1

Republic of the Philippines

SUPREME COURT
Manila

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,
vs.
THE HONORABLE CITY MAYOR OF MANILA, respondent-appellant.
VICTOR ALABANZA, intervenor-appellee.

Panganiban, Abad and Associates Law Office for respondent-appellant.

J. M. Aruego, Tenchavez and Associates for intervenor-appellee.

FERNANDO, J.:

The principal question in this appeal from a judgment of the lower court in an action for prohibition is whether
Ordinance No. 4760 of the City of Manila is violative of the due process clause. The lower court held that it is and
adjudged it "unconstitutional, and, therefore, null and void." For reasons to be more specifically set forth, such
judgment must be reversed, there being a failure of the requisite showing to sustain an attack against its validity.

The petition for prohibition against Ordinance No. 4760 was filed on July 5, 1963 by the petitioners, Ermita-Malate
Hotel and Motel Operators Association, one of its members, Hotel del Mar Inc., and a certain Go Chiu, who is "the
president and general manager of the second petitioner" against the respondent Mayor of the City of Manila who was
sued in his capacity as such "charged with the general power and duty to enforce ordinances of the City of Manila
and to give the necessary orders for the faithful execution and enforcement of such ordinances." (par. 1). It was
alleged that the petitioner non-stock corporation is dedicated to the promotion and protection of the interest of its
eighteen (18) members "operating hotels and motels, characterized as legitimate businesses duly licensed by both
national and city authorities, regularly paying taxes, employing and giving livelihood to not less than 2,500 person and
representing an investment of more than P3 million." 1 (par. 2). It was then alleged that on June 13, 1963, the
Municipal Board of the City of Manila enacted Ordinance No. 4760, approved on June 14, 1963 by the then Vice-
Mayor Herminio Astorga, who was at the time acting as Mayor of the City of Manila. (par. 3).

After which the alleged grievances against the ordinance were set forth in detail. There was the assertion of its being
beyond the powers of the Municipal Board of the City of Manila to enact insofar as it would regulate motels, on the
ground that in the revised charter of the City of Manila or in any other law, no reference is made to motels; that
Section 1 of the challenged ordinance is unconstitutional and void for being unreasonable and violative of due
process insofar as it would impose P6,000.00 fee per annum for first class motels and P4,500.00 for second class
motels; that the provision in the same section which would require the owner, manager, keeper or duly authorized
representative of a hotel, motel, or lodging house to refrain from entertaining or accepting any guest or customer or
letting any room or other quarter to any person or persons without his filling up the prescribed form in a lobby open to
public view at all times and in his presence, wherein the surname, given name and middle name, the date of birth, the
address, the occupation, the sex, the nationality, the length of stay and the number of companions in the room, if any,
with the name, relationship, age and sex would be specified, with data furnished as to his residence certificate as well
as his passport number, if any, coupled with a certification that a person signing such form has personally filled it up
and affixed his signature in the presence of such owner, manager, keeper or duly authorized representative, with
such registration forms and records kept and bound together, it also being provided that the premises and facilities of
such hotels, motels and lodging houses would be open for inspection either by the City Mayor, or the Chief of Police,
or their duly authorized representatives is unconstitutional and void again on due process grounds, not only for being
arbitrary, unreasonable or oppressive but also for being vague, indefinite and uncertain, and likewise for the alleged
invasion of the right to privacy and the guaranty against self-incrimination ; that Section 2 of the challenged ordinance
classifying motels into two classes and requiring the maintenance of certain minimum facilities in first class motels
such as a telephone in each room, a dining room or, restaurant and laundry similarly offends against the due process
clause for being arbitrary, unreasonable and oppressive, a conclusion which applies to the portion of the ordinance
requiring second class motels to have a dining room; that the provision of Section 2 of the challenged ordinance
prohibiting a person less than 18 years old from being accepted in such hotels, motels, lodging houses, tavern or
common inn unless accompanied by parents or a lawful guardian and making it unlawful for the owner, manager,
keeper or duly authorized representative of such establishments to lease any room or portion thereof more than
twice every 24 hours, runs counter to the due process guaranty for lack of certainty and for its unreasonable, arbitrary
and oppressive character; and that insofar as the penalty provided for in Section 4 of the challenged ordinance for a
subsequent conviction would, cause the automatic cancellation of the license of the offended party, in effect causing
the destruction of the business and loss of its investments, there is once again a transgression of the due process
clause.

There was a plea for the issuance of preliminary injunction and for a final judgment declaring the above ordinance
null and void and unenforceable. The lower court on July 6, 1963 issued a writ of preliminary injunction ordering
respondent Mayor to refrain from enforcing said Ordinance No. 4760 from and after July 8, 1963.

In the a answer filed on August 3, 1963, there was an admission of the personal circumstances regarding the
respondent Mayor and of the fact that petitioners are licensed to engage in the hotel or motel business in the City of
Manila, of the provisions of the cited Ordinance but a denial of its alleged nullity, whether on statutory or constitutional
grounds. After setting forth that the petition did fail to state a cause of action and that the challenged ordinance bears
a reasonable relation, to a proper purpose, which is to curb immorality, a valid and proper exercise of the police
power and that only the guests or customers not before the court could complain of the alleged invasion of the right to
privacy and the guaranty against self incrimination, with the assertion that the issuance of the preliminary
injunction ex parte was contrary to law, respondent Mayor prayed for, its dissolution and the dismissal of the petition.

Instead of evidence being offered by both parties, there was submitted a stipulation of facts dated September 28,
1964, which reads:

1. That the petitioners Ermita-Malate Hotel and Motel Operators Association, Inc. and Hotel del Mar Inc. are
duly organized and existing under the laws of the Philippines, both with offices in the City of Manila, while
the petitioner Go Chin is the president and general manager of Hotel del Mar Inc., and the intervenor Victor
Alabanza is a resident of Baguio City, all having the capacity to sue and be sued;

2. That the respondent Mayor is the duly elected and incumbent City Mayor and chief executive of the City
of Manila charged with the general power and duty to enforce ordinances of the City of Manila and to give
the necessary orders for the faithful execution and enforcement of such ordinances;

3. That the petitioners are duly licensed to engage in the business of operating hotels and motels in Malate
and Ermita districts in Manila;

4. That on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No. 4760, which was
approved on June 14, 1963, by Vice-Mayor Herminio Astorga, then the acting City Mayor of Manila, in the
absence of the respondent regular City Mayor, amending sections 661, 662, 668-a, 668-b and 669 of the
compilation of the ordinances of the City of Manila besides inserting therein three new sections. This
ordinance is similar to the one vetoed by the respondent Mayor (Annex A) for the reasons stated in its 4th
Indorsement dated February 15, 1963 (Annex B);

5. That the explanatory note signed by then Councilor Herminio Astorga was submitted with the proposed
ordinance (now Ordinance 4760) to the Municipal Board, copy of which is attached hereto as Annex C;

6. That the City of Manila derived in 1963 an annual income of P101,904.05 from license fees paid by the
105 hotels and motels (including herein petitioners) operating in the City of Manila. 1äwphï1.ñët

Thereafter came a memorandum for respondent on January 22, 1965, wherein stress was laid on the presumption of
the validity of the challenged ordinance, the burden of showing its lack of conformity to the Constitution resting on the
party who assails it, citing not only U.S. v. Salaveria, but likewise applicable American authorities. Such a
memorandum likewise refuted point by point the arguments advanced by petitioners against its validity. Then barely
two weeks later, on February 4, 1965, the memorandum for petitioners was filed reiterating in detail what was set
forth in the petition, with citations of what they considered to be applicable American authorities and praying for a
judgment declaring the challenged ordinance "null and void and unenforceable" and making permanent the writ of
preliminary injunction issued.
After referring to the motels and hotels, which are members of the petitioners association, and referring to the alleged
constitutional questions raised by the party, the lower court observed: "The only remaining issue here being purely a
question of law, the parties, with the nod of the Court, agreed to file memoranda and thereafter, to submit the case
for decision of the Court." It does appear obvious then that without any evidence submitted by the parties, the
decision passed upon the alleged infirmity on constitutional grounds of the challenged ordinance, dismissing as is
undoubtedly right and proper the untenable objection on the alleged lack of authority of the City of Manila to regulate
motels, and came to the conclusion that "the challenged Ordinance No. 4760 of the City of Manila, would be
unconstitutional and, therefore, null and void." It made permanent the preliminary injunction issued against
respondent Mayor and his agents "to restrain him from enforcing the ordinance in question." Hence this appeal.

As noted at the outset, the judgment must be reversed. A decent regard for constitutional doctrines of a fundamental
character ought to have admonished the lower court against such a sweeping condemnation of the challenged
ordinance. Its decision cannot be allowed to stand, consistently with what has hitherto been the accepted standards
of constitutional adjudication, in both procedural and substantive aspects.

Primarily what calls for a reversal of such a decision is the absence of any evidence to offset the presumption of
validity that attaches to a challenged statute or ordinance. As was expressed categorically by Justice Malcolm: "The
presumption is all in favor of validity x x x . The action of the elected representatives of the people cannot be lightly
set aside. The councilors must, in the very nature of things, be familiar with the necessities of their particular
municipality and with all the facts and circumstances which surround the subject and necessitate action. The local
legislative body, by enacting the ordinance, has in effect given notice that the regulations are essential to the well
being of the people x x x . The Judiciary should not lightly set aside legislative action when there is not a clear
invasion of personal or property rights under the guise of police regulation. 2

It admits of no doubt therefore that there being a presumption of validity, the necessity for evidence to rebut it is
unavoidable, unless the statute or ordinance is void on its face which is not the case here. The principle has been
nowhere better expressed than in the leading case of O'Gorman & Young v. Hartford Fire Insurance Co.,3 where the
American Supreme Court through Justice Brandeis tersely and succinctly summed up the matter thus: The statute
here questioned deals with a subject clearly within the scope of the police power. We are asked to declare it void on
the ground that the specific method of regulation prescribed is unreasonable and hence deprives the plaintiff of due
process of law. As underlying questions of fact may condition the constitutionality of legislation of this character, the
resumption of constitutionality must prevail in the absence of some factual foundation of record for overthrowing the
statute." No such factual foundation being laid in the present case, the lower court deciding the matter on the
pleadings and the stipulation of facts, the presumption of validity must prevail and the judgment against the ordinance
set aside.

Nor may petitioners assert with plausibility that on its face the ordinance is fatally defective as being repugnant to the
due process clause of the Constitution. The mantle of protection associated with the due process guaranty does not
cover petitioners. This particular manifestation of a police power measure being specifically aimed to safeguard public
morals is immune from such imputation of nullity resting purely on conjecture and unsupported by anything of
substance. To hold otherwise would be to unduly restrict and narrow the scope of police power which has been
properly characterized as the most essential, insistent and the least limitable of powers, 4 extending as it does "to all
the great public needs."5 It would be, to paraphrase another leading decision, to destroy the very purpose of the state
if it could be deprived or allowed itself to be deprived of its competence to promote public health, public morals, public
safety and the genera welfare.6 Negatively put, police power is "that inherent and plenary power in the State which
enables it to prohibit all that is hurt full to the comfort, safety, and welfare of society. 7

There is no question but that the challenged ordinance was precisely enacted to minimize certain practices hurtful to
public morals. The explanatory note of the Councilor Herminio Astorga included as annex to the stipulation of facts,
speaks of the alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to
the existence of motels, which "provide a necessary atmosphere for clandestine entry, presence and exit" and thus
become the "ideal haven for prostitutes and thrill-seekers." The challenged ordinance then proposes to check the
clandestine harboring of transients and guests of these establishments by requiring these transients and guests to fill
up a registration form, prepared for the purpose, in a lobby open to public view at all times, and by introducing several
other amendatory provisions calculated to shatter the privacy that characterizes the registration of transients and
guests." Moreover, the increase in the licensed fees was intended to discourage "establishments of the kind from
operating for purpose other than legal" and at the same time, to increase "the income of the city government." It
would appear therefore that the stipulation of facts, far from sustaining any attack against the validity of the
ordinance, argues eloquently for it.
It is a fact worth noting that this Court has invariably stamped with the seal of its approval, ordinances punishing
vagrancy and classifying a pimp or procurer as a vagrant; 8 provide a license tax for and regulating the maintenance
or operation of public dance halls;9 prohibiting gambling;10 prohibiting jueteng;11 and monte;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 or local, primarily rest the exercise of the police power,
which, it cannot be too often emphasized, is the power to prescribe regulations to promote the health, morals, peace,
good order, safety and general welfare of the people. In view of the requirements of due process, equal protection
and other applicable constitutional guaranties however, the exercise of such police power insofar as it may affect the
life, liberty or property of any person is subject to judicial inquiry. Where such exercise of police power may be
considered as either capricious, whimsical, unjust or unreasonable, a denial of due process or a violation of any other
applicable constitutional guaranty may call for correction by the courts.

We are thus led to considering the insistent, almost shrill tone, in which the objection is raised to the question of due
process.16 There is no controlling and precise definition of due process. It furnishes though a standard to which the
governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be
valid. What then is the standard of due process which must exist both as a procedural and a substantive requisite to
free the challenged ordinance, or any governmental action for that matter, from the imputation of legal infirmity
sufficient to spell its doom? It is responsiveness to the supremacy of reason, obedience to the dictates of justice.
Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due process requirement, official
action, to paraphrase Cardozo, must not outrun the bounds of reason and result in sheer oppression. Due process is
thus hostile to any official action marred by lack of reasonableness. Correctly it has been identified as freedom from
arbitrariness. It is the embodiment of the sporting idea of fair play. 17 It exacts fealty "to those strivings for justice" and
judges the act of officialdom of whatever branch "in the light of reason drawn from considerations of fairness that
reflect [democratic] traditions of legal and political thought." 18 It is not a narrow or "technical conception with fixed
content unrelated to time, place and circumstances,"19 decisions based on such a clause requiring a "close and
perceptive inquiry into fundamental principles of our society."20 Questions of due process are not to be treated
narrowly or pedantically in slavery to form or phrases.21

It would thus be an affront to reason to stigmatize an ordinance enacted precisely to meet what a municipal
lawmaking body considers an evil of rather serious proportion an arbitrary and capricious exercise of authority. It
would seem that what should be deemed unreasonable and what would amount to an abdication of the power to
govern is inaction in the face of an admitted deterioration of the state of public morals. To be more specific, the
Municipal Board of the City of Manila felt the need for a remedial measure. It provided it with the enactment of the
challenged ordinance. A strong case must be found in the records, and, as has been set forth, none is even
attempted here to attach to an ordinance of such character the taint of nullity for an alleged failure to meet the due
process requirement. Nor does it lend any semblance even of deceptive plausibility to petitioners' indictment of
Ordinance No. 4760 on due process grounds to single out such features as the increased fees for motels and hotels,
the curtailment of the area of freedom to contract, and, in certain particulars, its alleged vagueness.

Admittedly there was a decided increase of the annual license fees provided for by the challenged ordinance for
hotels and motels, 150% for the former and over 200% for the latter, first-class motels being required to pay a P6,000
annual fee and second-class motels, P4,500 yearly. It has been the settled law however, as far back as 1922 that
municipal license fees could be classified into those imposed for regulating occupations or regular enterprises, for the
regulation or restriction of non-useful occupations or enterprises and for revenue purposes only. 22 As was explained
more in detail in the above Cu Unjieng case: (2) Licenses for non-useful occupations are also incidental to the police
power and the right to exact a fee may be implied from the power to license and regulate, but in fixing amount of the
license fees the municipal corporations are allowed a much wider discretion in this class of cases than in the former,
and aside from applying the well-known legal principle that municipal ordinances must not be unreasonable,
oppressive, or tyrannical, courts have, as a general rule, declined to interfere with such discretion. The desirability of
imposing restraint upon the number of persons who might otherwise engage in non-useful enterprises is, of course,
generally an important factor in the determination of the amount of this kind of license fee. Hence license fees clearly
in the nature of privilege taxes for revenue have frequently been upheld, especially in of licenses for the sale of
liquors. In fact, in the latter cases the fees have rarely been declared unreasonable. 23

Moreover in the equally leading case of Lutz v. Araneta24 this Court affirmed the doctrine earlier announced by the
American Supreme Court that taxation may be made to implement the state's police power. Only the other day, this
Court had occasion to affirm that the broad taxing authority conferred by the Local Autonomy Act of 1959 to cities and
municipalities is sufficiently plenary to cover a wide range of subjects with the only limitation that the tax so levied is
for public purposes, just and uniform.25

As a matter of fact, even without reference to the wide latitude enjoyed by the City of Manila in imposing licenses for
revenue, it has been explicitly held in one case that "much discretion is given to municipal corporations in determining
the amount," here the license fee of the operator of a massage clinic, even if it were viewed purely as a police power
measure.26 The discussion of this particular matter may fitly close with this pertinent citation from another decision of
significance: "It is urged on behalf of the plaintiffs-appellees that the enforcement of the ordinance could deprive them
of their lawful occupation and means of livelihood because they can not rent stalls in the public markets. But it
appears that plaintiffs are also dealers in refrigerated or cold storage meat, the sale of which outside the city markets
under certain conditions is permitted x x x . And surely, the mere fact, that some individuals in the community may be
deprived of their present business or a particular mode of earning a living cannot prevent the exercise of the police
power. As was said in a case, persons licensed to pursue occupations which may in the public need and interest be
affected by the exercise of the police power embark in these occupations subject to the disadvantages which may
result from the legal exercise of that power."27

Nor does the restriction on the freedom to contract, insofar as the challenged ordinance makes it unlawful for the
owner, manager, keeper or duly authorized representative of any hotel, motel, lodging house, tavern, common inn or
the like, to lease or rent room or portion thereof more than twice every 24 hours, with a proviso that in all cases full
payment shall be charged, call for a different conclusion. Again, such a limitation cannot be viewed as a
transgression against the command of due process. It is neither unreasonable nor arbitrary. Precisely it was intended
to curb the opportunity for the immoral or illegitimate use to which such premises could be, and, according to the
explanatory note, are being devoted. How could it then be arbitrary or oppressive when there appears a
correspondence between the undeniable existence of an undesirable situation and the legislative attempt at
correction. Moreover, petitioners cannot be unaware that every regulation of conduct amounts to curtailment of liberty
which as pointed out by Justice Malcolm cannot be absolute. Thus: "One thought which runs through all these
different conceptions of liberty is plainly apparent. It is this: 'Liberty' as understood in democracies, is not license; it is
'liberty regulated by law.' Implied in the term is restraint by law for the good of the individual and for the greater good
of the peace and order of society and the general well-being. No man can do exactly as he pleases. Every man must
renounce unbridled license. The right of the individual is necessarily subject to reasonable restraint by general law for
the common good x x x The liberty of the citizen may be restrained in the interest of the public health, or of the public
order and safety, or otherwise within the proper scope of the police power."28

A similar observation was made by Justice Laurel: "Public welfare, then, lies at the bottom of the enactment of said
law, and the state in order to promote the general welfare may interfere with personal liberty, with property, and with
business and occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state x x x To this fundamental aim of our Government the
rights of the individual are subordinated. Liberty is a blessing without which life is a misery, but liberty should not be
made to prevail over authority because then society will fall into anarchy. Neither should authority be made to prevail
over liberty because then the individual will fall into slavery. The citizen should achieve the required balance of liberty
and authority in his mind through education and personal discipline, so that there may be established the resultant
equilibrium, which means peace and order and happiness for all. 29

It is noteworthy that the only decision of this Court nullifying legislation because of undue deprivation of freedom to
contract, People v. Pomar,30 no longer "retains its virtuality as a living principle. The policy of laissez faire has to some
extent given way to the assumption by the government of the right of intervention even in contractual relations
affected with public interest.31 What may be stressed sufficiently is that if the liberty involved were freedom of the
mind or the person, the standard for the validity of governmental acts is much more rigorous and exacting, but where
the liberty curtailed affects at the most rights of property, the permissible scope of regulatory measure is wider. 32 How
justify then the allegation of a denial of due process?

Lastly, there is the attempt to impugn the ordinance on another due process ground by invoking the principles of
vagueness or uncertainty. It would appear from a recital in the petition itself that what seems to be the gravamen of
the alleged grievance is that the provisions are too detailed and specific rather than vague or uncertain. Petitioners,
however, point to the requirement that a guest should give the name, relationship, age and sex of the companion or
companions as indefinite and uncertain in view of the necessity for determining whether the companion or
companions referred to are those arriving with the customer or guest at the time of the registry or entering the room
With him at about the same time or coming at any indefinite time later to join him; a proviso in one of its sections
which cast doubt as to whether the maintenance of a restaurant in a motel is dependent upon the discretion of its
owners or operators; another proviso which from their standpoint would require a guess as to whether the "full rate of
payment" to be charged for every such lease thereof means a full day's or merely a half-day's rate. It may be asked,
do these allegations suffice to render the ordinance void on its face for alleged vagueness or uncertainty? To ask the
question is to answer it. From Connally v. General Construction Co.33 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 construing laws as saying what they obviously mean." 35

That is all then that this case presents. As it stands, with all due allowance for the arguments pressed with such vigor
and determination, the attack against the validity of the challenged ordinance cannot be considered a success. Far
from it. Respect for constitutional law principles so uniformly held and so uninterruptedly adhered to by this Court
compels a reversal of the appealed decision.

Wherefore, the judgment of the lower court is reversed and the injunction issued lifted forthwith. With costs.
2

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-5060 January 26, 1910

THE UNITED STATES, plaintiff-appellee,

vs.
LUIS TORIBIO, defendant-appellant.

Rodriguez & Del Rosario, for appellant.

Attorney-General Villamor, for appellee.

CARSON, J.:

The evidence of record fully sustains the findings of the trial court that the appellant slaughtered or caused to be
slaughtered for human consumption, the carabao described in the information, without a permit from the municipal
treasure of the municipality wherein it was slaughtered, in violation of the provisions of sections 30 and 33 of Act No.
1147, an Act regulating the registration, branding, and slaughter of large cattle.

It appears that in the town of Carmen, in the Province of Bohol, wherein the animal was slaughtered there is no
municipal slaughterhouse, and counsel for appellant contends that under such circumstances the provisions of Act
No. 1147 do not prohibit nor penalize the slaughter of large cattle without a permit of the municipal treasure. Sections
30, 31, 32, and 33 of the Act are as follows:

SEC. 30. No large cattle shall be slaughtered or killed for food at the municipal slaughterhouse except upon
permit secured from the municipal treasure. Before issuing the permit for the slaughter of large cattle for
human consumption, the municipal treasurer shall require for branded cattle the production of the original
certificate of ownership and certificates of transfer showing title in the person applying for the permit, and for
unbranded cattle such evidence as may satisfy said treasurer as to the ownership of the animals for which
permit to slaughter has been requested.

SEC. 31. No permit to slaughter has been carabaos shall be granted by the municipal treasurer unless such
animals are unfit for agricultural work or for draft purposes, and in no event shall a permit be given to
slaughter for food any animal of any kind which is not fit for human consumption.

SEC. 32. The municipal treasurer shall keep a record of all permits for slaughter issued by him, and such
record shall show the name and residence of the owner, and the class, sex, age, brands, knots of radiated
hair commonly know as remolinos or cowlicks, and other marks of identification of the animal for the
slaughter of which permit is issued and the date on which such permit is issued. Names of owners shall be
alphabetically arranged in the record, together with date of permit.

A copy of the record of permits granted for slaughter shall be forwarded monthly to the provincial treasurer,
who shall file and properly index the same under the name of the owner, together with date of permit.

SEC. 33. Any person slaughtering or causing to be slaughtered for human consumption or killing for food at
the municipal slaughterhouse any large cattle except upon permit duly secured from the municipal treasurer,
shall be punished by a fine of not less than ten nor more than five hundred pesos, Philippine currency, or by
imprisonment for not less than one month nor more than six months, or by both such fine and imprisonment,
in the discretion of the court.

It is contended that the proper construction of the language of these provisions limits the prohibition contained in
section 30 and the penalty imposed in section 33 to cases (1) of slaughter of large cattle for human consumption in a
municipal slaughter without a permit duly secured from the municipal treasurer, and (2) cases of killing of large cattle
for food in a municipal slaughterhouse without a permit duly secured from the municipal treasurer; and it is urged that
the municipality of Carmen not being provided with a municipal slaughterhouse, neither the prohibition nor the penalty
is applicable to cases of slaughter of large cattle without a permit in that municipality.

We are of opinion, however, that the prohibition contained in section 30 refers (1) to the slaughter of large cattle for
human consumption, anywhere, without a permit duly secured from the municipal treasurer, and (2) expressly and
specifically to the killing for food of large cattle at a municipal slaughterhouse without such permit; and that the
penalty provided in section 33 applies generally to the slaughter of large cattle for human consumption, anywhere,
without a permit duly secured from the municipal treasurer, and specifically to the killing for food of large cattle at a
municipal slaughterhouse without such permit.

It may be admitted at once, that the pertinent language of those sections taken by itself and examined apart from the
context fairly admits of two constructions: one whereby the phrase "at the municipal slaughterhouse" may be taken as
limiting and restricting both the word "slaughtered" and the words "killed for food" in section 30, and the words
"slaughtering or causing to be slaughtered for human consumption" and the words "killing for food" in section 33; and
the other whereby the phrase "at the municipal slaughterhouse" may be taken as limiting and restricting merely the
words "killed for food" and "killing for food" as used in those sections. But upon a reading of the whole Act, and
keeping in mind the manifest and expressed purpose and object of its enactment, it is very clear that the latter
construction is that which should be adopted.

The Act primarily seeks to protect the "large cattle" of the Philippine Islands against theft and to make easy the
recovery and return of such cattle to their proper owners when lost, strayed, or stolen. To this end it provides an
elaborate and compulsory system for the separate branding and registry of ownership of all such cattle throughout
the Islands, whereby owners are enabled readily and easily to establish their title; it prohibits and invalidates all
transfers of large cattle unaccompanied by certificates of transfer issued by the proper officer in the municipality
where the contract of sale is made; and it provides also for the disposition of thieves or persons unlawfully in
possession, so as to protect the rights of the true owners. All this, manifestly, in order to make it difficult for any one
but the rightful owner of such cattle to retain them in his possession or to dispose of them to others. But the
usefulness of this elaborate and compulsory system of identification, resting as it does on the official registry of the
brands and marks on each separate animal throughout the Islands, would be largely impaired, if not totally destroyed,
if such animals were requiring proof of ownership and the production of certificates of registry by the person
slaughtering or causing them to be slaughtered, and this especially if the animals were slaughtered privately or in a
clandestine manner outside of a municipal slaughterhouse. Hence, as it would appear, sections 30 and 33 prohibit
and penalize the slaughter for human consumption or killing for food at a municipal slaughterhouse of such animals
without a permit issued by the municipal treasurer, and section 32 provides for the keeping of detailed records of all
such permits in the office of the municipal and also of the provincial treasurer.

If, however, the construction be placed on these sections which is contended for by the appellant, it will readily be
seen that all these carefully worked out provisions for the registry and record of the brands and marks of identification
of all large cattle in the Islands would prove in large part abortion, since thieves and persons unlawfully in possession
of such cattle, and naturally would, evade the provisions of the law by slaughtering them outside of municipal
slaughterhouses, and thus enjoy the fruits of their wrongdoing without exposing themselves to the danger of detection
incident to the bringing of the animals to the public slaughterhouse, where the brands and other identification marks
might be scrutinized and proof of ownership required.

Where the language of a statute is fairly susceptible of two or more constructions, that construction should be
adopted which will most tend to give effect to the manifest intent of the lawmaker and promote the object for which
the statute was enacted, and a construction should be rejected which would tend to render abortive other provisions
of the statute and to defeat the object which the legislator sought to attain by its enactment. We are of opinion,
therefore, that sections 30 and 33 of the Act prohibit and penalize the slaughtering or causing to be slaughtered for
human consumption of large cattle at any place without the permit provided for in section 30.

It is not essential that an explanation be found for the express prohibition in these sections of the "killing for food at a
municipal slaughterhouse" of such animals, despite the fact that this prohibition is clearly included in the general
prohibition of the slaughter of such animals for human consumption anywhere; but it is not improbable that the
requirement for the issue of a permit in such cases was expressly and specifically mentioned out of superabundance
of precaution, and to avoid all possibility of misunderstanding in the event that some of the municipalities should be
disposed to modify or vary the general provisions of the law by the passage of local ordinances or regulations for the
control of municipal slaughterhouse.
Similar reasoning applied to the specific provisions of section 31 of the Act leads to the same conclusion. One of the
secondary purposes of the law, as set out in that section, is to prevent the slaughter for food of carabaos fit for
agricultural and draft purposes, and of all animals unfit for human consumption. A construction which would limit the
prohibitions and penalties prescribed in the statute to the killing of such animals in municipal slaughterhouses, leaving
unprohibited and unpenalized their slaughter outside of such establishments, so manifestly tends to defeat the
purpose and object of the legislator, that unless imperatively demanded by the language of the statute it should be
rejected; and, as we have already indicated, the language of the statute is clearly susceptible of the construction
which we have placed upon it, which tends to make effective the provisions of this as well as all the other sections of
the Act.

It appears that the defendant did in fact apply for a permit to slaughter his carabao, and that it was denied him on the
ground that the animal was not unfit "for agricultural work or for draft purposes." Counsel for appellant contends that
the statute, in so far as it undertakes to penalize the slaughter of carabaos for human consumption as food, without
first obtaining a permit which can not be procured in the event that the animal is not unfit "for agricultural work or draft
purposes," is unconstitutional and in violation of the terms of section 5 of the Philippine Bill (Act of Congress, July 1,
1902), which provides that "no law shall be enacted which shall deprive any person of life, liberty, or property without
due process of law."

It is not quite clear from the argument of counsel whether his contention is that this provision of the statute constitutes
a taking of property for public use in the exercise of the right of eminent domain without providing for the
compensation of the owners, or that it is an undue and unauthorized exercise of the police power of the State. But
whatever may be the basis of his contention, we are of opinion, appropriating, with necessary modifications
understood, the language of that great jurist, Chief Justice Shaw (in the case of Com. vs. Tewksbury, 11 Met., 55,
where the question involved was the constitutionality of a statute prohibiting and penalizing the taking or carrying
away by any person, including the owner, of any stones, gravel, or sand, from any of the beaches in the town of
Chesea,) that the law in question "is not a taking of the property for public use, within the meaning of the constitution,
but is a just and legitimate exercise of the power of the legislature to regulate and restrain such particular use of the
property as would be inconsistent with or injurious to the rights of the public. All property is acquired and held under
the tacit condition that it shall not be so used as to injure the equal rights of others or greatly impair the public rights
and interest of the community."

It may be conceded that the benificial use and exclusive enjoyment of the property of all carabao owners in these
Islands is to a greater or less degree interfered with by the provisions of the statute; and that, without inquiring what
quantum of interest thus passes from the owners of such cattle, it is an interest the deprivation of which detracts from
their right and authority, and in some degree interferes with their exclusive possession and control of their property,
so that if the regulations in question were enacted for purely private purpose, the statute, in so far as these
regulations are concerned, would be a violation of the provisions of the Philippine Bill relied on be appellant; but we
are satisfied that it is not such a taking, such an interference with the right and title of the owners, as is involved in the
exercise by the State of the right of eminent domain, so as to entitle these owners to compensation, and that it is no
more than "a just restrain of an injurious private use of the property, which the legislature had authority to impose."

In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the doctrine laid down in Com. vs. Tewksbury (supra) was
reviewed and affirmed, the same eminent jurist who wrote the former opinion, in distinguishing the exercise of the
right of eminent domain from the exercise of the sovereign police powers of the State, said:

We think it is settled principle, growing out of the nature of well-ordered civil 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 may be so regulated that is 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. . . . 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 restrain and regulations establish by law, as the
legislature, under the governing and controlling power vested in them by the constitution, may think
necessary and expedient.

This is very different from the right of eminent domain, the right of a government to take and appropriate
private property to public use, whenever the public exigency requires it; which can be done only on condition
of providing a reasonable compensation therefor. The power we allude to is rather the police power, 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.

It is much easier to perceive and realize the existence and sources of this power than to mark its boundaries
or prescribe limits to its exercise.

Applying these principles, we are opinion that the restrain placed by the law on the slaughter for human consumption
of carabaos fit for agricultural work and draft purpose is not an appropriation of property interests to a "public use,"
and is not, therefore, within the principle of the exercise by the State of the right of eminent domain. It is fact a mere
restriction or limitation upon a private use, which the legislature deemed to be determental to the public welfare. And
we think that an examination of the general provisions of the statute in relation to the public interest which it seeks to
safeguard and the public necessities for which it provides, leaves no room for doubt that the limitations and restraints
imposed upon the exercise of rights of ownership by the particular provisions of the statute under consideration were
imposed not for private purposes but, strictly, in the promotion of the "general welfare" and "the public interest" in the
exercise of the sovereign police power which every State possesses for the general public welfare and which
"reaches to every species of property within the commonwealth."

For several years prior to the enactment of the statute a virulent contagious or infectious disease had threatened the
total extinction of carabaos in these Islands, in many sections sweeping away seventy, eighty, and in some cases as
much as ninety and even one hundred per cent of these animals. Agriculture being the principal occupation of the
people, and the carabao being the work animal almost exclusively in use in the fields as well as for draft purposes,
the ravages of the disease with which they were infected struck an almost vital blow at the material welfare of the
country. large areas of productive land lay waste for years, and the production of rice, the staple food of the
inhabitants of the Islands, fell off to such an extent that the impoverished people were compelled to spend many
millions of pesos in its importation, notwithstanding the fact that with sufficient work animals to cultivate the fields the
arable rice lands of the country could easily be made to produce a supply more that sufficient for its own needs. The
drain upon the resources of the Islands was such that famine soon began to make itself felt, hope sank in the breast
of the people, and in many provinces the energies of the breadwinners seemed to be paralyzed by the apparently
hopeless struggle for existence with which they were confronted.

To meet these conditions, large sums of money were expended by the Government in relieving the immediate needs
of the starving people, three millions of dollars were voted by the Congress of the United States as a relief or famine
fund, public works were undertaken to furnish employment in the provinces where the need was most pressing, and
every effort made to alleviate the suffering incident to the widespread failure of the crops throughout the Islands, due
in large measure to the lack of animals fit for agricultural work and draft purposes.

Such measures, however, could only temporarily relieve the situation, because in an agricultural community material
progress and permanent prosperity could hardly be hoped for in the absence of the work animals upon which such a
community must necessarily rely for the cultivation of the fields and the transportation of the products of the fields to
market. Accordingly efforts were made by the Government to increase the supply of these animals by importation,
but, as appears from the official reports on this subject, hope for the future depended largely on the conservation of
those animals which had been spared from the ravages of the diseased, and their redistribution throughout the
Islands where the need for them was greatest.

At large expense, the services of experts were employed, with a view to the discovery and applications of preventive
and curative remedies, and it is hoped that these measures have proved in some degree successful in protecting the
present inadequate supply of large cattle, and that the gradual increase and redistribution of these animals
throughout the Archipelago, in response to the operation of the laws of supply and demand, will ultimately results in
practically relieving those sections which suffered most by the loss of their work animals.

As was to be expected under such conditions, the price of carabaos rapidly increase from the three to five fold or
more, and it may fairly be presumed that even if the conservative measures now adopted prove entirely successful,
the scant supply will keep the price of these animals at a high figure until the natural increase shall have more nearly
equalized the supply to the demand.

Coincident with and probably intimately connected with this sudden rise in the price of cattle, the crime of cattle
stealing became extremely prevalent throughout the Islands, necessitating the enactment of a special law penalizing
with the severest penalties the theft of carabaos and other personal property by roving bands; and it must be
assumed from the legislative authority found that the general welfare of the Islands necessitated the enactment of
special and somewhat burdensome provisions for the branding and registration of large cattle, and supervision and
restriction of their slaughter for food. It will hardly be questioned that the provisions of the statute touching the
branding and registration of such cattle, and prohibiting and penalizing the slaughter of diseased cattle for food were
enacted in the due and proper exercise of the police power of the State; and we are of opinion that, under all the
circumstances, the provision of the statute prohibiting and penalizing the slaughter for human consumption of
carabaos fit for work were in like manner enacted in the due and proper exercise of that power, justified by the
exigent necessities of existing conditions, and the right of the State to protect itself against the overwhelming disaster
incident to the further reduction of the supply of animals fit for agricultural work or draft purposes.

It is, we think, a fact of common knowledge in these Islands, and disclosed by the official reports and records of the
administrative and legislative departments of the Government, that not merely the material welfare and future
prosperity of this agricultural community were threatened by the ravages of the disease which swept away the work
animals during the years prior to the enactment of the law under consideration, but that the very life and existence of
the inhabitants of these Islands as a civilized people would be more or less imperiled by the continued destruction of
large cattle by disease or otherwise. Confronted by such conditions, there can be no doubt of the right of the
Legislature to adopt reasonable measures for the preservation of work animals, even to the extent of prohibiting and
penalizing what would, under ordinary conditions, be a perfectly legitimate and proper exercise of rights of ownership
and control of the private property of the citizen. The police power rests upon necessity and the right of self-protection
and if ever the invasion of private property by police regulation can be justified, we think that the reasonable
restriction placed upon the use of carabaos by the provision of the law under discussion must be held to be
authorized as a reasonable and proper exercise of that power.

As stated by Mr. Justice Brown in his opinion in the case of Lawton vs. Steele (152 U.S., 133, 136):

The extent and limits of what is known as the police power have been a fruitful subject of discussion in the
appellate courts of nearly every State in the Union. It is universally conceded to include everything essential
to the public safely, health, and morals, and to justify the destruction or abatement, by summary
proceedings, of whatever may be regarded as a public nuisance. Under this power it has been held that the
State may order the destruction of a house falling to decay or otherwise endangering the lives of passers-by;
the demolition of such as are in the path of a conflagration; the slaughter of diseased cattle; the destruction
of decayed or unwholesome food; the prohibition of wooden buildings in cities; the regulation of railways and
other means of public conveyance, and of interments in burial grounds; the restriction of objectionable
trades to certain localities; the compulsary vaccination of children; the confinement of the insane or those
afficted with contagious deceases; the restraint of vagrants, beggars, and habitual drunkards; the
suppression of obscene publications and houses of ill fame; and the prohibition of gambling houses and
places where intoxicating liquors are sold. Beyond this, however, 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 interests of the public require, but what measures are necessary for the
protection of such interests. (Barbier vs. Connolly, 113 U. S., 27; Kidd vs. Pearson, 128 U. S., 1.) 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. 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 court.

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.

Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt., 140), said (p. 149) that by this "general
police power of the State, persons and property are subjected to all kinds of restraints and burdens, in order to secure
the general comfort, health, and prosperity of the State; of the perfect right in the legislature to do which no question
ever was, or, upon acknowledge and general principles, ever can be made, so far as natural persons are concerned."
And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says:

It would be quite impossible to enumerate all the instances in which the police power is or may be exercised,
because the various cases in which the exercise by one individual of his rights may conflict with a similar
exercise by others, or may be detrimental to the public order or safety, are infinite in number and in variety.
And there are other cases where it becomes necessary for the public authorities to interfere with the control
by individuals of their property, and even to destroy it, where the owners themselves have fully observed all
their duties to their fellows and to the State, but where, nevertheless, some controlling public necessity
demands the interference or destruction. A strong instance of this description is where it becomes necessary
to take, use, or destroy the private property of individuals to prevent the spreading of a fire, the ravages of a
pestilence, the advance of a hostile army, or any other great public calamity. Here the individual is in no
degree in fault, but his interest must yield to that "necessity" which "knows no law." The establishment of
limits within the denser portions of cities and villages within which buildings constructed of inflammable
materials shall not be erected or repaired may also, in some cases, be equivalent to a destruction of private
property; but regulations for this purpose have been sustained notwithstanding this result. Wharf lines may
also be established for the general good, even though they prevent the owners of water-fronts from building
out on soil which constitutes private property. And, whenever the legislature deem it necessary to the
protection of a harbor to forbid the removal of stones, gravel, or sand from the beach, they may establish
regulations to that effect under penalties, and make them applicable to the owners of the soil equally with
other persons. Such regulations are only "a just restraint of an injurious use of property, which the legislature
have authority" to impose.

So a particular use of property may sometimes be forbidden, where, by a change of circumstances, and
without the fault of the power, that which was once lawful, proper, and unobjectionable has now become a
public nuisance, endangering the public health or the public safety. Milldams are sometimes destroyed upon
this grounds; and churchyards which prove, in the advance of urban population, to be detrimental to the
public health, or in danger of becoming so, are liable to be closed against further use for cemetery purposes.

These citations from some of the highest judicial and text-book authorities in the United States clearly indicate the
wide scope and extent which has there been given to the doctrine us in our opinion that the provision of the statute in
question being a proper exercise of that power is not in violation of the terms of section 5 of the Philippine Bill, which
provide that "no law shall be enacted which shall deprive any person of life, liberty, or property without due process of
law," a provision which itself is adopted from the Constitution of the United States, and is found in substance in the
constitution of most if not all of the States of the Union.

The judgment of conviction and the sentence imposed by the trial court should be affirmed with the costs of this
instance against the appellant. So ordered.
Republic of the Philippines
Supreme Court
Manila
EN BANC
3

EMILIO GANCAYCO, G.R. No. 177807

Petitioner,
- versus -

CITY GOVERNMENT OF QUEZON CITY AND

METRO MANILADEVELOPMENT AUTHORITY,
Respondents.

x-----------------------------------------------x
METRO MANILA DEVELOPMENT AUTHORITY,
Petitioner,
G.R. No. 177933

Present:

CORONA, C.J.,
-versus- CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
JUSTICE EMILIO A. GANCAYCO (Retired), ABAD,
Respondent, VILLARAMA, JR.,
PEREZ,
x-----------------------------------------x MENDOZA,
SERENO,
REYES, and
PERLAS-BERNABE, JJ.

Promulgated:

October 11, 2011

x - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - x
 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

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 Gancaycos 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 Councils
(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.
Q03-49693, 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 Gancaycos 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 owner’s 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 Gancaycos 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. WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM ASSAILING THE

VALIDITY OF ORDINANCE NO. 2904.
II. WHETHER OR NOT ORDINANCE NO. 2904 IS CONSTITUTIONAL.
III. WHETHER OR NOT THE WING WALL OF JUSTICE GANCAYCOS BUILDING IS A
PUBLIC NUISANCE.
IV. WHETHER OR NOT THE MMDA LEGALLY DEMOLISHED THE PROPERTY OF
JUSTICE GANCAYCO.

The Courts 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 bona fide 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
the Sangguniang 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 Gancaycos 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.

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 205. Building Officials. Except as otherwise provided herein, the Building Official
shall be responsible for carrying out the provisions of 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

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.)

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. 96-009 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]

MMDAs 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 Gancaycos building.

WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals in CA-G.R. SP No. 84648
is AFFIRMED.

SO ORDERED.
 4

FIRST DIVISION

[G.R. No. 135962. March 27, 2000]

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs.

BEL-AIR VILLAGE ASSOCIATION, INC., respondent.

DECISION

PUNO, J.:

Not infrequently, the government is tempted to take legal shortcuts to solve urgent
problems of the people. But even when government is armed with the best of intention,
we cannot allow it to run roughshod over the rule of law. Again, we let the hammer fall
and fall hard on the illegal attempt of the MMDA to open for public use a private road in
a private subdivision. While we hold that the general welfare should be promoted, we
stress that it should not be achieved at the expense of the rule of law. h Y

Petitioner MMDA is a government agency tasked with the delivery of basic services in
Metro Manila. Respondent Bel-Air Village Association, Inc. (BAVA) is a non-stock, non-
profit corporation whose members are homeowners in Bel-Air Village, a private
subdivision in Makati City. Respondent BAVA is the registered owner of Neptune Street,
a road inside Bel-Air Village.

On December 30, 1995, respondent received from petitioner, through its Chairman, a
notice dated December 22, 1995 requesting respondent to open Neptune Street to
public vehicular traffic starting January 2, 1996. The notice reads: Court

"SUBJECT: NOTICE of the Opening of Neptune Street to Traffic

"Dear President Lindo,

"Please be informed that pursuant to the mandate of the MMDA law or

Republic Act No. 7924 which requires the Authority to rationalize the use
of roads and/or thoroughfares for the safe and convenient movement of
persons, Neptune Street shall be opened to vehicular traffic effective
January 2, 1996.

"In view whereof, the undersigned requests you to voluntarily open the
points of entry and exit on said street.
 "Thank you for your cooperation and whatever assistance that may be
extended by your association to the MMDA personnel who will be directing
traffic in the area.

"Finally, we are furnishing you with a copy of the handwritten instruction of

the President on the matter.

"Very truly yours,

PROSPERO I. ORETA

Chairman"[1]

On the same day, respondent was apprised that the perimeter wall separating the
subdivision from the adjacent Kalayaan Avenue would be demolished. Sppedsc

On January 2, 1996, respondent instituted against petitioner before the Regional Trial
Court, Branch 136, Makati City, Civil Case No. 96-001 for injunction. Respondent
prayed for the issuance of a temporary restraining order and preliminary injunction
enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter
wall. The trial court issued a temporary restraining order the following day.

On January 23, 1996, after due hearing, the trial court denied issuance of a preliminary
injunction.[2] Respondent questioned the denial before the Court of Appeals in CA-G.R.
SP No. 39549. The appellate court conducted an ocular inspection of Neptune
Street[3] and on February 13, 1996, it issued a writ of preliminary injunction enjoining the
implementation of the MMDAs proposed action.[4]

On January 28, 1997, the appellate court rendered a Decision on the merits of the case
finding that the MMDA has no authority to order the opening of Neptune Street, a
private subdivision road and cause the demolition of its perimeter walls. It held that the
authority is lodged in the City Council of Makati by ordinance. The decision disposed of
as follows: Jurissc

"WHEREFORE, the Petition is GRANTED; the challenged Order dated

January 23, 1995, in Civil Case No. 96-001, is SET ASIDE and the Writ of
Preliminary Injunction issued on February 13, 1996 is hereby made
permanent.

"For want of sustainable substantiation, the Motion to Cite Roberto L. del

Rosario in contempt is denied.[5]

"No pronouncement as to costs.

"SO ORDERED."[6]
The Motion for Reconsideration of the decision was denied on September 28, 1998.
Hence, this recourse. Jksm

Petitioner MMDA raises the following questions:

"I

HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY

(MMDA) THE MANDATE TO OPEN NEPTUNE STREET TO PUBLIC
TRAFFIC PURSUANT TO ITS REGULATORY AND POLICE POWERS?

II

IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT

BEFORE THE MMDA MAY ORDER THE OPENING OF SUBDIVISION
ROADS TO PUBLIC TRAFFIC?

III

IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED

FROM DENYING OR ASSAILING THE AUTHORITY OF THE MMDA TO
OPEN THE SUBJECT STREET? Jlexj

WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE

SEVERAL MEETINGS HELD BETWEEN MMDA AND THE AFFECTED
BEL-AIR RESIDENTS AND BAVA OFFICERS?

HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?"[7]

Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village,
a private residential subdivision in the heart of the financial and commercial district of
Makati City. It runs parallel to Kalayaan Avenue, a national road open to the general
public. Dividing the two (2) streets is a concrete perimeter wall approximately fifteen
(15) feet high. The western end of Neptune Street intersects Nicanor Garcia, formerly
Reposo Street, a subdivision road open to public vehicular traffic, while its eastern end
intersects Makati Avenue, a national road. Both ends of Neptune Street are guarded by
iron gates. Edp mis

Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic
because it is an agent of the state endowed with police power in the delivery of basic
services in Metro Manila. One of these basic services is traffic management which
involves the regulation of the use of thoroughfares to insure the safety, convenience
and welfare of the general public. It is alleged that the police power of MMDA was
affirmed by this Court in the consolidated cases of Sangalang v. Intermediate Appellate
Court.[8] From the premise that it has police power, it is now urged that there is no need
for the City of Makati to enact an ordinance opening Neptune street to the public. [9]

Police power is an inherent attribute of sovereignty. It has been defined as the power
vested by the Constitution in the legislature to make, ordain, and establish all manner of
wholesome and reasonable laws, statutes and ordinances, either with penalties or
without, not repugnant to the Constitution, as they shall judge to be for the good and
welfare of the commonwealth, and for the subjects of the same.[10] The power is plenary
and its scope is vast and pervasive, reaching and justifying measures for public health,
public safety, public morals, and the general welfare.[11]

It bears stressing that police power is lodged primarily in the National Legislature. [12] It
cannot be exercised by any group or body of individuals not possessing legislative
power.[13] The National Legislature, however, may delegate this power to the President
and administrative boards as well as the lawmaking bodies of municipal corporations or
local government units.[14] Once delegated, the agents can exercise only such legislative
powers as are conferred on them by the national lawmaking body.[15]

A local government is a "political subdivision of a nation or state which is constituted by

law and has substantial control of local affairs."[16] The Local Government Code of 1991
defines a local government unit as a "body politic and corporate" [17]-- one endowed with
powers as a political subdivision of the National Government and as a corporate entity
representing the inhabitants of its territory.[18] Local government units are the provinces,
cities, municipalities and barangays.[19] They are also the territorial and political
subdivisions of the state.[20]

Our Congress delegated police power to the local government units in the Local
Government Code of 1991. This delegation is found in Section 16 of the same Code,
known as the general welfare clause, viz: Chief

"Sec. 16. General Welfare.Every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as
powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local government
units shall ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities,
improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and
order, and preserve the comfort and convenience of their inhabitants." [21]
Local government units exercise police power through their respective legislative
bodies. The legislative body of the provincial government is the sangguniang
panlalawigan, that of the city government is the sangguniang panlungsod, that of the
municipal government is the sangguniang bayan, and that of the barangay is
the sangguniang barangay. The Local Government Code of 1991 empowers
the sangguniang panlalawigan, sangguniang panlungsod and sangguniang
bayan to "enact ordinances, approve resolutions and appropriate funds for the general
welfare of the [province, city or municipality, as the case may be], and its inhabitants
pursuant to Section 16 of the Code and in the proper exercise of the corporate powers
of the [province, city municipality] provided under the Code x x x." [22] The same Code
gives the sangguniang barangay the power to "enact ordinances as may be necessary
to discharge the responsibilities conferred upon it by law or ordinance and to promote
the general welfare of the inhabitants thereon."[23]

Metropolitan or Metro Manila is a body composed of several local government

units - i.e., twelve (12) cities and five (5) municipalities, namely, the cities of Caloocan,
Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pinas, Marikina,
Paranaque and Valenzuela, and the municipalities of Malabon, , Navotas, , Pateros,
San Juan and Taguig. With the passage of Republic Act (R. A.) No. 7924[24] in 1995,
Metropolitan Manila was declared as a "special development and administrative
region" and the Administration of "metro-wide" basic services affecting the
region placed under "a development authority" referred to as the MMDA.[25]

"Metro-wide services" are those "services which have metro-wide impact and
transcend local political boundaries or entail huge expenditures such that it would not be
viable for said services to be provided by the individual local government units
comprising Metro Manila."[26] There are seven (7) basic metro-wide services and the
scope of these services cover the following: (1) development planning; (2) transport and
traffic management; (3) solid waste disposal and management; (4) flood control and
sewerage management; (5) urban renewal, zoning and land use planning, and shelter
services; (6) health and sanitation, urban protection and pollution control; and (7) public
safety. The basic service of transport and traffic management includes the
following: Lexjuris

"(b) Transport and traffic management which include the formulation,

coordination, and monitoring of policies, standards, programs and
projects to rationalize the existing transport operations,
infrastructure requirements, the use of thoroughfares, and
promotion of safe and convenient movement of persons and goods;
provision for the mass transport system and the institution of a
system to regulate road users; administration and implementation of
all traffic enforcement operations, traffic engineering services and
traffic education programs, including the institution of a single
ticketing system in Metropolitan Manila;"[27]
In the delivery of the seven (7) basic services, the MMDA has the following
powers and functions: Esm

"Sec. 5. Functions and powers of the Metro Manila Development

Authority.The MMDA shall:

(a) Formulate, coordinate and regulate the implementation of medium and

long-term plans and programs for the delivery of metro-wide services, land
use and physical development within Metropolitan Manila, consistent with
national development objectives and priorities;

(b) Prepare, coordinate and regulate the implementation of medium-term

investment programs for metro-wide services which shall indicate sources
and uses of funds for priority programs and projects, and which shall
include the packaging of projects and presentation to funding
institutions; Esmsc

(c) Undertake and manage on its own metro-wide programs and projects
for the delivery of specific services under its jurisdiction, subject to the
approval of the Council. For this purpose, MMDA can create appropriate
project management offices;

(d) Coordinate and monitor the implementation of such plans, programs

and projects in Metro Manila; identify bottlenecks and adopt solutions to
problems of implementation;

(e) The MMDA shall set the policies concerning traffic in Metro
Manila, and shall coordinate and regulate the implementation of all
programs and projects concerning traffic management, specifically
pertaining to enforcement, engineering and education. Upon request,
it shall be extended assistance and cooperation, including but not
limited to, assignment of personnel, by all other government
agencies and offices concerned;

(f) Install and administer a single ticketing system, fix, impose and
collect fines and penalties for all kinds of violations of traffic rules
and regulations, whether moving or non-moving in nature, and
confiscate and suspend or revoke drivers licenses in the
enforcement of such traffic laws and regulations, the provisions of
RA 4136 and PD 1605 to the contrary notwithstanding. For this
purpose, the Authority shall impose all traffic laws and regulations in
Metro Manila, through its traffic operation center, and may deputize
members of the PNP, traffic enforcers of local government units,
duly licensed security guards, or members of non-governmental
organizations to whom may be delegated certain authority, subject to
such conditions and requirements as the Authority may impose; and
 (g) Perform other related functions required to achieve the objectives of
the MMDA, including the undertaking of delivery of basic services to the
local government units, when deemed necessary subject to prior
coordination with and consent of the local government unit
concerned." Jurismis

The implementation of the MMDAs plans, programs and projects is undertaken by the
local government units, national government agencies, accredited peoples
organizations, non-governmental organizations, and the private sector as well as by the
MMDA itself. For this purpose, the MMDA has the power to enter into contracts,
memoranda of agreement and other cooperative arrangements with these bodies for
the delivery of the required services within Metro Manila.[28]

The governing board of the MMDA is the Metro Manila Council. The Council is
composed of the mayors of the component 12 cities and 5 municipalities, the president
of the Metro Manila Vice-Mayors League and the president of the Metro Manila
Councilors League.[29] The Council is headed by a Chairman who is appointed by the
President and vested with the rank of cabinet member. As the policy-making body of the
MMDA, the Metro Manila Council approves metro-wide plans, programs and projects,
and issues the necessary rules and regulations for the implementation of said plans; it
approves the annual budget of the MMDA and promulgates the rules and regulations for
the delivery of basic services, collection of service and regulatory fees, fines and
penalties. These functions are particularly enumerated as follows: LEX

"Sec. 6. Functions of the Metro Manila Council. -

(a) The Council shall be the policy-making body of the MMDA;

(b) It shall approve metro-wide plans, programs and projects and issue
rules and regulations deemed necessary by the MMDA to carry out the
purposes of this Act;

(c) It may increase the rate of allowances and per diems of the members
of the Council to be effective during the term of the succeeding Council. It
shall fix the compensation of the officers and personnel of the MMDA, and
approve the annual budget thereof for submission to the Department of
Budget and Management (DBM);

(d) It shall promulgate rules and regulations and set policies and
standards for metro-wide application governing the delivery of basic
services, prescribe and collect service and regulatory fees, and impose
and collect fines and penalties." Jj sc

Clearly, the scope of the MMDAs function is limited to the delivery of the seven (7) basic
services. One of these is transport and traffic management which includes the
formulation and monitoring of policies, standards and projects to rationalize the existing
transport operations, infrastructure requirements, the use of thoroughfares and
promotion of the safe movement of persons and goods. It also covers the mass
transport system and the institution of a system of road regulation, the administration of
all traffic enforcement operations, traffic engineering services and traffic education
programs, including the institution of a single ticketing system in Metro Manila for traffic
violations. Under this service, the MMDA is expressly authorized "to set the policies
concerning traffic" and "coordinate and regulate the implementation of all traffic
management programs." In addition, the MMDA may "install and administer a single
ticketing system," fix, impose and collect fines and penalties for all traffic violations. Ca-
lrsc

It will be noted that the powers of the MMDA are limited to the following acts:
formulation, coordination, regulation, implementation, preparation, management,
monitoring, setting of policies, installation of a system and administration. There is no
syllable in R. A. No. 7924 that grants the MMDA police power, let alone legislative
power. Even the Metro Manila Council has not been delegated any legislative power.
Unlike the legislative bodies of the local government units, there is no provision in R. A.
No. 7924 that empowers the MMDA or its Council to "enact ordinances, approve
resolutions and appropriate funds for the general welfare" of the inhabitants of Metro
Manila. The MMDA is, as termed in the charter itself, a "development authority."[30] It is
an agency created for the purpose of laying down policies and coordinating with the
various national government agencies, peoples 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. -- x x

x.

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 the local government units
concerning purely local matters."[31]

Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate

Court[32] where we upheld a zoning ordinance issued by the Metro Manila Commission
(MMC), the predecessor of the MMDA, as an exercise of police power. The
first Sangalang decision was on the merits of the petition,[33] while the second decision
denied reconsideration of the first case and in addition discussed the case of Yabut v.
Court of Appeals.[34]

Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA and
three residents of Bel-Air Village against other residents of the Village and the Ayala
Corporation, formerly the Makati Development Corporation, as the developer of the
subdivision. The petitioners sought to enforce certain restrictive easements in the deeds
of sale over their respective lots in the subdivision. These were the prohibition on the
setting up of commercial and advertising signs on the lots, and the condition that the
lots be used only for residential purposes. Petitioners alleged that respondents, who
were residents along Jupiter Street of the subdivision, converted their residences into
commercial establishments in violation of the "deed restrictions," and that respondent
Ayala Corporation ushered in the full commercialization" of Jupiter Street by tearing
down the perimeter wall that separated the commercial from the residential section of
the village.[35]

The petitions were dismissed based on Ordinance No. 81 of the Municipal Council of
Makati and Ordinance No. 81-01 of the Metro Manila Commission (MMC). Municipal
Ordinance No. 81 classified Bel-Air Village as a Class A Residential Zone, with its
boundary in the south extending to the center line of Jupiter Street. The Municipal
Ordinance was adopted by the MMC under the Comprehensive Zoning Ordinance for
the National Capital Region and promulgated as MMC Ordinance No. 81-01. Bel-Air
Village was indicated therein as bounded by Jupiter Street and the block adjacent
thereto was classified as a High Intensity Commercial Zone.[36]

We ruled that since both Ordinances recognized Jupiter Street as the boundary
between Bel-Air Village and the commercial district, Jupiter Street was not for the
exclusive benefit of Bel-Air residents. We also held that the perimeter wall on said street
was constructed not to separate the residential from the commercial blocks but simply
for security reasons, hence, in tearing down said wall, Ayala Corporation did not violate
the "deed restrictions" in the deeds of sale. Scc-alr

We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate

exercise of police power.[37] The power of the MMC and the Makati Municipal Council to
enact zoning ordinances for the general welfare prevailed over the "deed restrictions".

In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street
was warranted by the demands of the common good in terms of "traffic decongestion
and public convenience." Jupiter was opened by the Municipal Mayor to alleviate traffic
congestion along the public streets adjacent to the Village.[38] The same reason was
given for the opening to public vehicular traffic of Orbit Street, a road inside the same
village. The destruction of the gate in Orbit Street was also made under the police
power of the municipal government. The gate, like the perimeter wall along Jupiter, was
a public nuisance because it hindered and impaired the use of property, hence, its
summary abatement by the mayor was proper and legal.[39]

Contrary to petitioners claim, the two Sangalang cases do not apply to the case at
bar. Firstly, both involved zoning ordinances passed by the municipal council of Makati
and the MMC. In the instant case, the basis for the proposed opening of Neptune Street
is contained in the notice of December 22, 1995 sent by petitioner to respondent BAVA,
through its president. The notice does not cite any ordinance or law, either by the
Sangguniang Panlungsod of Makati City or by the MMDA, as the legal basis for the
proposed opening of Neptune Street. Petitioner MMDA simply relied on its authority
under its charter "to rationalize the use of roads and/or thoroughfares for the safe and
convenient movement of persons." Rationalizing the use of roads and thoroughfares is
one of the acts that fall within the scope of transport and traffic management. By no
stretch of the imagination, however, can this be interpreted as an express or implied
grant of ordinance-making power, much less police power. Misjuris

Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although
the MMC is the forerunner of the present MMDA, an examination of Presidential
Decree (P. D.) No. 824, the charter of the MMC, shows that the latter possessed
greater powers which were not bestowed on the present MMDA. Jjlex

Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824. It
comprised the Greater Manila Area composed of the contiguous four (4) cities of
Manila, Quezon, Pasay and Caloocan, and the thirteen (13) municipalities of Makati,
Mandaluyong, San Juan, Las Pinas, Malabon, Navotas, Pasig, Pateros, Paranaque,
Marikina, Muntinlupa and Taguig in the province of Rizal, and Valenzuela in the
province of Bulacan.[40] Metropolitan Manila was created as a response to the finding that
the rapid growth of population and the increase of social and economic requirements in
these areas demand a call for simultaneous and unified development; that the public
services rendered by the respective local governments could be administered more
efficiently and economically if integrated under a system of central planning; and this
coordination, "especially in the maintenance of peace and order and the eradication of
social and economic ills that fanned the flames of rebellion and discontent [were] part of
reform measures under Martial Law essential to the safety and security of the State." [41]

Metropolitan Manila was established as a "public corporation" with the following

powers: Calrs-pped

"Section 1. Creation of the Metropolitan Manila.There is hereby created

a public corporation, to be known as the Metropolitan Manila, vested
with powers and attributes of a corporation including the power to
make contracts, sue and be sued, acquire, purchase, expropriate,
hold, transfer and dispose of property and such other powers as are
necessary to carry out its purposes. The Corporation shall be
administered by a Commission created under this Decree."[42]

The administration of Metropolitan Manila was placed under the Metro Manila
Commission (MMC) vested with the following powers:

"Sec. 4. Powers and Functions of the Commission. - The Commission

shall have the following powers and functions:

1. To act as a central government to establish and administer

programs and provide services common to the area;

2. To levy and collect taxes and special assessments, borrow and expend
money and issue bonds, revenue certificates, and other obligations of
indebtedness. Existing tax measures should, however, continue to be
operative until otherwise modified or repealed by the Commission;

3. To charge and collect fees for the use of public service facilities;

4. To appropriate money for the operation of the metropolitan government

and review appropriations for the city and municipal units within its
jurisdiction with authority to disapprove the same if found to be not in
accordance with the established policies of the Commission, without
prejudice to any contractual obligation of the local government units
involved existing at the time of approval of this Decree;

5. To review, amend, revise or repeal all ordinances, resolutions and

acts of cities and municipalities within Metropolitan Manila;

6. To enact or approve ordinances, resolutions and to fix penalties

for any violation thereof which shall not exceed a fine of P10,000.00
or imprisonment of six years or both such fine and imprisonment for
a single offense;

7. To perform general administrative, executive and policy-making

functions;

8. To establish a fire control operation center, which shall direct the fire
services of the city and municipal governments in the metropolitan area;

9. To establish a garbage disposal operation center, which shall direct

garbage collection and disposal in the metropolitan area;

10. To establish and operate a transport and traffic center, which shall
direct traffic activities; Jjjuris

11. To coordinate and monitor governmental and private activities

pertaining to essential services such as transportation, flood control and
drainage, water supply and sewerage, social, health and environmental
services, housing, park development, and others;

12. To insure and monitor the undertaking of a comprehensive social,

economic and physical planning and development of the area;

13. To study the feasibility of increasing barangay participation in the

affairs of their respective local governments and to propose to the
President of the Philippines definite programs and policies for
implementation;
 14. To submit within thirty (30) days after the close of each fiscal year an
annual report to the President of the Philippines and to submit a periodic
report whenever deemed necessary; and

15. To perform such other tasks as may be assigned or directed by the

President of the Philippines." Sc jj

The MMC was the "central government" of Metro Manila for the purpose of
establishing and administering programs providing services common to the area. As a
"central government" it had the power to levy and collect taxes and special
assessments, the power to charge and collect fees; the power to appropriate money for
its operation, and at the same time, review appropriations for the city and municipal
units within its jurisdiction. It was bestowed the power to enact or approve ordinances,
resolutions and fix penalties for violation of such ordinances and resolutions. It also had
the power to review, amend, revise or repeal all ordinances, resolutions and acts of any
of the four (4) cities and thirteen (13) municipalities comprising Metro Manila.

P. D. No. 824 further provided:

"Sec. 9. Until otherwise provided, the governments of the four cities and
thirteen municipalities in the Metropolitan Manila shall continue to exist in
their present form except as may be inconsistent with this Decree. The
members of the existing city and municipal councils in Metropolitan
Manila shall, upon promulgation of this Decree, and until December
31, 1975, become members of the Sangguniang Bayan which is
hereby created for every city and municipality of Metropolitan Manila.

In addition, the Sangguniang Bayan shall be composed of as many

barangay captains as may be determined and chosen by the Commission,
and such number of representatives from other sectors of the society as
may be appointed by the President upon recommendation of the
Commission.

x x x.

The Sangguniang Bayan may recommend to the Commission

ordinances, resolutions or such measures as it may adopt; Provided,
that no such ordinance, resolution or measure shall become
effective, until after its approval by the Commission; and Provided
further, that the power to impose taxes and other levies, the power to
appropriate money and the power to pass ordinances or resolutions
with penal sanctions shall be vested exclusively in the Commission."

The creation of the MMC also carried with it the creation of the Sangguniang
Bayan. This was composed of the members of the component city and municipal
councils, barangay captains chosen by the MMC and sectoral representatives
appointed by the President. The Sangguniang Bayan had the power to recommend to
the MMC the adoption of ordinances, resolutions or measures. It was the MMC itself,
however, that possessed legislative powers. All ordinances, resolutions and
measures recommended by the Sangguniang Bayan were subject to the MMCs
approval. Moreover, the power to impose taxes and other levies, the power to
appropriate money, and the power to pass ordinances or resolutions with penal
sanctions were vested exclusively in the MMC. Sce-dp

Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully
possessed legislative and police powers. Whatever legislative powers the
component cities and municipalities had were all subject to review and approval
by the MMC.

After President Corazon Aquino assumed power, there was a clamor to restore the
autonomy of the local government units in Metro Manila. Hence, Sections 1 and 2 of
Article X of the 1987 Constitution provided: Sj cj

"Section 1. The territorial and political subdivisions of the Republic of the

Philippines are the provinces, cities, municipalities and barangays. There
shall be autonomous regions in Muslim Mindanao and the Cordilleras as
herein provided.

Section 2. The territorial and political subdivisions shall enjoy local

autonomy."

The Constitution, however, recognized the necessity of creating metropolitan regions

not only in the existing National Capital Region but also in potential equivalents in the
Visayas and Mindanao.[43] Section 11 of the same Article X thus provided:

"Section 11. The Congress may, by law, create special metropolitan

political subdivisions, subject to a plebiscite as set forth in Section 10
hereof. The component cities and municipalities shall retain their basic
autonomy and shall be entitled to their own local executives and legislative
assemblies. The jurisdiction of the metropolitan authority that will thereby
be created shall be limited to basic services requiring coordination."

The Constitution itself expressly provides that Congress may, by law, create "special
metropolitan political subdivisions" which shall be subject to approval by a majority of
the votes cast in a plebiscite in the political units directly affected; the jurisdiction of this
subdivision shall be limited to basic services requiring coordination; and the cities and
municipalities comprising this subdivision shall retain their basic autonomy and their
own local executive and legislative assemblies.[44] Pending enactment of this law, the
Transitory Provisions of the Constitution gave the President of the Philippines the power
to constitute the Metropolitan Authority, viz:
 "Section 8. Until otherwise provided by Congress, the President may
constitute the Metropolitan Authority to be composed of the heads of all
local government units comprising the Metropolitan Manila area."[45]

In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted
the Metropolitan Manila Authority (MMA). The powers and functions of the MMC
were devolved to the MMA.[46] It ought to be stressed, however, that not all powers
and functions of the MMC were passed to the MMA. The MMAs power was limited
to the "delivery of basic urban services requiring coordination in Metropolitan
Manila."[47] The MMAs governing body, the Metropolitan Manila Council, although
composed of the mayors of the component cities and municipalities, was merely
given the power of: (1) formulation of policies on the delivery of basic services
requiring coordination and consolidation; and (2) promulgation of resolutions and
other issuances, approval of a code of basic services and the exercise of its rule-
making power.[48]

Under the 1987 Constitution, the local government units became primarily responsible
for the governance of their respective political subdivisions. The MMAs jurisdiction
was limited to addressing common problems involving basic services that transcended
local boundaries. It did not have legislative power. Its power was merely to provide
the local government units technical assistance in the preparation of local development
plans. Any semblance of legislative power it had was confined to a "review [of]
legislation proposed by the local legislative assemblies to ensure consistency among
local governments and with the comprehensive development plan of Metro Manila," and
to "advise the local governments accordingly."[49]

When R.A. No. 7924 took effect, Metropolitan Manila became a "special
development and administrative region" and the MMDA a "special development
authority" whose functions were "without prejudice to the autonomy of the
affected local government units." The character of the MMDA was clearly defined
in the legislative debates enacting its charter.

R. A. No. 7924 originated as House Bill No. 14170/ 11116 and was introduced by
several legislators led by Dante Tinga, Roilo Golez and Feliciano Belmonte. It was
presented to the House of Representatives by the Committee on Local Governments
chaired by Congressman Ciriaco R. Alfelor. The bill was a product of Committee
consultations with the local government units in the National Capital Region (NCR), with
former Chairmen of the MMC and MMA,[50] and career officials of said agencies. When
the bill was first taken up by the Committee on Local Governments, the following debate
took place:

"THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has
been debated a long time ago, you know. Its a special we can create a
special metropolitan political subdivision. Supreme
 Actually, there are only six (6) political subdivisions provided for in the
Constitution: barangay, municipality, city, province, and we have the
Autonomous Region of Mindanao and we have the Cordillera. So we have
6. Now.

HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the
Autonomous Region, that is also specifically mandated by the
Constitution.

THE CHAIRMAN: Thats correct. But it is considered to be a political

subdivision. What is the meaning of a political subdivision? Meaning
to say, that it has its own government, it has its own political
personality, it has the power to tax, and all governmental powers:
police power and everything. All right. Authority is different; because
it does not have its own government. It is only a council, it is an
organization of political subdivision, powers, no, which is not
imbued with any political power. Esmmis

If you go over Section 6, where the powers and functions of the

Metro Manila Development Authority, it is purely coordinative. And it
provides here that the council is policy-making. All right.

Under the Constitution is a Metropolitan Authority with coordinative power.

Meaning to say, it coordinates all of the different basic services which
have to be delivered to the constituency. All right.

There is now a problem. Each local government unit is given its respective as a political
subdivision. Kalookan has its powers, as provided for and protected and guaranteed by
the Constitution. All right, the exercise. However, in the exercise of that power, it might
be deleterious and disadvantageous to other local government units. So, we are forming
an authority where all of these will be members and then set up a policy in order that the
basic services can be effectively coordinated. All right.justice

Of course, we cannot deny that the MMDA has to survive. We have to

provide some funds, resources. But it does not possess any political
power. We do not elect the Governor. We do not have the power to
tax. As a matter of fact, I was trying to intimate to the author that it must
have the power to sue and be sued because it coordinates. All right. It
coordinates practically all these basic services so that the flow and the
distribution of the basic services will be continuous. Like traffic, we cannot
deny that. Its before our eyes. Sewerage, flood control, water system,
peace and order, we cannot deny these. Its right on our face. We have to
look for a solution. What would be the right solution? All right, we envision
that there should be a coordinating agency and it is called an authority. All
right, if you do not want to call it an authority, its alright. We may call it a
council or maybe a management agency.
 x x x."[51]

Clearly, the MMDA is not a political unit of government. The power delegated to the
MMDA is that given to the Metro Manila Council to promulgate administrative rules and
regulations in the implementation of the MMDAs functions. There is no grant of
authority to enact ordinances and regulations for the general welfare of the
inhabitants of the metropolis. This was explicitly stated in the last Committee
deliberations prior to the bills presentation to Congress. Thus: Ed-p

"THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I

think this was already approved before, but it was reconsidered in view of
the proposals, set-up, to make the MMDA stronger. Okay, so if there is no
objection to paragraph "f" And then next is paragraph "b," under Section
6. "It shall approve metro-wide plans, programs and projects and
issue ordinances or resolutions deemed necessary by the MMDA to
carry out the purposes of this Act." Do you have the powers? Does
the MMDA because that takes the form of a local government unit, a
political subdivision.

HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we

say that it has the policies, its very clear that those policies must be
followed. Otherwise, whats the use of empowering it to come out with
policies. Now, the policies may be in the form of a resolution or it may be
in the form of a ordinance. The term "ordinance" in this case really gives it
more teeth, your honor. Otherwise, we are going to see a situation where
you have the power to adopt the policy but you cannot really make it stick
as in the case now, and I think here is Chairman Bunye. I think he will
agree that that is the case now. Youve got the power to set a policy, the
body wants to follow your policy, then we say lets call it an ordinance and
see if they will not follow it.

THE CHAIRMAN: Thats very nice. I like that. However, there is a

constitutional impediment. You are making this MMDA a political
subdivision. The creation of the MMDA would be subject to a
plebiscite. That is what Im trying to avoid. Ive been trying to avoid
this kind of predicament. Under the Constitution it states: if it is a
political subdivision, once it is created it has to be subject to a
plebiscite. Im trying to make this as administrative. Thats why we
place the Chairman as a cabinet rank.

HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying
there is .

THE CHAIRMAN: In setting up ordinances, it is a political exercise.

Believe me.
 HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances
of rules and regulations. That would be it shall also be enforced. Jksm

HON. BELMONTE: Okay, I will .

HON. LOPEZ: And you can also say that violation of such rule, you
impose a sanction. But you know, ordinance has a different legal
connotation.

HON. BELMONTE: All right. I defer to that opinion, your Honor. sc

THE CHAIRMAN: So instead of ordinances, say rules and

regulations.

HON. BELMONTE: Or resolutions. Actually, they are actually

considering resolutions now.

THE CHAIRMAN: Rules and resolutions.

HON. BELMONTE: Rules, regulations and resolutions."[52]

The draft of H. B. No. 14170/ 11116 was presented by the Committee to the House of
Representatives. The explanatory note to the bill stated that the proposed MMDA is a
"development authority" which is a "national agency, not a political government
unit."[53] The explanatory note was adopted as the sponsorship speech of the Committee
on Local Governments. No interpellations or debates were made on the floor and no
amendments introduced. The bill was approved on second reading on the same day it
was presented.[54]

When the bill was forwarded to the Senate, several amendments were made. These
amendments, however, did not affect the nature of the MMDA as originally conceived in
the House of Representatives.[55]

It is thus beyond doubt that the MMDA is not a local government unit or a public
corporation endowed with legislative power. It is not even a "special metropolitan
political subdivision" as contemplated in Section 11, Article X of the Constitution. The
creation of a "special metropolitan political subdivision" requires the approval by a
majority of the votes cast in a plebiscite in the political units directly affected. [56] R. A. No.
7924 was not submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman
of the MMDA is not an official elected by the people, but appointed by the President with
the rank and privileges of a cabinet member. In fact, part of his function is to perform
such other duties as may be assigned to him by the President,[57] whereas in local
government units, the President merely exercises supervisory authority. This
emphasizes the administrative character of the MMDA. Newmiso
Clearly then, the MMC under P. D. No. 824 is not the same entity as the MMDA
under R. A. No. 7924. Unlike the MMC, the MMDA has no power to enact
ordinances for the welfare of the community. It is the local government units, acting
through their respective legislative councils, that possess legislative power and police
power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any
ordinance or resolution ordering the opening of Neptune Street, hence, its proposed
opening by petitioner MMDA is illegal and the respondent Court of Appeals did not err in
so ruling. We desist from ruling on the other issues as they are unnecessary. Esmso

We stress that this decision does not make light of the MMDAs noble efforts to solve the
chaotic traffic condition in Metro Manila. Everyday, traffic jams and traffic bottlenecks
plague the metropolis. Even our once sprawling boulevards and avenues are now
crammed with cars while city streets are clogged with motorists and pedestrians. Traffic
has become a social malaise affecting our peoples productivity and the efficient delivery
of goods and services in the country. The MMDA was created to put some order in the
metropolitan transportation system but unfortunately the powers granted by its charter
are limited. Its good intentions cannot justify the opening for public use of a private
street in a private subdivision without any legal warrant. The promotion of the general
welfare is not antithetical to the preservation of the rule of law. Sdjad

IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 39549 are affirmed. Sppedsc

SO ORDERED.

Davide, Jr., C.J., (Chairman), Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

Section 10, Article X of the 1987 Constitution reads:

Sec. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary
substantially altered except in accordance with the criteria established in the local government code and subject to
approval by a majority of the votes cast in a plebiscite in the political units directly affected."
[57]
Section 7 (g), R.A. 7924.
5

Republic of the Philippines

Supreme Court
Manila

FIRST DIVISION

METROPOLITAN MANILA G.R. No. 179554

DEVELOPMENT AUTHORITY,
Petitioner, Present:
PUNO, C.J., Chairperson,
-versus- CARPIO MORALES,
LEONARDO-DE CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.
TRACKWORKS RAIL TRANSIT
ADVERTISING, VENDING Promulgated:
AND PROMOTIONS, INC.,
Respondent. December 16, 2009
x-----------------------------------------------------------------------------------------x

RESOLUTION

BERSAMIN, J.:

This case concerns whether the Metropolitan Manila Development Authority (MMDA) could unilaterally dismantle the billboards, signages and
other advertizing media in the structures of the Metro Rail Transit 3 (MRT3) installed by respondent advertising company by virtue of its existing
contract with the owner of the MRT3.

The trial and appellate courts ruled that MMDA did not have the authority to dismantle. MMDA is now before the Court to assail such adverse
ruling.

Antecedents

In 1997, the Government, through the Department of Transportation and Communications, entered into a build-lease-transfer agreement (BLT
agreement) with Metro Rail Transit Corporation, Limited (MRTC) pursuant to Republic Act No. 6957 (Build, Operate and Transfer Law), under
which MRTC undertook to build MRT3 subject to the condition that MRTC would own MRT3 for 25 years, upon the expiration of which the
ownership would transfer to the Government.

The BLT agreement stipulated, among others, that MRTC could build and develop commercial premises in the MRT3 structures, or
obtain advertising income therefrom, viz:

16.1. Details of Development Rights. DOTC hereby confirms and awards to Metro Rail the rights to (a) develop
commercial premises in the Depot and the air space above the Stations, which shall be allowed to such height as is legally
and technically feasible, (b) lease or sub-lease interests or assign such interests in the Depot and such air space and (c)
obtain any advertising income from the Depot and such air space and LRTS Phase I.

LRTS Phase I means the rail transport system comprising about 16.9 line kilometers extending from Taft Avenue,
Pasay City, to North Avenue, Quezon City, occupying a strip in the center of EDSA approximately 10.5 meters wide
(approximately 12 meters wide at or around the Boni Avenue, Santolan and Buendia Stations), plus about 0.1 to 0.2 line
kilometers extending from the North Avenue Station to the Depot, together with the Stations, 73 Light Rail Vehicles and
all ancillary plant, equipment and facilities, as more particularly detailed in the Specifications.

16.2. Assignment of Rights. During the Development Rights Period, Metro Rail shall be entitled to assign all or
any of its rights, titles and interests in the Development Rights to bona fide real estate developers. In this connection,
 Metro Rail may enter into such development, lease, sub-lease or other agreements or contracts relating to the Depot and the
air space above the Stations (the space not needed for all or any portion of the operation of the LRTS) for all or any portion
of the Development Rights Period.

In 1998, respondent Trackworks Rail Transit Advertising, Vending & Promotions, Inc. (Trackworks) entered into a contract for advertising
services with MRTC. Trackworks thereafter installed commercial billboards, signages and other advertizing media in the different parts of the
MRT3. In 2001, however, MMDA requested Trackworks to dismantle the billboards, signages and other advertizing media pursuant to MMDA
Regulation No. 96-009, whereby MMDA prohibited the posting, installation and display of any kind or form of billboards, signs, posters,
streamers, in any part of the road, sidewalk, center island, posts, trees, parks and open space. After Trackworks refused the request of MMDA,
MMDA proceeded to dismantle the formers billboards and similar forms of advertisement.

On March 1, 2002, Trackworks filed against MMDA in the Regional Trial Court (RTC) in Pasig City an injunction suit (with prayer for the
issuance of a temporary restraining order [TRO] and preliminary injunction), docketed as Civil Case No. 68864.

On March 6, 2002, the RTC (Branch 155) issued a TRO, enjoining MMDA from dismantling or destroying Trackworks billboards,
signages and other advertizing media. On March 25, 2002, the RTC issued a writ of preliminary injunction for the same purpose.

Without filing a motion for reconsideration to challenge the RTCs issuances, MMDA brought a petition for certiorari and prohibition
before the Court of Appeals (CA), docketed as C.A.-G.R. SP No. 70932, but the CA denied the petition and affirmed the RTC on August 31,
2004. The CA ultimately denied MMDAs motion for reconsideration through its resolution issued on March 14, 2005.

Thence, MMDA appealed to this Court (G.R. No. 167514), which denied MMDAs petition for review on October 25, 2005.[1]

Ruling of the RTC

In the meanwhile, on October 10, 2005, the RTC (Branch 155) rendered its decision permanently enjoining MMDA from dismantling,
removing or destroying the billboards, signages and other advertizing media installed by Trackworks on the interior and exterior structures of the
MRT3.[2]

Ruling of the CA

MMDA appealed the RTCs decision to the CA.

On April 30, 2007, the CA denied the MMDAs appeal, [3] holding that Trackworks right to install billboards, signages and other
advertizing media on the interior and exterior structures of the MRT3 must be protected by a writ of permanent injunction; and that MMDA had
no power to dismantle, remove or destroy Trackworks billboards, signages and other advertizing media. [4]

MMDA moved for reconsideration, but the CA resolution denied the motion for reconsideration on September 3, 2007.[5]

Hence, this appeal by petition for review.

Issues
 MMDA claims that its mandate under its charter[6] of formulating, coordinating and monitoring of policies, standards, progress and
projects for the use of thoroughfares and the promotion of safe and convenient movement of persons and goods prompted its issuance of MMDA
Regulation No. 96-009, which reads in part:

h. ) It is unlawful for any person/s, private or public corporations, advertising and promotions companies, movie
producers, professionals and service contractors to post, install, display any kind or form of billboards, signs, posters,
streamers, professional service advertisements and other visual clutters in any part of the road, sidewalk, center island,
posts, trees parks and open space.
MMDA avers that the conversion of the center island of Epifanio Delos Santos Avenue (EDSA) into the carriageway of the MRT3
line did not exempt the EDSA center island from the coverage of the MMDA regulation; [7] that the Governments grant of development rights to
MRTC was not an abdication of its right to regulate, and, therefore, the development of the MRT3 remained subject to all existing and applicable
national and local laws, ordinances, rules and regulations; [8] that MMDA was merely implementing existing and applicable laws; [9] that
Trackworks advertising materials were placed indiscriminately and without due regard to safety, and as such might be classified as obstructions
and distractions to the motorists traversing EDSA;[10] and that the interests of a few should not prevail over the good of the greater number in the
community whose safety and general welfare MMDA was mandated to protect. [11]

Trackworks maintains, on the other hand, that MMDAs petition was defective for its failure to raise any genuine question of law; and that the
CAs decision dated April 30, 2007 was valid and correct.[12]

Ruling of the Court

The petition has no merit.

That Trackworks derived its right to install its billboards, signages and other advertizing media in the MRT3 from MRTCs authority under the
BLT agreement to develop commercial premises in the MRT3 structure or to obtain advertising income therefrom is no longer debatable. Under
the BLT agreement, indeed, MRTC owned the MRT3 for 25 years, upon the expiration of which MRTC would transfer ownership of the MRT3
to the Government.

Considering that MRTC remained to be the owner of the MRT3 during the time material to this case, and until this date, MRTCs
entering into the contract for advertising services with Trackworks was a valid exercise of ownership by the former. In fact, in Metropolitan
Manila Development Authority v. Trackworks Rail Transit Advertising, Vending & Promotions, Inc.,[13] this Court expressly recognized
Trackworks right to install the billboards, signages and other advertising media pursuant to said contract. The latters right should, therefore, be
respected.

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.,[14] Metropolitan Manila
Development Authority v. Viron Transportation Co., Inc.,[15] and Metropolitan Manila Development Authority v. Garin,[16] the Court had the
occasion to rule that MMDAs 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.[17]
 Clarifying the real nature of MMDA, the Court held:

xxx 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, peoples 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.[18]

The Court also agrees with the CAs ruling that MMDA Regulation No. 96-009 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.

MMDAs 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 laws 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.

WHEREFORE, we deny the petition for review, and affirm the decision dated April 30, 2007 and the resolution dated September 3, 2007.

Costs against the petitioner.

6

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B.

ALARCIO, FELIPE 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. ARRESTO,
CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S.
FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

G.R. No. 79310 July 14, 1989

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO,
PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, Negros
Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner,

vs.
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 AVANCENA and ROBERTO TAAY, respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,

vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES, respondents.

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 battle-cry
dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as their place in the
sun.

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," especially the less privileged. In 1973, the new Constitution affirmed this goal
1

adding specifically that "the State shall regulate the acquisition, ownership, use, enjoyment and disposition of private
property and equitably diffuse property ownership and profits." Significantly, there was also the specific injunction to
2

"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 tenant-farmers 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
first 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 5-hectare 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 andManotok v. National Food Authority. Moreover, the just compensation contemplated by the Bill of Rights
5 6

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
ofChavez v. Zobel, Gonzales v. Estrella, and Association of Rice and Corn Producers of the Philippines, Inc. v. The
7 8

National Land Reform Council. The determination of just compensation by the executive authorities conformably to
9

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, 1588, 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 above- mentioned 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:

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 owner's 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 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.

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 assessor's 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 petitioner's contention, a pilot project to determine the feasibility
of CARP and a general survey on the people's 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.0. 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 respondent's 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 above-quoted
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 Tanada v. Tuvera. As for LOI 474, the same is ineffective for the additional
10

reason that a mere letter of instruction could not have repealed the presidential decree.

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. And as established by judge made doctrine, the Court will assume
11

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. And even if, strictly speaking, they are not
13

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, ordinary citizens and taxpayers were allowed to question the constitutionality
14

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 Laurel's pithy language, where the acts of these departments, or of any public official,
betray the people's 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.

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 Aquino's 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. Indeed, some portions of the said measures, like the creation of the P50 billion fund
17

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. The creation of
19

the fund is only incidental to the main objective of the proclamation, which is agrarian reform.

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 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.

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 Tanada v. Tuvera. Hence, unless published in the Official Gazette in accordance
21

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, for 24

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, Justice Holmes laid down the limits of the police power in a famous
25

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:
 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.

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. As for the power of expropriation, Prof.
26

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 opinion's 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 government's 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 Court's 1954 decision in Berman v. Parker,
which broadened the reach of eminent domain's "public use" test to match that of the police
power's 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:

If those who govern the District of Columbia decide that the Nation's 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, decided by a 6-3 vote in 1978, the U.S Supreme Court
29

sustained the respondent's 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 Terminal's 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. To be valid, it must conform to the following requirements: (1) it
31

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. The Court finds that all
32

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. The petitioners have not shown that they belong to a different class and
33

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. As the subject and purpose of agrarian reform have been laid down by the Constitution
34

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.

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 individual's 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 person's 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. It is only where the
35

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 Tañada 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." Even so,
37

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
apace 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, it was held:

38

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's 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 ... .

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.

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. It has been repeatedly stressed by this Court that the measure is not the taker's gain but the owner's
39

loss. The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the
40

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, there is compensable taking when the following conditions
42

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.

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." Nevertheless, Section 16(e) of the CARP
43

Law provides that:

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.

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 resolved a challenge to several decrees
44

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.:
 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.

xxx

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.

This time, we answer in the affirmative.

xxx

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 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:

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.

The compensation shall be paid in one of the following modes, at the option of the landowner:
(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;

(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 hospitals; and

(viii) Such other uses as the PARC may from time to time
allow.

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 . (Emphasis supplied.)
45

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. (Emphasis supplied.)
47

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. (Emphasis supplied.)
49

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 excercise 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 categorical 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 farmer's 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 ther eof 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.

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 condemnor's title relates back to the date on which the petition
under the Eminent Domain Act, or the commissioner's 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. (Emphasis supplied.)
52

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does not pass to
53

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, it was held that "actual payment to the owner of the condemned
54

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, the Court of Appeals of New York said that the construction
55

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, that: 56

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 tenant-farmer 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. No outright change of
57

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 tenant-farmer 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 counter-balance 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.

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 farmer's 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 Holmes's 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.

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.

SO ORDERED.
7

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-7859 December 22, 1955

WALTER LUTZ, as Judicial Administrator of the Intestate Estate of the deceased Antonio Jayme
Ledesma,plaintiff-appellant,
vs.
J. ANTONIO ARANETA, as the Collector of Internal Revenue, defendant-appellee.

Ernesto J. Gonzaga for appellant.

Office of the Solicitor General Ambrosio Padilla, First Assistant Solicitor General Guillermo E. Torres and Solicitor
Felicisimo R. Rosete for appellee.

REYES, J.B L., J.:

This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the taxes imposed by
Commonwealth Act No. 567, otherwise known as the Sugar Adjustment Act.

Promulgated in 1940, the law in question opens (section 1) with a declaration of emergency, due to the threat to our
industry by the imminent imposition of export taxes upon sugar as provided in the Tydings-McDuffe Act, and the
"eventual loss of its preferential position in the United States market"; wherefore, the national policy was expressed
"to obtain a readjustment of the benefits derived from the sugar industry by the component elements thereof" and "to
stabilize the sugar industry so as to prepare it for the eventuality of the loss of its preferential position in the United
States market and the imposition of the export taxes."

In section 2, Commonwealth Act 567 provides for an increase of the existing tax on the manufacture of sugar, on a
graduated basis, on each picul of sugar manufactured; while section 3 levies on owners or persons in control of lands
devoted to the cultivation of sugar cane and ceded to others for a consideration, on lease or otherwise —

a tax equivalent to the difference between the money value of the rental or consideration collected and the
amount representing 12 per centum of the assessed value of such land.

According to section 6 of the law —

SEC. 6. All collections made under this Act shall accrue to a special fund in the Philippine Treasury, to be
known as the 'Sugar Adjustment and Stabilization Fund,' and shall be paid out only for any or all of the
following purposes or to attain any or all of the following objectives, as may be provided by law.

First, to place the sugar industry in a position to maintain itself, despite the gradual loss of the preferntial
position of the Philippine sugar in the United States market, and ultimately to insure its continued existence
notwithstanding the loss of that market and the consequent necessity of meeting competition in the free
markets of the world;

Second, to readjust the benefits derived from the sugar industry by all of the component elements thereof —
the mill, the landowner, the planter of the sugar cane, and the laborers in the factory and in the field — so
that all might continue profitably to engage therein;lawphi1.net
 Third, to limit the production of sugar to areas more economically suited to the production thereof; and

Fourth, to afford labor employed in the industry a living wage and to improve their living and working
conditions: Provided, That the President of the Philippines may, until the adjourment of the next regular
session of the National Assembly, make the necessary disbursements from the fund herein created (1) for
the establishment and operation of sugar experiment station or stations and the undertaking of researchers
(a) to increase the recoveries of the centrifugal sugar factories with the view of reducing manufacturing
costs, (b) to produce and propagate higher yielding varieties of sugar cane more adaptable to different
district conditions in the Philippines, (c) to lower the costs of raising sugar cane, (d) to improve the buying
quality of denatured alcohol from molasses for motor fuel, (e) to determine the possibility of utilizing the
other by-products of the industry, (f) to determine what crop or crops are suitable for rotation and for the
utilization of excess cane lands, and (g) on other problems the solution of which would help rehabilitate and
stabilize the industry, and (2) for the improvement of living and working conditions in sugar mills and sugar
plantations, authorizing him to organize the necessary agency or agencies to take charge of the expenditure
and allocation of said funds to carry out the purpose hereinbefore enumerated, and, likewise, authorizing the
disbursement from the fund herein created of the necessary amount or amounts needed for salaries, wages,
travelling expenses, equipment, and other sundry expenses of said agency or agencies.

Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma,
seeks to recover from the Collector of Internal Revenue the sum of P14,666.40 paid by the estate as taxes, under
section 3 of the Act, for the crop years 1948-1949 and 1949-1950; alleging that such tax is unconstitutional and void,
being levied for the aid and support of the sugar industry exclusively, which in plaintiff's opinion is not a public
purpose for which a tax may be constitutioally levied. The action having been dismissed by the Court of First
Instance, the plaintifs appealed the case directly to this Court (Judiciary Act, section 17).

The basic defect in the plaintiff's position is his assumption that the tax provided for in Commonwealth Act No. 567 is
a pure exercise of the taxing power. Analysis of the Act, and particularly of section 6 (heretofore quoted in full), will
show that the tax is levied with a regulatory purpose, to provide means for the rehabilitation and stabilization of the
threatened sugar industry. In other words, the act is primarily an exercise of the police power.

This Court can take judicial notice of the fact that sugar production is one of the great industries of our nation, sugar
occupying a leading position among its export products; that it gives employment to thousands of laborers in fields
and factories; that it is a great source of the state's wealth, is one of the important sources of foreign exchange
needed by our government, and is thus pivotal in the plans of a regime committed to a policy of currency stability. Its
promotion, protection and advancement, therefore redounds greatly to the general welfare. Hence it was competent
for the legislature to find that the general welfare demanded that the sugar industry should be stabilized in turn; and in
the wide field of its police power, the lawmaking body could provide that the distribution of benefits therefrom be
readjusted among its components to enable it to resist the added strain of the increase in taxes that it had to sustain
(Sligh vs. Kirkwood, 237 U. S. 52, 59 L. Ed. 835; Johnson vs. State ex rel. Marey, 99 Fla. 1311, 128 So. 853; Maxcy
Inc. vs. Mayo, 103 Fla. 552, 139 So. 121).

As stated in Johnson vs. State ex rel. Marey, with reference to the citrus industry in Florida —

The protection of a large industry constituting one of the great sources of the state's wealth and therefore
directly or indirectly affecting the welfare of so great a portion of the population of the State is affected to
such an extent by public interests as to be within the police power of the sovereign. (128 Sp. 857).

Once it is conceded, as it must, that the protection and promotion of the sugar industry is a matter of public concern,
it follows that the Legislature may determine within reasonable bounds what is necessary for its protection and
expedient for its promotion. Here, the legislative discretion must be allowed fully play, subject only to the test of
reasonableness; and it is not contended that the means provided in section 6 of the law (above quoted) bear no
relation to the objective pursued or are oppressive in character. If objective and methods are alike constitutionally
valid, no reason is seen why the state may not levy taxes to raise funds for their prosecution and attainment. Taxation
may be made the implement of the state's police power (Great Atl. & Pac. Tea Co. vs. Grosjean, 301 U. S. 412, 81 L.
Ed. 1193; U. S. vs. Butler, 297 U. S. 1, 80 L. Ed. 477; M'Culloch vs. Maryland, 4 Wheat. 316, 4 L. Ed. 579).

That the tax to be levied should burden the sugar producers themselves can hardly be a ground of complaint; indeed,
it appears rational that the tax be obtained precisely from those who are to be benefited from the expenditure of the
funds derived from it. At any rate, it is inherent in the power to tax that a state be free to select the subjects of
taxation, and it has been repeatedly held that "inequalities which result from a singling out of one particular class for
taxation, or exemption infringe no constitutional limitation" (Carmichael vs. Southern Coal & Coke Co., 301 U. S. 495,
81 L. Ed. 1245, citing numerous authorities, at p. 1251).

From the point of view we have taken it appears of no moment that the funds raised under the Sugar Stabilization
Act, now in question, should be exclusively spent in aid of the sugar industry, since it is that very enterprise that is
being protected. It may be that other industries are also in need of similar protection; that the legislature is not
required by the Constitution to adhere to a policy of "all or none." As ruled in Minnesota ex rel. Pearson vs. Probate
Court, 309 U. S. 270, 84 L. Ed. 744, "if the law presumably hits the evil where it is most felt, it is not to be overthrown
because there are other instances to which it might have been applied;" and that "the legislative authority, exerted
within its proper field, need not embrace all the evils within its reach" (N. L. R. B. vs. Jones & Laughlin Steel Corp.
301 U. S. 1, 81 L. Ed. 893).

Even from the standpoint that the Act is a pure tax measure, it cannot be said that the devotion of tax money to
experimental stations to seek increase of efficiency in sugar production, utilization of by-products and solution of
allied problems, as well as to the improvements of living and working conditions in sugar mills or plantations, without
any part of such money being channeled directly to private persons, constitutes expenditure of tax money for private
purposes, (compare Everson vs. Board of Education, 91 L. Ed. 472, 168 ALR 1392, 1400).

The decision appealed from is affirmed, with costs against appellant. So ordered.
8

Republic of the Philippines

SUPREME COURT
Manila

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,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer of
Manila,respondents.

Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates for petitioner.
Office of the 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.

LABRADOR, J.:

I. The case and 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 driv e 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 engaged 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, 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 judicial 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 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 the 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 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 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 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:

SECTION 1.(1) No person shall be deprived of life, liberty or property without due process of law, nor 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 vs. 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 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 legislature's 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 the 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 dealer's importance is enhanced.
Under modern conditions and standards of living, in which man's 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 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
resident's 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 retailer's trait. —

The alien retailer must have started plying his trades in this country in the bigger centers of population (Time there
was when he was unknown in provincial towns and villages). Slowly but gradually be 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 note of him, as he appears to be harmless and extremely useful.

c. Alleged alien control and dominance. —

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 nation's 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 Acefa, his control over principal foods and
products would easily become full and complete.

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 radicalism 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.

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 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:

Assets Gross Sales

Year and Retailers No.- Per cent Per cent
Pesos Pesos
Nationality Establishments Distribution Distribution
1941:
Filipino .......... 106,671 200,323,138 55.82 174,181,924 51.74
Chinese ........... 15,356 118,348,692 32.98 148,813,239 44.21
Others ............ 1,646 40,187,090 11.20 13,630,239 4.05
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: (Census)
Filipino .......... 113,631 213,342,264 67.30 467,161,667 60.51
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
Chinese .......... 16,248 125,223,336 35.72 392,414,875 45.36
Others .......... 486 12,056,365 3.39 10,078,364 1.17
1951:
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
Year and Retailer's
Assets Sales
Nationality
(Pesos) (Pesos)

1941:

Filipino ............................................. 1,878 1,633

Chinese .............................................. 7,707 9,691

Others ............................................... 24,415 8,281

1947:

Filipino ............................................. 1,878 2,516

Chinese ........................................... 7,707 14,934

Others .............................................. 24,749 13,919

1948: (Census)

Filipino ............................................. 1,878 4,111

Chinese ............................................. 7,707 24,398

Others .............................................. 24,916 23,686

1949:

Filipino ............................................. 1,878 4,069

Chinese .............................................. 7,707 24,152

 Others .............................................. 24,807 20,737

1951:

Filipino ............................................. 1,877 3,905

Chinese ............................................. 7,707 33,207

Others ............................................... 24,824 22,033

(Estimated 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 assests and 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 assests 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 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 legislature's target
in the enactment of the disputed 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 Sinco
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 businessmen,
manufacturers and producers believe so; they fear the dangers 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 economy
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 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, nay 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 countrymen. 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 country's economy and increase national wealth. The alien's 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 legislature's 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 can not 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 Linsey vs. Natural Carbonic Fas 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:

. . . . "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. vs. 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 or 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 vs. 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 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 vs. 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 vs. 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 vs. Deckebach,
274 U. S. 392, 71 L. ed. 115 (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 vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City of Seattle,
210 P. 30 (Washington, 1922), the business of pawn brooking 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 vs. May, L.R.A., 1915 P. 151 (Minnesota, 1914). So also
in Anton vs. 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 prohibitions 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 vs. 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 court's findings 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 vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a California statute banning the issuance of
commercial fishing licenses to person 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 the persons of Japanese ancestry. However, two Justices dissented on the theory
that fishing rights have been treated traditionally as natural resources. In Fraser vs. 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 this decision 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 vs. 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 court's belief that no public
benefit would be derived from the operations of the law and on the other hand it would deprive Chinese of something
indispensable for carrying on their business. In Yick Wo vs. Hopkins, 30 L. ed 220 (1885) an ordinance conferring
powers 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 vs. 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 the customers with whom they come in daily contact, nor the
patriotic desire to help bolster the nation's 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 the 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 vs. 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 alien 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 discriminations against aliens as it relates to the subject of legislation. . . . .

VII. The Due Process of Law Limitation.

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:

. . . . 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. . . . .

xxx xxx xxx

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 vs. 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 restriction it imposes on rights secured to individuals by the Bill of
Rights are unreasonable, and not whether it imposes any restrictions on such rights. . . .

xxx xxx xxx

. . . . 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 annoyance of a particular class, and must not be unduly oppressive. (11 Am. Jur.
Sec. 302., 1:1)- 1074-1075.)

In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:

. . . . 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. . . .

Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of constitutionality:

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. Petitioner's argument considered. —

Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges long ago
recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful and honest occupation
and therefore beyond the power of the legislature to prohibit and penalized. This arguments 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 nation's 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 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.

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 people's welfare, we are not really the masters
of our 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 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 the their Resolution:

That it is the sense of the Convention that the public interest requires the nationalization of retail trade; but it
abstain 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. (11 Aruego, The Framing of the
Philippine Constitution, 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 principle objective is the conservation of the patrimony of the nation and as corollary 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 the 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 Legislature's concern for the plight of the nationals as manifested in the approval of the radical
measures 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 the 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. Beside, 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 in the law shall embrace more than 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 appraise 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 vs. 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 tale, the title to regulate the sale of intoxicating liquors, etc." sufficiently expresses the subject
of an actprohibiting 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 vs. 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 vs. 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, See. 4803, p. 345.) The above rule was
followed 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 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 been appraised of the nature of the law, especially the nationalization and the
prohibition provisions. The legislators took active interest in the discussion of the law, and a great many of the
persons affected by the prohibitions 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 the Human Rights adopted by the United Nations General Assembly. We
find no merit in the 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 the fact that members of the United Nations Organizations, 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
discriminating 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.
vs. Thompson, 258, Fed. 257, 260), and the same may never curtail or restrict the scope of the police power of the
State (plaston vs. 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 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 the 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.

Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur.

Separate Opinions
PADILLA, J., concurring and dissenting:

I agree to the proposition, principle or rule that courts may not inquire into the wisdom of an the Act passed by the
Congress and duly approved by the President of the Republic. But the rule does not preclude courts from inquiring
and determining whether the Act offends against a provision or provisions of the Constitution. I am satisfied that the
Act assailed as violative of the due process of law and the equal protection of the laws clauses of the Constitution
does not infringe upon them, insofar as it affects associations, partnership or corporations, the capital of which is not
wholly owned by the citizens of the Philippines, and aliens, who are not and have not been engaged in the retail
business. I am, however, unable to persuade myself that it does not violate said clauses insofar as the Act applies to
associations and partnerships referred to in the Act and to aliens, who are and have heretofore been engaged in said
business. When they did engage in the retail business there was no prohibition on or against them to engage in it.
They assumed and believed in good faith they were entitled to engaged in the business. The Act allows aliens to
continue in business until their death or voluntary retirement from the business or forfeiture of their license; and
corporations, associations or partnership, the capital of which is not wholly owned by the citizens of the Philippines to
continue in the business for a period of ten years from the date of the approval of the Act (19 June 1954) or until the
expiry of term of the existence of the association or partnership or corporation, whichever event comes first. The
prohibition on corporations, the capital of which is not wholly owned by citizens of the Philippines, to engage in the
retail business for a period of more than ten years from the date of the approval of the Act or beyond the term of their
corporate existence, whichever event comes first, is valid and lawful, because the continuance of the existence of
such corporations is subject to whatever the Congress may impose reasonably upon them by subsequent
legislation.1 But the prohibition to engage in the retail business by associations and partnerships, the capital of which
is not wholly owned by citizen of the Philippines, after ten years from the date of the approval of the Act, even before
the end of the term of their existence as agreed upon by the associates and partners, and by alien heirs to whom the
retail business is transmitted by the death of an alien engaged in the business, or by his executor or administrator,
amounts to a deprivation of their property without due process of law. To my mind, the ten-year period from the date
of the approval of the Act or until the expiration of the term of the existence of the association and partnership,
whichever event comes first, and the six-month period granted to alien heirs of a deceased alien, his executor or
administrator, to liquidate the business, do not cure the defect of the law, because the effect of the prohibition is to
compel them to sell or dispose of their business. The price obtainable at such forced sale of the business would be
inadequate to reimburse and compensate the associates or partners of the associations or partnership, and the alien
heirs of a deceased alien, engaged in the retail business for the capital invested in it. The stock of merchandise
bought and sold at retail does not alone constitute the business. The goodwill that the association, partnership and
the alien had built up during a long period of effort, patience and perseverance forms part of such business. The
constitutional provisions that no person shall be deprived of his property without due process of law2 and that no
person shall be denied the equal protection of the laws 3 would have no meaning as applied to associations or
partnership and alien heirs of an alien engaged in the retail business if they were to be compelled to sell or dispose of
their business within ten years from the date of the approval of the Act and before the end of the term of the existence
of the associations and partnership as agreed upon by the associations and partners and within six months after the
death of their predecessor-in-interest.

The authors of the Constitution were vigilant, careful and zealous in the safeguard of the ownership of private
agricultural lands which together with the lands of the public domain constitute the priceless patrimony and mainstay
of the nation; yet, they did not deem it wise and prudent to deprive aliens and their heirs of such lands. 4

For these reasons, I am of the opinion that section 1 of the Act, insofar as it compels associations and partnership
referred to therein to wind up their retail business within ten years from the date of the approval of the Act even
before the expiry of the term of their existence as agreed upon by the associates and partners and section 3 of the
Act, insofar as it compels the aliens engaged in the retail business in his lifetime his executor or administrator, to
liquidate the business, are invalid, for they violate the due process of law and the equal protection of the laws clauses
of the Constitution.
9

EN BANC

June 18, 1987

G.R. No. L-75697

VALENTIN TIO doing business under the name and style of OMI ENTERPRISES, petitioner,
vs.
VIDEOGRAM REGULATORY BOARD, MINISTER OF FINANCE, METRO MANILA COMMISSION, CITY MAYOR
and CITY TREASURER OF MANILA, respondents.

Nelson Y. Ng for petitioner.

The City Legal Officer for respondents City Mayor and City Treasurer.

MELENCIO-HERRERA, J.:

This petition was filed on September 1, 1986 by petitioner on his own behalf and purportedly on behalf of other
videogram operators adversely affected. It assails the constitutionality of Presidential Decree No. 1987 entitled "An
Act Creating the Videogram Regulatory Board" with broad powers to regulate and supervise the videogram industry
(hereinafter briefly referred to as the BOARD). The Decree was promulgated on October 5, 1985 and took effect on
April 10, 1986, fifteen (15) days after completion of its publication in the Official Gazette.

On November 5, 1985, a month after the promulgation of the abovementioned decree, Presidential Decree No. 1994
amended the National Internal Revenue Code providing, inter alia:

SEC. 134. Video Tapes. — There shall be collected on each processed video-tape cassette, ready for
playback, regardless of length, an annual tax of five pesos; Provided, That locally manufactured or imported
blank video tapes shall be subject to sales tax.

On October 23, 1986, the Greater Manila Theaters Association, Integrated Movie Producers, Importers and
Distributors Association of the Philippines, and Philippine Motion Pictures Producers Association, hereinafter
collectively referred to as the Intervenors, were permitted by the Court to intervene in the case, over petitioner's
opposition, upon the allegations that intervention was necessary for the complete protection of their rights and that
their "survival and very existence is threatened by the unregulated proliferation of film piracy." The Intervenors were
thereafter allowed to file their Comment in Intervention.

The rationale behind the enactment of the DECREE, is set out in its preambular clauses as follows:

1. WHEREAS, the proliferation and unregulated circulation of videograms including, among others,
videotapes, discs, cassettes or any technical improvement or variation thereof, have greatly prejudiced the
operations of moviehouses and theaters, and have caused a sharp decline in theatrical attendance by at
least forty percent (40%) and a tremendous drop in the collection of sales, contractor's specific, amusement
and other taxes, thereby resulting in substantial losses estimated at P450 Million annually in government
revenues;
 2. WHEREAS, videogram(s) establishments collectively earn around P600 Million per annum from rentals,
sales and disposition of videograms, and such earnings have not been subjected to tax, thereby depriving
the Government of approximately P180 Million in taxes each year;

3. WHEREAS, the unregulated activities of videogram establishments have also affected the viability of the
movie industry, particularly the more than 1,200 movie houses and theaters throughout the country, and
occasioned industry-wide displacement and unemployment due to the shutdown of numerous moviehouses
and theaters;

4. "WHEREAS, in order to ensure national economic recovery, it is imperative for the Government to create
an environment conducive to growth and development of all business industries, including the movie
industry which has an accumulated investment of about P3 Billion;

5. WHEREAS, proper taxation of the activities of videogram establishments will not only alleviate the dire
financial condition of the movie industry upon which more than 75,000 families and 500,000 workers depend
for their livelihood, but also provide an additional source of revenue for the Government, and at the same
time rationalize the heretofore uncontrolled distribution of videograms;

6. WHEREAS, the rampant and unregulated showing of obscene videogram features constitutes a clear and
present danger to the moral and spiritual well-being of the youth, and impairs the mandate of the
Constitution for the State to support the rearing of the youth for civic efficiency and the development of moral
character and promote their physical, intellectual, and social well-being;

7. WHEREAS, civic-minded citizens and groups have called for remedial measures to curb these blatant
malpractices which have flaunted our censorship and copyright laws;

8. WHEREAS, in the face of these grave emergencies corroding the moral values of the people and
betraying the national economic recovery program, bold emergency measures must be adopted with
dispatch; ... (Numbering of paragraphs supplied).

Petitioner's attack on the constitutionality of the DECREE rests on the following grounds:

1. Section 10 thereof, which imposes a tax of 30% on the gross receipts payable to the local government is
a RIDER and the same is not germane to the subject matter thereof;

2. The tax imposed is harsh, confiscatory, oppressive and/or in unlawful restraint of trade in violation of the
due process clause of the Constitution;

3. There is no factual nor legal basis for the exercise by the President of the vast powers conferred upon him
by Amendment No. 6;

4. There is undue delegation of power and authority;

5. The Decree is an ex-post facto law; and

6. There is over regulation of the video industry as if it were a nuisance, which it is not.

We shall consider the foregoing objections in seriatim.

1. The Constitutional requirement that "every bill shall embrace only one subject which shall be expressed in the title
thereof" is sufficiently complied with if the title be comprehensive enough to include the general purpose which a
1

statute seeks to achieve. It is not necessary that the title express each and every end that the statute wishes to
accomplish. The requirement is satisfied if all the parts of the statute are related, and are germane to the subject
matter expressed in the title, or as long as they are not inconsistent with or foreign to the general subject and title. An
2

act having a single general subject, indicated in the title, may contain any number of provisions, no matter how
diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may be
considered in furtherance of such subject by providing for the method and means of carrying out the general
object." The rule also is that the constitutional requirement as to the title of a bill should not be so narrowly construed
3

as to cripple or impede the power of legislation. It should be given practical rather than technical construction.
4 5

Tested by the foregoing criteria, petitioner's contention that the tax provision of the DECREE is a rider is without
merit. That section reads, inter alia:

Section 10. Tax on Sale, Lease or Disposition of Videograms. — Notwithstanding any provision of law to the
contrary, the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate, as the
case may be, for every sale, lease or disposition of a videogram containing a reproduction of any motion
picture or audiovisual program. Fifty percent (50%) of the proceeds of the tax collected shall accrue to the
province, and the other fifty percent (50%) shall acrrue to the municipality where the tax is collected;
PROVIDED, That in Metropolitan Manila, the tax shall be shared equally by the City/Municipality and the
Metropolitan Manila Commission.

xxx xxx xxx

The foregoing provision is allied and germane to, and is reasonably necessary for the accomplishment of, the general
object of the DECREE, which is the regulation of the video industry through the Videogram Regulatory Board as
expressed in its title. The tax provision is not inconsistent with, nor foreign to that general subject and title. As a tool
for regulation it is simply one of the regulatory and control mechanisms scattered throughout the DECREE. The
6

express purpose of the DECREE to include taxation of the video industry in order to regulate and rationalize the
heretofore uncontrolled distribution of videograms is evident from Preambles 2 and 5, supra. Those preambles
explain the motives of the lawmaker in presenting the measure. The title of the DECREE, which is the creation of the
Videogram Regulatory Board, is comprehensive enough to include the purposes expressed in its Preamble and
reasonably covers all its provisions. It is unnecessary to express all those objectives in the title or that the latter be an
index to the body of the DECREE. 7

2. Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive, confiscatory, and in
restraint of trade. However, it is beyond serious question that a tax does not cease to be valid merely because it
regulates, discourages, or even definitely deters the activities taxed. The power to impose taxes is one so unlimited
8

in force and so searching in extent, that the courts scarcely venture to declare that it is subject to any restrictions
whatever, except such as rest in the discretion of the authority which exercises it. In imposing a tax, the legislature
9

acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation. 10

The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the realization
that earnings of videogram establishments of around P600 million per annum have not been subjected to tax, thereby
depriving the Government of an additional source of revenue. It is an end-user tax, imposed on retailers for every
videogram they make available for public viewing. It is similar to the 30% amusement tax imposed or borne by the
movie industry which the theater-owners pay to the government, but which is passed on to the entire cost of the
admission ticket, thus shifting the tax burden on the buying or the viewing public. It is a tax that is imposed uniformly
on all videogram operators.

The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the video
industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights, and the
proliferation of pornographic video tapes. And while it was also an objective of the DECREE to protect the movie
industry, the tax remains a valid imposition.

The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the
tax was to favor one industry over another. 11

It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been
repeatedly held that "inequities which result from a singling out of one particular class for taxation or
exemption infringe no constitutional limitation". Taxation has been made the implement of the state's police
12

power. 13

At bottom, the rate of tax is a matter better addressed to the taxing legislature.
3. Petitioner argues that there was no legal nor factual basis for the promulgation of the DECREE by the former
President under Amendment No. 6 of the 1973 Constitution providing that "whenever in the judgment of the President
... , there exists a grave emergency or a threat or imminence thereof, or whenever the interim Batasang Pambansa or
the regular National Assembly fails or is unable to act adequately on any matter for any reason that in his judgment
requires immediate action, he may, in order to meet the exigency, issue the necessary decrees, orders, or letters of
instructions, which shall form part of the law of the land."

In refutation, the Intervenors and the Solicitor General's Office aver that the 8th "whereas" clause sufficiently
summarizes the justification in that grave emergencies corroding the moral values of the people and betraying the
national economic recovery program necessitated bold emergency measures to be adopted with dispatch. Whatever
the reasons "in the judgment" of the then President, considering that the issue of the validity of the exercise of
legislative power under the said Amendment still pends resolution in several other cases, we reserve resolution of the
question raised at the proper time.

4. Neither can it be successfully argued that the DECREE contains an undue delegation of legislative power. The
grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct assistance of other agencies and
units of the government and deputize, for a fixed and limited period, the heads or personnel of such agencies and
units to perform enforcement functions for the Board" is not a delegation of the power to legislate but merely a
conferment of authority or discretion as to its execution, enforcement, and implementation. "The true distinction is
between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and
conferring authority or discretion as to its execution to be exercised under and in pursuance of the law. The first
cannot be done; to the latter, no valid objection can be made." Besides, in the very language of the decree, the
14

authority of the BOARD to solicit such assistance is for a "fixed and limited period" with the deputized agencies
concerned being "subject to the direction and control of the BOARD." That the grant of such authority might be the
source of graft and corruption would not stigmatize the DECREE as unconstitutional. Should the eventuality occur,
the aggrieved parties will not be without adequate remedy in law.

5. The DECREE is not violative of the ex post facto principle. An ex post facto law is, among other categories, one
which "alters the legal rules of evidence, and authorizes conviction upon less or different testimony than the law
required at the time of the commission of the offense." It is petitioner's position that Section 15 of the DECREE in
providing that:

All videogram establishments in the Philippines are hereby given a period of forty-five (45) days after the
effectivity of this Decree within which to register with and secure a permit from the BOARD to engage in the
videogram business and to register with the BOARD all their inventories of videograms, including
videotapes, discs, cassettes or other technical improvements or variations thereof, before they could be
sold, leased, or otherwise disposed of. Thereafter any videogram found in the possession of any person
engaged in the videogram business without the required proof of registration by the BOARD, shall be prima
facie evidence of violation of the Decree, whether the possession of such videogram be for private showing
and/or public exhibition.

raises immediately a prima facie evidence of violation of the DECREE when the required proof of registration of any
videogram cannot be presented and thus partakes of the nature of an ex post facto law.

The argument is untenable. As this Court held in the recent case of Vallarta vs. Court of Appeals, et al. 15

... it is now well settled that "there is no constitutional objection to the passage of a law providing that the
presumption of innocence may be overcome by a contrary presumption founded upon the experience of
human conduct, and enacting what evidence shall be sufficient to overcome such presumption of innocence"
(People vs. Mingoa 92 Phil. 856 [1953] at 858-59, citing 1 COOLEY, A TREATISE ON THE
CONSTITUTIONAL LIMITATIONS, 639-641). And the "legislature may enact that when certain facts have
been proved that they shall be prima facie evidence of the existence of the guilt of the accused and shift the
burden of proof provided there be a rational connection between the facts proved and the ultimate facts
presumed so that the inference of the one from proof of the others is not unreasonable and arbitrary
because of lack of connection between the two in common experience". 16

Applied to the challenged provision, there is no question that there is a rational connection between the fact proved,
which is non-registration, and the ultimate fact presumed which is violation of the DECREE, besides the fact that
the prima facie presumption of violation of the DECREE attaches only after a forty-five-day period counted from its
effectivity and is, therefore, neither retrospective in character.

6. We do not share petitioner's fears that the video industry is being over-regulated and being eased out of existence
as if it were a nuisance. Being a relatively new industry, the need for its regulation was apparent. While the underlying
objective of the DECREE is to protect the moribund movie industry, there is no question that public welfare is at
bottom of its enactment, considering "the unfair competition posed by rampant film piracy; the erosion of the moral
fiber of the viewing public brought about by the availability of unclassified and unreviewed video tapes containing
pornographic films and films with brutally violent sequences; and losses in government revenues due to the drop in
theatrical attendance, not to mention the fact that the activities of video establishments are virtually untaxed since
mere payment of Mayor's permit and municipal license fees are required to engage in business. 17

The enactment of the Decree since April 10, 1986 has not brought about the "demise" of the video industry. On the
contrary, video establishments are seen to have proliferated in many places notwithstanding the 30% tax imposed.

In the last analysis, what petitioner basically questions is the necessity, wisdom and expediency of the DECREE.
These considerations, however, are primarily and exclusively a matter of legislative concern.

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 its
wisdom cannot be sustained. 18

In fine, petitioner has not overcome the presumption of validity which attaches to a challenged statute. We find no
clear violation of the Constitution which would justify us in pronouncing Presidential Decree No. 1987 as
unconstitutional and void.

WHEREFORE, the instant Petition is hereby dismissed.

No costs.

SO ORDERED.
10.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-77194 March 15, 1988

VIRGILIO GASTON, HORTENCIA STARKE, ROMEO GUANZON, OSCAR VILLANUEVA, JOSE ABELLO, REMO
RAMOS, CAROLINA LOPEZ, JESUS ISASI, MANUEL LACSON, JAVIER LACSON, TITO TAGARAO, EDUARDO
SUATENGCO, AUGUSTO LLAMAS, RODOLFO SIASON, PACIFICO MAGHARI, JR., JOSE JAMANDRE,
AURELIO GAMBOA, ET AL., petitioners,
vs.
REPUBLIC PLANTERS BANK, PHILIPPINE SUGAR COMMISSION, and SUGAR REGULATORY
ADMINISTRATION, respondents, ANGEL H. SEVERINO, JR., GLICERIO JAVELLANA, GLORIA P. DE LA PAZ,
JOEY P. DE LA PAZ, ET AL., and NATIONAL FEDERATION OF SUGARCANE PLANTERS, intervenors.

MELENCIO-HERRERA, J.:

Petitioners are sugar producers, sugarcane planters and millers, who have come to this Court in their individual capacities and in
representation of other sugar producers, planters and millers, said to be so numerous that it is impracticable to bring them all before the
Court although the subject matter of the present controversy is of common interest to all sugar producers, whether parties in this action or
not.

Respondent Philippine Sugar Commission (PHILSUCOM, for short) was formerly the government office tasked with
the function of regulating and supervising the sugar industry until it was superseded by its co-respondent Sugar
Regulatory Administration (SRA, for brevity) under Executive Order No. 18 on May 28, 1986. Although said Executive
Order abolished the PHILSUCOM, its existence as a juridical entity was mandated to continue for three (3) more
years "for the purpose of prosecuting and defending suits by or against it and enables it to settle and close its affairs,
to dispose of and convey its property and to distribute its assets."

Respondent Republic Planters Bank (briefly, the Bank) is a commercial banking corporation.

Angel H. Severino, Jr., et al., who are sugarcane planters planting and milling their sugarcane in different mill districts
of Negros Occidental, were allowed to intervene by the Court, since they have common cause with petitioners and
respondents having interposed no objection to their intervention. Subsequently, on January 14,1988, the National
Federation of Sugar Planters (NFSP) also moved to intervene, which the Court allowed on February 16,1988.

Petitioners and Intervenors have come to this Court praying for a Writ of mandamus commanding respondents:

TO IMPLEMENT AND ACCOMPLISH THE PRIVATIZATION OF REPUBLIC PLANTERS BANK

BY THE TRANSFER AND DISTRIBUTION OF THE SHARES OF STOCK IN THE SAID BANK;
NOW HELD BY AND STILL CARRIED IN THE NAME OF THE PHILIPPINE SUGAR
COMMISSION, TO THE SUGAR PRODUCERS, PLANTERS AND MILLERS, WHO ARE THE
TRUE BENEFICIAL OWNERS OF THE 761,416 COMMON SHARES VALUED AT
P36,548.000.00, AND 53,005,045 PREFERRED SHARES (A, B & C) WITH A TOTAL PAR VALUE
OF P254,424,224.72, OR A TOTAL INVESTMENT OF P290,972,224.72, THE SAID INVESTMENT
HAVING BEEN FUNDED BY THE DEDUCTION OF Pl.00 PER PICUL FROM SUGAR
PROCEEDS OF THE SUGAR PRODUCERS COMMENCING THE YEAR 1978-79 UNTIL THE
PRESENT AS STABILIZATION FUND PURSUANT TO P.D. # 388.

Respondent Bank does not take issue with either petitioners or its correspondents as it has no beneficial or equitable
interest that may be affected by the ruling in this Petition, but welcomes the filing of the Petition since it will settle
finally the issue of legal ownership of the questioned shares of stock.
Respondents PHILSUCOM and SRA, for their part, squarely traverse the petition arguing that no trust results from
Section 7 of P.D. No. 388; that the stabilization fees collected are considered government funds under the
Government Auditing Code; that the transfer of shares of stock from PHILSUCOM to the sugar producers would be
irregular, if not illegal; and that this suit is barred by laches.

The Solicitor General aptly summarizes the basic issues thus: (1) whether the stabilization fees collected from sugar
planters and millers pursuant to Section 7 of P.D. No. 388 are funds in trust for them, or public funds; and (2) whether
shares of stock in respondent Bank paid for with said stabilization fees belong to the PHILSUCOM or to the different
sugar planters and millers from whom the fees were collected or levied.

P. D. No. 388, promulgated on February 2,1974, which created the PHILSUCOM, provided for the collection of a
Stabilization Fund as follows:

SEC. 7. Capitalization, Special Fund of the Commission, Development and Stabilization Fund. —
There is hereby established a fund for the commission for the purpose of financing the growth and
development of the sugar industry and all its components, stabilization of the domestic market
including the foreign market to be administered in trust by the Commission and deposited in the
Philippine National Bank derived in the manner herein below cited from the following sources:

a. Stabilization fund shall be collected as provided for in the various provisions of this Decree.

b. Stabilization fees shall be collected from planters and millers in the amount of Two (P2.00)
Pesos for every picul produced and milled for a period of five years from the approval of this
Decree and One (Pl.00) Peso for every picul produced and milled every year thereafter.

Provided: That fifty (P0.50) centavos per picul of the amount levied on planters, millers and traders
under Section 4(c) of this Decree will be used for the payment of salaries and wages of personnel,
fringe benefits and allowances of officers and employees for the purpose of accomplishing and
employees for the purpose of accomplishing the efficient performance of the duties of the
Commission.

Provided, further: That said amount shall constitute a lien on the sugar quedan and/or warehouse
receipts and shall be paid immediately by the planters and mill companies, sugar centrals and
refineries to the Commission. (paragraphing and bold supplied).

Section 7 of P.D. No. 388 does provide that the stabilization fees collected "shall be administered in trust by the
Commission." However, while the element of an intent to create a trust is present, a resulting trust in favor of the
sugar producers, millers and planters cannot be said to have ensued because the presumptive intention of the parties
is not reasonably ascertainable from the language of the statute itself.

The doctrine of resulting trusts is founded on the presumed intention of the parties; and as a
general rule, it arises where, and only where such may be reasonably presumed to be the intention
of the parties, as determined from the facts and circumstances existing at the time of the
transaction out of which it is sought to be established (89 C.J.S. 947).

No implied trust in favor of the sugar producers either can be deduced from the imposition of the levy. "The essential
Idea of an implied trust involves a certain antagonism between the cestui que trust and the trustee even when the
trust has not arisen out of fraud nor out of any transaction of a fraudulent or immoral character (65 CJ 222). It is not
clearly shown from the statute itself that the PHILSUCOM imposed on itself the obligation of holding the stabilization
fund for the benefit of the sugar producers. It must be categorically demonstrated that the very administrative agency
which is the source of such regulation would place a burden on itself (Batchelder v. Central Bank of the
Philippines, L-25071, July 29,1972,46 SCRA 102, citing People v. Que Po Lay, 94 Phil. 640 [1954]).

Neither can petitioners place reliance on the history of respondents Bank. They recite that at the beginning, the Bank
was owned by the Roman-Rojas Group. Because it underwent difficulties early in the year 1978, Mr. Roberto S.
Benedicto, then Chairman of the PHILSUCOM, submitted a proposal to the Central Bank for the rehabilitation of the
Bank. The Central Bank acted favorably on the proposal at the meeting of the Monetary Board on March 31, 1978
subject to the infusion of fresh capital by the Benedicto Group. Petitioners maintain that this infusion of fresh capital
was accomplished, not by any capital investment by Mr. Benedicto, but by PHILSUCOM, which set aside the
proceeds of the P1.00 per picul stabilization fund to pay for its subscription in shares of stock of respondent Bank. It
is petitioners' submission that all shares were placed in PHILSUCOM's name only out of convenience and necessity
and that they are the true and beneficial owners thereof.

In point of fact, we cannot see our way clear to upholding petitioners' position that the investment of the proceeds
from the stabilization fund in subscriptions to the capital stock of the Bank were being made for and on their behalf.
That could have been clarified by the Trust Agreement, dated May 28, 1986, entered into between PHILSUCOM, as
"Trustor" acting through Mr. Fred J. Elizalde as Officer-in-Charge, and respondent RPB- Trust Department' as
"Trustee," acknowledging that PHILSUCOM holds said shares for and in behalf of the sugar producers," the latter
"being the true and beneficial owners thereof." The Agreement, however, did not get off the ground because it failed
to receive the approval of the PHILSUCOM Board of Commissioners as required in the Agreement itself.

The SRA, which succeeded PHILSUCOM, neither approved the Agreement because of the adverse opinion of the
SRA, Resident Auditor, dated June 25,1986, which was aimed by the Chairman of the Commission on Audit, on
January 26,1987.

On February 19, 1987, the SRA, resolved to revoke the Trust Agreement "in the light of the ruling of the Commission
on Audit that the aforementioned Agreement is of doubtful validity."

From the legal standpoint, we find basis for the opinion of the Commission on Audit reading:

That the government, PHILSUCOM or its successor-in-interest, Sugar Regulatory Administration, in

particular, owns and stocks. While it is true that the collected stabilization fees were set aside by
PHILSUCOM to pay its subscription to RPB, it did not collect said fees for the account of the sugar
producers. That stabilization fees are charges/levies on sugar produced and milled which accrued
to PHILSUCOM under PD 338, as amended. ...

The stabilization fees collected are in the nature of a tax, which is within the power of the State to impose for the
promotion of the sugar industry (Lutz vs. Araneta, 98 Phil. 148). They constitute sugar liens (Sec. 7[b], P.D. No. 388).
The collections made accrue to a "Special Fund," a "Development and Stabilization Fund," almost Identical to the
"Sugar Adjustment and Stabilization Fund" created under Section 6 of Commonwealth Act 567. The tax collected is
1

not in a pure exercise of the taxing power. It is levied with a regulatory purpose, to provide means for the stabilization
of the sugar industry. The levy is primarily in the exercise of the police power of the State (Lutz vs. Araneta, supra.).

The protection of a large industry constituting one of the great sources of the state's wealth and
therefore directly or indirectly affecting the welfare of so great a portion of the population of the
State is affected to such an extent by public interests as to be within the police power of the
sovereign. (Johnson vs. State ex rel. Marey, 128 So. 857, cited in Lutz vs. Araneta, supra).

The stabilization fees in question are levied by the State upon sugar millers, planters and producers for a special
purpose — that of "financing the growth and development of the sugar industry and all its components, stabilization of
the domestic market including the foreign market the fact that the State has taken possession of moneys pursuant to
law is sufficient to constitute them state funds, even though they are held for a special purpose (Lawrence vs.
American Surety Co., 263 Mich 586, 249 ALR 535, cited in 42 Am. Jur. Sec. 2, p. 718). Having been levied for a
special purpose, the revenues collected are to be treated as a special fund, to be, in the language of the statute,
"administered in trust' for the purpose intended. Once the purpose has been fulfilled or abandoned, the balance, if
any, is to be transferred to the general funds of the Government. That is the essence of the trust intended (See 1987
Constitution, Article VI, Sec. 29(3), lifted from the 1935 Constitution, Article VI, Sec. 23(l]).
2

The character of the Stabilization Fund as a special fund is emphasized by the fact that the funds are deposited in the
Philippine National Bank and not in the Philippine Treasury, moneys from which may be paid out only in pursuance of
an appropriation made by law (1987) Constitution, Article VI, Sec. 29[1],1973 Constitution, Article VIII, Sec. 18[l]).

That the fees were collected from sugar producers, planters and millers, and that the funds were channeled to the
purchase of shares of stock in respondent Bank do not convert the funds into a trust fired for their benefit nor make
them the beneficial owners of the shares so purchased. It is but rational that the fees be collected from them since it
is also they who are to be benefited from the expenditure of the funds derived from it. The investment in shares of
respondent Bank is not alien to the purpose intended because of the Bank's character as a commodity bank for sugar
conceived for the industry's growth and development. Furthermore, of note is the fact that one-half, (1/2) or PO.50 per
picul, of the amount levied under P.D. No. 388 is to be utilized for the "payment of salaries and wages of personnel,
fringe benefits and allowances of officers and employees of PHILSUCOM" thereby immediately negating the claim
that the entire amount levied is in trust for sugar, producers, planters and millers.

To rule in petitioners' favor would contravene the general principle that revenues derived from taxes cannot be used
for purely private purposes or for the exclusive benefit of private persons. The Stabilization Fund is to be utilized for
the benefit of the entire sugar industry, "and all its components, stabilization of the domestic market," including the
foreign market the industry being of vital importance to the country's economy and to national interest.

WHEREFORE, the Writ of mandamus is denied and the Petition hereby dismissed. No costs.

This Decision is immediately executory.

SO ORDERED.
11

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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

TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO CABIGAO and ACE TRANSPORTATION
CORPORATION, petitioners,
vs.
THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU OF LAND
TRANSPORTATION, respondents.

MELENCIO-HERRERA, J.:

This Petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction and Temporary Restraining Order"
filed by the Taxicab 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 15, 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;

WHEREAS, after studies and inquiries made by the Board of Transportation, the latter believes that
in six years of operation, a taxi operator has not only covered the cost of his taxis, but has made
reasonable profit for his investments;

NOW, THEREFORE, pursuant to this policy, the Board hereby declares that no car beyond six
years shall be operated as taxi, and in implementation of the same hereby promulgates the
following rules and regulations:

1. As of December 31, 1977, all taxis of Model 1971 and earlier are ordered withdrawn from public
service and thereafter may no longer be registered and operated as taxis. In the registration of
 cards for 1978, only taxis of Model 1972 and later shall be accepted for registration and allowed for
operation;

2. As of December 31, 1978, all taxis of Model 1972 are ordered withdrawn from public service and
thereafter may no longer be registered and operated as taxis. In the registration of cars for 1979,
only taxis of Model 1973 and later shall be accepted for registration and allowed for operation; and
every year thereafter, there shall be a six-year lifetime of taxi, to wit:

1980 — Model 1974

1981 — Model 1975, etc.

All taxis of earlier models than those provided above are hereby ordered withdrawn from public
service as of the last day of registration of each particular year and their respective plates shall be
surrendered directly to the Board of Transportation for subsequent turnover to the Land
Transportation Commission.

For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be
effective in Metro-Manila. Its implementation outside Metro- Manila shall be carried out only after
the project has been implemented in Metro-Manila and only after the date has been determined by
the Board. 1

Pursuant to the above BOT circular, respondent Director of the Bureau of Land Transportation (BLT)
issued Implementing Circular No. 52, dated August 15, 1980, instructing the Regional Director, the MV
Registrars and other personnel of BLT, all within the National Capitol Region, to implement said Circular,
and formulating a schedule of phase-out of vehicles to be allowed and accepted for registration as public
conveyances. To quote said Circular:

Pursuant to BOT Memo-Circular No. 77-42, taxi units with year models over six (6) years old are
now banned from operating as public utilities in Metro Manila. As such the units involved should be
considered as automatically dropped as public utilities and, therefore, do not require any further
dropping order from the BOT.

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

Year Model Automatic

Phase-Out
Year

1980

1974 1981

1975 1982

1976 1983

1977

etc. etc.

Strict compliance here is desired. 2

In accordance therewith, cabs of model 1971 were phase-out in registration year 1978; those of model
1972, in 1979; those of model 1973, in 1980; and those of model 1974, in 1981.

On January 27, 1981, petitioners filed a Petition with the BOT, docketed as Case No. 80-7553, seeking to nullify MC
No. 77-42 or to stop its implementation; to allow the registration and operation in 1981 and subsequent years of
taxicabs of model 1974, as well as those of earlier models which were phased-out, provided that, at the time of
registration, they are roadworthy and fit for operation.

On February 16, 1981, petitioners filed before the BOT a "Manifestation and Urgent Motion", praying for an early
hearing of their petition. The case was heard on February 20, 1981. Petitioners presented testimonial and
documentary evidence, offered the same, and manifested that they would submit additional documentary proofs. Said
proofs were submitted on March 27, 1981 attached to petitioners' pleading entitled, "Manifestation, Presentation of
Additional Evidence and Submission of the Case for Resolution." 3

On November 28, 1981, petitioners filed before the same Board a "Manifestation and Urgent Motion to
Resolve or Decide Main Petition" praying that the case be resolved or decided not later than December
10, 1981 to enable them, in case of denial, to avail of whatever remedy they may have under the law for
the protection of their interests before their 1975 model cabs are phased-out on January 1, 1982.

Petitioners, through its President, allegedly made personal follow-ups of the case, but was later informed that the
records of the case could not be located.

On December 29, 1981, the present Petition was instituted wherein the following queries were posed for
consideration by this Court:

A. Did BOT and BLT promulgate the questioned memorandum circulars in accord with the manner
required by Presidential Decree No. 101, thereby safeguarding the petitioners' constitutional right to
procedural due process?

B. Granting, arguendo, that respondents did comply with the procedural requirements imposed by
Presidential Decree No. 101, would the implementation and enforcement of the assailed
memorandum circulars violate the petitioners' constitutional rights to.

(1) Equal protection of the law;

(2) Substantive due process; and

(3) Protection against arbitrary and unreasonable classification

and standard?

On Procedural and Substantive Due Process:

Presidential Decree No. 101 grants to the Board of Transportation the power

4. To fix just and reasonable standards, classification, regulations, practices, measurements, or

service to be furnished, imposed, observed, and followed by operators of public utility motor
vehicles.

Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers:

Sec. 2. Exercise of powers. — In the exercise of the powers granted in the preceding section, the
Board shag proceed promptly along the method of legislative inquiry.

Apart from its own investigation and studies, the Board, in its discretion, may require the
cooperation and assistance of the Bureau of Transportation, the Philippine Constabulary,
particularly the Highway Patrol Group, the support agencies within the Department of Public Works,
 Transportation and Communications, or any other government office or agency that may be able to
furnish useful information or data in the formulation of the Board of any policy, plan or program in
the implementation of this Decree.

The Board may also can conferences, require the submission of position papers or other
documents, information, or data by operators or other persons that may be affected by the
implementation of this Decree, or employ any other suitable means of inquiry.

In support of their submission that they were denied procedural due process, petitioners contend that they were not
caged upon to submit their position papers, nor were they ever summoned to attend any conference prior to the
issuance of the questioned BOT Circular.

It is clear from the provision aforequoted, however, that the leeway accorded the Board gives it a wide range of
choice in gathering necessary information or data in the formulation of any policy, plan or program. It is not
mandatory that it should first call a conference or require the submission of position papers or other documents from
operators or persons who may be affected, this being only one of the options open to the Board, which is given wide
discretionary authority. Petitioners cannot justifiably claim, therefore, that they were deprived of procedural due
process. Neither can they state with certainty that public respondents had not availed of other sources of inquiry prior
to issuing the challenged Circulars. operators of public conveyances are not the only primary sources of the data and
information that may be desired by the BOT.

Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process.
As held in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972):

Pevious notice and hearing as elements of due process, are constitutionally required for the
protection of life or vested property rights, as well as of liberty, when its limitation or loss takes
place in consequence of a judicial or quasi-judicial proceeding, generally dependent upon a past
act or event which has to be established or ascertained. It is not essential to the validity of general
rules or regulations promulgated to govern future conduct of a class or persons or enterprises,
unless the law provides otherwise. (Emphasis supplied)

Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the
roadworthiness of taxicabs depends upon their kind of maintenance and the use to which they are subjected, and,
therefore, their actual physical condition should be taken into consideration at the time of registration. As public
contend, however, it is impractical to subject every taxicab to constant and recurring evaluation, not to speak of the
fact that it can open the door to the adoption of multiple standards, possible collusion, and even graft and corruption.
A reasonable standard must be adopted to apply to an vehicles affected uniformly, fairly, and justly. The span of six
years supplies that reasonable standard. The product of experience shows that by that time taxis have fully
depreciated, their cost recovered, and a fair return on investment obtained. They are also generally dilapidated and
no longer fit for safe and comfortable service to the public specially considering that they are in continuous operation
practically 24 hours everyday in three shifts of eight hours per shift. With that standard of reasonableness and
absence of arbitrariness, the requirement of due process has been met.

On Equal Protection of the Law:

Petitioners alleged that the Circular in question violates their right to equal protection of the law because the same is
being enforced in Metro Manila only and is directed solely towards the taxi industry. At the outset it should be pointed
out that implementation outside Metro Manila is also envisioned in Memorandum Circular No. 77-42. To repeat the
pertinent portion:

For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be
effective in Metro Manila. Its implementation outside Metro Manila shall be carried out only after the
project has been implemented in Metro Manila and only after the date has been determined by the
Board. 4

In fact, it is the understanding of the Court that implementation of the Circulars in Cebu City is already
being effected, with the BOT in the process of conducting studies regarding the operation of taxicabs in
other cities.
The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs in this city, compared to those of
other places, are subjected to heavier traffic pressure and more constant use. This is of common knowledge.
Considering that traffic conditions are not the same in every city, a substantial distinction exists so that infringement
of the equal protection clause can hardly be successfully claimed.

As enunciated in the preambular clauses of the challenged BOT Circular, the overriding consideration is the safety
and comfort of the riding public from the dangers posed by old and dilapidated taxis. The State, in the exercise, of its
police power, can prescribe regulations to promote the health, morals, peace, good order, safety and general welfare
of the people. It can prohibit all things hurtful to comfort, safety and welfare of society. 5 It may also regulate
property rights. 6 In the language of Chief Justice Enrique M. Fernando "the necessities imposed by public
welfare may justify the exercise of governmental authority to regulate even if thereby certain groups may
plausibly assert that their interests are disregarded". 7

In so far as the non-application of the assailed Circulars to other transportation services is concerned, it
need only be recalled that the equal protection clause does not imply that the same treatment be
accorded all and sundry. It applies to things or persons Identically or similarly situated. It permits of
classification of the object or subject of the law provided classification is reasonable or based on
substantial distinction, which make for real differences, and that it must apply equally to each member of
the class. 8 What is required under the equal protection clause is the uniform operation by legal means so
that all persons under Identical or similar circumstance would be accorded the same treatment both in
privilege conferred and the liabilities imposed. 9 The challenged Circulars satisfy the foregoing criteria.

Evident then is the conclusion that the questioned Circulars do not suffer from any constitutional infirmity. To declare
a law unconstitutional, the infringement of constitutional right must be clear, categorical and undeniable. 10

WHEREFORE, the Writs prayed for are denied and this Petition is hereby dismissed. No costs.

SO ORDERED.
12

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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

TOMAS VELASCO, LOURDES RAMIREZ, SY PIN, EDMUNDO UNSON, APOLONIA RAMIREZ and LOURDES
LOMIBAO, as component members of the STA. CRUZ BARBERSHOP ASSOCIATION, in their own behalf and
in representation of the other owners of barbershops in the City of Manila, petitioners-appellants,
vs.
HON. ANTONIO J. VILLEGAS, City Mayor of Manila, HON. HERMINIO A. ASTORGA, Vice-Mayor and Presiding
Officer of the Municipal Board in relation to Republic Act 4065, THE MUNICIPAL BOARD OF THE CITY OF
MANILA and EDUARDO QUINTOS SR., Chief of Police of the City of Manila, respondents-appellees.

Leonardo L. Arguelles for respondent-appellant.

FERNANDO, C.J.:

This is an appeal from an order of the lower court dismissing a suit for declaratory relief challenging the
constitutionality based on Ordinance No. 4964 of the City of Manila, the contention being that it amounts to a
deprivation of property of petitioners-appellants of their means of livelihood without due process of law. The assailed
ordinance is worded thus: "It shall be prohibited for any operator of any barber shop to conduct the business of
massaging customers or other persons in any adjacent room or rooms of said barber shop, or in any room or rooms
within the same building where the barber shop is located as long as the operator of the barber shop and the room
where massaging is conducted is the same person." As noted in the appealed order, petitioners-appellants admitted
1

that criminal cases for the violation of this ordinance had been previously filed and decided. The lower court,
therefore, held that a petition for declaratory relief did not lie, its availability being dependent on there being as yet no
case involving such issue having been filed. 2

Even if such were not the case, the attack against the validity cannot succeed. As pointed out in the brief of
respondents-appellees, it is a police power measure. The objectives behind its enactment are: "(1) To be able to
impose payment of the license fee for engaging in the business of massage clinic under Ordinance No. 3659 as
amended by Ordinance 4767, an entirely different measure than the ordinance regulating the business of
barbershops and, (2) in order to forestall possible immorality which might grow out of the construction of separate
rooms for massage of customers." This Court has been most liberal in sustaining ordinances based on the general
3

welfare clause. As far back as U.S. v. Salaveria, a 1918 decision, this Court through Justice Malcolm made clear the
4

significance and scope of such a clause, which "delegates in statutory form the police power to a municipality. As
above stated, this clause has been given wide application by municipal authorities and has in its relation to the
particular circumstances of the case been liberally construed by the courts. Such, it is well to really is the progressive
view of Philippine jurisprudence." As it was then, so it has continued to be. There is no showing, therefore, of the
5 6

unconstitutionality of such ordinance.

WHEREFORE, the appealed order of the lower court is affirmed. No costs.

13

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 93891 March 11, 1991

POLLUTION ADJUDICATION BOARD, petitioner

vs.
COURT OF APPEALS and SOLAR TEXTILE FINISHING CORPORATION, respondents.

Oscar A. Pascua and Charemon Clio L. Borre for petitioner.

Leonardo A. Aurelio for respondent Solar Textile Finishing Corp.

RESOLUTION

FELICIANO, J.:

Petitioner Pollution Adjudication Board ("Board") asks us to review the Decision and Resolution promulgated on 7
February 1990 and 10 May 1990, respectively, by the Court of Appeals in C.A.-G R. No. SP 18821 entitled "Solar
Textile Finishing Corporation v. Pollution Adjudication Board." In that Decision and Resolution, the Court of Appeals
reversed an order of the Regional Trial Court, Quezon City, Branch 77, in Civil Case No. Q-89-2287 dismissing
private respondent Solar Textile Finishing Corporation's ("Solar") petition for certiorari and remanded the case to the
trial court for further proceedings.

On 22 September 1988, petitioner Board issued an ex parte Order directing Solar immediately to cease and desist
from utilizing its wastewater pollution source installations which were discharging untreated wastewater directly into a
canal leading to the adjacent Tullahan-Tinejeros River. The Order signed by Hon. Fulgencio Factoran, Jr., as Board
Chairman, reads in full as follows:

Respondent, Solar Textile Finishing Corporation with plant and place of business at 999 General Pascual
Avenue, Malabon, Metro Manila is involved in bleaching, rinsing and dyeing textiles with wastewater of
about 30 gpm. being directly discharged untreated into the sewer. Based on findings in the Inspections
conducted on 05 November 1986 and 15 November 1986, the volume of untreated wastewater discharged
in the final out fall outside of the plant's compound was even greater. The result of inspection conducted on
06 September 1988 showed that respondent's Wastewater Treatment Plant was noted unoperational and
the combined wastewater generated from its operation was about 30 gallons per minute and 80% of the
wastewater was being directly discharged into a drainage canal leading to the Tullahan-Tinejeros River by
means of a by-pass and the remaining 20% was channelled into the plant's existing Wastewater Treatment
Plant (WTP). Result of the analyses of the sample taken from the by-pass showed that the wastewater is
highly pollutive in terms of Color units, BOD and Suspended Solids, among others. These acts of
respondent in spite of directives to comply with the requirements are clearly in violation of Section 8 of
Presidential Decree No. 984 and Section 103 of its Implementing Rules and Regulations and the 1982
Effluent Regulations.

WHEREFORE, pursuant to Section 7 of P.D. 984 and Section 38 of its Implementing Rules and
Regulations, respondent is hereby ordered to cease and desist from utilizing its wastewater pollution source
installation and discharging its untreated wastewater directly into the canal leading to the Tullahan-Tinejeros
 River effective immediately upon receipt hereof and until such time when it has fully complied with all the
requirements and until further orders from this Board.

SO ORDERED. 1

We note that the above Order was based on findings of several inspections of Solar's plant:

a. inspections conducted on 5 November 1986 and 12 November 1986 by the National Pollution Control
Commission ("NPCC"), the predecessor of the Board ; and 2

b. the inspection conducted on 6 September 1988 by the Department of Environment and Natural
Resources ("DENR").

The findings of these two (2) inspections were that Solar's wastewater treatment plant was non-operational and that
its plant generated about 30 gallons per minute of wastewater, 80% of which was being directly discharged into a
drainage canal leading to the Tullahan-Tinejeros River. The remaining 20% of the wastewater was being channeled
through Solar's non-operational wastewater treatment plant. Chemical analysis of samples of Solar's effluents
showed the presence of pollutants on a level in excess of what was permissible under P.D. No. 984 and its
Implementing Regulations.

A copy of the above Order was received by Solar on 26 September 1988. A Writ of Execution issued by the Board
was received by Solar on 31 March 1989.

Meantime, Solar filed a motion for reconsideration/appeal with prayer for stay of execution of the Order dated 22
September 1988. Acting on this motion, the Board issued an Order dated 24 April 1989 allowing Solar to operate
temporarily, to enable the Board to conduct another inspection and evaluation of Solar's wastewater treatment
facilities. In the same Order, the Board directed the Regional Executive Director of the DENR/ NCR to conduct the
inspection and evaluation within thirty (30) days.

On 21 April 1989, however, Solar went to the Regional Trial Court of Quezon City, Branch 77, on petition for certiorari
with preliminary injunction against the Board, the petition being docketed as Civil Case No. Q-89-2287.

On 21 July 1989, the Regional Trial Court dismissed Solar's petition upon two (2) grounds, i.e., that appeal and not
certiorari from the questioned Order of the Board as well as the Writ of Execution was the proper remedy, and that
the Board's subsequent Order allowing Solar to operate temporarily had rendered Solar's petition moot and
academic.

Dissatisfied, Solar went on appeal to the Court of Appeals which, in the Decision here assailed, reversed the Order of
dismissal of the trial court and remanded the case to that court for further proceedings. In addition, the Court of
Appeals declared the Writ of Execution null and void. At the same time, the Court of Appeals said in the dispositive
portion of its Decision that:

. . .. Still and all, this decision is without prejudice to whatever action the appellee [Board] may take relative
to the projected 'inspection and evaluation' of appellant's [Solar's] water treatment facilities.3

The Court of Appeals, in so ruling, held that certiorari was a proper remedy since the Orders of petitioner Board may
result in great and irreparable injury to Solar; and that while the case might be moot and academic, "larger issues"
demanded that the question of due process be settled. Petitioner Board moved for reconsideration, without success.

The Board is now before us on a Petition for Review basically arguing that:

1. its ex parte Order dated 22 September 1988 and the Writ of Execution were issued in accordance with
law and were not violative of the requirements of due process; and

2. the ex parte Order and the Writ of Execution are not the proper subjects of a petition for certiorari.
The only issue before us at this time is whether or not the Court of Appeals erred in reversing the trial court on the
ground that Solar had been denied due process by the Board.

Petitioner Board claims that under P.D. No. 984, Section 7(a), it has legal authority to issue ex parte orders to
suspend the operations of an establishment when there is prima facie evidence that such establishment is
discharging effluents or wastewater, the pollution level of which exceeds the maximum permissible standards set by
the NPCC (now, the Board). Petitioner Board contends that the reports before it concerning the effluent discharges of
Solar into the Tullahan-Tinejeros River provided prima facie evidence of violation by Solar of Section 5 of the 1982
Effluent Code.

Solar, on the other hand, contends that under the Board's own rules and regulations, an ex parte order may issue
only if the effluents discharged pose an "immediate threat to life, public health, safety or welfare, or to animal and
plant life." In the instant case, according to Solar, the inspection reports before the Board made no finding that Solar's
wastewater discharged posed such a threat.

The Court is not persuaded by Solar's contention. Section 7(a) of P.D. No. 984 authorized petitioner Board to
issue ex parte cease and desist orders under the following circumstances:

P.D. 984, Section 7, paragraph (a), provides:

(a) Public Hearing. . . . Provided, That whenever the Commission finds prima facie evidence that the
discharged sewage or wastes are of immediate threat to life, public health, safety or welfare, or to animal or
plant life, or exceeds the allowable standards set by the Commission, the Commissioner may issue an ex-
parte order directing the discontinuance of the same or the temporary suspension or cessation of operation
of the establishment or person generating such sewage or wastes without the necessity of a prior public
hearing. The said ex-parte order shall be immediately executory and shall remain in force until said
establishment or person prevents or abates the said pollution within the allowable standards or modified or
nullified by a competent court. (Emphasis supplied)

We note that under the above-quoted portion of Section 7(a) of P.D. No. 984, an ex parte cease and desist order may
be issued by the Board (a) whenever the wastes discharged by an establishment pose an "immediate threat to life,
public health, safety or welfare, or to animal or plant life," or (b) whenever such discharges or wastes exceed "the
allowable standards set by the [NPCC]." On the one hand, it is not essential that the Board prove that an "immediate
threat to life, public health, safety or welfare, or to animal or plant life" exists before an ex parte cease and desist
order may be issued. It is enough if the Board finds that the wastes discharged do exceed "the allowable standards
set by the [NPCC]." In respect of discharges of wastes as to which allowable standards have been set by the
Commission, the Board may issue an ex parte cease and desist order when there is prima facie evidence of an
establishment exceeding such allowable standards. Where, however, the effluents or discharges have not yet been
the subject matter of allowable standards set by the Commission, then the Board may act on an ex parte basis when
it finds at least prima facie proof that the wastewater or material involved presents an "immediate threat to life, public
health, safety or welfare or to animal or plant life." Since the applicable standards set by the Commission existing at
any given time may well not cover every possible or imaginable kind of effluent or waste discharge, the general
standard of an "immediate threat to life, public health, safety or welfare, or to animal and plant life" remains
necessary.

Upon the other hand, the Court must assume that the extant allowable standards have been set by the Commission
or Board precisely in order to avoid or neutralize an "immediate threat to life, public health, safety or welfare, or to
animal or plant life.''

Section 5 of the Effluent Regulations of 1982 sets out the maximum permissible levels of physical and chemical
4

substances which effluents from domestic wastewater treatment plants and industrial plants" must not exceed "when
discharged into bodies of water classified as Class A, B, C, D, SB and SC in accordance with the 1978 NPCC Rules
and Regulations." The waters of Tullahan-Tinejeros River are classified as inland waters Class D under Section 68 of
the 1978 NPCC Rules and Regulations which in part provides that:
5

Sec. 68. Water Usage and Classification. — The quality of Philippine waters shall be maintained in a safe
and satisfactory condition according to their best usages. For this purpose, all water shall be classified
according to the following beneficial usages:
 (a) Fresh Surface Water
Classification Best usage

xxx xxx xxx

Class D For agriculture, irrigation, livestock watering
and industrial cooling and processing.
xxx xxx xxx

(Emphases supplied)

The reports on the inspections carried on Solar's wastewater treatment facilities on 5 and 12 November 1986 and 6
September 1988 set forth the following Identical finding:

a. For legal action in [view of] implementing rules and regulations of P.D. No. 984 and Section 5 of the
Effluent Regulations of 1982.6

Placing the maximum allowable standards set in Section 5 of the Effluent Regulations of 1982 alongside the findings
of the November 1986 and September 1988 inspection reports, we get the following results:

"Inland November September

Waters 1986 1988
(Class C & D 7
Report 8
Report 9

Station 1 Station 1
a) Color in 100 a) Color units 250 125
platinum (Apparent
cobalt Color)
units
b) pH 6-8.5 b) pH 9.3 8.7
c) Tempera- 40 c) Temperature
ture in °C (°C)
d) Phenols in 0.1 d) Phenols in
mg.1 mg./1.
e) Suspended 75 e) Suspended 340 80
solids in solids in
mg./1. mg./1.
f) BOD in 80 f) BOD (5-day) 1,100 152
mg./1. mg./1
g) oil/Grease 10 g) Oil/Grease
in mg./1. mg./1.
h) Detergents 5 h) Detergents 2.93
mg./1." mg./1. MBAS
i) Dissolved 0
oxygen, mg./1.
j) Settleable 0.4 1.5
Matter, mg./1.
k) Total Dis 800 610
solved Solids
mg./1.
l) Total Solids 1,400 690
m) Turbidity NTU / ppm, SiO 3
70

The November 1986 inspections report concluded that:

 Records of the Commission show that the plant under its previous owner, Fine Touch Finishing Corporation,
was issued a Notice of Violation on 20 December 1985 directing same to cease and desist from conducting
dyeing operation until such time the waste treatment plant is already completed and operational. The new
owner Solar Textile Corporation informed the Commission of the plant acquisition thru its letter dated March
1986 (sic).

The new owner was summoned to a hearing held on 13 October 1986 based on the adverse findings during
the inspection/water sampling test conducted on 08 August 1986. As per instruction of the Legal Division a
re- inspection/sampling text should be conducted first before an appropriate legal action is instituted; hence,
this inspection.

Based on the above findings, it is clear that the new owner continuously violates the directive of the
Commission by undertaking dyeing operation without completing first and operating its existing WTP. The
analysis of results on water samples taken showed that the untreated wastewater from the firm pollutes our
water resources. In this connection, it is recommended that appropriate legal action be instituted
immediately against the firm. . . .
10

The September 1988 inspection report's conclusions were:

1. The plant was undertaking dyeing, bleaching and rinsing operations during the inspection. The combined
wastewater generated from the said operations was estimated at about 30 gallons per minute. About 80% of
the wastewater was traced directly discharged into a drainage canal leading to the Tullahan-Tinejeros river
by means of a bypass. The remaining 20% was channeled into the plant's existing wastewater treatment
plant (WTP).

2. The WTP was noted not yet fully operational- some accessories were not yet installed. Only the sump pit
1âwphi1

and the holding/collecting tank are functional but appeared seldom used. The wastewater mentioned
channeled was noted held indefinitely into the collection tank for primary treatment. There was no effluent
discharge [from such collection tank].

3. A sample from the bypass wastewater was collected for laboratory analyses. Result of the analyses show
that the bypass wastewater is polluted in terms of color units, BOD and suspended solids, among others.
(Please see attached laboratory resul .)11

From the foregoing reports, it is clear to this Court that there was at least prima facie evidence before the Board that
the effluents emanating from Solar's plant exceeded the maximum allowable levels of physical and chemical
substances set by the NPCC and that accordingly there was adequate basis supporting the ex parte cease and desist
order issued by the Board. It is also well to note that the previous owner of the plant facility Fine Touch Finishing
Corporation had been issued a Notice of Violation on 20 December 1985 directing it to cease and refrain from
carrying out dyeing operations until the water treatment plant was completed and operational. Solar, the new owner,
informed the NPCC of the acquisition of the plant on March 1986. Solar was summoned by the NPCC to a hearing on
13 October 1986 based on the results of the sampling test conducted by the NPCC on 8 August 1986. Petitioner
Board refrained from issuing an ex parte cease and desist order until after the November 1986 and September 1988
re-inspections were conducted and the violation of applicable standards was confirmed. In other words, petitioner
Board appears to have been remarkably forbearing in its efforts to enforce the applicable standards vis-a-vis Solar.
Solar, on the other hand, seemed very casual about its continued discharge of untreated, pollutive effluents into the
Tullahan- Tinerejos River, presumably loath to spend the money necessary to put its Wastewater Treatment Plant
("WTP") in an operating condition.

In this connection, we note that in Technology Developers, Inc. v. Court of appeals, et al., the Court very recently
12

upheld the summary closure ordered by the Acting Mayor of Sta. Maria, Bulacan, of a pollution-causing
establishment, after finding that the records showed that:

1. No mayor's permit had been secured. While it is true that the matter of determining whether there is a
pollution of the environment that requires control if not prohibition of the operation of a business is
essentially addressed to the then National Pollution Control Commission of the Ministry of Human
Settlements, now the Environmental Management Bureau of the Department of Environment and Natural
Resources, it must be recognized that the mayor of a town has as much responsibility to protect its
inhabitants from pollution, and by virtue of his police power, he may deny the application for a permit to
 operate a business or otherwise close the same unless appropriate measures are taken to control and/or
avoid injury to the health of the residents of the community from the emission in the operation of the
business.

2. The Acting Mayor, in a letter of February l6, 1989, called the attention of petitioner to the pollution emitted
by the fumes of its plant whose offensive odor "not only pollute the air in the locality but also affect the health
of the residents in the area," so that petitioner was ordered to stop its operation until further orders and it
was required to bring the following:

xxx xxx xxx

(3) Region III-Department of Environment and Natural Resources Anti-Pollution permit. (Annex A-2,
petition)

3. This action of the Acting Mayor was in response to the complaint of the residents of Barangay Guyong,
Sta. Maria, Bulacan, directed to the Provincial Governor through channels (Annex A-B, petition).. . .

4. The closure order of the Acting Mayor was issued only after an investigation was made by Marivic Guina
who in her report of December 8, 1988 observed that the fumes emitted by the plant of petitioner goes
directly to the surrounding houses and that no proper air pollution device has been installed. (Annex A-9,
petition)

xxx xxx xxx

6. While petitioner was able to present a temporary permit to operate by the then National Pollution Control
Commission on December 15,1987, the permit was good only up to May 25,1988 (Annex A-12, petition).
Petitioner had not exerted any effort to extend or validate its permit much less to install any device to control
the pollution and prevent any hazard to the health of the residents of the community."

In the instant case, the ex parte cease and desist Order was issued not by a local government official but by the
Pollution Adjudication Board, the very agency of the Government charged with the task of determining whether the
effluents of a particular industrial establishment comply with or violate applicable anti-pollution statutory and
regulatory provisions.

Ex parte cease and desist orders are permitted by law and regulations in situations like that here presented precisely
because stopping the continuous discharge of pollutive and untreated effluents into the rivers and other inland waters
of the Philippines cannot be made to wait until protracted litigation over the ultimate correctness or propriety of such
orders has run its full course, including multiple and sequential appeals such as those which Solar has taken, which
of course may take several years. The relevant pollution control statute and implementing regulations were enacted
and promulgated in the exercise of that pervasive, sovereign power to protect the safety, health, and general welfare
and comfort of the public, as well as the protection of plant and animal life, commonly designated as the police power.
It is a constitutional commonplace that the ordinary requirements of procedural due process yield to the necessities of
protecting vital public interests like those here involved, through the exercise of police power. The Board's ex
parte Order and Writ of Execution would, of course, have compelled Solar temporarily to stop its plant operations, a
state of affairs Solar could in any case have avoided by simply absorbing the bother and burden of putting its WTP on
an operational basis. Industrial establishments are not constitutionally entitled to reduce their capitals costs and
operating expenses and to increase their profits by imposing upon the public threats and risks to its safety, health,
general welfare and comfort, by disregarding the requirements of anti- pollution statutes and their implementing
regulations.

It should perhaps be made clear the Court is not here saying that the correctness of the ex parte Order and Writ of
Execution may not be contested by Solar in a hearing before the Board itself. Where the establishment affected by
an ex parte cease and desist order contests the correctness of the prima facie findings of the Board, the Board must
hold a public hearing where such establishment would have an opportunity to controvert the basis of such ex
parteorder. That such an opportunity is subsequently available is really all that is required by the due process clause
of the Constitution in situations like that we have here. The Board's decision rendered after the public hearing may
then be tested judicially by an appeal to the Court of Appeals in accordance with Section 7(c) of P.D. No. 984 and
Section 42 of the Implementing Rules and Regulations. A subsequent public hearing is precisely what Solar should
have sought instead of going to court to seek nullification of the Board's Order and Writ of Execution and instead of
appealing to the Court of Appeals. It will be recalled the at the Board in fact gave Solar authority temporarily to
continue operations until still another inspection of its wastewater treatment facilities and then another analysis of
effluent samples could be taken and evaluated.

Solar claims finally that the petition for certiorari was the proper remedy as the questioned Order and Writ of
Execution issued by the Board were patent nullities. Since we have concluded that the Order and Writ of Execution
were entirely within the lawful authority of petitioner Board, the trial court did not err when it dismissed Solar's petition
for certiorari. It follows that the proper remedy was an appeal from the trial court to the Court of Appeals, as Solar did
in fact appeal.

ACCORDINGLY, the Petition for Review is given DUE COURSE and the Decision of the Court of Appeals dated 7
February 1990 and its Resolution dated 10 May 1990 in A.C.-G.R. No. SP 18821 are hereby SET ASIDE. The Order
of petitioner Board dated 22 September 1988 and the Writ of Execution, as well as the decision of the trial court dated
21 July 1989, are hereby REINSTATED, without prejudice to the right of Solar to contest the correctness of the basis
of the Board's Order and Writ of Execution at a public hearing before the Board.
14

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-38429 June 30, 1988

CARLOS BALACUIT, LAMBERTO TAN and SERGIO YU CARCEL, petitioners-appellants,

vs.
COURT OF FIRST INSTANCE OF AGUSAN DEL NORTE AND BUTUAN CITY, Branch 11, and the CITY OF
BUTUAN, respondents-appellees.

Romeo B. Sanchez, Eduardo Deza Mercado and Wilfred D. Asis for petitioners.

The City Legal Officer for respondents-appeliees.

GANCAYCO, J.:

At issue in the petition for review before Us is the validity and constitutionality of Ordinance No. 640 passed by the Municipal Board of the
City of Butuan on April 21, 1969, the title and text of which are reproduced below:

ORDINANCE--640

ORDINANCE PENALIZING ANY PERSON, GROUP OF PERSONS, ENTITY OR CORPORATION

ENGAGED IN THE BUSINESS OF SELLING ADMISSION TICKETS TO ANY MOVIE OR OTHER
PUBLIC EXHIBITIONS, GAMES, CONTESTS OR OTHER PERFORMANCES TO REQUIRE
CHILDREN BETWEEN SEVEN (7) AND TWELVE (12) YEARS OF AGE TO PAY FULL PAYMENT
FOR TICKETS INTENDED FOR ADULTS BUT SHOULD CHARGE ONLY ONE-HALF OF THE
SAID TICKET

xxx xxx xxx

Be it ordained by the Municipal Board of the City of Butuan in session assembled, that:

SECTION 1—It shall be unlawful for any person, group of persons, entity, or corporation engaged
in the business of selling admission tickets to any movie or other public exhibitions, games,
contests, or other performances to require children between seven (7) and twelve (12) years of age
to pay full payment for admission tickets intended for adults but should charge only one-half of the
value of the said tickets.

SECTION 2—Any person violating the provisions of this Ordinance shall upon conviction be
punished by a fine of not less than TWO HUNDRED PESOS (P200.00) but not more than SIX
HUNDRED PESOS (P600.00) or an imprisonment of not less than TWO (2) MONTHS or not more
than SIX (6) MONTHS or both such firm and imprisonment in the discretion of the Court.

If the violator be a firm or corporation the penalty shall be imposed upon the Manager, Agent or
Representative of such firm or corporation.

SECTION 3—This ordinance shall take effect upon its approval.

Petitioners are Carlos Balacuit Lamberto Tan, and Sergio Yu Carcel managers of the Maya and Dalisay Theaters, the
Crown Theater, and the Diamond Theater, respectively. Aggrieved by the effect of Ordinance No. 640, they filed a
complaint before the Court of First Instance of Agusan del Norte and Butuan City docketed as Special Civil Case No.
237 on June 30, 1969 praying, inter alia, that the subject ordinance be declared unconstitutional and, therefore, void
and unenforceable. 1

Upon motion of the petitioners, a temporary restraining order was issued on July 14, 1969 by the court a quo
2

enjoining the respondent City of Butuan and its officials from enforcing Ordinance No. 640. On July 29, 1969,
3

respondents filed their answer sustaining the validity of the ordinance. 4

On January 30, 1973, the litigants filed their stipulation of facts. On June 4, 1973, the respondent court rendered its
5

decision, the dispositive part of which reads:

6

IN THE LIGHT OF ALL THE FOREGOING, the Court hereby adjudges in favor of the respondents
and against the petitioners, as follows:

1. Declaring Ordinance No. 640 of the City of Butuan constitutional and valid: Provided, however,
that the fine for a single offense shall not exceed TWO HUNDRED PESOS, as prescribed in the
aforequoted Section 15 (nn) of Rep. Act No. 523;

2. Dissolving the restraining order issued by this Court; and;

3. Dismissing the complaint, with costs against the petitioners.

4. SO ORDERED. 7

Petitioners filed their motion for reconsideration of the decision of the court a quo which was denied in a resolution of
8

the said court dated November 10, 1973. 9

Hence, this petition.

Petitioners attack the validity and constitutionality of Ordinance No. 640 on the grounds that it is ultra vires and an
invalid exercise of police power.

Petitioners contend that Ordinance No. 640 is not within the power of' the Municipal Board to enact as provided for in
Section 15(n) of Republic Act No. 523, the Charter of the City of Butuan, which states:

Sec. 15. General powers and duties of the Board — Except as otherwise provided by law, and
subject to the conditions and limitations thereof, the Municipal Board shall have the following
legislative powers:

xxx xxx xxx

(n) To regulate and fix the amount of the license fees for the following; . . . theaters, theatrical
performances, cinematographs, public exhibitions and all other performances and places of
amusements ...

xxx xxx xxx

Respondent City of Butuan, on the other hand, attempts to justify the enactment of the ordinance by invoking the
general welfare clause embodied in Section 15 (nn) of the cited law, which provides:

(nn) 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 Act, and to fix
 the penalties for the violation of the ordinances, which shall not exceed a two hundred peso fine or
six months imprisonment, or both such fine and imprisonment, for a single offense.

We can see from the aforecited Section 15(n) that the power to regulate and fix the amount of license fees for
theaters, theatrical performances, cinematographs, public exhibitions and other places of amusement has been
expressly granted to the City of Butuan under its charter. But the question which needs to be resolved is this: does
this power to regulate include the authority to interfere in the fixing of prices of admission to these places of exhibition
and amusement whether under its general grant of power or under the general welfare clause as invoked by the City?

This is the first time this Court is confronted with the question of direct interference by the local government with the
operation of theaters, cinematographs and the like to the extent of fixing the prices of admission to these places.
Previous decisions of this Court involved the power to impose license fees upon businesses of this nature as a
corollary to the power of the local government to regulate them. Ordinances which required moviehouses or theaters
to increase the price of their admission tickets supposedly to cover the license fees have been held to be invalid for
these impositions were considered as not merely license fees but taxes for purposes of revenue and not regulation
which the cities have no power to exact, unless expressly granted by its charter.
10 11

Applying the ruling in Kwong Sing v. City of Manila, where the word "regulate" was interpreted to include the power
12

to control, to govern and to restrain, it would seem that under its power to regulate places of exhibitions and
amusement, the Municipal Board of the City of Butuan could make proper police regulations as to the mode in which
the business shall be exercised.

While in a New York case, an ordinance which regulates the business of selling admission tickets to public
13

exhibitions or performances by virtue of the power of cities under the General City Law "to maintain order, enforce the
laws, protect property and preserve and care for the safety, health, comfort and general welfare of the inhabitants of
the city and visitors thereto; and for any of said purposes, to regulate and license occupations" was considered not to
be within the scope of any duty or power implied in the charter. It was held therein that the power of regulation of
public exhibitions and places of amusement within the city granted by the charter does not carry with it any authority
to interfere with the price of admission to such places or the resale of tickets or tokens of admission.

In this jurisdiction, it is already settled that the operation of theaters, cinematographs and other places of public
exhibition are subject to regulation by the municipal council in the exercise of delegated police power by the local
government. Thus, in People v. Chan, an ordinance of the City of Manila prohibiting first run cinematographs from
14 15

selling tickets beyond their seating capacity was upheld as constitutional for being a valid exercise of police power.
Still in another case, the validity of an ordinance of the City of Bacolod prohibiting admission of two or more persons
16

in moviehouses and other amusement places with the use of only one ticket was sustained as a valid regulatory
police measure not only in the interest of preventing fraud in so far as municipal taxes are concerned but also in
accordance with public health, public safety, and the general welfare.

The City of Butuan, apparently realizing that it has no authority to enact the ordinance in question under its power to
regulate embodied in Section 15(n), now invokes the police power as delegated to it under the general welfare clause
to justify the enactment of said ordinance.

To invoke the exercise of police power, not only must it appear that the interest of the public generally requires 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. The legislature may not, under the guise of protecting the
17

public interest, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful
occupations. In other words, the determination as to what is a proper exercise of its police power is not final or
conclusive, but is subject to the supervision of the courts. 18

Petitioners maintain that Ordinance No. 640 violates the due process clause of the Constitution for being oppressive,
unfair, unjust, confiscatory, and an undue restraint of trade, and violative of the right of persons to enter into
contracts, considering that the theater owners are bound under a contract with the film owners for just admission
prices for general admission, balcony and lodge.

In Homeowners' Association of the Philippines, Inc. v. Municipal Board of the City of Manila, this Court held:
19

The authority of municipal corporations to regulate is essentially police power, Inasmuch as the
same generally entails a curtailment of the liberty, the rights and/or the property of persons, which
 are protected and even guaranteed by the Constitution, the exercise of police power is necessarily
subject to a qualification, limitation or restriction demanded by the regard, the respect and the
obedience due to the prescriptions of the fundamental law, particularly those forming part of the
Constitution of Liberty, otherwise known as the Bill of Rights — the police power measure must be
reasonable. In other words, individual rights may be adversely affected by the exercise of police
power to the extent only — and only to the extent--that may be fairly required by the legitimate
demands of public interest or public welfare.

What is the reason behind the enactment of Ordinance No. 640?

A reading of the minutes of the regular session of the Municipal Board when the ordinance in question was passed
shows that a certain Councilor Calo, the proponent of the measure, had taken into account the complaints of parents
that for them to pay the full price of admission for their children is too financially burdensome.

The trial court advances the view that "even if the subject ordinance does not spell out its raison d'etre in all
probability the respondents were impelled by the awareness that children are entitled to share in the joys of their
elders, but that considering that, apart from size, children between the ages of seven and twelve cannot fully grasp
the nuance of movies or other public exhibitions, games, contests or other performances, the admission prices with
respect to them ought to be reduced. a 19

We must bear in mind that there must be public necessity which demands the adoption of proper measures to secure
the ends sought to be attained by the enactment of the ordinance, and the large discretion is necessarily vested in
the legislative authority to determine not only what the interests of the public require, but what measures are
necessary for the protection of such interests. The methods or means used to protect the public health, morals,
20

safety or welfare, must have some relation to the end in view, for under the guise of the police power, personal rights
and those pertaining to private property will not be permitted to be arbitralily invaded by the legislative department. 21

We agree with petitioners that the ordinance is not justified by any necessity for the public interest. The police power
legislation must be firmly grounded on public interest and welfare, and a reasonable relation must exist between
purposes and means. The evident purpose of the ordinance is to help ease the burden of cost on the part of parents
22

who have to shell out the same amount of money for the admission of their children, as they would for themselves, A
reduction in the price of admission would mean corresponding savings for the parents; however, the petitioners are
the ones made to bear the cost of these savings. The ordinance does not only make the petitioners suffer the loss of
earnings but it likewise penalizes them for failure to comply with it. Furthermore, as petitioners point out, there will be
difficulty in its implementation because as already experienced by petitioners since the effectivity of the ordinance,
children over 12 years of age tried to pass off their age as below 12 years in order to avail of the benefit of the
ordinance. The ordinance does not provide a safeguard against this undesirable practice and as such, the
respondent City of Butuan now suggests that birth certificates be exhibited by movie house patrons to prove the age
of children. This is, however, not at all practicable. We can see that the ordinance is clearly unreasonable if not
unduly oppressive upon the business of petitioners. Moreover, there is no discernible relation between the ordinance
and the promotion of public health, safety, morals and the general welfare.

Respondent City of Butuan claims that it was impelled to protect the youth from the pernicious practice of movie
operators and other public exhibitions promoters or the like of demanding equal price for their admission tickets along
with the adults. This practice is allegedly repugnant and unconscionable to the interest of the City in the furtherance
of the prosperity, peace, good order, comfort, convenience and the general well-being of its inhabitants.

There is nothing pernicious in demanding equal price for both children and adults. The petitioners are merely
conducting their legitimate businesses. The object of every business entrepreneur is to make a profit out of his
venture. There is nothing immoral or injurious in charging the same price for both children and adults. In fact, no
person is under compulsion to purchase a ticket. It is a totally voluntary act on the part of the purchaser if he buys a
ticket to such performances.

Respondent City of Butuan claims that Ordinance No. 640 is reasonable and necessary to lessen the economic
burden of parents whose minor children are lured by the attractive nuisance being maintained by the petitioners.
Respondent further alleges that by charging the full price, the children are being exploited by movie house operators.
We fail to see how the children are exploited if they pay the full price of admission. They are treated with the same
quality of entertainment as the adults. The supposition of the trial court that because of their age children cannot fully
grasp the nuances of such entertainment as adults do fails to convince Us that the reduction in admission ticket price
is justifiable. In fact, by the very claim of respondent that movies and the like are attractive nuisances, it is difficult to
comprehend why the municipal board passed the subject ordinance. How can the municipal authorities consider the
movies an attractive nuisance and yet encourage parents and children to patronize them by lowering the price of
admission for children? Perhaps, there is some ,truth to the argument of petitioners that Ordinance No. 640 is
detrimental to the public good and the general welfare of society for it encourages children of tender age to frequent
the movies, rather than attend to their studies in school or be in their homes.

Moreover, as a logical consequence of the ordinance, movie house and theater operators will be discouraged from
exhibiting wholesome movies for general patronage, much less children's pictures if only to avoid compliance with the
ordinance and still earn profits for themselves. For after all, these movie house and theater operators cannot be
compelled to exhibit any particular kind of film except those films which may be dictated by public demand and those
which are restricted by censorship laws. So instead of children being able to share in the joys of their elders as
envisioned by the trial court, there will be a dearth of wholesome and educational movies for them to enjoy.

There are a number of cases decided by the Supreme Court and the various state courts of the United States which
upheld the right of the proprietor of a theater to fix the price of an admission ticket as against the right of the state to
interfere in this regard and which We consider applicable to the case at bar.

A theater ticket has been described to be either a mere license, revocable at the will of the proprietor of the theater or
it may be evidence of a contract whereby, for a valuable consideration, the purchaser has acquired the right to enter
the theater and observe the performance on condition that he behaves properly. Such ticket, therefore, represents a
23

right, Positive or conditional, as the case may be, according to the terms of the original contract of sale. This right is
clearly a right of property. The ticket which represents that right is also, necessarily, a species of property. As such,
the owner thereof, in the absence of any condition to the contrary in the contract by which he obtained it, has the
clear right to dispose of it, to sell it to whom he pleases and at such price as he can obtain. So that an act
24

prohibiting the sale of tickets to theaters or other places of amusement at more than the regular price was held invalid
as conflicting with the state constitution securing the right of property. 25

In Collister vs. Hayman, it was held:

26

The defendants were conducting a private business, which, even if clothed with a public interest,
was without a franchise to accommodate the public, and they had the right to control it, the same
as the proprietors of any other business, subject to such obligations as were placed upon them by
statute. Unlike a carrier of passengers, for instance, with a franchise from the state, and hence
under obligation to transport anyone who applies and to continue the business year in and year out,
the proprietors of a theater can open and close their place at will, and no one can make a lawful
complaint. They can charge what they choose for admission to their theater. They can limit the
number admitted. They can refuse to sell tickets and collect the price of admission at the door.
They can preserve order and enforce quiet while the performance is going on. They can make it a
part of the contract and condition of admission, by giving due notice and printing the condition in
the ticket that no one shall be admitted under 21 years of age, or that men only or women only shall
be admitted, or that a woman cannot enter unless she is accompanied by a male escort, and the
like. The proprietors, in the control of their business, may regulate the terms of admission in any
reasonable way. If those terms are not satisfactory, no one is obliged to buy a ticket or make the
contract. If the terms are satisfactory, and the contract is made, the minds of the parties meet upon
the condition, and the purchaser impliedly promises to perform it.

In Tyson and Bro. — United Theater Ticket Officers, Inc. vs. Banton, the United States Supreme Court held:
27

... And certainly a place of entertainment is in no legal sense a public utility; and quite as certainly,
its activities are not such that their enjoyment can be regarded under any conditions from the point
of view of an emergency.

The interest of the public in theaters and other places of entertainment may be more nearly, and
with better reason, assimilated to the like interest in provision stores and markets and in the rental
of houses and apartments for residence purposes; although in importance it fails below such an
interest in the proportion that food and shelter are of more moment than amusement or instruction.
As we have shown there is no legislative power to fix the prices of provisions or clothing, or the
rental charges for houses and apartments, in the absence of some controlling emergency; and we
 are unable to perceive any dissimilarities of such quality or degree as to justify a different rule in
respect of amusements and entertainment ...

We are in consonance with the foregoing observations and conclusions of American courts. In this jurisdiction,
legislation had been passed controlling the prices of goods commodities and drugs during periods of
emergency, limiting the net profits of public utility as well as regulating rentals of residential apartments for a limited
28 29

period, as a matter of national policy in the interest of public health and safety, economic security and the general
30

welfare of the people. And these laws cannot be impugned as unconstitutional for being violative of the due process
clause.

However, the same could not be said of theaters, cinematographs and other exhibitions. In no sense could these
businesses be considered public utilities. The State has not found it appropriate as a national policy to interfere with
the admission prices to these performances. This does not mean however, that theaters and exhibitions are not
affected with public interest even to a certain degree. Motion pictures have been considered important both as a
medium for the communication of Ideas and expression of the artistic impulse. Their effects on the perceptions by our
people of issues and public officials or public figures as well as the prevailing cultural traits are considerable. People
31

of all ages flock to movie houses, games and other public exhibitions for recreation and relaxation. The government
realizing their importance has seen it fit to enact censorship laws to regulate the movie industry. Their aesthetic
32

entertainment and even educational values cannot be underestimated. Even police measures regulating the
operation of these businesses have been upheld in order to safeguard public health and safety.

Nonetheless, as to the question of the subject ordinance being a valid exercise of police power, the same must be
resolved in the negative. While it is true that a business may be regulated, it is equally true that such regulation must
be within the bounds of reason, that is, the regulatory ordinance must be reasonable, and its provisions cannot be
oppressive amounting to an arbitrary interference with the business or calling subject of regulation. A lawful business
or calling may not, under the guise of regulation, be unreasonably interfered with even by the exercise of police
power. A police measure for the regulation of the conduct, control and operation of a business should not encroach
33

upon the legitimate and lawful exercise by the citizens of their property rights. The right of the owner to fix a price at
34

which his property shall be sold or used is an inherent attribute of the property itself and, as such, within the
protection of the due process clause."" Hence, the proprietors of a theater have a right to manage their property in
their own way, to fix what prices of admission they think most for their own advantage, and that any person who did
not approve could stay away. 36

Respondent City of Butuan argues that the presumption is always in favor of the validity of the ordinance. This maybe
the rule but 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
37

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. 38

Ordinance No. 640 clearly invades the personal and property rights of petitioners for even if We could assume that,
on its face, the interference was reasonable, from the foregoing considerations, it has been fully shown that it is an
unwarranted and unlawful curtailment of the property and personal rights of citizens. For being unreasonable and an
undue restraint of trade, it cannot, under the guise of exercising police power, be upheld as valid.

WHEREFORE, the decision of the trial court in Special Civil Case No. 237 is hereby REVERSED and SET ASIDE
and a new judgment is hereby rendered declaring Ordinance No. 640 unconstitutional and, therefore, null and void.
This decision is immediately executory.

SO ORDERED.

Yap, C.J., Narvasa, Cruz, Paras, Padilla, Bidin, Sarmiento and Griño-Aquino, JJ., concur.

Separate Opinions
GUTIERREZ, JR., J., Separate opinion

The issue before the Court is a simple one. Does Butuan City have the power to compel theatre owners to charge
only half fares for children below twelve even as they charge all other moviegoers full prices for admission into
moviehouses?

Instead of nullifying the municipal ordinance through a broad and sweeping justification of property rights, I believe,
however, that we should do so on a more limited ground directly bearing on the issue.

I find no rational basis for classifying children as a distinct group insofar as paying for admission into a moviehouse is
concerned. There is absolutely no pretense that the municipal ordinance is intended to protect children, enhance their
morals, promote their health, safeguard their safety, improve their education, or otherwise promote the general
welfare. In fact, the effect of the ordinance may be the opposite.

With the price of movie tickets suddenly within the reach of many children, they may neglect their studies or use
money intended for food or school supplies to enter moviehouses. Movie owners who are compelled to accept half
prices for a newly increased group of young patrons will be tempted to allow them to enter moviehouses
indiscriminately, including those where scenes of violence, crime, or even sex are portrayed. Addiction of the young
to movie going is definitely injurious to their health.

The avowed purpose of the ordinance--to ease the burden of costs for parents who have to shell out the same
amount of money for the admission of their children as they would for themselves — is not covered by police power.
If the city cannot compel refreshment parlors to charge half-prices for hamburgers, soft drinks, pizzas, or cakes
consumed by children by what authority can it impose the obligation of similarly easing parents' burdens upon the
owners of moviehouses?

As discussed by the minority opinion, the legislature may not., under the guise of protecting the public interest,
arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations.
The imposition enacted by the municipal board of Butuan City has not been justified by its proponents as a restriction
necessary for public health or public welfare. No reasonable relationship has been shown between a valid purpose
and the proper means to accomplish it.

I hesitate, however, to make a brief for owners of theatres and expound a laissez faire approach insofar as their
businesses are concerned. Movie houses may not be public utilities but as places of entertainment affected with a
certain degree of public interest, they are subject to reasonable regulation. That regulation is stronger and more
restrictive than that of regular or ordinary businesses.

The following citation for instance, is pure obiter insofar as half-prices for minors are concerned:

... [T]he proprietors of a theater can open and close their place at will, and no one can make lawful
complaint. They can charge what they choose for admission to their theater. They can limit the
number admitted. They can refuse to sell tickets and collect the price of admission at the door.
They can preserve order and enforce quiet while the performance is going on. They can make it a
part of the contract and a condition of admission, by giving due notice and printing the condition in
the ticket that no one shall be admitted under 21 years of age, or that men only or women only shall
be admitted, or that a woman cannot enter unless she is accompanied by a male escort, and the
like. The proprietors, in the control of their business, may regulate the terms of admission in any
reasonable way. If those terms are not satisfactory, no one is obliged to buy a ticket or make the
contract. If the terms are satisfactory, and the contract is made, the minds of the parties meet upon
the condition, and the purchaser impliedly promises to perform it. (Collister v. Hayman, 76 N.E.
20,183 N.Y. 250, 253, 1 L.R.A. [N.S.] 1188, 11 Am. St. Rep. 740, An Cas. 344).

I see no reason at this time why we should pass upon situations that are not before us or warn municipal
governments beforehand to avoid enacting certain regulations when nobody knows exactly what circumstances may
call for those regulations.
For instance,

A theater ticket has been described to be either a mere license, revocable at the will of the
proprietor of the theater or it may be evidence of a contract whereby, for a valuable consideration,
the purchaser has acquired the right to enter the theater and observe the performance on condition
that he behaves properly (Law of the State.

Screen and Radio by Marchetti, 1939, ec., page 268). Such ticket, therefore, represents a right,
positive or conditional, as the case may be, according to the terms of the original contract of sale.
This right is clearly a right of property. The ticket which represents that right is also, necessarily, a
species of property. As such, the owner thereof, in the absence of any condition to the contrary y in
the contract by which he obtained it, has the clear right to dispose of it, to sell it to whom he
pleases and at such price as he can obtain Ibids, citing Ex-parte Quarg, 84 Pac., 766,149 Cal. 79,
80, 5 L.R.A. [N.S], 183, 117 Am. St. Rep. 11 5, 9 Ann. Ca. 747; Also People v. Steele, 231, III. 340,
344, 14 R.A. [N.S.] 361, 121 Am. St. Rep. 321, 83 N.E. 236). ....

xxx xxx xxx

.... A lawful business or calling may not, under the guise of regulation, be unreasonably interfered
with even by the exercise of police power. (Ogden City v. Leo, 54 Utah 556, 182 P. 530) A police
measure for the regulation of the conduct, control and operation of a business should not encroach
upon the legitimate and lawful exercise by the citizens of their property rights (Pampanga Bus Co.,
Inc. v. Municipality of Tarlac, 3 SCRA 816). The right of the owner to fix a price at which his
property shall be sold or used is an inherent attribute of the property itself and, as such, within the
protection of the due process clause (Tyson and Bro.--United Theater Ticket Officers, Inc. v.
Banton, supra). Hence the proprietors of a theater have a right to manage their property in their
own way, to fix what prices of admission they think most for their own advantage, and that ally
person who did not approve could stay away (Ibid, citing v. Clifford v. Brandon, 2 Campb. 358,
368.).

may be interpreted as carte blanche for movie owners to practically ignore municipal regulation and do as they
please.

More appropriate to my maid is to state that while tile Butuan City ordinance is invalid, it does not necessarily follow
that all forms of regulation are proscribed.

We have ruled in People v. Chan (65 Phil. 612):

In the first place, it must be noted that there can be no doubt that the City of Manila exercises
police power, by delegation and that in the exercise of that power it is authorized to enact
ordinances for, the regulation of the operation of theatres and cinematographs (sec. 2444(m) and
(ee) of the Revised Administrative Code: U.S. v. Gomez Jesus, 31 Phil. 218; U.S. v. Pompeya, 31
Phil. 245).

On April 17, 1935, Ordinance No. 2347 was approved. In section 1 it provides that all first run
theatres or cinematographs should register their seating capacity with the City Treasurer, and in
section 1 it prohibits the sale of tickets in said theatres or cinematographs in excess of their
registered seating capacity.

Before the approval of Ordinance No. 2347, Ordinance No. 2188, approved on July 22, 1933, was
in force, section 1 of which divides cinematographs into three different classes: first, second and
third. The first class includes those located on certain and specified streets like Rosario, Escolta,
etc., which exhibit films for the first time; those belonging to the second class are those which, not
being located on said streets, also exhibit films for the first time, and those which, being located on
said streets, regularly show films for the second time or which have the exclusive right to show
secondhand films; and the third class comprehends all those which are not included in the first and
second classes.
 xxx xxx xxx

To the foregoing must be added, and this is of common knowledge, that the films which are shown
for the first time attract a large attendance, and the theatre or cinematograph, whether it is first or
second class, presenting shows for the first time, would be suffocatingly overcrowded if the number
of tickets were not limited. This is the reason for the prohibition of the sale of tickets in excess of
the seating capacity. The prohibition applies with equal force wherever the same reason exists, that
is, to first and second class theatres which show films for the first time. (at pp. 612- 613)

There being a rational basis for the restriction of sales of tickets beyond seating capacity, the ordinance is perfectly
valid.

The same is true for the situation found in Samson v. Mayor of Bacolod City (60 SCRA 274):

When it is further remembered that insofar as movie houses and other places of amusement are
concerned. (According to Section 17[1] of the City Charter of Bacolod, Commonwealth Act No. 326
119381: 'To regulate and fix the amount of the fees for the following: ... theatres, theatrical
performances, cinematographs, public exhibitions, circuses and all other performances and places
of amusements ....") the least doubt cannot be entertained as to the validity of a measure
prohibiting a proprietor, lessee or operator of an amusement place to admit two or more persons
with only one admission ticket, not only in the interest of preventing fraud insofar as municipal taxes
are concerned but also in accordance with public health, public safety and the general welfare. (Cf.
People v. Chan, 65 Phil. 611 [1938]). An American Supreme Court decision, Western Turf
Association v. Greenberg, (204 US 359 [1907] the opinion being penned by Justice Harlan is
equally illuminating: 'The statute is only a regulation of places of public entertainment and
amusement upon terms of equal and exact justice to everyone holding a ticket of admission, and
who is not, at the time, under the influence of liquor, or boisterous in conduct, or of lewd and
immoral character. .... Such a regulation, in itself just, is likewise promotive of peace and good
order among those who attend places of public entertainment and amusement. It is neither an
arbitrary exertion of the state's inherent or governmental power, nor a violation of any right secured
by the constitution of the United States. (at pp. 363-364).

The City of Butuan tries to justify the challenged ordinance by invoking police power. The invocation is improper. The
definitions of police power, including its exercise based on the general welfare clause, are emphasized to show that
the respondents' arguments have no merit —

Police power is inherent in the State but not in municipal corporations. For a municipal corporation
to exercise police power, there must be a legislative grant which necessarily also sets the limits for
the exercise of the power.

In the Philippines, the grant of authority to the municipality to exercise police power is embodied in
Section 2238 of the Revised Administrative Code, otherwise known as the General Welfare Clause.
Chartered cities are granted similar authority in their respective charters

The general welfare clause has two branches. The first 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 the municipal council by law. The
second branch authorizes the municipality to enact such ordinances as may be necessary and
proper for the health and safety, promote the prosperity, improve the morals, peace, good order,
comfort, and convenience of the municipality and inhabitants thereof, and for the protection of
property therein. (U.S. v. Salaveria 39 Phil. 103).

This Court has generally been liberal in sustaining municipal action based on the general welfare clause. In the case
before us, however, there appears to be no basis for sustaining the ordinance even on a generous interpretation of
the general welfare clause.
Separate Opinions

GUTIERREZ, JR., J., Separate opinion

The issue before the Court is a simple one. Does Butuan City have the power to compel theatre owners to charge
only half fares for children below twelve even as they charge all other moviegoers full prices for admission into
moviehouses?

Instead of nullifying the municipal ordinance through a broad and sweeping justification of property rights, I believe,
however, that we should do so on a more limited ground directly bearing on the issue.

I find no rational basis for classifying children as a distinct group insofar as paying for admission into a moviehouse is
concerned. There is absolutely no pretense that the municipal ordinance is intended to protect children, enhance their
morals, promote their health, safeguard their safety, improve their education, or otherwise promote the general
welfare. In fact, the effect of the ordinance may be the opposite.

With the price of movie tickets suddenly within the reach of many children, they may neglect their studies or use
money intended for food or school supplies to enter moviehouses. Movie owners who are compelled to accept half
prices for a newly increased group of young patrons will be tempted to allow them to enter moviehouses
indiscriminately, including those where scenes of violence, crime, or even sex are portrayed. Addiction of the young
to movie going is definitely injurious to their health.

The avowed purpose of the ordinance--to ease the burden of costs for parents who have to shell out the same
amount of money for the admission of their children as they would for themselves — is not covered by police power.
If the city cannot compel refreshment parlors to charge half-prices for hamburgers, soft drinks, pizzas, or cakes
consumed by children by what authority can it impose the obligation of similarly easing parents' burdens upon the
owners of moviehouses?

As discussed by the minority opinion, the legislature may not., under the guise of protecting the public interest,
arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations.
The imposition enacted by the municipal board of Butuan City has not been justified by its proponents as a restriction
necessary for public health or public welfare. No reasonable relationship has been shown between a valid purpose
and the proper means to accomplish it.

I hesitate, however, to make a brief for owners of theatres and expound a laissez faire approach insofar as their
businesses are concerned. Movie houses may not be public utilities but as places of entertainment affected with a
certain degree of public interest, they are subject to reasonable regulation. That regulation is stronger and more
restrictive than that of regular or ordinary businesses.

The following citation for instance, is pure obiter insofar as half-prices for minors are concerned:

... [T]he proprietors of a theater can open and close their place at will, and no one can make lawful
complaint. They can charge what they choose for admission to their theater. They can limit the
number admitted. They can refuse to sell tickets and collect the price of admission at the door.
They can preserve order and enforce quiet while the performance is going on. They can make it a
part of the contract and a condition of admission, by giving due notice and printing the condition in
the ticket that no one shall be admitted under 21 years of age, or that men only or women only shall
be admitted, or that a woman cannot enter unless she is accompanied by a male escort, and the
like. The proprietors, in the control of their business, may regulate the terms of admission in any
reasonable way. If those terms are not satisfactory, no one is obliged to buy a ticket or make the
contract. If the terms are satisfactory, and the contract is made, the minds of the parties meet upon
the condition, and the purchaser impliedly promises to perform it. (Collister v. Hayman, 76 N.E.
20,183 N.Y. 250, 253, 1 L.R.A. [N.S.] 1188, 11 Am. St. Rep. 740, An Cas. 344).
I see no reason at this time why we should pass upon situations that are not before us or warn municipal
governments beforehand to avoid enacting certain regulations when nobody knows exactly what circumstances may
call for those regulations.

For instance,

A theater ticket has been described to be either a mere license, revocable at the will of the
proprietor of the theater or it may be evidence of a contract whereby, for a valuable consideration,
the purchaser has acquired the right to enter the theater and observe the performance on condition
that he behaves properly (Law of the State.

Screen and Radio by Marchetti, 1939, ec., page 268). Such ticket, therefore, represents a right,
positive or conditional, as the case may be, according to the terms of the original contract of sale.
This right is clearly a right of property. The ticket which represents that right is also, necessarily, a
species of property. As such, the owner thereof, in the absence of any condition to the contrary y in
the contract by which he obtained it, has the clear right to dispose of it, to sell it to whom he
pleases and at such price as he can obtain Ibids, citing Ex-parte Quarg, 84 Pac., 766,149 Cal. 79,
80, 5 L.R.A. [N.S], 183, 117 Am. St. Rep. 11 5, 9 Ann. Ca. 747; Also People v. Steele, 231, III. 340,
344, 14 R.A. [N.S.] 361, 121 Am. St. Rep. 321, 83 N.E. 236). ....

xxx xxx xxx

.... A lawful business or calling may not, under the guise of regulation, be unreasonably interfered
with even by the exercise of police power. (Ogden City v. Leo, 54 Utah 556, 182 P. 530) A police
measure for the regulation of the conduct, control and operation of a business should not encroach
upon the legitimate and lawful exercise by the citizens of their property rights (Pampanga Bus Co.,
Inc. v. Municipality of Tarlac, 3 SCRA 816). The right of the owner to fix a price at which his
property shall be sold or used is an inherent attribute of the property itself and, as such, within the
protection of the due process clause (Tyson and Bro.--United Theater Ticket Officers, Inc. v.
Banton, supra). Hence the proprietors of a theater have a right to manage their property in their
own way, to fix what prices of admission they think most for their own advantage, and that ally
person who did not approve could stay away (Ibid, citing v. Clifford v. Brandon, 2 Campb. 358,
368.).

may be interpreted as carte blanche for movie owners to practically ignore municipal regulation and do as they
please.

More appropriate to my maid is to state that while tile Butuan City ordinance is invalid, it does not necessarily follow
that all forms of regulation are proscribed.

We have ruled in People v. Chan (65 Phil. 612):

In the first place, it must be noted that there can be no doubt that the City of Manila exercises
police power, by delegation and that in the exercise of that power it is authorized to enact
ordinances for, the regulation of the operation of theatres and cinematographs (sec. 2444(m) and
(ee) of the Revised Administrative Code: U.S. v. Gomez Jesus, 31 Phil. 218; U.S. v. Pompeya, 31
Phil. 245).

On April 17, 1935, Ordinance No. 2347 was approved. In section 1 it provides that all first run
theatres or cinematographs should register their seating capacity with the City Treasurer, and in
section 1 it prohibits the sale of tickets in said theatres or cinematographs in excess of their
registered seating capacity.

Before the approval of Ordinance No. 2347, Ordinance No. 2188, approved on July 22, 1933, was
in force, section 1 of which divides cinematographs into three different classes: first, second and
third. The first class includes those located on certain and specified streets like Rosario, Escolta,
etc., which exhibit films for the first time; those belonging to the second class are those which, not
being located on said streets, also exhibit films for the first time, and those which, being located on
 said streets, regularly show films for the second time or which have the exclusive right to show
secondhand films; and the third class comprehends all those which are not included in the first and
second classes.

xxx xxx xxx

To the foregoing must be added, and this is of common knowledge, that the films which are shown
for the first time attract a large attendance, and the theatre or cinematograph, whether it is first or
second class, presenting shows for the first time, would be suffocatingly overcrowded if the number
of tickets were not limited. This is the reason for the prohibition of the sale of tickets in excess of
the seating capacity. The prohibition applies with equal force wherever the same reason exists, that
is, to first and second class theatres which show films for the first time. (at pp. 612- 613)

There being a rational basis for the restriction of sales of tickets beyond seating capacity, the ordinance is perfectly
valid.

The same is true for the situation found in Samson v. Mayor of Bacolod City (60 SCRA 274):

When it is further remembered that insofar as movie houses and other places of amusement are
concerned. (According to Section 17[1] of the City Charter of Bacolod, Commonwealth Act No. 326
119381: 'To regulate and fix the amount of the fees for the following: ... theatres, theatrical
performances, cinematographs, public exhibitions, circuses and all other performances and places
of amusements ....") the least doubt cannot be entertained as to the validity of a measure
prohibiting a proprietor, lessee or operator of an amusement place to admit two or more persons
with only one admission ticket, not only in the interest of preventing fraud insofar as municipal taxes
are concerned but also in accordance with public health, public safety and the general welfare. (Cf.
People v. Chan, 65 Phil. 611 [1938]). An American Supreme Court decision, Western Turf
Association v. Greenberg, (204 US 359 [1907] the opinion being penned by Justice Harlan is
equally illuminating: 'The statute is only a regulation of places of public entertainment and
amusement upon terms of equal and exact justice to everyone holding a ticket of admission, and
who is not, at the time, under the influence of liquor, or boisterous in conduct, or of lewd and
immoral character. .... Such a regulation, in itself just, is likewise promotive of peace and good
order among those who attend places of public entertainment and amusement. It is neither an
arbitrary exertion of the state's inherent or governmental power, nor a violation of any right secured
by the constitution of the United States. (at pp. 363-364).

The City of Butuan tries to justify the challenged ordinance by invoking police power. The invocation is improper. The
definitions of police power, including its exercise based on the general welfare clause, are emphasized to show that
the respondents' arguments have no merit —

Police power is inherent in the State but not in municipal corporations. For a municipal corporation
to exercise police power, there must be a legislative grant which necessarily also sets the limits for
the exercise of the power.

In the Philippines, the grant of authority to the municipality to exercise police power is embodied in
Section 2238 of the Revised Administrative Code, otherwise known as the General Welfare Clause.
Chartered cities are granted similar authority in their respective charters

The general welfare clause has two branches. The first 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 the municipal council by law. The
second branch authorizes the municipality to enact such ordinances as may be necessary and
proper for the health and safety, promote the prosperity, improve the morals, peace, good order,
comfort, and convenience of the municipality and inhabitants thereof, and for the protection of
property therein. (U.S. v. Salaveria 39 Phil. 103).

This Court has generally been liberal in sustaining municipal action based on the general welfare clause. In the case
before us, however, there appears to be no basis for sustaining the ordinance even on a generous interpretation of
the general welfare clause.
15

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-34915 June 24, 1983

CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF QUEZON CITY, petitioners,
vs.
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.

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:

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 Himlayang Pilipino, Inc. in writing that Section
9 of Ordinance No. 6118, S-64 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 respondent's 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.

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 State's 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.

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 court's 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 be established or practised in the
City.' (Subsections 'C', Sec. 12, R.A. 537).

The power to regulate does not include the power to prohibit (People vs. Esguerra, 81 PhiL 33,
Vega vs. 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. Ill, 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 Tanada and Carreon, V-11, 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 vs. Provincial Board, 39 PhiL 660; Ichong vs.
Hernandez, 1,7995, May 31, 1957). This power embraces the whole system of public regulation
(U.S. vs. 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
vs. 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 station on governmental power, the conflict between this power of government and
the due process clause of the Constitution is oftentimes inevitable.

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 so, where the
ma corporation asserts that the ordinance was enacted to promote the common good and general welfare.

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 a of any evidence to offset the
presumption of validity that attaches to a 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 must, in the very nature of
things, be familiar with the necessities of their particular ... municipality and with all the facts and
lances 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. (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 Ebona v. Daet, [1950]85 Phil. 369.)

We have likewise considered the principles earlier stated in Case v. Board of Health supra :

... 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 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 society, that every holder of property, however absolute and 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. An 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.

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 an 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.

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 practise 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 home-owners.

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.