the requisites for a valid ordinance. The tests of a valid ordinance must
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.

Second is that it did not meet the valid exercise of police power. Police Power 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. For Police power to be validly
exercised, the means adopted must be reasonably necessary for the accomplishment of the
purpose and not unduly oppressive upon individuals. 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. 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. The Court ruled that there are indeed other means to reasonably accomplish the city
governments desired end (impose increased license fees, impose daily inspections of the
establishments for any violation of the conditions of their licenses or permits)

Third reason is that the modality employed constitutes unlawful taking. The ordinance is
unreasonable and oppressive as it deprives the respondents of the beneficial use of their property.
Not only does the ordinance forbid the running of the enumerated businesses but orders them to
wind up their business operations or to transfer outside the Ermita-Malate Area or better yet
convert to another type of business which is allowed under the ordinance. There are two types of
taking that can be identified:

1. Possessory taking occurs when the government confiscates or physically occupies the
property.
2. Regulatory taking occurs when the governments regulation leaves no reasonable
economically viable use of the property.
The second and third options found in Section 4 of the said ordinance is equivalent to a taking of
private property without due process of law, nay, even without compensation.

Fourth The ordinance violates the equal protection clause. In the courts view, there is 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. The classification in the instant case is invalid as similar
subjects are not similarly treated, both as to rights conferred and obligations imposed.

To be valid, it must conform to the following requirements:

1. It must be based on substantial distinctions.
2. It must be germane to the purposes of the law.
3. It must not be limited to existing conditions only.
4. It must apply equally to all members of the class.
Notes: