Consti 2 - Police Power (Case 1-21)

CONSTITUTIONAL LAW 2- NOTES
Alfreda C. Abis, MPA

ILLUSTRATIVE CASES 1-21
POLICE POWER
ILLUSTRATIVE CASES
POLICE POWER
Definition
1. Francis A. Churchill, et al. vs. James J. Rafferty G.R. No. L-10572 December 21, 1915
32 Phil 580
2. People of the Philippine Islands vs. Julio Pomar G.R. No. L-22008, November 3, 192446
Phil 126
3. Philippine Long-Distance Telephone Co. vs. City of Davao, etal. G.R. No. L-23080
October 30, 1965
4. Philippine Association of Service Exporters, Inc. vs. Franklin M. Drilon G.R. No. 81958
June 30, 1988
5. Jesus P. Morfe vs. Amelito R. Mutuc, et al. G.R. No. L-20387January 31, 1968
6. Pres. Common Good Govt. vs. Emmanuel G. Peña G.R. No. 77663 April 12, 1988
Scope/Characteristics
7. United States vs. Silvestre Pompeya G.R. No. L-10255 August 6, 1915
Public Health
8. Edwin William Case, et al vs. La Junta de Sanidad de Manila, et al. G.R. No. L-7595
February 4, 1913
9. YNOT VS. IAC, 148 SCRA 659
10. Zabal v. Duterte, G.R. No. 238467, February 12, 2019
Public morals
11. Ermita-Malate Hotel and Motel Operators Asso., Inc., et al. vs.City Mayor of Manila,
et al.G.R. No. L-24693July 31, 1967
12. CITY OF MANILA vs. LAGUIO, JR. G.R. No. 118127, April 12, 2005
13. CITY OF MANILA, VS. LAGUIO G.R. No. 118127, April 12, 2008
14. WHITE LIGHT CORPORATION VS. CITY OF MANILA G.R. No. 122846, January 20, 2009.
15. De La Cruz, et al. vs. Paras, et al.G.R. No. L-42571-72July 25, 1983
General Welfare
20%, DISCOUNT FOR SENIOR CITIZENS AND PWDs

16. Carlos Superdrug v. Department of Social Welfare and Development G.R. No.
166494, 29 June 2007, 526 SCRA 130
17. Manila Memorial Park, Inc., et al. Vs. Secretary of the Department of Social Welfare
and Development, et al. G.R. No. 175356. December 3, 2013
18. Southern Luzon Drug Corporation Vs. The Department of Social Welfare and
Development G.R. No. 199669. April 25, 2017
19. ESTOCONING VS. PEOPLE G.R. No. 231298, October 07, 2020
Regulation of vehicular traffic

20. Luque vs. Villegas, et al. G.R. No. L-22545November 28, 1969
21. PANTALEON VS. METRO MANILA DEVELOPMENT AUTHORITY, G.R. No. 194335,
November 17, 2020
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POLICE POWER
DEFINITION
Francis A. Churchill, et al. vs. James J. Rafferty G.R. No. L-10572 December 21, 1915 32 Phil
580
The judgment appealed from in this case perpetually restrains and prohibits the defendant
and his deputies from collecting and enforcing against the plaintiffs and their property the
annual tax mentioned and described in subsection (b) of section 100 of Act No. 2339, effective
July 1, 1914, and from destroying or removing any sign, signboard, or billboard, the property of
the plaintiffs, for the sole reason that such sign, signboard, or billboard is, or may be, offensive
to the sight; and decrees the cancellation of the bond given by the plaintiffs to secure the
issuance of the preliminary injunction granted soon after the commencement of this action.
This case divides itself into two parts and gives rise to two main questions; (1) that relating to
the power of the court to restrain by injunction the collection of the tax complained of, and
(2) that relating to the validity of those provisions of subsection (b) of section 100 of Act No.
2339, conferring power upon the Collector of Internal Revenue to remove any sign, signboard,
or billboard upon the ground that the same is offensive to the sight or is otherwise a nuisance.
The first question is one of the jurisdiction and is of vital importance to the Government. The
sections of Act No. 2339, which bear directly upon the subject, are 139 and 140. The first
expressly forbids the use of an injunction to stay the collection of any internal revenue tax; the
second provides a remedy for any wrong in connection with such taxes, and this remedy was
intended to be exclusive, thereby precluding the remedy by injunction, which remedy is
claimed to be constitutional. The two sections, then, involve the right of a dissatisfied taxpayers
to use an exceptional remedy to test the validity of any tax or to determine any other question
connected therewith, and the question whether the remedy by injunction is exceptional.
Preventive remedies of the courts are extraordinary and are not the usual remedies. The origin
and history of the writ of injunction show that it has always been regarded as an extraordinary,
preventive remedy, as distinguished from the common course of the law to redress evils after
they have been consummated. No injunction issues as of course, but is granted only upon the
oath of a party and when there is no adequate remedy at law. The Government does, by
section 139 and 140, take away the preventive remedy of injunction, if it ever existed, and
leaves the taxpayer, in a contest with it, the same ordinary remedial actions which prevail
between citizen and citizen. The Attorney-General, on behalf of the defendant, contends that
there is no provisions of the paramount law which prohibits such a course. While, on the other
hand, counsel for plaintiffs urge that the two sections are unconstitutional because (a) they
attempt to deprive aggrieved taxpayers of all substantial remedy for the protection of their
property, thereby, in effect, depriving them of their property without due process of law, and
(b) they attempt to diminish the jurisdiction of the courts, as conferred upon them by Acts Nos.
136 and 190, which jurisdiction was ratified and confirmed by the Act of Congress of July 1,
1902.
In the first place, it has been suggested that section 139 does not apply to the tax in question
because the section, in speaking of a "tax," means only legal taxes; and that an illegal tax (the
one complained of) is not a tax, and, therefore, does not fall within the inhibition of the section,
and may be restrained by injunction. There is no force in this suggestion. The inhibition applies
to all internal revenue taxes imposes, or authorized to be imposed, by Act No. 2339. (Snyder
vs. Marks, 109 U.S., 189.) And, furthermore, the mere fact that a tax is illegal, or that the law, by
virtue of which it is imposed, is unconstitutional, does not authorize a court of equity to restrain
its collection by injunction. There must be a further showing that there are special
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POLICE POWER
circumstances which bring the case under some well recognized head of equity
jurisprudence, such as that irreparable injury, multiplicity of suits, or a cloud upon title to real
estate will result, and also that there is, as we have indicated, no adequate remedy at law.
This is the settled law in the United States, even in the absence of statutory enactments such
as sections 139 and 140. (Hannewinkle vs. Mayor, etc., of Georgetown, 82 U.S., 547; Indiana
Mfg. Co. vs. Koehne, 188 U.S., 681; Ohio Tax cases, 232 U. S., 576, 587; Pittsburgh C. C. & St. L.
R. Co. vs. Board of Public Works, 172 U. S., 32; Shelton vs. Plat, 139 U.S., 591; State Railroad Tax
Cases, 92 U. S., 575.) Therefore, this branch of the case must be controlled by sections 139 and
140, unless the same be held unconstitutional, and consequently, null and void.
The right and power of judicial tribunals to declare whether enactments of the legislature
exceed the constitutional limitations and are invalid has always been considered a grave
responsibility, as well as a solemn duty. The courts invariably give the most careful
consideration to questions involving the interpretation and application of the Constitution, and
approach constitutional questions with great deliberation, exercising their power in this respect
with the greatest possible caution and even reluctance; and they should never declare a
statute void, unless its invalidity is, in their judgment, beyond reasonable doubt. To justify a
court in pronouncing a legislative act unconstitutional, or a provision of a state constitution to
be in contravention of the Constitution of the United States, the case must be so clear to be
free from doubt, and the conflict of the statute with the constitution must be irreconcilable,
because it is but a decent respect to the wisdom, the integrity, and the patriotism of the
legislative body by which any law is passed to presume in favor of its validity until the contrary
is shown beyond reasonable doubt. Therefore, in no doubtful case will the judiciary pronounce
a legislative act to be contrary to the constitution. To doubt the constitutionality of a law is to
resolve the doubt in favor of its validity. (6 Ruling Case Law, secs. 71, 72, and 73, and cases
cited therein.)
It is also the settled law in the United States that "due process of law" does not always require,
in respect to the Government, the same process that is required between citizens, though it
generally implies and includes regular allegations, opportunity to answer, and a trial
according to some well settled course of judicial proceedings. The case with which we are
dealing is in point. A citizen's property, both real and personal, may be taken, and usually is
taken, by the government in payment of its taxes without any judicial proceedings whatever.
In this country, as well as in the United States, the officer charged with the collection of taxes
is authorized to seize and sell the property of delinquent taxpayers without applying to the
courts for assistance, and the constitutionality of the law authorizing this procedure never has
been seriously questioned. (City of Philadelphia vs. [Diehl] The Collector, 5 Wall., 720; Nicholl
vs. U.S., 7 Wall., 122, and cases cited.) This must necessarily be the course, because it is upon
taxation that the Government chiefly relies to obtain the means to carry on its operations, and
it is of the utmost importance that the modes adopted to enforce the collection of the taxes
levied should be summary and interfered with as little as possible. No government could exist
if every litigious man were permitted to delay the collection of its taxes. This principle of public
policy must be constantly borne in mind in determining cases such as the one under
consideration.
With these principles to guide us, we will proceed to inquire whether there is any merit in the
two propositions insisted upon by counsel for the plaintiffs. Section 5 of the Philippine Bill
provides: "That no law shall be enacted in said Islands which shall deprive any person of life,
liberty, or property without due process of law, or deny to any person therein the equal
protection of the law."
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POLICE POWER
The origin and history of these provisions are well-known. They are found in substance in the
Constitution of the United States and in that of ever state in the Union.
Section 3224 of the Revised Statutes of the United States, effective since 1867, provides that:
"No suit for the purpose of restraining the assessment or collection of any tax shall be
maintained in any court."
Section 139, with which we have been dealing, reads: "No court shall have authority to grant
an injunction to restrain the collection of any internal-revenue tax."
A comparison of these two sections show that they are essentially the same. Both expressly
prohibit the restraining of taxes by injunction. If the Supreme Court of the United States has
clearly and definitely held that the provisions of section 3224 do not violate the "due process
of law" and "equal protection of the law" clauses in the Constitution, we would be going too
far to hold that section 139 violates those same provisions in the Philippine Bill. That the Supreme
Court of the United States has so held, cannot be doubted.
In Cheatham vs. United States (92 U.S., 85,89) which involved the validity of an income tax
levied by an act of Congress prior to the one in issue in the case of Pollock vs. Farmers' Loan &
Trust Co. (157 U.S., 429) the court, through Mr. Justice Miller, said: "If there existed in the courts,
state or National, any general power of impeding or controlling the collection of taxes, or
relieving the hardship incident to taxation, the very existence of the government might be
placed in the power of a hostile judiciary. (Dows vs. The City of Chicago, 11 Wall., 108.) While
a free course of remonstrance and appeal is allowed within the departments before the
money is finally exacted, the General Government has wisely made the payment of the tax
claimed, whether of customs or of internal revenue, a condition precedent to a resort to the
courts by the party against whom the tax is assessed. In the internal revenue branch it has
further prescribed that no such suit shall be brought until the remedy by appeal has been tried;
and, if brought after this, it must be within six months after the decision on the appeal. We
regard this as a condition on which alone the government consents to litigate the lawfulness
of the original tax. It is not a hard condition. Few governments have conceded such a right
on any condition. If the compliance with this condition requires the party aggrieved to pay
the money, he must do it."
Again, in State Railroad Tax Cases (92 U.S., 575, 613), the court said: "That there might be no
misunderstanding of the universality of this principle, it was expressly enacted, in 1867, that "no
suit for the purpose of restraining the assessment or collection of any tax shall be maintained
in any court." (Rev, Stat., sec. 3224.) And though this was intended to apply alone to taxes
levied by the United States, it shows the sense of Congress of the evils to be feared if courts of
justice could, in any case, interfere with the process of collecting taxes on which the
government depends for its continued existence. It is a wise policy. It is founded in the simple
philosophy derived from the experience of ages, that the payment of taxes has to be
enforced by summary and stringent means against a reluctant and often adverse sentiment;
and to do this successfully, other instrumentalities and other modes of procedure are
necessary, than those which belong to courts of justice."
And again, in Snyder vs. Marks (109 U.S., 189), the court said: "The remedy of a suit to recover
back the tax after it is paid is provided by statute, and a suit to restrain its collection is
forbidden. The remedy so given is exclusive, and no other remedy can be substituted for it.
Such has been the current of decisions in the Circuit Courts of the United States, and we are
satisfied it is a correct view of the law."itc-a1f
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POLICE POWER
In the consideration of the plaintiffs' second proposition, we will attempt to show (1) that the
Philippine courts never have had, since the American occupation, the power to restrain by
injunction the collection of any tax imposed by the Insular Government for its own purpose
and benefit, and (2) that assuming that our courts had or have such power, this power has not
been diminished or curtailed by sections 139 and 140.
We will first review briefly the former and present systems of taxation. Upon the American
occupation of the Philippine, there was found a fairly complete system of taxation. This system
was continued in force by the military authorities, with but few changes, until the Civil
Government assumed charge of the subject. The principal sources of revenue under the
Spanish regime were derived from customs receipts, the so-called industrial taxes, the urbana
taxes, the stamp tax, the personal cedula tax, and the sale of the public domain. The industrial
and urbana taxes constituted practically an income tax of some 5 per cent on the net income
of persons engaged in industrial and commercial pursuits and on the income of owners of
improved city property. The sale of stamped paper and adhesive stamp tax. The cedula tax
was a graduated tax, ranging from nothing up to P37.50. The revenue derived from the sale
of the public domain was not considered a tax. The American authorities at once abolished
the cedula tax, but later restored it in a modified form, charging for each cedula twenty
centavos, an amount which was supposed to be just sufficient to cover the cost of issuance.
The urbana tax was abolished by Act No. 223, effective September 6, 1901.
The "Municipal Code" (Act No. 82) and the Provincial Government Act (No. 83), both enacted
in 1901, authorize municipal councils and provincial boards to impose an ad valorem tax on
real estate. The Municipal Code did not apply to the city of Manila. This city was given a
special charter (Act No. 183), effective August 30, 1901; Under this charter the Municipal Board
of Manila is authorized and empowered to impose taxes upon real estate and, like municipal
councils, to license and regulate certain occupations. Customs matters were completely
reorganized by Act No. 355, effective at the port of Manila on February 7, 1902, and at other
ports in the Philippine Islands the day after the receipt of a certified copy of the Act. The
Internal Revenue Law of 1904 (Act No. 1189), repealed all existing laws, ordinances, etc.,
imposing taxes upon the persons, objects, or occupations taxed under that act, and all
industrial taxes and stamp taxes imposed under the Spanish regime were eliminated, but the
industrial tax was continued in force until January 1, 1905. This Internal Revenue Law did not
take away from municipal councils, provincial boards, and the Municipal Board of the city of
Manila the power to impose taxes upon real estate. This Act (No. 1189), with its amendments,
was repealed by Act No. 2339, an act "revising and consolidating the laws relative to internal
revenue."
Section 84 of Act No. 82 provides that "No court shall entertain any suit assailing the validity of
a tax assessed under this act until the taxpayer shall have paid, under protest, the taxes
assessed against him, . . . ."
This inhibition was inserted in section 17 of Act No. 83 and applies to taxes imposed by
provincial boards. The inhibition was not inserted in the Manila Charter until the passage of Act
No. 1793, effective October 12, 1907. Act No. 355 expressly makes the payment of the
exactions claimed a condition precedent to a resort to the courts by dissatisfied importers.
Section 52 of Act No. 1189 provides "That no courts shall have authority to grant an injunction
restraining the collection of any taxes imposed by virtue of the provisions of this Act, but the
remedy of the taxpayer who claims that he is unjustly assessed or taxed shall be by payment
under protest of the sum claimed from him by the Collector of Internal Revenue and by action
to recover back the sum claimed to have been illegally collected."
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POLICE POWER
Sections 139 and 140 of Act No. 2339 contain, as we have indicated, the same prohibition and
remedy. The result is that the courts have been expressly forbidden, in every act creating or
imposing taxes or imposts enacted by the legislative body of the Philippines since the
American occupation, to entertain any suit assailing the validity of any tax or impost thus
imposed until the tax shall have been paid under protest. The only taxes which have not been
brought within the express inhibition were those included in that part of the old Spanish system
which completely disappeared on or before January 1, 1905, and possibly the old customs
duties which disappeared in February, 1902.
Section 56 of the Organic Act (No. 136), effective June 16, 1901, provides that "Courts of First
Instance shall have original jurisdiction:
xxx xxx xxx
2. In all civil actions which involve the ... legality of any tax, impost, or assessment, . . . .
xxx xxx xxx
7. Said courts and their judges, or any of them, shall have power to issue writs of injunction,
mandamus, certiorari, prohibition, quo warranto, and habeas corpus in their respective
provinces and districts, in the manner provided in the Code of Civil Procedure.
The provisions of the Code of Civil Procedure (Act No. 190), effective October 1, 1901, which
deals with the subject of injunctions, are sections 162 to 172, inclusive. Injunctions, as here
defined, are of two kinds; preliminary and final. The former may be granted at any time after
the commencement of the action and before final judgment, and the latter at the termination
of the trial as the relief or part of the relief prayed for (sec. 162). Any judge of the Supreme
Court may grant a preliminary injunction in any action pending in that court or in any Court of
First Instance. A preliminary injunction may also be granted by a judge of the Court of First
Instance in actions pending in his district in which he has original jurisdiction (sec. 163). But such
injunctions may be granted only when the complaint shows facts entitling the plaintiff to the
relief demanded (sec. 166), and before a final or permanent injunction can be granted, it
must appear upon the trial of the action that the plaintiff is entitled to have commission or
continuance of the acts complained of perpetually restrained (sec. 171). These provisions
authorize the institution in Courts of First Instance of what are known as "injunction suits," the
sole object of which is to obtain the issuance of a final injunction. They also authorize the
granting of injunctions as aiders in ordinary civil actions. We have defined in Davesa vs. Arbes
(13 Phil. Rep., 273), an injunction to be "A "special remedy" adopted in that code (Act 190)
from American practice, and originally borrowed from English legal procedure, which was
there issued by the authority and under the seal of a court of equity, and limited, as in other
cases where equitable relief is sought, to those cases where there is no "plain, adequate, and
complete remedy at law,"which will not be granted while the rights between the parties are
undetermined, except in extraordinary cases where material and irreparable injury will be
done,"which cannot be compensated in damages . . .
By paragraph 2 of section 56 of Act No. 136, supra, and the provisions of the various
subsequent Acts heretofore mentioned, the Insular Government has consented to litigate with
aggrieved persons the validity of any original tax or impost imposed by it on condition that this
be done in ordinary civil actions after the taxes or exactions shall have been paid. But it is said
that paragraph 2 confers original jurisdiction upon Courts of First Instance to hear and
determine "all civil actions" which involve the validity of any tax, impost or assessment, and
that if the all-inclusive words "all" and "any" be given their natural and unrestricted meaning,
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POLICE POWER
no action wherein that question is involved can arise over which such courts do not have
jurisdiction. (Barrameda vs. Moir, 25 Phil. Rep., 44.) This is true. But the term "civil actions" had its
well defined meaning at the time the paragraph was enacted. The same legislative body
which enacted paragraph 2 on June 16, 1901, had, just a few months prior to that time,
defined the only kind of action in which the legality of any tax imposed by it might be assailed.
(Sec. 84, Act 82, enacted January 31, 1901, and sec. 17, Act No. 83, enacted February 6, 1901.)
That kind of action being payment of the tax under protest and an ordinary suit to recover
and no other, there can be no doubt that Courts of First Instance have jurisdiction over all such
actions. The subsequent legislation on the same subject shows clearly that the Commission, in
enacting paragraph 2, supra, did not intend to change or modify in any way section 84 of Act
No. 82 and section 17 of Act No. 83, but, on the contrary, it was intended that "civil actions,"
mentioned in said paragraph, should be understood to mean, in so far as testing the legality
of taxes were concerned, only those of the kind and character provided for in the two sections
above mentioned. It is also urged that the power to restrain by injunction the collection of
taxes or imposts is conferred upon Courts of First Instance by paragraph 7 of section 56, supra.
This paragraph does empower those courts to grant injunctions, both preliminary and final, in
any civil action pending in their districts, provided always, that the complaint shows facts
entitling the plaintiff to the relief demanded. Injunction suits, such as the one at bar, are "civil
actions," but of a special or extraordinary character. It cannot be said that the Commission
intended to give a broader or different meaning to the word "action," used in Chapter 9 of
the Code of Civil Procedure in connection with injunctions, than it gave to the same word
found in paragraph 2 of section 56 of the Organic Act. The Insular Government, in exercising
the power conferred upon it by the Congress of the United States, has declared that the
citizens and residents of this country shall pay certain specified taxes and imposts. The power
to tax necessarily carries with it the power to collect the taxes. This being true, the weight of
authority supports the proposition that the Government may fix the conditions upon which it
will consent to litigate the validity of its original taxes. (Tennessee vs. Sneed, 96 U.S., 69.)
We must, therefore, conclude that paragraph 2 and 7 of section 56 of Act No. 136, construed
in the light of the prior and subsequent legislation to which we have referred, and the
legislative and judicial history of the same subject in the United States with which the
Commission was familiar, do not empower Courts of firs Instance to interfere by injunction with
the collection of the taxes in question in this case.1awphil.net
If we are in error as to the scope of paragraph 2 and 7, supra, and the Commission did intend
to confer the power upon the courts to restrain the collection of taxes, it does not necessarily
follow that this power or jurisdiction has been taken away by section 139 of Act No. 2339, for
the reason that all agree that an injunction will not issue in any case if there is an adequate
remedy at law. The very nature of the writ itself prevents its issuance under such circumstances.
Legislation forbidding the issuing of injunctions in such cases is unnecessary. So the only
question to be here determined is whether the remedy provided for in section 140 of Act No.
2339 is adequate. If it is, the writs which form the basis of this appeal should not have been
issued. If this is the correct view, the authority to issue injunctions will not have been taken away
by section 139, but rendered inoperative only by reason of an adequate remedy having been
made available.
The legislative body of the Philippine Islands has declared from the beginning (Act No. 82) that
payment under protest and suit to recover is an adequate remedy to test the legality of any
tax or impost, and that this remedy is exclusive. Can we say that the remedy is not adequate
or that it is not exclusive, or both? The plaintiffs in the case at bar are the first, in so far as we
are aware, to question either the adequacy or exclusiveness of this remedy. We will refer to a
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POLICE POWER
few cases in the United States where statutes similar to sections 139 and 140 have been
construed and applied.
In May, 1874, one Bloomstein presented a petition to the circuit court sitting in Nashville,
Tennessee, stating that his real and personal property had been assessed for state taxes in the
year 1872 to the amount of $132.60; that he tendered to the collector this amount in "funds
receivable by law for such purposes;" and that the collector refused to receive the same. He
prayed for an alternative writ of mandamus to compel the collector to receive the bills in
payment for such taxes, or to show cause to the contrary. To this petition the collector, in his
answer, set up the defense that the petitioner's suit was expressly prohibited by the Act of the
General Assembly of the State of Tennessee, passed in 1873. The petition was dismissed and
the relief prayed for refused. An appeal to the supreme court of the State resulted in the
affirmance of the judgment of the lower court. The case was then carried to the Supreme
Court of the United States (Tennessee vs. Sneed, 96 U. S., 69), where the judgment was again
affirmed.
The two sections of the Act of [March 21,] 1873, drawn in question in that cases, read as follows:
1. That in all cases in which an officer, charged by law with the collection of revenue due the
State, shall institute any proceeding, or take any steps for the collection of the same, alleged
or claimed to be due by said officer from any citizen, the party against whom the proceeding
or step is taken shall, if he conceives the same to be unjust or illegal, or against any statute or
clause of the Constitution of the State, pay the same under protest; and, upon his making said
payment, the officer or collector shall pay such revenue into the State Treasury, giving notice
at the time of payment to the Comptroller that the same was paid under protest; and the
party paying said revenue may, at any time within thirty days after making said payment, and
not longer thereafter, sue the said officer having collected said sum, for the recovery thereof.
And the same may be tried in any court having the jurisdiction of the amount and parties;
and, if it be determined that the same was wrongfully collected, as not being due from said
party to the State, for any reason going to the merits of the same, then the court trying the
case may certify of record that the same was wrongfully paid and ought to be refunded; and
thereupon the Comptroller shall issue his warrant for the same, which shall be paid in
preference to other claims on the Treasury.
2. That there shall be no other remedy, in any case of the collection of revenue, or attempt to
collect revenue illegally, or attempt to collect revenue in funds only receivable by said officer
under the law, the same being other or different funds than such as the tax payer may tender,
or claim the right to pay, than that above provided; and no writ for the prevention of the
collection of any revenue claimed, or to hinder or delay the collection of the same, shall in
anywise issue, either injunction, supersedeas, prohibition, or any other writ or process whatever;
but in all cases in which, for any reason, any person shall claim that the tax so collected was
wrongfully or illegally collected, the remedy for said party shall be as above provided, and in
no other manner."
In discussing the adequacy of the remedy provided by the Tennessee Legislature, as above
set forth, the Supreme Court of the United States, in the case just cited, said: "This remedy is
simple and effective. A suit at law to recover money unlawfully exacted is as speedy, as easily
tried, and less complicated than a proceeding by mandamus. ... In revenue cases, whether
arising upon its (United States) Internal Revenue Laws or those providing for the collection of
duties upon foreign imports, it (United States) adopts the rule prescribed by the State of
Tennessee. It requires the contestant to pay the amount as fixed by the Government, and
gives him power to sue the collector, and in such suit to test the legality of the tax. There is
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POLICE POWER
nothing illegal or even harsh in this. It is a wise and reasonable precaution for the security of
the Government."
Thomas C. Platt commenced an action in the Circuit Court of the United States for the Eastern
District of Tennessee to restrain the collection of a license tax from the company which he
represented. The defense was that sections 1 and 2 of the Act of 1873, supra, prohibited the
bringing of that suit. This case also reached the Supreme Court of the United States. (Shelton
vs. Platt, 139 U. 591.) In speaking of the inhibitory provisions of sections 1 and 2 of the Act of
1873, the court said: "This Act has been sanctioned and applied by the Courts of Tennessee.
(Nashville vs. Smith, 86 Tenn., 213; Louisville & N. R. Co. vs. State, 8 Heisk., 663, 804.) It is, as
counsel observe, similar to the Act of Congress forbidding suit for the purpose of restraining the
assessment or collection of taxes under the Internal Revenue Laws, in respect to which this
court held that the remedy by suit to recover back the tax after payment, provided for by the
Statute, was exclusive. (Snyder vs. Marks, of this character has been called for by the
embarrassments resulting from the improvident employment of the writ of injunction in
arresting the collection of the public revenue; and, even in its absence, the strong arm of the
court of chancery ought not to be interposed in that direction except where resort to that
court is grounded upon the settled principles which govern its jurisdiction."
In Louisville & N.R. Co. vs. State (8 Heisk. [64 Tenn.], 663, 804), cited by the Supreme Court of
the United States in Shelton vs. Platt, supra, the court said: "It was urged that this statute
(sections 1 and 2 of the Act of 1873, supra) is unconstitutional and void, as it deprives the citizen
of the remedy by certiorari, guaranteed by the organic law."
By the 10th section of the sixth article of the Constitution, [Tennessee] it is provided that: "The
judges or justices of inferior courts of law and equity shall have power in all civil cases to issue
writs of certiorari, to remove any cause, or the transcript of the record thereof, from any inferior
jurisdiction into such court of law, on sufficient cause, supported by oath or affirmation."
The court held the act valid as not being in conflict with these provisions of the State
constitution.
In Eddy vs. The Township of Lee (73 Mich., 123), the complainants sought to enjoin the
collection of certain taxes for the year 1886. The defendants, in support of their demurrer,
insisted that the remedy by injunction had been taken away by section 107 of the Act of 1885,
which section reads as follows: "No injunction shall issue to stay proceedings for the assessment
or collection of taxes under this Act."
It was claimed by the complainants that the above quoted provisions of the Act of 1885 were
unconstitutional and void as being in conflict with article 6, sec. 8, of the Constitution, which
provides that: "The circuit courts shall have original jurisdiction in all matters, civil and criminal,
not excepted in this Constitution, and not prohibited by law. ... They shall also have power to
issue writs of habeas corpus, mandamus, injunction, quo warranto, certiorari, and other writs
necessary to carry into effect their orders, judgments, and decrees."
Mr. Justice Champlin, speaking for the court, said: "I have no doubt that the Legislature has
the constitutional authority, where it has provided a plain, adequate, and complete remedy
at law to recover back taxes illegally assessed and collected, to take away the remedy by
injunction to restrain their collection."
Section 9 of the Philippine Bill reads in part as follows: "That the Supreme Court and the Courts
of First Instance of the Philippine Islands shall possess and exercise jurisdiction as heretofore
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provided and such additional jurisdiction as shall hereafter be prescribed by the Government
of said Islands, subject to the power of said Government to change the practice and method
of procedure."
It will be seen that this section has not taken away from the Philippine Government the power
to change the practice and method of procedure. If sections 139 and 140, considered
together, and this must always be done, are nothing more than a mode of procedure, then it
would seem that the Legislature did not exceed its constitutional authority in enacting them.
Conceding for the moment that the duly authorized procedure for the determination of the
validity of any tax, impost, or assessment was by injunction suits and that this method was
available to aggrieved taxpayers prior to the passage of Act No. 2339, may the Legislature
change this method of procedure? That the Legislature has the power to do this, there can
be no doubt, provided some other adequate remedy is substituted in lieu thereof. In speaking
of the modes of enforcing rights created by contracts, the Supreme Court of the United States,
in Tennessee vs. Sneed, supra, said: "The rule seems to be that in modes of proceedings and
of forms to enforce the contract the Legislature has the control, and may enlarge, limit or alter
them, provided that it does not deny a remedy, or so embarrass it with conditions and
restrictions as seriously to impair the value of the right."
In that case the petitioner urged that the Acts of 1873 were laws impairing the obligation of
the contract contained in the charter of the Bank of Tennessee, which contract was entered
into with the State in 1838. It was claimed that this was done by placing such impediments
and obstructions in the way of its enforcement, thereby so impairing the remedies as
practically to render the obligation of no value. In disposing of this contention, the court said:
"If we assume that prior to 1873 the relator had authority to prosecute his claim against the
State by mandamus, and that by the statutes of that year the further use of that form was
prohibited to him, the question remains. whether an effectual remedy was left to him or
provided for him. We think the regulation of the statute gave him an abundant means of
enforcing such right as he possessed. It provided that he might pay his claim to the collector
under protest, giving notice thereof to the Comptroller of the Treasury; that at any time within
thirty days thereafter he might sue the officer making the collection; that the case should be
tried by any court having jurisdiction and, if found in favor of the plaintiff on the merits, the
court should certify that the same was wrongfully paid and ought to be refunded and the
Comptroller should thereupon issue his warrant therefor, which should be paid in preference
to other claim on the Treasury."
But great stress is laid upon the fact that the plaintiffs in the case under consideration are
unable to pay the taxes assessed against them and that if the law is enforced, they will be
compelled to suspend business. This point may be best answered by quoting from the case of
Youngblood vs. Sexton (32 Mich., 406), wherein Judge Cooley, speaking for the court, said:
"But if this consideration is sufficient to justify the transfer of a controversy from a court of law
to a court of equity, then every controversy where money is demanded may be made the
subject of equitable cognizance. To enforce against a dealer a promissory note may in some
cases as effectually break up his business as to collect from him a tax of equal amount. This is
not what is known to the law as irreparable injury. The courts have never recognized the
consequences of the mere enforcement of a money demand as falling within that category."
Certain specified sections of Act No. 2339 were amended by Act No. 2432, enacted
December 23, 1914, effective January 1, 1915, by imposing increased and additional taxes.
Act No. 2432 was amended, were ratified by the Congress of the United States on March 4,
1915. The opposition manifested against the taxes imposed by Acts Nos. 2339 and 2432 is a
matter of local history. A great many business men thought the taxes thus imposed were too
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POLICE POWER
high. If the collection of the new taxes on signs, signboards, and billboards may be restrained,
we see no well-founded reason why injunctions cannot be granted restraining the collection
of all or at least a number of the other increased taxes. The fact that this may be done, shows
the wisdom of the Legislature in denying the use of the writ of injunction to restrain the
collection of any tax imposed by the Acts. When this was done, an equitable remedy was
made available to all dissatisfied taxpayers.
The question now arises whether, the case being one of which the court below had no
jurisdiction, this court, on appeal, shall proceed to express an opinion upon the validity of
provisions of subsection (b) of section 100 of Act No. 2339, imposing the taxes complained of.
As a general rule, an opinion on the merits of a controversy ought to be declined when the
court is powerless to give the relief demanded. But it is claimed that this case is, in many
particulars, exceptional. It is true that it has been argued on the merits, and there is no reason
for any suggestion or suspicion that it is not a bona fide controversy. The legal points involved
in the merits have been presented with force, clearness, and great ability by the learned
counsel of both sides. If the law assailed were still in force, we would feel that an opinion on its
validity would be justifiable, but, as the amendment became effective on January 1, 1915, we
think it advisable to proceed no further with this branch of the case.
The next question arises in connection with the supplementary complaint, the object of which
is to enjoin the Collector of Internal Revenue from removing certain billboards, the property of
the plaintiffs located upon private lands in the Province of Rizal. The plaintiffs allege that the
billboards here in question "in no sense constitute a nuisance and are not deleterious to the
health, morals, or general welfare of the community, or of any persons." The defendant denies
these allegations in his answer and claims that after due investigation made upon the
complaints of the British and German Consuls, he "decided that the billboard complained of
was and still is offensive to the sight, and is otherwise a nuisance." The plaintiffs proved by Mr.
Churchill that the "billboards were quite a distance from the road and that they were strongly
built, not dangerous to the safety of the people, and contained no advertising matter which
is filthy, indecent, or deleterious to the morals of the community." The defendant presented no
testimony upon this point. In the agreed statement of facts submitted by the parties, the
plaintiffs "admit that the billboards mentioned were and still are offensive to the sight."
The pertinent provisions of subsection (b) of section 100 of Act No. 2339 read: "If after due
investigation the Collector of Internal Revenue shall decide that any sign, signboard, or
billboard displayed or exposed to public view is offensive to the sight or is otherwise a nuisance,
he may by summary order direct the removal of such sign, signboard, or billboard, and if same
is not removed within ten days after he has issued such order he my himself cause its removal,
and the sign, signboard, or billboard shall thereupon be forfeited to the Government, and the
owner thereof charged with the expenses of the removal so effected. When the sign,
signboard, or billboard ordered to be removed as herein provided shall not comply with the
provisions of the general regulations of the Collector of Internal Revenue, no rebate or refund
shall be allowed for any portion of a year for which the tax may have been paid. Otherwise,
the Collector of Internal Revenue may in his discretion make a proportionate refund of the tax
for the portion of the year remaining for which the taxes were paid. An appeal may be had
from the order of the Collector of Internal Revenue to the Secretary of Finance and Justice
whose decision thereon shall be final."
The Attorney-General, on behalf of the defendant, says: "The question which the case presents
under this head for determination, resolves itself into this inquiry: Is the suppression of advertising
signs displayed or exposed to public view, which are admittedly offensive to the sight,
conducive to the public interest?"
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POLICE POWER
And cunsel for the plaintiffs states the question thus: "We contend that that portion of section
100 of Act No. 2339, empowering the Collector of Internal Revenue to remove billboards as
nuisances, if objectionable to the sight, is unconstitutional, as constituting a deprivation of
property without due process of law."
From the position taken by counsel for both sides, it is clear that our inquiry is limited to the
question whether the enactment assailed by the plaintiffs was a legitimate exercise of the
police power of the Government; for all property is held subject to that power.
As a consequence of the foregoing, all discussion and authorities cited, which go to the power
of the state to authorize administrative officers to find, as a fact, that legitimate trades, callings,
and businesses are, under certain circumstances, statutory nuisances, and whether the
procedure prescribed for this purpose is due process of law, are foreign to the issue here
presented.
There can be no doubt that the exercise of the police power of the Philippine Government
belongs to the Legislature and that this power is limited only by the Acts of Congress and those
fundamentals principles which lie at the foundation of all republican forms of government. An
Act of the Legislature which is obviously and undoubtedly foreign to any of the purposes of
the police power and interferes with the ordinary enjoyment of property would, without doubt,
be held to be invalid. But where the Act is reasonably within a proper consideration of and
care for the public health, safety, or comfort, it should not be disturbed by the courts. The
courts cannot substitute their own views for what is proper in the premises for those of the
Legislature. In Munn vs. Illinois (94 U.S., 113), the United States Supreme Court states the rule
thus: "If no state of circumstances could exist to justify such statute, then we may declare this
one void because in excess of the legislative power of this state; but if it could, we must
presume it did. Of the propriety of legislative interference, within the scope of the legislative
power, a legislature is the exclusive judge."
This rule very fully discussed and declared in Powell vs. Pennsylvania (127 U.S., 678) — "oleo-
margarine" case. (See also Crowley vs. Christensen, 137 U.S., 86, 87; Camfield vs. U.S., 167 U.S.,
518.) While the state may interfere wherever the public interests demand it, and in this
particular a large discretion is necessarily vested in the legislature to determine, not only what
the interest of the public require, but what measures are necessary for the protection of such
interests; yet, its determination in these matters is not final or conclusive, but is subject to the
supervision of the courts. (Lawton vs. Steele, 152 U.S., 133.) Can it be said judicially that signs,
signboards, and billboards, which are admittedly offensive to the sight, are not with the
category of things which interfere with the public safety, welfare, and comfort, and therefore
beyond the reach of the police power of the Philippine Government?
The numerous attempts which have been made to limit by definition the scope of the police
power are only interesting as illustrating its rapid extension within comparatively recent years
to points heretofore deemed entirely within the field of private liberty and property rights.
Blackstone's definition of the police power was as follows: "The due regulation and domestic
order of the kingdom, whereby the individuals of the state, like members of a well governed
family, are bound to conform their general behavior to the rules of propriety, good
neigborhood, and good manners, to be decent, industrious, and inoffensive in their respective
stations." (Commentaries, vol. 4, p. 162.)
Chanceller Kent considered the police power the authority of the state "to regulate
unwholesome trades, slaughter houses, operations offensive to the senses." Chief Justice Shaw
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POLICE POWER
of Massachusetts defined it as follows: "The power vested in the legislature by the constitution
to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and
ordinances, either with penalties or without, not repugnant to the constitution, as they shall
judge to be for the good and welfare of the commonwealth, and of the subjects of the same."
(Com. vs. Alger, 7 Cush., 53.)
In the case of Butchers' Union Slaughter-house, etc. Co. vs. Crescent City Live Stock Landing,
etc. Co. (111 U.S., 746), it was suggested that the public health and public morals are matters
of legislative concern of which the legislature cannot divest itself. (See State vs. Mountain
Timber Co. [1913], 75 Wash., 581, where these definitions are collated.)
In Champer vs. Greencastle (138 Ind., 339), it was said: "The police power of the State, so far,
has not received a full and complete definition. It may be said, however, to be the right of the
State, or state functionary, to prescribe regulations for the good order, peace, health,
protection, comfort, convenience and morals of the community, which do not ... violate any
of the provisions of the organic law." (Quoted with approval in Hopkins vs. Richmond [Va.,
1915], 86 S.E., 139.)
In Com. vs. Plymouth Coal Co. ([1911] 232 Pa., 141), it was said: "The police power of the state
is difficult of definition, but it has been held by the courts to be the right to prescribe regulations
for the good order, peace, health, protection, comfort, convenience and morals of the
community, which does not encroach on a like power vested in congress or state legislatures
by the federal constitution, or does not violate the provisions of the organic law; and it has
been expressly held that the fourteenth amendment to the federal constitution was not
designed to interfere with the exercise of that power by the state."
In People vs. Brazee ([Mich., 1914], 149 N.W., 1053), it was said: "It [the police power] has for its
object the improvement of social and economic conditioned affecting the community at
large and collectively with a view to bring about "he greatest good of the greatest
number."Courts have consistently and wisely declined to set any fixed limitations upon subjects
calling for the exercise of this power. It is elastic and is exercised from time to time as varying
social conditions demand correction."
In 8 Cyc., 863, it is said: "Police power is the name given to that inherent sovereignty which it is
the right and duty of the government or its agents to exercise whenever public policy, in a
broad sense, demands, for the benefit of society at large, regulations to guard its morals,
safety, health, order or to insure in any respect such economic conditions as an advancing
civilization of a high complex character requires." (As quoted with approval in Stettler vs.
O'Hara [1914], 69 Ore, 519.)
Finally, the Supreme Court of the United States has said in Noble State Bank vs. Haskell (219 U.S.
[1911], 575: "It may be said in a general way that the police power extends to all the great
public needs. It may be put forth in aid of what is sanctioned by usage, or held by the
prevailing morality or strong and preponderant opinion to be greatly and immediately
necessary to the public welfare."
This statement, recent as it is, has been quoted with approval by several courts. (Cunningham
vs. Northwestern Imp. Co. [1911], 44 Mont., 180; State vs. Mountain Timber Co. [1913], 75 Wash.,
581; McDavid vs. Bank of Bay Minette [Ala., 1915], 69 Sou., 452; Hopkins vs. City of Richmond
[Va., 1915], 86 S.E., 139; State vs. Philipps [Miss. 1915], 67 Sou., 651.)
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POLICE POWER
It was said in Com. vs. Alger (7 Cush., 53, 85), per Shaw, C.J., that: "It is much easier to perceive
and realize the existence and sources of this police power than to mark its boundaries, or to
prescribe limits to its exercise." In Stone vs. Mississippi (101 U.S., 814), it was said: "Many attempts
have been made in this court and elsewhere to define the police power, but never with entire
success. It is always easier to determine whether a particular case comes within the general
scope of the power, than to give an abstract definition of the power itself, which will be in all
respects accurate."
Other courts have held the same vow of efforts to evolve a satisfactory definition of the police
power. Manifestly, definitions which fail to anticipate cases properly within the scope of the
police power are deficient. It is necessary, therefore, to confine our discussion to the principle
involved and determine whether the cases as they come up are within that principle. The
basic idea of civil polity in the United States is that government should interfere with individual
effort only to the extent necessary to preserve a healthy social and economic condition of the
country. State interference with the use of private property may be exercised in three ways.
First, through the power of taxation, second, through the power of eminent domain, and third,
through the police power. Buy the first method it is assumed that the individual receives the
equivalent of the tax in the form of protection and benefit he receives from the government
as such. By the second method he receives the market value of the property taken from him.
But under the third method the benefits he derived are only such as may arise from the
maintenance of a healthy economic standard of society and is often referred to as damnum
absque injuria. (Com. vs. Plymouth Coal Co. 232 Pa., 141; Bemis vs. Guirl Drainage Co., 182
Ind., 36.) There was a time when state interference with the use of private property under the
guise of the police power was practically confined to the suppression of common nuisances.
At the present day, however, industry is organized along lines which make it possible for large
combinations of capital to profit at the expense of the socio-economic progress of the nation
by controlling prices and dictating to industrial workers wages and conditions of labor. Not
only this but the universal use of mechanical contrivances by producers and common carriers
has enormously increased the toll of human life and limb in the production and distribution of
consumption goods. To the extent that these businesses affect not only the public health,
safety, and morals, but also the general social and economic life of the nation, it has been
and will continue to be necessary for the state to interfere by regulation. By so doing, it is true
that the enjoyment of private property is interfered with in no small degree and in ways that
would have been considered entirely unnecessary in years gone by. The regulation of rates
charged by common carriers, for instance, or the limitation of hours of work in industrial
establishments have only a very indirect bearing upon the public health, safety, and morals,
but do bear directly upon social and economic conditions. To permit each individual unit of
society to feel that his industry will bring a fair return; to see that his work shall be done under
conditions that will not either immediately or eventually ruin his health; to prevent the artificial
inflation of prices of the things which are necessary for his physical well being are matters
which the individual is no longer capable of attending to himself. It is within the province of
the police power to render assistance to the people to the extent that may be necessary to
safeguard these rights. Hence, laws providing for the regulation of wages and hours of labor
of coal miners (Rail & River Coal Co. vs. Taylor, 234 U.S., 224); requiring payment of employees
of railroads and other industrial concerns in legal tender and requiring salaries to be paid
semimonthly (Erie R.R. Co. vs. Williams, 233 U.S., 685); providing a maximum number of hours of
labor for women (Miller vs. Wilson, U.S. Sup. Ct. [Feb. 23, 1915], Adv. Opns., p. 342); prohibiting
child labor (Sturges & Burn vs. Beauchamp, 231 U.S., 320); restricting the hours of labor in public
laundries (In re Wong Wing, 167 Cal., 109); limiting hours of labor in industrial establishment
generally (State vs. Bunting, 71 Ore., 259); Sunday Closing Laws (State vs. Nicholls [Ore., 1915],
151 Pac., 473; People vs. C. Klinck Packing Co. [N.Y., 1915], 108 N. E., 278; Hiller vs. State [Md.,
1914], 92 Atl., 842; State vs. Penny, 42 Mont., 118; City of Springfield vs. Richter, 257 Ill., 578, 580;
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POLICE POWER
State vs. Hondros [S.C., 1915], 84 S.E., 781); have all been upheld as a valid exercise of the
police power. Again, workmen's compensation laws have been quite generally upheld. These
statutes discard the common law theory that employers are not liable for industrial accidents
and make them responsible for all accidents resulting from trade risks, it being considered that
such accidents are a legitimate charge against production and that the employer by
controlling the prices of his product may shift the burden to the community. Laws requiring
state banks to join in establishing a depositors' guarantee fund have also been upheld by the
Federal Supreme Court in Noble State Bank vs. Haskell (219 U. S., 104), and Assaria State Bank
vs. Dolley (219 U.S., 121).
Offensive noises and smells have been for a long time considered susceptible of suppression
in thickly populated districts. Barring livery stables from such locations was approved of in
Reinman vs. Little Rock (U.S. Sup. Ct. [Apr. 5, 1915], U.S. Adv. Opns., p. 511). And a municipal
ordinance was recently upheld (People vs. Ericsson, 263 Ill., 368), which prohibited the location
of garages within two hundred feet of any hospital, church, or school, or in any block used
exclusively for residential purposes, unless the consent of the majority of the property owners
be obtained. Such statutes as these are usually upheld on the theory of safeguarding the
public health. But we apprehend that in point of fact they have little bearing upon the health
of the normal person, but a great deal to do with his physical comfort and convenience and
not a little to do with his peace of mind. Without entering into the realm of psychology, we
think it quite demonstrable that sight is as valuable to a human being as any of his other senses,
and that the proper ministration to this sense conduces as much to his contentment as the
care bestowed upon the senses of hearing or smell, and probably as much as both together.
Objects may be offensive to the eye as well as to the nose or ear. Man's esthetic feelings are
constantly being appealed to through his sense of sight. Large investments have been made
in theaters and other forms of amusement, in paintings and spectacular displays, the success
of which depends in great part upon the appeal made through the sense of sight. Moving
picture shows could not possible without the sense of sight. Governments have spent millions
on parks and boulevards and other forms of civic beauty, the first aim of which is to appeal to
the sense of sight. Why, then, should the Government not interpose to protect from
annoyance this most valuable of man's senses as readily as to protect him from offensive noises
and smells?
The advertising industry is a legitimate one. It is at the same time a cause and an effect of the
great industrial age through which the world is now passing. Millions are spent each year in this
manner to guide the consumer to the articles which he needs. The sense of sight is the primary
essential to advertising success. Billboard advertising, as it is now conducted, is a
comparatively recent form of advertising. It is conducted out of doors and along the arteries
of travel, and compels attention by the strategic locations of the boards, which obstruct the
range of vision at points where travelers are most likely to direct their eyes. Beautiful
landscapes are marred or may not be seen at all by the traveler because of the gaudy array
of posters announcing a particular kind of breakfast food, or underwear, the coming of a
circus, an incomparable soap, nostrums or medicines for the curing of all the ills to which the
flesh is heir, etc. It is quite natural for people to protest against this indiscriminate and wholesale
use of the landscape by advertisers and the intrusion of tradesmen upon their hours of leisure
and relaxation from work. Outdoor life must lose much of its charm and pleasure if this form of
advertising is permitted to continue unhampered until it converts the streets and highways into
veritable canyons through which the world must travel in going to work or in search of outdoor
pleasure.
The success of billboard advertising depends not so much upon the use of private property as
it does upon the use of the channels of travel used by the general public. Suppose that the
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POLICE POWER
owner of private property, who so vigorously objects to the restriction of this form of advertising,
should require the advertiser to paste his posters upon the billboards so that they would face
the interior of the property instead of the exterior. Billboard advertising would die a natural
death if this were done, and its real dependency not upon the unrestricted use of private
property but upon the unrestricted use of the public highways is at once apparent. Ostensibly
located on private property, the real and sole value of the billboard is its proximity to the public
thoroughfares. Hence, we conceive that the regulation of billboards and their restriction is not
so much a regulation of private property as it is a regulation of the use of the streets and other
public thoroughfares.
We would not be understood as saying that billboard advertising is not a legitimate business
any more than we would say that a livery stable or an automobile garage is not. Even a
billboard is more sightly than piles of rubbish or an open sewer. But all these businesses are
offensive to the senses under certain conditions.
It has been urged against ministering to the sense of sight that tastes are so diversified that
there is no safe standard of legislation in this direction. We answer in the language of the
Supreme Court in Noble State Bank vs. Haskell (219 U.S., 104), and which has already been
adopted by several state courts (see supra), that "the prevailing morality or strong and
preponderating opinion" demands such legislation. The agitation against the unrestrained
development of the billboard business has produced results in nearly all the countries of
Europe. (Ency. Britannica, vol. 1, pp. 237-240.) Many drastic ordinances and state laws have
been passed in the United States seeking to make the business amenable to regulation. But
their regulation in the United states is hampered by what we conceive an unwarranted
restriction upon the scope of the police power by the courts. If the police power may be
exercised to encourage a healthy social and economic condition in the country, and if the
comfort and convenience of the people are included within those subjects, everything which
encroaches upon such territory is amenable to the police power. A source of annoyance and
irritation to the public does not minister to the comfort and convenience of the public. And
we are of the opinion that the prevailing sentiment is manifestly against the erection of
billboards which are offensive to the sight.
We do not consider that we are in conflict with the decision in Eubank vs. Richmond (226 U.S.,
137), where a municipal ordinance establishing a building line to which property owners must
conform was held unconstitutional. As we have pointed out, billboard advertising is not so
much a use of private property as it is a use of the public thoroughfares. It derives its value to
the power solely because the posters are exposed to the public gaze. It may well be that the
state may not require private property owners to conform to a building line, but may prescribe
the conditions under which they shall make use of the adjoining streets and highways. Nor is
the law in question to be held invalid as denying equal protection of the laws. In Keokee Coke
Co. vs. Taylor (234 U.S., 224), it was said: "It is more pressed that the act discriminates
unconstitutionally against certain classes. But while there are differences of opinion as to the
degree and kind of discrimination permitted by the Fourteenth Amendment, it is established
by repeated decisions that a statute aimed at what is deemed an evil, and hitting it
presumably where experience shows it to be most felt, is not to be upset by thinking up and
enumerating other instances to which it might have been applied equally well, so far as the
court can see. That is for the legislature to judge unless the case is very clear."
But we have not overlooked the fact that we are not in harmony with the highest courts of a
number of the states in the American Union upon this point. Those courts being of the opinion
that statutes which are prompted and inspired by esthetic considerations merely, having for
their sole purpose the promotion and gratification of the esthetic sense, and not the promotion
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POLICE POWER
or protection of the public safety, the public peace and good order of society, must be held
invalid and contrary to constitutional provisions holding inviolate the rights of private property.
Or, in other words, the police power cannot interfere with private property rights for purely
esthetic purposes. The courts, taking this view, rest their decisions upon the proposition that the
esthetic sense is disassociated entirely from any relation to the public health, morals, comfort,
or general welfare and is, therefore, beyond the police power of the state. But we are of the
opinion, as above indicated, that unsightly advertisements or signs, signboards, or billboards
which are offensive to the sight, are not disassociated from the general welfare of the public.
This is not establishing a new principle, but carrying a well recognized principle to further
application. (Fruend on Police Power, p. 166.)
For the foregoing reasons the judgment appealed from is hereby reversed and the action
dismissed upon the merits, with costs. So ordered.
Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.
DECISION ON THE MOTION FOR A REHEARING, JANUARY 24, 1916.
TRENT, J.:
Counsel for the plaintiffs call our attention to the case of Ex parte Young (209 U.S., 123); and
say that they are of the opinion that this case "is the absolutely determinative of the question
of jurisdiction in injunctions of this kind." We did not refer to this case in our former opinion
because we were satisfied that the reasoning of the case is not applicable to section 100 (b),
139 and 140 of Act No. 2339. The principles announced in the Young case are stated as follows:
"It may therefore be said that when the penalties for disobedience are by fines so enormous
and imprisonment so severe as to intimidate the company and its officers from resorting to the
courts to test the validity of the legislation, the result is the same as if the law in terms prohibited
the company from seeking judicial construction of laws which deeply affect its rights.
It is urged that there is no principle upon which to base the claim that a person is entitled to
disobey a statute at least once, for the purpose of testing its validity without subjecting himself
to the penalties for disobedience provided by the statute in case it is valid. This is not an
accurate statement of the case. Ordinarily a law creating offenses in the nature of
misdemeanors or felonies relates to a subject over which the jurisdiction of the legislature is
complete in any event. In these case, however, of the establishment of certain rates without
any hearing, the validity of such rates necessarily depends upon whether they are high
enough to permit at least some return upon the investment (how much it is not now necessary
to state), and an inquiry as to that fact is a proper subject of judicial investigation. If it turns out
that the rates are too low for that purpose, then they are illegal. Now, to impose upon a party
interested the burden of obtaining a judicial decision of such a question (no prior hearing
having ever been given) only upon the condition that, if unsuccessful, he must suffer
imprisonment and pay fines as provided in these acts, is, in effect, to close up all approaches
to the courts, and thus prevent any hearing upon the question whether the rates as provided
by the acts are not too low, and therefore invalid. The distinction is obvious between a case
where the validity of the acts depends upon the existence of a fact which can be determined
only after investigation of a very complicated and technical character, and the ordinary case
of a statute upon a subject requiring no such investigation and over which the jurisdiction of
the legislature is complete in any event.
An examination of the sections of our Internal Revenue Law and of the circumstances under
which and the purposes for which they were enacted, will show that, unlike the statutes under
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consideration in the above cited case, their enactment involved no attempt on the part of
the Legislature to prevent dissatisfied taxpayers "from resorting to the courts to test the validity
of the legislation;" no effort to prevent any inquiry as to their validity. While section 139 does
prevent the testing of the validity of subsection (b) of section 100 in injunction suits instituted
for the purpose of restraining the collection of internal revenue taxes, section 140 provides a
complete remedy for that purpose. And furthermore, the validity of subsection (b) does not
depend upon "the existence of a fact which can be determined only after investigation of a
very complicated and technical character," but the jurisdiction of the Legislature over the
subject with which the subsection deals "is complete in any event." The judgment of the court
in the Young case rests upon the proposition that the aggrieved parties had no adequate
remedy at law.
Neither did we overlook the case of General Oil Co. vs. Crain (209 U.S., 211), decided the same
day and citing Ex parte Young, supra. In that case the plaintiff was a Tennessee corporation,
with its principal place of business in Memphis, Tennessee. It was engaged in the manufacture
and sale of coal oil, etc. Its wells and plant were located in Pennsylvania and Ohio. Memphis
was not only its place of business, at which place it sold oil to the residents of Tennessee, but
also a distributing point to which oils were shipped from Pennsylvania and Ohio and unloaded
into various tanks for the purpose of being forwarded to the Arkansas, Louisiana, and Mississippi
customers. Notwithstanding the fact that the company separated its oils, which were
designated to meet the requirements of the orders from those States, from the oils for sale in
Tennessee, the defendant insisted that he had a right, under the Act of the Tennessee
Legislature, approved April 21, 1899, to inspect all the oils unlocated in Memphis, whether for
sale in that State or not, and charge and collect for such inspection a regular fee of twenty-
five cents per barrel. The company, being advised that the defendant had no such right,
instituted this action in the inferior States court for the purpose of enjoining the defendant,
upon the grounds stated in the bill, from inspecting or attempting to inspect its oils. Upon trial,
the preliminary injunction which had been granted at the commencement of the action, was
continued in force. Upon appeal, the supreme court of the State of Tennessee decided that
the suit was one against the State and reversed the judgment of the Chancellor. In the
Supreme Court of the United States, where the case was reviewed upon a writ of error, the
contentions of the parties were stated by the court as follows: "It is contended by defendant
in error that this court is without jurisdiction because no matter sought to be litigated by plaintiff
in error was determined by the Supreme Court of Tennessee. The court simply held, it is paid,
that, under the laws of the State, it had no jurisdiction to entertain the suit for any purpose.
And it is insisted "hat this holding involved no Federal question, but only the powers and
jurisdiction of the courts of the State of Tennessee, in respect to which the Supreme Court of
Tennessee is the final arbiter."
Opposing these contentions, plaintiff in error urges that whether a suit is one against a State
cannot depend upon the declaration of a statute, but depends upon the essential nature
ofthe suit, and that the Supreme Court recognized that the statute "aded nothing to the
axiomatic principle that the State, as a sovereign, is not subject to suit save by its own
consent."And it is hence insisted that the court by dismissing the bill gave effect to the law
which was attacked. It is further insisted that the bill undoubtedly present rights under the
Constitution of the United States and conditions which entitle plaintiff in error to an injunction
for the protection of such rights, and that a statute of the State which operates to deny such
rights, or such relief, `is itself in conflict with the Constitution of the United States."
That statute of Tennessee, which the supreme court of that State construed and held to be
prohibitory of the suit, was an act passed February 28, 1873, which provides: "That no court in
the State of Tennessee has, nor shall hereafter have, any power, jurisdiction, or authority to
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entertain any suit against the State, or any officer acting by the authority of the State, with a
view to reach the State, its treasury, funds or property; and all such suits now pending, or
hereafter brought, shall be dismissed as to the State, or such officer, on motion, plea or
demurrer of the law officer of the State, or counsel employed by the State."
The Supreme Court of the United States, after reviewing many cases, said: "Necessarily, to give
adequate protection to constitutional rights a distinction must be made between valid and
invalid state laws, as determining the character of the suit against state officers. And the suit
at bar illustrates the necessity. If a suit against state officer is precluded in the national courts
by the Eleventh Amendment to the Constitution, and may be forbidden by a State to its courts,
as it is contended in the case at bar that it may be, without power of review by this court, it
must be evident that an easy way is open to prevent the enforcement of many provisions of
the Constitution; and the Fourteenth Amendment, which is directed at state action, could be
nullified as to much of its operation. ... It being then the right of a party to be protected against
a law which violates a constitutional right, whether by its terms or the manner of its
enforcement, it is manifest that a decision which denies such protection gives effect to the
law, and the decision is reviewable by this court."
The court then proceeded to consider whether the law of 1899 would, if administered against
the oils in question, violate any constitutional right of the plaintiff and after finding and
adjudging that the oils were not in movement through the States, that they had reached the
destination of their first shipment, and were held there, not in necessary delay at means of
transportation but for the business purposes and profit of the company, and resting its
judgment upon the taxing power of the State, affirmed the decree of the supreme court of
the State of Tennessee.
From the foregoing it will be seen that the Supreme Court of Tennessee dismissed the case for
want of jurisdiction because the suit was one against the State, which was prohibited by the
Tennessee Legislature. The Supreme Court of the United States took jurisdiction of the
controversy for the reasons above quoted and sustained the Act of 1899 as a revenue law.
The case of Tennessee vs. Sneed (96 U.S., 69), and Shelton vs. Platt (139 U.S., 591), relied upon
in our former opinion, were not cited in General Oil Co. vs. Crain, supra, because the questions
presented and the statutes under consideration were entirely different. The Act approved
March 31, 1873, expressly prohibits the courts from restraining the collection of any tax, leaving
the dissatisfied taxpayer to his exclusive remedy — payment under protest and suit to recover
— while the Act approved February 28, 1873, prohibits suits against the State.
In upholding the statute which authorizes the removal of signboards or billboards upon the
sole ground that they are offensive to the sight, we recognized the fact that we are not in
harmony with various state courts in the American Union. We have just examined the decision
of the Supreme Court of the State of Illinois in the recent case (October [December], 1914) of
Thomas Cusack Co. vs. City of Chicago (267 Ill., 344), wherein the court upheld the validity of
a municipal ordinances, which reads as follows: "707. Frontage consents required. It shall be
unlawful for any person, firm or corporation to erect or construct any bill-board or sign-board
in any block on any public street in which one-half of the buildings on both sides of the street
are used exclusively for residence purposes, without first obtaining the consent, in writing, of
the owners or duly authorized agents of said owners owning a majority of the frontage of the
property, on both sides of the street, in the block in which such bill-board or sign-board is to be
erected, constructed or located. Such written consent shall be filed with the commissioner of
buildings before a permit shall be issued for the erection, construction or location of such bill-
board or sign-board."
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POLICE POWER
The evidence which the Illinois court relied upon was the danger of fires, the fact that
billboards promote the commission of various immoral and filthy acts by disorderly persons,
and the inadequate police protection furnished to residential districts. The last objection has
no virtue unless one or the other of the other objections are valid. If the billboard industry does,
in fact, promote such municipal evils to noticeable extent, it seems a curious inconsistency
that a majority of the property owners on a given block may legalize the business. However,
the decision is undoubtedly a considerable advance over the views taken by other high courts
in the United States and distinguishes several Illinois decisions. It is an advance because it
permits the suppression of billboards where they are undesirable. The ordinance which the
court approved will no doubt cause the virtual suppression of the business in the residential
districts. Hence, it is recognized that under certain circumstances billboards may be
suppressed as an unlawful use of private property. Logically, it would seem that the premise
of fact relied upon is not very solid. Objections to the billboard upon police, sanitary, and moral
grounds have been, as pointed out by counsel for Churchill and Tait, duly considered by
numerous high courts in the United States, and, with one exception, have been rejected as
without foundation. The exception is the Supreme Court of Missouri, which advances
practically the same line of reasoning as has the Illinois court in this recent case. (St. Louis
Gunning Advt. Co. vs. City of St. Louis, 137 S. W., 929.) In fact, the Illinois court, in Haller Sign
Works vs. Physical Culture Training School (249 Ill., 436), "distinguished" in the recent case, said:
"There is nothing inherently dangerous to the health or safety of the public in structures that
are properly erected for advertising purposes."
If a billboard is so constructed as to offer no room for objections on sanitary or moral grounds,

it would seem that the ordinance above quoted would have to be sustained upon the very
grounds which we have advanced in sustaining our own statute.
It might be well to note that billboard legislation in the United States is attempting to eradicate
a business which has already been firmly established. This business was allowed to expand
unchecked until its very extent called attention to its objectionable features. In the Philippine
Islands such legislation has almost anticipated the business, which is not yet of such proportions
that it can be said to be fairly established. It may be that the courts in the United States have
committed themselves to a course of decisions with respect to billboard advertising, the full
consequences of which were not perceived for the reason that the development of the
business has been so recent that the objectionable features of it did not present themselves
clearly to the courts nor to the people. We, in this country, have the benefit of the experience
of the people of the United States and may make our legislation preventive rather than
corrective. There are in this country, moreover, on every hand in those districts where Spanish
civilization has held sway for so many centuries, examples of architecture now belonging to a
past age, and which are attractive not only to the residents of the country but to visitors. If the
billboard industry is permitted without constraint or control to hide these historic sites from the
passerby, the country will be less attractive to the tourist and the people will suffer a district
economic loss.
The motion for a rehearing is therefore denied.
Arellano, C.J., Torres, and Carson, JJ., concur
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People of the Philippine Islands vs. Julio Pomar G.R. No. L-22008, November 3, 192446 Phil 126
The only question presented by this appeal is whether or not the provisions of sections 13 and
15 of Act No. 3071 are a reasonable and lawful exercise of the police power of the state.
It appears from the record that on the 26th day of October, 1923, the prosecuting attorney of
the City of Manila presented a complaint in the Court of First Instance, accusing the defendant
of a violation of section 13 in connection with section 15 of Act No. 3071 of the Philippine
Legislature. The complaint alleged:
That on or about the 27th day of August, 1923, and sometime prior thereto, in the City of
Manila, Philippine Islands, the said accused, being the manager and person in charge of La
Flor de la Isabela, a tobacco factory pertaining to La Campania General de Tabacos de
Filipinas, a corporation duly authorized to transact business in said city, and having, during the
year 1923, in his employ and service as cigar-maker in said factory, a woman by the name of
Macaria Fajardo, whom he granted vacation leave which began on the 16th day of July,
1923, by reason of her pregnancy, did then and there willfully, unlawfully, and feloniously fail
and refuse to pay to said woman the sum of eighty pesos (P80), Philippine currency, to which
she was entitled as her regular wages corresponding to thirty days before and thirty days after
her delivery and confinement which took place on the 12th day of August, 1923, despite and
over the demands made by her, the said Macaria Fajardo, upon said accused, to do so.
To said complaint, the defendant demurred, alleging that the facts therein contained did not
constitute an offense. The demurrer was overruled, whereupon the defendant answered and
admitted at the trial all of the allegations contained in the complaint, and contended that
the provisions of said Act No. 3071, upon which the complaint was based were illegal,
unconstitutional and void.
Upon a consideration of the facts charged in the complaint and admitted by the defendant,
the Honorable C. A. Imperial, judge, found the defendant guilty of the alleged offense
described in the complaint, and sentenced him to pay a fine of P50, in accordance with the
provisions of section 15 of said Act, to suffer subsidiary imprisonment in case of insolvency, and
to pay the costs.
From that sentence the defendant appealed, and now makes the following assignments of
error: That the court erred in overruling the demurrer; in convicting him of the crime charged
in the information; and in not declaring section 13 of Act No. 3071, unconstitutional:
Section 13 of Act No. 3071 is as follows:
Every person, firm or corporation owning or managing a factory, shop or place of labor of any
description shall be obliged to grant to any woman employed by it as laborer who may be
pregnant, thirty days vacation with pay before and another thirty days after confinement:
Provided, That the employer shall not discharge such laborer without just cause, under the
penalty of being required to pay to her wages equivalent to the total of two months counted
from the day of her discharge.
Section 15 of the same Act is as follows:
Any person, firm or corporation violating any of the provisions of this Act shall be punished by
a fine of not less than fifty pesos nor more than two hundred and fifty, or by imprisonment for
not less than ten days nor more than six months, or both, in the discretion of the court.
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In the case of firms or corporations, the presidents, directors or managers thereof or, in their
default, the persons acting in their stead, shall be criminally responsible for each violation of
the provisions of this Act.
Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its
supposed police power, with the praiseworthy purpose of safeguarding the health of
pregnant women laborers in "factory, shop or place of labor of any description," and of insuring
to them, to a certain extent, reasonable support for one month before and one month after
their delivery. The question presented for decision by the appeal is whether said Act has been
adopted in the reasonable and lawful exercise of the police power of the state.
In determining whether a particular law promulgated under the police power of the state is,
in fact, within said power, it becomes necessary first, to determine what that power is, its limits
and scope. Literally hundreds of decisions have been promulgated in which definitions of the
police power have been attempted. An examination of all of said decisions will show that the
definitions are generally limited to particular cases and examples, which are as varied as they
are numerous.
By reason of the constant growth of public opinion in a developing civilization, the term "police
power" has never been, and we do not believe can be, clearly and definitely defined and
circumscribed. One hundred years ago, for example, it is doubtful whether the most eminent
jurist, or court, or legislature would have for a moment thought that, by any possibility, a law
providing for the destruction of a building in which alcoholic liquors were sold, was within a
reasonable and lawful exercise of the police power. (Mugler vs. Kansas, 123 U. S., 623.) The
development of civilization, the rapidly increasing population, the growth of public opinion,
with a desire on the part of the masses and of the government to look after and care for the
interests of the individuals of the state, have brought within the police power of the state many
questions for regulation which formerly were not so considered. In a republican form of
government public sentiment wields a tremendous influence upon what the state may or may
not do, for the protection of the health and public morals of the people. Yet, neither public
sentiment, nor a desire to ameliorate the public morals of the people of the state will justify the
promulgation of a law which contravenes the express provisions of the fundamental law of
the people — the constitutional of the state.
A definition of the police power of the state must depend upon the particular law and the
particular facts to which it is to be applied. The many definitions which have been given by
the highest courts may be examined, however, for the purpose of giving us a compass or
guide to assist us in arriving at a correct conclusion in the particular case before us. Sir William
Blackstone, one of the greatest expounders of the common law, defines the police power as
"the due regulation and domestic order of the kingdom, whereby the inhabitants of a state,
like members of a well-governed family, are bound to conform their general behavior to the
rules of propriety, good neighborhood, and good manners, and to be decent, industrious, and
inoffensive in their respective stations." (4 Blackstone's Commentaries, 162.)
Mr. Jeremy Bentham, in his General View of Public Offenses, gives us the following definition:
"Police is in general a system of precaution, either for the prevention of crimes or of calamities.
Its business may be distributed into eight distinct branches: (1) Police for the prevention of
offenses; (2) police for the prevention of calamities; (3) police for the prevention of endemic
diseased; (4) police of charity; (5) police of interior communications; (6) police of public
amusements; (7) police for recent intelligence; (8) police for registration."
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POLICE POWER
Mr. Justice Cooley, perhaps the greatest expounder of the American Constitution, says: "The
police power is 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 subject of the same. . . ." (Cooley's
Constitutional Limitations, p. 830.)
In the case of Commonwealth of Massachusetts vs. Alger (7 Cushing, 53), we find a very
comprehensive definition of the police power of the state. In that case it appears that the
colony of Massachusetts in 1647 adopted an Act to preserve the harbor of Boston and to
prevent encroachments therein. The defendant unlawfully erected, built, and established in
said harbor, and extended beyond said lines and into and over the tide water of the
Commonwealth a certain superstructure, obstruction and encumbrance. Said Act provided
a penalty for its violation of a fine of not less than $1,000 nor more than $5,000 for every offense,
and for the destruction of said buildings, or structures, or obstructions as a public nuisance.
Alger was arrested and placed on trial for violation of said Act. His defense was that the Act
of 1647 was illegal and void, because if permitted the destruction of private property without
compensation. Mr. Justice Shaw, speaking for the court in that said, said: "We think it is a 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 it shall not be injurious to the equal environment of others
having an equal right to the enjoyment of their property nor injurious to the rights of the
community. All property in this commonwealth, as well that in the interior as that bordering on
tide waters, is derived directly or indirectly from the government and held subject to those
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." Mr. Justice Shaw further adds: ". . . 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."
This court has, in the case of Case vs. Board of Health and Heiser (24 Phil., 250), in discussing
the police power of the state, had occasion to say: ". . . It is a well settled principle, growing
out of the nature of well-ordered and civilized society, that every holder of property, however
absolute and unqualified may be his title, holds it under the implied liability that his use of it
shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment
of their property, nor injurious to the rights of the community. All property in the state is held
subject to its general regulations, which are necessary to the common good and general
welfare. Rights of property, like all other social and conventional rights, are subject to such
reasonable limitations in their enjoyment as shall prevent them from being injurious, and to
such reasonable restraints and regulations, established by law, as the legislature, under the
governing and controlling power vested in them by the constitution, may think necessary and
expedient. The state, under the police power is possessed with plenary power to deal with all
matters relating to the general health, morals, and safety of the people, so long as it does not
contravene any positive inhibition of the organic law and providing that such power is not
exercised in such a manner as to justify the interference of the courts to prevent positive wrong
and oppression."
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POLICE POWER
Many other definitions have been given not only by the Supreme Court of the United States
but by the Supreme Court of every state of the Union. The foregoing definitions, however,
cover the general field of all of the definitions, found in jurisprudence. From all of the definitions
we conclude that it is much easier to perceive and realize the existence and sources of the
police power than to exactly mark its boundaries, or prescribe limits to its exercise by the
legislative department of the government.
The most recent definition which has been called to our attention is that found in the case of
Adkins vs. Children's Hospital of the District of Columbia (261 U. S., 525). In that case the
controversy arose in this way: A children's hospital employed a number of women at various
rates of wages, which were entirely satisfactory to both the hospital and the employees. A
hotel company employed a woman as elevator operator at P35 per month and two meals a
day under healthy and satisfactory conditions, and she did not risk to lose her position as she
could not earn so much anywhere else. Her wages were less than the minimum fixed by a
board created under a law for the purpose of fixing a minimum wage for women and children,
with a penalty providing a punishment for a failure or refusal to pay the minimum wage fixed.
The wage paid by the hotel company of P35 per month and two meals a day was less than
the minimum wage fixed by said board. By reason of the order of said board, the hotel
company, was about to discharge her, as it was unwilling to pay her more and could not give
her employment at that salary without risking the penalty of a fine and imprisonment under
the law. She brought action to enjoin the hotel company from discharging her upon the
ground that the enforcement of the "Minimum Wage Act" would deprive her of her
employment and wages without due process of law, and that she could not get as good a
position anywhere else. The constitutionality of the Act was squarely presented to the Supreme
Court of the United States for decision.
The Supreme Court of the United States held that said Act was void on the ground that the
right to contract about one's own affairs was a part of the liberty of the individual under the
constitution, and that while there was no such thing as absolute freedom of contract, and it
was necessary subject to a great variety of restraints, yet none of the exceptional
circumstances, which at times justify a limitation upon one's right to contract for his own
services, applied in the particular case.
In the course of the decision in that case (Adkins vs. Children's Hospital of the District of
Columbia, 261 U. S., 525), Mr. Justice Sutherland, after a statement of the fact and making
reference to the particular law, said:
The statute now under consideration is attacked upon the ground that it authorizes an
unconstitutional interference with the freedom of contract including within the guarantees of
the due process clause of the 5th Amendment. That the right to contract about one's affairs is
a part of the liberty of the individual protected by this clause is settled by the decision of this
court, and is no longer open to question. Within this liberty are contracts of employment of
labor. In making such contracts, generally speaking, the parties have an equal right to obtain
from each other the best terms they can as the result of private bargaining. (Allgeyer vs.
Louisiana, 165 U. S., 578; 591; Adair vs. United States, 208 U. S., 161; Muller vs. Oregon, 208 U. S.,
412, 421.)
xxx xxx xxx
The law takes account of the necessities of only one party to the contract. It ignores the
necessities of the employer by compelling him to pay not less than a certain sum, not only
whether the employee is capable of earning it, but irrespective of the ability of his business to
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POLICE POWER
sustain the burden, generously leaving him, of course, the privilege of abandoning his business
as an alternative for going on at a loss. Within the limits of the minimum sum, he is precluded,
under penalty of fine and imprisonment, from adjusting compensation to the differing merits
of his employees. It compels him to pay at least the sum fixed in any event, because the
employee needs it, but requires no service of equivalent value from the employee. It (the law)
therefore undertakes to solve but one-half of the problem. The other half is the establishment
of a corresponding standard of efficiency; and this forms no part of the policy of the legislation,
although in practice the former half without the latter must lead to ultimate failure, in
accordance with the inexorable law that no one can continue indefinitely to take out more
than he puts in without ultimately exhausting the supply. The law . . . takes no account of
periods of distress and business depression, or crippling losses, which may leave the employer
himself without adequate means of livelihood. To the extent that the sum fixed exceeds the
fair value of the services rendered, it amounts to a compulsory exaction from the employer for
the support of a partially indigent person, for whose condition there rests upon him no peculiar
responsibility, and therefore, in effect, arbitrarily shifts to his shoulders a burden which, if it
belongs to anybody, belongs to society as a whole.
The failure of this state which, perhaps more than any other, puts upon it the stamp of invalidity
is that it exacts from the employer an arbitrary payment for a purpose and upon a basis having
no casual connection with his business, or the contract, or the work the employee engages to
do. The declared basis, as already pointed out, is not the value of the service rendered, but
the extraneous circumstances that the employee needs to get a prescribed sum of money to
insure her subsistence, health and morals. . . . The necessities of the employee are alone
considered, and these arise outside of the employment, are the same when there is no
employment, and as great in one occupation as in another. . . . In principle, there can be no
difference between the case of selling labor and the case of selling goods. If one goes to the
butcher, the baker, or grocer to buy food, he is morally entitled to obtain the worth of his
money, but he is not entitle to more. If what he gets is worth what he pays, he is not justified in
demanding more simply because he needs more; and the shopkeeper, having dealt fairly
and honestly in that transaction, is not concerned in any peculiar sense with the question of
his customer's necessities. Should a statute undertake to vest in a commission power to
determine the quantity of food necessary for individual support, and require the shopkeeper,
if he sell to the individual at all, to furnish that quantity at not more than a fixed maximum, it
would undoubtedly fall before the constitutional test. The fallacy of any argument in support
of the validity of such a statute would be quickly exposed. The argument in support of that
now being considered is equally fallacious, though the weakness of it may not be so plain. . .
.
It has been said that the particular statute before us is required in the interest of social justice
for whose end freedom of contract may lawfully be subjected to restraint. The liberty of the
individual to do as he pleases, even in innocent matters, is not absolute. That liberty must
frequently yield to the common good, and the line beyond which the power of interference
may not be pressed is neither definite nor unalterable, may be made to move, within limits not
well defined, with changing needs and circumstances.
The late Mr. Justice Harlan, in the case of Adair vs. United States (208 U. S., 161, 174), said that
the right of a person to sell his labor upon such terms as he deems proper is, in its essence, the
same as the right of the purchaser of labor to prescribe the conditions upon which he will
accept such labor from the person offering to sell. In all such particulars the employer and the
employee have equality of right, and any legislation that disturbs that equality is an arbitrary
interference with the liberty of contract, which no government can legally justify in a free land,
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POLICE POWER
under a constitution which provides that no person shall be deprived of his liberty without due
process of law.
Mr. Justice Pitney, in the case of Coppage vs. Kansas (235 U. S., 1, 14), speaking for the
Supreme Court of the United States, said: ". . . Included in the right of personal liberty and the
right of private property — partaking of the nature of each — is the right to make contracts
for the acquisition of property. Chief among such contracts is that of personal employment,
by which labor and other services are exchange for money or other forms of property. If this
right be struck down or arbitrarily interfered with, there is a substantial impairment of liberty in
the long established constitutional sense. The right is as essential to the laborer as to the
capitalist, to the poor as to the rich; for the vast majority of persons have no other honest way
to begin to acquire property, save by working for money."
The right to liberty includes the right to enter into contracts and to terminate contracts. In the
case of Gillespie vs. People (118 Ill., 176, 183-185) it was held that a statute making it unlawful
to discharge an employee because of his connection with any lawful labor organization, and
providing a penalty therefor, is void, since the right to terminate a contract, subject to liability
to respond in a civil action for an unwarranted termination, is within the protection of the state
and Federal constitutions which guarantee that no person shall be deprived of life, liberty or
property without due process of law. The court said in part: ". . . One citizen cannot be
compelled to give employment to another citizen, nor can anyone be compelled to be
employed against his will. The Act of 1893, now under consideration, deprives the employer of
the right to terminate his contract with his employee. The right to terminate such a contract is
guaranteed by the organic law of the state. The legislature is forbidden to deprive the
employer or employee of the exercise of that right. The legislature has no authority to
pronounce the performance of an innocent act criminal when the public health, safety,
comfort or welfare is not interfered with. The statute in question says that, if a man exercises his
constitutional right to terminate a contract with his employee, he shall, without a hearing, be
punished as for the commission of a crime.
xxx xxx xxx
Liberty includes not only the right to labor, but to refuse to labor, and, consequently, the right
to contract to labor or for labor, and to terminate such contracts, and to refuse to make such
contracts. The legislature cannot prevent persons, who are sui juris, from laboring, or from
making such contracts as they may see fit to make relative to their own lawful labor; nor has
it any power by penal laws to prevent any person, with or without cause, from refusing to
employ another or to terminate a contract with him, subject only to the liability to respond in
a civil action for an unwarranted refusal to do that which has been agreed upon. Hence, we
are of the opinion that this Act contravenes those provisions of the state and Federal
constitutions, which guarantee that no person shall be deprived of life, liberty or property
without due process of law.
The statute in question is exactly analogous to the "Minimum Wage Act" referred to above. In
section 13 it will be seen that no person, firm, or corporation owning or managing a factory
shop, or place of labor of any description, can make a contract with a woman without
incurring the obligation, whatever the contract of employment might be, unless he also
promise to pay to such woman employed as a laborer, who may become pregnant, her
wages for thirty days before and thirty days after confinement. In other words, said section
creates a term or condition in every contract made by every person, firm, or corporation with
any woman who may, during the course of her employment, become pregnant, and a failure
to include in said contract the terms fixed to a fine and imprisonment. Clearly, therefore, the
26
POLICE POWER
law has deprived, every person, firm, or corporation owning or managing a factory, shop or
place of labor of any description within the Philippine Islands, of his right to enter into contracts
of employment upon such terms as he and the employee may agree upon. The law creates
a term in every such contract, without the consent of the parties. Such persons are, therefore,
deprived of their liberty to contract. The constitution of the Philippine Islands guarantees to
every citizen his liberty and one of his liberties is the liberty to contract.
It is believed and confidently asserted that no case can be found, in civilized society and well-
organized governments, where individuals have been deprived of their property, under the
police power of the state, without compensation, except in cases where the property in
question was used for the purpose of violating some legally adopted, or constitutes a
nuisance. Among such cases may be mentioned: Apparatus used in counterfeiting the money
of the state; firearms illegally possessed; opium possessed in violation of law; apparatus used
for gambling in violation of law; buildings and property used for the purpose of violating laws
prohibiting the manufacture and sale of intoxicating liquors; and all cases in which the
property itself has become a nuisance and dangerous and detrimental to the public health,
morals and general welfare of the state. In all of such cases, and in many more which might
be cited, the destruction of the property is permitted in the exercise of the police power of the
state. But it must first be established that such property was used as the instrument for the
violation of a valid existing law. (Mugler vs. Kansas, 123 U. S., 623; Slaughter-House Cases, 16
Wall., [U. S.], 36; Butchers' Union, etc., Co. vs. Crescent City, etc., Co., 111 U. S., 746 John Stuart
Mill — "On Liberty," 28, 29.)
Without further attempting to define what are the peculiar subjects or limits of the police
power, it may safely be affirmed, that every law for the restraint and punishment of crimes, for
the preservation of the public peace, health, and morals, must come within this category. But
the state, when providing by legislation for the protection of the public health, the public
morals, or the public safety, is subject to and is controlled by the paramount authority of the
constitution of the state, and will not be permitted to violate rights secured or guaranteed by
that instrument or interfere with the execution of the powers and rights guaranteed to the
people under their law — the constitution. (Mugler vs. Kansas, 123 U. S., 623.)
The police power of the state is a growing and expanding power. As civilization develops and
public conscience becomes awakened, the police power may be extended, as has been
demonstrated in the growth of public sentiment with reference to the manufacture and sale
of intoxicating liquors. But that power cannot grow faster than the fundamental law of the
state, nor transcend or violate the express inhibition of the people's law — the constitution. If
the people desire to have the police power extended and applied to conditions and things
prohibited by the organic law, they must first amend that law.1awphil.net
It will also be noted from an examination of said section 13, that it takes no account of
contracts for the employment of women by the day nor by the piece. The law is equally
applicable to each case. It will hardly be contended that the person, firm or corporation
owning or managing a factory, shop or place of labor, who employs women by the day or by
the piece, could be compelled under the law to pay for sixty days during which no services
were rendered.
It has been decided in a long line of decisions of the Supreme Court of the United States, that
the right to contract about one's affairs is a part of the liberty of the individual, protected by
the "due process of law" clause of the constitution. (Allgeyer vs. Louisiana, 165 U. S., 578, 591;
New York Life Ins. Co. vs. Dodge, 246 U. S., 357, 373, 374; Coppage vs. Kansas, 236 U. S., 1, 10,
27
POLICE POWER
14; Adair vs. United States, 208 U. S., 161; Lochner vs. New York, 198 U. S.; 45, 49; Muller vs.
Oregon, 208 U. S., 412, 421.)
The rule in this jurisdiction is, that the contracting parties may establish any agreements, terms,
and conditions they may deem advisable, provided they are not contrary to law, morals or
public policy. (Art. 1255, Civil Code.)
For all of the foregoing reasons, we are fully persuaded, under the facts and the law, that the
provisions of section 13, of Act No. 3071 of the Philippine Legislature, are unconstitutional and
void, in that they violate and are contrary to the provisions of the first paragraph of section 3
of the Act of Congress of the United States of August 29, 1916. (Vol. 12, Public Laws, p. 238.)
Therefore, the sentence of the lower court is hereby revoked, the complaint is hereby
dismissed, and the defendant is hereby discharged from the custody of the law, with costs de
oficio. So ordered.
Street, Malcolm, Avanceña, Villamor, Ostrand and Romualdez, JJ., concur.
28
POLICE POWER
Philippine Long-Distance Telephone Co. vs. City of Davao, etal. G.R. No. L-23080 October 30,
1965
Philippine Long Distance Telephone Co., Inc. filed on June 23, 1964 this suit for prohibition and
mandamus against the City of Davao and the Public Service Commission. Petitioner seeks to
enjoin Davao City from fulfilling its contract with ITT Philippines, Inc. for the installation of Davao
City's telephone system. It further seeks to compel the Public Service Commission to require
that Davao City first obtain a certificate of public convenience and necessity.
The Public Service Commission filed its answer on July 15, 1964, Davao City on August 11, 1964.
ITT Philippines, Inc. filed a motion to intervene, which was granted, and an answer in
intervention on August 7, 1964. Petitioner replied to the answer in intervention on October 15,
1964.
Petitioner twice applied for preliminary injunction but same was denied.
The record shows that on August 7, 1963 and December 27, 1963 the Davao City Council
Passed Resolutions Nos. 664 and 2015, respectively, authorizing the establishment and
maintenance of a city-wide telephone system, owned, maintained and operated by Davao
City.
Pursuant thereto Davao City entered into a contract with ITT Philippines, Inc. on February 26,
1964, under the terms of which ITT Philippines, Inc. agreed to install and deliver the telephone
system for the consideration of P3,587,000.00. A down payment of P717,000.00 was paid on
May 29, 1964, from which date ITT Philippines, Inc. was given 18 months, or until November 29,
1966, to deliver the telephone system. Practically all the materials for the project have arrived
and the process of construction of the aforesaid telephone system is now well in its advanced
stage.
Petitioner maintains that, unless restrained, the projected installation of a telephone system for
Davao City would result not only in unlawful expenditure of public funds but prejudicial to the
rights of petitioner as prior owner and operator since 1931 of a city-wide telephone system in
the City of Davao.
Petitioner would therefore rest on two contentions: (1) Davao City has no power to establish
and operate a telephone system; and (2) Davao City has first to secure a certificate of public
convenience and necessity from the Public Service Commission.
Davao City's Charter, Commonwealth Act 51, in Section 14 (ee) provides:
SEC. 14. General powers and duties of the Council. — Except as otherwise provided by law,
and subject to the conditions and limitations thereof, the City Council shall have the following
legislative powers:
xxx xxx xxx
(ee) 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
charter; and to fix penalties for the violation of ordinances which shall not exceed a two
29
POLICE POWER
hundred-peso fine or six months imprisonment, or both such fine and imprisonment, for a single
offense.
Resolution No. 664 of Davao City's Council stated as reasons for the establishment of the new
telephone system.
WHEREAS, numerous changes in the economic aspects of the City of Davao during these last
ten (10) years have brought about an urgent necessity, not only for the improvement of the
present telephone service, but also, the immediate expansion of facilities in order to
accommodate the ever-increasing demands for telephone connection by the Davao public;
WHEREAS, the National Government, recognizing these demands and considering the inability
of the Philippine Long Distance Telephone Company to meet these requirements in places
where it has a franchise to operate, has taken the necessary steps for the establishment of a
nation-wide telephone network and that, as a matter of fact, it has just signed with the
International Telegraph & Telephone Company of the Philippines a contract for $11,880,000.00
to put up the project;
WHEREAS, said project of the National Government for a nation-wide telephone network
includes, among other thing, the establishment of a 1000-line automatic telephone system in
Davao City;
WHEREAS, it will be to the advantage of the people and government of the City of Davao if
the automatic telephone system proposed for the City of Davao should be owned and
operated by the City Government of Davao, not only because of its profitable nature, but
because of the need of expanding it to a minimum of 3000 lines which is actually the
immediate requirement in order to satisfy long standing requests for telephone connections,
and also, in order that the City can include provisions for the establishment of microwave
telephone system for the Districts of Calinan, Tugbok, Mintal, Daliao, Toril, Talomo, Panacan,
Tibungco, Bunawan and Lasang and pave the way for better control of peace and order and
emergencies arising from the occurence of fire and epidemics;
It is admitted that petitioner's existing telephone system in Davao City covers only the
poblacion. Its plans for expansion do not appear to include the 10 districts near the poblacion.
While petitioner hopes to provide 40,000 additional lines throughout the country by 1969, the
country's need as of May 31, 1964 was already for 58,000 additional lines (Annex 2 to Answer
in Intervention).1awphîl.nèt
Petitioner does not question the immediate need for 3,000 additional lines in Davao City. It has
not supplied and — from all that appears in the record — there is no immediate plan to supply
such need adequately. Account must be taken of the fact within judicial notice that Davao
City, with an area of 942 square miles 1 (1,507.2 square kilometers), is one of the biggest cities,
if not the biggest city, in the world.2 It is also the main port and commercial center of Southern
Mindanao.
Clearly, therefore, Davao City was responding to a pressing necessity in adopting the
resolutions to establish a telephone system that can fully serve and benefit the people in its
territory. Such resolutions, in the light of the foregoing set-up, constitute a lawful exercise of
Davao City's power under Section 14 (ee) of its Charter to legislate for the general welfare of
the city and its inhabitants.
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POLICE POWER
The power of a municipal corporation to establish and maintain a public utility, not under a
specific and express provision of its charter, but under the general welfare clause therein,
should the same be deemed conducive to the health, comfort and convenience of the
inhabitants has long been recognized in American jurisprudence.3 The Supreme Court of
Georgia, in 1918, said in Saunders vs. Mayor of Arlington, 147 Ga. 581, 94 SE 1022, 1022-24.
The controlling question in the case is whether the mayor and council of the town of Arlington,
under the general welfare clause of its charter, can install and operate an "ice plant and cold-
storage system," and whether bonds can be issued and validated for that purpose. ...
xxx xxx xxx
Express provision is made in the charter for the erection, installation, and maintenance of a
system of waterworks and an electric light plant within said town. Acts 1905, p. 608, sec. 2, et
seq. The charter also provides, under the general welfare clause, that the town may issue
bonds, in addition to the bonds already provided for, etc., in a certain amount, whenever the
mayor and board of aldermen "shall deem it proper and expedient so to do for the purpose
of making any public improvement or improvements for the benefit of said town." Does this
provision of the charter authorize the issuance of bonds, for and the erection and
maintenance of, an ice plant and cold-storage system by the town? It is suggested that the
town of Arlington had express authority given to it by the Legislature to establish a waterworks
and electric light system etc., and that, together with the general authority conferred of
making any other improvements within said town (Acts 1913, p. 492, sec. 1), included the
power to establish the ice plant and cold-storage system. Construing the two paragraphs of
the charter together, we are of the opinion that the legislative intent was to confer the power
to establish and maintain an ice plant and cold-storage systems. ...
xxx xxx xxx
It was held in Heilbron v. Cutbert, 96 Ga. 312, 314, 23, S. E. 206, that under a general welfare
clause which empowered the mayor and council to "contract and be contracted with; sue
and be sued; ... and ... and do all things for the benefit of the city, and all things not in violation
of the Constitution and laws of this state," the mayor and council could, upon complying with
the requisite constitutional and legal provisions, contract a debt for the construction and
maintenance of waterworks and an electric light plant, and could issue bonds for this purpose.
...
xxx xxx xxx
... It can hardly be doubted that the installation of an ice plant and cold-storage system for
the benefit of the citizens of the town is a public improvement, and one which would promote
the health and comfort of the citizens as much as those specifically enumerated in the act. It
would mean the furnishing of pure ice to its citizens, under sanitary conditions and regulations,
free from disease germs, etc.; and the same may be said of the cold-storage system for the
preservation of perishable articles of food. These things certainly tend to the preservation of
health, convenience, and comfort of the citizens; and we see no good reason why, in the
exercise of the police power of the state, this right cannot be and has not been conferred by
the Legislature on the municipality of Arlington by the grants in its charter. ...4
Petitioner would, however, argue that Davao City's telephone system cannot be justified
under general welfare clause provisions because said telephone system is commercial in
nature and, therefore, not the proper subject of the exercise of police power.
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POLICE POWER
Suffice it to state as to this that, firstly, Section 14 (ee) of Davao City's Charter speaks of "the
furtherance of the prosperity" and "the promotion of the ... comfort, convenience, and the
general welfare of the City and its inhabitants." If, as stated in Resolution No. 664, the City
Government stands to profit from the telephone system, the same is in accordance with,
rather than opposed to, the aforementioned general welfare clause.
Secondly, an adequate local telephone service is no longer a mere convenience but is

indispensable to the social life, business communications, transactions, law enforcement, fire
alarms, etc., of the City.5 As already observed, the proposed telephone system in, Davao City
would include 10 districts, thereby enhancing the promotion of peace and order in said
districts as well as facilitating the control of fire, flood, and other emergencies therein.
After this case was submitted for decision, Congress enacted the Revised Charter of Davao
City, Republic Act 4354, effective June 19, 1965. Section 16(aa-1) thereof states:
SEC. 16 Legislative powers. — The City council shall have the following legislative powers:
xxx xxx xxx
(aa-1) To provide for the establishment and Maintenance, of a telephone system, and, subject
to the provisions of the Public Service Act, to fix the charges for the use of said service.
Arguing on the basis of the above legislation, intervenor ITT Philippines, Inc. moved to dismiss
this case, for having allegedly become most. On the other hand, petitioner opposed said
motion on the ground that the validity of the challenged Resolutions Nos. 664 and 2015 of the
Davao City Council depends on the existence of Davao City's authority to establish and
maintain a telephone system as of the time of the passage of said resolutions, on August 7,
1963 and December 27, 1963, respectively, and not thereafter. Anent this point, Davao City
had the power and authority to establish and maintain the telephone system ordained under
said resolutions, as of the time of their passage in view of the special facts and circumstances
existing in Davao City which brought the same within the scope of the general welfare clause
in Davao City's charter, as above discussed. We therefore find no reason to pass upon the
question of whether Republic Act 4354, particularly Section 16 (aa-1) thereof, had or had no
curative effect on Resolutions Nos. 664 and 2015.
Petitioner would further argue that the Davao City's entry as another and new telephone
operator in the area covered by petitioner's franchise would violate its vested rights as prior
operator. We need only point out in this regard that the law granting petitioner's franchise
expressly provided that the rights thereunder conferred are not exclusive. Section 14 of Act
No. 3436 states:
SEC. 14. The rights herein granted shall not be exclusive, and the rights and power to grant any
corporation, association, or person other than the grantee franchise for the telephone or
electrical transmission of messages or signals shall not be impaired or affected by the granting
of this franchise.
A municipal corporation is not prevented from constructing and operating a competing plant,
although a franchise had been granted a private company for a similar public utility, provided
the franchise is not exclusive. (McQuillin, Municipal Corporations, 3rd Ed., Sec. 35.13, Vol. 12,
pp. 607-608.)
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POLICE POWER
Furthermore, petitioner cannot invoke, in this instance, the prior operator rule, for the same
requires for its application that the old operator offers to meet the increase in the demand the
moment it arises and not when another operator, even a new one, had made the offer to
serve the public needs.6
Regarding the issue of whether Davao City has first to secure a certificate of public
convenience and necessity, the Public Service Act exempts from said requirement all
government entities:
Section 13. (a) The Commission shall have jurisdiction, supervision, and control over all public
services and their franchises, equipment, and their properties, and in the exercise of its
authority, it shall have the necessary powers and the aid of the public force: Provided, That
public service owned or operated by government entities or government-owned or controlled
corporations shall be regulated by the Commission in the same way as privately-owned public
services, but certificates of public convenience or certificates of public convenience and
necessity shall not be required of such entities or corporations. ...
Section 14. The following are exempted from the provisions of the preceding section:
(e) Public service owned or operated by any instrumentality of the National Government or
by any government-owned or controlled corporations, except with respect to the fixing of
rates.
It cannot be seriously denied that Davao City is a Government entity.
WHEREFORE, the petition is hereby denied, without costs. So ordered.
Bengzon, C.J., Bautista Angelo, Concepcion, Dizon, Makalintal and Zaldivar, JJ., concur.
Reyes, J.B.L., and Regala, JJ., took no part.
33
POLICE POWER
Philippine Association of Service Exporters, Inc. vs. Franklin M. Drilon G.R. No. 81958 June 30,
1988
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm
"engaged principally in the recruitment of Filipino workers, male and female, for overseas
placement," 1 challenges the Constitutional validity of Department Order No. 1, Series of 1988,
of the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING
THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS," in this petition for certiorari and prohibition. Specifically, the measure is assailed for
"discrimination against males or females;" 2 that it "does not apply to all Filipino workers but
only to domestic helpers and females with similar skills;" 3 and that it is violative of the right to
travel. It is held likewise to be an invalid exercise of the lawmaking power, police power being
legislative, and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution,
providing for worker participation "in policy and decision-making processes affecting their
rights and benefits as may be provided by law." 4 Department Order No. 1, it is contended,
was passed in the absence of prior consultations. It is claimed, finally, to be in violation of the
Charter's non-impairment clause, in addition to the "great and irreparable injury" that PASEI
members face should the Order be further enforced.
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and
Administrator of the Philippine Overseas Employment Administration, filed a Comment
informing the Court that on March 8, 1988, the respondent Labor Secretary lifted the
deployment ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy,
Norway, Austria, and Switzerland. * In submitting the validity of the challenged "guidelines," the
Solicitor General invokes the police power of the Philippine State.
It is admitted that Department Order No. 1 is in the nature of a police power measure. The only
question is whether or not it is valid under the Constitution.
The concept of police power is well-established in this jurisdiction. It has been defined as the
"state authority to enact legislation that may interfere with personal liberty or property in order
to promote the general welfare." 5 As defined, it consists of (1) an imposition of restraint upon
liberty or property, (2) in order to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-comprehensive
embrace.
"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future
where it could be done, provides enough room for an efficient and flexible response to
conditions and circumstances thus assuring the greatest benefits." 6
It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
Charter. Along with the taxing power and eminent domain, it is inborn in the very fact of
statehood and sovereignty. It is a fundamental attribute of government that has enabled it to
perform the most vital functions of governance. Marshall, to whom the expression has been
credited, 7 refers to it succinctly as the plenary power of the State "to govern its citizens." 8
"The police power of the State ... is a power coextensive with self- protection, and it is not
inaptly termed the "law of overwhelming necessity." It may be said to be that inherent and
plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety,
and welfare of society." 9
34
POLICE POWER
It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in

the conception that men in organizing the state and imposing upon its government limitations
to safeguard constitutional rights did not intend thereby to enable an individual citizen or a
group of citizens to obstruct unreasonably the enactment of such salutary measures
calculated to ensure communal peace, safety, good order, and welfare." 10 Significantly, the
Bill of Rights itself does not purport to be an absolute guaranty of individual rights and liberties
"Even liberty itself, the greatest of all rights, is not unrestricted license to act according to one's
will." 11 It is subject to the far more overriding demands and requirements of the greater
number.
Notwithstanding its extensive sweep, police power is not without its own limitations. For all its
awesome consequences, it may not be exercised arbitrarily or unreasonably. Otherwise, and
in that event, it defeats the purpose for which it is exercised, that is, to advance the public
good. Thus, when the power is used to further private interests at the expense of the citizenry,
there is a clear misuse of the power. 12
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed vahdity. 13 In the absence of clear and
convincing evidence to the contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why the contested measure should be nullified.
There is no question that Department Order No. 1 applies only to "female contract workers," 14
but it does not thereby make an undue discrimination between the sexes. It is well-settled that
"equality before the law" under the Constitution 15 does not import a perfect Identity of rights
among all men and women. It admits of classifications, provided that (1) such classifications
rest on substantial distinctions; (2) they are germane to the purposes of the law; (3) they are
not confined to existing conditions; and (4) they apply equally to all members of the same
class. 16
The Court is satisfied that the classification made-the preference for female workers — rests on
substantial distinctions.
As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen
our female labor force abroad, especially domestic servants, amid exploitative working
conditions marked by, in not a few cases, physical and personal abuse. The sordid tales of
maltreatment suffered by migrant Filipina workers, even rape and various forms of torture,
confirmed by testimonies of returning workers, are compelling motives for urgent Government
action. As precisely the caretaker of Constitutional rights, the Court is called upon to protect
victims of exploitation. In fulfilling that duty, the Court sustains the Government's efforts.
The same, however, cannot be said of our male workers. In the first place, there is no evidence
that, except perhaps for isolated instances, our men abroad have been afflicted with an
Identical predicament. The petitioner has proffered no argument that the Government should
act similarly with respect to male workers. The Court, of course, is not impressing some male
chauvinistic notion that men are superior to women. What the Court is saying is that it was
largely a matter of evidence (that women domestic workers are being ill-treated abroad in
massive instances) and not upon some fanciful or arbitrary yardstick that the Government
acted in this case. It is evidence capable indeed of unquestionable demonstration and
evidence this Court accepts. The Court cannot, however, say the same thing as far as men
are concerned. There is simply no evidence to justify such an inference. Suffice it to state, then,
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POLICE POWER
that insofar as classifications are concerned, this Court is content that distinctions are borne
by the evidence. Discrimination in this case is justified.
As we have furthermore indicated, executive determinations are generally final on the Court.
Under a republican regime, it is the executive branch that enforces policy. For their part, the
courts decide, in the proper cases, whether that policy, or the manner by which it is
implemented, agrees with the Constitution or the laws, but it is not for them to question its
wisdom. As a co-equal body, the judiciary has great respect for determinations of the Chief
Executive or his subalterns, especially when the legislature itself has specifically given them
enough room on how the law should be effectively enforced. In the case at bar, there is no
gainsaying the fact, and the Court will deal with this at greater length shortly, that Department
Order No. 1 implements the rule-making powers granted by the Labor Code. But what should
be noted is the fact that in spite of such a fiction of finality, the Court is on its own persuaded
that prevailing conditions indeed call for a deployment ban.
There is likewise no doubt that such a classification is germane to the purpose behind the
measure. Unquestionably, it is the avowed objective of Department Order No. 1 to "enhance
the protection for Filipino female overseas workers" 17 this Court has no quarrel that in the midst
of the terrible mistreatment Filipina workers have suffered abroad, a ban on deployment will
be for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is intended to apply
indefinitely so long as those conditions exist. This is clear from the Order itself ("Pending review
of the administrative and legal measures, in the Philippines and in the host countries . . ."18),
meaning to say that should the authorities arrive at a means impressed with a greater degree
of permanency, the ban shall be lifted. As a stop-gap measure, it is possessed of a necessary
malleability, depending on the circumstances of each case. Accordingly, it provides:
9. LIFTING OF SUSPENSION. — The Secretary of Labor and Employment (DOLE) may, upon
recommendation of the Philippine Overseas Employment Administration (POEA), lift the
suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection
of Filipino workers. 19
The Court finds, finally, the impugned guidelines to be applicable to all female domestic
overseas workers. That it does not apply to "all Filipina workers" 20 is not an argument for
unconstitutionality. Had the ban been given universal applicability, then it would have been
unreasonable and arbitrary. For obvious reasons, not all of them are similarly circumstanced.
What the Constitution prohibits is the singling out of a select person or group of persons within
an existing class, to the prejudice of such a person or group or resulting in an unfair advantage
to another person or group of persons. To apply the ban, say exclusively to workers deployed
by A, but not to those recruited by B, would obviously clash with the equal protection clause
of the Charter. It would be a classic case of what Chase refers to as a law that "takes property
from A and gives it to B." 21 It would be an unlawful invasion of property rights and freedom of
contract and needless to state, an invalid act. 22 (Fernando says: "Where the classification is
based on such distinctions that make a real difference as infancy, sex, and stage of civilization
of minority groups, the better rule, it would seem, is to recognize its validity only if the young,
the women, and the cultural minorities are singled out for favorable treatment. There would
be an element of unreasonableness if on the contrary their status that calls for the law
36
POLICE POWER
ministering to their needs is made the basis of discriminatory legislation against them. If such
be the case, it would be difficult to refute the assertion of denial of equal protection." 23 In the
case at bar, the assailed Order clearly accords protection to certain women workers, and not
the contrary.)
It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas
deployment. From scattered provisions of the Order, it is evident that such a total ban has hot
been contemplated. We quote:
5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and workers of similar skills

defined herein to the following [sic] are authorized under these guidelines and are exempted
from the suspension.
5.1 Hirings by immediate members of the family of Heads of State and Government;
5.2 Hirings by Minister, Deputy Minister and the other senior government officials; and
5.3 Hirings by senior officials of the diplomatic corps and duly accredited international
organizations.
5.4 Hirings by employers in countries with whom the Philippines have [sic] bilateral labor
agreements or understanding.
xxx xxx xxx
7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS--Vacationing domestic

helpers and/or workers of similar skills shall be allowed to process with the POEA and leave for
worksite only if they are returning to the same employer to finish an existing or partially served
employment contract. Those workers returning to worksite to serve a new employer shall be
covered by the suspension and the provision of these guidelines.
xxx xxx xxx
9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE) may, upon

recommendation of the Philippine Overseas Employment Administration (POEA), lift the
suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection
of Filipino workers. 24
xxx xxx xxx
The consequence the deployment ban has on the right to travel does not impair the right. The
right to travel is subject, among other things, to the requirements of "public safety," "as may be
provided by law." 25 Department Order No. 1 is a valid implementation of the Labor Code, in
particular, its basic policy to "afford protection to labor," 26 pursuant to the respondent
Department of Labor's rule-making authority vested in it by the Labor Code. 27 The petitioner
assumes that it is unreasonable simply because of its impact on the right to travel, but as we
have stated, the right itself is not absolute. The disputed Order is a valid qualification thereto.
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Neither is there merit in the contention that Department Order No. 1 constitutes an invalid
exercise of legislative power. It is true that police power is the domain of the legislature, but it
does not mean that such an authority may not be lawfully delegated. As we have mentioned,
the Labor Code itself vests the Department of Labor and Employment with rulemaking powers
in the enforcement whereof. 28
The petitioners's reliance on the Constitutional guaranty of worker participation "in policy and
decision-making processes affecting their rights and benefits" 29 is not well-taken. The right
granted by this provision, again, must submit to the demands and necessities of the State's
power of regulation.
The Constitution declares that:
Sec. 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.
30
"Protection to labor" does not signify the promotion of employment alone. What concerns the
Constitution more paramountly is that such an employment be above all, decent, just, and
humane. It is bad enough that the country has to send its sons and daughters to strange lands
because it cannot satisfy their employment needs at home. Under these circumstances, the
Government is duty-bound to insure that our toiling expatriates have adequate protection,
personally and economically, while away from home. In this case, the Government has
evidence, an evidence the petitioner cannot seriously dispute, of the lack or inadequacy of
such protection, and as part of its duty, it has precisely ordered an indefinite ban on
deployment.
The Court finds furthermore that the Government has not indiscriminately made use of its
authority. It is not contested that it has in fact removed the prohibition with respect to certain
countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the
loftier purposes targetted by the Government. 31 Freedom of contract and enterprise, like all
other freedoms, is not free from restrictions, more so in this jurisdiction, where laissez faire has
never been fully accepted as a controlling economic way of life.
This Court understands the grave implications the questioned Order has on the business of
recruitment. The concern of the Government, however, is not necessarily to maintain profits of
business firms. In the ordinary sequence of events, it is profits that suffer as a result of
Government regulation. The interest of the State is to provide a decent living to its citizens. The
Government has convinced the Court in this case that this is its intent. We do not find the
impugned Order to be tainted with a grave abuse of discretion to warrant the extraordinary
relief prayed for.
WHEREFORE, the petition is DISMISSED. No costs.
SO ORDERED.
Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Cortes and Griño-Aquino, JJ., concur.
Gutierrez, Jr. and Medialdea, JJ., are on leave.
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Jesus P. Morfe vs. Amelito R. Mutuc, et al. G.R. No. L-20387January 31, 1968
Congress in 1960 enacted the Anti-Graft and Corrupt Practices Act 1 to deter public officials
and employees from committing acts of dishonesty and improve the tone of morality in public
service. It was declared to be the state policy "in line with the principle that a public office is
a public trust, to repress certain acts of public officers and private persons alike which
constitute graft or corrupt practices or which may lead thereto." 2 Nor was it the first statute of
its kind to deal with such a grave problem in the public service that unfortunately has afflicted
the Philippines in the post-war era. An earlier statute decrees the forfeiture in favor of the State
of any property found to have been unlawfully acquired by any public officer or employee. 3
One of the specific provisions of the Anti-Graft and Corrupt Practices Act of 1960 is that every
public officer, either within thirty (30) days after its approval or after his assumption of office
"and within the month of January of every other year thereafter", as well as upon the
termination of his position, shall prepare and file with the head of the office to which he
belongs, "a true detailed and sworn statement of assets and liabilities, including a statement
of the amounts and sources of his income, the amounts of his personal and family expenses
and the amount of income taxes paid for the next preceding calendar: . . ." 4
In this declaratory relief proceeding, the periodical submission "within the month of January of
every other year thereafter" of such sworn statement of assets and liabilities after an officer or
employee had once bared his financial condition upon assumption of office was challenged
for being violative of due process as an oppressive exercise of police power and as an
unlawful invasion of the constitutional right to privacy, implicit in the ban against unreasonable
search and seizure construed together with the prohibition against self-incrimination. The lower
court in the decision appealed from sustained plaintiff, then as well as now, a judge of repute
of a court of first instance. For it, such requirement of periodical submission of such sworn
statement of assets and liabilities exceeds the permissible limit of the police power and is thus
offensive to the due process clause.
We do not view the matter thus and accordingly reverse the lower court.
1. The reversal could be predicated on the absence of evidence to rebut the presumption of
validity. For in this action for declaratory relief filed with the Court of First Instance of
Pangasinan on January 31, 1962, plaintiff, after asserting his belief "that it was a reasonable
requirement for employment that a public officer make of record his assets and liabilities upon
assumption of office and thereby make it possible thereafter to determine whether, after
assuming his position in the public service, he accumulated assets grossly disproportionate to
his reported incomes, the herein plaintiff [having] filed within the period of time fixed in the
aforesaid Administrative Order No. 334 the prescribed sworn statement of financial condition,
assets, income and liabilities, . . ." 5 maintained that the provision on the "periodical filing of
sworn statement of financial condition, assets, income and liabilities after an officer or
employee had once bared his financial condition, upon assumption of office, is oppressive
and unconstitutional." 6
As earlier noted, both the protection of due process and the assurance of the privacy of the
individual as may be inferred from the prohibition against unreasonable search and seizure
and self-incrimination were relied upon. There was also the allegation that the above
requirement amounts to "an insult to the personal integrity and official dignity" of public
officials, premised as it is "on the unwarranted and derogatory assumption" that they are
"corrupt at heart" and unless thus restrained by this periodical submission of the statements of
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"their financial condition, income, and expenses, they cannot be trusted to desist from
committing the corrupt practices defined. . . ." 7 It was further asserted that there was no need
for such a provision as "the income tax law and the tax census law also require statements
which can serve to determine whether an officer or employee in this Republic has enriched
himself out of proportion to his reported income." 8
Then on February 14, 1962, came an Answer of the then Executive Secretary and the then
Secretary of Justice as defendants, where after practically admitting the facts alleged, they
denied the erroneous conclusion of law and as one of the special affirmative defenses set
forth: "1. That when a government official, like plaintiff, accepts a public position, he is deemed
to have voluntarily assumed the obligation to give information about his personal affair, not
only at the time of his assumption of office but during the time he continues to discharge public
trust. The private life of an employee cannot be segregated from his public life. . . ." 9 The
answer likewise denied that there was a violation of his constitutional rights against self-
incrimination as well as unreasonable search and seizure and maintained that "the provision
of law in question cannot be attacked on the ground that it impairs plaintiff's normal and
legitimate enjoyment of his life and liberty because said provision merely seeks to adopt a
reasonable measure of insuring the interest or general welfare in honest and clean public
service and is therefore a legitimate exercise of the police power." 10
On February 27, 1962, plaintiff filed a Motion for judgment on the pleadings as in his opinion all
his material allegations were admitted. Then on March 10, 1962, an order was issued giving
the parties thirty days within which to submit memoranda, but with or without them, the case
was deemed submitted for decision the lower court being of the belief that "there is no
question of facts, . . . the defendants [having admitted] all the material allegations of the
complaint." 11
The decision, now on appeal, came on July 19, 1962, the lower court declaring
"unconstitutional, null and void Section 7, Republic Act No. 3019, insofar as it required
periodical submittal of sworn statements of financial conditions, assets and liabilities of an
official or employee of the government after he had once submitted such a sworn statement
upon assuming office; . . . ." 12
In Ermita-Malate Hotel and Motel Operators Association v. The Mayor of Manila, 13 it was the
holding of this Court that in the absence of a factual foundation, the lower court deciding the
matter purely "on the pleadings and the stipulation of facts, the presumption of validity must
prevail." In the present case likewise there was no factual foundation on which the nullification
of this section of the statute could be based. Hence as noted the decision of the lower court
could be reversed on that ground.
A more extended consideration is not inappropriate however, for as likewise made clear in
the above Ermita-Malate Hotel case: "What cannot be stressed sufficiently is that if the liberty
involved were freedom of the mind or the person, the standard for the validity of
governmental acts is much more rigorous and exacting, but where the liberty curtailed affects
at the most rights of property, the permissible scope of regulatory measure is wider."
Moreover, in the Resolution denying the Motion for Reconsideration in the above case, we
expressly affirmed: "This is not to discount the possibility of a situation where the nullity of a
statute, executive order, or ordinance may not be readily apparent but the threat to
constitutional rights, especially those involving the freedom of the mind, present and ominous."
14 In such an event therefore, "there should not be a rigid insistence on the requirement that
evidence be presented." Also, in the same Resolution, Professor Freund was quoted thus: "In
40
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short, when freedom of the mind is imperiled by law, it is freedom that commands a
momentum of respect; when property is imperiled, it is the lawmakers' judgment that
commands respect. This dual standard may not precisely reverse the presumption of
constitutionality in civil liberties cases, but obviously it does set up a hierarchy of values within
the due process clause. 15
2. We inquire first whether or not by virtue of the above requirement for a periodical submission
of sworn statement of assets and liabilities, there is an invasion of liberty protected by the due
process clause.
Under the Anti-Graft Act of 1960, after the statement of policy, 16 and definition of terms, 17
there is an enumeration of corrupt practices declared unlawful in addition to acts or omissions
of public officers already penalized by existing law. They include persuading, inducing, or
influencing another public officer to perform an act constituting a violation of rules and
regulations duly promulgated by competent authority or an offense in connection with the
official duties of the latter, or allowing himself to be persuaded, induced, or influenced to
commit such violation or offense; requesting or receiving directly or indirectly any gift, present,
share, percentage, or benefit, for himself, or for any other person, in connection with any
contract or transaction between the government and any other party, wherein the public
officer in his official capacity, has to intervene under the law; requesting or receiving directly
or indirectly any gift, present, or other pecuniary or material benefit, for himself or for another,
from any person for whom the public officer, in any manner or capacity, has secured or
obtained, or will secure or obtain, any Government permit or license, in consideration for the
help given or to be given; accepting or having any member of his family accept employment
in a private enterprise which has pending official business with him during the pendency
thereof or within one year after its termination; causing any undue injury to any party, including
the Government, or giving any private party any unwarranted benefits, advantage or
preference in the discharge of his official administrative or judicial functions through manifest
partiality, evident bad faith or gross inexcusable negligence; neglecting or refusing, after due
demand or request, without sufficient justification, to act within a reasonable time on any
matter pending before him for the purpose of obtaining, directly or indirectly, from any person
interested in the matter some pecuniary or material benefit or advantage, or for the purpose
of favoring his own interest or giving undue advantage in favor of or discriminating against
any other interested party; entering, on behalf of the Government, into any contract or
transaction manifestly and grossly disadvantageous to the same, whether or not the public
officer profited or will profit thereby; having directly or indirectly financial or pecuniary interest
in any business, contract or transaction in connection with which he intervenes or takes part
in his official capacity or in which he is prohibited by the Constitution or by any law from having
any interests; becoming interested directly or indirectly, for personal gain, or having a material
interest in any transaction or act requiring the approval of a board, panel or group of which
he is a member, and which exercises discretion in such approval, even if he votes against the
same or does not participate in such action; approving or granting knowingly any license,
permit, privilege or benefit in favor of any person not qualified for or not legally entitled to such
license, permit, privilege or advantage, or of a mere representative or dummy of one who is
not so qualified or entitled and divulging valuable information of a confidential character,
acquired by his office or by him on account of his official position to unauthorized persons, or
releasing such information in advance of its authorized release date. 18
After which come the prohibition on private individuals, 19 prohibition on certain relatives, 20
and prohibition on Members of Congress. 21 Then there is this requirement of a statement of
assets and liabilities, that portion requiring periodical submission being challenged here. 22 The
other sections of the Act deal with dismissal due to unexplained wealth, reference being
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made to the previous statute, 23 penalties for violation, 24 the vesting of original jurisdiction in
the Court of First Instance as the competent court, 25 the prescription of offenses, 26 the
prohibition against any resignation or retirement pending investigation, criminal or
administrative or pending a prosecution, 27 suspension and loss of benefits, 28 exception of
unsolicited gifts or presents of small or insignificant value as well as recognition of legitimate
practice of one's profession or trade or occupation, 29 the separability clause, 30 and its
effectivity. 31
Nothing can be clearer therefore than that the Anti-Graft Act of 1960 like the earlier statute 32
was precisely aimed at curtailing and minimizing the opportunities for official corruption and
maintaining a standard of honesty in the public service. It is intended to further promote
morality in public administration. A public office must indeed be a public trust. Nobody can
cavil at its objective; the goal to be pursued commands the assent of all. The conditions then
prevailing called for norms of such character. The times demanded such a remedial device.
The statute was framed with that end in view. It is comprehensive in character, sufficiently
detailed and explicit to make clear to all and sundry what practices were prohibited and
penalized. More than that, an effort was made, so evident from even a cursory perusal
thereof, to avoid evasions and plug loopholes. One such feature is the challenged section.
Thereby it becomes much more difficult by those disposed to take advantage of their positions
to commit acts of graft and corruption.
While in the attainment of such public good, no infringement of constitutional rights is

permissible, there must be a showing, clear, categorical, and undeniable, that what the
Constitution condemns, the statute allows. More specifically, since that is the only question
raised, is that portion of the statute requiring periodical submission of assets and liabilities, after
an officer or employee had previously done so upon assuming office, so infected with infirmity
that it cannot be upheld as valid?
Or, in traditional terminology, is this requirement a valid exercise of the police power? In the
aforesaid Ermita-Malate Hotel decision, 33 there is a reaffirmation of its nature and scope as
embracing the power to prescribe regulations to promote the health, morals, education,
good order, safety, or the general welfare of the people. It has been negatively put forth by
Justice Malcolm as "that inherent and plenary power in the state which enables it to prohibit
all things hurtful to the comfort, safety and welfare of society." 34
Earlier Philippine cases refer to police power as the power to promote the general welfare and
public interest; 35 to enact such laws in relation to persons and property as may promote
public health, public morals, public safety and the general welfare of each inhabitant; 36 to
preserve public order and to prevent offenses against the state and to establish for the
intercourse of citizen with citizen those rules of good manners and good neighborhood
calculated to prevent conflict of rights. 37 In his work on due process, Mott 38 stated that the
term police power was first used by Chief Justice Marshall. 39
As currently in use both in Philippine and American decisions then, police power legislation
usually has reference to regulatory measures restraining either the rights to property or liberty
of private individuals. It is undeniable however that one of its earliest definitions, valid then as
well as now, given by Marshall's successor, Chief Justice Taney does not limit its scope to
curtailment of rights whether of liberty or property of private individuals. Thus: "But what are the
police powers of a State? They are nothing more or less than the powers of government
inherent in every sovereignty to the extent of its dominions. And whether a State passes a
quarantine law, or a law to punish offenses, or to establish courts of justice, or requiring certain
42
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instruments to be recorded, or to regulate commerce within its own limits, in every case it
exercises the same power; that is to say, the power of sovereignty, the power to govern men
and things within the limits of its domain." 40 Text writers like Cooley and Burdick were of a
similar mind. 41
What is under consideration is a statute enacted under the police power of the state to
promote morality in public service necessarily limited in scope to officialdom. May a public
official claiming to be adversely affected rely on the due process clause to annul such statute
or any portion thereof? The answer must be in the affirmative. If the police power extends to
regulatory action affecting persons in public or private life, then anyone with an alleged
grievance can invoke the protection of due process which permits deprivation of property or
liberty as long as such requirement is observed.
While the soundness of the assertion that a public office is a public trust and as such not
amounting to property in its usual sense cannot be denied, there can be no disputing the
proposition that from the standpoint of the security of tenure guaranteed by the Constitution
the mantle of protection afforded by due process could rightfully be invoked. It was so
implicitly held in Lacson v. Romero, 42 in line with the then pertinent statutory provisions 43 that
procedural due process in the form of an investigation at which he must be given a fair hearing
and an opportunity to defend himself must be observed before a civil service officer or
employee may be removed. There was a reaffirmation of the view in even stronger language
when this Court through Justice Tuason in Lacson v. Roque 44 declared that even without
express provision of law, "it is established by the great weight of authority that the power of
removal or suspension for cause can not, except by clear statutory authority, be exercised
without notice and hearing." Such is likewise the import of a statement from the then Justice,
now Chief Justice, Concepcion, speaking for the Court in Meneses v. Lacson; 45 "At any rate,
the reinstatement directed in the decision appealed from does not bar such appropriate
administrative action as the behaviour of petitioners herein may warrant, upon compliance
with the requirements of due process."
To the same effect is the holding of this Court extending the mantle of the security of tenure
provision to employees of government-owned or controlled corporations entrusted with
governmental functions when through Justice Padilla in Tabora v. Montelibano, 46 it stressed:
"That safeguard, guarantee, or feeling of security that they would hold their office or
employment during good behavior and would not be dismissed without justifiable cause to
be determined in an investigation, where an opportunity to be heard and defend themselves
in person or by counsel is afforded them, would bring about such a desirable condition."
Reference was there made to promoting honesty and efficiency through an assurance of
stability in their employment relation. It was to be expected then that through Justice Labrador
in Unabia v. City Mayor, 47 this Court could categorically affirm: "As the removal of petitioner
was made without investigation and without cause, said removal is null and void. . . ."
It was but logical therefore to expect an explicit holding of the applicability of due process
guaranty to be forthcoming. It did in Cammayo v. Viña, 48 where the opinion of Justice
Endencia for the Court contained the following unmistakable language: "Evidently, having
these facts in view, it cannot be pretended that the constitutional provision of due process of
law for the removal of the petitioner has not been complied with."
Then came this restatement of the principle from the pen of Justice J.B.L. Reyes "We are thus
compelled to conclude that the positions formerly held by appellees were not primarily
confidential in nature so as to make their terms of office co-terminal with the confidence
reposed in them. The inevitable corollary is that respondents-appellees, Leon Piñero, et al.,
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were not subject to dismissal or removal, except for cause specified by law and within due
process. . . ." 49 In a still later decision, Abaya v. Subido, 50 this Court, through Justice Sanchez,
emphasized "that the vitality of the constitutional principle of due process cannot be allowed
to weaken by sanctioning cancellation" of an employee's eligibility or "of his dismissal from
service — without hearing — upon a doubtful assumption that he has admitted his guilt for an
offense against Civil Service rules." Equally emphatic is this observation from the same case: "A
civil service employee should be heard before he is condemned. Jurisprudence has clung to
this rule with such unrelenting grasp that by now it would appear trite to make citations
thereof."
If as is so clearly and unequivocally held by this Court, due process may be relied upon by
public official to protect the security of tenure which in that limited sense is analogous to
property, could he not likewise avail himself of such constitutional guarantee to strike down
what he considers to be an infringement of his liberty? Both on principle, reason and authority,
the answer must be in the affirmative. Even a public official has certain rights to freedom the
government must respect. To the extent then, that there is a curtailment thereof, it could only
be permissible if the due process mandate is not disregarded.
Since under the constitutional scheme, liberty is the rule and restraint the exception, the
question raised cannot just be brushed aside. In a leading Philippine case, Rubi v. Provincial
Board, 51 liberty as guaranteed by the Constitution was defined by Justice Malcolm to include
"the right to exist and the right to be free from arbitrary personal restraint or servitude. The term
cannot be dwarfed into mere freedom from physical restraint of the person of the citizen, but
is deemed to embrace the right of man to enjoy the facilities with which he has been
endowed by his Creator, subject only to such restraint as are necessary for the common
welfare." In accordance with this case therefore, the rights of the citizens to be free to use his
faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful
calling; to pursue any avocation, are all deemed embraced in the concept of liberty. This
Court in the same case, however, gave the warning that liberty as understood in democracies,
is not license. Implied in the term is restraint by law for the good of the individual and for the
greater good, the peace and order of society and the general well-being. No one can do
exactly as he pleases. Every man must renounce unbridled license. In the words of Mabini as
quoted by Justice Malcolm, "liberty is freedom to do right and never wrong; it is ever guided
by reason and the upright and honorable conscience of the individual."
The liberty to be safeguarded is, as pointed out by Chief Justice Hughes, liberty in a social
organization, 52 implying the absence of arbitrary restraint not immunity from reasonable
regulations and prohibitions imposed in the interest of the community. 53 It was Linton's view
that "to belong to a society is to sacrifice some measure of individual liberty, no matter how
slight the restraints which the society consciously imposes." 54 The above statement from Linton
however, should be understood in the sense that liberty, in the interest of public health, public
order or safety, of general welfare, in other words through the proper exercise of the police
power, may be regulated. The individual thought, as Justice Cardozo pointed out, has still left
a "domain of free activity that cannot be touched by government or law at all, whether the
command is specially against him or generally against him and others." 55
Is this provision for a periodical submission of sworn statement of assets and liabilities after he
had filed one upon assumption of office beyond the power of government to impose?
Admittedly without the challenged provision, a public officer would be free from such a
requirement. To the extent then that there is a compulsion to act in a certain way, his liberty is
affected. It cannot be denied however that under the Constitution, such a restriction is
allowable as long as due process is observed.
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The more crucial question therefore is whether there is an observance of due process. That
leads us to an inquiry into its significance. "There is no controlling and precise definition of due
process. It furnishes though a standard to which governmental action should conform in order
that deprivation of life, liberty or property, in each appropriate case, be valid. What then is
the standard of due process which must exist both as a procedural and as substantive requisite
to free the challenged ordinance, or any 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 has it been identified as freedom from
arbitrariness. It is the embodiment of the sporting idea of fair play. 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.' It is not a narrow or 'technical conception with fixed content unrelated to time, place
and circumstances,' decisions based on such a clause requiring a 'close and perceptive
inquiry into fundamental principles of our society.' Questions of due process are not to be
treated narrowly or pedantically in slavery to form or phrases." 56
It would be to dwell in the realm of abstractions and to ignore the harsh and compelling
realities of public service with its ever-present temptation to heed the call of greed and
avarice to condemn as arbitrary and oppressive a requirement as that imposed on public
officials and employees to file such sworn statement of assets and liabilities every two years
after having done so upon assuming office. The due process clause is not susceptible to such
a reproach. There was therefore no unconstitutional exercise of police power.
4. The due process question touching on an alleged deprivation of liberty as thus resolved
goes a long way in disposing of the objections raised by plaintiff that the provision on the
periodical submission of a sworn statement of assets and liabilities is violative of the
constitutional right to privacy. There is much to be said for this view of Justice Douglas: "Liberty
in the constitutional sense must mean more than freedom from unlawful governmental
restraint; it must include privacy as well, if it is to be a repository of freedom. The right to be let
alone is indeed the beginning of all freedom." 57 As a matter of fact, this right to be let alone
is, to quote from Mr. Justice Brandeis "the most comprehensive of rights and the right most
valued by civilized men." 58
The concept of liberty would be emasculated if it does not likewise compel respect for his
personality as a unique individual whose claim to privacy and interference demands respect.
As Laski so very aptly stated: "Man is one among many, obstinately refusing reduction to unity.
His separateness, his isolation, are indefeasible; indeed, they are so fundamental that they are
the basis on which his civic obligations are built. He cannot abandon the consequences of his
isolation, which are, broadly speaking, that his experience is private, and the will built out of
that experience personal to himself. If he surrenders his will to others, he surrenders his
personality. If his will is set by the will of others, he ceases to be master of himself. I cannot
believe that a man no longer master of himself is in any real sense free." 59
Nonetheless, in view of the fact that there is an express recognition of privacy, specifically that
of communication and correspondence which "shall be inviolable except upon lawful order
of Court or when public safety and order" 60 may otherwise require, and implicitly in the search
and seizure clause, 61 and the liberty of abode 62 the alleged repugnancy of such statutory
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requirement of further periodical submission of a sworn statement of assets and liabilities

deserves to be further looked into.
In that respect the question is one of first impression, no previous decision having been
rendered by this Court. It is not so in the United States where, in the leading case of Griswold
v. Connecticut, 63 Justice Douglas, speaking for five members of the Court, stated: "Various
guarantees create zones of privacy. The right of association contained in the penumbra of
the First Amendment is one, as we have seen. The Third Amendment in its prohibition against
the quartering of soldiers 'in any house' in time of peace without the consent of the owner is
another facet of that privacy. The Fourth Amendment explicitly affirms the 'right of the people
to be secure in their persons, houses, papers, and effects, against unreasonable searches and
seizures.' The Fifth Amendment in its Self-Incrimination Clause enables the citizen to create a
zone of privacy which government may not force him to surrender to his detriment. The Ninth
Amendment provides: 'The enumeration in the Constitution, of certain rights, shall not be
construed to deny or disparage others retained by the people." After referring to various
American Supreme Court decisions, 64 Justice Douglas continued: "These cases bear witness
that the right of privacy which presses for recognition is a legitimate one."
The Griswold case invalidated a Connecticut statute which made the use of contraceptives
a criminal offense on the ground of its amounting to an unconstitutional invasion of the right
of privacy of married persons; rightfully it stressed "a relationship lying within the zone of privacy
created by several fundamental constitutional guarantees." 65 It has wider implications
though. The constitutional right to privacy has come into its own.1äwphï1.ñët
So it is likewise in our jurisdiction. The right to privacy as such is accorded recognition

independently of its identification with liberty; in itself, it is fully deserving of constitutional
protection. The language of Prof. Emerson is particularly apt: "The concept of limited
government has always included the idea that governmental powers stop short of certain
intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between
absolute and limited government. Ultimate and pervasive control of the individual, in all
aspects of his life, is the hallmark of the absolute state. In contrast, a system of limited
government, safeguards a private sector, which belongs to the individual, firmly distinguishing
it from the public sector, which the state can control. Protection of this private sector —
protection, in other words, of the dignity and integrity of the individual — has become
increasingly important as modern society has developed. All the forces of a technological
age — industrialization, urbanization, and organization — operate to narrow the area of
privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and support
this enclave of private life marks the difference between a democratic and a totalitarian
society." 66
Even with due recognition of such a view, it cannot be said that the challenged statutory
provision calls for disclosure of information which infringes on the right of a person to privacy.
It cannot be denied that the rational relationship such a requirement possesses with the
objective of a valid statute goes very far in precluding assent to an objection of such
character. This is not to say that a public officer, by virtue of a position he holds, is bereft of
constitutional protection; it is only to emphasize that in subjecting him to such a further
compulsory revelation of his assets and liabilities, including the statement of the amounts and
sources of income, the amounts of personal and family expenses, and the amount of income
taxes paid for the next preceding calendar year, there is no unconstitutional intrusion into what
otherwise would be a private sphere.
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5. Could it be said, however, as plaintiff contends, that insofar as the challenged provision
requires the periodical filing of a sworn statement of financial condition, it would be violative
of the guarantees against unreasonable search and seizure and against self-incrimination?
His complaint cited on this point Davis v. United States. 67 In that case, petitioner Davis was
convicted under an information charging him with unlawfully having in his possession a
number of gasoline ration coupons representing so many gallons of gasoline, an offense
penalized under a 1940 statute. 68 He was convicted both in the lower court and in the Circuit
Court of Appeals over the objection that there was an unlawful search which resulted in the
seizure of the coupons and that their use at the trial was in violation of Supreme Court
decisions. 69 In the District Court, there was a finding that he consented to the search and
seizure. The Circuit Court of Appeals did not disturb that finding although expressed doubt
concerning it, affirming however under the view that such seized coupons were properly
introduced in evidence, the search and seizure being incidental to an arrest, and therefore
reasonable regardless of petitioner's consent.
In affirming the conviction the United States Supreme Court, through Justice Douglas
emphasized that the Court was dealing in this case "not with private papers or documents,
but with gasoline ration coupons which never became the private property of the holder but
remained at all times the property of the government and subject to inspection and recall by
it." 70 He made it clear that the opinion was not to be understood as suggesting "that officers
seeking to reclaim government property may proceed lawlessly and subject to no restraints.
Nor [does it] suggest that the right to inspect under the regulations subjects a dealer to a
general search of his papers for the purpose of learning whether he has any coupons subject
to inspection and seizure. The nature of the coupons is important here merely as indicating
that the officers did not exceed the permissible limits of persuasion in obtaining them." 71
True, there was a strong dissenting opinion by Justice Frankfurter in which Justice Murphy
joined, critical of what it considered "a process of devitalizing interpretation" which in this
particular case gave approval "to what was done by arresting officers" and expressing the
regret that the Court might be "in danger of forgetting what the Bill of Rights reflects
experience with police excesses."
Even this opinion, however, concerned that the constitutional guarantee against
unreasonable search and seizure "does not give freedom from testimonial compulsion. Subject
to familiar qualifications every man is under obligation to give testimony. But that obligation
can be exacted only under judicial sanctions which are deemed precious to Anglo-American
civilization. Merely because there may be the duty to make documents available for litigation
does not mean that police officers may forcibly or fraudulently obtain them. This protection of
the right to be let alone except under responsible judicial compulsion is precisely what the
Fourth Amendment meant to express and to safeguard." 72
It would appear then that a reliance on that case for an allegation that this statutory provision
offends against the unreasonable search and seizure clause would be futile and unavailing.
This is the more so in the light of the latest decision of this Court in Stonehill v. Diokno, 73 where
this Court, through Chief Justice Concepcion, after stressing that the constitutional
requirements must be strictly complied with, and that it would be "a legal heresy of the highest
order" to convict anybody of a violation of certain statutes without reference to any of its
determinate provisions delimited its scope as "one of the most fundamental rights guaranteed
in our Constitution," safeguarding "the sanctity, of the domicile and the privacy of
communication and correspondence. . . ." Such is precisely the evil sought to be remedied by
the constitutional provision above quoted — to outlaw the so-called general warrants.
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It thus appears clear that no violation of the guarantee against unreasonable search and
seizure has been shown to exist by such requirement of further periodical submission of one's
financial condition as set forth in the Anti-Graft Act of 1960.
Nor does the contention of plaintiff gain greater plausibility, much less elicit acceptance, by
his invocation of the non-incrimination clause. According to the Constitution: "No person shall
be compelled to be a witness against himself." 74 This constitutional provision gives the
accused immunity from any attempt by the prosecution to make easier its task by coercing or
intimidating him to furnish the evidence necessary to convict. He may confess, but only if he
voluntarily wills it. He may admit certain facts but only if he freely chooses to.75 Or he could
remain silent, and the prosecution is powerless to compel him to talk. 76 Proof is not solely
testimonial in character. It may be documentary. Neither then could the accused be ordered
to write, when what comes from his pen may constitute evidence of guilt or innocence. 77
Moreover, there can be no search or seizure of his house, papers or effects for the purpose of
locating incriminatory matter. 78
In a declaratory action proceeding then, the objection based on the guaranty against self-
incrimination is far from decisive. It is well to note what Justice Tuason stated: "What the above
inhibition seeks to [prevent] is compulsory disclosure of incriminating facts." 79 Necessarily then,
the protection it affords will have to await, in the language of Justice J. B. L. Reyes, the
existence of actual cases, "be they criminal, civil or administrative." 80 Prior to such a stage,
there is no pressing need to pass upon the validity of the fear sincerely voiced that there is an
infringement of the non-incrimination clause. What was said in an American State decision is
of relevance. In that case, a statutory provision requiring any person operating a motor
vehicle, who knows that injury has been caused a person or property, to stop and give his
name, residence, and his license number to the injured party or to a police officer was
sustained against the contention that the information thus exacted may be used as evidence
to establish his connection with the injury and therefore compels him to incriminate himself. As
was stated in the opinion: "If the law which exacts this information is invalid, because such
information, although in itself no evidence of guilt, might possibly lead to a charge of crime
against the informant, then all police regulations which involve identification may be
questioned on the same ground. We are not aware of any constitutional provision designed
to protect a man's conduct from judicial inquiry or aid him in fleeing from justice. But, even if
a constitutional right be involved, it is not necessary to invalidate the statute to secure its
protection. If, in this particular case, the constitutional privilege justified the refusal to give the
information exacted by the statute, that question can be raised in the defense to the pending
prosecution. Whether it would avail, we are not called upon to decide in this proceeding." 81
6. Nor could such a provision be nullified on the allegation that it constitutes "an insult to the
personal integrity and official dignity" of public officials. On its face, it cannot thus be
stigmatized. As to its being unnecessary, it is well to remember that this Court, in the language
of Justice Laurel, "does not pass upon questions of wisdom, justice or expediency of legislation."
82 As expressed by Justice Tuason: "It is not the province of the courts to supervise legislation
and keep it within the bounds of propriety and common sense. That is primarily and exclusively
a legislative concern." 83 There can be no possible objection then to the observation of Justice
Montemayor: "As long as laws do not violate any Constitutional provision, the Courts merely
interpret and apply them regardless of whether or not they are wise or salutary." 84 For they,
according to Justice Labrador, "are not supposed to override legitimate policy and . . . never
inquire into the wisdom of the law." 85
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It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on

Elections, 86 that only congressional power or competence, not the wisdom of the action
taken may be the basis for declaring a statute invalid. This is as it ought to be. The principle of
separation of powers has in the main wisely allocated the respective authority of each
department and confined its jurisdiction to such a sphere. There would then be intrusion not
allowable under the Constitution if on a matter left to the discretion of a coordinate branch,
the judiciary would substitute its own. If there be adherence to the rule of law, as there ought
to be, the last offender should be courts of justice, to which rightly litigants submit their
controversy precisely to maintain unimpaired the supremacy of legal norms and prescriptions.
The attack on the validity of the challenged provision likewise insofar as there may be
objections, even if valid and cogent on its wisdom cannot be sustained.
WHEREFORE, the decision of the lower court of July 19, 1962 "declaring unconstitutional, null
and void Section 7, Republic Act No. 3019, insofar as it requires periodical submittal of sworn
statements of financial conditions, assets and liabilities of an official or employee of the
government after he had once submitted such a sworn statement . . . is reversed." Without
costs.
Concepcion, C.J., Reyes, J.B.L., Makalintal, Bengzon, J.P., Zaldivar and Angeles, JJ., concur.
Sanchez, J., reserves his vote.
Castro, J., concurs in the result.
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Pres. Common Good Govt. vs. Emmanuel G. Peña G.R. No. 77663 April 12, 1988
This special civil action for certiorari, prohibition and mandamus with preliminary injunction
and/or restraining order seeks to set aside the orders, dated February 16 and March 5, 1987,
rendered by respondent trial judge on grounds of lack of jurisdiction and grave abuse of
discretion. The main issue is whether regional trial courts have jurisdiction over the petitioner
Presidential Commission on Good Government (hereinafter referred to as the Commission)
and properties sequestered and placed in its custodia legis in the exercise of its powers under
Executive Orders Nos. 1, 2 and 14, as amended, and whether said regional trial courts may
interfere with and restrain or set aside the orders and actions of the Commission. The Court
holds that regional trial courts do not have such jurisdiction over the Commission and
accordingly grants the petition. To eliminate all doubts, the Court upholds the primacy of
administrative jurisdiction as vested in the Commission and holds that jurisdiction over all
sequestration cases of ill-gotten wealth, assets and properties under the past discredited
regime fall within the exclusive and original jurisdiction of the Sandiganbayan, subject to
review exclusively by this Court. *
The antecedent facts are:
On March 25, 1986, the Commission issued an order freezing the assets, effects, documents
and records of two export garment manufacturing firms denominated as American Inter-
fashion Corporation and De Soleil Apparel Manufacturing Corporation. Said firms had both
been organized by joint venture agreement on July 2,1984 with the approval of the Garments
& Textile Export Board. Two-thirds or 67% of the stock of both corporations were subscribed by
so-called Local Investors represented by Renato Z. Francisco and Atty. Gregorio R. Castillo and
one-third or 33% thereof were subscribed by the so-called Hongkong Investors, namely
respondents Yeung Chun Kam and Yeung Chun Ho. The Commission appointed Ms. Noemi L.
Saludo as Officer-in-Charge (OIC) of the said corporations with full authority to manage and
operate the same. On June 27, 1986, the Commission designated the OIC, Saludo, and
Mr.Yeung Chun Ho private respondent herein, as authorized signatories to effect deposits and
withdrawals of the funds of the two corporations. On September 4, 1986, the Commission
designated Mr. Yim Kam Shing as co-signatory, in the absence of Mr. Yeung Chun Ho and Mr.
Marcelo de Guzman, in the absence of Ms. Saludo. However, in a memorandum dated
February 3, 1987, and addressed to depository banks of the said two corporations, Ms. Saludo
revoked the authorizations previously issued upon finding that Mr. Yim Kam Shing was a
Hongkong Chinese national staying in the country on a mere tourist visa, and designated
James Dy as her co-signatory and Enrico Reyes Santos as the other authorized signatory with
Teresita Yu as the latter's co-signatory. The said memorandum was approved by then
Commissioner Mary Concepcion Bautista of the Commission.
On February 11, 1987, the OIC withdrew the amount of P400,000.00, more or less, from the
Metropolitan Bank and Trust Company against the accounts of the said corporations for
payment of the salaries of the staff, employees and laborers of the same for the period from
February 1 to 15 of 1987. On February 13, 1987, respondents Yeung Chun Kam Yeung Chun Ho
and Archie Chan who are all in Hongkong, instituted through Yim Kam Shing an action for
damages with prayer for a writ of preliminary injunction against the said bank, the Commission,
then Commissioner Mary Concepcion Bautista and the OIC, Saludo, docketed as Civil Case
No. 54298 of Branch 152 of the Regional Trial Court at Pasig, Metro Manila, presided by
respondent judge, and questioning the aforesaid revocation of the authorization as signatory
previously granted to Mr. Yim Kam Shing as private respondents' representative. On February
16, 1987, respondent judge issued ex-parte the questioned temporary restraining order
enjoining the bank, its attorneys, agents or persons acting in their behalf "from releasing any
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funds of American Inter-fashion Corporation without the signature of plaintiff Yim Kam Shing
and to desist from committing any other acts complained of ..." and the Commission "from
enforcing the questioned memorandum dated February 3, 1987" (Annex "J" Petition).
On February 20, 1987, the Commission filed a motion to dismiss with opposition to plaintiffs'
(private respondents herein) prayer for a writ of preliminary injunction on the ground that the
trial court has no jurisdiction over the Commission or over the subject of the case and that
assuming arguendo its jurisdiction, it acted with grave abuse of discretion since private
respondents as 33% minority shareholders are not entitled to any restraining order or
preliminary injunction. On March 5, 1987, respondent judge issued the other assailed order
denying the Commission's motion to dismiss and granting private respondents prayer for a writ
of preliminary injunction on a P10,000 bond (Annex "L," Petition). On March 20, 1987, the
Commission filed the petition at bar questioning the jurisdiction of respondent judge's court
over it and praying for (a) the nullification of the aforesaid February 16 and March 5, 1987
orders and (b) the issuance of a writ of prohibition ordering the respondent judge to cease
and desist from proceeding with the said case.
On March 24, 1987, the Court issued a temporary restraining order, "ordering respondent judge
to cease and desist from enforcing his orders dated February 16 and March 5, 1987 and from
proceeding with Civil Case No. 54298 ... subject to the condition that the amounts that the
petitioner may withdraw from the accounts of (the sequestered corporations) with the
Metropolitan Bank and Trust Company, Inc., shall be limited to the 'necessary operating
expenses of the two companies and for the payment of the salaries, wages and allowances
of the companies" staff, employees and laborers" ... and that the proceeds and income
received shall likewise in due course be deposited with the said companies' accounts with the
said Metropolitan Bank and Trust Company, Inc."
On the issue of jurisdiction squarely raised, as above indicated, the Court sustains petitioner's
stand and holds that regional trial courts and the Court of Appeals for that matter have no
jurisdiction over the Presidential Commission on Good Government in the exercise of its powers
under the applicable Executive Orders and Article XVIII, section 26 of the Constitution and
therefore may not interfere with and restrain or set aside the orders and actions of the
Commission. Under section 2 of the President's Executive Order No. 14 issued on May 7, 1986,
all cases of the Commission regarding "the Funds, Moneys, Assets, and Properties Illegally
Acquired or Misappropriated by Former President Ferdinand Marcos, Mrs. Imelda Romualdez
Marcos, their Close Relatives, Subordinates, Business Associates, Dummies, Agents, or
Nominees" 1 whether civil or criminal, are lodged within the "exclusive and original jurisdiction
of the Sandiganbayan" 2 and all incidents arising from, incidental to, or related to, such cases
necessarily fall likewise under the Sandiganbayan's exclusive and original jurisdiction, subject
to review on certiorari exclusively by the Supreme Court. 3
The Constitution and the applicable Executive Orders and established legal principles and
jurisprudence fully support the Court's ruling at bar.
1. The very first Executive Order issued by President Corazon C. Aquino after her assumption of
office and the ouster of deposed President Ferdinand E. Marcos on February 25, 1986 was
Executive Order No. 1 issued on February 28, 1986 creating the Presidential Commission on
Good Government, charging it with the task of assisting the President in regard to the
"recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates, whether located in the
Philippines or abroad, including the takeover or sequestration of all business enterprises and
entities owned or controlled by them, during his administration, directly or through nominees,
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by taking undue advantage of their public office and/or using their powers, authority,
influence, connections or relationship." 4
In the discharge of its vital task "to recover the tremendous wealth plundered from the people
by the past regime in the most execrable thievery perpetrated in all history," 5 or "organized
pillage" (to borrow a phrase from the articulate Mr. Blas Ople 6 ), the Commission was vested
with the ample power and authority
(a) x x x
(b) to sequester or place or cause to be placed under its control or possession any building or
office wherein any ill-gotten wealth or properties may be found, and any records pertaining
thereto, in order to prevent their destruction, concealment or disappearance which would
frustrate or hamper the investigation or otherwise prevent the Commission from accomplishing
its task.
(c) to provisionally takeover in the public interest or to prevent the disposal or dissipation of
business enterprises and properties taken over by the government of the Marcos
Administration or by entities or persons close to former President Marcos, until the transactions
leading to such acquisition by the latter can be disposed of by the appropriate authorities.
(d) to enjoin or restrain any actual or threatened commission of acts by any person or entity
that may render moot and academic, or frustrate or otherwise make ineffectual the efforts of
the Commission to carry out its task under this Order. ... 7
As stressed in Baseco "So that it might ascertain the facts germane to its objectives, it [the
Commission] was granted power to conduct investigations; require submission of evidence by
subpoena ad testificandum and duces tecum; administer oaths; punish for contempt. It was
given power also to promulgate such rules and regulations as may be necessary to carry out
the purposes of (its creation)." 8
2. These ample powers and authority vested in the Commission by the President in the exercise
of legislative power granted her in the Provisional (Freedom) Constitution 9 were confirmed in
said Constitution and in the 1987 Constitution. Thus, the Freedom Constitution (Proc. No. 3)
mandated that 'The President shall give priority to measures to achieve the mandate of the
people to: .. (d) recover ill-gotten properties amassed by the leaders and supporters of the
previous regime and protect the interest of the people through orders of sequestration or
freezing of assets or accounts. ..." 10 The Constitution overwhelmingly ratified by the people in
the February 2, 1987 plebiscite likewise expressly confirmed that:
Sec. 26. The authority to issue sequestration or freeze orders under Proclamation No. 3 dated
March 25, 1986 in relation to the recovery of ill- gotten wealth shall remain operative for not
more than eighteen months after the ratification of this Constitution. However, in the national
interest, as certified by the President, the Congress may extend said period.
A sequestration or freeze order shall be issued only upon showing of a prima facie case. The
order and the list of the sequestered or frozen properties shall forthwith be registered with the
proper court. For orders issued before the ratification of this Constitution, the corresponding
judicial action or proceeding shall be filed within six months from its ratification. For those issued
after such ratification, the judicial action or proceeding shall be commenced within six months
from the issuance thereof.
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The sequestration or freeze order is deemed automatically lifted if no judicial action or

proceeding is commenced as herein provided. 11
3. As can be readily seen from the foregoing discussion of the duties and functions and the
power and authority of the Commission, it exercises quasi-judicial functions. In the exercise of
quasi-judicial functions, the Commission is a co-equal body with regional trial courts and "co-
equal bodies have no power to control the other." 12 The Solicitor General correctly submits
that the lack of jurisdiction of regional trial courts over quasi-judicial agencies is recognized in
section 9, paragraph 3 of Batas Pambansa Blg. 129 (the Judiciary Reorganization Act of 1980),
which otherwise vests exclusive appellate jurisdiction in the Court of Appeals over all final
judgment, decisions, resolutions, orders, or awards of regional trial courts and quasi judicial
agencies, instrumentalities, boards or commissions. But as already indicated hereinabove, the
Court of Appeals is not vested with appellate or supervisory jurisdiction over the Commission.
Executive Order No. 14, which defines the jurisdiction over cases involving the ill-gotten wealth
of former President Marcos, his wife, Imelda, members of their immediate family, close
relatives, subordinates, close and/or business associates, dummies, agents and nominees,
specifically provides in section 2 that "The Presidential Commission on Good Government shall
file all such cases, whether civil or criminal, with the Sandiganbayan which shall have exclusive
and original jurisdiction thereof." Necessarily, those who wish to question or challenge the
Commission's acts or orders in such cases must seek recourse in the same court, the
Sandiganbayan, which is vested with exclusive and original jurisdiction. The Sandiganbayan's
decisions and final orders are in turn subject to review on certiorari exclusively by this Court.
4. Having been charged with the herculean task of bailing the country-out of the financial
bankruptcy and morass of the previous regime and returning to the people what is rightfully
theirs, the Commission could ill-afford to be impeded or restrained in the performance of its
functions by writs or injunctions emanating from tribunals co-equal to it and inferior to this
Court. Public policy dictates that the Commission be not embroiled in and swamped by legal
suits before inferior courts all over the land, since the loss of time and energy required to
defend against such suits would defeat the very purpose of its creation. Hence, section 4(a)
of Executive Order No. 1 has expressly accorded the Commission and its members immunity
from suit for damages in that: "No civil action shall lie against the Commission or any member
thereof for anything done or omitted in the discharge of the task contemplated by this order."
The law and the courts frown upon split jurisdiction and the resultant multiplicity of actions. To
paraphrase the leading case of Rheem of the Phil., Inc. vs. Ferrer, et al,12-a to draw a tenuous
jurisdiction line is to undermine stability in litigations. A piecemeal resort to one court and
another gives rise to multiplicity of suits, To force the parties to shuttle from one court to another
to secure full determination of their suit is a situation gravely prejudicial to the administration
of justice. The time lost, the effort wasted, the anxiety augmented, additional expenses
incurred, the irreparable injury to the public interest – are considerations which weigh heavily
against split jurisdiction.
Civil Case No. 54298 pending before respondent judge is expressly denominated as one "for
damages with prayer for a writ of preliminary injunction" (Annex "I," petition) filed by private
respondents against the Commission and then Commissioner Mary Concepcion Bautista. The
said case is clearly barred by the aforequoted immunity provision of Executive Order No. 1, as
buttressed by section 4(b) thereof which further provides that: "No member or staff of the
Commission shall be required to testify or produce evidence in any judicial, legislative or
administrative proceeding concerning matters within its official cognizance."
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Executive Order No. 1 thus effectively withholds jurisdiction over cases against the Commission
from all lower courts, including the Court of Appeals, except the Sandiganbayan in whom is
vested original and exclusive jurisdiction and this Court. Early on, in special civil actions
questioning challenged acts of the Commission, its submittal that the cited Executive Order
bars such actions in this Court was given short shrift because this Court, as the third great
department of government vested with the judicial power and as the guardian of the
Constitution, cannot be deprived of its certiorari jurisdiction to pass upon and determine
alleged violations of the citizens' constitutional and legal rights under the Rule of Law.
5. The rationale of the exclusivity of such jurisdiction is readily understood. Given the magnitude
of the past regime's "organized pillage" and the ingenuity of the plunderers and pillagers with
the assistance of the experts and best legal minds available in the market, it is a matter of
sheer necessity to restrict access to the lower courts, which would have tied into knots and
made impossible the Commission's gigantic task of recovering the plundered wealth of the
nation, whom the past regime in the process had saddled and laid prostrate with a huge $27
billion foreign debt that has since ballooned to $28.5 billion.
To cite an example as recorded in Baseco, "in the ongoing case filed by the government to
recover from the Marcoses valuable real estate holdings in New York and the Lindenmere
estate in Long Island, former PCGG chairman Jovito Salonga has revealed that their names
do not appear on any title to the property. Every building in New York is titled in the name of
a Netherlands Antilles Corporation, which in turn is purportedly owned by three Panamanian
corporations, with bearer shares. This means that the shares of this corporation can change
hands any time, since they can be transferred, under the law of Panama, without previous
registration on the books of the corporation. One of the first documents that we discovered
shortly after the February revolution was a declaration of trust handwritten by Mr. Joseph
Bernstein on April 4, 1982 on a Manila Peninsula Hotel stationery stating that he would act as
a trustee for the benefit of President Ferdinand Marcos and would act solely pursuant to the
instructions of Marcos with respect to the Crown Building; in New York." 13 Were it not for this
stroke of good fortune, it would have been impossible, legally and technically, to prove and
recover this ill-gotten wealth from the deposed President and his family, although their
ownership of these fabulous real estate holdings were a matter of public notoriety
Hence, the imperative need for the Government of the restored Republic as its first official act
to create the Commission as an administrative and quasi- judicial commission to recover the
ill-gotten wealth "amassed from vast resources of the government by the former President, his
immediate family, relatives and close associates." 14
This is the only possible and practical way to enable the Commision to begin to do its
formidable job. Thus, in the fifties in an analogous case, the Court taking cognizance of the
trend to vest jurisdiction in administrative commissions and boards the power to resolve
specialized disputes ruled that Congress in requiring the Industrial Court's intervention in the
resolution of labor-management controversies likely to cause strikes or lockouts meant such
jurisdiction to be exclusive, although it did not so expressly state in the law. The court held that
under the sense-making and expeditious doctrine of primary jurisdiction ... the courts cannot
or will not determine a controversy involving a question which is within the jurisdiction of an
administrative tribunal, where the question demands the exercise of sound administrative
discretion requiring the special knowledge, experience, and services of the administrative
tribunal to determine technical and intricate matters of fact, and of the regulatory statute
administered.15
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In this era of clogged court dockets, the need for specialized administrative boards or
commissions with the special knowledge, experience and capability to hear and determine
promptly disputes on technical matters or essentially factual matters, subject to judicial review
in case of grave abuse of discretion, has become well nigh indispensable. For example, the
Court in the case of Ebon vs. de Guzman16 noted that the lawmaking authority, in restoring
to the labor arbiters and the NLRC their jurisdiction to award all kinds of damages in labor
cases, as against the previous P.D. amendment splitting their jurisdiction with the regular courts,
"evidently..... had second thoughts about depriving the Labor Arbiters and the NLRC of the
jurisdiction to award damages in labor cases because that setup would mean duplicity of
suits, splitting the cause of action and possible conflicting findings and conclusions by two
tribunals on one and the same claim."
6. The Court recently had occasion to stress once more, in G.R. No. 82218, Reyes vs. Caneba
March 17, 1988, that "(T)he thrust of the related doctrines of primary administrative jurisdiction
and exhaustion of administrative remedies is that courts must allow administrative agencies to
carry out their functions and discharge their responsibilities within the specialized areas of their
respective competence. Acts of an administrative agency must not casually be overturned
by a court, and a court should as a rule not substitute its judgment for that of the administrative
agency acting within the perimeters of its own competence." Applying these fundamental
doctrines to the case at bar, the questions and disputes raised by respondents seeking to
controvert the Commission's finding of prima facie basis for the issuance of its sequestration
orders as well as the interjection of the claims of the predecessor of American Inter-fashion
and De Soleil Corporations, viz. Glorious Sun Phil., headed by Nemesis Co are all questions that
he within the primary administrative jurisdiction of the Commission that cannot be prematurely
brought up to clog the court dockets without first resorting to the exhaustion of the prescribed
administrative remedies. The administrative procedure and remedies for contesting orders of
sequestration issued by the Commission are provided for in its rules and regulations. Thus, the
person against whom a writ of sequestration is directed may request the lifting thereof, in
writing; after due hearing or motu proprio for good cause shown, the Commission may lift the
writ unconditionally or subject to such conditions as it may deem necessary, taking into
consideration the evidence and the circumstances of the case. The resolution of the
Commission is appealable to the President of the Philippines. The Commission conducts a
hearing, after due notice to the parties concerned to ascertain whether any particular asset,
property or enterprise constitutes ill-gotten wealth. The Commission's order of sequestration is
not final, at the proper time, the question of ownership of the sequestered properties shall be
exclusively determined in the Sandiganbayan, whose own decisions in turn are subject to
review exclusively by the Supreme Court.
It should be emphasized here, as again stressed by the Court in the recent case of Republic,
et al. vs. De los Angeles, et al., G.R. No. L-30240, March 25, 1988, that "it is well-recognized
principle that purely administrative and discretionary function may not be interfered with by
the courts. In general, courts have no supervising power over the proceedings and actions of
the administrative departments of government. This is generally true with respect to acts
involving the exercise of judgment or discretion, and findings of fact. There should be no
thought of disregarding the traditional line separating judicial and administrative
competence, the former being entrusted with the determination of legal questions and the
latter being limited as a result of its expertise to the ascertainment of the decisive facts." This is
specially true in sequestration cases affected by the Commission for the recovery of the nation'
s plundered wealth that may affect the nation's very survival, in the light of the constitutional
mandate that such sequestration or freeze orders "shall be issued only upon showing of a prima
facie case" 17 and the settled principle that findings by administrative or quasi-judicial
agencies like the Commission are entitled to the greatest respect and are practically binding
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and conclusive, like the factual findings of the trial and appellate courts, save where they are
patently arbitrary or capricious or are not supported by substantial evidence.
7. The Solicitor General has herein picturesquely submitted its "more than prima facie
evidence" for its sequestration and provisional take-over of the subject assets and properties
as follows:
... the subject sequestered assets are completely owned and/or completely utilized and/or
otherwise taken over by the Marcoses, with due 'compensation' to their co-participants in
terms of tacitly agreed upon 'mutual benefits,' for their personal benefits and selfish economic
interests, including particularly the salting, stashing and secreting of dollars abroad, cum loculo
et pera as witness the following, by way of summarizing PCGG's submission, ... as supported
by more than prima facie evidence:
The fun: Glorious Sun, Phils., headed by Nemesio G. Co and with private respondents herein
holding 40% of the shares of stock, soon after its incorporation on June 8, 1977, engaged in
dollar salting, among other business unlawful manipulations. This was unearthed by the
Garments and Textiles Export Board (GTEB) in January 1984. At that time, in the reign of Marcos,
it had been decreed that the matter of dollar salting was the exclusive domain of the so-
called 'Binondo Central Bank,' and any other person or en entity found engaging therein was
guilty of 'economic sabotage,' more so where the 'saboteurs' are aliens like the herein private
respondents who are otherwise known as the 'Hongkong investors.
The squeeze: GTEB, under the Ministry of Trade, under then .Minister Roberto V. Ongpin, on
April 27,1984 choked the lifeliness of Glorious Sun in terms of cancelling its export quotas, export
authorizations, and license to maintain bonded warehouses and of disqualifying its 'major
stockholders and officers from engaging in exports.' With protestations of innocence, Glorious
Sun on May 25, 1984 even had the temerity to file a Petition with the Supreme Court (G.R. No.
67180). How did Glorious Sun extricate itself from the tightening .screws let loose upon its neck
by the then reigning Ceasar with his apparently legal contretemps?
Easy: Give unto Ceasar what is Ceasar's. In July, 1984, herein private respondents came up
with two (2) joint venture agreements. and within the month, respondents themselves
withdrew their Petition in G.R. No. 67180. Pursuant to the two (2) joint venture agreements,
American Inter-Fashion Co. was incorporated on August 22, 1984 and De Soleil on September
3, 1984, in each of which herein private respondents, the Hongkong investors, held 33% of the
shares of stock while the 'Filipino investors' held 67%.
The sting:
In August, 1984, the GTEB informed Glorious Sun, Phils., that the substantial portion of the latter's
cancelled export quotas had been awarded to American Inter-Fashion and De Soleil. But
while the Yeung brothers control only 33% of the two corporations, they, however, operated
and managed said corporation and utilized 100% of their export quota allocations. The Yeung
brothers paid the nominees of the Filipino investors controlling 67%, the amount of $3.75 per
dozen as royalty for the utilization of the 67% export quota of said two corporations. It may also
be stated that even before the export quota allocations were awarded to American Inter-
Fashion and De Soleil Glorious Sun, Phils., despite the GTEB decision, Annex A hereof, was
allowed to ship out garments worth US $1,261,794.00 under its [previously cancelled] quota
from April 27 to May 30,1984. And on petition of a foreign buyer, Generra Sports Company of
Seattle, Washington, Glorious Sun, Phils., was allowed to fin its 3rd and 4th fashion-quarter
orders of 186,080 pieces valued at about US $1,159,531.00. As a result, Glorious Sun, Phils.
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continued to operate its bonded manufacturing warehouse ordered closed by the GTEB
(Please see GTEB Comment dated June 4, 1984 in G.R. No. 67180.). (pp. 9-10, Consolidated
Reply, May 15, 1987).
The end of the fun: All was fun that ended in fun for all the participants in the fun, the squeeze
and the sting, until of course the EDSA Revolution, when PCGG shortly sequestered the subject
assets and provisionally took over the conservation thereof pursuant to law (Secs. 2 & 3,
Executive Order No. 1 and related issuances) and pursuant to the very Baseco case cited
ironically in the Motion at bar. Again, with protestations of innocence, the herein private
respondents through their counsel and now Congressman Francisco Sumulong with the game
temerity have gone to the courts and other forum (Civil Case No. 54298 entitled Yeung Chun
Kam et al. vs. PCGG, et al., RTC, Branch 151, Pasig, Metro Manila: SEC Case No. 003144 entitled
Yeung Chun Kam et al. vs. PCGG, et al., Securities and Exchange Commission) just as Nemesio
Co allegedly President and owner of Glorious Sun, through counsel Benjamin C. Santos, has
gone to the courts with the same protestations of innocence and equal temerity (Civil Cases
Nos. 86-37220 and 86-37221 before RTC, Branches 33 and 36, Manila; Civil Cases Nos. 761-87
and 762-87, Metropolitan Trial Court, Branch 56, Malabon; Civil Case No. 54911, RTC, Branch
151 Pasig, Metro Manila) and with his own 'brand' of private army to boot, resorted to the
midnight plunder of the subject sequestered assets under a "midnight" writ (issued in Civil Case
No. 54911 by Judge Eutropio Migriño). Obviously, the herein private respondent as well as
Nemesio Co would like to continue their fun. 18
Such proliferation of suits filed against the Commission in the trial courts, and gross disregard
of the Commission's primacy of administrative jurisdiction has of course compelled the
Commission to question in turn in this Court and obtain restraining orders against the lower
courts' usurpation of jurisdiction, in the following pending cases:
1. G.R. No. 79901 (PCGG v. Hon. Eutropio Migriño Executive Judge, Regional Trial Court of Pasig
and Glorious Sun Fashion Manufacturing Co., Inc. and Nemesio Co )
2. G.R. No. 80072 (PCGG v. Emilio Opinion, Presiding Judge of the Metropolitan Trial Court,
Branch 56, Malabon, Metro Manila; Glorious Sun Fashion Manufacturing Co., Inc. and Nemesio
Co )
3. G.R. No. 80121 (PCGG v. Hon. Maximo M. Japzon as Presiding Judge of the Regional Trial
Court, Branch 36, Manila; Glorious Sun Fashion Garments Manufacturing Co., Inc. and
Nemesio Co.)
4. G.R. No. 80281 (PCGG v. Hon. Felix Barbers as Presiding Judge of the Regional Trial Court,
Branch 33, Manila, Deputy Sheriff Salvador A. Pueca and Glorious Sun Fashion Garments
Manufacturing Co., Inc. and Nemesio Co )
5. G.R. No. 80395 (PCGG v. Hon. Emiho C. Opinion as Presiding Judge of Branch 56 of the
Metropolitan Trial Court, Malabon, Metro Manila; Glorious Sun Garments Manufacturing Co.,
Inc. and Nemesio Co)
Going back to the pre-EDSA squeeze and scam, it need only be added that everything at the
time seemingly ended to everybody's satisfaction. Nemesio Co's Glorious Sun, Phil.
notwithstanding the GTEB's closure order, continued to operate its bonded warehouse and to
ship out millions of dollars of garments under its supposedly cancelled export quotas and
peremptorily withdrew on August 20, 1984 19 its petition in G.R. No. 67180 from this Court . The
two new substitute corporations American Inter-Fashion Co. and De Soleil cropped out of
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nowhere to take over the factories and export quotas and it was of public notoriety,
particularly in the trade, that the family had taken over.
8. This is the thrust of the complaint filed on July 16, 1987 [well ahead of the Constitutional
deadline of August 2, 1987]by the Solicitor General on behalf of the Commission representing
Plaintiff Republic of the Philippines docketed as Civil Case No. 0002, PCGG-3, with the
Sandiganbayan, against therein defendants Ferdinand E. Marcos, Imelda R. Marcos, Imelda
(Imee) R. Marcos, Tomas Manotoc, Irene R. Marcos Araneta, Gregorio Ma. Araneta III and
Ferdinand R. Marcos, Jr., for reversion, reconveyance, restitution, accounting and damages,
involving, among others, the subject matter of the petition at bar, namely, American Inter-
Fashion and De Soleil Corporations, together with their assets, shares of stocks, effects,
evidence and records, which the Commission avers, based on documents in its possession,
were "illegally acquired by said defendants in unlawful concert with one another and with
gross abuse of power and authority. ... 20 The Commission correctly submits that "questions on
whether or not the Plaintiff Republic of the Philippines is entitled to reversion, reconveyance,
restitution, accounting or damages in respect of the above-subject matter is for the
Sandiganbayan to resolve" — not in any of the scattershot cases that respondents have filed
in the various courts of the land.
The Court has so held in various cases, among them, Ofelia Trinidad vs. PCGG, et al., G.R. No.
77695, June 16, 1987, wherein We pointed out that — "The Supreme Court is not a trier of facts:
it cannot conceivably go over all the minute evidence that may be presented by the PCGG.
What is significant is that this Court believes that in the instant case no abuse, much less a
grave abuse of discretion has been exercised by the PCGG," and Agro-Industrial Foundation
Colleges of Southern Philippines, et al. vs. Regional XI Operating Team No. Five and/or the
PCGG, G.R. No. 78116, July 28, 1987, wherein We ruled that the parties affected "may raise
their defenses at the appropriate time and before the proper forum [the Sandiganbayan].
They will have their day in court."
9. What has not been appreciated by respondents and others similarly situated is that the
provisional remedies (including the encompassing and rarely availed of remedy of provisional
takeover) granted to the Commission in pursuing its life-and-death mission to recover from a
well-entrenched plundering regime of twenty years, the ill-gotten wealth which rightfully
belongs to the Republic although pillaged and plundered in the name of dummy or front
companies, in several known instances carried out with the bold and mercenary, if not
reckless, cooperation and assistance of members of the bar as supposed nominees, the full
extent of which has yet to be uncovered, are rooted in the police power of the State, the most
pervasive and the least limitable of the powers of Government since it represents "the power
of sovereignty, the power to govern men and things within the limits of its domain." 21 Police
power has been defined as the power inherent in the State "to prescribe regulations to
promote the health, morals, education, good order or safety, and general welfare of the
people."22 Police power rests upon public necessity and upon the right of the State and of the
public to self-protection. 23 " Salus populi suprema est lex" — the welfare of the people is the
supreme law. For this reason, it is coextensive with the necessities of the case and the
safeguards of public interest. Its scope expands and contracts with changing needs. 24 "It may
be said in a general way that the police power extends to all the great public needs. It may
be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or strong
and preponderant opinion to be greatly and immediately necessary to the public welfare."
25
That the public interest and the general welfare are subserved by sequestering the purported
ill-gotten assets and properties and taking over stolen properties of the government
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channeled to dummy or front companies is stating the obvious. The recovery of these ill-gotten
assets and properties would greatly aid our financially crippled government and hasten our
national economic recovery, not to mention the fact that they rightfully belong to the people.
While as a measure of self-protection, if, in the interest of general welfare, police power, may
be exercised to protect citizens and their businesses in financial and economic matters, it may
similarly be exercised to protect the government itself against potential financial loss and the
possible disruption of governmental functions. Police power as the power of self-protection on
the part of the community that the principle of self-defense bears to the individual. 26 Truly, it
may be said that even more than self-defense, the recovery of ill-gotten wealth and of the
government's own properties involves the material and moral survival of the nation, marked
as the past regime was by the obliteration of any line between private funds and the public
treasury and abuse of unlimited power and elimination of any accountability in public office,
as is a matter of public record and knowledge.
10 Despite all the complexities and difficulties, the original Commission created under
Executive Order No. 1 headed by its first chairman, now Senate President Jovito R. Salonga,
and composed of Hon. Ramon Diaz, the incumbent chairman, now Associate Justice Pedro
L. Yap of this Court, Hon. Raul Daza, now a ranking member of the House of Representatives,
and Hon.. Mary Concepcion Bautista, now chairman of the Human Rights Commission, and
the present Commission headed by Chairman Ramon Diaz have produced unprecedented
positive results for which they fully deserve the inadequately expressed (– at times – )
appreciation and gratitude of the nation. The report as of the end of 1987 of Chairman Ramon
Diaz shows the great extent of the Commission's accomplishments despite its limited resources,
but fortunately bolstered by the spontaneous and welcome assistance of friendly foreign
governments and lawyers, in the brief period of less than two years since its creation and which
are regarded yet as the tip of the iceberg:
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT SUMMARY OF ACCOMPLISHMENTS As of

January 05, 1988
1. CASH & OTHER CASH ITEMS
Funds turned over to
the treasury — Gen. Fund 592,350,799.00
Proceeds of Sale of
Princeton Property with
PNB—New York 20,500,000.00
Proceeds of New Jersey
Settlement 9,669,781.00
Proceeds of Auction Sale 17,231,429.00
Proceeds of Sale of
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Paintings 8,879,500.00
SBTC (1st payment Seq. T/Ds) 250,000,000.00
UPCB Bal of Profit Sharing 77,678,854.00
Other Cash Items
(Certificate of Time
Deposits) 1,492,951.00
Contribution to CARP 140,000,000.00
Sub-Total P1,117,803,314.00
2. OTHER RECOVERED FUNDS
Government Funds in TRB/
National Treasury
(Casino Funds) 1,138,000,000.00
T-Bills delivered to the
office of the President 100,020,000.00
Funds from Filbakers 59,884,453.00
P1,297,904,453.00
3. RECEIVABLES
Projected Proceeds of Sale
of knick-knacks and
Furnitures from Hachensach
in Olympic Towers 20,720,000.00
Projected Proceeds of New York
Properties (Lindenmere,
Olympic Towers Apartments,
Makiki Properties) $9.0M 184,500,000.00
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SBTC Certificates of Time
Deposits 731,407,842.00
Sub-total P936,627,842.00
4. FUNDS HELD IN TRUST
Funds with the Treasury 71,975,722.00
Funds with PNB-Ortigas 52,535,298.00
Sub-Total P124,511,020.00
GRAND TOTAL P3,476,846,629.00
5. JEWELRY
Estimated Value P250 M
6. COMPANIES WHICH WERE AFFECTED
BY SEQUESTRATION ORDER INCLUDING
RADION AND TV STATIONS
297 Companies were subject to
sequestration (including those
whose sequestrations was lifted and those surrendered companies
by J.Y. Campos and those holding
companies whose investments in
shares were affected by Writs of
Sequestration)
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74 Companies have available
financial statements with
estimated total assets of P44B
223 Companies still without
financial statements
18 TV Stations were sequestered
38 Radio Stations were sequestered
7. REAL PROPERTIES (BUILDING AND
IMPROVEMENTS)
Coconut Palace
13 Houses and improvements
12 Condominium units
Offices of R.S. Benedicto, E. Garcia, etc.
2 National Art and Museum Centers
2 Fishponds
8. SEQUESTERED LANDS (INCLUDING
IMPROVEMENTS)
450 parcels of land (including
improvements) have been issued
with specific Writs of Sequestration
of which only 148 have an area of
19,276,970.76 sq. m.
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23 Haciendas of which 13 haciendas
constituting RSB Farms, Inc. have
an area of 27,859,207.00 sq m.
9. SURRENDERED LANDS BY JOSE YAO CAMPOS
Total area in sq. m. of all surrendered
properties 19,684,435.45 sq. m.
Disposed to DAR (202 IRC titles) with
total area of 13,997,529 sq. m.
Remaining balance of 75 titles recommended for
disposal, with total area of 5,686,906.45 sq. m.
OTHER INFORMATION:
81 Sequestered Vehicles
29 Sequestered Aircrafts
13 Sequestered Vessels
11. A final word about the alleged misdeeds of the OIC which the Solicitor General has
denounced as false and unfounded. 27 Such alleged misdeeds, even if taken as true for the
nonce, do not and cannot detract from the Commission's accomplishments in the unselfish
service of the nation, rendered with integrity and honor and without the least taint of scandal
and self-interest (in welcome contrast to the past regime's rape and plunder sub-silentio of the
nation!). In our free and democratic space now, with full restoration of a free press and the
people's liberties, it should be acknowledged with some sort of appreciation that any such
misdeeds on the part of the Commission's representative or agents have been subjected to
full public exposure and the erring parties dismissed and replaced.
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ACCORDINGLY, the writs of certiorari and prohibition shall issue. The orders of respondent
Judge dated February 16, 1987 and March 5, 1987 are hereby set aside as null and void.
Respondent Judge is ordered to cease and desist from any further proceeding in Civil Case
No. 54298 which is hereby ordered DISMISSED. This decision is IMMEDIATELY EXECUTORY, **
Yap, Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento and
Cortes, JJ., concur.
Griño-Aquino, J., took no part.
Separate Opinions
ADDENDUM
TEEHANKEE, C.J.: concurring:
I make this Addendum to the foregoing main opinion of the Court to express briefly my views
on certain statements made in the dissenting opinion of Mr. Justice Gutierrez and the separate
concurring opinion with qualifications of Mr. Justice Feliciano, which for lack of time I have not
been able to submit to the majority who have concurred with the opinion written by me for
the Court. *** It is not that the statements I make in this Addendum are in any way
incompatible with those made in the main opinion; in fact, they are made simply by way of
clarification of amplification.
It can be readily seen from a reading of the main and the dissenting opinions that while both
are agreed that 67% of the shares and assets of the two corporations were taken over by the
family and crony of the deposed President, they view such takeover in different lights: The
main opinion gives prima facie status to the position taken by the petitioner Commission that
Nemesio G. Co, the previous majority shareholder of Glorious Sun Fashion Garments Mfg. Co.,
predecessor of the two corporations, had made a deal with Mr. Marcos and transferred his
interest to the nominees of Mr. Marcos in return for benefits and concessions received; while
the dissenting opinion views Mr. Co as a "poor victim" of Mr. Marcos. This dispute, involving as
it does PCGG-sequestered properties, as held by the majority on the basis of the provisions of
the law, Executive Order. No. 14, comes within the exclusive and original jurisdiction of the
Sandiganbayan's jurisdiction limited to the PCGG acting against the nominees of Mr. Marcos
holding 67% of the shares and assets of the two corporations, and Mr. Co being free to sue the
PCGG in the regular courts. To force the State to draw a tenuous jurisdiction line and split
jurisdiction is to undermine stability in litigations and to force the parties, particularly the
government as represented by the PCGG to shuttle from one court to another to secure full
determination of its suit for reversal, reconveyance, restitution, etc., of the subject mater of the
petition, that is, the two corporations, together with the assets, shares of stock, evidence of
record, etc. It would be to create an intolerable situation gravely prejudicial to the
administration of justice, that undermines the tremendous task given to the PCGG to recover
ill-gotten wealth accumulated by Mr. Marcos, his immediate family, relatives, subordinates
and close associates, directly or through nominees.
The main opinion's quoting the "picturesque" submittal by the Solicitor General of prima facie
evidence for its case should not connote, as misperceived in the dissenting opinion, that said
submittals represent the facts. At this stage, neither the submittals of the Solicitor General nor
those of Mr. Co as stated in the dissenting opinion can be taken as established facts. These
issues have to be threshed out in a proper trial before the Sandiganbayan.
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The dissenting opinion states that "(I)f the PCGG investigation action were solely against the
67% allegedly misappropriated by a Marcos daughter and a Marcos crony, I will have no
hesitation in concurring with the majority opinion that this is a case where exclusive jurisdiction
over all incidents is vested in the Sandiganbayan.
In response, it should be stressed that this is a case precisely where jurisdiction over all incidents
should be vested in one court, the Sandiganbayan. The issues are not simplistic and precisely
because of this, all hearings and processes should be limited exclusively in one court, subject
to review by the Supreme Court. Otherwise, as already pointed out, given the magnitude of
the past regime's organized pillage" and the ingenuity of the plunderers and pillagers with the
assistance of the experts and best legal minds available in the market, and in several known
instances carried out with the questionable and mercenary cooperation and assistance of
members of the bar as supposed nominees, the government's claims would have been tied
into knots throughout the land as in this case and made impossible the Commission's gigantic
task of seeking to recover the plundered wealth of the nation for the benefit of the people to
whom it rightfully belongs.
Again, it should also be stressed that jurisdiction is conferred by law which, in the case of ill-
gotten wealth of Mr. Marcos, has been vested exclusively in the Sandiganbayan. the question
of the wisdom of vesting such exclusive jurisdiction in one court, the Sandiganbayan, is not for
this Court to encroach upon or legislate.
With respect to the qualifications expressed by Mr. Justice Feliciano in his separate opinion, I
just to point out two things: First, the main opinion does not claim absolute immunity for the
members of the Commission. The cited section of Executive Order No. 1 provides the
Commission's members immunity from suit thus: "No civil action shall lie against the Commission
or any member thereof for anything done or omitted in the discharge of the task
contemplated by this order." No absolute immunity like that sought by Mr. Marcos in his
Constitution for himself and his subordinates is herein involved. It is understood that the
immunity granted the members of the Commission by virtue of the unimaginable magnitude
of its task to recover the plundered wealth and the State's exercise of police power was
immunity from liability for damages in the official discharge of the task granted the members
of the Commission much in the same manner that judges are immune from suit in the official
discharge of the functions of their office. Secondly, as to the seemingly grudging
acknowledgment of the achievements so far of the Commission in terms of recovered funds
and properties, the observation that the Sandiganbayan still has to rule that these funds and
assets constitute ill-gotten wealth of Mr. Marcos and his associates ignores two facts: (1) many
of these recovered funds and properties were turned over to the Commission by self-
confessed cronies and dummies of Mr. Marcos, who, as Mr. Marcos stated, had proper
documentation to the properties in their names, but who, because they were stricken by their
conscience or because of other extraneous considerations have voluntarily confessed to
being Mr. Marcos' dummies and turned over these recovered property and assets in tens if not
in hundreds of millions of pesos to the Commission; and (2) Rep. Act No. 1379 provides that
whenever any public officer or employee has acquired during his incumbency an amount of
property which is manifestly out of proportion to his salary as such public officer or employee
and to his other lawful income and the income from legitimately acquired property, such
unexplained wealth shall be presumed prima facie to have been unlawfully acquired, in an
appropriate proceeding, such as that filed in the Sandiganbayan, and the burden is placed
upon such public official or employee to show cause why the property aforesaid or any part
thereof should not be forfeited and declared property of the State. This provision is fully
applicable to Mr. Marcos and members of his family, all of whom were public officials during
his regime, as well as many of his cronies and associates who held public office and the burden
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is on them and not on the Commission or the Republic to show that their property is not ill-
gotten wealth.
FELICIANO, J., concurring:
I concur with the great bulk of the majority opinion so vigorously written by the Chief Justice. I
seek below to clarify, principally to myself, certain qualifications which do not affect the result
reached but which, to my mind, should be made.
The Presidential Commission on Good Government (PCGG) is, of course, an administrative

agency which has been charged with the vitally important task of investigating and
recovering "all ill-gotten wealth accummulated by former President Ferdinand E. Marcos, his
Philippines or abroad — during his administration, directly or through nominees, by taking
undue advantage of their public office and/or using their powers, authority, influence,
connections or relations." (Section 2[a], Executive Order No. 1, dated 28 February 1986; 82
Official Gazette, p. 1234 [3 March 1986]).
In the carrying out of this fundamental task, the PCGG has been authorized to sequester or
place under its control or possession assets which it believes constitute "ill-gotten wealth" of Mr.
Marcos or his associates. Necessarily, the PCGG is authorized to determine whether or not
there is sufficient prima facie basis to warrant sequestering particular assets as probably
constituting such "ill-gotten wealth." In Bataan Shipyard & Engineering Co., Inc. (Baseco) v.
Presidential Commission on Good Government, et al., G.R. No. 75885, 27 May 1987, it was
made abundantly clear that under Executive Order No. 14, dated 7 May 1986, the PCGG's
own rules and regulations and Article No. XVIII, Section 26 of the 1987 Constitution,
sequestration and take over orders issued by the PCGG must rest upon a prima facie basis.
It is also quite clear that the determinations made by the PCGG at the time of issuing
sequestration or provisional take over orders cannot be regarded as final determinations; that
the assets sequestered or provisionally taken over in fact constitute "ill-gotten wealth" within
the meaning of Executive Order No. 1 is a determination which can be finally made only by a
court; and that the court vested with jurisdiction to make that determination is the
Sandiganbayan. Thus, the PCGG was required to bring suit for recovery or reconveyance of
"ill-gotten wealth" before the Sandiganbayan by Executive Order No. 14 As pointed out in the
majority opinion, the Sandiganbayan is vested with exclusive original jurisdiction over such
cases.
The principal thrust of the Chief Justice's opinion is that to prevent the splitting of jurisdiction
and consequent multiplicity of cases relating to the ownership of assets which may have been
placed under sequestration or provisional take over orders, all such cases which are
reasonably related to the question of ownership and characterization of such assets, are
properly regarded as embraced within the exclusive original jurisdiction vested upon the
Sandiganbayan. I entirely agree with the basic holding. It would follow that all parties who
claim ownership of or rights to assets which have been subjected to sequestration and which
are the subject matter of proceedings before the Sandiganbayan must be regarded as
having a right to intervene in the proceedings before the Sandiganbayan. It seems equally
clear that parties who are not allowed to intervene in proceedings before the Sandiganbayan
cannot, consistently with the Due Process Clause of the Constitution, be regarded as bound
by any decision which the Sandiganbayan may render in respect of ownership of such assets.
There appears no basis for supposing that proceedings before the Sandiganbayan are in the
nature of in rem proceedings.
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I would submit, with respect, that the foregoing is all that is necessary to arrive at the resolution
of this case. The PCGG is clearly not a court. The majority opinion states that the PCGG
"exercise quasi-judicial functions" and that "in the exercise of quasi-judicial functions, the
PCGG is a co-equal body with Regional Trial Courts." It seems to me that PCGG can be
regarded as exercising quasi-judicial functions only in a loose and non-technical sense. The
PCGG is not a quasi-judicial body in the same sense that the National Labor Relations
Commission (NLRC), the Securities and Exchange Commission (SEC) and the Office of the
Insurance Commissioner (OIC) exercise quasi-judicial functions. The PCGG in issuing
sequestration or take over orders is not properly regarded as determining private rights, even
though subject to judicial review in a proper case. All that the PCGG is really doing in so issuing
such orders is determining that the exist prima facie basis for filing the appropriate proceedings
before the Sandiganbayan to seek recovery and reconveyance, etc., of the sequestered
assets as probably belonging to the category of "ill-gotten wealth." Without pre-empting the
question of the civil or criminal nature of such proceedings, the PCGG is appropriately
analogized not to a court or to a quasi-judicial body rather to a fiscal or public prosecutor.
I do not consider that this is simply a matter of verbal description or of semantic equivalency.
The preliminary or prima facie findings of the PCGG implicit in each issuance of sequestration
orders, are not entitled to the same respect that findings of fact of administrative agencies or
tribunals exercising quasi-judicial functions are ordinarily accorded by courts. The PCGG must
still carry the burden of proving before the Sandiganbayan that the assets it has sequestered
in fact belong to Mr. Marcos or his associates and that such assets constitute "ill-gotten wealth"
within the meaning of Executive Order No. 1 and Article No. XVIII (26) of the 1987 Constitution
or "ill-gotten properties" within the meaning of Article No. 2 [1] [b] of the Provisional Constitution
dated 25 March 1986.
In Section No. 4 of the majority opinion, it is said:
4. Having been charged with the herculean task of bailing the country out of the financial
functions by writ or injuctions emanating from tribunals co-equal to it and inferior to this Court.
Public policy dictates that the Commission be not embroiled in and swamped by legal suits
before inferior courts all over that land, since the loss of time and energy required to defend
against such suits would defeat the very purpose of its creation. Hence, Section 4 (a) of
Executive Order No. 1 has expressly accorded the Commission and its members immunity from
suit for damages in that: 'No civil action shall like against the Commission or any member
thereof for anything done or omitted in the discharge of the task contemplated by this order.'
xxx xxx xxx
damages with prayer for a writ of preliminary injunction (Annex "I", petition) filed by private
buttressed by Section 4 (b) thereof which further provides that: "No member or staff of the
xxx xxx xxx
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(Emphasis supplied)
The above underscored portions are, it is respectfully submitted, clearly obiter. It is important
to make clear that the Court is not here interpreting, much less upholding as valid and
constitutional, the literal terms of Section 4 (a), (b) of Executive Order No. 1. If Section 4 (a)
were given its literal import as immunizing the PCGG or any member thereof from civil liability
"for anything done or omitted in the discharge of the task contemplated by this Order," the
constitutionality of Section 4 (a) would, in my submission, be open to most serious doubt. For
so viewed, Section 4 (a) would institutionalize the irresponsibility and non-accountability of
members and staff of the PCGG, a notion that is clearly repugnant to both the 1973 and the
1987 Constitutions and a privileged status not claimed by any other official of the Republic
under the 1987 Constitution. Article No. XIII, Section 1 of the 1973 Constitution which formed
part of the Provisional Constitution of 25 March 1986, under Section 2 thereof, provided as
follows:
Section 1. Public office is a public trust. Public officers and employees shall serve with the
highest degree of responsibility, integrity, loyalty, and efficiency and shall remain accountable
to the people. (Emphasis supplied)
In closely comparable language, Article No. XI, Section 1 of the 1987 Constitution stresses that:
Section 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and lead modest lives. (Emphasis supplied)
It may be further submitted, with equal respect, that Section 4 (a) of Executive Order No. 1
was intended merely to restate the general principle of the law of public officers that the
PCGG or any member thereof may not be held civilly liable for acts done in the performance
of official duty, provided that such member had acted in good faith and within the scope of
his lawful authority. It may also be assumed that the Sandiganbayan would have jurisdiction
to determine whether the PCGG or any particular official thereof may be held liable in
damages to a private person injured by acts of such member. It would seem constitutionally
offensive to suppose that a member or staff member of the PCGG could not be required to
testify before the Sandiganbayan or that such members were exempted from complying with
orders of this Court.
Turning, finally, to Section No. 10 of the majority opinion, the information there set out is, of
course, impressive and heartening; it is, however, at once obiter and gratis. Neither the
magnitude of the figures nor the use of phrases such as "funds turned over to the treasury" and
"other recovered funds" should obscure the fact that the Sandiganbayan still has to rule that
all these funds and assets do constitute "ill-gotten wealth" of Mr. Marcos and his associates. It
seems important to bear in mind that no transfer of ownership to the Republic of the Philippines
can legally take place until a final ruling to that effect is rendered by the Sandiganbayan and,
ultimately, this Court.
GUTIERREZ, JR., J., dissenting:
It is with no little trepidation that I write this dissent to one of the valedictory decisions of the
Chief Justice. However, I have carefully gone over the pleadings and pertinent records and
am convinced that this is again one case where the Presidential Commission on Good
Government (PCGG) has stepped beyond legal and constitutional boundaries. I find no
alternative but to dissent.
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The PCGG has been given unprecedented powers by Executive Orders of a revolutionary
Government and by the Transitory Provisions of the Constitution.
Not content with powers which are more than sufficient to accomplish the purposes for which
it was created, the PCGG has, in various cases now before us, strained and broken beyond
what I view as the unduly generous guidelines of BASECO v. PCGG (150 SCRA 151). The instant
case is an example of how the PCGG may mindlessly encroach on the rights of hapless
individuals who are themselves victims of oppression and make it difficult if not virtually
impossible for them to readily recover what was seized against their will by persons close to
the former regime.
Since the PCGG has often acted as if the noble ends for which it was created perhaps justify
the employment of extreme and supra-legal measures, I submit, that the Supreme Court's
function is more to find out how the rights of parties caught by an unfeeling steam-roller may
be protected instead of going out of its way to shield the PCGG from legal suits and other
actions. The powerful PCGG needs no protection or succor from us. Private persons who plead
with PCGG for the maintenance of their rights but who are brusquely turned away are the
ones we should assist.
Notwithstanding the Court's decision in this case, the factual antecedents of the controversy
will still have to be determined after a protracted trial before the Sandiganbayan. However,
by calling the petitioner's picturesque (but illusive) presentation as "more than prima facie
evidence," the majority opinion might give the Sandiganbayan the wrong impression that said
submissions indeed represent the facts. I urge that this is not so. The facts are still to be
established.
We had occasion to look into the beginnings of this case in 1984 in G.R. No. 67180, Glorious
Sun Fashion Garments Manufacturing Co. v. Garments and Textile Export Board (GTEB), et al.
Glorious Sun started with a P600,000.00 capitalization in 1977. It has steadfastly contended that
far from salting dollars abroad, it invested every available centavo of its earnings in expanding
its export potentials such that by 1983 its capital was already P9,500,000.00. The private
respondents in the petition now before us owned 40% of the shares of stock while 60% was
owned by the Nemesio Co group.
By 1983, Glorious Sun was exporting more than 309,000 dozens of garments valued at
US$19,900,000.00 annually. It was employing more than 3,000 workers. As the second biggest
garment exporter of the Philippines, covetous eyes fell upon it. Glorious Sun's lifelines were
choked (to use the Solicitor General's words) by the GTEB under then Minister Roberto V.
Ongpin which cancelled its export quotas, authority to engage in exports, and license to
maintain bonded warehouses in order, it now appears, to give opportunity to certain parties
to acquire the business.
I participated in the deliberations and hearings of the Glorious Sun case in 1984 and I recall
that there was not the slightest scintilla of evidence to support the charges of dollar salting
made by GTEB. A scrap of yellow pad paper on which were pencilled a few computations
and with nothing to support them, a graph of import prices of four local importers Identified
only by letters, and another piece of paper with supposed 1983 prices of fabrics were the only
"proof" that the respondent Minister with all the power (he was issuing warrants of arrest) and
resources at his command could produce before the Court. So patently arbitrary was the
finding of dollars salting that it would have been easy for the First Division of the Court to uphold
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the exporter's rights. Unfortunately, Glorious Sun in an act of business "prudence" and possibly
worried that retaliatory acts would be taken against its stockholders' other firms and enterprises
decided to withdraw the petition and rely completely on the GTEB's sense of justice and
compassion. It turned out to be a fatal error.
Glorious Sun's export quotas were turned over to hastily organized corporations — the
American Inter-Fashion Co. and De Soleil. The Hongkong businessmen and minority owners
Glorious Sun were allowed to hold 33% of the stocks of these two corporations while 67% was
given, according to PCGG, to a daughter and crony of then President Marcos.
Hence, the PCGG freeze orders on the two corporations.
If the PCGG investigate action were solely against the 67% allegedly misappropriated by a
Marcos daughter and a Marcos crony, I will have no hesitation in concurring with the majority
opinion that this is a case where exclusive jurisdiction over all incidents is vested in the
Sandiganbayan.
Unfortunately, the issues are not that simplistic. The respondents as well as the so-called
"interjector" are not cronies.
What is the recourse of the poor victims whose properties were seized on charges so hastily
trumped up that not a semblance of due process appears in the records?
Not only were the export quotas and business licenses cancelled but millions of pesos worth of
machines and physical plant were unceremoniously confiscated. No compensation was
given and no rentals are now paid for the use of manufacturing facilities which are not owned
by the two new corporations, which have never appeared in their balance sheets as assets,
and which the two new corporations have clearly never claimed. Why should we not allow
the owners to use summary remedies for acquiring possession, assuming that the issue of
ownership has to be resolved somewhere else? I feel this issue is not exclusive for the
Sandiganbayan.
There is nothing in the records to show that the members of the Nemesio Co group are tainted
with the slightest color of cronyism. They can only be victims of the illegal acquisition charged
in CC No. 0002, PCGG-3 before the Sandiganbayan, not malefactors who spirited away public
funds or properties. They are not parties and have no standing in a recovery of illegal wealth
case before the Sandiganbayan.
If citizens similarly situated as the members of the Nemesio Co group are summarily shunted
aside and even maligned when they plead with the PCGG for the return of their properties,
why should not regular courts have jurisdiction over the issues they raise? How can private
persons file an action with the anti-graft court private parties who took away their quotas and
factories? Why should the PCGG be immune from suit where the complainants insist that it
continues the illegal seizure inflicted by the GTEB, the Marcos daughter and the Marcos crony?
If the PCGG keeps flip-flopping, promising to pay rent at one time, then reneging on the
promise, only to reiterate it again, to which court should the victims apply? If the owners sue
the PCGG officers-in-charge who mismanage their firms and lead them to destruction, why
should the former not seek redress before regular courts familiar with the handling of these
types of grievances against government action? Do the owners have to wait for years while
the Sandiganbayan and the Tanodbayan wade through all the illegal wealth cases before
they can hope for redress for injustices committed during a past regime.?
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Under the sweeping declaration of the majority opinion, everything – including issues which
have nothing to do with cronyism or illegal acquisition of wealth but where alleged cronies or
members of the "family" are somehow involved – must go to the Sandiganbayan.
I have the highest respect for the Chief Justice and the other members of the Court but I regret
most sincerely that I cannot join them in such an artless and simplistic approach.
The private respondents in this petition are foreign nationals but they, too, have rights. As
foreign investors, they have cast their lot with us in our financial travails and our hopes for a
better tomorrow. They claim that owning only 33% of the two corporations on paper, in truth
they solely and exclusively financed the operations of the garment firms. They point out that
De Soleil and American Inter-Fashion do not own any assets except the export quotas. All
machinery, equipment, and leasehold rights are owned by Glorious Sun. Inspite of the
injustices perpetrated by the previous regime, the private respondent to the 3,000 employees,
and tried their best not to allow any disruptions and to keep the corporations alive. As far as I
can gather from the records, the private respondents have not been charged before the
Sandiganbayan for anything. They have no standing there.
The private respondents are only trying to protect their proprietary rights against what they
perceive are arbitrary PCGG incursions when they went to the civil courts. I must again stress
that no illegal wealth cases have been brought against them. The civil suit they filed with the
Pasig Regional Trial Court is simply to annul the joint venture agreement between local
investors of American Inter-Fashion and the private respondents on the ground of vitiated
consent. It has nothing to do with plundered wealth, organized pillage, or sequestration of ill-
gotten wealth. Like the group of Nemesio Co, the private respondents also profess to be
victims. They charge the OIC appointed by the PCGG with anomalies, including irresponsible,
capricious, and arbitrary acts (See pp. 16-21 of the respondents' April 3, 1987 Comments). Why
do they have to be haled and dragged before the Sandiganbayan when they are the
complainants in an annulment of contract case and not the defendants?
The PCGG may be a powerful agency of government but in cases not involving its basic
functions, I believe it is not above or beyond the jurisdiction of regular courts of justice. I
continue to have great faith in our Regional Trial Courts and in the Court of Appeals.
According to the majority opinion, the PCGG, in the exercise of quasi-judicial functions is co-
equal with regional trial courts. I am afraid that such an all-embracing dictum is fraught with
dangerous implications. In the two years we have reviewed PCGG actions, I have yet to see
the PCGG deliberately avoid questionable shortcuts or studiedly apply the fine points and the
established principles of investigative due process. For this reason, it is better reined in rather
than emboldened by a too expansive definition of its powers.
The PCGG is an investigator and prosecutor, not a judge. It is not a quasi-judicial tribunal. More
appropriate is the majority opinion in BASECO V. PCGG (supra) where the Court stated:
PCGG not a "Judge": General Functions
It should also by now be reasonably evident from what has thus far been said that the PCGG
is not, and was never intended to act as, a judge. Its general function is to conduct
investigations in order to collect evidence establishing instances of 'ill-gotten wealth;' issue
sequestration, and such orders as may be warranted by the evidence thus collected and as
may be necessary to preserve and conserve the assets of which it takes custody and control
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and prevent their disappearance, loss or dissipation; and eventually file and prosecute in the
proper court of competent jurisdiction all cases investigated by it as may be warranted by is
findings. It does not try and decide, or hear and determine, or adjudicate with any character
of finality or compulsion, cases involving the essential issue of whether or not property should
be forfeited and transferred to the State because 'ill-gotten' within the meaning of the
Constitution and the executive orders. This function is reserved to the designated court, in this
case, the Sandiganbayan. (Ex. Ord. No. 14). There can therefore be no serious regard
accorded to the accusation, leveled by BASECO, (Rollo, pp. 695-697) that the PCGG plays
the perfidious role of prosecutor and judge at the same time. (Id. p. 218)
It is the Sandiganbayan and not the PCGG which should be equated with courts of justice.
I share with all right thinking Filipinos the hope that the PCGG succeeds in its vital but
unenviably difficult function of ferreting out and recovering ill-gotten wealth through courts of
justice. Needles to say, only legitimate and praiseworthy procedures, must, of course, be
applied in this task. Perhaps even more important than the recovery of much-needed money
is our standing true by principles of due process, fair play, and other aspects of civil liberties.
I am not privy to the methods used in the acquisition, or the motivations behind the surrender,
of the properties such as casino funds, surrendered lands, SBTC cash items, etc., mentioned in
pages 28-30 of the majority opinion. Since the PCGG accomplishments, according to the
Court, are only the tip of the iceberg and there must be much more to come, the report is
indeed impressive. However, I wonder if encomiums are appropriate in a court decision at this
time. Granting that the PCGG has done such a great job in the two years of its existence, I feel
that the dispensing of commendations should be left to the Press Secretary, independent
media, or public opinion. The trial of the illegal wealth cases has not even started. The
Sandiganbayan decisions on these cases will undoubtedly be elevated to us. I am sorry and I
regret very much my inability to join the rest of the Court in prematurely singing Hallelujahs for
the Presidential Commission on Good Government.
I, therefore, register my dissent and vote to DISMISS the instant petition.
Separate Opinions
ADDENDUM
TEEHANKEE, C.J.: concurring:
I make this Addendum to the foregoing main opinion of the Court to express briefly my views
on certain statements made in the dissenting opinion of Mr. Justice Gutierrez and the separate
concurring opinion with qualifications of Mr. Justice Feliciano, which for lack of time I have not
been able to submit to the majority who have concurred with the opinion written by me for
the Court. *** It is not that the statements I make in this Addendum are in any way
incompatible with those made in the main opinion; in fact, they are made simply by way of
clarification of amplification.
It can be readily seen from a reading of the main and the dissenting opinions that while both
are agreed that 67% of the shares and assets of the two corporations were taken over by the
family and crony of the deposed President, they view such takeover in different lights: The
main opinion gives prima facie status to the position taken by the petitioner Commission that
Nemesio G. Co, the previous majority shareholder of Glorious Sun Fashion Garments Mfg. Co.,
predecessor of the two corporations, had made a deal with Mr. Marcos and transferred his
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interest to the nominees of Mr. Marcos in return for benefits and concessions received; while
the dissenting opinion views Mr. Co as a "poor victim" of Mr. Marcos. This dispute, involving as
it does PCGG-sequestered properties, as held by the majority on the basis of the provisions of
the law, Executive Order. No. 14, comes within the exclusive and original jurisdiction of the
Sandiganbayan's jurisdiction limited to the PCGG acting against the nominees of Mr. Marcos
holding 67% of the shares and assets of the two corporations, and Mr. Co being free to sue the
PCGG in the regular courts. To force the State to draw a tenuous jurisdiction line and split
jurisdiction is to undermine stability in litigations and to force the parties, particularly the
government as represented by the PCGG to shuttle from one court to another to secure full
determination of its suit for reversal, reconveyance, restitution, etc., of the subject mater of the
petition, that is, the two corporations, together with the assets, shares of stock, evidence of
record, etc. It would be to create an intolerable situation gravely prejudicial to the
administration of justice, that undermines the tremendous task given to the PCGG to recover
ill-gotten wealth accumulated by Mr. Marcos, his immediate family, relatives, subordinates
and close associates, directly or through nominees.
The main opinion's quoting the "picturesque" submittal by the Solicitor General of prima facie
evidence for its case should not connote, as misperceived in the dissenting opinion, that said
submittals represent the facts. At this stage, neither the submittals of the Solicitor General nor
those of Mr. Co as stated in the dissenting opinion can be taken as established facts. These
issues have to be threshed out in a proper trial before the Sandiganbayan.
The dissenting opinion states that "(I)f the PCGG investigation action were solely against the
67% allegedly misappropriated by a Marcos daughter and a Marcos crony, I will have no
hesitation in concurring with the majority opinion that this is a case where exclusive jurisdiction
over all incidents is vested in the Sandiganbayan.
In response, it should be stressed that this is a case precisely where jurisdiction over all incidents
should be vested in one court, the Sandiganbayan. The issues are not simplistic and precisely
because of this, all hearings and processes should be limited exclusively in one court, subject
to review by the Supreme Court. Otherwise, as already pointed out, given the magnitude of
the past regime's organized pillage" and the ingenuity of the plunderers and pillagers with the
assistance of the experts and best legal minds available in the market, and in several known
instances carried out with the questionable and mercenary cooperation and assistance of
members of the bar as supposed nominees, the government's claims would have been tied
into knots throughout the land as in this case and made impossible the Commission's gigantic
task of seeking to recover the plundered wealth of the nation for the benefit of the people to
whom it rightfully belongs.
Again, it should also be stressed that jurisdiction is conferred by law which, in the case of ill-
gotten wealth of Mr. Marcos, has been vested exclusively in the Sandiganbayan. the question
of the wisdom of vesting such exclusive jurisdiction in one court, the Sandiganbayan, is not for
this Court to encroach upon or legislate.
With respect to the qualifications expressed by Mr. Justice Feliciano in his separate opinion, I
just to point out two things: First, the main opinion does not claim absolute immunity for the
members of the Commission. The cited section of Executive Order No. 1 provides the
Commission's members immunity from suit thus: "No civil action shall lie against the Commission
or any member thereof for anything done or omitted in the discharge of the task
contemplated by this order." No absolute immunity like that sought by Mr. Marcos in his
Constitution for himself and his subordinates is herein involved. It is understood that the
immunity granted the members of the Commission by virtue of the unimaginable magnitude
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of its task to recover the plundered wealth and the State's exercise of police power was
immunity from liability for damages in the official discharge of the task granted the members
of the Commission much in the same manner that judges are immune from suit in the official
discharge of the functions of their office. Secondly, as to the seemingly grudging
acknowledgment of the achievements so far of the Commission in terms of recovered funds
and properties, the observation that the Sandiganbayan still has to rule that these funds and
assets constitute ill-gotten wealth of Mr. Marcos and his associates ignores two facts: (1) many
of these recovered funds and properties were turned over to the Commission by self-
confessed cronies and dummies of Mr. Marcos, who, as Mr. Marcos stated, had proper
documentation to the properties in their names, but who, because they were stricken by their
conscience or because of other extraneous considerations have voluntarily confessed to
being Mr. Marcos' dummies and turned over these recovered property and assets in tens if not
in hundreds of millions of pesos to the Commission; and (2) Rep. Act No. 1379 provides that
whenever any public officer or employee has acquired during his incumbency an amount of
property which is manifestly out of proportion to his salary as such public officer or employee
and to his other lawful income and the income from legitimately acquired property, such
unexplained wealth shall be presumed prima facie to have been unlawfully acquired, in an
appropriate proceeding, such as that filed in the Sandiganbayan, and the burden is placed
upon such public official or employee to show cause why the property aforesaid or any part
thereof should not be forfeited and declared property of the State. This provision is fully
applicable to Mr. Marcos and members of his family, all of whom were public officials during
his regime, as well as many of his cronies and associates who held public office and the burden
is on them and not on the Commission or the Republic to show that their property is not ill-
gotten wealth.
FELICIANO, J., concurring:
I concur with the great bulk of the majority opinion so vigorously written by the Chief Justice. I
seek below to clarify, principally to myself, certain qualifications which do not affect the result
reached but which, to my mind, should be made.
The Presidential Commission on Good Government (PCGG) is, of course, an administrative

agency which has been charged with the vitally important task of investigating and
recovering "all ill-gotten wealth accummulated by former President Ferdinand E. Marcos, his
Philippines or abroad — during his administration, directly or through nominees, by taking
undue advantage of their public office and/or using their powers, authority, influence,
connections or relations." (Section 2[a], Executive Order No. 1, dated 28 February 1986; 82
Official Gazette, p. 1234 [3 March 1986]).
In the carrying out of this fundamental task, the PCGG has been authorized to sequester or
place under its control or possession assets which it believes constitute "ill-gotten wealth" of Mr.
Marcos or his associates. Necessarily, the PCGG is authorized to determine whether or not
there is sufficient prima facie basis to warrant sequestering particular assets as probably
constituting such "ill-gotten wealth." In Bataan Shipyard & Engineering Co., Inc. (Baseco) v.
Presidential Commission on Good Government, et al., G.R. No. 75885, 27 May 1987, it was
made abundantly clear that under Executive Order No. 14, dated 7 May 1986, the PCGG's
own rules and regulations and Article No. XVIII, Section 26 of the 1987 Constitution,
sequestration and take over orders issued by the PCGG must rest upon a prima facie basis.
It is also quite clear that the determinations made by the PCGG at the time of issuing
sequestration or provisional take over orders cannot be regarded as final determinations; that
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the assets sequestered or provisionally taken over in fact constitute "ill-gotten wealth" within
the meaning of Executive Order No. 1 is a determination which can be finally made only by a
court; and that the court vested with jurisdiction to make that determination is the
Sandiganbayan. Thus, the PCGG was required to bring suit for recovery or reconveyance of
"ill-gotten wealth" before the Sandiganbayan by Executive Order No. 14 As pointed out in the
majority opinion, the Sandiganbayan is vested with exclusive original jurisdiction over such
cases.
The principal thrust of the Chief Justice's opinion is that to prevent the splitting of jurisdiction
and consequent multiplicity of cases relating to the ownership of assets which may have been
placed under sequestration or provisional take over orders, all such cases which are
reasonably related to the question of ownership and characterization of such assets, are
properly regarded as embraced within the exclusive original jurisdiction vested upon the
Sandiganbayan. I entirely agree with the basic holding. It would follow that all parties who
claim ownership of or rights to assets which have been subjected to sequestration and which
are the subject matter of proceedings before the Sandiganbayan must be regarded as
having a right to intervene in the proceedings before the Sandiganbayan. It seems equally
clear that parties who are not allowed to intervene in proceedings before the Sandiganbayan
cannot, consistently with the Due Process Clause of the Constitution, be regarded as bound
by any decision which the Sandiganbayan may render in respect of ownership of such assets.
There appears no basis for supposing that proceedings before the Sandiganbayan are in the
nature of in rem proceedings.
I would submit, with respect, that the foregoing is all that is necessary to arrive at the resolution
of this case. The PCGG is clearly not a court. The majority opinion states that the PCGG
"exercise quasi-judicial functions" and that "in the exercise of quasi-judicial functions, the
PCGG is a co-equal body with Regional Trial Courts." It seems to me that PCGG can be
regarded as exercising quasi-judicial functions only in a loose and non-technical sense. The
PCGG is not a quasi-judicial body in the same sense that the National Labor Relations
Commission (NLRC), the Securities and Exchange Commission (SEC) and the Office of the
Insurance Commissioner (OIC) exercise quasi-judicial functions. The PCGG in issuing
sequestration or take over orders is not properly regarded as determining private rights, even
though subject to judicial review in a proper case. All that the PCGG is really doing in so issuing
such orders is determining that the exist prima facie basis for filing the appropriate proceedings
before the Sandiganbayan to seek recovery and reconveyance, etc., of the sequestered
assets as probably belonging to the category of "ill-gotten wealth." Without pre-empting the
question of the civil or criminal nature of such proceedings, the PCGG is appropriately
analogized not to a court or to a quasi-judicial body rather to a fiscal or public prosecutor.
I do not consider that this is simply a matter of verbal description or of semantic equivalency.
The preliminary or prima facie findings of the PCGG implicit in each issuance of sequestration
orders, are not entitled to the same respect that findings of fact of administrative agencies or
tribunals exercising quasi-judicial functions are ordinarily accorded by courts. The PCGG must
still carry the burden of proving before the Sandiganbayan that the assets it has sequestered
in fact belong to Mr. Marcos or his associates and that such assets constitute "ill-gotten wealth"
within the meaning of Executive Order No. 1 and Article No. XVIII (26) of the 1987 Constitution
or "ill-gotten properties" within the meaning of Article No. 2 [1] [b] of the Provisional Constitution
dated 25 March 1986.
In Section No. 4 of the majority opinion, it is said:
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4. Having been charged with the herculean task of bailing the country out of the financial
functions by writ or injuctions emanating from tribunals co-equal to it and inferior to this Court.
Public policy dictates that the Commission be not embroiled in and swamped by legal suits
before inferior courts all over that land, since the loss of time and energy required to defend
against such suits would defeat the very purpose of its creation. Hence, Section 4 (a) of
Executive Order No. 1 has expressly accorded the Commission and its members immunity from
suit for damages in that: 'No civil action shall like against the Commission or any member
thereof for anything done or omitted in the discharge of the task contemplated by this order.'
xxx xxx xxx
damages with prayer for a writ of preliminary injunction (Annex "I", petition) filed by private
buttressed by Section 4 (b) thereof which further provides that: "No member or staff of the
xxx xxx xxx
(Emphasis supplied)
The above underscored portions are, it is respectfully submitted, clearly obiter. It is important
to make clear that the Court is not here interpreting, much less upholding as valid and
constitutional, the literal terms of Section 4 (a), (b) of Executive Order No. 1. If Section 4 (a)
were given its literal import as immunizing the PCGG or any member thereof from civil liability
"for anything done or omitted in the discharge of the task contemplated by this Order," the
constitutionality of Section 4 (a) would, in my submission, be open to most serious doubt. For
so viewed, Section 4 (a) would institutionalize the irresponsibility and non-accountability of
members and staff of the PCGG, a notion that is clearly repugnant to both the 1973 and the
1987 Constitutions and a privileged status not claimed by any other official of the Republic
under the 1987 Constitution. Article No. XIII, Section 1 of the 1973 Constitution which formed
part of the Provisional Constitution of 25 March 1986, under Section 2 thereof, provided as
follows:
Section 1. Public office is a public trust. Public officers and employees shall serve with the
highest degree of responsibility, integrity, loyalty, and efficiency and shall remain accountable
to the people. (Emphasis supplied)
In closely comparable language, Article No. XI, Section 1 of the 1987 Constitution stresses that:
Section 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and lead modest lives. (Emphasis supplied)
It may be further submitted, with equal respect, that Section 4 (a) of Executive Order No. 1
was intended merely to restate the general principle of the law of public officers that the
PCGG or any member thereof may not be held civilly liable for acts done in the performance
of official duty, provided that such member had acted in good faith and within the scope of
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his lawful authority. It may also be assumed that the Sandiganbayan would have jurisdiction
to determine whether the PCGG or any particular official thereof may be held liable in
damages to a private person injured by acts of such member. It would seem constitutionally
offensive to suppose that a member or staff member of the PCGG could not be required to
testify before the Sandiganbayan or that such members were exempted from complying with
orders of this Court.
Turning, finally, to Section No. 10 of the majority opinion, the information there set out is, of
course, impressive and heartening; it is, however, at once obiter and gratis. Neither the
magnitude of the figures nor the use of phrases such as "funds turned over to the treasury" and
"other recovered funds" should obscure the fact that the Sandiganbayan still has to rule that
all these funds and assets do constitute "ill-gotten wealth" of Mr. Marcos and his associates. It
seems important to bear in mind that no transfer of ownership to the Republic of the Philippines
can legally take place until a final ruling to that effect is rendered by the Sandiganbayan and,
ultimately, this Court.
GUTIERREZ, JR., J., dissenting:
It is with no little trepidation that I write this dissent to one of the valedictory decisions of the
Chief Justice. However, I have carefully gone over the pleadings and pertinent records and
am convinced that this is again one case where the Presidential Commission on Good
Government (PCGG) has stepped beyond legal and constitutional boundaries. I find no
alternative but to dissent.
The PCGG has been given unprecedented powers by Executive Orders of a revolutionary
Government and by the Transitory Provisions of the Constitution.
Not content with powers which are more than sufficient to accomplish the purposes for which
it was created, the PCGG has, in various cases now before us, strained and broken beyond
what I view as the unduly generous guidelines of BASECO v. PCGG (150 SCRA 151). The instant
case is an example of how the PCGG may mindlessly encroach on the rights of hapless
individuals who are themselves victims of oppression and make it difficult if not virtually
impossible for them to readily recover what was seized against their will by persons close to
the former regime.
Since the PCGG has often acted as if the noble ends for which it was created perhaps justify
the employment of extreme and supra-legal measures, I submit, that the Supreme Court's
function is more to find out how the rights of parties caught by an unfeeling steam-roller may
be protected instead of going out of its way to shield the PCGG from legal suits and other
actions. The powerful PCGG needs no protection or succor from us. Private persons who plead
with PCGG for the maintenance of their rights but who are brusquely turned away are the
ones we should assist.
Notwithstanding the Court's decision in this case, the factual antecedents of the controversy
will still have to be determined after a protracted trial before the Sandiganbayan. However,
by calling the petitioner's picturesque (but illusive) presentation as "more than prima facie
evidence," the majority opinion might give the Sandiganbayan the wrong impression that said
submissions indeed represent the facts. I urge that this is not so. The facts are still to be
established.
We had occasion to look into the beginnings of this case in 1984 in G.R. No. 67180, Glorious
Sun Fashion Garments Manufacturing Co. v. Garments and Textile Export Board (GTEB), et al.
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Glorious Sun started with a P600,000.00 capitalization in 1977. It has steadfastly contended that
far from salting dollars abroad, it invested every available centavo of its earnings in expanding
its export potentials such that by 1983 its capital was already P9,500,000.00. The private
respondents in the petition now before us owned 40% of the shares of stock while 60% was
owned by the Nemesio Co group.
By 1983, Glorious Sun was exporting more than 309,000 dozens of garments valued at
US$19,900,000.00 annually. It was employing more than 3,000 workers. As the second biggest
garment exporter of the Philippines, covetous eyes fell upon it. Glorious Sun's lifelines were
choked (to use the Solicitor General's words) by the GTEB under then Minister Roberto V.
Ongpin which cancelled its export quotas, authority to engage in exports, and license to
maintain bonded warehouses in order, it now appears, to give opportunity to certain parties
to acquire the business.
I participated in the deliberations and hearings of the Glorious Sun case in 1984 and I recall
that there was not the slightest scintilla of evidence to support the charges of dollar salting
made by GTEB. A scrap of yellow pad paper on which were pencilled a few computations
and with nothing to support them, a graph of import prices of four local importers Identified
only by letters, and another piece of paper with supposed 1983 prices of fabrics were the only
"proof" that the respondent Minister with all the power (he was issuing warrants of arrest) and
resources at his command could produce before the Court. So patently arbitrary was the
finding of dollars salting that it would have been easy for the First Division of the Court to uphold
the exporter's rights. Unfortunately, Glorious Sun in an act of business "prudence" and possibly
worried that retaliatory acts would be taken against its stockholders' other firms and enterprises
decided to withdraw the petition and rely completely on the GTEB's sense of justice and
compassion. It turned out to be a fatal error.
Glorious Sun's export quotas were turned over to hastily organized corporations — the
American Inter-Fashion Co. and De Soleil. The Hongkong businessmen and minority owners
Glorious Sun were allowed to hold 33% of the stocks of these two corporations while 67% was
given, according to PCGG, to a daughter and crony of then President Marcos.
Hence, the PCGG freeze orders on the two corporations.
If the PCGG investigate action were solely against the 67% allegedly misappropriated by a
Marcos daughter and a Marcos crony, I will have no hesitation in concurring with the majority
opinion that this is a case where exclusive jurisdiction over all incidents is vested in the
Sandiganbayan.
Unfortunately, the issues are not that simplistic. The respondents as well as the so-called
"interjector" are not cronies.
What is the recourse of the poor victims whose properties were seized on charges so hastily
trumped up that not a semblance of due process appears in the records?
Not only were the export quotas and business licenses cancelled but millions of pesos worth of
machines and physical plant were unceremoniously confiscated. No compensation was
given and no rentals are now paid for the use of manufacturing facilities which are not owned
by the two new corporations, which have never appeared in their balance sheets as assets,
and which the two new corporations have clearly never claimed. Why should we not allow
the owners to use summary remedies for acquiring possession, assuming that the issue of
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ownership has to be resolved somewhere else? I feel this issue is not exclusive for the
Sandiganbayan.
There is nothing in the records to show that the members of the Nemesio Co group are tainted
with the slightest color of cronyism. They can only be victims of the illegal acquisition charged
in CC No. 0002, PCGG-3 before the Sandiganbayan, not malefactors who spirited away public
funds or properties. They are not parties and have no standing in a recovery of illegal wealth
case before the Sandiganbayan.
If citizens similarly situated as the members of the Nemesio Co group are summarily shunted
aside and even maligned when they plead with the PCGG for the return of their properties,
why should not regular courts have jurisdiction over the issues they raise? How can private
persons file an action with the anti-graft court private parties who took away their quotas and
factories? Why should the PCGG be immune from suit where the complainants insist that it
continues the illegal seizure inflicted by the GTEB, the Marcos daughter and the Marcos crony?
If the PCGG keeps flip-flopping, promising to pay rent at one time, then reneging on the
promise, only to reiterate it again, to which court should the victims apply? If the owners sue
the PCGG officers-in-charge who mismanage their firms and lead them to destruction, why
should the former not seek redress before regular courts familiar with the handling of these
types of grievances against government action? Do the owners have to wait for years while
the Sandiganbayan and the Tanodbayan wade through all the illegal wealth cases before
they can hope for redress for injustices committed during a past regime.?
Under the sweeping declaration of the majority opinion, everything – including issues which
have nothing to do with cronyism or illegal acquisition of wealth but where alleged cronies or
members of the "family" are somehow involved – must go to the Sandiganbayan.
I have the highest respect for the Chief Justice and the other members of the Court but I regret
most sincerely that I cannot join them in such an artless and simplistic approach.
The private respondents in this petition are foreign nationals but they, too, have rights. As
foreign investors, they have cast their lot with us in our financial travails and our hopes for a
better tomorrow. They claim that owning only 33% of the two corporations on paper, in truth
they solely and exclusively financed the operations of the garment firms. They point out that
De Soleil and American Inter-Fashion do not own any assets except the export quotas. All
machinery, equipment, and leasehold rights are owned by Glorious Sun. Inspite of the
injustices perpetrated by the previous regime, the private respondent to the 3,000 employees,
and tried their best not to allow any disruptions and to keep the corporations alive. As far as I
can gather from the records, the private respondents have not been charged before the
Sandiganbayan for anything. They have no standing there.
The private respondents are only trying to protect their proprietary rights against what they
perceive are arbitrary PCGG incursions when they went to the civil courts. I must again stress
that no illegal wealth cases have been brought against them. The civil suit they filed with the
Pasig Regional Trial Court is simply to annul the joint venture agreement between local
investors of American Inter-Fashion and the private respondents on the ground of vitiated
consent. It has nothing to do with plundered wealth, organized pillage, or sequestration of ill-
gotten wealth. Like the group of Nemesio Co, the private respondents also profess to be
victims. They charge the OIC appointed by the PCGG with anomalies, including irresponsible,
capricious, and arbitrary acts (See pp. 16-21 of the respondents' April 3, 1987 Comments). Why
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do they have to be haled and dragged before the Sandiganbayan when they are the
complainants in an annulment of contract case and not the defendants?
The PCGG may be a powerful agency of government but in cases not involving its basic
functions, I believe it is not above or beyond the jurisdiction of regular courts of justice. I
continue to have great faith in our Regional Trial Courts and in the Court of Appeals.
According to the majority opinion, the PCGG, in the exercise of quasi-judicial functions is co-
equal with regional trial courts. I am afraid that such an all-embracing dictum is fraught with
dangerous implications. In the two years we have reviewed PCGG actions, I have yet to see
the PCGG deliberately avoid questionable shortcuts or studiedly apply the fine points and the
established principles of investigative due process. For this reason, it is better reined in rather
than emboldened by a too expansive definition of its powers.
The PCGG is an investigator and prosecutor, not a judge. It is not a quasi-judicial tribunal. More
appropriate is the majority opinion in BASECO V. PCGG (supra) where the Court stated:
PCGG not a "Judge": General Functions
It should also by now be reasonably evident from what has thus far been said that the PCGG
is not, and was never intended to act as, a judge. Its general function is to conduct
investigations in order to collect evidence establishing instances of 'ill-gotten wealth;' issue
sequestration, and such orders as may be warranted by the evidence thus collected and as
may be necessary to preserve and conserve the assets of which it takes custody and control
and prevent their disappearance, loss or dissipation; and eventually file and prosecute in the
proper court of competent jurisdiction all cases investigated by it as may be warranted by is
findings. It does not try and decide, or hear and determine, or adjudicate with any character
of finality or compulsion, cases involving the essential issue of whether or not property should
be forfeited and transferred to the State because 'ill-gotten' within the meaning of the
Constitution and the executive orders. This function is reserved to the designated court, in this
case, the Sandiganbayan. (Ex. Ord. No. 14). There can therefore be no serious regard
accorded to the accusation, leveled by BASECO, (Rollo, pp. 695-697) that the PCGG plays
the perfidious role of prosecutor and judge at the same time. (Id. p. 218)
It is the Sandiganbayan and not the PCGG which should be equated with courts of justice.
I share with all right thinking Filipinos the hope that the PCGG succeeds in its vital but
unenviably difficult function of ferreting out and recovering ill-gotten wealth through courts of
justice. Needles to say, only legitimate and praiseworthy procedures, must, of course, be
applied in this task. Perhaps even more important than the recovery of much-needed money
is our standing true by principles of due process, fair play, and other aspects of civil liberties.
I am not privy to the methods used in the acquisition, or the motivations behind the surrender,
of the properties such as casino funds, surrendered lands, SBTC cash items, etc., mentioned in
pages 28-30 of the majority opinion. Since the PCGG accomplishments, according to the
Court, are only the tip of the iceberg and there must be much more to come, the report is
indeed impressive. However, I wonder if encomiums are appropriate in a court decision at this
time. Granting that the PCGG has done such a great job in the two years of its existence, I feel
that the dispensing of commendations should be left to the Press Secretary, independent
media, or public opinion. The trial of the illegal wealth cases has not even started. The
Sandiganbayan decisions on these cases will undoubtedly be elevated to us. I am sorry and I
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regret very much my inability to join the rest of the Court in prematurely singing Hallelujahs for
the Presidential Commission on Good Government.
I, therefore, register my dissent and vote to DISMISS the instant petition.
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SCOPE/CHARACTERISTICS
United States vs. Silvestre Pompeya G.R. No. L-10255 August 6, 1915
On the 1st day of June, 1914, the acting prosecuting attorney of the Province of Iloilo
presented the following complaint in the Court of First Instance of said province: "The
undersigned fiscal charges Silvestre Pompeya with violation of the municipal ordinance of
Iloilo, on the subject of patrol duty, Executive Order No. 1, series of 1914, based on section 40
(m) of the Municipal Code, in the following manner:
"That on or about March 20 of the current year, 1914, in the jurisdiction of the municipality of
Iloilo, Province of Iloilo, Philippine Islands, the said accused did willfully, illegally, and criminally
and without justifiable motive fail to render service on patrol duty; an act performed in
violation of the law.
"That for this violation the said accused was sentenced by the justice of the peace of Iloilo to
a fine of P2 and payment of the costs of the trial, from which judgment said accused
appealed to the Court of First Instance.".
Upon said complaint the defendant was duly arraigned .Upon arraignment he presented the
following demurrer: "The defendant, through his undersigned attorneys, demurs to the
complaint filed in this case on the ground that the acts charged therein do not constitute a
crime.".
In support of said demurrer, the defendant presented the following argument: "The municipal
ordinance alleged to be violated is unconstitutional because it is repugnant to the Organic
Act of the Philippines, which guarantees the liberty of the citizens.".
Upon issues thus presented, the Honorable J. s .Powell, judge, on he 22nd day of August, 1914,
after hearing the arguments of the respective parties, sustained said demurrer and ordered
the dismissal of said complaint and the cancellation of the bond theretofore given, with costs
de oficio.
From the order sustaining the demurrer of the lower court, the prosecuting attorney appealed
to this court.
It appears from the demurrer that the defendant claims that the facts stated in the complaint
are not sufficient to constitute a cause of action. In his argument in support of said demurrer it
appears that the real basis of said demurrer was the fact that the ordinance upon which said
complaint was based was unconstitutional, for the reason that it was contrary to the provisions
of the Philippine Bill which guarantees liberty to the citizens of the Philippine Islands.
In this court the only question argued by the Attorney-General is whether or not the ordinance
upon which said complaint was based (paragraph "m" of section 40 of the Municipal Code)
which was adopted in accordance with the provisions of Act No. 1309 is constitutional. Section
40 of Act No. 82 (the Municipal Code) relates to the power of municipal councils. Act No. 1309
amends said section (section 40, paragraph "m") which reads as follows: "(m) With the
approval of the provincial governor, when a province or municipality is infested with ladrones
or outlaws (the municipal council is empowered):
"1. To authorize the municipal president to require able-bodied male residents of the
municipality, between the ages of eighteen and fifty years, to assist, for a period not
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exceeding five days in any one month, in apprehending ladrones, robbers, and other
lawbreakers and suspicious characters, and to act as patrols for the protection of the
municipality, not exceeding one day in each week. The failure, refusal, or neglect of any such
able-bodied man to render promptly the service thus required shall be punishable by a fine
not exceeding one hundred pesos or by imprisonment for not more than three months, or by
both such fine and imprisonment, in the discretion of the court: Provided, That nothing herein
contained shall authorize the municipal president to require such service of officers or men of
the Army of Navy of the United States, civil employees of the United States Government,
officers and employees of the Insular Government, or the officers or servants of companies or
individuals engaged in the business of common carriers on sea or land, or priests, ministers of
the gospel, physicians, practicantes, druggists or practicantes de farmacia, actually engaged
in business, or lawyers when actually engaged in court proceedings.".
Said Act No. 1309 contains some other provisions which are not important in the consideration
of the present case.
The question which we have to consider is whether or not the facts stated in the complaint
are sufficient to show (a) a cause of action under the said law; and (b) whether or not said
law is in violation of the provisions of the Philippine Bill in depriving citizens of their rights therein
guaranteed.
We deem it advisable to consider the second question first.
It becomes important to ascertain the real purpose of said Act (No. 1309) in order to know
whether it covers a subject upon which the United States Philippine Commission could
legislate. A reading of said Act discloses (1) that it is an amendment of the general law (Act
No. 82) for the organization of municipal government; (2) that it is amendment of section 40
of said Act No. 82, by adding thereto paragraph "m;" (3) that said section 40 enumerates some
of the powers conferred upon the municipal council; (4) that said amendment confers upon
the council additional powers. The amendment empowers the municipal council, by
ordinance, to authorize the president: (a) To require able-bodied male residents of the
municipality, between the ages of 18 and 55 [50], to assist, for a period not exceeding five
days in any month, in apprehending ladrones, robbers, and other lawbreakers and suspicious
characters, and to act as patrols for the protection of the municipality, not exceeding one
day each week; (b) To require each householder to report certain facts, enumerated in said
amendment.
The specific purpose of said amendment is to require each able-bodied male resident of the
municipality, between the ages of 18 and 55 [50], as well as each householder when so
required by the president, to assist in the maintenance of peace and good order in the
community, by apprehending ladrones, etc., as well as by giving information of the existence
of such persons in the locality. The amendment contains a punishment for those who may be
called upon for such service, and who refuse to render the same.
Is there anything in the law, organic or otherwise, in force in the Philippine Islands, which
prohibits the central Government, or any governmental entity connected therewith, from
adopting or enacting rules and regulations for the maintenance of peace and good
government? May not the people be called upon, when necessary, to assist, in any
reasonable way, to rid the state and each community thereof, of disturbing elements? Do not
individuals whose rights are protected by the Government, owe some duty to such, in
protecting it against lawbreakers, and the disturbers of the quiet and peace? Are the sacred
rights of the individual violated when he is called upon to render assistance for the protection
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of his protector, the Government, whether it be the local or general government? Does the
protection of the individual, the home, and the family, in civilized communities, under
established government, depend solely and alone upon the individual? Does not the
individual owe something to his neighbor, in return for the protection which the law afford him
against encroachment upon his rights, by those who might be inclined so to do? To answer
these questions in the negative would, we believe, admit that the individual, in organized
governments, in civilized society, where men are governed by law, does not enjoy the
protection afforded to the individual by men in their primitive relations.
If tradition may be relied upon, the primitive man, living in his tribal relations before the days of
constitutions and states, enjoyed the security and assurance of assistance from his fellows
when his quiet and peace were violated by malhechores. Even under the feudal system, a
system of land holdings by the Teutonic nations of Europe in the eleventh, twelfth, and
thirteenth centuries, the feudal lord exercised the right to call upon all his vassals of a certain
age to assist in the protection of their individual and collective rights. (Book 2, Cooley's
Blackstone's Commentaries, 44; 3 Kent's Commentaries, 487; Hall, Middle Ages; Maine, Ancient
Law; Guizot, history of Civilization; Stubbs' Constitutional History of England; Chisholm vs.
Georgia, 2 Dall .(U. S.), 419; DePeyster vs. Michael, 6 N. Y., 467.) Each vassal was obliged to
render individual assistance in return for the protection afforded by all.
The feudal system was carried in to Britain by William the Conqueror in the year 1085 with all of
is ancient customs and usages.
we find in the days of the "hundreds," which meant a division of the state occupied by one
hundred free men, the individual was liable to render service for the protection of all. (Book 3,
Cooley's Blackstone's Commentaries, 160, 245, 293, 411.) In these "hundreds" the individual
"hundredor," in case of the commission of a crime within the county or by one of the
"hundredors," as against another "hundred," was obliged to join the "hue and cry" (hutesium et
clamor) in the pursuit of the felon. This purely customary ancient obligation was later made
obligatory by statute. (Book 4, Cooley's Blackstone's Commentaries, 294; 3 Edward I., Chapter
9; 4 Edward I., Chapter 2; 13 Edward I., Chapters 1 and 4.).
Later the statute provided and directed: "That from thenceforth every county shall be so well
kept, that, immediately upon robberies and feloniously committed, fresh suit shall be made
from town (pueblo) to town, and from county to county; and that "hue and cry" shall be raised
upon the felons, and they keep the town (pueblo) shall follow with "hue and cry," with all the
town (pueblo), and the towns (pueblos) near; and so "hue and cry" shall be made from town
(pueblo) to town, until they be taken and delivered to the sheriff.".
Said statue further provided that in case the "hundred" failed to join the "hue and cry" that it
should be liable for the damages done by the malhechores. Later, by statue (27th Elizabeth,
chapter 13) it was provided that no "hue and cry" would be sufficient unless it was made with
both horsemen and footmen. The "hue and cry" might be raised by a justice of the peace, or
by any peace officer, or by any private person who knew of the commission of the crime.
This ancient obligation of the individual to assist in the protection of the peace and good order
of his community is still recognized in all well-organized governments in the "posse comitatus"
(power of the county, poder del condado). (Book 1 Cooley's Blackstone's Commentaries, 343;
Book 4, 122.) Under this power, those persons in the state, county, or town who were charged
with the maintenance of peace and good order were bound, ex oficio, to pursue and to take
all persons who had violated the law. For that purpose they might command all the male
inhabitants of a certain age to assist them. This power is called "posse comitatus" (power of
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the county). This was a right well recognized at common law. Act No. 1309 is a statutory
recognition of such common-law right. Said Act attempts simply to designate the cases and
the method when and by which the people of the town (pueblo) may be called upon to
render assistance for the protection of the public and the preservation of peace and order. It
is an exercise of the police power of the state. Is there anything in the organic or statutory law
prohibiting the United States Philippine Commission from adopting the provisions contained in
said Act No. 1309?
While the statement has its exceptions, we believe, generally speaking, that the United States
Commission, and now the Philippine Legislature, may legislate and adopt laws upon all
subjects not expressly prohibited by the Organic Law (Act of congress of July 1, 1902) or
expressly reserved to Congress. Congress did not attempt to say to the Philippine Legislature
what laws it might adopt. Congress contended itself by expressly indicating what laws the
Legislature should not adopt, with the requirement that all laws adopted should be reported
to it, and with the implied reservation of the right to nullify such laws as might not meet with its
approval.
Considering the Organic Act (Act of Congress of July 1, 1902) as the real constitution of the
United States Government in the Philippine Islands, and its inhibitions upon the power of the
Legislature, we believe an analogy may be drawn relating to the difference between the
Constitution of the United States and the constitution of the different States, with reference to
what laws may be adopted by the different States. While the statement needs much
explanation, the general rule is that Congress has authority to legislate only upon the questions
expressly stated in the Constitution of the United States, while the state legislature may legislate
upon all questions, not expressly conferred upon Congress, nor prohibited in its constitution. In
other words, an examination of the Constitution of the United States discloses the subject
matter upon which Congress may legislate, while examination of the constitutions of the
different States must be made for the purpose of ascertaining upon what subjects the state
legislature can not legislate. Stating the rule in another way — the Constitution of the United
States permits Congress to legislate upon the following subjects; the constitutions of the States
prohibit the state legislature from legislating upon the following subjects. Generally, then, the
legislature of a State any adopt laws upon any question not expressly delegated to Congress
by the Constitution of the United States or prohibited by the constitution of the particular State.
We think that is the rule which should be applied to the Philippine Legislature. The Philippine
Legislature has power to legislate upon all subjects affecting the people of the Philippine
Islands which has not been delegated to Congress or expressly prohibited by said Organic
Act. (Gaspar vs. Molina, 5 Phil. Rep., 197; U.S., vs. Bull, 15 Phil. Rep., 7.)
The right or power conferred upon the municipalities by Act No. 1309 falls within the police
power of the state (U.S .vs. Ling Su Fan, 10 Phil. Rep., 104.) Police power of the state has been
variously defined. It has been defined as the power of the government, inherent in every
sovereign, and cannot be limited; (License Cases, 5 How. (U.S.), 483). The power vested in the
legislature to make such laws as they shall judge to be for the good of the state and its subjects.
(Commonwealth vs. Alger, 7 Cush. (Mass.), 53, 85). The power to govern men and things,
extending to the protection of the lives, limbs, health, comfort, and quiet of all persons, and
the protection of all property within the state. (Thorpe vs. Rutland, etc., Co., 27 Vt., 140, 149.)
The authority to establish such rules and regulations for the conduct of all persons as may be
conducive to the public interest. (People vs. Budd., 117 N.Y., 1, 14; U.S., vs. Ling Su Fan, supra.)
Blackstone, in his valuable commentaries on the common laws, defines police power as "the
defenses, regulations, and domestic order of the country, whereby the inhabitants of a state,
like members of a well-governed family, are bound to conform their general behaviour to the
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rules of propriety, good neighborhood, and good manners, and to be decent, industrious, and
inoffensive in their respective stations." (4 Blackstone's Co., 162.)
The police power of the state may be said to embrace the whole system of internal regulation,
by which the state seeks not only to preserve public order and to prevent offenses against the
state, but also to establish, for the intercourse of citizen with citizen, those rules of good
manners and good neighborhood, which are calculated to prevent a conflict of rights, and
to insure to each the uninterrupted enjoyment of his own, so far as is reasonably consistent,
with a like enjoyment of the rights of others. The police power of the state includes not only
the public health and safety, but also the public welfare, protection against impositions, and
generally the public's best best interest. It so extensive and all pervading, that the courts refuse
to lay down a general rule defining it, but decide each specific case on its merits. (Harding vs.
People, 32 L.R.A., 445.)
The police power of the state has been exercised in controlling and regulating private
business, even to the extent of the destruction of the property of private persons, when the
use of such property became a nuisance to the public health and convenience. (Slaughter
House Cases, 16 Wal (U.S.), 36 Minnesota vs. Barber, 136 U.S., 313; Powell vs. Pennsylvania, 127
U.S., 678; Walling vs. People, 166 U.S., 446; U.S. vs. Ling Su Fan, 10 Phil. Rep., 104.)
We are of the opinion, and so hold, that the power exercised under the provisions of Act No.
1309 falls within the police power of the state and that the state was fully authorized and
justified in conferring the same upon the municipalities of the Philippine Islands and that,
therefore, the provisions of said Act are constitutional and not in violation nor in derogation of
the rights of the persons affected thereby.
With reference to the first question presented by the appeal, relating to the sufficiency of the
complaint, it will be noted that Act No. 1309 authorized the municipal governments to establish
ordinances requiring (a) all able bodied male residents, between the the ages of 18 and 55
[50], and (b) all householders, under certain conditions, to do certain things.
It will also be noted that the law authorizing the president of the municipality to call upon
persons, imposes certain conditions as prerequisites: (1) The person called upon to render such
services must be an able-bodied male resident of the municipality; (2) he must be between
the ages of 18 and 55 [50], and (3) certain conditions must exist requiring the services of such
persons.
It will not contended that a nonresident of the municipality would be liable for his refusal to
obey the call of the president; neither can it be logically contended that one under the age
of 18 or over the age of 55 [50] would incur the penalty of the law by his refusal to obey the
command of the president. Moreover, the persons liable for the service mentioned in the law
cannot be called upon at the mere whim or caprice of the president. There must be some just
and reasonable ground, at least sufficient in the mind of a reasonable man, before the
president can call upon the the persons for the service mentioned in the law. The law does
not apply to all persons. The law does not apply to every condition. The law applies to special
persons and special conditions.
A complaint based upon such a law, in order to be free from objection under a demurrer,
must show that the person charged belongs to the class of persons to which the law is
applicable. For example, under the Opium Law, certain persons are punishable criminally for
having opium in their possession. All possessors of opium are not liable under the law. A
complaint, therefore, charging a person with the possession of opium, without alleging that
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he did not belong to the class which are permitted to possess it, would be objectionable under
a demurrer, because all persons are not liable. The complaint must show that the one charged
wit the possession of the opium was not one of the persons who might legally possess opium.
Suppose, for another example, that there was a law providing that all persons who performed
manual labor on Sunday should be punished, with a provision that if such labor should be
performed out of necessity, the person performing it would not be liable. In such a case, in the
complaint, in order to show a good cause of action , it would be necessary to allege that the
labor was not performed under necessity. In other words, the complaint, in order to be free
from objection raised by a demurrer, must show that the person accused of the crime, in the
absence of proof, is punishable under the law. One who performed labor under necessity
would not be liable. The complaints, in the foregoing examples, in the absence of an
allegation which showed that the party accused did not belong to the exempted class, would
not be good. In the absence of such negations, the courts would be unable to impose the
penalty of the law, because, perchance, the defendant might belong to the exempt class.
The complaint, in a criminal case, must state every fact necessary to make out an offense.
(U.S. vs. Cook, 17 Wall. (U.S.), 168.) The complaint must show, on its face that, if the facts
alleged are true, an offense has been committed. It must state explicitly and directly every
fact and circumstance necessary to constitute an offense. If the statute exempts certain
persons, or classes of persons, from liability, then the complaint should show that the person
charged does not belong to that class.
Even admitting all of the facts in the complaint in the present case, the court would be unable
to impose the punishment provided for by law, because it does not show (a) that the
defendant was a male citizen of the municipality; (b) that he was an able-bodied citizen; (c)
that he was not under 18 years of age nor over 55 [50]; nor (d) that conditions existed which
justified the president of the municipality in calling upon him for the services mentioned in the
law.
For all of the foregoing reasons, the judgment of the lower court is hereby affirmed, with costs.
So ordered.
Arellano, C.J., Torres, Carson, Trent, and Araullo, JJ., concur.
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Public Health
Edwin William Case, et al vs. La Junta de Sanidad de Manila, et al. G.R. No. L-7595 February
4, 1913
This is an appeal by the defendants from a judgment of the Court of First Instance of the city
of Manila, in which said court enjoined them from proceeding in the performance of their
alleged duties, as prescribed in Ordinance No. 125 of the city of Manila.
The lower court held that said ordinance (No. 125) was null and void and for that reason
enjoined the defendants from enforcing the same.
It appears from the record that the plaintiff, Edwin William case, is the owner of a certain house
and lot, located at No. 202 Calle Solana, within the walled city of Manila; that said house is
occupied, from time to time, by a large number of persons. It seems to be an apartment
house, gymnasium, or dormitory.
On or about the 20th of November, 1909, the assistant sanitary engineer of the Bureau of
Health, by order of the Director of Health, addressed a letter to the representatives of the
plaintiffs, informing them that the sanitary condition of said premises (202 Calle Solana) was
very bad, and directing them to make connections with the new sewer system. (See Exhibit
A.)
The plaintiff not having complied with the order contained in said notice (November 20, 1909),
on the 28th of December, 1909, the said assistant engineer of the Bureau of Health addressed
another letter (Exhibit B) to the representatives of the plaintiff, calling attention to the fact that
the instructions in the former order not having been carried out he would be given ten days in
which to comply with the same.
The foregoing notices of the orders and directions of the Director of Health were given to the
plaintiff in compliance with the provisions of Ordinance No. 125 of the city of Manila, entitled:
An ordinance to regulate and enforce the use of sewers and drains in the city of Manila,
Philippine Islands.
Thereafter, on the 12th of January, 1910, the plaintiff filed a petition in the Court of First Instance
of the city of Manila, praying that the defendants be enjoined from carrying out the
performance of said orders requiring the improvements in the sanitary conditions of said
premises, and for a judgment of the court, declaring that the sanitary conditions of said
property are good and in no manner injurious to the public health; and further, that the
defendants were without lawful power or authority to order and compel the plaintiff to make
on said premises the improvements ordered by said Director of Health.
To the said petition, the defendants presented the following demurrer:
Now come the above-named defendants, through the Attorney-General, and demur to the
complainant in the present case, on the following grounds:
1. That the court has no jurisdiction over one of the defendants in this action, for the reason
that there does not exist any legal entity known as "Junta de Sanidad de Manila." (See section
of Act No. 183 and 5 (e) of Act No. 1407.)
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2. That the court lacks jurisdiction over the subject matter of these proceedings, since an
application for injunction cannot be sustained unless some material and irreparable damage
is about to be done, and also because the legal remedy of injunction cannot be invoked to
prevent a criminal prosecution under a city ordinance, even when that ordinance is null and
void.
3. That there is omission and erroneous joinder of plaintiffs and defendants, for the firm of Ferrer
& Codina, agent of the plaintiff, who does not reside in the Philippines, has not been joined
with its principal as plaintiffs, and, moreover, because there does not exist any legal entity
named "Junta de Sanidad de Manila," and Victor G. Heiser is not director of said "Junta."
4. That the complaint does not set forth facts sufficient to constitute a right of action, because
paragraph 3 of section 90 of Act No. 190 requires that when a complaint asks for a special
remedy, like that of injunction, the basis whereon such remedy is asked should be stated
therein, and the complaint in this case does not allege the nullity of any ordinance, execution
whereof the court is asked to prohibit.
5. That the complaint is vague, ambiguous and unintelligible, for it does not allege that no
other remedy exists; that the complaint is contradictory in its terms, for paragraph VIII alleges
that the Director of Health has no authority to issue the notice and order contained in Exhibit
A, filed in this case, and paragraph IX that the court ought to prevent the defendants from
compelling and obliging the plaintiff to make the changes the alterations mentioned in Exhibit
A, prohibiting a criminal prosecution under municipal ordinances; and further because if the
plaintiff is prosecuted for infraction of a municipal ordinance he cannot be caused irreparable
damage, aside from the fact that the questions here raised can be raised in defense against
said prosecution.
6. That the petition for relief is vague and ambiguous, because in paragraph (a) it asks for the
issuance of a preliminary injunction to prohibit the defendants from executing the order
marked Exhibit A, and in (b) it asks the court to declare that the sanitary conditions of the
house mentioned therein are good and in no way prejudicial to the public health and that
the defendants are not authorized to require the plaintiff to make the changes and alterations
ordered in said Exhibit A; for the fact does not appear that Ordinance No. 125 of the city of
Manila expressly authorizes the defendants to order the plaintiff to make in said building the
alterations mentioned in Exhibit A.
Manila, P.I., January 24, 1910.

(Sgd.) IGNACIO VILLAMOR,
Attorney-General, representing the defendants.
On the 25th of January, 1910, the Court of First Instance of the city of Manila, after considering
the facts alleged in said petition, granted a preliminary injunction, as prayed for by the
plaintiffs.
Later, on the 11th of March, 1910, the plaintiffs presented an amendment complaint, which
alleged substantially the following:
(1) That the plaintiff, Edwin William Case, resides in Paris, France, and is represented in the city
of Manila by the firm of Ferrer and Codina, his lawful attorneys in fact, residing at No. 150
Escolta, in said city, and that the defendants, the "Junta de Sanidad de Manila" and its
director, Victor G. Heiser, are residents of said city of Manila;
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(2) That said firm of Ferrer and Codina, and the representative and agent in Manila of Edwin
William Case, received on November 26, 1909, from the defendants a written order dated the
20th of said month, copy of which is attached to the complaint, marked Exhibit A and made
a part thereto, ordering the said Ferrer and Codina to connect with the new sewer system all
the sanitary apparatus, except those which receive rain water, of the premises at No. 202
Calle Solana, the property of the plaintiff, Edwin William Case;
(3) That on January 4, 1910, the said Ferrer and Codina received another communication from
the defendants dated December 28, 1909, copy of which is attached to the original
complaint, marked Exhibit B, and made a part of this complaint, extending ten days the time
for the execution of the order of November 20, 1909;
(4) That in the year 1902 the plaintiff, Edwin William Case, having received from the defendant
"Junta de Sanidad" a communication, copy of which is marked Exhibit C and attached to the
complaint, ordering that he do and complete on the said premises at No. 202 Calle Solana
the sanitary work set forth in said communication, executed all of said work and it was
approved by said Board of Health and that said work cost the plaintiff P3,110.08;
(5) That for many years there has existed in the walled city, in which said premises No. 202 Calle
Solana are situated, a sewer system constructed for sanitary purposes by the municipality of
Manila, which sewer system drains into the bay and has thus far been in good condition and
in use, and that all the sanitary apparatus of said premises are at present connected with the
said sewer system;
(6) That the premises in question are manifestly in as good sanitary condition now as
immediately after the execution of the said work ordered by the defendant "Junta de
Sanidad" in its communication, Exhibit C, attached to the complaint in this case;
(7) That the performance of the work directed in the communication from the defendants of
November 20, 1909, would cost at least P500 and would cause other additional expenses on
account of the work that the city engineer of Manila would have to execute at the expense
and risk of the plaintiffs;
(8) That the plaintiffs, upon the execution of said work, would have to pay thenceforth 50 per
cent over the general rate for hydrant water in Manila on account of the consumption thereof
on the property at No. 202 Calle Solana;
(9) That the defendant "Junta de Sanidad" and its director are absolutely without lawful power
and authority to order and compel the plaintiffs to perform the work mentioned in the
communication, Exhibit A; and
(10) That the Ordinance No. 125, approved and published by the Municipal Board of Manila,
and invoked by the defendants in their additional memorandum upon the demurrer to the
complaint, is null and void in all and each of its parts and is in no manner obligatory, because
the Municipal Board of Manila and said defendants are without lawful power and authority to
enact, approve, and enforce said ordinance.
The prayer of the amended complaint was to the effect that the court declare the plaintiff
firm of Ferrer and Codina entitled to the benefits of said order of January 25, 1910; that the
court declare that the sanitary conditions of the premises No. 202 Calle Solana are very good,
and in no manner and by no means injurious to the public health; and that the defendant
"Junta de Sanidad" and its director are absolutely without lawful power and authority to order
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and compel the plaintiffs to perform on said premises the work ordered by the defendants in
their communication of November 20, 1909; that the court declare said Ordinance No. 125 to
be null and void and in no manner obligatory; and finally, that the court condemn the
defendants to the payment of the costs of the case and to grant the plaintiffs any other
positive remedy to which they may be entitled in justice and equity.
To the foregoing complaint, on the 12th of July, 1910, the defendants presented their answer,
alleging:
1. They admit the allegations set forth in paragraphs Nos. 1, 2, 3, 4, 5, 6, and 8 of said complaint.
2. Further answering said complaint, defendants (1) deny that the sewer connection required
to be made in pursuance of the orders referred to in paragraphs 2 and 3 of said complaint
would cost the sum of P500 as therein alleged, and state to the court that the reasonable cost
thereof would not exceed P100; (2) deny that defendants are not empowered to make the
orders in question, and (3) deny that ordinance of the city of Manila, numbered 125, referred
to in paragraph 10 of said amended complaint, is invalid owing either to lack of power of the
Municipal Board of the city of Manila to enact and enforce said ordinance, or for any other
reason.
3. Further answering said complaint, defendants allege and show to the court that the orders
referred to in paragraphs 2 and 3 of said amended complaint were issued in connection with
many other similar orders and as part of a general sanitary plan of the city of Manila to have
the premises known as No. 202 Calle Solana, Intramuros, as well as all other premises in the
walled city occupied and used by a considerable number of people, connected with the
new sanitary sewers which have been recently constructed and completed by the
municipality at great expense for the purpose of improving the sanitary conditions within said
city. In this connection defendants respectfully state and show to the court that the old sewers,
with which said premises are now connected, run on flat and faulty grades, the sewage
passing directly through the old moat and other surface channels into the Pasig River; thereby
polluting all of said surface watercourses; that the contents of the new or sanitary sewers are
pumped from the pumping station on the Tondo beach for a distance of over a mile over the
flats into the deep water of Manila Bay; and that according to the present plans adopted by
the city of Manila the old sewers are in the future to be reserved for storm or rain water only, in
order that the small channels left in the old moat and other watercourses into which said
sewers empty may be kept comparatively free from pollution.
Defendants further represent to the court that it is particularly urgent that said premises No.
202 Calle Solana, Intramuros, be connected with the new sewers, as directed to be done by
said orders, for the reason that although almost every house in the walled city of Manila is
equipped with an aseptic tank or modern cesspool which purifies the sewage to a certain
extent, said premises No. 202 Calle Solana, Intramuros, have no vault or cesspool, but that the
crude sewage (human feces, etc.) from said house enters the old sewer direct, passing thence
into the city moat and gradually finding its way by means of a small, sluggish watercourse to
the Pasig River, catch basins Nos. 1 and 2 of the order dated January 3, 1902, referred to in
paragraph 4 of said amended complaint, being merely small sediment basins which do not
interrupt the free flow of crude sewage as above explained.
Wherefore, defendants pray that the restraining order granted in this case by this court on the
25th day of January, 1910, be set aside and that plaintiff's complaint and amended complaint
be dismissed at the cost of plaintiffs; and they further pray for such other relief as equity and
justice may require.
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Upon the issues thus formed by the amended complaint and answer, the cause was set down
for trial.
After a consideration of all of the facts submitted, the Honorable Simplicio del Rosario, judge,
in a very interesting opinion, in which he discussed the facts and the law relating to the
questions presented, reached the conclusion that said Ordinance No. 125 was null and
without force, and made the preliminary injunction issued on the 25th of January, 1910,
permanent, perpetually prohibiting the defendants from carrying into effect said orders of
November 20, 1909.
From the conclusion of the lower court the defendants appealed, after having made a motion
for a new trial in the lower court.
The appelants allege that the lower court committed the following errors:
1. The Court of First Instance erred in declaring that Ordinance No. 125 of the city of Manila is
null and void, on the ground that it is unreasonable, unjust, oppressive and opposed to the
civil laws and the provisions of the Philippine Bill.
2. The Court of First Instance erred in declaring that the health authorities are without legal
authority or power to require plaintiff to connect his premises with the new sewer system,
except at the expense of the city of Manila, or upon the payment of damages in the amount
of the cost to plaintiff of the connection made with the old sewer system in the year 1902.
3. The Court of First Instance erred in declaring that the plaintiff, Edwin William Case, cannot
be disturbed in his use of the connection made by him at No. 202 Calle Solana with the old
sewer system in the year 1902 or be deprived thereof, wholly or partially, by the defendants,
without the payment of the corresponding damages.
4. The Court of First Instance erred in granting a permanent injunction against the defendants,
thus preventing them from proceeding in the performance of their duties under the provisions
of said Ordinance No. 125 of the city of Manila for the protection of the health of the
inhabitants of said city.
5. The Court of First Instance erred in overruling defendant's motion for a new trial.
Before discussing the questions presented by the assignments of error, we deem it advisable
to present the questions of fact which the record disclosed. The present case presents
questions both of fact and of law. The plaintiffs maintain:
(a) That the premises in question are in a sanitary condition; and
(b) That the city of Manila had no right or authority to adopt and enforce said Ordinance No.
125.
The defendants allege that the premises are in an insanitary condition and maintain that the
city of Manila had authority to adopt and enforce said ordinance.
From the record it appears that there were two hearings during the pendency of the cause in
the lower court, at which proof was adduced. The first was when the question as to the right
of the plaintiffs to a preliminary injunction was under consideration, and the second when the
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merits of the cause were investigated. In neither of these hearings did the plaintiffs present any
proof whatever in support of the facts alleged in the complaint. As the first hearing the
defendants presented two witnesses, Dr. Victor G. Heiser, Director of Health of the Philippine
Islands, and W.C. Palmer, assistant sanitary engineer of the city of Manila. At the second
hearing the defendants presented Mr. George H. Guerdrum, sanitary engineer of the Bureau
of Health.
As was said above, the plaintiffs presented no proof whatever in support of the allegations
contained in the complaint. Whatever facts were presented by the defendants therefore
stand undisputed in the record. By mutual agreement Ordinance No. 125 was admitted in
evidence without objection.
Dr. Victor G. Heiser testified with reference to the sanitary condition of the premises in question
as follows:
Q. Are you familiar with the property or lot at No. 202 Calle Solana, Intramuros?
A. In a general way, yes.
Q. Please state whether the document Exhibit A in this case was issued by you.
A. Yes, sir.
Q. Is it true, Mr. Heiser, that the old sewer system in Intramuros now exists?
A. Yes, sir.
Q. Please describe it the court and state its nature with respect to sanitary or insanitary
conditions.
A. At the present time there exists around and outside the walls of the city a sewer system
that constituted a menace to the public health.
Q. Please describe to the court the nature and use of the new sewer system of the city.
A. The new sewer system is modern in every way. It is a covered system, offering no menace
to the public health; I mean that it is underground; and one of the principal reasons assigned
for this new system is to eliminate the old system.
Q. Please state the cost of this new sewer system and the time needed to put it into
operation.
A. It took several years to construct, and cost several million pesos.
Q. Please explain to the court the sewer plan prepared by the health authorities, and in
particular the plan of the sewer system in Intramuros. What is desired is the reason for
constructing this sewer system.
A. In view of the fact that the walled city is especially congested, and the greater part of
the people live in dwelling houses, which are not apartments or hotels and lodging houses, it
is difficult to handle the question of hygiene and it is desired that this part of the city be
connected immediately with the new sewer system.
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Q. State whether at the present time a general effort has been made for the purpose of
connecting the house with the new sewer system.
A. Yes, sir.
Q. Please tell the court whether in your opinion as a health officer this house in question in
this case ought to be connected with the new sewer system.
A. Not only necessary, but also it is imperative, especially in this house mentioned in this
case, that it be connected immediately with the new system, on account of the crowd of
people that lived in said house.
Q. State whether the old sewer system has been declared by competent authority to be
dangerous to the public health.
A. I have informed the division of engineering and the Department of Sanitation that the
old system is a menace to the public health.
Q. Do you know how many live in the house No. 202 Calle Solana?
A. I don't know the exact number, but I do know that many people live there.
Q. And is that the only reason for issuing the order to the owner of that house to connect
its sanitary installations with the new system?
A. The order was issued because the house is in an insanitary condition.
Q. As soon as the houses on Manila are connected with the new sewer system, what
disposition will be made of the old?
A. The old one will be abolished.
Q. Will it be absolutely abandoned or will it be destroyed?
A. That is the intention.
Q. What is the present nature of that sewer system, is it a permanent structure, or merely
temporary?
A. With reference to the sewer system outside the walls, it is a temporary structure.
Q. Of what materials?
A. The greater part of the wood.
Q. Is it covered in any way?
A. The greater part is not covered.
Q. You mean that it is an open ditch around the walls, conveying the feces from Intramuros?
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A. Yes, sir.
Q. How long, Doctor, have those conditions, existed in that sewer system?
A. Outside the walls, in the outer part, for several years.
Q. And the old sewer system that exists in the city of Manila, how long has it existed, the
old one?
A. I Don't know exactly, but it has certainly existed for many years.
George H. Guerdrum, being first duly sworn, testified as follows:
Q. State your name, occupation, and residence.
A. George H. Guerdrum, sanitary engineer of the Department of Sanitation, Manila.
Q. How long have you held that office?
A. Since may, 1907.
Q. Are you familiar with the building at No. 202 Calle Solana, Intramuros?
A. Yes, sir.
Q. Can you state to the court the conditions in which this building is, with reference to its
connection with the new sewer system, and also with reference to its sanitary installations?
A. The question, your honor, is that the exterior installations connected with the sewer are
defective, and are not good conductors of the feces that come from that building. More or
less sanitary installations have been placed inside the house; these sanitary installations are
now in a rather defective condition. The question we wish to demonstrate is not exactly with
reference to these few defects that exist in the sanitary installation in this house, but the way
in which feces that issue from the building ought to be disposed of, which is the duty of the
sanitary department. The records of our office shows that the sanitary installations inside this
house were renewed in the year 1902; at that time, nevertheless, the feces that came from
this house were carried away by the old Spanish sewer, by the storm drain.
Q. How might that have been avoided?
A. That might have been avoided by properly constructing an aseptic vault. These aseptic
vault are constructed in such way that the feces which pass through that vault are filtered,
letting the liquid part flow away.
Q. To what degree, or to what extent is this aseptic vault to which you refer in use here in
the walled city.
A. I would like to state that during the three years I have been working in this line, I have
examined all the houses in Manila, and only with the exception of some houses beside the
Pasig, almost 95 per cent have been connected with these aseptic vaults, long before the
termination of the new sewer system.
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Q. Describe to the court with more details the exact purpose of constructing these vaults.
(Counsel for the plaintiffs excepted to this question, saying: "I admit that the house has no
aseptic vaults, because it is connected with the old sewer system.")
A. The purpose of an aseptic vault is to hold the solid material that comes from these feces
issuing from the house, and in general way to purify it in such manner that the liquid part which
afterwards flows through the installations be free from germs.
Q. And without this vault, where do the feces from this building pass out?
A. Without these aseptic vaults, the feces pass out in that crude form through the Spanish
sewer in Calle Solana, and afterwards pass along Calle Real and flow into that open ditch in
the Perian Gate.
Q. What kind of building is this at No. 202 Calle Solana?
A. It is a very large building, of stone and wood, has a frontage, that is, a frontage of Calle
Solana, of 15 or 20 meters, and on the Calle San Francisco side, probably about 20.
Q. To what use is this house put?
A. It was used for several years as a students' dormitory, and before that it was a big hotel
known as the "Hotel de Francia," and is now used as a gymnasium.
Q. What would have been done with regard to the feces which issue from that building, if
the ordinance had been enforced?
A. If this order had been enforced the feces that issue from this building would have passed
through the new sewer system. This new sewer system was constructed by the city at a cost of
several million pesos and after a careful investigation which demonstrated that the old Spanish
sewer system was defective and unsubstantial.
Q. Wherein is it defective?
A. One of the defects of this old system is the grade of the sewer, which is so low that the
solid matter of these feces remains in the bottom of the sewer and upon its sides; and the
feces that also pass through this old sewer flow directly through these open ditches and also
into the Pasig River, which is subject to ebb and flow, this matter is deposited in the estuaries
and open ditches of the city, in this way contaminating with germs the greater part of the
localities of the city. In the new sewer system this defect in the grade of the sewer has been
corrected by establishing stations where the material is pumped to give more flow to the
feces, whereby they flow rapidly from a higher to a lower level, and thence, by means of a
pump, this material is raised up, these feces, and then again from a lower to a higher level,
and so on successively.
Q. In this new system, what is finally done, what procedure is used with these feces?
A. The crude material is finally ejected by means of a pumping station on the Tondo beach.
This is the final pumping station; and from this last pumping station the feces are ejected
through pipes laid under the water, more than a mile out to sea, where the current takes them
up and carries them away, whence they may not return to the city.
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Q. Has the waterworks system of the city any connection with this sewer system, and if so,
what connection?
A. This new waterworks system was constructed in the first place for the purpose of furnishing
water; and this new waterworks system brings water to many private houses, and that water
is used in the sanitary installations, water closets, and ditches.
Q. Do there exists in any of the houses that are not connected with this new system facilities
for getting this help from the new water system, for the purpose of being able to get rid of the
human feces and other filth?
A. Before the construction of this system the old way was to let the water carry these feces
to the place where the aseptic vaults are, and from these aseptic vaults, although at greater
expense, they used sometimes to take out these feces and put them on board the steamer
Pluto and carry them outside the bay, where the material was dumped.
Q. You are now referring to the properties that new connected with the aseptic vaults?
A. Yes, sir.
Q. Then, of what use would be this new sewer system if no orders existed for buildings to
connect their sanitary installations with the new system, or if they should not make connection?
A. Then it would be of no use.
Q. Explain to the court.
A. I will explain to your honor the reasons for what I have just said, and that is, because the
rain water is not allowed to pass through the new sewer system. The new sewer system is only
for the feces gathered from all parts of the city of Manila. I would like to explain to your honor
that this crude material not only comes from the feces but for the greater part consists
principally of water from this Carriedo system, which mixes the human feces with the filth or
material that is taken from the stables, fish entrails, and other things. All this water, after being
used by the houses, is mixed with these feces and other matter, which forms what we call the
crude material that passes through this new sewer system.
xxx xxx xxx
Q. You have said that the old sewer system empties into open ditches toward the outside
of the Parian Gate?
A. Yes, sir.
Q. How long have these ditches been open?
A. For several hundred years, several centuries. Since the construction of the walls, of those
moats.
Q. Those ditches have never been covered?
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A. So far as I know those ditches have never been covered. I only know that recently the
Government has filled up a part of these ditches, reducing them merely to a small ditch which
is for the flow there of the human feces.
Q. Does the old sewer of Intramuros, inside the walled city, empty into any estuary?
A. There are several points of discharge; some of them empty through that open ditch,
others through the Pasig River.
Q. But none of the final mouths of that sewer empty into any estuary?
A. These open ditches lead, though in an indirect way, to the estuary, because they empty
into the Pasig River and the river flows into those estuaries.
Q. Do you how many houses of the walled city are connected with the old sewer?
A. At present and during the last few months, about a hundred houses have removed their
connections with the old system.
Q. But isn't it true that the greater part, if not all, the houses in Intramuros were and are
connected with the old sewer system, with the exceptions of those hundred houses to which
you refer?
A. Ninety-nine per cent of the houses here in Intramuros do not discharge the crude material
into the old system for this reason, because the greater part of these houses still have the privy,
as it was called in the time of the Spanish government, and those that have no privies have
an aseptic vault. And this house at No. 202 Calle Solana is one of the few that have direct
connection with the old system, without having a privy or an aseptic vault.
Q. Have those orders issued by the "Junta de Sanidad" for connection of the house with
the new sewer system been issued to the houses with a privy or an aseptic vault?
A. I would like to explain to your honor that we have issued orders and have tried to carry
out these orders in the houses that have had aseptic vaults since 1903, 1904, up to 1906, and
this was done for two reasons: one of which is that the construction of these aseptic vaults is
merely for temporary or provisional use, pending the construction of this new sewer system;
and another reason is that when the aseptic vault is defective, is out of order, we give orders
for connection with the new system; and another reason is, when we have an order to compel
the houses to connect with the new system of a district, for example, we compel all the houses
in a block to connect their installations with the new system, we aren't going to make an
exception of one house in each block, so that it should not make connection, four months
ago we issued orders to all the houses in the Escolta, and in that case, all were notified to
comply with that order.
Q. Do you mean to tell the court that inside Intramuros this old system is entirely open?
A. In Intramuros there are many openings in this old system, for example, at the street
corners there is generally and ordinarily that iron grating for reception of rain water. In this way
it may be said that crude material is exposed to the air on the street corners.
The foregoing proofs shows, beyond question, that the method of depositing the sewage from
said premises, No. 202 Calle Solana, Intramuros, is insanitary and likely to produce disease and
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discomfort, not only to the occupants of said house, but to the people of the city of Manila. It
would be possible, under the system used, for instance, if a typhoid germ should be deposited
in the water-closet system of said premises, for the same to reach the Pasig River, and thence
be carried to every one of the numerous esteros of the city and thus be communicated to the
thousands of inhabitants who use water from the rivers and esteros for bathing and other
purposes. The detrimental effect from such possibilities to the health and comfort of the people
of the city can scarcely be over-estimated.
From the proof clearly showing that said premises are insanitary, we pass to a consideration of
the question whether or not the city of Manila, through the sanitary authorities, had the power
to remedy such conditions, in the manner attempted by the defendant in the present case.
The city of Manila is clearly authorized by its charter to enact ordinances. It is thus authorized
to legislate upon certain questions which are defined in said charter. These questions are more
or less definitely and expressly defined by said charter. The charters of municipalities generally
contain powers which are known and included within "the general welfare powers of
municipal corporations." We find such a general welfare clause in the charter of the city of
Manila (Act No. 183). Section 16 of said charter, among other things, provides that the Board
"shall make such ordinances and regulations as may be necessary to carry into effect and
discharge the powers and duties conferred by this Act, and to provide for the peace, order,
safety, and general welfare of the city and its inhabitants."
In addition to the foregoing general powers of the Board, we find enumerated in section 17
of said charter a number of specific powers conferred upon said Board. In paragraph (t) we
find that the Board is authorized "to lay out, construct, improve and regulate the use of streets,
avenues, alleys, sidewalks, wharves, piers, parks, cemeteries, and other public places; to
prevent and remove encroachments from the same; to provide for the lighting, cleaning and
sprinkling of streets and public places. ... To prohibit the throwing or depositing of offal,
garbage, refuse or other offensive matter in the same and to provide for its collection and
disposition; to regulate openings therein for the laying of gas, water, sewer and other pipes
therein, the building and repair of tunnels, sewers, and drains, and all structures therein and
thereunder, and the erecting of poles and the stringing of wires therein, etc."
In paragraph (x) of said section (17) we find that the Board is authorized "to establish and
maintain public drains, sewers, latrines, and cesspools."
In paragraph (dd) of said section (17) we find that the Board is authorized "to enforce the
regulations of the Bureau of Health for the Philippine Islands and by ordinance to prescribe
fines and penalties for violations of said regulations."
Under paragraph (jj) of said section (17) the Board is authorized "to declare, prevent, and
abate nuisances;" while in paragraph (kk) of the same section the Board is authorized "to
make, publish, amend and repeal all ordinances, necessary to carry into effect the powers
herein granted, and to enforce the same by fines and penalties, within the limits authorized by
law."
Section 33 of the charter of Manila provides that the city engineer "shall have the care and
custody of the public system of water works and sewers, and all sources of water supply and
shall control, maintain, and regulate the use of the same in accordance with the ordinances
relating thereto, shall inspect and regulate, subject to the approval of the Board, the use of all
private systems for supplying water to the city and its inhabitants, and all private sewers and
their connection with the public sewer system."
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In addition for the foregoing general and special powers conferred upon the Municipal Board
and the officers of the city of Manila, Act No. 1150 of the Philippine Commission further defines
the powers and duties of the Board of Health for the Philippine Islands and of the Municipal
Board of the city of Manila, in connection with the preservation of the public health of said
city. Section 1 of said Act (No. 1150) provides:
Subject to the approval of the Secretary of the Interior, the Board of Health for the Philippine
Islands, acting in its capacity as a local board of health for the city of Manila, shall draft and
forward, through the Secretary of the Interior, for the Municipal Board for enactment, health
ordinances for that city. The Municipal Board shall enact the ordinances so forwarded to it by
the Board of Health.
Section 3 of said Act (No. 1150) provides that the ordinances to be adopted by the Board of
Health may provide for:
xxx xxx xxx
(d) Installation and maintenance of adequate and proper drainage of buildings and premises,
including the materials to be used in and the construction of plumbing systems, drains,
trappings, water-closets, vaults, latrines, urinals, cesspools, and sanitary fixtures and
appliances.
(e) Proper sanitary maintenance, scavenging, collection and disposal of refuse, garbage, and
manure, the removal and disposal of night soil, and the proper construction of receptacles for
such substances, subject to the provisions of section 33 of Act No. 183, as amended by this
Act.
xxx xxx xxx
(r) Definition, declaration, and prohibition of nuisances dangerous to the public health;
location and use of public drains, sewers, latrines, and cesspools, and construction and use of
private drains, sewers, latrines and cesspools.
Section 6 of said Act No. 1150 provides as follows:
Sanitary inspections shall be made under the general supervision and control of the
Commissioner of Public Health by district medical inspectors of the Board of Health, by such
members of the police force of the city of Manila as shall be designated as sanitary police by
the chief of police, and by such sanitary inspectors as may be authorized by law. Sanitary
police and sanitary inspectors shall make sanitary inspections under the immediate direction
of district medical inspectors, to whom they shall report the results of such inspections:
Provided, That the city engineer of Manila or his duly authorized agent shall inspect and
supervise the construction, repair, removal, and safety of buildings, and the ventilation,
drainage, and plumbing of buildings and premises, and shall report to the Commissioner of
Public Health any violation of ordinances relative to the ventilation, drainage, and plumbing:
And provided further, That the Board of Health shall have power to make inspections through
its duly authorized agents in order to ascertain whether such ordinances are being enforced,
and to initiate complaints against violators of such ordinances after consultation with the city
engineer.
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In pursuance of the general and special powers conferred upon the Municipal Board and the
officers of the city of Manila by Acts. Nos. 183 and 1150, certain ordinances relating to the
question presented in the present case have been adopted.
We find in article 14 of Ordinance No. 86 (Revised Ordinance No. 179) that the Municipal Board
has imposed upon the engineer certain duties with reference to the inspection of buildings
and the plumbing and sewer system of houses and places. Said ordinance provides that:
When any premises shall have been so inspected and defects found in the material or
plumbing, written notice of such defects shall be served upon the owner or agent of the
premises, who shall make the repairs or changes directed within the time specified therein.
Failure to comply with the order shall be a violation of this Ordinance (No. 86).
Said Ordinance (No. 86) in article 18 (Revised Ordinances, section 183) provides for a system
of permissible receptacles until the new sewer system, which was at the date of said ordinance
under construction, shall be completed. Said section 18 (183) provides that until the new sewer
system now under construction is in operation the different systems of receptacles for the
collection and removal of filth in sanitary installations, to be permitted after the 1st of January,
1907, shall be as follows:
First. Movable vaults (pail system);
Second. Dry vaults;
Third. Filtering vaults with discharge;
Fourth. Absorbent vaults, with or without discharge.
Fifth. Aseptic vaults, absorbent or with discharge, or both absorbent and with discharge.
Later said article 18 of Ordinance No. 86 (Revised Ordinances, section 183) was amended by
Ordinance No. 120, to read as follows:
The different systems of receptacles for the collection and removal of filth in sanitary
installations, to be permitted subject to the approval of the Director of Health or his authorized
representative on and after the first day of August, nineteen hundred and nine, shall be as
follows:
First. Direct discharge into the new sewer system;
Second. Movable vaults (pail system);
Third. Dry vaults;
Fourth. Filtering vaults, with discharge;
Fifth. Absorbent vaults with or without discharge;
Sixth. Aseptic vaults, absorbent or with discharge, or both absorbent and with discharge;
Provided, That the first-mentioned system shall, in future, be obligatory in the case of premises
abutting upon a street through which the new sewer system has been laid.
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Later, and in pursuance of the policy of the Municipal Board of the city of Manila in preserving
health conditions, and for the purpose of making more effectual the ordinances therefore
adopted, on the 27th of September, 1909, Ordinance No. 125 was enacted, which provides
in part as follows:
Section 1. Every building or premises in the city of Manila, shall be connected with the sanitary
sewer system when the owner or agent of such building or premises is notified in writing by the
official designated by the Municipal Board or by the Director of Health or his authorized
representative that the sewer into which his building or premises can drain is ready for service.
xxx xxx xxx
Sec. 4. Upon receipt of the notice provided for in section one hereof, it shall be compulsory for
each owner or agent of a building or premises to have begun, within thirty days from date of
such notification, the work of connections from the sanitary sewer to the property line of said
owner or agent.
The connection from the property line to the house fixtures shall be completed by the owner
or agent within sixty days after the completion of the connection to be made by the city.
xxx xxx xxx
SEC. 7. Wherever existing house sewers connect with a vault, cesspool, or other similar
arrangement, and it is possible to connect with the sanitary sewers, the connection will be
made directly with the sewer, and the vault, cesspool, or other similar depository shall be filled
in with clean fresh material level with the surrounding ground. Whenever the existing drains
serve both for house sewage and for surface drainage, the two shall be separated. House
sewage and stable liquids alone shall be permitted to enter the sanitary sewers, and in no
case will storm water or surface drainage be allowed to enter therein. Stable drains must be
so arranged as to prevent the entrance of storm water. (See chap. 12, sec. 222 of the Revised
Ordinances.)
xxx xxx xxx
SEC. 10. Any person or persons, firm, company, or corporation who shall violate any of the
provisions of sections four, seven, and nine of this ordinance shall, upon conviction, be
punished by a fine not to exceed two hundred pesos, Philippine currency, or by imprisonment
not to exceed six months, or by both such fine and imprisonment, in the discretion of the court,
for each offense.
In resuming, and by reference to section 18 of Ordinance No. 86 (Revised Ordinances, section

183), it will be noted that during the construction of the new sewer system, certain different
systems of receptacles for the filth and sewage of the city of Manila were permitted after the
1st of January, 1907.
By Ordinance No. 120, said section 18 of Ordinance No. 86 was amended. Under the
amendment different systems of receptacles for the collection of filth and sewage of the city
and the removal thereof were permitted, subject to the approval of the Director of Health, on
and after the 1st of August, 1909. By said amendment (Ordinance No. 120), direct discharge
into the new sewer system became obligatory in the case of all premises abutting upon a
street through which the new sewer system had been laid. It will be noted, therefore, that
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connection with the new sewer system, under said Ordinance No. 120, did not apply to all
premises. By Ordinance No. 125, however, it will be noted that Ordinance No. 120 was
amended, requiring every building or premises in the city of Manila to be connected with the
sanitary sewer system, when the owner or agent of such building or premises shall be so
required in writing, by the official designated by the Municipal Board or by the Director of
Health, or his authorized representative, provided that the sewer into which such building or
premises may be drained is ready for service.
In the present case it is admitted that the new sewer system into which the sewage from the
house in question (202 Calle Solana) may be drained was completed prior to the said notice
of November 20, 1909, on which date the plaintiff herein was required to connect the
drainage system of his house with the new sanitary sewer system.
From the foregoing provisions of the charter of Manila (Act No. 183) and the amendment
thereto (Act No. 1150) it seems clear that the Municipal Board had been expressly authorized
to adopt the ordinance in question, and that the defendants herein were duly authorized to
require the plaintiffs to do the things demanded of them to be done in said notice of
November 20, 1909, and that by virtue of Ordinance No. 125, the plaintiffs are liable to be
punished in the manner prescribed therein for a failure to comply with the terms of said notice.
The plaintiffs contend that said ordinance is unreasonable, illegal, and void. As we observed
above, said ordinance was adopted in pursuance of express power conferred upon the city
of Manila by the legislative department of the Government. The plaintiffs have not called our
attention to any fundamental law which is contravened by said charter or ordinance. The
defendants contend that said charter and ordinance are clearly within the police powers of
the State, and that there is no fundamental law of the State restraining power of the city, under
the "general welfare clause" of the charter, from adopting such ordinances as may be
deemed necessary to regulate and abate nuisances, and thus to protect the health, peace,
and comfort of the inhabitants. The said ordinance being within the express powers conferred
by the legislative department of the Government, the courts will not pronounce the same
unreasonable, illegal, and void, unless and until it is shown to have contravened or violated
some fundamental law. Courts are slow to pronounce statutes invalid or void. The question of
the validity of every statute is first determined by the legislative department of the Government
itself, and the courts should resolve every presumption in favor of its validity. Courts are not
justified in adjudging statutes invalid, in the face of the conclusion of the legislature, when the
question of its validity is at all doubtful. The courts must assume that the validity of the statute
was fully considered by the legislature when adopted. Courts will not presume a statute invalid
unless it clearly appears that it falls within some of the inhibitions of the fundamental laws of
the State. The wisdom or advisability of a particular statute is not a question for the courts to
determine — that is a question for the legislature to determine. The courts may or may not
agree with the legislature upon the wisdom or necessity of the law. Their disagreement,
however, furnishes no basis for pronouncing a statute illegal. If the particular statute is within
the constitutional power of the legislature to enact, whether the courts agree or not in the
wisdom of its enactment is a matter of no concern. Upon the other hand, however, if the
statute covers subjects not authorized by the fundamental laws of the land or its constitution,
then the courts are not only authorized but are justified in pronouncing the same illegal and
void, no matter how wise or beneficient such legislation may seem to be.
Courts are not justified in measuring their opinions with the opinion of the legislative
department of the Government, as expressed in statutes, upon questions of the wisdom,
justice, and advisability of a particular law.
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In exercising the high authority conferred upon the courts to pronounce valid or invalid a
particular statute, they are only the administrators of the public will, as expressed in the
fundamental law of the land. If an act of the legislature is to be held illegal, it is not because
the judges have any control over the legislative power, but because the act is forbidden by
the fundamental law of the land and because the will of the people, as declared by such
fundamental law, is paramount and must be obeyed, even by the legislature. In pronouncing
a statute illegal, the courts are simply interpreting the meaning, force, and application of the
fundamental law of the State. (U.S. vs. Ten Yu, supra, p. 1; State Board of Health vs. City of
Greenville, 98 N.E. Reporter, 1019.)
It is also argued by the plaintiffs that said ordinance is unreasonable, in that it requires another
expenditure so soon after the expenditure of a large sum of money, namely P3,110.08, in the
year 1902, for the purpose of complying with an order of the defendants at that time. The
plaintiffs allege that to comply with the order of November 20, 1909, would require an
expenditure of the additional sum of P500. This fact is denied by the defendants. The
defendants allege that the order of November 20, 1909, might be complied with by an outlay
of a sum not to exceed P100. Upon this question, however, neither party offered any proof. It
is within the possibilities to have orders, of the character of that with which we are dealing, to
follow each other, in point of time, so rapidly that the courts would be justified in intervening,
by the extraordinary equitable remedy of injunction, to prevent the doing of a positive
injustice, under a perfectly legal and valid law. While the courts hesitate to intervene in the
method of enforcing the law by the executive department of the Government, they have a
right to insist that even a valid law shall not be enforced in a manner that will amount to
practically a confiscation of private property. In the present case, however, viewing all the
facts and circumstances, there seems to be no reason for sustaining the contention of the
plaintiffs, that the enforcement of the ordinance is being done in an unreasonable manner.
The enforcement of the ordinance, under the evidence presented in the present case, is a
reasonable application of the same, when we take into consideration the insanitary conditions
produced as a result of the failure of the plaintiffs to comply with the order of the defendants.
The only changes apparently necessary to make at the present time, in order to comply with
the order of the defendants, is simply to connect the old system installed in the house with the
new sewer system, at practically a nominal cost. The sanitary fixtures in the house itself
apparently need no change or alteration, in order to comply with the order of the defendants.
In the case of the Health Department vs. Trinity Church (145 N.Y., 32, 49,; 27 L.R.A., 710, 716; 45
American State Reports, 579, 590), Judge Peckham, who was later an associate justice of the
Supreme Court of the United States, in discussing the necessity of a strict compliance with
orders looking to the sanitation of insanitary premises, said:
Dirt, filth, and nastiness in general are great promoters of disease — that they breed pestilence,
contagion, sickness, and death, cannot be successfully denied. There is scarcely a dissent from
the general belief on the part of all who have studied the disease that cholera is essentially a
filth disease. The so-called ship fever or jail fever arises from filth. Most diseases are aggravated
by it.
Every citizen of every community, in civilized society, must bear certain burdens imposed for
the good of all. The plaintiffs complain that the expense imposed upon them, by virtue of said
order of the defendants, is unreasonable. It has been shown, however, by the proof adduced
during the trial of the cause, that the filth and human excrement deposited in the old sewer
from said house might reach every one of the numerous esteros in the city of Manila and thus
jeopardize the health of the people of the entire city. A simple illustration may show the
unreasonableness of the contention of the plaintiffs. Under the law men are not permitted to
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appear on the streets in public in a nude condition. Might the plaintiffs justify a violation of that
law upon the ground that they had purchased expensive suits of clothing eight or ten years
before and that it was unreasonable to require them to buy other suits now, even though the
first lad lost their capacity to hide their nakedness? Could they justify a violation of the law
upon that ground — upon the ground solely that it was too expensive? That law is made to
protect public morals and public decency. The ordinance is to protect public health. There
seems to be little difference in principle between the above example and the present case,
so far as the reasonableness of the contention of the plaintiffs is concerned.
The particular ordinance now under consideration was clearly designed to preserve and
protect the health, comfort, and convenience of the inhabitants of the thickly populated city
of Manila, and, therefore, in its scope, falls directly under what is generally known as the police
power of the Government. This power of the State has but few limitations when it is exercised
to secure the peace, safety, health, morals, and the best and highest interests of the public.
Judge Cooley, one of the best and clearest law writers and jurists, in discussing this power, said:
No definition of the power can be more complete and satisfactory than some which have
been given by eminent jurists in deciding cases which have arisen from its exercise, and which
have been so often approved and adopted that to present them in any other than the
language of the decisions would be unwise, if not inexcusable. Says Chief Justice Shaw: "We
think it is a 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 shall not be injurious to the equal enjoyment of others having
an equal right to the enjoyment of their property, nor injurious to the rights of the community.
All property in this Commonwealth is ... held subject to those 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. This is very different from the
right of eminent domain — the right of a government to take and appropriate property
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."
"This police power of the State," says another eminent judge, "extends to the protection of the
lives, limbs, health, comfort, and the quiet of all persons, and the protection of all property
within the State. According to the maxim, Sic utere tuo ut alienum non laedas, which being of
universal application, it must, of course, be within the range of legislative action to define the
mode and manner in which every one may so use his own as not to injure others." And again:
(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
acknowledged general principles, ever can be made, so far as natural persons are
concerned." And neither the power itself, nor the discretion to exercise it as need may require
can be bargained away by the State. (Cooley's Constitutional Limitations, Chapter XVI, pages
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705, 706; Commonwealth vs. Alger (7 Cush. (Mass.), 53, 84); Thorpe vs. R.R. Co. (27 Vt., 140,
149).)
In discussing the same question, the late Mr. Justice Field, of the Supreme Court of the United
States, in the case of Crowley vs. Christensen (137 U.S., 86, 89) said:
Even liberty itself, the greatest of all rights, is not unrestricted license to act according to one's
own will. It is only freedom from restraint under conditions essential to the equal enjoyment of
the same right by others.
In the case of Holden vs. Hardy (169 U.S., 366, 395) Mr. Justice Brown said:
It is as much for the interest of the State that the public health should be preserved as that life
should be made secure. With this end in view quarantine laws have been enacted in most if
not all of the States; insane asylums, public hospitals, and institutions for the care and
education of the blind established; and special measures taken for the exclusion of infected
cattle, rags, and decayed fruit. In other States laws have been enacted limiting the hours
during which women and children shall be employed in factories; and while their
constitutionality, at least as applied to women, has been doubted in some of the States, they
have been generally upheld.
It is now generally recognized by all civilized States that the legislative department of the
Government, under the police powers of the State, is possessed with plenary power to deal
with all matters relating to the public 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.
In discussing this power of the State, the late Mr. Justice Harlan of the Supreme Court of the
United States, in the case of Jacobson vs. Massachusetts (197 U.S., 11, 31; 3 A. & E. Ann. Cas.,
765), said:
If there is any such power in the judiciary to review legislative action in respect of a matter
affecting the general welfare, it can only be when that which the legislature has done comes
within the rule that if a statute purporting to have been enacted to protect the public health,
the public morals, or the public safety has no real or substantial relation to those objects, or is,
beyond all question, a plain palpable invasion of rights secured by the fundamental law, it is
the duty of the courts to so adjudge, and thereby give effect to the Constitution.
This doctrine has also been declared in the following cases: Mugler vs. Kansas (123 U.S., 623,
661; 8 Sup. Ct., 273; 31 L. Ed., 205); Minnesota vs. Barber (136 U.S., 313, 320; 10 Sup. Ct., 862; 24
L. Ed., 455); Atkin vs. Kansas (191 U.S., 207, 223; 24 Sup. Ct., 124; 48 L. Ed., 148).
The present is not the first time the courts have been called upon to answer the question
whether or not a statute or ordinance is reasonable and legal which requires owners of private
property to incur expense in order to remedy an insanitary condition, and thereby preserve
the health and convenience of the people. This question has been answered by various
eminent jurists and by courts of the highest standing, practically unanimously in the affirmative.
In the case of the Tenement House Department of the City of New York vs. Moeschen (179
N.Y., 325; 70 L.R.A., 704; 103 American State Reports, 910; 203 U.S., 583), the defendant was
required by law to change the water closets theretofore used in her premises for another
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system. In that case, as in the present, the system which had been installed in the house of the
defendant had been installed pursuant to an order of the board of health of the city of New
York and the mandate of the legislature of the State. The defendant argued that to require
her to incur the expense of installing another and new system was, in effect, depriving her of
her property without due process of law; that to require the additional expense, in view of the
former expense incurred by virtue of an order of the plaintiff, rendered the statute or ordinance
unreasonable and therefore unenforceable. The question of the legality of the statute having
been sustained in the lower court, it finally reached the supreme court of the State of New
York, where the court, speaking through Mr. Justice Bartlett, said, in part (pp. 330, 331):
It is not the hardship of the individual case that determines the question, but rather the general
scope and effect of the legislation as an exercise of the police power, in protecting the health
and promoting the welfare of the community at large.
The single question is presented in this case whether the legislation under consideration is a
lawful exercise of the police power, imposing upon the citizen only such expenses as are
reasonable. We are of the opinion that, considering the facts in the case, the language of the
section under review, and the expense incurred in making the necessary changes required,
that the legislation is a proper exercise of the police power.
In the case of the Health Department vs. Trinity Church (supra), Mr. Justice Peckham, in
discussing the question of the effect of the additional expense in complying with an order such
as was made in the present case, said (p. 43):
Instances are numerous of the passage of laws which entail expense on the part of those who
must comply with them and where such expenses must be borne by them without any hearing
or compensation because of the provisions of the law. (Thorpe vs. R.R. Co., 27 Vt., 140-152; 62
American Decisions, 625.)
Many more analogous cases might be cited in support of the doctrine that if the premises are
insanitary, the mere fact that the owner of the property is required to incur expense in
rendering the same sanitary, can in no sense render an ordinance like the one under discussion
unreasonable. (State Board of Health vs. Greenville (April 2, 1912) (98 N.E. Reporter, 1019);
Tenement House Department of the City of N.Y. vs. Moeschen (179 N.Y., 325); Commonwealth
vs. Roberts (155 Mass., 281); Health Department vs. Trinity Church (145 N.Y., 32, 43-45);
Jacobson vs. Mass. (197 U.S., 11).)
From all of the foregoing, and after a careful consideration of the facts involved in the present
case, and the law applicable thereto, we have arrived at the following conclusions:
1. That the Municipal Board of the city of Manila had full power and authority, under the
express provisions of the charter, to enact Ordinance No. 125.
2. That said Ordinance No. 125 having been adopted by express authority of law, and being
a reasonable exercise of the police power of the State, the same is valid and enforceable.
3. That by reason of the fact that the sewage and human excrement deposited in the sanitary
fixtures of the premises in question (No. 202 Calle Solana) are at present emptied into the old
sewer system, the same is insanitary and a menace to the health and comfort of the
inhabitants of the city of Manila.
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4. That by reason of the fact that said premises are in an insanitary condition, the defendants
were justified, in pursuance of the provisions of said Ordinance (No. 125), in issuing the order
to the plaintiffs contained in the notice of November 20, 1909.
Therefore, and for all of the foregoing reasons, the order of the lower court perpetually
enjoining the defendants from enforcing said order was not justified, and the same is hereby
revoked and the defendants are hereby absolved from any liability under the complaint
presented in the present case.
Without any finding as to costs, it is so ordered.
Arellano, C.J., Torres, Carson, Moreland, and Trent, JJ., concur.
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YNOT VS. IAC, 148 SCRA 659
The essence of due process is distilled in the immortal cry of Themistocles to Alcibiades "Strike
— but hear me first!" It is this cry that the petitioner in effect repeats here as he challenges the
constitutionality of Executive Order No. 626-A.
The said executive order reads in full as follows:
WHEREAS, the President has given orders prohibiting the interprovincial movement of
carabaos and the slaughtering of carabaos not complying with the requirements of Executive
Order No. 626 particularly with respect to age;
WHEREAS, it has been observed that despite such orders the violators still manage to
circumvent the prohibition against inter-provincial movement of carabaos by transporting
carabeef instead; and
WHEREAS, in order to achieve the purposes and objectives of Executive Order No. 626 and the
prohibition against interprovincial movement of carabaos, it is necessary to strengthen the
said Executive Order and provide for the disposition of the carabaos and carabeef subject of
the violation;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the

powers vested in me by the Constitution, do hereby promulgate the following:
SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no carabao
regardless of age, sex, physical condition or purpose and no carabeef shall be transported
from one province to another. The carabao or carabeef transported in violation of this
Executive Order as amended shall be subject to confiscation and forfeiture by the
government, to be distributed to charitable institutions and other similar institutions as the
Chairman of the National Meat Inspection Commission may ay see fit, in the case of carabeef,
and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the
case of carabaos.
SECTION 2. This Executive Order shall take effect immediately.
Done in the City of Manila, this 25th day of October, in the year of Our Lord, nineteen hundred
and eighty.
(SGD.) FERDINAND E. MARCOS
President
Republic of the Philippines
The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on January
13, 1984, when they were confiscated by the police station commander of Barotac Nuevo,
Iloilo, for violation of the above measure. 1 The petitioner sued for recovery, and the Regional
Trial Court of Iloilo City issued a writ of replevin upon his filing of a supersedeas bond of
P12,000.00. After considering the merits of the case, the court sustained the confiscation of the
carabaos and, since they could no longer be produced, ordered the confiscation of the
bond. The court also declined to rule on the constitutionality of the executive order, as raise
by the petitioner, for lack of authority and also for its presumed validity. 2
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The petitioner appealed the decision to the Intermediate Appellate Court,* 3 which upheld
the trial court, ** and he has now come before us in this petition for review on certiorari.
The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes
outright confiscation of the carabao or carabeef being transported across provincial
boundaries. His claim is that the penalty is invalid because it is imposed without according the
owner a right to be heard before a competent and impartial court as guaranteed by due
process. He complains that the measure should not have been presumed, and so sustained,
as constitutional. There is also a challenge to the improper exercise of the legislative power by
the former President under Amendment No. 6 of the 1973 Constitution. 4
While also involving the same executive order, the case of Pesigan v. Angeles 5 is not
applicable here. The question raised there was the necessity of the previous publication of the
measure in the Official Gazette before it could be considered enforceable. We imposed the
requirement then on the basis of due process of law. In doing so, however, this Court did not,
as contended by the Solicitor General, impliedly affirm the constitutionality of Executive Order
No. 626-A. That is an entirely different matter.
This Court has declared that while lower courts should observe a becoming modesty in
examining constitutional questions, they are nonetheless not prevented from resolving the
same whenever warranted, subject only to review by the highest tribunal. 6 We have
jurisdiction under the Constitution to "review, revise, reverse, modify or affirm on appeal or
certiorari, as the law or rules of court may provide," final judgments and orders of lower courts
in, among others, all cases involving the constitutionality of certain measures. 7 This simply
means that the resolution of such cases may be made in the first instance by these lower
courts.
And while it is true that laws are presumed to be constitutional, that presumption is not by any
means conclusive and in fact may be rebutted. Indeed, if there be a clear showing of their
invalidity, and of the need to declare them so, then "will be the time to make the hammer fall,
and heavily," 8 to recall Justice Laurel's trenchant warning. Stated otherwise, courts should not
follow the path of least resistance by simply presuming the constitutionality of a law when it is
questioned. On the contrary, they should probe the issue more deeply, to relieve the abscess,
paraphrasing another distinguished jurist, 9 and so heal the wound or excise the affliction.
Judicial power authorizes this; and when the exercise is demanded, there should be no shirking
of the task for fear of retaliation, or loss of favor, or popular censure, or any other similar
inhibition unworthy of the bench, especially this Court.
The challenged measure is denominated an executive order but it is really presidential decree,
promulgating a new rule instead of merely implementing an existing law. It was issued by
President Marcos not for the purpose of taking care that the laws were faithfully executed but
in the exercise of his legislative authority under Amendment No. 6. It was provided thereunder
that whenever in his judgment there existed a grave emergency or a threat or imminence
thereof or whenever the legislature failed or was unable to act adequately on any matter that
in his judgment required immediate action, he could, in order to meet the exigency, issue
decrees, orders or letters of instruction that were to have the force and effect of law. As there
is no showing of any exigency to justify the exercise of that extraordinary power then, the
petitioner has reason, indeed, to question the validity of the executive order. Nevertheless,
since the determination of the grounds was supposed to have been made by the President
"in his judgment, " a phrase that will lead to protracted discussion not really necessary at this
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time, we reserve resolution of this matter until a more appropriate occasion. For the nonce,
we confine ourselves to the more fundamental question of due process.
It is part of the art of constitution-making that the provisions of the charter be cast in precise
and unmistakable language to avoid controversies that might arise on their correct
interpretation. That is the Ideal. In the case of the due process clause, however, this rule was
deliberately not followed and the wording was purposely kept ambiguous. In fact, a proposal
to delineate it more clearly was submitted in the Constitutional Convention of 1934, but it was
rejected by Delegate Jose P. Laurel, Chairman of the Committee on the Bill of Rights, who
forcefully argued against it. He was sustained by the body. 10
The due process clause was kept intentionally vague so it would remain also conveniently
resilient. This was felt necessary because due process is not, like some provisions of the
fundamental law, an "iron rule" laying down an implacable and immutable command for all
seasons and all persons. Flexibility must be the best virtue of the guaranty. The very elasticity
of the due process clause was meant to make it adapt easily to every situation, enlarging or
constricting its protection as the changing times and circumstances may require.
Aware of this, the courts have also hesitated to adopt their own specific description of due
process lest they confine themselves in a legal straitjacket that will deprive them of the elbow
room they may need to vary the meaning of the clause whenever indicated. Instead, they
have preferred to leave the import of the protection open-ended, as it were, to be "gradually
ascertained by the process of inclusion and exclusion in the course of the decision of cases as
they arise." 11 Thus, Justice Felix Frankfurter of the U.S. Supreme Court, for example, would go
no farther than to define due process — and in so doing sums it all up — as nothing more and
nothing less than "the embodiment of the sporting Idea of fair play." 12
When the barons of England extracted from their sovereign liege the reluctant promise that
that Crown would thenceforth not proceed against the life liberty or property of any of its
subjects except by the lawful judgment of his peers or the law of the land, they thereby won
for themselves and their progeny that splendid guaranty of fairness that is now the hallmark of
the free society. The solemn vow that King John made at Runnymede in 1215 has since then
resounded through the ages, as a ringing reminder to all rulers, benevolent or base, that every
person, when confronted by the stern visage of the law, is entitled to have his say in a fair and
open hearing of his cause.
The closed mind has no place in the open society. It is part of the sporting Idea of fair play to
hear "the other side" before an opinion is formed or a decision is made by those who sit in
judgment. Obviously, one side is only one-half of the question; the other half must also be
considered if an impartial verdict is to be reached based on an informed appreciation of the
issues in contention. It is indispensable that the two sides complement each other, as unto the
bow the arrow, in leading to the correct ruling after examination of the problem not from one
or the other perspective only but in its totality. A judgment based on less that this full appraisal,
on the pretext that a hearing is unnecessary or useless, is tainted with the vice of bias or
intolerance or ignorance, or worst of all, in repressive regimes, the insolence of power.
The minimum requirements of due process are notice and hearing 13 which, generally
speaking, may not be dispensed with because they are intended as a safeguard against
official arbitrariness. It is a gratifying commentary on our judicial system that the jurisprudence
of this country is rich with applications of this guaranty as proof of our fealty to the rule of law
and the ancient rudiments of fair play. We have consistently declared that every person,
faced by the awesome power of the State, is entitled to "the law of the land," which Daniel
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Webster described almost two hundred years ago in the famous Dartmouth College Case, 14
as "the law which hears before it condemns, which proceeds upon inquiry and renders
judgment only after trial." It has to be so if the rights of every person are to be secured beyond
the reach of officials who, out of mistaken zeal or plain arrogance, would degrade the due
process clause into a worn and empty catchword.
This is not to say that notice and hearing are imperative in every case for, to be sure, there are
a number of admitted exceptions. The conclusive presumption, for example, bars the
admission of contrary evidence as long as such presumption is based on human experience
or there is a rational connection between the fact proved and the fact ultimately presumed
therefrom. 15 There are instances when the need for expeditions action will justify omission of
these requisites, as in the summary abatement of a nuisance per se, like a mad dog on the
loose, which may be killed on sight because of the immediate danger it poses to the safety
and lives of the people. Pornographic materials, contaminated meat and narcotic drugs are
inherently pernicious and may be summarily destroyed. The passport of a person sought for a
criminal offense may be cancelled without hearing, to compel his return to the country he has
fled. 16 Filthy restaurants may be summarily padlocked in the interest of the public health and
bawdy houses to protect the public morals. 17 In such instances, previous judicial hearing may
be omitted without violation of due process in view of the nature of the property involved or
the urgency of the need to protect the general welfare from a clear and present danger.
The protection of the general welfare is the particular function of the police power which both
restraints and is restrained by due process. The police power is simply defined as the power
inherent in the State to regulate liberty and property for the promotion of the general welfare.
18 By reason of its function, it extends to all the great public needs and is described as the
most pervasive, the least limitable and the most demanding of the three inherent powers of
the State, far outpacing taxation and eminent domain. The individual, as a member of society,
is hemmed in by the police power, which affects him even before he is born and follows him
still after he is dead — from the womb to beyond the tomb — in practically everything he does
or owns. Its reach is virtually limitless. It is a ubiquitous and often unwelcome intrusion. Even so,
as long as the activity or the property has some relevance to the public welfare, its regulation
under the police power is not only proper but necessary. And the justification is found in the
venerable Latin maxims, Salus populi est suprema lex and Sic utere tuo ut alienum non laedas,
which call for the subordination of individual interests to the benefit of the greater number.
It is this power that is now invoked by the government to justify Executive Order No. 626-A,
amending the basic rule in Executive Order No. 626, prohibiting the slaughter of carabaos
except under certain conditions. The original measure was issued for the reason, as expressed
in one of its Whereases, that "present conditions demand that the carabaos and the buffaloes
be conserved for the benefit of the small farmers who rely on them for energy needs." We
affirm at the outset the need for such a measure. In the face of the worsening energy crisis
and the increased dependence of our farms on these traditional beasts of burden, the
government would have been remiss, indeed, if it had not taken steps to protect and preserve
them.
A similar prohibition was challenged in United States v. Toribio, 19 where a law regulating the
registration, branding and slaughter of large cattle was claimed to be a deprivation of
property without due process of law. The defendant had been convicted thereunder for
having slaughtered his own carabao without the required permit, and he appealed to the
Supreme Court. The conviction was affirmed. The law was sustained as a valid police measure
to prevent the indiscriminate killing of carabaos, which were then badly needed by farmers.
An epidemic had stricken many of these animals and the reduction of their number had
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resulted in an acute decline in agricultural output, which in turn had caused an incipient
famine. Furthermore, because of the scarcity of the animals and the consequent increase in
their price, cattle-rustling had spread alarmingly, necessitating more effective measures for
the registration and branding of these animals. The Court held that the questioned statute was
a valid exercise of the police power and declared in part as follows:
To justify the State in thus interposing its authority in behalf of the public, it must appear, first,
that the interests of the public generally, as distinguished from those of a particular class,
require such interference; and second, that the means are reasonably necessary for the
accomplishment of the purpose, and not unduly oppressive upon individuals. ...
From what has been said, we think it is clear that the enactment of the provisions of the statute
under consideration was required by "the interests of the public generally, as distinguished
from those of a particular class" and that the prohibition of the slaughter of carabaos for
human consumption, so long as these animals are fit for agricultural work or draft purposes
was a "reasonably necessary" limitation on private ownership, to protect the community from
the loss of the services of such animals by their slaughter by improvident owners, tempted
either by greed of momentary gain, or by a desire to enjoy the luxury of animal food, even
when by so doing the productive power of the community may be measurably and
dangerously affected.
In the light of the tests mentioned above, we hold with the Toribio Case that the carabao, as
the poor man's tractor, so to speak, has a direct relevance to the public welfare and so is a
lawful subject of Executive Order No. 626. The method chosen in the basic measure is also
reasonably necessary for the purpose sought to be achieved and not unduly oppressive upon
individuals, again following the above-cited doctrine. There is no doubt that by banning the
slaughter of these animals except where they are at least seven years old if male and eleven
years old if female upon issuance of the necessary permit, the executive order will be
conserving those still fit for farm work or breeding and preventing their improvident depletion.
But while conceding that the amendatory measure has the same lawful subject as the original
executive order, we cannot say with equal certainty that it complies with the second
requirement, viz., that there be a lawful method. We note that to strengthen the original
measure, Executive Order No. 626-A imposes an absolute ban not on the slaughter of the
carabaos but on their movement, providing that "no carabao regardless of age, sex, physical
condition or purpose (sic) and no carabeef shall be transported from one province to
another." The object of the prohibition escapes us. The reasonable connection between the
means employed and the purpose sought to be achieved by the questioned measure is
missing
We do not see how the prohibition of the inter-provincial transport of carabaos can prevent
their indiscriminate slaughter, considering that they can be killed anywhere, with no less
difficulty in one province than in another. Obviously, retaining the carabaos in one province
will not prevent their slaughter there, any more than moving them to another province will
make it easier to kill them there. As for the carabeef, the prohibition is made to apply to it as
otherwise, so says executive order, it could be easily circumvented by simply killing the animal.
Perhaps so. However, if the movement of the live animals for the purpose of preventing their
slaughter cannot be prohibited, it should follow that there is no reason either to prohibit their
transfer as, not to be flippant dead meat.
Even if a reasonable relation between the means and the end were to be assumed, we would
still have to reckon with the sanction that the measure applies for violation of the prohibition.
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The penalty is outright confiscation of the carabao or carabeef being transported, to be

meted out by the executive authorities, usually the police only. In the Toribio Case, the statute
was sustained because the penalty prescribed was fine and imprisonment, to be imposed by
the court after trial and conviction of the accused. Under the challenged measure,
significantly, no such trial is prescribed, and the property being transported is immediately
impounded by the police and declared, by the measure itself, as forfeited to the government.
In the instant case, the carabaos were arbitrarily confiscated by the police station
commander, were returned to the petitioner only after he had filed a complaint for recovery
and given a supersedeas bond of P12,000.00, which was ordered confiscated upon his failure
to produce the carabaos when ordered by the trial court. The executive order defined the
prohibition, convicted the petitioner and immediately imposed punishment, which was
carried out forthright. The measure struck at once and pounced upon the petitioner without
giving him a chance to be heard, thus denying him the centuries-old guaranty of elementary
fair play.
It has already been remarked that there are occasions when notice and hearing may be
validly dispensed with notwithstanding the usual requirement for these minimum guarantees
of due process. It is also conceded that summary action may be validly taken in administrative
proceedings as procedural due process is not necessarily judicial only. 20 In the exceptional
cases accepted, however. there is a justification for the omission of the right to a previous
hearing, to wit, the immediacy of the problem sought to be corrected and the urgency of the
need to correct it.
In the case before us, there was no such pressure of time or action calling for the petitioner's
peremptory treatment. The properties involved were not even inimical per se as to require their
instant destruction. There certainly was no reason why the offense prohibited by the executive
order should not have been proved first in a court of justice, with the accused being accorded
all the rights safeguarded to him under the Constitution. Considering that, as we held in
Pesigan v. Angeles, 21 Executive Order No. 626-A is penal in nature, the violation thereof should
have been pronounced not by the police only but by a court of justice, which alone would
have had the authority to impose the prescribed penalty, and only after trial and conviction
of the accused.
We also mark, on top of all this, the questionable manner of the disposition of the confiscated
property as prescribed in the questioned executive order. It is there authorized that the seized
property shall "be distributed to charitable institutions and other similar institutions as the
Chairman of the National Meat Inspection Commission may see fit, in the case of carabeef,
and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the
case of carabaos." (Emphasis supplied.) The phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and
abuse, and even corruption. One searches in vain for the usual standard and the reasonable
guidelines, or better still, the limitations that the said officers must observe when they make
their distribution. There is none. Their options are apparently boundless. Who shall be the
fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the
officers named can supply the answer, they and they alone may choose the grantee as they
see fit, and in their own exclusive discretion. Definitely, there is here a "roving commission," a
wide and sweeping authority that is not "canalized within banks that keep it from overflowing,"
in short, a clearly profligate and therefore invalid delegation of legislative powers.
To sum up then, we find that the challenged measure is an invalid exercise of the police power
because the method employed to conserve the carabaos is not reasonably necessary to the
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purpose of the law and, worse, is unduly oppressive. Due process is violated because the
owner of the property confiscated is denied the right to be heard in his defense and is
immediately condemned and punished. The conferment on the administrative authorities of
the power to adjudge the guilt of the supposed offender is a clear encroachment on judicial
functions and militates against the doctrine of separation of powers. There is, finally, also an
invalid delegation of legislative powers to the officers mentioned therein who are granted
unlimited discretion in the distribution of the properties arbitrarily taken. For these reasons, we
hereby declare Executive Order No. 626-A unconstitutional.
We agree with the respondent court, however, that the police station commander who
confiscated the petitioner's carabaos is not liable in damages for enforcing the executive
order in accordance with its mandate. The law was at that time presumptively valid, and it
was his obligation, as a member of the police, to enforce it. It would have been impertinent
of him, being a mere subordinate of the President, to declare the executive order
unconstitutional and, on his own responsibility alone, refuse to execute it. Even the trial court,
in fact, and the Court of Appeals itself did not feel they had the competence, for all their
superior authority, to question the order we now annul.
The Court notes that if the petitioner had not seen fit to assert and protect his rights as he saw
them, this case would never have reached us and the taking of his property under the
challenged measure would have become a fait accompli despite its invalidity. We commend
him for his spirit. Without the present challenge, the matter would have ended in that pump
boat in Masbate and another violation of the Constitution, for all its obviousness, would have
been perpetrated, allowed without protest, and soon forgotten in the limbo of relinquished
rights.
The strength of democracy lies not in the rights it guarantees but in the courage of the people
to invoke them whenever they are ignored or violated. Rights are but weapons on the wall if,
like expensive tapestry, all they do is embellish and impress. Rights, as weapons, must be a
promise of protection. They become truly meaningful, and fulfill the role assigned to them in
the free society, if they are kept bright and sharp with use by those who are not afraid to assert
them.
WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except as

affirmed above, the decision of the Court of Appeals is reversed. The supersedeas bond is
cancelled and the amount thereof is ordered restored to the petitioner. No costs.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Gutierrez, Jr., Paras, Gancayco, Padilla Bidin
Sarmiento and Cortes, JJ., concur.
Melencio-Herrera and Feliciano, JJ., are on leave.
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Zabal v. Duterte, G.R. No. 238467, February 12, 2019
Paradise is a place of bliss, felicity, and delight. 1 For Filipinos and foreign nationals alike,
Boracay - a small island in Malay, Aklan, with its palm-fringed, pristine white sand beaches,
azure waters, coral reefs, rare seashells,2 and a lot more to offer,3 - is indeed a piece of
paradise. Unsurprisingly, Boracay is one of the country's prime tourist destinations. However,
this island-paradise has been disrespected, abused, degraded, over-used, and taken
advantage of by both locals and tourists. Hence, the government gave Boracay its much-
needed respite and rehabilitation. However, the process by which the rehabilitation was to be
implemented did not sit well with petitioners, hence, the present petition.
The Case
Before this Court is a Petition for Prohibition and Mandamus with Application for Temporary
Restraining Order, Preliminary Injunction, and/or Status Quo Ante Order filed by petitioners
Mark Anthony V. Zabal (Zabal), Thiting Estoso Jacosalem (Jacosalem), and Odon S. Bandiola
(Bandiola) against respondents President Rodrigo R. Duterte (President Duterte ), Executive
Secretary Salvador C. Medialdea, and Secretary Eduardo M. Año of the Department of Interior
and Local Government (DILG).
The Parties
Zabal and Jacosalem are both residents of Boracay who, at the time of the filing of the
petition, were earning a living from the tourist activities therein. Zabal claims to build
sandcastles for tourists while Jacosalem drives for tourists and workers in the island. While not
a resident, Bandiola, for his part, claims to occasionally visit Boracay for business and pleasure.
The three base their locus standi on direct injury and also from the transcendental importance
doctrine. 4 Respondents, on the other hand, are being sued in their capacity as officials of the
government.
The Facts
Claiming that Boracay has become a cesspool, President Duterte first made public his plan to
shut it down during a business forum held in Davao sometime February 2018. 5 This was
followed by several speeches and news releases stating that he would place Boracay under
a state of calamity. True to his words, President Duterte ordered the shutting down of the island
in a cabinet meeting held on April 4, 2018. This was confirmed by then Presidential
Spokesperson Harry L. Roque, Jr. in a press briefing the following day wherein he formally
announced that the total closure of Boracay would be for a maximum period of six months
starting April 26, 2018. 6
Following this pronouncement, petitioners contend that around 630 police and military
personnel were readily deployed to Boracay including personnel for crowd dispersal
management. 7 They also allege that the DILG had already released guidelines for the closure.
8
Petitioners claim that ever since the news of Boracay's closure came about, fewer tourists had
been engaging the services of Zabal and Jacosalem such that their earnings were barely
enough to feed their families. They fear that if the closure pushes through, they would suffer
grave and irreparable damage. Hence, despite the fact that the government was then yet
to release a formal issuance on the matter,9 petitioners filed the petition on April 25, 2018
praying that:
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(a) Upon the filing of [the] petition, a TEMPORARY RESTRAINING ORDER (TRO) and/or a WRIT
OF PRELIMINARY PROHIBITORY INJUNCTION be immediately issued RESTRAINING and/or
ENJOINING the respondents, and all persons acting under their command, order, and
responsibility from enforcing a closure of Boracay Island or from banning the petitioners,
tourists, and non-residents therefrom, and a WRIT OF PRELIMINARY MANDATORY INJUNCTION
directing the respondents, and all persons acting under their command, order, and
responsibility to ALLOW all of the said persons to enter and/or leave Boracay Island
unimpeded;
(b) In the alternative, if the respondents enforce the closure after the instant petition is filed,
that a STATUS QUO ANTE Order be issued restoring and maintaining the condition prior to such
closure;
(c) After proper proceedings, a judgment be rendered PERMANENTLY RESTRAINING and/or

ENJOINING the respondents, and all persons acting under their command, order, and
responsibility from enforcing a closure of Boracay Island or from banning the petitioners,
tourists, and non-residents therefrom, and further DECLARING the closure of Boracay Island or
the ban against petitioners, tourists, and non-residents therefrom to be UNCONSTITUTIONAL.
Other reliefs just and equitable under the premises are similarly prayed for. 10
On May 18, 2018, petitioners filed a Supplemental Petition 11 stating that the day following the
filing of their original petition or on April 26, 2018, President Duterte issued Proclamation No. 475
12 formally declaring a state of calamity in Boracay and ordering its closure for six months from
April 26, 2018 to October 25, 2018. The closure was implemented on even date. Thus, in
addition to what they prayed for in their original petition, petitioners implore the Court to
declare as unconstitutional Proclamation No. 475 insofar as it orders the closure of Boracay
and ban of tourists and nonresidents therefrom. 13
In the Resolutions dated April 26, 201814 and June 5, 2018, 15 the Court required respondents
to file their Comment on the Petition and the Supplemental Petition, respectively. Respondents
filed their Consolidated Comment16 on July 30, 2018 while petitioners filed their Reply 17
thereto on October 12, 2018.
On October 26, 2018, Boracay was reopened to tourism.
Petitioners' Arguments
Petitioners state that a petition for prohibition is the appropriate remedy to raise constitutional
issues and to review and/or prohibit or nullify, when proper, acts of legislative and executive
officials. An action for mandamus, on the other hand, lies against a respondent who unlawfully
excludes another from the enjoyment of an entitled right or office. Justifying their resort to
prohibition and mandamus, petitioners assert that ( 1) this case presents constitutional issues,
i.e., whether President Duterte acted within the scope of the powers granted him by the
Constitution in ordering the closure of Boracay and, whether the measures implemented
infringe upon the constitutional rights to travel and to due process of petitioners as well as of
tourists and non-residents of the island; and, (2) President Duterte exercised a power legislative
in nature, thus unlawfully excluding the legislative department from the assertion of such
power.
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As to the substantive aspect, petitioners argue that Proclamation No. 475 is an invalid exercise
of legislative powers. They posit that its issuance is in truth a law-making exercise since the
proclamation imposed a restriction on the right to travel and therefore substantially altered
the relationship between the State and its people by increasing the former's power over the
latter. Simply stated, petitioners posit that Proclamation No. 475 partakes of a law the issuance
of which is not vested in the President. As such, Proclamation No. 475 must be struck down for
being the product of an invalid exercise of legislative power.
Likewise, petitioners argue that Proclamation No. 475 is unconstitutional for infringing on the
constitutional rights to travel and to due process.
Petitioners point out that although Section 6, Article III of the Constitution explicitly allows the
impairment of the right to travel, two conditions, however, must concur to wit: (1) there is a
law restricting the said right, and (2) the restriction is based on national security, public safety
or public health. For petitioners, neither of these conditions have been complied with. For one,
Proclamation No. 475 does not refer to any specific law restricting the right to travel. Second,
it has not been shown that the presence of tourists in the island poses any threat or danger to
national security, public safety or public health.
As to the right to due process, petitioners aver that the same covers property rights and these
include the right to work and earn a living. Since the government, through Proclamation No.
475, restricted the entry of tourists and non-residents into the island, petitioners claim that they,
as well as all others who work, do business, or earn a living in the island, were deprived of the
source of their livelihood as a result thereof. Their right to work and earn a living was curtailed
by the proclamation. Moreover, while Proclamation No. 475 cites various violations of
environmental laws in the island, these, for the petitioners, do not justify disregard of the rights
of thousands of law-abiding people. They contend that environmental laws provide for
specific penalties intended only for violators. Verily, to make those innocent of environmental
transgressions suffer the consequences of the Boracay closure is tantamount to violating their
right to due process.
Petitioners likewise argue that the closure of Boracay could not be anchored on police power.
For one, police power must be exercised not by the executive but by legislative bodies through
the creation of statutes and ordinances that aim to promote the health, moral, peace,
education, safety, and general welfare of the people. For another, the measure is
unreasonably unnecessary and unduly oppressive.
In their Supplemental Petition, petitioners aver that Proclamation No. 475 unduly impinges
upon the local autonomy of affected Local Government Units (LGUs) since it orders the said
LGUs to implement the closure of Boracay and the ban of tourists and non-residents therefrom.
While petitioners acknowledge the President's power of supervision over LGUs, they
nevertheless point out that he does not wield the power of control over them. As such,
President Duterte can only call the attention of the LGUs concerned with regard to rules not
being followed, which is the true essence of supervision, but he cannot lay down the rules
himself as this already constitutes control.
Finally, petitioners state that this case does not simply revolve on the need to rehabilitate
Boracay, but rather, on the extent of executive power and the manner by which it was
wielded by President Duterte. To them, necessity does not justify the President's abuse of
power.
Respondents' Arguments
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At the outset, respondents assert that President Duterte must be dropped as party-respondent
in this case because he is immune from suit. They also argue that the petition should be
dismissed outright for lack of basis. According to respondents, prohibition is a preventive
remedy to restrain future action. Here, President Duterte had already issued Proclamation No.
475 and in fact, the rehabilitation of the island was then already ongoing. These, according
to respondents, have rendered improper the issuance of a writ of prohibition considering that
as a rule, prohibition does not lie to restrain an act that is already fait accompli. Neither is
mandamus proper. Section 3, Rule 65 of the Rules of Court provides that a mandamus petition
may be resorted to when any tribunal, corporation, board, officer or person unlawfully
neglects the performance of an act which the law specifically enjoins as a duty resulting from
an office, trust, or station. Respondents argue that mandamus will not lie in this case because
they were not neglectful of their duty to protect the environment; on the contrary, they
conscientiously performed what they were supposed to do by ordering the closure of Boracay
to give way to its rehabilitation. Thus, to them, mandamus is obviously inappropriate.
At any rate, respondents contend that there is no real justiciable controversy in this case. They
see no clash between the right of the State to preserve and protect its natural resources and
the right of petitioners to earn a living. Proclamation No. 475 does not prohibit anyone from
being gainfully employed.
Respondents moreover maintain that the petition is in the nature of a Strategic Lawsuit Against
Public Participation (SLAPP) under Rule 6 of A.M. No. 09-6-8-SC or the Rules of Procedure for
Environmental Cases, or a legal action filed to harass, vex, exert undue pressure or stifle any
legal recourse that any person, institution or the government has taken or may take in the
enforcement of environmental laws, protection of the environment or assertion of
environmental rights. Respondents thus assert that the petition must be dismissed since it was
filed for the said sole purpose.
With regard to the substantive aspect, respondents contend that the issuance of Proclamation
No. 475 is a valid exercise of delegated legislative power, it being anchored on Section 16 of
Republic Act (RA) No. 10121, otherwise known as the Philippine Disaster Risk Reduction and
Management Act of 2010, or the authority given to the President to declare a state of
calamity, viz.:
SECTION 16. Declaration of State of Calamity. - The National Council shall recommend to the
President of the Philippines the declaration of a cluster of barangays, municipalities, cities,
provinces, and regions under a state of calamity, and the lifting thereof, based on the criteria
set by the National Council. The President's declaration may warrant international
humanitarian assistance as deemed necessary.
They likewise contend that Proclamation No. 475 was issued pursuant to the President's
executive power under Section 1, Article VII of the Constitution. As generally defined,
executive power is the power to enforce and administer laws. It is the power of implementing
the laws and enforcing their due observance. And in order to effectively discharge the
enforcement and administration of the laws, the President is granted administrative power
over bureaus and offices, which includes the power of control. The power of control, in turn,
refers to the authority to direct the performance of a duty, restrain the commission of acts,
review, approve, reverse or modify acts and decisions of subordinate officials or units, and
prescribe standards, guidelines, plans and programs. Respondents allege that President
Duterte's issuance of Proclamation No. 475 was precipitated by his approval of the
recommendation of the National Disaster Risk Reduction and Management Council
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(NDRRMC) to place Boracay under a state of calamity. By giving his imprimatur, it is clear that
the President merely exercised his power of control over the executive branch.
In any case, respondents assert that the President has residual powers which are implied from
the grant of executive power and which are necessary for him to comply with his duties under
the Constitution as held in the case of Marcos v. Manglapus. 18
In sum, respondents emphasize that the issuance of Proclamation No. 475 is within the ambit
of the powers of the President, not contrary to the doctrine of separation of powers, and in
accordance with the mechanism laid out by the Constitution.
Further, respondents dispute petitioners' allegation that Proclamation No. 475 infringes upon
the rights to travel and to due process. They emphasize that the right to travel is not an
absolute right. It may be impaired or restricted in the interest of national security, public safety,
or public health. In fact, there are already several existing laws which serve as statutory
limitations to the right to travel.
Anent the alleged violation of the right to due process, respondents challenge petitioners'
claim that they were deprived of their livelihood without due process. Respondents call
attention to the fact that Zabal as sandcastle maker and Jacosalem as driver are freelancers
and thus belong to the infonnal economy sector. This means that their source of livelihood is
never guaranteed and is susceptible to changes in regulations and the overall business
climate. In any case, petitioners' contentions must yield to the State's exercise of police power.
As held in Ermita-Malate Hotel & Motel Operators Association, Inc. v. The Hon. City Mayor of
Manila, 19 the mere fact that some individuals in the community may be deprived of their
present business or of a particular mode of living cannot prevent the exercise of the police
power of the State. Indeed, to respondents, private interests should yield to the reasonable
prerogatives of the State for the public good and welfare, which precisely are the primary
objectives of the government measure herein questioned
Lastly, respondents insist that Proclamation No. 475 does not unduly transgress upon the local
autonomy of the LGUs concerned. Under RA 10121, it is actually the Local Disaster Risk
Reduction Management Council concerned which, subject to several criteria, is tasked to
take the lead in preparing for, responding to, and recovering from the effects of any disaster
when a state of calamity is declared. In any case, the devolution of powers upon LGUs
pursuant to the constitutional mandate of ensuring their autonomy does not mean that the
State can no longer interfere in their affairs. This is especially true in this case since Boracay's
environmental disaster cannot be treated as a localized problem that can be resolved by the
concerned LGUs only. The magnitude and gravity of the problem require the intervention and
assistance of different national government agencies in coordination with the concerned
LGUs.
As a final point, respondents aver that the bottom line of petitioners' lengthy discourse and
constitutional posturing is their intention to re-open Boracay to tourists and non-residents for
the then remainder of the duration of the closure and thus perpetuate and further aggravate
the island's environmental degradation. Respondents posit that this is unacceptable since
Boracay cannot be sacrificed for the sake of profit and personal convenience of the few.
Our Ruling
First, we discuss the procedural issues.
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President Duterte is dropped as

respondent in this case
As correctly pointed out by respondents, President Duterte must be dropped as respondent in

this case. The Court's pronouncement in Professor David v. President Macapagal-Arroyo20 on
the non-suability of an incumbent President cannot be any clearer, viz.:
x x x Settled is the doctrine that the President, during his tenure of office or actual incumbency,
may not be sued in any civil or criminal case, and there is no need to provide for it in the
Constitution or law. It will degrade the dignity of the high office of the President, the Head of
State, if he can be dragged into court litigations while serving as such. Furthermore, it is
important that he be freed from any form of harassment, hindrance or distraction to enable
him to fully attend to the performance of his official duties and functions. Unlike the legislative
and judicial branch, only one constitutes the executive branch and anything which impairs
his usefulness in the discharge of the many great and important duties imposed upon him by
the Constitution necessarily impairs the operation of the Government. 21
Accordingly, President Duterte is dropped as respondent in this case.
Propriety of Prohibition and

Mandamus
Section 2, Rule 65 of the Rules of Court provides for a petition for prohibition as follows:
SEC. 2. Petition for prohibition. - When the proceedings of any tribunal, corporation, board,
officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without
or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or in
excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition
in the proper court, alleging the facts with certainty and praying that judgment be rendered
commanding the respondent to desist from further proceedings in the action or matter
specified therein, or otherwise granting such incidental reliefs as law and justice may require.
xxxx
"Indeed, prohibition is a preventive remedy seeking that a judgment be rendered directing

the defendant to desist from continuing with the commission of an act perceived to be illegal.
As a rule, the proper function of a writ of prohibition is to prevent the performance of an act
which is about to be done. It is not intended to provide a remedy for acts already
accomplished. "22
Mandamus, on the other hand, is provided for by Section 3 of the same Rule 65:
SEC. 3. Petition for mandamus. - When any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy
and adequate remedy in the ordinary course of law, the person aggrieved thereby may file
a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered commanding the respondent, immediately or at some other time to
be specified by the court, to do the act required to be done to protect the rights of the
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petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts
of the respondent.
xxxx
"As the quoted provision instructs, mandamus will lie if the tribunal, corporation, board, officer,
or person unlawfully neglects the performance of an act which the law enjoins as a duty
resulting from an office, trust, or station."23
It is upon the above-discussed contexts of prohibition and mandamus that respondents base
their contention of improper recourse. Respondents maintain that prohibition is not proper in
this case because the closure of Boracay is already a fait accompli. Neither is mandamus
appropriate since there is no neglect of duty on their part as they were precisely performing
their duty to protect the environment when the closure was ordered.
Suffice it to state, however, that the use of prohibition and mandamus is not merely confined
to Rule 65. These extraordinary remedies may be invoked when constitutional violations or
issues are raised. As the Court stated in Spouses Imbong v. Hon. Ochoa, Jr.: 24
As far back as Tañada v. Angara, the Court has unequivocally declared that certiorari,
prohibition and mandamus are appropriate remedies to raise constitutional issues and to
review and/or prohibit/nullify, when proper, acts of legislative and executive officials, as there
is no other plain, speedy or adequate remedy in the ordinary course of law. This ruling was
later on applied in Macalintal v. COMELEC, Aldaba v. COMELEC, Magallona v. Ermita, and
countless others. In Tañada, the Court wrote:
In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the
Constitution, the petition no doubt raises a justiciable controversy. Where an action of the
legislative branch is seriously alleged to have infringed the Constitution, it becomes not only
the right but in fact the duty of the judiciary to settle the dispute. 'The question thus posed is
judicial rather than political. The duty (to adjudicate) remains to assure that the supremacy of
the Constitution is upheld. Once a 'controversy as to the application or interpretation of
constitutional provision is raised before this Court, as in the instant case, it becomes a legal
issue which the Court is bound by constitutional mandate to decide. x x x25 (Citations omitted;
emphasis supplied)
It must be stressed, though, that resort to prohibition and mandamus on the basis of alleged
constitutional violations is not without limitations. After all, this Court does not have unrestrained
authority to rule on just about any and every claim of constitutional violation.26 The petition
must be subjected to the four exacting requisites for the exercise of the power of judicial
review, viz.: (a) there must be an actual case or controversy; (b) the petitioners must possess
locus standi; ( c) the question of constitutionality must be raised at the earliest opportunity;
and ( d) the issue of constitutionality must be the lis mota of the case.27 Hence, it is not enough
that this petition mounts a constitutional challenge against Proclamation No. 475. It is likewise
necessary that it meets the aforementioned requisites before the Court sustains the propriety
of the recourse.
Existence of Requisites for Judicial

Review
In La Bugal-B'laan Tribal Association, Inc. v. Sec. Ramos,28 an actual case or controversy was
characterized as a "case or controversy that is appropriate or ripe for determination, not
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conjectural or anticipatory, lest the decision of the court would amount to an advisory opinion.
The power does not extend to hypothetical questions since any attempt at abstraction could
only lead to dialectics and barren legal question and to sterile conclusions unrelated to
actualities."29
The existence of an actual controversy in this case is evident. President Duterte issued
Proclamation No. 475 on April 26, 2018 and, pursuant thereto, Boracay was temporarily closed
the same day. Entry of non-residents and tourists to the island was not allowed until October
25, 2018. Certainly, the implementation of the proclamation has rendered legitimate the
concern of petitioners that constitutional rights may have possibly been breached by this
governmental measure. It bears to state that when coupled with sufficient facts, "reasonable
certainty of the occurrence of a perceived threat to any constitutional interest suffices to
provide a basis for mounting a constitutional challenge". 30 And while it may be argued that
the reopening of Boracay has seemingly rendered moot and academic questions relating to
the ban of tourists and non-residents into the island, abstention from judicial review is
precluded by such possibility of constitutional violation and also by the exceptional character
of the situation, the paramount public interest involved, and the fact that the case is capable
of repetition.31
As to legal standing, petitioners assert that they were directly injured since their right to travel
and, their right to work and earn a living which thrives solely on tourist arrivals, were affected
by the closure. They likewise want to convince the Court that the issues here are of
transcendental importance since according to them, the resolution of the same will have
farreaching consequences upon all persons living and working in Boracay; upon the Province
of Aklan which is heavily reliant on the island's tourism industry; and upon the whole country
considering that fundamental constitutional rights were allegedly breached.
"Legal standing or locus standi is a party's personal and substantial interest in a case such that
he has sustained or will sustain direct injury as a result of the governmental act being
challenged. It calls for more than just a generalized grievance. The term 'interest' means a
material interest, an interest in issue affected by the decree, as distinguished from mere interest
in the question involved, or a mere incidental interest."32 There must be a present substantial
interest and not a mere expectancy or a future, contingent, subordinate, or consequential
interest. 33
In Galicto v. Aquino III,34 the therein petitioner, Jelbert B. Galicto (Galicto) questioned the
constitutionality of Executive Order No. 7 (E07) issued by President Benigno Simeon C. Aquino
III, which ordered, among others, a moratorium on the increases in the salaries and other forms
of compensation of all government-owned-and-controlled corporations (GOCCs) and
government financial institutions. The Court held that Galicto, an employee of the GOCC
Philhealth, has no legal standing to assail E07 for his failure to demonstrate that he has a
personal stake or material interest in the outcome of the case. His interest, if any, was
speculative and based on a mere expectancy. Future increases in his salaries and other
benefits were contingent events or expectancies to which he has no vested rights. Hence, he
possessed no locus standi to question the curtailment thereof.
Here, as mentioned, Zabal is a sandcastle maker and Jacosalem, a driver.1avvphi1 The nature
of their livelihood is one wherein earnings are not guaranteed. As correctly pointed out by
respondents, their earnings are not fixed and may vary depending on the business climate in
that while they can earn much on peak seasons, it is also possible for them not to earn anything
on lean seasons, especially when the rainy days set in. Zabal and Jacosalem could not have
been oblivious to this kind of situation, they having been in the practice of their trade for a
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considerable length of time. Clearly, therefore, what Zabal and Jacosalem could lose in this
case are mere projected earnings which are in no way guaranteed, and are sheer
expectancies characterized as contingent, subordinate, or consequential interest, just like in
Galicto. Concomitantly, an assertion of direct injury on the basis of loss of income does not
clothe Zabal and Jacosalem with legal standing.
As to Bandiola, the petition is bereft of any allegation as to his substantial interest in the case
and as to how he sustained direct injury as a result of the issuance of Proclamation No. 475.
While the allegation that he is a non-resident who occasionally goes to Boracay for business
and pleasure may suggest that he is claiming direct injury on the premise that his right to travel
was affected by the proclamation, the petition fails to expressly provide specifics as to how.
"It has been held that a party who assails the constitutionality of a statute must have a direct
and personal interest. [He] must show not only that the law or any governmental act is invalid,
but also that [he] sustained or is in immediate danger of sustaining some direct injury as a result
of its enforcement, and not merely that [he] suffers thereby in some indefinite way. [He] must
show that [he] has been or is about to be denied some right or privilege to which [he] is lawfully
entitled or that [he] is about to be subjected to some burdens or penalties by reason of the
statute or act complained of."35 Indeed, the petition utterly fails to demonstrate that Bandiola
possesses the requisite legal standing to sue.
Notwithstanding petitioners' lack of locus standi, this Court will allow this petition to proceed to
its ultimate conclusion due to its transcendental importance. After all, the rule on locus standi
is a mere procedural technicality, which the Court, in a long line of cases involving subjects of
transcendental importance, has waived or relaxed, thus allowing nontraditional plaintiffs such
as concerned citizens, taxpayers, voters and legislators to sue in cases of public interest, albeit
they may not have been personally injured by a government act. 36 More importantly, the
matters raised in this case, involved on one hand, possible violations of the Constitution and,
on the other, the need to rehabilitate the country's prime tourist destination. Undeniably, these
matters affect public interests and therefore are of transcendental importance to the people.
In addition, the situation calls for review because as stated, it is capable of repetition, the
Court taking judicial notice of the many other places in our country that are suffering from
similar environmental degradation.
As to the two other requirements, their existence is indubitable. It will be recalled that even
before a formal issuance on the closure of Boracay was made by the government, petitioners
already brought the question of the constitutionality of the then intended closure to this Court.
And, a day after Proclamation No. 475 was issued, they filed a supplemental petition
impugning its constitutionality. Clearly, the filing of the petition and the supplemental petition
signals the earliest opportunity that the constitutionality of the subject government measure
could be raised. There can also be no denying that the very lis mota of this case is the
constitutionality of Proclamation No. 475.
Defense of SLAPP
Suffice it to state that while this case touches on the environmental issues in Boracay, the
ultimate issue for resolution is the constitutionality of Proclamation No. 475. The procedure in
the treatment of a defense of SLAPP provided for under Rule 6 of the Rules of Procedure for
Environmental Cases should not, therefore, be made to apply.
Now as to the substantive issues.
We first quote in full Proclamation No. 475.
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PROCLAMATION No. 475
DECLARING A STATE OF CALAMITY IN THE BARANGAYS OF BALABAG, MANOC-MANOC AND Y

APAK (ISLAND OF BORACAY) IN THE MUNICIPALITY OF MALAY, AKLAN, AND TEMPORARY
CLOSURE OF THE ISLAND AS A TOURIST DESTINATION
WHEREAS, Section 15, Article II of the 1987 Constitution states that the State shall protect and
promote the right to health of the people and instill health consciousness among them;
WHEREAS, Section 16, Article II of the 1987 Constitution provides that it is the policy of the State
to protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature;
WHEREAS, Section 2, Article XII of the 1987 Constitution provides that the State shall protect the
nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone;
WHEREAS, an Inter-Agency Task Force, composed of the Department of Environment and

Natural Resources (DENR), the [DILG] and the Department of Tourism (DOT), was established
to evaluate the environmental state of the Island of Boracay, and investigate possible
violations of existing environmental and health laws, rules and regulations;
WHEREAS, the investigations and validation undertaken revealed that:
a. There is a high concentration of fecal coliform in the Bolabog beaches located in the
eastern side of Boracay Island due to insufficient sewer lines and illegal discharge of untreated
waste water into the beach, with daily tests conducted from 6 to 10 March 2018 revealing
consistent failure in compliance with acceptable water standards, with an average result of
18,000 most probable number (MPN)/1 OOml, exceeding the standard level of 400
MPN/100ml;
b. Most commercial establishments and residences are not connected to the sewerage
infrastructure of Boracay Island, and waste products are not being disposed through the
proper sewerage infrastructures in violation of environmental law, rules, and regulations;
c. Only 14 out of 51 establishments near the shores of Boracay Island are compliant with the
provision of Republic Act (RA) No. 9275 or the Philippine Clean Water Act of 2004;
d. Dirty water results in the degradation of the coral reefs and coral cover of Boracay Island,
which declined by approximately 70.5% from 1988 to 2011, with the highest decrease taking
place between 2008 and 2011 during a period of increased tourist arrivals (approximately
38.4%);
e. Solid waste within Boracay Island is at a generation rate of 90 to 115 tons per day, while the
hauling capacity of the local government is only 30 tons per day, hence, leaving
approximately 85 tons of waste in the Island daily;
f. The natural habitats of Puka shells, nesting grounds of marine turtles, and roosting grounds of
flying foxes or fruit bats have been damaged and/or destroyed; and
g. Only four (4) out of nine (9) wetlands in Boracay Island remain due to illegal encroachment
of structures, including 93 7 identified illegal structures constructed on forestlands and
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wetlands, as well as 102 illegal structures constructed on areas already classified as

easements, and the disappearance of the wetlands, which acts as natural catchments,
enhances flooding in the area;
WHEREAS, the findings of the Department of Science and Technology (DOST) reveal that
beach erosion is prevalent in Boracay Island, particularly along the West Beach, where as
much as 40 meters of erosion has taken place in the past 20 years from 1993 to 2003, due to
storms, extraction of sand along the beach to construct properties and structures along the
foreshore, and discharge of waste water near the shore causing degradation of coral reefs
and seagrass meadows that supply the beach with sediments and serve as buffer to wave
action;
WHEREAS, the DOST also reports that based on the 2010-2015 Coastal Ecosystem Conservation
and Adaptive Management Study of the Japan International Cooperation Agency, direct
discharge of waste water near the shore has resulted in the frequent algal bloom and coral
deterioration, which may reduce the source of sand and cause erosion;
WHEREAS, the data from the Region VI - Western Visayas Regional Disaster Risk Reduction and
Management Council shows that the number of tourists in the island in a day amounts to
18,082, and the tourist arrival increased by more than 160% from 2012 to 2017;
WHEREAS, the continuous rise of tourist arrivals, the insufficient sewer and waste management
system, and environmental violations of establishments aggravate the environmental
degradation and destroy the ecological balance of the Island of Boracay, resulting in major
damage to property and natural resources, as well as the disruption of the normal way of life
of the people therein;
WHEREAS, it is necessary to implement urgent measures to address the abovementioned

human-induced hazards, to protect and promote the health and well-being of its residents,
workers and tourists, and to rehabilitate the Island in order to ensure the sustainability of the
area and prevent further degradation of its rich ecosystem;
WHEREAS, RA No. 9275 provides that the DENR shall designate water bodies, or portions
thereof, where specific pollutants from either natural or man-made source have already
exceeded water quality guidelines as non-attainment areas for the exceeded pollutants and
shall prepare and implement a program that will not allow new sources of exceeded water
pollutant in non-attainment areas without a corresponding reduction in discharges from
existing sources;
WHEREAS, RA No. 9275 also mandates the DENR, in coordination with other concerned
agencies and the private sectors, to take such measures as may be necessary to upgrade the
quality of such water in non-attainment areas to meet the standards under which it has been
classified, and the local government units to prepare and implement contingency plans and
other measures including relocation, whenever necessary, for the protection of health and
welfare of the residents within potentially affected areas;
WHEREAS, Proclamation No. 1064 (s. 2006) classified the Island of Boracay into 3 77 .68 hectares
of reserved forest land for protection purposes and 628.96 hectares of agricultural land as
alienable and disposable land;
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WHEREAS, pursuant to the Regalian Doctrine, and as emphasized in recent jurisprudence,

whereby all lands not privately owned belong to the State, the entire island of Boracay is state-
owned, except for lands already covered by existing valid titles;
WHEREAS, pursuant to RA No. 10121, or the Philippine Disaster Risk Reduction and
Management Act of 2010, the National Disaster Risk Reduction and Management Council has
recommended the declaration of a State of Calamity in the Island of Boracay and the
temporary closure of the Island as a tourist destination to ensure public safety and public
health, and to assist the government in its expeditious rehabilitation, as well as in addressing
the evolving socio-economic needs of affected communities;
NOW, THEREFORE, I, RODRIGO ROA DUTERTE, President of the Philippines, by virtue of the
powers vested in me by the Constitution and existing laws, do hereby declare a State of
Calamity in the barangays of Balabag, Manoc-Manoc and Yapak (Island of Boracay) in the
Municipality of Malay, Aklan. In this regard, the temporary closure of the Island as a tourist
destination for six (6) months starting 26 April 2018, or until 25 October 2018, is hereby ordered
subject to applicable laws, rules, regulations and jurisprudence.
Concerned government agencies shall, as may be necessary or appropriate, undertake the

remedial measures during a State of Calamity as provided in RA No. 10121 and other
applicable laws, rules and regulations, such as control of the prices of basic goods and
commodities for the affected areas, employment of negotiated procurement and utilization
of appropriate funds, including the National Disaster Risk Reduction and Management Fund,
for relief and rehabilitation efforts in the area. All departments and other concerned
government agencies are also hereby directed to coordinate with, and provide or augment
the basic services and facilities of affected local government units, if necessary.
The State of Calamity in the Island of Boracay shall remain in force and effect until lifted by
the President, notwithstanding the lapse of the six-month closure period.
All departments, agencies and offices, including government-owned or controlled

corporations and affected local government units are hereby directed to implement and
execute the abovementioned closure and the appropriate rehabilitation works, in
accordance with pertinent operational plans and directives, including the Boracay Action
Plan.
The Philippine National Police, Philippine Coast Guard and other law enforcement agencies,
with the support of the Armed Forces of the Philippines, are hereby directed to act with
restraint and within the bounds of the law in the strict implementation of the closure of the
Island and ensuring peace and order in the area.
The Municipality of Malay, Aklan is also hereby directed to ensure that no tourist will be allowed
entry to the island of Boracay until such time that the closure has been lifted by the President.
All tourists, residents and establishment owners in the area are also urged to act within the
bounds of the law and to comply with the directives herein provided for the rehabilitation and
restoration of the ecological balance of the Island which will be for the benefit of all
concerned.
It must be noted at the outset that petitioners failed to present and establish the factual bases
of their arguments because they went directly to this Court. In ruling on the substantive issues
in this case, the Court is, thus, constrained to rely on, and uphold the factual bases, which
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prompted the issuance of the challenged proclamation, as asserted by respondents. Besides,

executive determinations, such as said factual bases, are generally final on this Court.37
The Court observes that the meat of petitioners' constitutional challenge on Proclamation No.
475 is the right to travel.
Clearly then, the one crucial question that needs to be preliminarily answered is - does
Proclamation No. 475 constitute an impairment on the right to travel?
The Court answers in the negative.
Proclamation No. 475 does not pose an

actual impairment on the right to travel
Petitioners claim that Proclamation No. 475 impairs the right to travel based on the following
provisions:
NOW, THEREFORE, I, RODRIGO ROA DUTERTE, President of the Philippines, by virtue of the
powers vested in me by the Constitution and existing laws, do hereby declare a State of
Calamity in the barangays of Balabag, Manoc-Manoc and Yapak (Island of Boracay) in the
Municipality of Malay, Aldan. In this regard, the temporary closure of the Island as a tourist
destination for six (6) months starting 26 April 2018, or until 25 October 2018, is hereby ordered
subject to applicable laws, rules, regulations and jurisprudence.
xxxx
The Municipality of Malay, Aldan is also hereby directed to ensure that no tourist will be
allowed entry to the island of Boracay until such time that the closure has been lifted by the
President.
xxxx
The activities proposed to be undertaken to rehabilitate Boracay involved inspection, testing,

demolition, relocation, and construction. These could not have been implemented freely and
smoothly with tourists coming in and out of the island not only because of the possible
disruption that they may cause to the works being undertaken, but primarily because their
safety and convenience might be compromised. Also, the contaminated waters in the island
were not just confined to a small manageable area. The excessive water pollutants were all
over Bolabog beach and the numerous illegal drainpipes connected to and discharging
wastewater over it originate from different parts of the island. Indeed, the activities
occasioned by the necessary digging of these pipes and the isolation of the contaminated
beach waters to give way to treatment could not be done in the presence of tourists. Aside
from the dangers that these contaminated waters pose, hotels, inns, and other
accommodations may not be available as they would all be inspected and checked to
determine their compliance with environmental laws. Moreover, it bears to state that a piece-
meal closure of portions of the island would not suffice since as mentioned, illegal drainpipes
extend to the beach from various parts of Boracay. Also, most areas in the island needed
major structural rectifications because of numerous resorts and tourism facilities which lie along
easement areas, illegally reclaimed wetlands, and of forested areas that were illegally cleared
for construction purposes. Hence, the need to close the island in its entirety and ban tourists
therefrom.
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In fine, this case does not actually involve the right to travel in its essential sense contrary to
what petitioners want to portray. Any bearing that Proclamation No. 475 may have on the
right to travel is merely corollary to the closure of Boracay and the ban of tourists and non-
residents therefrom which were necessary incidents of the island's rehabilitation. There is
certainly no showing that Proclamation No. 475 deliberately meant to impair the right to travel.
Tue questioned proclamation is clearly focused on its purpose of rehabilitating Boracay and
any intention to directly restrict the right cannot, in any manner, be deduced from its import.
This is contrary to the import of several laws recognized as constituting an impairment on the
right to travel which directly impose restriction on the right, viz.:
[1] The Human Security Act of2010 or Republic Act (R.A.) No. 9372. The law restricts the right
travel of an individual charged with the crime of terrorism even though such person is out on
bail.
[2] The Philippine Passport Act of 1996 or R.A. No. 8239. Pursuant to said law, the Secretary of
Foreign Affairs or his authorized consular officer may refuse the issuance of, restrict the use of,
or withdraw, a passport of a Filipino citizen.
[3] The 'Anti-Trafficking in Persons Act of 2003' or RA 9208. Pursuant to the provisions thereof,
the Bureau of Immigration, in order to manage migration and curb trafficking in persons, issued
Memorandum Order Radjr No. 2011-011, allowing its Travel Control and Enforcement Unit to
'offload passengers with fraudulent travel documents, doubtful purpose of travel, including
possible victims of human trafficking' from our ports.
[4] The Migrant Workers and Overseas Filipinos Act of 1995 or R.A. No. 8042, as amended by
R.A. No. 10022. In enforcement of said law, the Philippine Overseas Employment Administration
(POEA) may refuse to issue deployment permit[ s] to a specific country that effectively
prevents our migrant workers to enter such country.
[5] The Act on Violence Against Women and Children or R.A. No. 9262. The law restricts
movement of an individual against whom the protection order is intended.
[6] Inter-Country Adoption Act of 1995 or R.A. No. 8043. Pursuant thereto, the Inter-Country
Adoption Board may issue rules restrictive of an adoptee's right to travel 'to protect the Filipino
child from abuse, exploitation, trafficking and/or sale or any other practice in connection with
adoption which is harmful, detrimental, or prejudicial to the child.’38
In Philippine Association of Service Exporters, Inc. v. Hon. Drilon, 39 the Court held that the
consequence on the right to travel of the deployment ban implemented by virtue of
Department Order No. 1, Series of 1998 of the Department of Labor and Employment does not
impair the right.
Also significant to note is that the closure of Boracay was only temporary considering the
categorical pronouncement that it was only for a definite period of six months.
Hence, if at all, the impact of Proclamation No. 475 on the right to travel is not direct but merely
consequential; and, the same is only for a reasonably short period of time or merely temporary.
In this light, a discussion on whether President Duterte exercised a power legislative in nature
loses its significance. Since Proclamation No. 475 does not actually impose a restriction on the
right to travel, its issuance did not result to any substantial alteration of the relationship
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between the State and the people. The proclamation is therefore not a law and conversely,
the President did not usurp the law-making power of the legislature.
For obvious reason, there is likewise no more need to determine the existence in this case of
the requirements for a valid impairment of the right to travel.
Even if it is otherwise, Proclamation

No. 475 must be upheld for being in
the nature of a valid police power
measure
Police power, amongst the three fundamental and inherent powers of the state, is the most
pervasive and comprehensive.40 "It has been defined as the 'state authority to enact
legislation that may interfere with personal liberty or property in order to promote general
welfare."41 "As defined, it consists of (1) imposition or restraint upon liberty or property, (2) in
order to foster the common good. It is not capable of exact definition but has be purposely,
veiled in general terms to underscore its all-comprehensive embrace."42 The police power
"finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
Charter"43 since "it is inborn in the very fact of statehood and sovereignty."44 It is said to be
the "inherent and plenary power of the State which enables it to prohibit all things hurtful to
the comfort, safety, and welfare of the society."45 Thus, police power constitutes an implied
limitation on the Bill of Rights. 46 After all, "the Bill of Rights itself does not purport to be an
absolute guaranty of individual rights and liberties. 'Even liberty itself, the greatest of all rights,
is not unrestricted license to act according to one's will.' It is subject to the far more overriding
demands and requirements of the greater number."47
"Expansive and extensive as its reach may be, police power is not a force without limits."48 "It
has to be exercised within bounds - lawful ends through lawful means, i.e., that the interests of
the public generally, as distinguished from that of a particular class, require its exercise, and
that the means employed are reasonably necessary for the accomplishment of the purpose
while not being unduly oppressive upon individuals."49
That the assailed governmental measure in this case is within the scope of police power
cannot be disputed. Verily, the statutes50 from which the said measure draws authority and
the constitutional provisions51 which serve as its framework are primarily concerned with the
environment and health, safety, and well-being of the people, the promotion and securing of
which are clearly legitimate objectives of governmental efforts and regulations. The
motivating factor in the issuance of Proclamation No. 475 is without a doubt the interest of the
public in general. The only question now is whether the means employed are reasonably
necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.
The pressing need to implement urgent measures to rehabilitate Boracay is beyond cavil from
the factual milieu that precipitated the President's issuance of Proclamation No. 475. This
necessity is even made more critical and insistent by what the Court said in Oposa v. Hon.
Factoran, Jr. 52 in regard the rights to a balanced and healthful ecology and to health, which
rights are likewise integral concerns in this case. Oposa warned that unless the rights to a
balanced and healthful ecology and to health are given continuing importance and the
State assumes its solemn obligation to preserve and protect them, the time will come that
nothing will be left not only for this generation but for the generations to come as well. 53 It
further taught that the right to a balanced and healthful ecology carries with it the correlative
duty to refrain from impairing the environment. 54
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Against the foregoing backdrop, we now pose this question: Was the temporary closure of
Boracay as a tourist destination for six months reasonably necessary under the circumstances?
The answer is in the affirmative.
As earlier noted, one of the root causes of the problems that beset Boracay was tourist influx.
Tourist arrivals in the island were clearly far more than Boracay could handle. As early as 2007,
the DENR had already determined this as the major cause of the catastrophic depletion of
the island's biodiversity. 55 Also part of the equation is the lack of commitment to effectively
enforce pertinent environmental laws. Unfortunately, direct action on these matters has been
so elusive that the situation reached a critical level. Hence, by then, only bold and sweeping
steps were required by the situation.
Certainly, the closure of Boracay, albeit temporarily, gave the island its much needed
breather, and likewise afforded the government the necessary leeway in its rehabilitation
program. Note that apart from review, evaluation and amendment of relevant policies, the
bulk of the rehabilitation activities involved inspection, testing, demolition, relocation, and
construction. These works could not have easily been done with tourists present. The
rehabilitation works in the first place were not simple, superficial or mere cosmetic but rather
quite complicated, major, and permanent in character as they were intended to serve as
long-term solutions to the problem. 56 Also, time is of the essence. Every precious moment lost
is to the detriment of Boracay's environment and of the health and well-being of the people
thereat. Hence, any unnecessary distraction or disruption is most unwelcome. Moreover, as
part of the rehabilitation efforts, operations of establishments in Boracay had to be halted in
the course thereof since majority, if not all of them, need to comply with environmental and
regulatory requirements in order to align themselves with the government's goal to restore
Boracay into normalcy and develop its sustainability. Allowing tourists into the island while it
was undergoing necessary rehabilitation would therefore be pointless as no establishment
would cater to their accommodation and other needs. Besides, it could not be said that
Boracay, at the time of the issuance of the questioned proclamation, was in such a physical
state that would meet its purpose of being a tourist destination. For one, its beach waters could
not be said to be totally safe for swimming. In any case, the closure, to emphasize, was only
for a definite period of six months, i.e., from April 26, 2018 to October 25, 2018. To the mind of
the Court, this period constitutes a reasonable time frame, if not to complete, but to at least
put in place the necessary rehabilitation works to be done in the island. Indeed, the temporary
closure of Boracay, although unprecedented and radical as it may seem, was reasonably
necessary and not unduly oppressive under the circumstances. It was the most practical and
realistic means of ensuring that rehabilitation works in the island are started and carried out in
the most efficacious and expeditious way. Absent a clear showing of grave abuse of
discretion, unreasonableness, arbitrariness or oppressiveness, the Court will not disturb the
executive determination that the closure of Boracay was necessitated by the foregoing
circumstances. As earlier noted, petitioners totally failed to counter the factual bases of, and
justification for the challenged executive action.
Undoubtedly, Proclamation No. 475 is a valid police power measure. To repeat, police power
constitutes an implied limitation to the Bill of Rights, and that even liberty itself, the greatest of
all rights, is subject to the far more overriding demands and requirements of the greater
number.
For the above reasons, petitioners' constitutional challenge on Proclamation No. 475
anchored on their perceived impairment of the right to travel must fail.
Petitioners have no vested rights on
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their sources of income as to be

entitled to due process
Petitioners argue that Proclamation No. 475 impinges on their constitutional right to due
process since they were deprived of the corollary right to work and earn a living by reason of
the issuance thereof.
Concededly, "[a] profession, trade or calling is a property right within the meaning of our
constitutional guarantees. One cannot be deprived of the right to work and the right to make
a living because these rights are property rights, the arbitrary and unwarranted deprivation of
which normally constitutes an actionable wrong."57 Under this premise, petitioners claim that
they were deprived of due process when their right to work and earn a living was taken away
from them when Boracay was ordered closed as a tourist destination. It must be stressed,
though, that "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."58 Otherwise, 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, government measures implemented pursuant to the
said state power would be stymied or invalidated. 59
In any case, petitioners, particularly Zabal and Jacosalem, cannot be said to have already
acquired vested rights to their sources of income in Boracay. As heretofore mentioned, they
are part of the informal sector of the economy where earnings are not guaranteed. In
Southern Luzon Drug Corporation v. Department of Social Welfare and Development, 60 the
Court elucidated on vested rights, as follows:
x x x Vested rights are 'fixed, unalterable, or irrevocable.' More extensively, they are depicted
as follows:
Rights which have so completely and definitely accrued to or settled in a person that they are
not subject to be defeated or cancelled by the act of any other private person, and which it
is right and equitable that the government should recognize and protect, as being lawful in
themselves, and settled according to the then current rules of law, and of which the individual
could not be deprived arbitrarily without injustice, or of which he could not justly be deprived
otherwise than by the established methods of procedure and for the public welfare. x x x A
right is not 'vested' unless it is more than a mere expectancy based on the anticipated
continuance of present laws; it must be an established interest in property, not open to doubt.
x x x To be vested in its accurate legal sense, a right must be complete and consummated,
and one of which the person to whom it belongs cannot be divested without his consent. x x
x61
Here, Zabal and J acosalem 's asserted right to whatever they may earn from tourist arrivals in
Boracay is merely an inchoate right or one that has not fully developed and therefore cannot
be claimed as one's own. An inchoate right is a mere expectation, which may or may not
come into fruition. "It is contingent as it only comes 'into existence on an event or condition
which may not happen or be performed until some other event may prevent their
vesting.’’’’62 Clearly, said petitioners' earnings are contingent in that, even assuming tourists
are still allowed in the island, the will still earn nothing if no one avails of their services. Certainly,
they do not possess any vested right on their sources of income, and under this context, their
claim of lack of due process collapses. To stress, only rights which have completely and
definitely accrued and settled are entitled protection under the due process clause.
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Besides, Proclamation No. 475 does not strip Zabal and Jacosalem of their right to work and
earn a living. They are free to work and practice their trade elsewhere. That they were not
able to do so in Boracay, at least for the duration of its closure, is a necessary consequence
of the police power measure to close and rehabilitate the island.
Also clearly untenable is petitioners' claim that they were being made to suffer the
consequences of the environmental transgressions of others. It must be stressed that the
temporary closure of Boracay as a tourist destination and the consequent ban of tourists into
the island were not meant to serve as penalty to violators of environmental laws. The
temporary closure does not erase the environmental violations committed; hence, the
liabilities of the violators remain and only they alone shall suffer the same. The temporary
inconvenience that petitioners or other persons may have experienced or are experiencing is
but the consequence of the police measure intended to attain a much higher purpose, that
is, to protect the environment, the health of the people, and the general welfare. Indeed, any
and all persons may be burdened by measures intended for the common good or to serve
some important governmental interest. 63
No intrusion into the autonomy of the

concerned LGUs
The alleged intrusion of the President into the autonomy of the LG Us concerned is likewise too
trivial to merit this Court's consideration. Contrary to petitioners' argument, RA 10121 recognizes
and even puts a premium on the role of the LG Us in disaster risk reduction and management
as shown by the fact that a number of the legislative policies set out in the subject statute
recognize and aim to strengthen the powers decentralized to LGUs. 64 This role is echoed in
the questioned proclamation.
The fact that other government agencies are involved in the rehabilitation works does not
create the inference that the powers and functions of the LGUs are being encroached upon.
The respective roles of each government agency are particularly defined and enumerated in
Executive Order No. 5365 and all are in accordance with their respective mandates. Also, the
situation in Boracay can in no wise be characterized or labelled as a mere local issue as to
leave its rehabilitation to local actors. Boracay is a prime tourist destination which caters to
both local and foreign tourists. Any issue thereat has corresponding effects, direct or otherwise,
at a national level. This, for one, reasonably takes the issues therein from a level that concerns
only the local officials. At any rate, notice must be taken of the fact that even if the concerned
LGUs have long been fully aware of the problems afflicting Boracay, they failed to effectively
remedy it. Yet still, in recognition of their mandated roles and involvement in the rehabilitation
of Boracay, Proclamation No. 475 directed "[a]ll departments, agencies and offices, including
government-owned or controlled corporations and affected local government units x x x to
implement and execute xx x the closure [of Boracay] and the appropriate rehabilitation works,
in accordance with pertinent operational plans and directives, including the Boracay Action
Plan."
As a final note, the Court in Metropolitan Manila Development Authority v. Concerned

Residents of Manila Bay, 66 called out the concerned government agencies for their cavalier
attitude towards solving environmental destruction despite hard evidence and clear signs of
climate crisis. It equated the failure to put environmental protection on a plane of high
national priority to the then lacking level of bureaucratic efficiency and commitment. Hence,
the Court therein took it upon itself to put the heads of concerned department-agencies and
the bureaus and offices under them on continuing notice and to enjoin them to perform their
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mandates and duties towards the clean-up and/or restoration of Manila Bay, through a
"continuing mandamus." It likewise took the occasion to state, viz.:
In the light of the ongoing environmental degradation, the Court wishes to emphasize the
extreme necessity for all concerned executive departments and agencies to immediately act
and discharge their respective official duties and obligations. Indeed, time is of the essence;
hence, there is a need to set timetables for the performance and completion of the tasks,
some of them as defined for them by law and the nature of their respective offices and
mandates.
The importance of the Manila Bay as a sea resource, playground and as a historical landmark
cannot be over-emphasized. It is not yet too late in the day to restore the Manila Bay to its
former splendor and bring back the plants and sea life that once thrived in its blue waters. But
the tasks ahead, daunting as they may be, could only be accomplished if those mandated,
with the help and cooperation of all civic-minded individuals, would put their minds to these
tasks and take responsibility. This means that the State, through [the concerned department-
agencies], has to take the lead in the preservation and protection of the Manila Bay.
The era of delays, procrastination, and ad hoc measures is over. [The concerned department-
agencies] must transcend their limitations, real or imaginary, and buckle down to work before
the problem at hand becomes unmanageable. Thus, we must reiterate that different
government agencies and instrumentalities cannot shirk from their mandates; they must
perform their basic functions in cleaning up and rehabilitating the Manila Bay. x x x67
There is an obvious similarity in Metropolitan Manila Development Authority and in the present
case in that both involve the restoration of key areas in the country which were once glowing
with radiance and vitality but are now in shambles due to abuses and exploitation. What sets
these two cases apart is that in the former, those mandated to act still needed to be enjoined
in order to act. In this case, the bold and urgent action demanded by the Court in
Metropolitan Manila Development Authority is now in the roll out. Still, the voice of cynicism,
naysayers, and procrastinators heard during times of inaction can still be heard during this time
of full action - demonstrating a classic case of "damn if you do, damn if you don't". Thus, in
order for the now staunch commitment to save the environment not to fade, it behooves upon
the courts to be extra cautious in invalidating government measures meant towards
addressing environmental degradation. Absent any clear showing of constitutional infirmity,
arbitrariness or grave abuse of discretion, these measures must be upheld and even lauded
and promoted. After all, not much time is left for us to remedy the present environmental
situation. To borrow from Oposa, unless the State undertakes its solemn obligation to preserve
the rights to a balanced and healthful ecology and advance the health of the people, "the
day would not be too far when all else would be lost not only for the present generation, but
also for those to come - generations which stand to inherit nothing but parched earth
incapable of sustaining life."68
All told, the Court sustains the constitutionality and validity of Proclamation No. 475.
WHEREFORE, the Petition for Prohibition and Mandamus is DISMISSED.
SO ORDERED.
Bersamin (C.J.), Peralta, A. Reyes, Jr., Gesmundo, J. Reyes, Jr., Hernando, and Carandang, JJ.,
concur.
Carpio and Perlas-Bernabe, JJ., see separate concurring opinions.
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Leonen, J., dissent. See separate opinion.

Jardeleza, J., see concurring and dissenting opinion.
Caguioa, J., dissent. See dissenting opinion.
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Public morals
Ermita-Malate Hotel and Motel Operators Association, Inc., et al. vs. City Mayor of Manila, et
al.G.R. No. L-24693 July 31, 1967
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
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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);
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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
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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
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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
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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
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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.
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Reyes, J.B.L., Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro and Angeles, JJ., concur.
Concepcion, C.J. and Dizon, J., are on leave.
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CITY OF MANILA vs. LAGUIO, JR. G.R. No. 118127, April 12, 2005
I know only that what is moral is what you feel good after and what is immoral is what you feel
bad after.
Ernest Hermingway
Death in the Afternoon, Ch. 1
It is a moral and political axiom that any dishonorable act, if performed by oneself, is less
immoral than if performed by someone else, who would be well-intentioned in his dishonesty.
J. Christopher Gerald
Bonaparte in Egypt, Ch. I
The Court's commitment to the protection of morals is secondary to its fealty to the
fundamental law of the land. It is foremost a guardian of the Constitution but not the
conscience of individuals. And if it need be, the Court will not hesitate to "make the hammer
fall, and heavily" in the words of Justice Laurel, and uphold the constitutional guarantees when
faced with laws that, though not lacking in zeal to promote morality, nevertheless fail to pass
the test of constitutionality.
The pivotal issue in this Petition1 under Rule 45 (then Rule 42) of the Revised Rules on Civil
Procedure seeking the reversal of the Decision2 in Civil Case No. 93-66511 of the Regional Trial
Court (RTC) of Manila, Branch 18 (lower court),3 is the validity of Ordinance No. 7783 (the
Ordinance) of the City of Manila.4
The antecedents are as follows:
Private respondent Malate Tourist Development Corporation (MTDC) is a corporation

engaged in the business of operating hotels, motels, hostels and lodging houses.5 It built and
opened Victoria Court in Malate which was licensed as a motel although duly accredited with
the Department of Tourism as a hotel.6 On 28 June 1993, MTDC filed a Petition for Declaratory
Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order7 (RTC
Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon.
Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila
(City Council). MTDC prayed that the Ordinance, insofar as it includes motels and inns as
among its prohibited establishments, be declared invalid and unconstitutional.8
Enacted by the City Council9 on 9 March 1993 and approved by petitioner City Mayor on 30
March 1993, the said Ordinance is entitled–
AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING

CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-
MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER
PURPOSES.10
The Ordinance is reproduced in full, hereunder:
SECTION 1. Any provision of existing laws and ordinances to the contrary notwithstanding, no
person, partnership, corporation or entity shall, in the Ermita-Malate area bounded by Teodoro
M. Kalaw Sr. Street in the North, Taft Avenue in the East, Vito Cruz Street in the South and Roxas
Boulevard in the West, pursuant to P.D. 499 be allowed or authorized to contract and engage
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in, any business providing certain forms of amusement, entertainment, services and facilities
where women are used as tools in entertainment and which tend to disturb the community,
annoy the inhabitants, and adversely affect the social and moral welfare of the community,
such as but not limited to:
1. Sauna Parlors
2. Massage Parlors
3. Karaoke Bars
4. Beerhouses
5. Night Clubs
6. Day Clubs
7. Super Clubs
8. Discotheques
9. Cabarets
10. Dance Halls
11. Motels
12. Inns
SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the said officials are
prohibited from issuing permits, temporary or otherwise, or from granting licenses and
accepting payments for the operation of business enumerated in the preceding section.
SEC. 3. Owners and/or operator of establishments engaged in, or devoted to, the businesses
enumerated in Section 1 hereof are hereby given three (3) months from the date of approval
of this ordinance within which to wind up business operations or to transfer to any place outside
of the Ermita-Malate area or convert said businesses to other kinds of business allowable within
the area, such as but not limited to:
1. Curio or antique shop
2. Souvenir Shops
3. Handicrafts display centers
4. Art galleries
5. Records and music shops
6. Restaurants
7. Coffee shops
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8. Flower shops
9. Music lounge and sing-along restaurants, with well-defined activities for wholesome family
entertainment that cater to both local and foreign clientele.
10. Theaters engaged in the exhibition, not only of motion pictures but also of cultural shows,
stage and theatrical plays, art exhibitions, concerts and the like.
11. Businesses allowable within the law and medium intensity districts as provided for in the
zoning ordinances for Metropolitan Manila, except new warehouse or open-storage depot,
dock or yard, motor repair shop, gasoline service station, light industry with any machinery, or
funeral establishments.
SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction, be
punished by imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both,
at the discretion of the Court, PROVIDED, that in case of juridical person, the President, the
General Manager, or person-in-charge of operation shall be liable thereof; PROVIDED
FURTHER, that in case of subsequent violation and conviction, the premises of the erring
establishment shall be closed and padlocked permanently.
SEC. 5. This ordinance shall take effect upon approval.
Enacted by the City Council of Manila at its regular session today, March 9, 1993.
Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)
In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in
its enumeration of prohibited establishments, motels and inns such as MTDC's Victoria Court
considering that these were not establishments for "amusement" or "entertainment" and they
were not "services or facilities for entertainment," nor did they use women as "tools for
entertainment," and neither did they "disturb the community," "annoy the inhabitants" or
"adversely affect the social and moral welfare of the community."11
MTDC further advanced that the Ordinance was invalid and unconstitutional for the following
reasons: (1) The City Council has no power to prohibit the operation of motels as Section 458
(a) 4 (iv)12 of the Local Government Code of 1991 (the Code) grants to the City Council only
the power to regulate the establishment, operation and maintenance of hotels, motels, inns,
pension houses, lodging houses and other similar establishments; (2) The Ordinance is void as
it is violative of Presidential Decree (P.D.) No. 49913 which specifically declared portions of the
Ermita-Malate area as a commercial zone with certain restrictions; (3) The Ordinance does not
constitute a proper exercise of police power as the compulsory closure of the motel business
has no reasonable relation to the legitimate municipal interests sought to be protected; (4)
The Ordinance constitutes an ex post facto law by punishing the operation of Victoria Court
which was a legitimate business prior to its enactment; (5) The Ordinance violates MTDC's
constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiff's
property rights; (b) the City Council has no power to find as a fact that a particular thing is a
nuisance per se nor does it have the power to extrajudicially destroy it; and (6) The Ordinance
constitutes a denial of equal protection under the law as no reasonable basis exists for
prohibiting the operation of motels and inns, but not pension houses, hotels, lodging houses or
other similar establishments, and for prohibiting said business in the Ermita-Malate area but not
outside of this area.14
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In their Answer15 dated 23 July 1993, petitioners City of Manila and Lim maintained that the
City Council had the power to "prohibit certain forms of entertainment in order to protect the
social and moral welfare of the community" as provided for in Section 458 (a) 4 (vii) of the
Local Government Code,16 which reads, thus:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod,
as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate
funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code
and in the proper exercise of the corporate powers of the city as provided for under Section
22 of this Code, and shall:
....
(4) Regulate activities relative to the use of land, buildings and structures within the city in order
to promote the general welfare and for said purpose shall:
....
(vii) Regulate the establishment, operation, and maintenance of any entertainment or

amusement facilities, including theatrical performances, circuses, billiard pools, public
dancing schools, public dance halls, sauna baths, massage parlors, and other places for
entertainment or amusement; regulate such other events or activities for amusement or
entertainment, particularly those which tend to disturb the community or annoy the
inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of
amusement or entertainment in order to protect the social and moral welfare of the
community.
Citing Kwong Sing v. City of Manila,17 petitioners insisted that the power of regulation spoken
of in the above-quoted provision included the power to control, to govern and to restrain
places of exhibition and amusement.18
Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to
protect the social and moral welfare of the community in conjunction with its police power as
found in Article III, Section 18(kk) of Republic Act No. 409,19 otherwise known as the Revised
Charter of the City of Manila (Revised Charter of Manila)20 which reads, thus:
ARTICLE III
THE MUNICIPAL BOARD
. . .
Section 18. Legislative powers. – The Municipal Board shall have the following legislative
powers:
. . .
(kk) To enact all ordinances it may deem necessary and proper for the sanitation and safety,
the furtherance of the prosperity, and the promotion of the morality, peace, good order,
comfort, convenience, and general welfare of the city and its inhabitants, and such others as
may be necessary to carry into effect and discharge the powers and duties conferred by this
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chapter; and to fix penalties for the violation of ordinances which shall not exceed two
hundred pesos fine or six months' imprisonment, or both such fine and imprisonment, for a
single offense.
Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private
respondent had the burden to prove its illegality or unconstitutionality.21
Petitioners also maintained that there was no inconsistency between P.D. 499 and the
Ordinance as the latter simply disauthorized certain forms of businesses and allowed the
Ermita-Malate area to remain a commercial zone.22 The Ordinance, the petitioners likewise
claimed, cannot be assailed as ex post facto as it was prospective in operation.23 The
Ordinance also did not infringe the equal protection clause and cannot be denounced as
class legislation as there existed substantial and real differences between the Ermita-Malate
area and other places in the City of Manila.24
On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-
parte temporary restraining order against the enforcement of the Ordinance.25 And on 16
July 1993, again in an intrepid gesture, he granted the writ of preliminary injunction prayed for
by MTDC.26
After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the
petitioners from implementing the Ordinance. The dispositive portion of said Decision reads:27
WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of
the City of Manila null and void, and making permanent the writ of preliminary injunction that
had been issued by this Court against the defendant. No costs.
SO ORDERED.28
Petitioners filed with the lower court a Notice of Appeal29 on 12 December 1994, manifesting
that they are elevating the case to this Court under then Rule 42 on pure questions of law.30
On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were
committed by the lower court in its ruling: (1) It erred in concluding that the subject ordinance
is ultra vires, or otherwise, unfair, unreasonable and oppressive exercise of police power; (2) It
erred in holding that the questioned Ordinance contravenes P.D. 49931 which allows
operators of all kinds of commercial establishments, except those specified therein; and (3) It
erred in declaring the Ordinance void and unconstitutional.32
In the Petition and in its Memorandum,33 petitioners in essence repeat the assertions they
made before the lower court. They contend that the assailed Ordinance was enacted in the
exercise of the inherent and plenary power of the State and the general welfare clause
exercised by local government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter
of Manila and conjunctively, Section 458 (a) 4 (vii) of the Code.34 They allege that the
Ordinance is a valid exercise of police power; it does not contravene P.D. 499; and that it
enjoys the presumption of validity.35
In its Memorandum36 dated 27 May 1996, private respondent maintains that the Ordinance is
ultra vires and that it is void for being repugnant to the general law. It reiterates that the
questioned Ordinance is not a valid exercise of police power; that it is violative of due process,
confiscatory and amounts to an arbitrary interference with its lawful business; that it is violative
of the equal protection clause; and that it confers on petitioner City Mayor or any officer
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unregulated discretion in the execution of the Ordinance absent rules to guide and control
his actions.
This is an opportune time to express the Court's deep sentiment and tenderness for the Ermita-
Malate area being its home for several decades. A long-time resident, the Court witnessed
the area's many turn of events. It relished its glory days and endured its days of infamy. Much
as the Court harks back to the resplendent era of the Old Manila and yearns to restore its lost
grandeur, it believes that the Ordinance is not the fitting means to that end. The Court is of
the opinion, and so holds, that the lower court did not err in declaring the Ordinance, as it did,
ultra vires and therefore null and void.
The Ordinance is so replete with constitutional infirmities that almost every sentence thereof
violates a constitutional provision. The prohibitions and sanctions therein transgress the
cardinal rights of persons enshrined by the Constitution. The Court is called upon to shelter
these rights from attempts at rendering them worthless.
The tests of a valid ordinance are well established. A long line of decisions has held that for an
ordinance to be valid, it must not only be within the corporate powers of the local government
unit to enact and must be passed according to the procedure prescribed by law, it must also
conform to the following substantive requirements: (1) must not contravene the Constitution
or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4)
must not prohibit but may regulate trade; (5) must be general and consistent with public
policy; and (6) must not be unreasonable.37
Anent the first criterion, ordinances shall only be valid when they are not contrary to the
Constitution and to the laws.38 The Ordinance must satisfy two requirements: it must pass
muster under the test of constitutionality and the test of consistency with the prevailing laws.
That ordinances should be constitutional uphold the principle of the supremacy of the
Constitution. The requirement that the enactment must not violate existing law gives stress to
the precept that local government units are able to legislate only by virtue of their derivative
legislative power, a delegation of legislative power from the national legislature. The delegate
cannot be superior to the principal or exercise powers higher than those of the latter.39
This relationship between the national legislature and the local government units has not been
enfeebled by the new provisions in the Constitution strengthening the policy of local
autonomy. The national legislature is still the principal of the local government units, which
cannot defy its will or modify or violate it.40
The Ordinance was passed by the City Council in the exercise of its police power, an
enactment of the City Council acting as agent of Congress. Local government units, as
agencies of the State, are endowed with police power in order to effectively accomplish and
carry out the declared objects of their creation.41 This delegated police power is found in
Section 16 of the Code, known as the general welfare clause, viz:
SECTION 16. General Welfare. Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or
incidental for its efficient and effective governance, and those which are essential to the
promotion of the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant
scientific and technological capabilities, improve public morals, enhance economic
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prosperity and social justice, promote full employment among their residents, maintain peace
and order, and preserve the comfort and convenience of their inhabitants.
Local government units exercise police power through their respective legislative bodies; in
this case, the sangguniang panlungsod or the city council. The Code empowers the legislative
bodies to "enact ordinances, approve resolutions and appropriate funds for the general
welfare of the province/city/municipality and its inhabitants pursuant to Section 16 of the
Code and in the proper exercise of the corporate powers of the province/city/ municipality
provided under the Code.42 The inquiry in this Petition is concerned with the validity of the
exercise of such delegated power.
The Ordinance contravenes

the Constitution
The police power of the City Council, however broad and far-reaching, is subordinate to the
constitutional limitations thereon; and is subject to the limitation that its exercise must be
reasonable and for the public good.43 In the case at bar, the enactment of the Ordinance
was an invalid exercise of delegated power as it is unconstitutional and repugnant to general
laws.
The relevant constitutional provisions are the following:
SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property, and
the promotion of the general welfare are essential for the enjoyment by all the people of the
blessings of democracy.44
SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the
fundamental equality before the law of women and men.45
SEC. 1. No person shall be deprived of life, liberty or property without due process of law, nor
shall any person be denied the equal protection of laws.46
Sec. 9. Private property shall not be taken for public use without just compensation.47
A. The Ordinance infringes

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

of Police Power are not met
To successfully invoke the exercise of police power as the rationale for the enactment of the
Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear
that the interests of the public generally, as distinguished from those of a particular class,
require an interference with private rights, but the means adopted must be reasonably
necessary for the accomplishment of the purpose and not unduly oppressive upon
individuals.60 It must be evident that no other alternative for the accomplishment of the
purpose less intrusive of private rights can work. A reasonable relation must exist between the
purposes of the police measure and the means employed for its accomplishment, for even
under the guise of protecting the public interest, personal rights and those pertaining to private
property will not be permitted to be arbitrarily invaded.61
Lacking a concurrence of these two requisites, the police measure shall be struck down as an
arbitrary intrusion into private rights62 a violation of the due process clause.
The Ordinance was enacted to address and arrest the social ills purportedly spawned by the
establishments in the Ermita-Malate area which are allegedly operated under the deceptive
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veneer of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses,
cocktail lounges, hotels and motels. Petitioners insist that even the Court in the case of Ermita-
Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila63 had already
taken judicial notice of the "alarming increase in the rate of prostitution, adultery and
fornication in Manila traceable in great part to existence of motels, which provide a necessary
atmosphere for clandestine entry, presence and exit and thus become the ideal haven for
prostitutes and thrill-seekers."64
The object of the Ordinance was, accordingly, the promotion and protection of the social
and moral values of the community. Granting for the sake of argument that the objectives of
the Ordinance are within the scope of the City Council's police powers, the means employed
for the accomplishment thereof were unreasonable and unduly oppressive.
It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable
regulations looking to the promotion of the moral and social values of the community.
However, the worthy aim of fostering public morals and the eradication of the community's
social ills can be achieved through means less restrictive of private rights; it can be attained
by reasonable restrictions rather than by an absolute prohibition. The closing down and
transfer of businesses or their conversion into businesses "allowed" under the Ordinance have
no reasonable relation to the accomplishment of its purposes. Otherwise stated, the
prohibition of the enumerated establishments will not per se protect and promote the social
and moral welfare of the community; it will not in itself eradicate the alluded social ills of
prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila.
Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and
establishments of the like which the City Council may lawfully prohibit,65 it is baseless and
insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars,
night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This
is not warranted under the accepted definitions of these terms. The enumerated
establishments are lawful pursuits which are not per se offensive to the moral welfare of the
community.
That these are used as arenas to consummate illicit sexual affairs and as venues to further the
illegal prostitution is of no moment. We lay stress on the acrid truth that sexual immorality, being
a human frailty, may take place in the most innocent of places that it may even take place
in the substitute establishments enumerated under Section 3 of the Ordinance. If the flawed
logic of the Ordinance were to be followed, in the remote instance that an immoral sexual
act transpires in a church cloister or a court chamber, we would behold the spectacle of the
City of Manila ordering the closure of the church or court concerned. Every house, building,
park, curb, street or even vehicles for that matter will not be exempt from the prohibition.
Simply because there are no "pure" places where there are impure men. Indeed, even the
Scripture and the Tradition of Christians churches continually recall the presence and
universality of sin in man's history.66
The problem, it needs to be pointed out, is not the establishment, which by its nature cannot
be said to be injurious to the health or comfort of the community and which in itself is amoral,
but the deplorable human activity that may occur within its premises. While a motel may be
used as a venue for immoral sexual activity, it cannot for that reason alone be punished. It
cannot be classified as a house of ill-repute or as a nuisance per se on a mere likelihood or a
naked assumption. If that were so and if that were allowed, then the Ermita-Malate area would
not only be purged of its supposed social ills, it would be extinguished of its soul as well as every
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human activity, reprehensible or not, in its every nook and cranny would be laid bare to the
estimation of the authorities.
The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as
the Ordinance may to shape morality, it should not foster the illusion that it can make a moral
man out of it because immorality is not a thing, a building or establishment; it is in the hearts of
men. The City Council instead should regulate human conduct that occurs inside the
establishments, but not to the detriment of liberty and privacy which are covenants, premiums
and blessings of democracy.
While petitioners' earnestness at curbing clearly objectionable social ills is commendable, they
unwittingly punish even the proprietors and operators of "wholesome," "innocent"
establishments. In the instant case, there is a clear invasion of personal or property rights,
personal in the case of those individuals desirous of owning, operating and patronizing those
motels and property in terms of the investments made and the salaries to be paid to those
therein employed. If the City of Manila so desires to put an end to prostitution, fornication and
other social ills, it can instead impose reasonable regulations such as daily inspections of the
establishments for any violation of the conditions of their licenses or permits; it may exercise its
authority to suspend or revoke their licenses for these violations;67 and it may even impose
increased license fees. In other words, there are other means to reasonably accomplish the
desired end.
Means employed are

constitutionally infirm
The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars,
beerhouses, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels
and inns in the Ermita-Malate area. In Section 3 thereof, owners and/or operators of the
enumerated establishments are given three (3) months from the date of approval of the
Ordinance within which "to wind up business operations or to transfer to any place outside the
Ermita-Malate area or convert said businesses to other kinds of business allowable within the
area." Further, it states in Section 4 that in cases of subsequent violations of the provisions of
the Ordinance, the "premises of the erring establishment shall be closed and padlocked
permanently."
It is readily apparent that the means employed by the Ordinance for the achievement of its
purposes, the governmental interference itself, infringes on the constitutional guarantees of a
person's fundamental right to liberty and property.
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right
to exist and the right to be free from arbitrary restraint or servitude. The term cannot be
dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed
to embrace the right of man to enjoy the facilities with which he has been endowed by his
Creator, subject only to such restraint as are necessary for the common welfare."68 In
accordance with this case, the rights of the citizen to be free to use his faculties in all lawful
ways; to live and work where he will; to earn his livelihood by any lawful calling; and to pursue
any avocation are all deemed embraced in the concept of liberty.69
The U.S. Supreme Court in the case of Roth v. Board of Regents,70 sought to clarify the
meaning of "liberty." It said:
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While the Court has not attempted to define with exactness the liberty. . . guaranteed [by the
Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint
but also the right of the individual to contract, to engage in any of the common occupations
of life, to acquire useful knowledge, to marry, establish a home and bring up children, to
worship God according to the dictates of his own conscience, and generally to enjoy those
privileges long recognized…as essential to the orderly pursuit of happiness by free men. In a
Constitution for a free people, there can be no doubt that the meaning of "liberty" must be
broad indeed.
In another case, it also confirmed that liberty protected by the due process clause includes
personal decisions relating to marriage, procreation, contraception, family relationships, child
rearing, and education. In explaining the respect the Constitution demands for the autonomy
of the person in making these choices, the U.S. Supreme Court explained:
These matters, involving the most intimate and personal choices a person may make in a
lifetime, choices central to personal dignity and autonomy, are central to the liberty protected
by the Fourteenth Amendment. At the heart of liberty is the right to define one's own concept
of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these
matters could not define the attributes of personhood where they formed under compulsion
of the State.71
Persons desirous to own, operate and patronize the enumerated establishments under Section
1 of the Ordinance may seek autonomy for these purposes.
Motel patrons who are single and unmarried may invoke this right to autonomy to
consummate their bonds in intimate sexual conduct within the motel's premises be it stressed
that their consensual sexual behavior does not contravene any fundamental state policy as
contained in the Constitution.72 Adults have a right to choose to forge such relationships with
others in the confines of their own private lives and still retain their dignity as free persons. The
liberty protected by the Constitution allows persons the right to make this choice.73 Their right
to liberty under the due process clause gives them the full right to engage in their conduct
without intervention of the government, as long as they do not run afoul of the law. Liberty
should be the rule and restraint the exception.
Liberty in the constitutional sense not only means freedom from unlawful government restraint;
it must include privacy as well, if it is to be a repository of freedom. The right to be let alone is
the beginning of all freedom it is the most comprehensive of rights and the right most valued
by civilized men.74
The concept of liberty compels respect for the individual whose claim to privacy and
interference demands respect. As the case of Morfe v. Mutuc,75 borrowing the words of Laski,
so very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation,
are indefeasible; indeed, they are so fundamental that they are the basis on which his civic
obligations are built. He cannot abandon the consequences of his isolation, which are,
broadly speaking, that his experience is private, and the will built out of that experience
personal to himself. If he surrenders his will to others, he surrenders himself. If his will is set by the
will of others, he ceases to be a master of himself. I cannot believe that a man no longer a
master of himself is in any real sense free.
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Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of
which should be justified by a compelling state interest. Morfe accorded recognition to the
right to privacy independently of its identification with liberty; in itself it is fully deserving of
constitutional protection. Governmental powers should stop short of certain intrusions into the
personal life of the citizen.76
There is a great temptation to have an extended discussion on these civil liberties but the Court
chooses to exercise restraint and restrict itself to the issues presented when it should. The
previous pronouncements of the Court are not to be interpreted as a license for adults to
engage in criminal conduct. The reprehensibility of such conduct is not diminished. The Court
only reaffirms and guarantees their right to make this choice. Should they be prosecuted for
their illegal conduct, they should suffer the consequences of the choice they have made.
That, ultimately, is their choice.
Modality employed is
unlawful taking
In addition, the Ordinance is unreasonable and oppressive as it substantially divests the

respondent of the beneficial use of its property.77 The Ordinance in Section 1 thereof forbids
the running of the enumerated businesses in the Ermita-Malate area and in Section 3 instructs
its owners/operators to wind up business operations or to transfer outside the area or convert
said businesses into allowed businesses. An ordinance which permanently restricts the use of
property that it can not be used for any reasonable purpose goes beyond regulation and
must be recognized as a taking of the property without just compensation.78 It is intrusive and
violative of the private property rights of individuals.
The Constitution expressly provides in Article III, Section 9, that "private property shall not be
taken for public use without just compensation." The provision is the most important protection
of property rights in the Constitution. This is a restriction on the general power of the
government to take property. The constitutional provision is about ensuring that the
government does not confiscate the property of some to give it to others. In part too, it is about
loss spreading. If the government takes away a person's property to benefit society, then
society should pay. The principal purpose of the guarantee is "to bar the Government from
forcing some people alone to bear public burdens which, in all fairness and justice, should be
borne by the public as a whole.79
There are two different types of taking that can be identified. A "possessory" taking occurs
when the government confiscates or physically occupies property. A "regulatory" taking
occurs when the government's regulation leaves no reasonable economically viable use of
the property.80
In the landmark case of Pennsylvania Coal v. Mahon,81 it was held that a taking also could
be found if government regulation of the use of property went "too far." When regulation
reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent
domain and compensation to support the act. While property may be regulated to a certain
extent, if regulation goes too far it will be recognized as a taking.82
No formula or rule can be devised to answer the questions of what is too far and when
regulation becomes a taking. In Mahon, Justice Holmes recognized that it was "a question of
degree and therefore cannot be disposed of by general propositions." On many other
occasions as well, the U.S. Supreme Court has said that the issue of when regulation constitutes
a taking is a matter of considering the facts in each case. The Court asks whether justice and
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fairness require that the economic loss caused by public action must be compensated by the
government and thus borne by the public as a whole, or whether the loss should remain
concentrated on those few persons subject to the public action.83
What is crucial in judicial consideration of regulatory takings is that government regulation is a

taking if it leaves no reasonable economically viable use of property in a manner that
interferes with reasonable expectations for use.84 A regulation that permanently denies all
economically beneficial or productive use of land is, from the owner's point of view, equivalent
to a "taking" unless principles of nuisance or property law that existed when the owner
acquired the land make the use prohibitable.85 When the owner of real property has been
called upon to sacrifice all economically beneficial uses in the name of the common good,
that is, to leave his property economically idle, he has suffered a taking.86
A regulation which denies all economically beneficial or productive use of land will require
compensation under the takings clause. Where a regulation places limitations on land that fall
short of eliminating all economically beneficial use, a taking nonetheless may have occurred,
depending on a complex of factors including the regulation's economic effect on the
landowner, the extent to which the regulation interferes with reasonable investment-backed
expectations and the character of government action. These inquiries are informed by the
purpose of the takings clause which is to prevent the government from forcing some people
alone to bear public burdens which, in all fairness and justice, should be borne by the public
as a whole.87
A restriction on use of property may also constitute a "taking" if not reasonably necessary to
the effectuation of a substantial public purpose or if it has an unduly harsh impact on the
distinct investment-backed expectations of the owner.88
The Ordinance gives the owners and operators of the "prohibited" establishments three (3)
months from its approval within which to "wind up business operations or to transfer to any
place outside of the Ermita-Malate area or convert said businesses to other kinds of business
allowable within the area." The directive to "wind up business operations" amounts to a closure
of the establishment, a permanent deprivation of property, and is practically confiscatory.
Unless the owner converts his establishment to accommodate an "allowed" business, the
structure which housed the previous business will be left empty and gathering dust. Suppose
he transfers it to another area, he will likewise leave the entire establishment idle. Consideration
must be given to the substantial amount of money invested to build the edifices which the
owner reasonably expects to be returned within a period of time. It is apparent that the
Ordinance leaves no reasonable economically viable use of property in a manner that
interferes with reasonable expectations for use.
The second and third options to transfer to any place outside of the Ermita-Malate area or
to convert into allowed businesses are confiscatory as well. The penalty of permanent closure
in cases of subsequent violations found in Section 4 of the Ordinance is also equivalent to a
"taking" of private property.
The second option instructs the owners to abandon their property and build another one
outside the Ermita-Malate area. In every sense, it qualifies as a taking without just
compensation with an additional burden imposed on the owner to build another
establishment solely from his coffers. The proffered solution does not put an end to the
"problem," it merely relocates it. Not only is this impractical, it is unreasonable, onerous and
oppressive. The conversion into allowed enterprises is just as ridiculous. How may the
respondent convert a motel into a restaurant or a coffee shop, art gallery or music lounge
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without essentially destroying its property? This is a taking of private property without due
process of law, nay, even without compensation.
The penalty of closure likewise constitutes unlawful taking that should be compensated by the
government. The burden on the owner to convert or transfer his business, otherwise it will be
closed permanently after a subsequent violation should be borne by the public as this end
benefits them as a whole.
Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning
ordinance, although a valid exercise of police power, which limits a "wholesome" property to
a use which can not reasonably be made of it constitutes the taking of such property without
just compensation. Private property which is not noxious nor intended for noxious purposes
may not, by zoning, be destroyed without compensation. Such principle finds no support in
the principles of justice as we know them. The police powers of local government units which
have always received broad and liberal interpretation cannot be stretched to cover this
particular taking.
Distinction should be made between destruction from necessity and eminent domain. It
needs restating that the property taken in the exercise of police power is destroyed because
it is noxious or intended for a noxious purpose while the property taken under the power of
eminent domain is intended for a public use or purpose and is therefore "wholesome."89 If it
be of public benefit that a "wholesome" property remain unused or relegated to a particular
purpose, then certainly the public should bear the cost of reasonable compensation for the
condemnation of private property for public use.90
Further, the Ordinance fails to set up any standard to guide or limit the petitioners' actions. It
in no way controls or guides the discretion vested in them. It provides no definition of the
establishments covered by it and it fails to set forth the conditions when the establishments
come within its ambit of prohibition. The Ordinance confers upon the mayor arbitrary and
unrestricted power to close down establishments. Ordinances such as this, which make
possible abuses in its execution, depending upon no conditions or qualifications whatsoever
other than the unregulated arbitrary will of the city authorities as the touchstone by which its
validity is to be tested, are unreasonable and invalid. The Ordinance should have established
a rule by which its impartial enforcement could be secured.91
Ordinances placing restrictions upon the lawful use of property must, in order to be valid and
constitutional, specify the rules and conditions to be observed and conduct to avoid; and
must not admit of the exercise, or of an opportunity for the exercise, of unbridled discretion by
the law enforcers in carrying out its provisions.92
Thus, in Coates v. City of Cincinnati,93 as cited in People v. Nazario,94 the U.S. Supreme
Court struck down an ordinance that had made it illegal for "three or more persons to
assemble on any sidewalk and there conduct themselves in a manner annoying to persons
passing by." The ordinance was nullified as it imposed no standard at all "because one may
never know in advance what 'annoys some people but does not annoy others.' "
Similarly, the Ordinance does not specify the standards to ascertain which establishments
"tend to disturb the community," "annoy the inhabitants," and "adversely affect the social and
moral welfare of the community." The cited case supports the nullification of the Ordinance
for lack of comprehensible standards to guide the law enforcers in carrying out its provisions.
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Petitioners cannot therefore order the closure of the enumerated establishments without
infringing the due process clause. These lawful establishments may be regulated, but not
prevented from carrying on their business. This is a sweeping exercise of police power that is
a result of a lack of imagination on the part of the City Council and which amounts to an
interference into personal and private rights which the Court will not countenance. In this
regard, we take a resolute stand to uphold the constitutional guarantee of the right to liberty
and property.
Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far
cry from the ill-considered Ordinance enacted by the City Council.
In FW/PBS, INC. v. Dallas,95 the city of Dallas adopted a comprehensive ordinance regulating
"sexually oriented businesses," which are defined to include adult arcades, bookstores, video
stores, cabarets, motels, and theaters as well as escort agencies, nude model studio and
sexual encounter centers. Among other things, the ordinance required that such businesses
be licensed. A group of motel owners were among the three groups of businesses that filed
separate suits challenging the ordinance. The motel owners asserted that the city violated the
due process clause by failing to produce adequate support for its supposition that renting
room for fewer than ten (10) hours resulted in increased crime and other secondary effects.
They likewise argued than the ten (10)-hour limitation on the rental of motel rooms placed an
unconstitutional burden on the right to freedom of association. Anent the first contention, the
U.S. Supreme Court held that the reasonableness of the legislative judgment combined with
a study which the city considered, was adequate to support the city's determination that
motels permitting room rentals for fewer than ten (10 ) hours should be included within the
licensing scheme. As regards the second point, the Court held that limiting motel room rentals
to ten (10) hours will have no discernible effect on personal bonds as those bonds that are
formed from the use of a motel room for fewer than ten (10) hours are not those that have
played a critical role in the culture and traditions of the nation by cultivating and transmitting
shared ideals and beliefs.
The ordinance challenged in the above-cited case merely regulated the targeted businesses.
It imposed reasonable restrictions; hence, its validity was upheld.
The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of
Manila,96 it needs pointing out, is also different from this case in that what was involved therein
was a measure which regulated the mode in which motels may conduct business in order to
put an end to practices which could encourage vice and immorality. Necessarily, there was
no valid objection on due process or equal protection grounds as the ordinance did not
prohibit motels. The Ordinance in this case however is not a regulatory measure but is an
exercise of an assumed power to prohibit.97
The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment
of property and personal rights of citizens. For being unreasonable and an undue restraint of
trade, it cannot, even under the guise of exercising police power, be upheld as valid.
B. The Ordinance violates Equal

Protection Clause
Equal protection requires that all persons or things similarly situated should be treated alike,
both as to rights conferred and responsibilities imposed. Similar subjects, in other words, should
not be treated differently, so as to give undue favor to some and unjustly discriminate against
others.98 The guarantee means that no person or class of persons shall be denied the same
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protection of laws which is enjoyed by other persons or other classes in like circumstances.99
The "equal protection of the laws is a pledge of the protection of equal laws."100 It limits
governmental discrimination. The equal protection clause extends to artificial persons but only
insofar as their property is concerned.101
The Court has explained the scope of the equal protection clause in this wise:
… What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration: "The
ideal situation is for the law's benefits to be available to all, that none be placed outside the
sphere of its coverage. Only thus could chance and favor be excluded and the affairs of men
governed by that serene and impartial uniformity, which is of the very essence of the idea of
law." There is recognition, however, in the opinion that what in fact exists "cannot approximate
the ideal. Nor is the law susceptible to the reproach that it does not take into account the
realities of the situation. The constitutional guarantee then is not to be given a meaning that
disregards what is, what does in fact exist. To assure that the general welfare be promoted,
which is the end of law, a regulatory measure may cut into the rights to liberty and property.
Those adversely affected may under such circumstances invoke the equal protection clause
only if they can show that the governmental act assailed, far from being inspired by the
attainment of the common weal was prompted by the spirit of hostility, or at the very least,
discrimination that finds no support in reason." Classification is thus not ruled out, it being
sufficient to quote from the Tuason decision anew "that the laws operate equally and uniformly
on all persons under similar circumstances or that all persons must be treated in the same
manner, the conditions not being different, both in the privileges conferred and the liabilities
imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal
protection and security shall be given to every person under circumstances which, if not
identical, are analogous. If law be looked upon in terms of burden or charges, those that fall
within a class should be treated in the same fashion, whatever restrictions cast on some in the
group equally binding on the rest.102
Legislative bodies are allowed to classify the subjects of legislation. If the classification is
reasonable, the law may operate only on some and not all of the people without violating the
equal protection clause.103 The classification must, as an indispensable requisite, not be
arbitrary. To be valid, it must conform to the following requirements:
1) It must be based on substantial distinctions.
2) It must be germane to the purposes of the law.
3) It must not be limited to existing conditions only.
4) It must apply equally to all members of the class.104
In the Court's view, there are no substantial distinctions between motels, inns, pension houses,
hotels, lodging houses or other similar establishments. By definition, all are commercial
establishments providing lodging and usually meals and other services for the public. No
reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or
other similar establishments. The classification in the instant case is invalid as similar subjects
are not similarly treated, both as to rights conferred and obligations imposed. It is arbitrary as
it does not rest on substantial distinctions bearing a just and fair relation to the purpose of the
Ordinance.
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The Court likewise cannot see the logic for prohibiting the business and operation of motels in
the Ermita-Malate area but not outside of this area. A noxious establishment does not become
any less noxious if located outside the area.
The standard "where women are used as tools for entertainment" is also discriminatory as
prostitution one of the hinted ills the Ordinance aims to banish is not a profession exclusive
to women. Both men and women have an equal propensity to engage in prostitution. It is not
any less grave a sin when men engage in it. And why would the assumption that there is an
ongoing immoral activity apply only when women are employed and be inapposite when
men are in harness? This discrimination based on gender violates equal protection as it is not
substantially related to important government objectives.105 Thus, the discrimination is invalid.
Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency
with prevailing laws.
C. The Ordinance is repugnant

to general laws; it is ultra vires
The Ordinance is in contravention of the Code as the latter merely empowers local
government units to regulate, and not prohibit, the establishments enumerated in Section 1
thereof.
The power of the City Council to regulate by ordinances the establishment, operation, and
maintenance of motels, hotels and other similar establishments is found in Section 458 (a) 4
(iv), which provides that:
. . .
. . .
(iv) Regulate the establishment, operation and maintenance of cafes, restaurants,

beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar
establishments, including tourist guides and transports . . . .
While its power to regulate the establishment, operation and maintenance of any
entertainment or amusement facilities, and to prohibit certain forms of amusement or
entertainment is provided under Section 458 (a) 4 (vii) of the Code, which reads as follows:
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. . .
. . .
(vii) Regulate the establishment, operation, and maintenance of any entertainment or

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

conglomerated and unified power of regulation, suppression and prohibition.112
The Congress unequivocably specified the establishments and forms of amusement or

entertainment subject to regulation among which are beerhouses, hotels, motels, inns,
pension houses, lodging houses, and other similar establishments (Section 458 (a) 4 (iv)), public
entertainment or amusement (Section 458 (a) 4 (vii)). This enumeration therefore cannot be
included as among "other events or activities for amusement or entertainment, particularly
those which tend to disturb the community or annoy the inhabitants" or "certain forms of
amusement or entertainment" which the City Council may suspend, suppress or prohibit.
The rule is that the City Council has only such powers as are expressly granted to it and those
which are necessarily implied or incidental to the exercise thereof. By reason of its limited
powers and the nature thereof, said powers are to be construed strictissimi juris and any doubt
or ambiguity arising out of the terms used in granting said powers must be construed against
the City Council.113 Moreover, it is a general rule in statutory construction that the express
mention of one person, thing, or consequence is tantamount to an express exclusion of all
others. Expressio unius est exclusio alterium. This maxim is based upon the rules of logic and the
natural workings of human mind. It is particularly applicable in the construction of such statutes
as create new rights or remedies, impose penalties or punishments, or otherwise come under
the rule of strict construction.114
The argument that the City Council is empowered to enact the Ordinance by virtue of the
general welfare clause of the Code and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila
is likewise without merit. On the first point, the ruling of the Court in People v. Esguerra,115 is
instructive. It held that:
The powers conferred upon a municipal council in the general welfare clause, or section 2238
of the Revised Administrative Code, refers to matters not covered by the other provisions of
the same Code, and therefore it can not be applied to intoxicating liquors, for the power to
regulate the selling, giving away and dispensing thereof is granted specifically by section 2242
(g) to municipal councils. To hold that, under the general power granted by section 2238, a
municipal council may enact the ordinance in question, notwithstanding the provision of
section 2242 (g), would be to make the latter superfluous and nugatory, because the power
to prohibit, includes the power to regulate, the selling, giving away and dispensing of
intoxicating liquors.
On the second point, it suffices to say that the Code being a later expression of the legislative
will must necessarily prevail and override the earlier law, the Revised Charter of Manila. Legis
posteriores priores contrarias abrogant, or later statute repeals prior ones which are repugnant
thereto. As between two laws on the same subject matter, which are irreconcilably
inconsistent, that which is passed later prevails, since it is the latest expression of legislative
will.116 If there is an inconsistency or repugnance between two statutes, both relating to the
same subject matter, which cannot be removed by any fair and reasonable method of
interpretation, it is the latest expression of the legislative will which must prevail and override
the earlier.117
Implied repeals are those which take place when a subsequently enacted law contains
provisions contrary to those of an existing law but no provisions expressly repealing them. Such
repeals have been divided into two general classes: those which occur where an act is so
inconsistent or irreconcilable with an existing prior act that only one of the two can remain in
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force and those which occur when an act covers the whole subject of an earlier act and is
intended to be a substitute therefor. The validity of such a repeal is sustained on the ground
that the latest expression of the legislative will should prevail.118
In addition, Section 534(f) of the Code states that "All general and special laws, acts, city
charters, decrees, executive orders, proclamations and administrative regulations, or part or
parts thereof which are inconsistent with any of the provisions of this Code are hereby
repealed or modified accordingly." Thus, submitting to petitioners' interpretation that the
Revised Charter of Manila empowers the City Council to prohibit motels, that portion of the
Charter stating such must be considered repealed by the Code as it is at variance with the
latter's provisions granting the City Council mere regulatory powers.
It is well to point out that petitioners also cannot seek cover under the general welfare clause
authorizing the abatement of nuisances without judicial proceedings. That tenet applies to a
nuisance per se, or one which affects the immediate safety of persons and property and may
be summarily abated under the undefined law of necessity. It can not be said that motels are
injurious to the rights of property, health or comfort of the community. It is a legitimate business.
If it be a nuisance per accidens it may be so proven in a hearing conducted for that purpose.
A motel is not per se a nuisance warranting its summary abatement without judicial
intervention.119
Notably, the City Council was conferred powers to prevent and prohibit certain activities and
establishments in another section of the Code which is reproduced as follows:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective city
government, and in this connection, shall:
. . .
(v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for
habitual drunkenness in public places, vagrancy, mendicancy, prostitution, establishment
and maintenance of houses of ill repute, gambling and other prohibited games of chance,
fraudulent devices and ways to obtain money or property, drug addiction, maintenance of
drug dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of
obscene or pornographic materials or publications, and such other activities inimical to the
welfare and morals of the inhabitants of the city;
. . .
If it were the intention of Congress to confer upon the City Council the power to prohibit the
establishments enumerated in Section 1 of the Ordinance, it would have so declared in
uncertain terms by adding them to the list of the matters it may prohibit under the above-
quoted Section. The Ordinance now vainly attempts to lump these establishments with houses
of ill-repute and expand the City Council's powers in the second and third clauses of Section
458 (a) 4 (vii) of the Code in an effort to overreach its prohibitory powers. It is evident that these
establishments may only be regulated in their establishment, operation and maintenance.
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It is important to distinguish the punishable activities from the establishments themselves. That
these establishments are recognized legitimate enterprises can be gleaned from another
Section of the Code. Section 131 under the Title on Local Government Taxation expressly
mentioned proprietors or operators of massage clinics, sauna, Turkish and Swedish baths,
hotels, motels and lodging houses as among the "contractors" defined in paragraph (h)
thereof. The same Section also defined "amusement" as a "pleasurable diversion and
entertainment," "synonymous to relaxation, avocation, pastime or fun;" and "amusement
places" to include "theaters, cinemas, concert halls, circuses and other places of amusement
where one seeks admission to entertain oneself by seeing or viewing the show or
performances." Thus, it can be inferred that the Code considers these establishments as
legitimate enterprises and activities. It is well to recall the maxim reddendo singula singulis
which means that words in different parts of a statute must be referred to their appropriate
connection, giving to each in its place, its proper force and effect, and, if possible, rendering
none of them useless or superfluous, even if strict grammatical construction demands
otherwise. Likewise, where words under consideration appear in different sections or are
widely dispersed throughout an act the same principle applies.120
Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions
of P.D. 499. As correctly argued by MTDC, the statute had already converted the residential
Ermita-Malate area into a commercial area. The decree allowed the establishment and
operation of all kinds of commercial establishments except warehouse or open storage depot,
dump or yard, motor repair shop, gasoline service station, light industry with any machinery or
funeral establishment. The rule is that for an ordinance to be valid and to have force and
effect, it must not only be within the powers of the council to enact but the same must not be
in conflict with or repugnant to the general law.121 As succinctly illustrated in Solicitor General
v. Metropolitan Manila Authority:122
The requirement that the enactment must not violate existing law explains itself. Local political
subdivisions are able to legislate only by virtue of a valid delegation of legislative power from
the national legislature (except only that the power to create their own sources of revenue
and to levy taxes is conferred by the Constitution itself). They are mere agents vested with
what is called the power of subordinate legislation. As delegates of the Congress, the local
government units cannot contravene but must obey at all times the will of their principal. In
the case before us, the enactment in question, which are merely local in origin cannot prevail
against the decree, which has the force and effect of a statute.123
Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be
the rule, it has already been held that although the presumption is always in favor of the
validity or reasonableness of the ordinance, such presumption must nevertheless be set aside
when the invalidity or unreasonableness appears on the face of the ordinance itself or is
established by proper evidence. The exercise of police power by the local government is valid
unless it contravenes the fundamental law of the land, or an act of the legislature, or unless it
is against public policy or is unreasonable, oppressive, partial, discriminating or in derogation
of a common right.124
Conclusion
All considered, the Ordinance invades fundamental personal and property rights and impairs
personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is
discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that
abuses may attend the enforcement of its sanctions. And not to be forgotten, the City Council
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under the Code had no power to enact the Ordinance and is therefore ultra vires, null and
void.
Concededly, the challenged Ordinance was enacted with the best of motives and shares the
concern of the public for the cleansing of the Ermita-Malate area of its social sins. Police power
legislation of such character deserves the full endorsement of the judiciary we reiterate our
support for it. But inspite of its virtuous aims, the enactment of the Ordinance has no statutory
or constitutional authority to stand on. Local legislative bodies, in this case, the City Council,
cannot prohibit the operation of the enumerated establishments under Section 1 thereof or
order their transfer or conversion without infringing the constitutional guarantees of due
process and equal protection of laws not even under the guise of police power.
WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court
declaring the Ordinance void is AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., Puno, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona,

Carpio-Morales, Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ., concur
Panganiban, J., in the result.
Ynares- Santiago, J., concur in the result only.
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WHITE LIGHT CORPORATION VS. CITY OF MANILA G.R. No. 122846, January 20, 2009.
With another city ordinance of Manila also principally involving the tourist district as subject,
the Court is confronted anew with the incessant clash between government power and
individual liberty in tandem with the archetypal tension between law and morality.
In City of Manila v. Laguio, Jr.,1 the Court affirmed the nullification of a city ordinance barring
the operation of motels and inns, among other establishments, within the Ermita-Malate area.
The petition at bar assails a similarly-motivated city ordinance that prohibits those same
establishments from offering short-time admission, as well as pro-rated or "wash up" rates for
such abbreviated stays. Our earlier decision tested the city ordinance against our sacred
constitutional rights to liberty, due process and equal protection of law. The same parameters
apply to the present petition.
This Petition2 under Rule 45 of the Revised Rules on Civil Procedure, which seeks the reversal of
the Decision3 in C.A.-G.R. S.P. No. 33316 of the Court of Appeals, challenges the validity of
Manila City Ordinance No. 7774 entitled, "An Ordinance Prohibiting Short-Time Admission,
Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging
Houses, Pension Houses, and Similar Establishments in the City of Manila" (the Ordinance).
I.
The facts are as follows:
On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the Ordinance.4
The Ordinance is reproduced in full, hereunder:
SECTION 1. Declaration of Policy. It is hereby the declared policy of the City Government to
protect the best interest, health and welfare, and the morality of its constituents in general
and the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting short time admission
in hotels, motels, lodging houses, pension houses and similar establishments in the City of
Manila.
SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate or other
similarly concocted terms, are hereby prohibited in hotels, motels, inns, lodging houses,
pension houses and similar establishments in the City of Manila.
SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance and charging of
room rate for less than twelve (12) hours at any given time or the renting out of rooms more
than twice a day or any other term that may be concocted by owners or managers of said
establishments but would mean the same or would bear the same meaning.
SEC. 5. Penalty Clause. Any person or corporation who shall violate any provision of this
ordinance shall upon conviction thereof be punished by a fine of Five Thousand (₱5,000.00)
Pesos or imprisonment for a period of not exceeding one (1) year or both such fine and
imprisonment at the discretion of the court; Provided, That in case of [a] juridical person, the
president, the manager, or the persons in charge of the operation thereof shall be liable:
Provided, further, That in case of subsequent conviction for the same offense, the business
license of the guilty party shall automatically be cancelled.
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SEC. 6. Repealing Clause. Any or all provisions of City ordinances not consistent with or contrary
to this measure or any portion hereof are hereby deemed repealed.
SEC. 7. Effectivity. This ordinance shall take effect immediately upon approval.
Enacted by the city Council of Manila at its regular session today, November 10, 1992.
Approved by His Honor, the Mayor on December 3, 1992.
On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed a
complaint for declaratory relief with prayer for a writ of preliminary injunction and/or
temporary restraining order ( TRO)5 with the Regional Trial Court (RTC) of Manila, Branch 9
impleading as defendant, herein respondent City of Manila (the City) represented by Mayor
Lim.6 MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its
prohibited establishments, be declared invalid and unconstitutional. MTDC claimed that as
owner and operator of the Victoria Court in Malate, Manila it was authorized by Presidential
Decree (P.D.) No. 259 to admit customers on a short time basis as well as to charge customers
wash up rates for stays of only three hours.
On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation (TC)
and Sta. Mesa Tourist and Development Corporation (STDC) filed a motion to intervene and
to admit attached complaint-in-intervention7 on the ground that the Ordinance directly
affects their business interests as operators of drive-in-hotels and motels in Manila.8 The three
companies are components of the Anito Group of Companies which owns and operates
several hotels and motels in Metro Manila.9
On December 23, 1992, the RTC granted the motion to intervene.10 The RTC also notified the
Solicitor General of the proceedings pursuant to then Rule 64, Section 4 of the Rules of Court.
On the same date, MTDC moved to withdraw as plaintiff.11
On December 28, 1992, the RTC granted MTDC's motion to withdraw.12 The RTC issued a TRO
on January 14, 1993, directing the City to cease and desist from enforcing the Ordinance.13
The City filed an Answer dated January 22, 1993 alleging that the Ordinance is a legitimate
exercise of police power.14
On February 8, 1993, the RTC issued a writ of preliminary injunction ordering the city to desist
from the enforcement of the Ordinance.15 A month later, on March 8, 1993, the Solicitor
General filed his Comment arguing that the Ordinance is constitutional.
During the pre-trial conference, the WLC, TC and STDC agreed to submit the case for decision
without trial as the case involved a purely legal question.16 On October 20, 1993, the RTC
rendered a decision declaring the Ordinance null and void. The dispositive portion of the
decision reads:
WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is hereby
declared null and void.
Accordingly, the preliminary injunction heretofor issued is hereby made permanent.
SO ORDERED.17
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The RTC noted that the ordinance "strikes at the personal liberty of the individual guaranteed
and jealously guarded by the Constitution."18 Reference was made to the provisions of the
Constitution encouraging private enterprises and the incentive to needed investment, as well
as the right to operate economic enterprises. Finally, from the observation that the illicit
relationships the Ordinance sought to dissuade could nonetheless be consummated by simply
paying for a 12-hour stay, the RTC likened the law to the ordinance annulled in Ynot v.
Intermediate Appellate Court,19 where the legitimate purpose of preventing indiscriminate
slaughter of carabaos was sought to be effected through an inter-province ban on the
transport of carabaos and carabeef.
The City later filed a petition for review on certiorari with the Supreme Court.20 The petition
was docketed as G.R. No. 112471. However in a resolution dated January 26, 1994, the Court
treated the petition as a petition for certiorari and referred the petition to the Court of
Appeals.21
Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of police
power pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities,
among other local government units, the power:
[To] regulate the establishment, operation and maintenance of cafes, restaurants,

beerhouses, hotels, motels, inns, pension houses, lodging houses and other similar
establishments, including tourist guides and transports.22
The Ordinance, it is argued, is also a valid exercise of the power of the City under Article III,
Section 18(kk) of the Revised Manila Charter, thus:
"to enact all ordinances it may deem necessary and proper for the sanitation and safety, the
furtherance of the prosperity and the promotion of the morality, peace, good order, comfort,
convenience and general welfare of the city and its inhabitants, and such others as be
necessary to carry into effect and discharge the powers and duties conferred by this Chapter;
and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos
fine or six months imprisonment, or both such fine and imprisonment for a single offense.23
Petitioners argued that the Ordinance is unconstitutional and void since it violates the right to
privacy and the freedom of movement; it is an invalid exercise of police power; and it is an
unreasonable and oppressive interference in their business.
The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the
Ordinance.24 First, it held that the Ordinance did not violate the right to privacy or the freedom
of movement, as it only penalizes the owners or operators of establishments that admit
individuals for short time stays. Second, the virtually limitless reach of police power is only
constrained by having a lawful object obtained through a lawful method. The lawful objective
of the Ordinance is satisfied since it aims to curb immoral activities. There is a lawful method
since the establishments are still allowed to operate. Third, the adverse effect on the
establishments is justified by the well-being of its constituents in general. Finally, as held in
Ermita-Malate Motel Operators Association v. City Mayor of Manila, liberty is regulated by law.
TC, WLC and STDC come to this Court via petition for review on certiorari.25 In their petition
and Memorandum, petitioners in essence repeat the assertions they made before the Court
of Appeals. They contend that the assailed Ordinance is an invalid exercise of police power.
II.
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We must address the threshold issue of petitioners’ standing. Petitioners allege that as owners
of establishments offering "wash-up" rates, their business is being unlawfully interfered with by
the Ordinance. However, petitioners also allege that the equal protection rights of their clients
are also being interfered with. Thus, the crux of the matter is whether or not these
establishments have the requisite standing to plead for protection of their patrons' equal
protection rights.
Standing or locus standi is the ability of a party to demonstrate to the court sufficient
connection to and harm from the law or action challenged to support that party's
participation in the case. More importantly, the doctrine of standing is built on the principle of
separation of powers,26 sparing as it does unnecessary interference or invalidation by the
judicial branch of the actions rendered by its co-equal branches of government.
The requirement of standing is a core component of the judicial system derived directly from
the Constitution.27 The constitutional component of standing doctrine incorporates concepts
which concededly are not susceptible of precise definition.28 In this jurisdiction, the extancy
of "a direct and personal interest" presents the most obvious cause, as well as the standard
test for a petitioner's standing.29 In a similar vein, the United States Supreme Court reviewed
and elaborated on the meaning of the three constitutional standing requirements of injury,
causation, and redressability in Allen v. Wright.30
Nonetheless, the general rules on standing admit of several exceptions such as the
overbreadth doctrine, taxpayer suits, third party standing and, especially in the Philippines, the
doctrine of transcendental importance.31
For this particular set of facts, the concept of third party standing as an exception and the
overbreadth doctrine are appropriate. In Powers v. Ohio,32 the United States Supreme Court
wrote that: "We have recognized the right of litigants to bring actions on behalf of third parties,
provided three important criteria are satisfied: the litigant must have suffered an ‘injury-in-fact,’
thus giving him or her a "sufficiently concrete interest" in the outcome of the issue in dispute;
the litigant must have a close relation to the third party; and there must exist some hindrance
to the third party's ability to protect his or her own interests."33 Herein, it is clear that the business
interests of the petitioners are likewise injured by the Ordinance. They rely on the patronage
of their customers for their continued viability which appears to be threatened by the
enforcement of the Ordinance. The relative silence in constitutional litigation of such special
interest groups in our nation such as the American Civil Liberties Union in the United States may
also be construed as a hindrance for customers to bring suit.34
American jurisprudence is replete with examples where parties-in-interest were allowed

standing to advocate or invoke the fundamental due process or equal protection claims of
other persons or classes of persons injured by state action. In Griswold v. Connecticut,35 the
United States Supreme Court held that physicians had standing to challenge a reproductive
health statute that would penalize them as accessories as well as to plead the constitutional
protections available to their patients. The Court held that:
"The rights of husband and wife, pressed here, are likely to be diluted or adversely affected
unless those rights are considered in a suit involving those who have this kind of confidential
relation to them."36
An even more analogous example may be found in Craig v. Boren,37 wherein the United
States Supreme Court held that a licensed beverage vendor has standing to raise the equal
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protection claim of a male customer challenging a statutory scheme prohibiting the sale of
beer to males under the age of 21 and to females under the age of 18. The United States High
Court explained that the vendors had standing "by acting as advocates of the rights of third
parties who seek access to their market or function."38
Assuming arguendo that petitioners do not have a relationship with their patrons for the former
to assert the rights of the latter, the overbreadth doctrine comes into play. In overbreadth
analysis, challengers to government action are in effect permitted to raise the rights of third
parties. Generally applied to statutes infringing on the freedom of speech, the overbreadth
doctrine applies when a statute needlessly restrains even constitutionally guaranteed rights.39
In this case, the petitioners claim that the Ordinance makes a sweeping intrusion into the right
to liberty of their clients. We can see that based on the allegations in the petition, the
Ordinance suffers from overbreadth.
We thus recognize that the petitioners have a right to assert the constitutional rights of their
clients to patronize their establishments for a "wash-rate" time frame.
III.
To students of jurisprudence, the facts of this case will recall to mind not only the recent City
of Manila ruling, but our 1967 decision in Ermita-Malate Hotel and Motel Operations
Association, Inc., v. Hon. City Mayor of Manila.40 Ermita-Malate concerned the City ordinance
requiring patrons to fill up a prescribed form stating personal information such as name,
gender, nationality, age, address and occupation before they could be admitted to a motel,
hotel or lodging house. This earlier ordinance was precisely enacted to minimize certain
practices deemed harmful to public morals. A purpose similar to the annulled ordinance in
City of Manila which sought a blanket ban on motels, inns and similar establishments in the
Ermita-Malate area. However, the constitutionality of the ordinance in Ermita-Malate was
sustained by the Court.
The common thread that runs through those decisions and the case at bar goes beyond the
singularity of the localities covered under the respective ordinances. All three ordinances were
enacted with a view of regulating public morals including particular illicit activity in transient
lodging establishments. This could be described as the middle case, wherein there is no
wholesale ban on motels and hotels but the services offered by these establishments have
been severely restricted. At its core, this is another case about the extent to which the State
can intrude into and regulate the lives of its citizens.
The test of a valid ordinance is well established. A long line of decisions including City of Manila
has held that for an ordinance to be valid, it must not only be within the corporate powers of
the local government unit to enact and pass according to the procedure prescribed by law,
it must also conform to the following substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or
discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent
with public policy; and (6) must not be unreasonable.41
The Ordinance prohibits two specific and distinct business practices, namely wash rate
admissions and renting out a room more than twice a day. The ban is evidently sought to be
rooted in the police power as conferred on local government units by the Local Government
Code through such implements as the general welfare clause.
A.
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Police power, while incapable of an exact definition, has been purposely veiled in general
terms to underscore its comprehensiveness to meet all exigencies and provide enough room
for an efficient and flexible response as the conditions warrant.42 Police power is based upon
the concept of necessity of the State and its corresponding right to protect itself and its
people.43 Police power has been used as justification for numerous and varied actions by the
State. These range from the regulation of dance halls,44 movie theaters,45 gas stations46 and
cockpits.47 The awesome scope of police power is best demonstrated by the fact that in its
hundred or so years of presence in our nation’s legal system, its use has rarely been denied.
The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered
establishments for illicit sex, prostitution, drug use and alike. These goals, by themselves, are
unimpeachable and certainly fall within the ambit of the police power of the State. Yet the
desirability of these ends do not sanctify any and all means for their achievement. Those
means must align with the Constitution, and our emerging sophisticated analysis of its
guarantees to the people. The Bill of Rights stands as a rebuke to the seductive theory of
Macchiavelli, and, sometimes even, the political majorities animated by his cynicism.
Even as we design the precedents that establish the framework for analysis of due process or
equal protection questions, the courts are naturally inhibited by a due deference to the co-
equal branches of government as they exercise their political functions. But when we are
compelled to nullify executive or legislative actions, yet another form of caution emerges. If
the Court were animated by the same passing fancies or turbulent emotions that motivate
many political decisions, judicial integrity is compromised by any perception that the judiciary
is merely the third political branch of government. We derive our respect and good standing
in the annals of history by acting as judicious and neutral arbiters of the rule of law, and there
is no surer way to that end than through the development of rigorous and sophisticated legal
standards through which the courts analyze the most fundamental and far-reaching
constitutional questions of the day.
B.
The primary constitutional question that confronts us is one of due process, as guaranteed
under Section 1, Article III of the Constitution. Due process evades a precise definition.48 The
purpose of the guaranty is to prevent arbitrary governmental encroachment against the life,
liberty and property of individuals. The due process guaranty serves as a protection against
arbitrary regulation or seizure. Even corporations and partnerships are protected by the
guaranty insofar as their property is concerned.
The due process guaranty has traditionally been interpreted as imposing two related but
distinct restrictions on government, "procedural due process" and "substantive due process."
Procedural due process refers to the procedures that the government must follow before it
deprives a person of life, liberty, or property.49 Procedural due process concerns itself with
government action adhering to the established process when it makes an intrusion into the
private sphere. Examples range from the form of notice given to the level of formality of a
hearing.
If due process were confined solely to its procedural aspects, there would arise absurd
situation of arbitrary government action, provided the proper formalities are followed.
Substantive due process completes the protection envisioned by the due process clause. It
inquires whether the government has sufficient justification for depriving a person of life, liberty,
or property.50
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The question of substantive due process, moreso than most other fields of law, has reflected
dynamism in progressive legal thought tied with the expanded acceptance of fundamental
freedoms. Police power, traditionally awesome as it may be, is now confronted with a more
rigorous level of analysis before it can be upheld. The vitality though of constitutional due
process has not been predicated on the frequency with which it has been utilized to achieve
a liberal result for, after all, the libertarian ends should sometimes yield to the prerogatives of
the State. Instead, the due process clause has acquired potency because of the sophisticated
methodology that has emerged to determine the proper metes and bounds for its
application.
C.
The general test of the validity of an ordinance on substantive due process grounds is best
tested when assessed with the evolved footnote 4 test laid down by the U.S. Supreme Court in
U.S. v. Carolene Products.51 Footnote 4 of the Carolene Products case acknowledged that
the judiciary would defer to the legislature unless there is a discrimination against a "discrete
and insular" minority or infringement of a "fundamental right."52 Consequently, two standards
of judicial review were established: strict scrutiny for laws dealing with freedom of the mind or
restricting the political process, and the rational basis standard of review for economic
legislation.
A third standard, denominated as heightened or immediate scrutiny, was later adopted by

the U.S. Supreme Court for evaluating classifications based on gender53 and legitimacy.54
Immediate scrutiny was adopted by the U.S. Supreme Court in Craig,55 after the Court
declined to do so in Reed v. Reed.56 While the test may have first been articulated in equal
protection analysis, it has in the United States since been applied in all substantive due process
cases as well.
We ourselves have often applied the rational basis test mainly in analysis of equal protection
challenges.57 Using the rational basis examination, laws or ordinances are upheld if they
rationally further a legitimate governmental interest.58 Under intermediate review,
governmental interest is extensively examined and the availability of less restrictive measures
is considered.59 Applying strict scrutiny, the focus is on the presence of compelling, rather than
substantial, governmental interest and on the absence of less restrictive means for achieving
that interest.
In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard for
determining the quality and the amount of governmental interest brought to justify the
regulation of fundamental freedoms.60 Strict scrutiny is used today to test the validity of laws
dealing with the regulation of speech, gender, or race as well as other fundamental rights as
expansion from its earlier applications to equal protection.61 The United States Supreme Court
has expanded the scope of strict scrutiny to protect fundamental rights such as suffrage,62
judicial access63 and interstate travel.64
If we were to take the myopic view that an Ordinance should be analyzed strictly as to its
effect only on the petitioners at bar, then it would seem that the only restraint imposed by the
law which we are capacitated to act upon is the injury to property sustained by the petitioners,
an injury that would warrant the application of the most deferential standard – the rational
basis test. Yet as earlier stated, we recognize the capacity of the petitioners to invoke as well
the constitutional rights of their patrons – those persons who would be deprived of availing
short time access or wash-up rates to the lodging establishments in question.
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Viewed cynically, one might say that the infringed rights of these customers were are trivial
since they seem shorn of political consequence. Concededly, these are not the sort of
cherished rights that, when proscribed, would impel the people to tear up their cedulas. Still,
the Bill of Rights does not shelter gravitas alone. Indeed, it is those "trivial" yet fundamental
freedoms – which the people reflexively exercise any day without the impairing awareness of
their constitutional consequence – that accurately reflect the degree of liberty enjoyed by
the people. Liberty, as integrally incorporated as a fundamental right in the Constitution, is not
a Ten Commandments-style enumeration of what may or what may not be done; but rather
an atmosphere of freedom where the people do not feel labored under a Big Brother
presence as they interact with each other, their society and nature, in a manner innately
understood by them as inherent, without doing harm or injury to others.
D.
The rights at stake herein fall within the same fundamental rights to liberty which we upheld in
City of Manila v. Hon. Laguio, Jr. We expounded on that most primordial of rights, thus:
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right
to exist and the right to be free from arbitrary restraint or servitude. The term cannot be
dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed
to embrace the right of man to enjoy the facilities with which he has been endowed by his
Creator, subject only to such restraint as are necessary for the common welfare."[65] In
accordance with this case, the rights of the citizen to be free to use his faculties in all lawful
ways; to live and work where he will; to earn his livelihood by any lawful calling; and to pursue
any avocation are all deemed embraced in the concept of liberty.[66]
The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the meaning
of "liberty." It said:
While the Court has not attempted to define with exactness the liberty . . . guaranteed [by the
Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint
but also the right of the individual to contract, to engage in any of the common occupations
of life, to acquire useful knowledge, to marry, establish a home and bring up children, to
worship God according to the dictates of his own conscience, and generally to enjoy those
privileges long recognized . . . as essential to the orderly pursuit of happiness by free men. In a
Constitution for a free people, there can be no doubt that the meaning of "liberty" must be
broad indeed.67 [Citations omitted]
It cannot be denied that the primary animus behind the ordinance is the curtailment of sexual
behavior. The City asserts before this Court that the subject establishments "have gained
notoriety as venue of ‘prostitution, adultery and fornications’ in Manila since they ‘provide the
necessary atmosphere for clandestine entry, presence and exit and thus became the ‘ideal
haven for prostitutes and thrill-seekers.’"68 Whether or not this depiction of a mise-en-scene of
vice is accurate, it cannot be denied that legitimate sexual behavior among willing married
or consenting single adults which is constitutionally protected69 will be curtailed as well, as it
was in the City of Manila case. Our holding therein retains significance for our purposes:
The concept of liberty compels respect for the individual whose claim to privacy and
interference demands respect. As the case of Morfe v. Mutuc, borrowing the words of Laski,
so very aptly stated:
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Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation,
are indefeasible; indeed, they are so fundamental that they are the basis on which his civic
obligations are built. He cannot abandon the consequences of his isolation, which are,
broadly speaking, that his experience is private, and the will built out of that experience
personal to himself. If he surrenders his will to others, he surrenders himself. If his will is set by the
will of others, he ceases to be a master of himself. I cannot believe that a man no longer a
master of himself is in any real sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of
which should be justified by a compelling state interest. Morfe accorded recognition to the
right to privacy independently of its identification with liberty; in itself it is fully deserving of
constitutional protection. Governmental powers should stop short of certain intrusions into the
personal life of the citizen.70
We cannot discount other legitimate activities which the Ordinance would proscribe or impair.
There are very legitimate uses for a wash rate or renting the room out for more than twice a
day. Entire families are known to choose pass the time in a motel or hotel whilst the power is
momentarily out in their homes. In transit passengers who wish to wash up and rest between
trips have a legitimate purpose for abbreviated stays in motels or hotels. Indeed any person or
groups of persons in need of comfortable private spaces for a span of a few hours with
purposes other than having sex or using illegal drugs can legitimately look to staying in a motel
or hotel as a convenient alternative.
E.
That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product
and the petitioners of lucrative business ties in with another constitutional requisite for the
legitimacy of the Ordinance as a police power measure. It must appear that the interests of
the public generally, as distinguished from those of a particular class, require an interference
with private rights and the means must be reasonably necessary for the accomplishment of
the purpose and not unduly oppressive of private rights.71 It must also be evident that no other
alternative for the accomplishment of the purpose less intrusive of private rights can work.
More importantly, a reasonable relation must exist between the purposes of the measure and
the means employed for its accomplishment, for even under the guise of protecting the public
interest, personal rights and those pertaining to private property will not be permitted to be
arbitrarily invaded.72
Lacking a concurrence of these requisites, the police measure shall be struck down as an
arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power is
subject to judicial review when life, liberty or property is affected.73 However, this is not in any
way meant to take it away from the vastness of State police power whose exercise enjoys the
presumption of validity.74
Similar to the Comelec resolution requiring newspapers to donate advertising space to

candidates, this Ordinance is a blunt and heavy instrument.75 The Ordinance makes no
distinction between places frequented by patrons engaged in illicit activities and patrons
engaged in legitimate actions. Thus it prevents legitimate use of places where illicit activities
are rare or even unheard of. A plain reading of section 3 of the Ordinance shows it makes no
classification of places of lodging, thus deems them all susceptible to illicit patronage and
subject them without exception to the unjustified prohibition.
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The Court has professed its deep sentiment and tenderness of the Ermita-Malate area, its
longtime home,76 and it is skeptical of those who wish to depict our capital city – the Pearl of
the Orient – as a modern-day Sodom or Gomorrah for the Third World set. Those still steeped
in Nick Joaquin-dreams of the grandeur of Old Manila will have to accept that Manila like all
evolving big cities, will have its problems. Urban decay is a fact of mega cities such as Manila,
and vice is a common problem confronted by the modern metropolis wherever in the world.
The solution to such perceived decay is not to prevent legitimate businesses from offering a
legitimate product. Rather, cities revive themselves by offering incentives for new businesses
to sprout up thus attracting the dynamism of individuals that would bring a new grandeur to
Manila.
The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in
fact be diminished simply by applying existing laws. Less intrusive measures such as curbing
the proliferation of prostitutes and drug dealers through active police work would be more
effective in easing the situation. So would the strict enforcement of existing laws and
regulations penalizing prostitution and drug use. These measures would have minimal intrusion
on the businesses of the petitioners and other legitimate merchants. Further, it is apparent that
the Ordinance can easily be circumvented by merely paying the whole day rate without any
hindrance to those engaged in illicit activities. Moreover, drug dealers and prostitutes can in
fact collect "wash rates" from their clientele by charging their customers a portion of the rent
for motel rooms and even apartments.
IV.
We reiterate that individual rights may be adversely affected only to the extent that may fairly
be required by the legitimate demands of public interest or public welfare. The State is a
leviathan that must be restrained from needlessly intruding into the lives of its citizens. However
well--intentioned the Ordinance may be, it is in effect an arbitrary and whimsical intrusion into
the rights of the establishments as well as their patrons. The Ordinance needlessly restrains the
operation of the businesses of the petitioners as well as restricting the rights of their patrons
without sufficient justification. The Ordinance rashly equates wash rates and renting out a room
more than twice a day with immorality without accommodating innocuous intentions.
The promotion of public welfare and a sense of morality among citizens deserves the full
endorsement of the judiciary provided that such measures do not trample rights this Court is
sworn to protect.77 The notion that the promotion of public morality is a function of the State
is as old as Aristotle.78 The advancement of moral relativism as a school of philosophy does
not de-legitimize the role of morality in law, even if it may foster wider debate on which
particular behavior to penalize. It is conceivable that a society with relatively little shared
morality among its citizens could be functional so long as the pursuit of sharply variant moral
perspectives yields an adequate accommodation of different interests.79
To be candid about it, the oft-quoted American maxim that "you cannot legislate morality" is
ultimately illegitimate as a matter of law, since as explained by Calabresi, that phrase is more
accurately interpreted as meaning that efforts to legislate morality will fail if they are widely at
variance with public attitudes about right and wrong.80 Our penal laws, for one, are founded
on age-old moral traditions, and as long as there are widely accepted distinctions between
right and wrong, they will remain so oriented.
Yet the continuing progression of the human story has seen not only the acceptance of the
right-wrong distinction, but also the advent of fundamental liberties as the key to the
enjoyment of life to the fullest. Our democracy is distinguished from non-free societies not with
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any more extensive elaboration on our part of what is moral and immoral, but from our
recognition that the individual liberty to make the choices in our lives is innate, and protected
by the State. Independent and fair-minded judges themselves are under a moral duty to
uphold the Constitution as the embodiment of the rule of law, by reason of their expression of
consent to do so when they take the oath of office, and because they are entrusted by the
people to uphold the law.81
Even as the implementation of moral norms remains an indispensable complement to

governance, that prerogative is hardly absolute, especially in the face of the norms of due
process of liberty. And while the tension may often be left to the courts to relieve, it is possible
for the government to avoid the constitutional conflict by employing more judicious, less
drastic means to promote morality.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is REVERSED, and
the Decision of the Regional Trial Court of Manila, Branch 9, is REINSTATED. Ordinance No. 7774
is hereby declared UNCONSTITUTIONAL. No pronouncement as to costs.
SO ORDERED.
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De La Cruz, et al. vs. Paras, et al.G.R. No. L-42571-72 July 25, 1983
The crucial question posed by this certiorari proceeding is whether or not a municipal
corporation, Bocaue, Bulacan, represented by respondents, 1 can, prohibit the exercise of a
lawful trade, the operation of night clubs, and the pursuit of a lawful occupation, such clubs
employing hostesses. It is contended that the ordinance assailed as invalid is tainted with
nullity, the municipality being devoid of power to prohibit a lawful business, occupation or
calling, petitioners at the same time alleging that their rights to due process and equal
protection of the laws were violated as the licenses previously given to them was in effect
withdrawn without judicial hearing. 2
The assailed ordinance 3 is worded as follows: "Section 1.— Title of Ordinance.— This Ordinance
shall be known and may be cited as the [Prohibition and Closure Ordinance] of Bocaue,
Bulacan. Section 2. — Definitions of Terms — (a) 'Night Club' shall include any place or
establishment selling to the public food or drinks where customers are allowed to dance. (b)
'Cabaret' or 'Dance Hall' shall include any place or establishment where dancing is permitted
to the public and where professional hostesses or hospitality girls and professional dancers are
employed. (c) 'Professional hostesses' or 'hospitality girls' shall include any woman employed
by any of the establishments herein defined to entertain guests and customers at their table
or to dance with them. (d) 'Professional dancer' shall include any woman who dances at any
of the establishments herein defined for a fee or remuneration paid directly or indirectly by the
operator or by the persons she dances with. (e) 'Operator' shall include the owner, manager,
administrator or any person who operates and is responsible for the operation of any night
club, cabaret or dance hall. Section 3. — Prohibition in the Issuance and Renewal of Licenses,
Permits. — Being the principal cause in the decadence of morality and because of their other
adverse effects on this community as explained above, no operator of night clubs, cabarets
or dance halls shall henceforth be issued permits/licenses to operate within the jurisdiction of
the municipality and no license/permit shall be issued to any professional hostess, hospitality
girls and professional dancer for employment in any of the aforementioned establishments.
The prohibition in the issuance of licenses/permits to said persons and operators of said
establishments shall include prohibition in the renewal thereof. Section 4.— Revocation of
Permits and Licenses.— The licenses and permits issued to operators of night clubs, cabarets
or dance halls which are now in operation including permits issued to professional hostesses,
hospitality girls and professional dancers are hereby revoked upon the expiration of the thirty-
day period given them as provided in Section 8 hereof and thenceforth, the operation of
these establishments within the jurisdiction of the municipality shall be illegal. Section 5.—
Penalty in case of violation. — Violation of any of the provisions of this Ordinance shall be
punishable by imprisonment not exceeding three (3) months or a fine not exceeding P200.00
or both at the discretion of the Court. If the offense is committed by a juridical entity, the
person charged with the management and/or operation thereof shall be liable for the penalty
provided herein. Section 6. — Separability Clause.— If, for any reason, any section or provision
of this Ordinance is held unconstitutional or invalid, no other section or provision hereof shall
be affected thereby. Section 7.— Repealing Clause.— All ordinance, resolutions, circulars,
memoranda or parts thereof that are inconsistent with the provisions of this Ordinance are
hereby repealed. Section 8.— Effectivity.— This Ordinance shall take effect immediately upon
its approval; provided, however, that operators of night clubs, cabarets and dance halls now
in operation including professional hostesses, hospitality girls and professional dancers are
given a period of thirty days from the approval hereof within which to wind up their businesses
and comply with the provisions of this Ordinance." 4
On November 5, 1975, two cases for prohibition with preliminary injunction were filed with the
Court of First Instance of Bulacan. 5 The grounds alleged follow:
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1. Ordinance No. 84 is null and void as a municipality has no authority to prohibit a lawful
business, occupation or calling.
2. Ordinance No. 84 is violative of the petitioners' right to due process and the equal protection
of the law, as the license previously given to petitioners was in effect withdrawn without judicial
hearing. 3. That under Presidential Decree No. 189, as amended, by Presidential Decree No.
259, the power to license and regulate tourist-oriented businesses including night clubs, has
been transferred to the Department of Tourism." 6 The cases were assigned to respondent
Judge, now Associate Justice Paras of the Intermediate Appellate Court, who issued a
restraining order on November 7, 1975. The answers were thereafter filed. It was therein
alleged: " 1. That the Municipal Council is authorized by law not only to regulate but to prohibit
the establishment, maintenance and operation of night clubs invoking Section 2243 of the
RAC, CA 601, Republic Acts Nos. 938, 978 and 1224. 2. The Ordinance No. 84 is not violative of
petitioners' right to due process and the equal protection of the law, since property rights are
subordinate to public interests. 3. That Presidential Decree No. 189, as amended, did not
deprive Municipal Councils of their jurisdiction to regulate or prohibit night clubs." 7 There was
the admission of the following facts as having been established: "l. That petitioners Vicente de
la Cruz, et al. in Civil Case No. 4755-M had been previously issued licenses by the Municipal
Mayor of Bocaue-petitioner Jose Torres III, since 1958; petitioner Vicente de la Cruz, since 1960;
petitioner Renato Alipio, since 1961 and petitioner Leoncio Corpuz, since 1972; 2. That
petitioners had invested large sums of money in their businesses; 3. That the night clubs are
well-lighted and have no partitions, the tables being near each other; 4. That the petitioners
owners/operators of these clubs do not allow the hospitality girls therein to engage in immoral
acts and to go out with customers; 5. That these hospitality girls are made to go through
periodic medical check-ups and not one of them is suffering from any venereal disease and
that those who fail to submit to a medical check-up or those who are found to be infected
with venereal disease are not allowed to work; 6. That the crime rate there is better than in
other parts of Bocaue or in other towns of Bulacan." 8 Then came on January 15, 1976 the
decision upholding the constitutionality and validity of Ordinance No. 84 and dismissing the
cases. Hence this petition for certiorari by way of appeal.
In an exhaustive as well as scholarly opinion, the lower court dismissed the petitions. Its
rationale is set forth in the opening paragraph thus: "Those who lust cannot last. This in essence
is why the Municipality of Bocaue, Province of Bulacan, stigmatized as it has been by
innuendos of sexual titillation and fearful of what the awesome future holds for it, had no
alternative except to order thru its legislative machinery, and even at the risk of partial
economic dislocation, the closure of its night clubs and/or cabarets. This in essence is also why
this Court, obedient to the mandates of good government, and cognizant of the categorical
imperatives of the current legal and social revolution, hereby [upholds] in the name of police
power the validity and constitutionality of Ordinance No. 84, Series of 1975, of the Municipal
Council of Bocaue, Bulacan. The restraining orders heretofore issued in these two cases are
therefore hereby rifted, effective the first day of February, 1976, the purpose of the grace
period being to enable the petitioners herein to apply to the proper appellate tribunals for
any contemplated redress."9 This Court is, however, unable to agree with such a conclusion
and for reasons herein set forth, holds that reliance on the police power is insufficient to justify
the enactment of the assailed ordinance. It must be declared null and void.
1. Police power is granted to municipal corporations in general terms as follows: "General

power of council to enact ordinances and make regulations. - The municipal council shall
enact such ordinances and make such regulations, not repugnant to law, as may be
necessary to carry into effect and discharge the powers and duties conferred upon it by law
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and such as shall seem necessary and proper to provide for the health and safety, promote
the prosperity, improve the morals, peace, good order, comfort, and convenience of the
municipality and the inhabitants thereof, and for the protection of property therein." 10 It is
practically a reproduction of the former Section 39 of Municipal Code.11 An ordinance
enacted by virtue thereof, according to Justice Moreland, speaking for the Court in the
leading case of United States v. Abendan 12 "is valid, unless it contravenes the fundamental
law of the Philippine Islands, or an Act of the Philippine Legislature, or unless it is against public
policy, or is unreasonable, oppressive, partial, discriminating, or in derogation of common right.
Where the power to legislate upon a given subject, and the mode of its exercise and the
details of such legislation are not prescribed, the ordinance passed pursuant thereto must be
a reasonable exercise of the power, or it will be pronounced invalid." 13 In another leading
case, United States v. Salaveria, 14 the ponente this time being Justice Malcolm, where the
present Administrative Code provision was applied, it was stated by this Court: "The general
welfare clause has two branches: One branch attaches itself to the main trunk of municipal
authority, and relates to such ordinances and regulations as may be necessary to carry into
effect and discharge the powers and duties conferred upon the municipal council by law.
With this class we are not here directly concerned. The second branch of the clause is much
more independent of the specific functions of the council which are enumerated by law. It
authorizes such ordinances as shall seem necessary and proper to provide for the health and
safety, promote the prosperity, improve the morals, peace, good order, comfort, and
convenience of the municipality and the inhabitants thereof, and for the protection of
property therein.' It is a general rule that ordinances passed by virtue of the implied power
found in the general welfare clause must be reasonable, consonant with the general
powersand purposes of the corporation, and not inconsistent with the laws or policy of the
State." 15 If night clubs were merely then regulated and not prohibited, certainly the assailed
ordinance would pass the test of validity. In the two leading cases above set forth, this Court
had stressed reasonableness, consonant with the general powers and purposes of municipal
corporations, as well as consistency with the laws or policy of the State. It cannot be said that
such a sweeping exercise of a lawmaking power by Bocaue could qualify under the term
reasonable. The objective of fostering public morals, a worthy and desirable end can be
attained by a measure that does not encompass too wide a field. Certainly the ordinance on
its face is characterized by overbreadth. The purpose sought to be achieved could have been
attained by reasonable restrictions rather than by an absolute prohibition. The admonition in
Salaveria should be heeded: "The Judiciary should not lightly set aside legislative action when
there is not a clear invasion of personal or property rights under the guise of police regulation."
16 It is clear that in the guise of a police regulation, there was in this instance a clear invasion
of personal or property rights, personal in the case of those individuals desirous of patronizing
those night clubs and property in terms of the investments made and salaries to be earned by
those therein employed.
2. The decision now under review refers to Republic Act No. 938 as amended. 17 It was
originally enacted on June 20, 1953. It is entitled: "AN ACT GRANTING MUNICIPAL OR CITY
BOARDS AND COUNCILS THE POWER TO REGULATE THE ESTABLISHMENT, MAINTENANCE AND
OPERATION OF CERTAIN PLACES OF AMUSEMENT WITHIN THEIR RESPECTIVE TERRITORIAL
JURISDICTIONS.' 18 Its first section insofar as pertinent reads: "The municipal or city board or
council of each chartered city shall have the power to regulate by ordinance the
establishment, maintenance and operation of night clubs, cabarets, dancing schools,
pavilions, cockpits, bars, saloons, bowling alleys, billiard pools, and other similar places of
amusement within its territorial jurisdiction: ... " 19 Then on May 21, 1954, the first section was
amended to include not merely "the power to regulate, but likewise "Prohibit ... " 20 The title,
however, remained the same. It is worded exactly as Republic Act No. 938. It is to be admitted
that as thus amended, if only the above portion of the Act were considered, a municipal
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council may go as far as to prohibit the operation of night clubs. If that were all, then the
appealed decision is not devoid of support in law. That is not all, however. The title was not in
any way altered. It was not changed one whit. The exact wording was followed. The power
granted remains that of regulation, not prohibition. There is thus support for the view advanced
by petitioners that to construe Republic Act No. 938 as allowing the prohibition of the
operation of night clubs would give rise to a constitutional question. The Constitution
mandates: "Every bill shall embrace only one subject which shall be expressed in the title
thereof. " 21 Since there is no dispute as the title limits the power to regulating, not prohibiting,
it would result in the statute being invalid if, as was done by the Municipality of Bocaue, the
operation of a night club was prohibited. There is a wide gap between the exercise of a
regulatory power "to provide for the health and safety, promote the prosperity, improve the
morals, 22 in the language of the Administrative Code, such competence extending to all "the
great public needs, 23 to quote from Holmes, and to interdict any calling, occupation, or
enterprise. In accordance with the well-settled principle of constitutional construction that
between two possible interpretations by one of which it will be free from constitutional infirmity
and by the other tainted by such grave defect, the former is to be preferred. A construction
that would save rather than one that would affix the seal of doom certainly commends itself.
We have done so before We do so again. 24
3. There is reinforcement to the conclusion reached by virtue of a specific provision of the

recently-enacted Local Government Code. 25 The general welfare clause, a reiteration of the
Administrative Code provision, is set forth in the first paragraph of Section 149 defining the
powers and duties of the sangguniang bayan. It read as follows: "(a) Enact such ordinances
and issue such regulations as may be necessary to carry out and discharge the responsibilities
conferred upon it by law, and such as shall be necessary and proper to provide for the health,
safety, comfort and convenience, maintain peace and order, improve public morals,
promote the prosperity and general welfare of the municipality and the inhabitants thereof,
and insure the protection of property therein; ..." 26 There are in addition provisions that may
have a bearing on the question now before this Court. Thus the sangguniang bayan shall "(rr)
Regulate cafes, restaurants, beer-houses, hotels, motels, inns, pension houses and lodging
houses, except travel agencies, tourist guides, tourist transports, hotels, resorts, de luxe
restaurants, and tourist inns of international standards which shall remain under the licensing
and regulatory power of the Ministry of Tourism which shall exercise such authority without
infringing on the taxing or regulatory powers of the municipality; (ss) Regulate public dancing
schools, public dance halls, and sauna baths or massage parlors; (tt) Regulate the
establishment and operation of billiard pools, theatrical performances, circuses and other
forms of entertainment; ..." 27 It is clear that municipal corporations cannot prohibit the
operation of night clubs. They may be regulated, but not prevented from carrying on their
business. It would be, therefore, an exercise in futility if the decision under review were
sustained. All that petitioners would have to do is to apply once more for licenses to operate
night clubs. A refusal to grant licenses, because no such businesses could legally open, would
be subject to judicial correction. That is to comply with the legislative will to allow the operation
and continued existence of night clubs subject to appropriate regulations. In the meanwhile,
to compel petitioners to close their establishments, the necessary result of an affirmance,
would amount to no more than a temporary termination of their business. During such time,
their employees would undergo a period of deprivation. Certainly, if such an undesirable
outcome can be avoided, it should be. The law should not be susceptible to the reproach
that it displays less than sympathetic concern for the plight of those who, under a mistaken
appreciation of a municipal power, were thus left without employment. Such a deplorable
consequence is to be avoided. If it were not thus, then the element of arbitrariness enters the
picture. That is to pay less, very much less, than full deference to the due process clause with
its mandate of fairness and reasonableness.
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4. The conclusion reached by this Court is not to be interpreted as a retreat from its resolute
stand sustaining police power legislation to promote public morals. The commitment to such
an Ideal forbids such a backward step. Legislation of that character is deserving of the fullest
sympathy from the judiciary. Accordingly, the judiciary has not been hesitant to lend the
weight of its support to measures that can be characterized as falling within that aspect of the
police power. Reference is made by respondents to Ermita-Malate Hotel and Motel Operators
Association, Inc. v. City Mayor of Manila. 28 There is a misapprehension as to what was
decided by this Court. That was a regulatory measure. Necessarily, there was no valid
objection on due process or equal protection grounds. It did not prohibit motels. It merely
regulated the mode in which it may conduct business in order precisely to put an end to
practices which could encourage vice and immorality. This is an entirely different case. What
was involved is a measure not embraced within the regulatory power but an exercise of an
assumed power to prohibit. Moreover, while it was pointed out in the aforesaid Ermita-Malate
Hotel and Motel Operators Association, Inc. decision that there must be a factual foundation
of invalidity, it was likewise made clear that there is no need to satisfy such a requirement if a
statute were void on its face. That it certainly is if the power to enact such ordinance is at the
most dubious and under the present Local Government Code non-existent.
WHEREFORE, the writ of certiorari is granted and the decision of the lower court dated January
15, 1976 reversed, set aside, and nullied. Ordinance No. 84, Series of 1975 of the Municipality
of Bocaue is declared void and unconstitutional. The temporary restraining order issued by this
Court is hereby made permanent. No costs.
Teehankee, Aquino, Concepcion Jr., Guerrero, Abad Santos, Plana, Escolin Relova and
Gutierrez, Jr., JJ., concur.
Makasiar, J, reserves his right to file a dissent.
De Castro, Melencio-Herrera and Vasquez, JJ., are on leave.
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General Welfare
20%, DISCOUNT FOR SENIOR CITIZENS AND PWDs
Carlos Superdrug v. Department of Social Welfare and Development G.R. No. 166494, 29
June 2007, 526 SCRA 130
This is a petition1 for Prohibition with Prayer for Preliminary Injunction assailing the
constitutionality of Section 4(a) of Republic Act (R.A.) No. 9257,2 otherwise known as the
"Expanded Senior Citizens Act of 2003."
Petitioners are domestic corporations and proprietors operating drugstores in the Philippines.
Public respondents, on the other hand, include the Department of Social Welfare and
Development (DSWD), the Department of Health (DOH), the Department of Finance (DOF),
the Department of Justice (DOJ), and the Department of Interior and Local Government
(DILG) which have been specifically tasked to monitor the drugstores’ compliance with the
law; promulgate the implementing rules and regulations for the effective implementation of
the law; and prosecute and revoke the licenses of erring drugstore establishments.
The antecedents are as follows:
On February 26, 2004, R.A. No. 9257, amending R.A. No. 7432,3 was signed into law by President
Gloria Macapagal-Arroyo and it became effective on March 21, 2004. Section 4(a) of the Act
states:
SEC. 4. Privileges for the Senior Citizens. – The senior citizens shall be entitled to the following:
(a) the grant of twenty percent (20%) discount from all establishments relative to the utilization
of services in hotels and similar lodging establishments, restaurants and recreation centers, and
purchase of medicines in all establishments for the exclusive use or enjoyment of senior citizens,
including funeral and burial services for the death of senior citizens;
...
The establishment may claim the discounts granted under (a), (f), (g) and (h) as tax deduction
based on the net cost of the goods sold or services rendered: Provided, That the cost of the
discount shall be allowed as deduction from gross income for the same taxable year that the
discount is granted. Provided, further, That the total amount of the claimed tax deduction net
of value added tax if applicable, shall be included in their gross sales receipts for tax purposes
and shall be subject to proper documentation and to the provisions of the National Internal
Revenue Code, as amended.4
On May 28, 2004, the DSWD approved and adopted the Implementing Rules and Regulations
of R.A. No. 9257, Rule VI, Article 8 of which states:
Article 8. Tax Deduction of Establishments. – The establishment may claim the discounts
granted under Rule V, Section 4 – Discounts for Establishments;5 Section 9, Medical and Dental
Services in Private Facilities[,]6 and Sections 107 and 118 – Air, Sea and Land Transportation as
tax deduction based on the net cost of the goods sold or services rendered. Provided, That
the cost of the discount shall be allowed as deduction from gross income for the same taxable
year that the discount is granted; Provided, further, That the total amount of the claimed tax
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deduction net of value added tax if applicable, shall be included in their gross sales receipts
for tax purposes and shall be subject to proper documentation and to the provisions of the
National Internal Revenue Code, as amended; Provided, finally, that the implementation of
the tax deduction shall be subject to the Revenue Regulations to be issued by the Bureau of
Internal Revenue (BIR) and approved by the Department of Finance (DOF).9
On July 10, 2004, in reference to the query of the Drug Stores Association of the Philippines
(DSAP) concerning the meaning of a tax deduction under the Expanded Senior Citizens Act,
the DOF, through Director IV Ma. Lourdes B. Recente, clarified as follows:
1) The difference between the Tax Credit (under the Old Senior Citizens Act) and Tax
Deduction (under the Expanded Senior Citizens Act).
1.1. The provision of Section 4 of R.A. No. 7432 (the old Senior Citizens Act) grants twenty
percent (20%) discount from all establishments relative to the utilization of transportation
services, hotels and similar lodging establishment, restaurants and recreation centers and
purchase of medicines anywhere in the country, the costs of which may be claimed by the
private establishments concerned as tax credit.
Effectively, a tax credit is a peso-for-peso deduction from a taxpayer’s tax liability due to the
government of the amount of discounts such establishment has granted to a senior citizen.
The establishment recovers the full amount of discount given to a senior citizen and hence,
the government shoulders 100% of the discounts granted.
It must be noted, however, that conceptually, a tax credit scheme under the Philippine tax
system, necessitates that prior payments of taxes have been made and the taxpayer is
attempting to recover this tax payment from his/her income tax due. The tax credit scheme
under R.A. No. 7432 is, therefore, inapplicable since no tax payments have previously
occurred.
1.2. The provision under R.A. No. 9257, on the other hand, provides that the establishment
concerned may claim the discounts under Section 4(a), (f), (g) and (h) as tax deduction from
gross income, based on the net cost of goods sold or services rendered.
Under this scheme, the establishment concerned is allowed to deduct from gross income, in
computing for its tax liability, the amount of discounts granted to senior citizens. Effectively, the
government loses in terms of foregone revenues an amount equivalent to the marginal tax
rate the said establishment is liable to pay the government. This will be an amount equivalent
to 32% of the twenty percent (20%) discounts so granted. The establishment shoulders the
remaining portion of the granted discounts.
It may be necessary to note that while the burden on [the] government is slightly diminished
in terms of its percentage share on the discounts granted to senior citizens, the number of
potential establishments that may claim tax deductions, have however, been broadened.
Aside from the establishments that may claim tax credits under the old law, more
establishments were added under the new law such as: establishments providing medical and
dental services, diagnostic and laboratory services, including professional fees of attending
doctors in all private hospitals and medical facilities, operators of domestic air and sea
transport services, public railways and skyways and bus transport services.
A simple illustration might help amplify the points discussed above, as follows:
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Tax Deduction Tax Credit
Gross Sales x x x x x x x x x x x x
Less : Cost of goods sold x x x x x x x x x x
Net Sales x x x x x x x x x x x x
Less: Operating Expenses:
Tax Deduction on Discounts x x x x --
Other deductions: x x x x x x x x
Net Taxable Income x x x x x x x x x x
Tax Due x x x x x x
Less: Tax Credit -- ______x x
Net Tax Due -- x x
As shown above, under a tax deduction scheme, the tax deduction on discounts was
subtracted from Net Sales together with other deductions which are considered as operating
expenses before the Tax Due was computed based on the Net Taxable Income. On the other
hand, under a tax credit scheme, the amount of discounts which is the tax credit item, was
deducted directly from the tax due amount.10
Meanwhile, on October 1, 2004, Administrative Order (A.O.) No. 171 or the Policies and
Guidelines to Implement the Relevant Provisions of Republic Act 9257, otherwise known as the
"Expanded Senior Citizens Act of 2003"11 was issued by the DOH, providing the grant of twenty
percent (20%) discount in the purchase of unbranded generic medicines from all
establishments dispensing medicines for the exclusive use of the senior citizens.
On November 12, 2004, the DOH issued Administrative Order No 17712 amending A.O. No.
171. Under A.O. No. 177, the twenty percent discount shall not be limited to the purchase of
unbranded generic medicines only, but shall extend to both prescription and non-prescription
medicines whether branded or generic. Thus, it stated that "[t]he grant of twenty percent
(20%) discount shall be provided in the purchase of medicines from all establishments
dispensing medicines for the exclusive use of the senior citizens."
Petitioners assail the constitutionality of Section 4(a) of the Expanded Senior Citizens Act based
on the following grounds:13
1) The law is confiscatory because it infringes Art. III, Sec. 9 of the Constitution which provides
that private property shall not be taken for public use without just compensation;
2) It violates the equal protection clause (Art. III, Sec. 1) enshrined in our Constitution which
states that "no person shall be deprived of life, liberty or property without due process of law,
nor shall any person be denied of the equal protection of the laws;" and
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3) The 20% discount on medicines violates the constitutional guarantee in Article XIII, Section
11 that makes "essential goods, health and other social services available to all people at
affordable cost."14
Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes
deprivation of private property. Compelling drugstore owners and establishments to grant the
discount will result in a loss of profit
and capital because 1) drugstores impose a mark-up of only 5% to 10% on branded medicines;
and 2) the law failed to provide a scheme whereby drugstores will be justly compensated for
the discount.
Examining petitioners’ arguments, it is apparent that what petitioners are ultimately

questioning is the validity of the tax deduction scheme as a reimbursement mechanism for the
twenty percent (20%) discount that they extend to senior citizens.
Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse
petitioners for the discount privilege accorded to senior citizens. This is because the discount
is treated as a deduction, a tax-deductible expense that is subtracted from the gross income
and results in a lower taxable income. Stated otherwise, it is an amount that is allowed by
law15 to reduce the income prior to the application of the tax rate to compute the amount
of tax which is due.16 Being a tax deduction, the discount does not reduce taxes owed on a
peso for peso basis but merely offers a fractional reduction in taxes owed.
Theoretically, the treatment of the discount as a deduction reduces the net income of the
private establishments concerned. The discounts given would have entered the coffers and
formed part of the gross sales of the private establishments, were it not for R.A. No. 9257.
The permanent reduction in their total revenues is a forced subsidy corresponding to the taking
of private property for public use or benefit.17 This constitutes compensable taking for which
petitioners would ordinarily become entitled to a just compensation.
Just compensation is defined as the full and fair equivalent of the property taken from its owner
by the expropriator. The measure is not the taker’s gain but the owner’s loss. The word just is
used to intensify the meaning of the word compensation, and to convey the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full and
ample.18
A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it
would not meet the definition of just compensation.19
Having said that, this raises the question of whether the State, in promoting the health and
welfare of a special group of citizens, can impose upon private establishments the burden of
partly subsidizing a government program.
The Court believes so.
The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens to
nation-building, and to grant benefits and privileges to them for their improvement and well-
being as the State considers them an integral part of our society.20
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The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself.
Thus, the Act provides:
SEC. 2. Republic Act No. 7432 is hereby amended to read as follows:
SECTION 1. Declaration of Policies and Objectives. – Pursuant to Article XV, Section 4 of the
Constitution, it is the duty of the family to take care of its elderly members while the State may
design programs of social security for them. In addition to this, Section 10 in the Declaration of
Principles and State Policies provides: "The State shall provide social justice in all phases of
national development." Further, Article XIII, Section 11, provides: "The State shall adopt an
integrated and comprehensive approach to health development which shall endeavor to
make essential goods, health and other social services available to all the people at
affordable cost. There shall be priority for the needs of the underprivileged sick, elderly,
disabled, women and children." Consonant with these constitutional principles the following
are the declared policies of this Act:
...
(f) To recognize the important role of the private sector in the improvement of the welfare of
senior citizens and to actively seek their partnership.21
To implement the above policy, the law grants a twenty percent discount to senior citizens for
medical and dental services, and diagnostic and laboratory fees; admission fees charged by
theaters, concert halls, circuses, carnivals, and other similar places of culture, leisure and
amusement; fares for domestic land, air and sea travel; utilization of services in hotels and
similar lodging establishments, restaurants and recreation centers; and purchases of
medicines for the exclusive use or enjoyment of senior citizens. As a form of reimbursement,
the law provides that business establishments extending the twenty percent discount to senior
citizens may claim the discount as a tax deduction.
The law is a legitimate exercise of police power which, similar to the power of eminent domain,
has general welfare for its object. Police power is not capable of an exact definition, but has
been purposely veiled in general terms to underscore its comprehensiveness to meet all
exigencies and provide enough room for an efficient and flexible response to conditions and
circumstances, thus assuring the greatest benefits. 22 Accordingly, it has been described as
"the most essential, insistent and the least limitable of powers, extending as it does to all the
great public needs."23 It is "[t]he power vested in the legislature by the constitution to make,
ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances,
either with penalties or without, not repugnant to the constitution, as they shall judge to be for
the good and welfare of the commonwealth, and of the subjects of the same."24
For this reason, when the conditions so demand as determined by the legislature, property
rights must bow to the primacy of police power because property rights, though sheltered by
due process, must yield to general welfare.25
Police power as an attribute to promote the common good would be diluted considerably if
on the mere plea of petitioners that they will suffer loss of earnings and capital, the questioned
provision is invalidated. Moreover, in the absence of evidence demonstrating the alleged
confiscatory effect of the provision in question, there is no basis for its nullification in view of the
presumption of validity which every law has in its favor.26
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Given these, it is incorrect for petitioners to insist that the grant of the senior citizen discount is
unduly oppressive to their business, because petitioners have not taken time to calculate
correctly and come up with a financial report, so that they have not been able to show
properly whether or not the tax deduction scheme really works greatly to their
disadvantage.27
In treating the discount as a tax deduction, petitioners insist that they will incur losses because,
referring to the DOF Opinion, for every ₱1.00 senior citizen discount that petitioners would give,
₱0.68 will be shouldered by them as only ₱0.32 will be refunded by the government by way of
a tax deduction.
To illustrate this point, petitioner Carlos Super Drug cited the anti-hypertensive maintenance
drug Norvasc as an example. According to the latter, it acquires Norvasc from the distributors
at ₱37.57 per tablet, and retails it at ₱39.60 (or at a margin of 5%). If it grants a 20% discount to
senior citizens or an amount equivalent to ₱7.92, then it would have to sell Norvasc at ₱31.68
which translates to a loss from capital of ₱5.89 per tablet. Even if the government will allow a
tax deduction, only ₱2.53 per tablet will be refunded and not the full amount of the discount
which is ₱7.92. In short, only 32% of the 20% discount will be reimbursed to the drugstores.28
Petitioners’ computation is flawed. For purposes of reimbursement, the law states that the cost
of the discount shall be deducted from gross income,29 the amount of income derived from
all sources before deducting allowable expenses, which will result in net income. Here,
petitioners tried to show a loss on a per transaction basis, which should not be the case. An
income statement, showing an accounting of petitioners’ sales, expenses, and net profit (or
loss) for a given period could have accurately reflected the effect of the discount on their
income. Absent any financial statement, petitioners cannot substantiate their claim that they
will be operating at a loss should they give the discount. In addition, the computation was
erroneously based on the assumption that their customers consisted wholly of senior citizens.
Lastly, the 32% tax rate is to be imposed on income, not on the amount of the discount.
Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices
of their medicines given the cutthroat nature of the players in the industry. It is a business
decision on the part of petitioners to peg the mark-up at 5%. Selling the medicines below
acquisition cost, as alleged by petitioners, is merely a result of this decision. Inasmuch as pricing
is a property right, petitioners cannot reproach the law for being oppressive, simply because
they cannot afford to raise their prices for fear of losing their customers to competition.
The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive
pricing component of the business. While the Constitution protects property rights, petitioners
must accept the realities of business and the State, in the exercise of police power, can
intervene in the operations of a business which may result in an impairment of property rights
in the process.
Moreover, the right to property has a social dimension. While Article XIII of the Constitution
provides the precept for the protection of property, various laws and jurisprudence,
particularly on agrarian reform and the regulation of contracts and public utilities, continuously
serve as a reminder that the right to property can be relinquished upon the command of the
State for the promotion of public good.30
Undeniably, the success of the senior citizens program rests largely on the support imparted
by petitioners and the other private establishments concerned. This being the case, the means
employed in invoking the active participation of the private sector, in order to achieve the
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purpose or objective of the law, is reasonably and directly related. Without sufficient proof
that Section 4(a) of R.A. No. 9257 is arbitrary, and that the continued implementation of the
same would be unconscionably detrimental to petitioners, the Court will refrain from quashing
a legislative act.31
WHEREFORE, the petition is DISMISSED for lack of merit.
No costs.
SO ORDERED.
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Manila Memorial Park, Inc., et al. Vs. Secretary of the Department of Social Welfare and
Development, et al. G.R. No. 175356. December 3, 2013
When a party challeges the constitutionality of a law, the burden of proof rests upon him.
Before us is a Petition for Prohibition2 under Rule 65 of the Rules of Court filed by petitioners
Manila Memorial Park, Inc. and La Funeraria Paz-Sucat, Inc., domestic corporations engaged
in the business of providing funeral and burial services, against public respondents Secretaries
of the Department of Social Welfare and Development (DSWD) and the Department of
Finance (DOF).
Petitioners assail the constitutionality of Section 4 of Republic Act (RA) No. 7432,3 as amended
by RA 9257,4 and the implementing rules and regulations issued by the DSWD and DOF insofar
as these allow business establishments to claim the 20% discount given to senior citizens as a
tax deduction.
Factual Antecedents
On April 23, 1992, RA 7432 was passed into law, granting senior citizens the following privileges:
SECTION 4. Privileges for the Senior Citizens. – The senior citizens shall be entitled to the
following:
a) the grant of twenty percent (20%) discount from all establishments relative to utilization of
transportation services, hotels and similar lodging establishment[s], restaurants and recreation
centers and purchase of medicine anywhere in the country: Provided, That private
establishments may claim the cost as tax credit;
b) a minimum of twenty percent (20%) discount on admission fees charged by theaters,

cinema houses and concert halls, circuses, carnivals and other similar places of culture, leisure,
and amusement;
c) exemption from the payment of individual income taxes: Provided, That their annual
taxable income does not exceed the property level as determined by the National Economic
and Development Authority (NEDA) for that year;
d) exemption from training fees for socioeconomic programs undertaken by the OSCA as part
of its work;
e) free medical and dental services in government establishment[s] anywhere in the country,
subject to guidelines to be issued by the Department of Health, the Government Service
Insurance System and the Social Security System;
f) to the extent practicable and feasible, the continuance of the same benefits and privileges
given by the Government Service Insurance System (GSIS), Social Security System (SSS) and
PAG-IBIG, as the case may be, as are enjoyed by those in actual service.
On August 23, 1993, Revenue Regulations (RR) No. 02-94 was issued to implement RA 7432.
Sections 2(i) and 4 of RR No. 02-94 provide:
Sec. 2. DEFINITIONS. – For purposes of these regulations: i. Tax Credit – refers to the amount
representing the 20% discount granted to a qualified senior citizen by all establishments
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relative to their utilization of transportation services, hotels and similar lodging establishments,
restaurants, drugstores, recreation centers, theaters, cinema houses, concert halls, circuses,
carnivals and other similar places of culture, leisure and amusement, which discount shall be
deducted by the said establishments from their gross income for income tax purposes and
from their gross sales for value-added tax or other percentage tax purposes. x x x x Sec. 4.
RECORDING/BOOKKEEPING REQUIREMENTS FOR PRIVATE ESTABLISHMENTS. – Private
establishments, i.e., transport services, hotels and similar lodging establishments, restaurants,
recreation centers, drugstores, theaters, cinema houses, concert halls, circuses, carnivals and
other similar places of culture[,] leisure and amusement, giving 20% discounts to qualified
senior citizens are required to keep separate and accurate record[s] of sales made to senior
citizens, which shall include the name, identification number, gross sales/receipts, discounts,
dates of transactions and invoice number for every transaction. The amount of 20% discount
shall be deducted from the gross income for income tax purposes and from gross sales of the
business enterprise concerned for purposes of the VAT and other percentage taxes.
In Commissioner of Internal Revenue v. Central Luzon Drug Corporation,5 the Court declared
Sections 2(i) and 4 of RR No. 02-94 as erroneous because these contravene RA 7432,6 thus:
RA 7432 specifically allows private establishments to claim as tax credit the amount of
discounts they grant. In turn, the Implementing Rules and Regulations, issued pursuant thereto,
provide the procedures for its availment. To deny such credit, despite the plain mandate of
the law and the regulations carrying out that mandate, is indefensible. First, the definition given
by petitioner is erroneous. It refers to tax credit as the amount representing the 20 percent
discount that "shall be deducted by the said establishments from their gross income for income
tax purposes and from their gross sales for value-added tax or other percentage tax purposes."
In ordinary business language, the tax credit represents the amount of such discount.
However, the manner by which the discount shall be credited against taxes has not been
clarified by the revenue regulations. By ordinary acceptation, a discount is an "abatement or
reduction made from the gross amount or value of anything." To be more precise, it is in
business parlance "a deduction or lowering of an amount of money;" or "a reduction from the
full amount or value of something, especially a price." In business there are many kinds of
discount, the most common of which is that affecting the income statement or financial report
upon which the income tax is based.
xxxx
Sections 2.i and 4 of Revenue Regulations No. (RR) 2-94 define tax credit as the 20 percent
discount deductible from gross income for income tax purposes, or from gross sales for VAT or
other percentage tax purposes. In effect, the tax credit benefit under RA 7432 is related to a
sales discount. This contrived definition is improper, considering that the latter has to be
deducted from gross sales in order to compute the gross income in the income statement and
cannot be deducted again, even for purposes of computing the income tax. When the law
says that the cost of the discount may be claimed as a tax credit, it means that the amount
— when claimed — shall be treated as a reduction from any tax liability, plain and simple. The
option to avail of the tax credit benefit depends upon the existence of a tax liability, but to
limit the benefit to a sales discount — which is not even identical to the discount privilege that
is granted by law — does not define it at all and serves no useful purpose. The definition must,
therefore, be stricken down.
Laws Not Amended by Regulations
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Second, the law cannot be amended by a mere regulation. In fact, a regulation that
"operates to create a rule out of harmony with the statute is a mere nullity;" it cannot prevail.
It is a cardinal rule that courts "will and should respect the contemporaneous construction
placed upon a statute by the executive officers whose duty it is to enforce it x x x." In the
scheme of judicial tax administration, the need for certainty and predictability in the
implementation of tax laws is crucial. Our tax authorities fill in the details that "Congress may
not have the opportunity or competence to provide." The regulations these authorities issue
are relied upon by taxpayers, who are certain that these will be followed by the courts. Courts,
however, will not uphold these authorities’ interpretations when clearly absurd, erroneous or
improper. In the present case, the tax authorities have given the term tax credit in Sections 2.i
and 4 of RR 2-94 a meaning utterly in contrast to what RA 7432 provides. Their interpretation
has muddled x x x the intent of Congress in granting a mere discount privilege, not a sales
discount. The administrative agency issuing these regulations may not enlarge, alter or restrict
the provisions of the law it administers; it cannot engraft additional requirements not
contemplated by the legislature.
In case of conflict, the law must prevail. A "regulation adopted pursuant to law is law."
Conversely, a regulation or any portion thereof not adopted pursuant to law is no law and has
neither the force nor the effect of law.7
On February 26, 2004, RA 92578 amended certain provisions of RA 7432, to wit:
following:
xxxx
of value added tax if applicable, shall be included in their gross sales receipts for tax purposes
Revenue Code, as amended.
To implement the tax provisions of RA 9257, the Secretary of Finance issued RR No. 4-2006, the
pertinent provision of which provides:
SEC. 8. AVAILMENT BY ESTABLISHMENTS OF SALES DISCOUNTS AS DEDUCTION FROM GROSS

INCOME. – Establishments enumerated in subparagraph (6) hereunder granting sales
discounts to senior citizens on the sale of goods and/or services specified thereunder are
entitled to deduct the said discount from gross income subject to the following conditions:
(1) Only that portion of the gross sales EXCLUSIVELY USED, CONSUMED OR ENJOYED BY THE
SENIOR CITIZEN shall be eligible for the deductible sales discount.
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(2) The gross selling price and the sales discount MUST BE SEPARATELY INDICATED IN THE
OFFICIAL RECEIPT OR SALES INVOICE issued by the establishment for the sale of goods or
services to the senior citizen.
(3) Only the actual amount of the discount granted or a sales discount not exceeding 20% of
the gross selling price can be deducted from the gross income, net of value added tax, if
applicable, for income tax purposes, and from gross sales or gross receipts of the business
enterprise concerned, for VAT or other percentage tax purposes.
(4) The discount can only be allowed as deduction from gross income for the same taxable
year that the discount is granted.
(5) The business establishment giving sales discounts to qualified senior citizens is required to
keep separate and accurate record[s] of sales, which shall include the name of the senior
citizen, TIN, OSCA ID, gross sales/receipts, sales discount granted, [date] of [transaction] and
invoice number for every sale transaction to senior citizen.
(6) Only the following business establishments which granted sales discount to senior citizens
on their sale of goods and/or services may claim the said discount granted as deduction from
gross income, namely:
xxxx
(i) Funeral parlors and similar establishments – The beneficiary or any person who shall shoulder
the funeral and burial expenses of the deceased senior citizen shall claim the discount, such
as casket, embalmment, cremation cost and other related services for the senior citizen upon
payment and presentation of [his] death certificate.
The DSWD likewise issued its own Rules and Regulations Implementing RA 9257, to wit:
RULE VI DISCOUNTS AS TAX DEDUCTION OF ESTABLISHMENTS
Article 8. Tax Deduction of Establishments. – The establishment may claim the discounts
granted under Rule V, Section 4 – Discounts for Establishments, Section 9, Medical and Dental
Services in Private Facilities and Sections 10 and 11 – Air, Sea and Land Transportation as tax
deduction based on the net cost of the goods sold or services rendered.
Provided, That the cost of the discount shall be allowed as deduction from gross income for
the same taxable year that the discount is granted; Provided, further, That the total amount
of the claimed tax deduction net of value added tax if applicable, shall be included in their
gross sales receipts for tax purposes and shall be subject to proper documentation and to the
provisions of the National Internal Revenue Code, as amended; Provided, finally, that the
implementation of the tax deduction shall be subject to the Revenue Regulations to be issued
by the Bureau of Internal Revenue (BIR) and approved by the Department of Finance (DOF).
Feeling aggrieved by the tax deduction scheme, petitioners filed the present recourse,
praying that Section 4 of RA 7432, as amended by RA 9257, and the implementing rules and
regulations issued by the DSWD and the DOF be declared unconstitutional insofar as these
allow business establishments to claim the 20% discount given to senior citizens as a tax
deduction; that the DSWD and the DOF be prohibited from enforcing the same; and that the
tax credit treatment of the 20% discount under the former Section 4 (a) of RA 7432 be
reinstated.
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Issues
Petitioners raise the following issues:
A.
WHETHER THE PETITION PRESENTS AN ACTUAL CASE OR CONTROVERSY.
B.
WHETHER SECTION 4 OF REPUBLIC ACT NO. 9257 AND X X X ITS IMPLEMENTING RULES AND
REGULATIONS, INSOFAR AS THEY PROVIDE THAT THE TWENTY PERCENT (20%) DISCOUNT TO
SENIOR CITIZENS MAY BE CLAIMED AS A TAX DEDUCTION BY THE PRIVATE ESTABLISHMENTS, ARE
INVALID AND UNCONSTITUTIONAL.9
Petitioners’ Arguments
Petitioners emphasize that they are not questioning the 20% discount granted to senior citizens
but are only assailing the constitutionality of the tax deduction scheme prescribed under RA
9257 and the implementing rules and regulations issued by the DSWD and the DOF.10
Petitioners posit that the tax deduction scheme contravenes Article III, Section 9 of the
Constitution, which provides that: "[p]rivate property shall not be taken for public use without
just compensation."11
In support of their position, petitioners cite Central Luzon Drug Corporation,12 where it was
ruled that the 20% discount privilege constitutes taking of private property for public use which
requires the payment of just compensation,13 and Carlos Superdrug Corporation v.
Department of Social Welfare and Development,14 where it was acknowledged that the tax
deduction scheme does not meet the definition of just compensation.15
Petitioners likewise seek a reversal of the ruling in Carlos Superdrug Corporation16 that the tax
deduction scheme adopted by the government is justified by police power.17
They assert that "[a]lthough both police power and the power of eminent domain have the
general welfare for their object, there are still traditional distinctions between the two"18 and
that "eminent domain cannot be made less supreme than police power."19
Petitioners further claim that the legislature, in amending RA 7432, relied on an erroneous
contemporaneous construction that prior payment of taxes is required for tax credit.20
Petitioners also contend that the tax deduction scheme violates Article XV, Section 421 and
Article XIII, Section 1122 of the Constitution because it shifts the State’s constitutional mandate
or duty of improving the welfare of the elderly to the private sector.23
Under the tax deduction scheme, the private sector shoulders 65% of the discount because
only 35%24 of it is actually returned by the government.25
Consequently, the implementation of the tax deduction scheme prescribed under Section 4
of RA 9257 affects the businesses of petitioners.26
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Thus, there exists an actual case or controversy of transcendental importance which deserves
judicious disposition on the merits by the highest court of the land.27
Respondents’ Arguments
Respondents, on the other hand, question the filing of the instant Petition directly with the
Supreme Court as this disregards the hierarchy of courts.28
They likewise assert that there is no justiciable controversy as petitioners failed to prove that
the tax deduction treatment is not a "fair and full equivalent of the loss sustained" by them.29
As to the constitutionality of RA 9257 and its implementing rules and regulations, respondents
contend that petitioners failed to overturn its presumption of constitutionality.30
More important, respondents maintain that the tax deduction scheme is a legitimate exercise
of the State’s police power.31
Our Ruling
The Petition lacks merit.
There exists an actual case or controversy.
We shall first resolve the procedural issue. When the constitutionality of a law is put in issue,
judicial review may be availed of only if the following requisites concur: "(1) the existence of
an actual and appropriate case; (2) the existence of personal and substantial interest on the
part of the party raising the [question of constitutionality]; (3) recourse to judicial review is
made at the earliest opportunity; and (4) the [question of constitutionality] is the lis mota of
the case."32
In this case, petitioners are challenging the constitutionality of the tax deduction scheme
provided in RA 9257 and the implementing rules and regulations issued by the DSWD and the
DOF. Respondents, however, oppose the Petition on the ground that there is no actual case
or controversy. We do not agree with respondents. An actual case or controversy exists when
there is "a conflict of legal rights" or "an assertion of opposite legal claims susceptible of judicial
resolution."33
The Petition must therefore show that "the governmental act being challenged has a direct
adverse effect on the individual challenging it."34
In this case, the tax deduction scheme challenged by petitioners has a direct adverse effect
on them. Thus, it cannot be denied that there exists an actual case or controversy.
The validity of the 20% senior citizen discount and tax deduction scheme under RA 9257, as an
exercise of police power of the State, has already been settled in Carlos Superdrug
Corporation.
Petitioners posit that the resolution of this case lies in the determination of whether the legally
mandated 20% senior citizen discount is an exercise of police power or eminent domain. If it is
police power, no just compensation is warranted. But if it is eminent domain, the tax deduction
scheme is unconstitutional because it is not a peso for peso reimbursement of the 20% discount
given to senior citizens. Thus, it constitutes taking of private property without payment of just
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compensation. At the outset, we note that this question has been settled in Carlos Superdrug
Corporation.35
In that case, we ruled:
discount will result in a loss of profit and capital because 1) drugstores impose a mark-up of
only 5% to 10% on branded medicines; and 2) the law failed to provide a scheme whereby
drugstores will be justly compensated for the discount. Examining petitioners’ arguments, it is
apparent that what petitioners are ultimately questioning is the validity of the tax deduction
scheme as a reimbursement mechanism for the twenty percent (20%) discount that they
extend to senior citizens. Based on the afore-stated DOF Opinion, the tax deduction scheme
does not fully reimburse petitioners for the discount privilege accorded to senior citizens. This is
because the discount is treated as a deduction, a tax-deductible expense that is subtracted
from the gross income and results in a lower taxable income. Stated otherwise, it is an amount
that is allowed by law to reduce the income prior to the application of the tax rate to compute
the amount of tax which is due. Being a tax deduction, the discount does not reduce taxes
owed on a peso for peso basis but merely offers a fractional reduction in taxes owed.
formed part of the gross sales of the private establishments, were it not for R.A. No. 9257. The
permanent reduction in their total revenues is a forced subsidy corresponding to the taking of
private property for public use or benefit. This constitutes compensable taking for which
petitioners would ordinarily become entitled to a just compensation. Just compensation is
defined as the full and fair equivalent of the property taken from its owner by the expropriator.
The measure is not the taker’s gain but the owner’s loss. The word just is used to intensify the
meaning of the word compensation, and to convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full and ample. A tax deduction
does not offer full reimbursement of the senior citizen discount. As such, it would not meet the
definition of just compensation. Having said that, this raises the question of whether the State,
in promoting the health and welfare of a special group of citizens, can impose upon private
establishments the burden of partly subsidizing a government program. The Court believes so.
being as the State considers them an integral part of our society. The priority given to senior
citizens finds its basis in the Constitution as set forth in the law itself.1âwphi1 Thus, the Act
provides: SEC. 2. Republic Act No. 7432 is hereby amended to read as follows:
SECTION 1. Declaration of Policies and Objectives. — Pursuant to Article XV, Section 4 of the
xxx xxx xxx
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senior citizens and to actively seek their partnership.
citizens may claim the discount as a tax deduction. The law is a legitimate exercise of police
power which, similar to the power of eminent domain, has general welfare for its object. Police
power is not capable of an exact definition, but has been purposely veiled in general terms
to underscore its comprehensiveness to meet all exigencies and provide enough room for an
efficient and flexible response to conditions and circumstances, thus assuring the greatest
benefits. Accordingly, it has been described as "the most essential, insistent and the least
limitable of powers, extending as it does to all the great public needs." It is "[t]he power vested
in the legislature by the constitution to make, ordain, and establish all manner of wholesome
and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant
to the constitution, as they shall judge to be for the good and welfare of the commonwealth,
and of the subjects of the same." 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.
presumption of validity which every law has in its favor. Given these, it is incorrect for petitioners
to insist that the grant of the senior citizen discount is unduly oppressive to their business,
because petitioners have not taken time to calculate correctly and come up with a financial
report, so that they have not been able to show properly whether or not the tax deduction
scheme really works greatly to their disadvantage. In treating the discount as a tax deduction,
petitioners insist that they will incur losses because, referring to the DOF Opinion, for every ₱1.00
senior citizen discount that petitioners would give, P0.68 will be shouldered by them as only
P0.32 will be refunded by the government by way of a tax deduction. To illustrate this point,
petitioner Carlos Super Drug cited the anti-hypertensive maintenance drug Norvasc as an
example. According to the latter, it acquires Norvasc from the distributors at ₱37.57 per tablet,
and retails it at ₱39.60 (or at a margin of 5%). If it grants a 20% discount to senior citizens or an
amount equivalent to ₱7.92, then it would have to sell Norvasc at ₱31.68 which translates to a
loss from capital of ₱5.89 per tablet. Even if the government will allow a tax deduction, only
₱2.53 per tablet will be refunded and not the full amount of the discount which is ₱7.92. In
short, only 32% of the 20% discount will be reimbursed to the drugstores. Petitioners’
computation is flawed. For purposes of reimbursement, the law states that the cost of the
discount shall be deducted from gross income, the amount of income derived from all sources
before deducting allowable expenses, which will result in net income. Here, petitioners tried
to show a loss on a per transaction basis, which should not be the case. An income statement,
showing an accounting of petitioners' sales, expenses, and net profit (or loss) for a given period
could have accurately reflected the effect of the discount on their income. Absent any
financial statement, petitioners cannot substantiate their claim that they will be operating at
a loss should they give the discount. In addition, the computation was erroneously based on
the assumption that their customers consisted wholly of senior citizens. Lastly, the 32% tax rate
is to be imposed on income, not on the amount of the discount.
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Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices
of their medicines given the cutthroat nature of the players in the industry. It is a business
decision on the part of petitioners to peg the mark-up at 5%. Selling the medicines below
acquisition cost, as alleged by petitioners, is merely a result of this decision. Inasmuch as pricing
is a property right, petitioners cannot reproach the law for being oppressive, simply because
they cannot afford to raise their prices for fear of losing their customers to competition. The
Court is not oblivious of the retail side of the pharmaceutical industry and the competitive
pricing component of the business. While the Constitution protects property rights, petitioners
must accept the realities of business and the State, in the exercise of police power, can
intervene in the operations of a business which may result in an impairment of property rights
in the process.
serve as x x x reminder[s] that the right to property can be relinquished upon the command of
the State for the promotion of public good. Undeniably, the success of the senior citizens
program rests largely on the support imparted by petitioners and the other private
establishments concerned. This being the case, the means employed in invoking the active
participation of the private sector, in order to achieve the purpose or objective of the law, is
reasonably and directly related. Without sufficient proof that Section 4 (a) of R.A. No. 9257 is
arbitrary, and that the continued implementation of the same would be unconscionably
detrimental to petitioners, the Court will refrain from quashing a legislative act.36 (Bold in the
original; underline supplied)
We, thus, found that the 20% discount as well as the tax deduction scheme is a valid exercise
of the police power of the State.
No compelling reason has been proffered to overturn, modify or abandon the ruling in Carlos
Superdrug Corporation.
Petitioners argue that we have previously ruled in Central Luzon Drug Corporation37 that the
20% discount is an exercise of the power of eminent domain, thus, requiring the payment of
just compensation. They urge us to re-examine our ruling in Carlos Superdrug Corporation38
which allegedly reversed the ruling in Central Luzon Drug Corporation.39
They also point out that Carlos Superdrug Corporation40 recognized that the tax deduction
scheme under the assailed law does not provide for sufficient just compensation. We agree
with petitioners’ observation that there are statements in Central Luzon Drug Corporation41
describing the 20% discount as an exercise of the power of eminent domain, viz.:
[T]he privilege enjoyed by senior citizens does not come directly from the State, but rather from
the private establishments concerned. Accordingly, the tax credit benefit granted to these
establishments can be deemed as their just compensation for private property taken by the
State for public use. The concept of public use is no longer confined to the traditional notion
of use by the public, but held synonymous with public interest, public benefit, public welfare,
and public convenience. The discount privilege to which our senior citizens are entitled is
actually a benefit enjoyed by the general public to which these citizens belong. The discounts
given would have entered the coffers and formed part of the gross sales of the private
establishments concerned, were it not for RA 7432. The permanent reduction in their total
revenues is a forced subsidy corresponding to the taking of private property for public use or
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benefit. As a result of the 20 percent discount imposed by RA 7432, respondent becomes

entitled to a just compensation. This term refers not only to the issuance of a tax credit
certificate indicating the correct amount of the discounts given, but also to the promptness in
its release. Equivalent to the payment of property taken by the State, such issuance — when
not done within a reasonable time from the grant of the discounts — cannot be considered
as just compensation. In effect, respondent is made to suffer the consequences of being
immediately deprived of its revenues while awaiting actual receipt, through the certificate, of
the equivalent amount it needs to cope with the reduction in its revenues. Besides, the taxation
power can also be used as an implement for the exercise of the power of eminent domain.
Tax measures are but "enforced contributions exacted on pain of penal sanctions" and "clearly
imposed for a public purpose." In recent years, the power to tax has indeed become a most
effective tool to realize social justice, public welfare, and the equitable distribution of wealth.
While it is a declared commitment under Section 1 of RA 7432, social justice "cannot be
invoked to trample on the rights of property owners who under our Constitution and laws are
also entitled to protection. The social justice consecrated in our [C]onstitution [is] not intended
to take away rights from a person and give them to another who is not entitled thereto." For
this reason, a just compensation for income that is taken away from respondent becomes
necessary. It is in the tax credit that our legislators find support to realize social justice, and no
administrative body can alter that fact. To put it differently, a private establishment that merely
breaks even — without the discounts yet — will surely start to incur losses because of such
discounts. The same effect is expected if its mark-up is less than 20 percent, and if all its sales
come from retail purchases by senior citizens. Aside from the observation we have already
raised earlier, it will also be grossly unfair to an establishment if the discounts will be treated
merely as deductions from either its gross income or its gross sales.1âwphi1 Operating at a loss
through no fault of its own, it will realize that the tax credit limitation under RR 2-94 is inutile, if
not improper. Worse, profit-generating businesses will be put in a better position if they avail
themselves of tax credits denied those that are losing, because no taxes are due from the
latter.42 (Italics in the original; emphasis supplied)
The above was partly incorporated in our ruling in Carlos Superdrug Corporation43 when we
stated preliminarily that—
discount will result in a loss of profit and capital because 1) drugstores impose a mark-up of
only 5% to 10% on branded medicines; and 2) the law failed to provide a scheme whereby
drugstores will be justly compensated for the discount. Examining petitioners’ arguments, it is
apparent that what petitioners are ultimately questioning is the validity of the tax deduction
scheme as a reimbursement mechanism for the twenty percent (20%) discount that they
extend to senior citizens. Based on the afore-stated DOF Opinion, the tax deduction scheme
does not fully reimburse petitioners for the discount privilege accorded to senior citizens. This is
because the discount is treated as a deduction, a tax-deductible expense that is subtracted
from the gross income and results in a lower taxable income. Stated otherwise, it is an amount
that is allowed by law to reduce the income prior to the application of the tax rate to compute
the amount of tax which is due. Being a tax deduction, the discount does not reduce taxes
owed on a peso for peso basis but merely offers a fractional reduction in taxes owed.
formed part of the gross sales of the private establishments, were it not for R.A. No. 9257. The
permanent reduction in their total revenues is a forced subsidy corresponding to the taking of
private property for public use or benefit. This constitutes compensable taking for which
petitioners would ordinarily become entitled to a just compensation. Just compensation is
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defined as the full and fair equivalent of the property taken from its owner by the expropriator.
The measure is not the taker’s gain but the owner’s loss. The word just is used to intensify the
meaning of the word compensation, and to convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full and ample. A tax deduction
does not offer full reimbursement of the senior citizen discount. As such, it would not meet the
definition of just compensation. Having said that, this raises the question of whether the State,
in promoting the health and welfare of a special group of citizens, can impose upon private
establishments the burden of partly subsidizing a government program. The Court believes
so.44
This, notwithstanding, we went on to rule in Carlos Superdrug Corporation45 that the 20%
discount and tax deduction scheme is a valid exercise of the police power of the State. The
present case, thus, affords an opportunity for us to clarify the above-quoted statements in
Central Luzon Drug Corporation46 and Carlos Superdrug Corporation.47
First, we note that the above-quoted disquisition on eminent domain in Central Luzon Drug
Corporation48 is obiter dicta and, thus, not binding precedent. As stated earlier, in Central
Luzon Drug Corporation,49 we ruled that the BIR acted ultra vires when it effectively treated
the 20% discount as a tax deduction, under Sections 2.i and 4 of RR No. 2-94, despite the clear
wording of the previous law that the same should be treated as a tax credit. We were,
therefore, not confronted in that case with the issue as to whether the 20% discount is an
exercise of police power or eminent domain. Second, although we adverted to Central Luzon
Drug Corporation50 in our ruling in Carlos Superdrug Corporation,51 this referred only to
preliminary matters. A fair reading of Carlos Superdrug Corporation52 would show that we
categorically ruled therein that the 20% discount is a valid exercise of police power. Thus, even
if the current law, through its tax deduction scheme (which abandoned the tax credit scheme
under the previous law), does not provide for a peso for peso reimbursement of the 20%
discount given by private establishments, no constitutional infirmity obtains because, being a
valid exercise of police power, payment of just compensation is not warranted. We have
carefully reviewed the basis of our ruling in Carlos Superdrug Corporation53 and we find no
cogent reason to overturn, modify or abandon it. We also note that petitioners’ arguments
are a mere reiteration of those raised and resolved in Carlos Superdrug Corporation.54 Thus,
we sustain Carlos Superdrug Corporation.55
Nonetheless, we deem it proper, in what follows, to amplify our explanation in Carlos

Superdrug Corporation56 as to why the 20% discount is a valid exercise of police power and
why it may not, under the specific circumstances of this case, be considered as an exercise
of the power of eminent domain contrary to the obiter in Central Luzon Drug Corporation.57
Police power versus eminent domain.
Police power is the inherent power of the State to regulate or to restrain the use of liberty and
property for public welfare.58
The only limitation is that the restriction imposed should be reasonable, not oppressive.59
In other words, to be a valid exercise of police power, it must have a lawful subject or objective
and a lawful method of accomplishing the goal.60
Under the police power of the State, "property rights of individuals may be subjected to
restraints and burdens in order to fulfill the objectives of the government."61
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The State "may interfere with personal liberty, property, lawful businesses and occupations to
promote the general welfare [as long as] the interference [is] reasonable and not arbitrary."62
Eminent domain, on the other hand, is the inherent power of the State to take or appropriate
private property for public use.63
The Constitution, however, requires that private property shall not be taken without due
process of law and the payment of just compensation.64
Traditional distinctions exist between police power and eminent domain. In the exercise of
police power, a property right is impaired by regulation,65 or the use of property is merely
prohibited, regulated or restricted66 to promote public welfare. In such cases, there is no
compensable taking, hence, payment of just compensation is not required. Examples of these
regulations are property condemned for being noxious or intended for noxious purposes (e.g.,
a building on the verge of collapse to be demolished for public safety, or obscene materials
to be destroyed in the interest of public morals)67 as well as zoning ordinances prohibiting the
use of property for purposes injurious to the health, morals or safety of the community (e.g.,
dividing a city’s territory into residential and industrial areas).68
It has, thus, been observed that, in the exercise of police power (as distinguished from eminent
domain), although the regulation affects the right of ownership, none of the bundle of rights
which constitute ownership is appropriated for use by or for the benefit of the public.69
On the other hand, in the exercise of the power of eminent domain, property interests are
appropriated and applied to some public purpose which necessitates the payment of just
compensation therefor. Normally, the title to and possession of the property are transferred to
the expropriating authority. Examples include the acquisition of lands for the construction of
public highways as well as agricultural lands acquired by the government under the agrarian
reform law for redistribution to qualified farmer beneficiaries. However, it is a settled rule that
the acquisition of title or total destruction of the property is not essential for "taking" under the
power of eminent domain to be present.70
Examples of these include establishment of easements such as where the land owner is
perpetually deprived of his proprietary rights because of the hazards posed by electric
transmission lines constructed above his property71 or the compelled interconnection of the
telephone system between the government and a private company.72
In these cases, although the private property owner is not divested of ownership or possession,
payment of just compensation is warranted because of the burden placed on the property
for the use or benefit of the public.
The 20% senior citizen discount is an exercise of police power.
It may not always be easy to determine whether a challenged governmental act is an

exercise of police power or eminent domain. The very nature of police power as elastic and
responsive to various social conditions73 as well as the evolving meaning and scope of public
use74 and just compensation75 in eminent domain evinces that these are not static concepts.
Because of the exigencies of rapidly changing times, Congress may be compelled to adopt
or experiment with different measures to promote the general welfare which may not fall
squarely within the traditionally recognized categories of police power and eminent domain.
The judicious approach, therefore, is to look at the nature and effects of the challenged
governmental act and decide, on the basis thereof, whether the act is the exercise of police
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power or eminent domain. Thus, we now look at the nature and effects of the 20% discount to
determine if it constitutes an exercise of police power or eminent domain. The 20% discount is
intended to improve the welfare of senior citizens who, at their age, are less likely to be
gainfully employed, more prone to illnesses and other disabilities, and, thus, in need of subsidy
in purchasing basic commodities. It may not be amiss to mention also that the discount serves
to honor senior citizens who presumably spent the productive years of their lives on
contributing to the development and progress of the nation. This distinct cultural Filipino
practice of honoring the elderly is an integral part of this law. As to its nature and effects, the
20% discount is a regulation affecting the ability of private establishments to price their
products and services relative to a special class of individuals, senior citizens, for which the
Constitution affords preferential concern.76
In turn, this affects the amount of profits or income/gross sales that a private establishment can
derive from senior citizens. In other words, the subject regulation affects the pricing, and,
hence, the profitability of a private establishment. However, it does not purport to appropriate
or burden specific properties, used in the operation or conduct of the business of private
establishments, for the use or benefit of the public, or senior citizens for that matter, but merely
regulates the pricing of goods and services relative to, and the amount of profits or
income/gross sales that such private establishments may derive from, senior citizens. The
subject regulation may be said to be similar to, but with substantial distinctions from, price
control or rate of return on investment control laws which are traditionally regarded as police
power measures.77
These laws generally regulate public utilities or industries/enterprises imbued with public
interest in order to protect consumers from exorbitant or unreasonable pricing as well as
temper corporate greed by controlling the rate of return on investment of these corporations
considering that they have a monopoly over the goods or services that they provide to the
general public. The subject regulation differs therefrom in that (1) the discount does not
prevent the establishments from adjusting the level of prices of their goods and services, and
(2) the discount does not apply to all customers of a given establishment but only to the class
of senior citizens. Nonetheless, to the degree material to the resolution of this case, the 20%
discount may be properly viewed as belonging to the category of price regulatory measures
which affect the profitability of establishments subjected thereto. On its face, therefore, the
subject regulation is a police power measure. The obiter in Central Luzon Drug Corporation,78
however, describes the 20% discount as an exercise of the power of eminent domain and the
tax credit, under the previous law, equivalent to the amount of discount given as the just
compensation therefor. The reason is that (1) the discount would have formed part of the gross
sales of the establishment were it not for the law prescribing the 20% discount, and (2) the
permanent reduction in total revenues is a forced subsidy corresponding to the taking of
private property for public use or benefit. The flaw in this reasoning is in its premise. It
presupposes that the subject regulation, which impacts the pricing and, hence, the
profitability of a private establishment, automatically amounts to a deprivation of property
without due process of law. If this were so, then all price and rate of return on investment
control laws would have to be invalidated because they impact, at some level, the regulated
establishment’s profits or income/gross sales, yet there is no provision for payment of just
compensation. It would also mean that overnment cannot set price or rate of return on
investment limits, which reduce the profits or income/gross sales of private establishments, if
no just compensation is paid even if the measure is not confiscatory. The obiter is, thus, at odds
with the settled octrine that the State can employ police power measures to regulate the
pricing of goods and services, and, hence, the profitability of business establishments in order
to pursue legitimate State objectives for the common good, provided that the regulation does
not go too far as to amount to "taking."79
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In City of Manila v. Laguio, Jr.,80 we recognized that— x x x a taking also could be found if
government regulation of the use of property went "too far." When regulation reaches a
certain magnitude, in most if not in all cases there must be an exercise of eminent domain
and compensation to support the act. While property may be regulated to a certain extent,
if regulation goes too far it will be recognized as a taking. No formula or rule can be devised
to answer the questions of what is too far and when regulation becomes a taking. In Mahon,
Justice Holmes recognized that it was "a question of degree and therefore cannot be disposed
of by general propositions." On many other occasions as well, the U.S. Supreme Court has said
that the issue of when regulation constitutes a taking is a matter of considering the facts in
each case. The Court asks whether justice and fairness require that the economic loss caused
by public action must be compensated by the government and thus borne by the public as
a whole, or whether the loss should remain concentrated on those few persons subject to the
public action.81
The impact or effect of a regulation, such as the one under consideration, must, thus, be
determined on a case-to-case basis. Whether that line between permissible regulation under
police power and "taking" under eminent domain has been crossed must, under the specific
circumstances of this case, be subject to proof and the one assailing the constitutionality of
the regulation carries the heavy burden of proving that the measure is unreasonable,
oppressive or confiscatory. The time-honored rule is that the burden of proving the
unconstitutionality of a law rests upon the one assailing it and "the burden becomes heavier
when police power is at issue."82
The 20% senior citizen discount has not been shown to be unreasonable, oppressive or
confiscatory.
In Alalayan v. National Power Corporation,83 petitioners, who were franchise holders of

electric plants, challenged the validity of a law limiting their allowable net profits to no more
than 12% per annum of their investments plus two-month operating expenses. In rejecting their
plea, we ruled that, in an earlier case, it was found that 12% is a reasonable rate of return and
that petitioners failed to prove that the aforesaid rate is confiscatory in view of the presumption
of constitutionality.84
We adopted a similar line of reasoning in Carlos Superdrug Corporation85 when we ruled that
petitioners therein failed to prove that the 20% discount is arbitrary, oppressive or confiscatory.
We noted that no evidence, such as a financial report, to establish the impact of the 20%
discount on the overall profitability of petitioners was presented in order to show that they
would be operating at a loss due to the subject regulation or that the continued
implementation of the law would be unconscionably detrimental to the business operations
of petitioners. In the case at bar, petitioners proceeded with a hypothetical computation of
the alleged loss that they will suffer similar to what the petitioners in Carlos Superdrug
Corporation86 did. Petitioners went directly to this Court without first establishing the factual
bases of their claims. Hence, the present recourse must, likewise, fail. Because all laws enjoy
the presumption of constitutionality, courts will uphold a law’s validity if any set of facts may
be conceived to sustain it.87
On its face, we find that there are at least two conceivable bases to sustain the subject
regulation’s validity absent clear and convincing proof that it is unreasonable, oppressive or
confiscatory. Congress may have legitimately concluded that business establishments have
the capacity to absorb a decrease in profits or income/gross sales due to the 20% discount
without substantially affecting the reasonable rate of return on their investments considering
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(1) not all customers of a business establishment are senior citizens and (2) the level of its profit
margins on goods and services offered to the general public. Concurrently, Congress may
have, likewise, legitimately concluded that the establishments, which will be required to
extend the 20% discount, have the capacity to revise their pricing strategy so that whatever
reduction in profits or income/gross sales that they may sustain because of sales to senior
citizens, can be recouped through higher mark-ups or from other products not subject of
discounts. As a result, the discounts resulting from sales to senior citizens will not be confiscatory
or unduly oppressive. In sum, we sustain our ruling in Carlos Superdrug Corporation88 that the
20% senior citizen discount and tax deduction scheme are valid exercises of police power of
the State absent a clear showing that it is arbitrary, oppressive or confiscatory.
Conclusion
In closing, we note that petitioners hypothesize, consistent with our previous ratiocinations, that
the discount will force establishments to raise their prices in order to compensate for its impact
on overall profits or income/gross sales. The general public, or those not belonging to the senior
citizen class, are, thus, made to effectively shoulder the subsidy for senior citizens. This, in
petitioners’ view, is unfair.
As already mentioned, Congress may be reasonably assumed to have foreseen this

eventuality. But, more importantly, this goes into the wisdom, efficacy and expediency of the
subject law which is not proper for judicial review. In a way, this law pursues its social equity
objective in a non-traditional manner unlike past and existing direct subsidy programs of the
government for the poor and marginalized sectors of our society. Verily, Congress must be
given sufficient leeway in formulating welfare legislations given the enormous challenges that
the government faces relative to, among others, resource adequacy and administrative
capability in implementing social reform measures which aim to protect and uphold the
interests of those most vulnerable in our society. In the process, the individual, who enjoys the
rights, benefits and privileges of living in a democratic polity, must bear his share in supporting
measures intended for the common good. This is only fair. In fine, without the requisite showing
of a clear and unequivocal breach of the Constitution, the validity of the assailed law must
be sustained.
Refutation of the Dissent
The main points of Justice Carpio’s Dissent may be summarized as follows: (1) the discussion
on eminent domain in Central Luzon Drug Corporation89 is not obiter dicta ; (2) allowable
taking, in police power, is limited to property that is destroyed or placed outside the
commerce of man for public welfare; (3) the amount of mandatory discount is private
property within the ambit of Article III, Section 990 of the Constitution; and (4) the permanent
reduction in a private establishment’s total revenue, arising from the mandatory discount, is a
taking of private property for public use or benefit, hence, an exercise of the power of eminent
domain requiring the payment of just compensation. I We maintain that the discussion on
eminent domain in Central Luzon Drug Corporation91 is obiter dicta. As previously discussed,
in Central Luzon Drug Corporation,92 the BIR, pursuant to Sections 2.i and 4 of RR No. 2-94,
treated the senior citizen discount in the previous law, RA 7432, as a tax deduction instead of
a tax credit despite the clear provision in that law which stated –
following:
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a) The grant of twenty percent (20%) discount from all establishments relative to utilization of
transportation services, hotels and similar lodging establishment, restaurants and recreation
centers and purchase of medicines anywhere in the country: Provided, That private
establishments may claim the cost as tax credit; (Emphasis supplied)
Thus, the Court ruled that the subject revenue regulation violated the law, viz:
The 20 percent discount required by the law to be given to senior citizens is a tax credit, not
merely a tax deduction from the gross income or gross sale of the establishment concerned.
A tax credit is used by a private establishment only after the tax has been computed; a tax
deduction, before the tax is computed. RA 7432 unconditionally grants a tax credit to all
covered entities. Thus, the provisions of the revenue regulation that withdraw or modify such
grant are void. Basic is the rule that administrative regulations cannot amend or revoke the
law.93
As can be readily seen, the discussion on eminent domain was not necessary in order to arrive
at this conclusion. All that was needed was to point out that the revenue regulation
contravened the law which it sought to implement. And, precisely, this was done in Central
Luzon Drug Corporation94 by comparing the wording of the previous law vis-à-vis the revenue
regulation; employing the rules of statutory construction; and applying the settled principle
that a regulation cannot amend the law it seeks to implement. A close reading of Central
Luzon Drug Corporation95 would show that the Court went on to state that the tax credit "can
be deemed" as just compensation only to explain why the previous law provides for a tax
credit instead of a tax deduction. The Court surmised that the tax credit was a form of just
compensation given to the establishments covered by the 20% discount. However, the reason
why the previous law provided for a tax credit and not a tax deduction was not necessary to
resolve the issue as to whether the revenue regulation contravenes the law. Hence, the
discussion on eminent domain is obiter dicta.
A court, in resolving cases before it, may look into the possible purposes or reasons that
impelled the enactment of a particular statute or legal provision. However, statements made
relative thereto are not always necessary in resolving the actual controversies presented
before it. This was the case in Central Luzon Drug Corporation96 resulting in that unfortunate
statement that the tax credit "can be deemed" as just compensation. This, in turn, led to the
erroneous conclusion, by deductive reasoning, that the 20% discount is an exercise of the
power of eminent domain. The Dissent essentially adopts this theory and reasoning which, as
will be shown below, is contrary to settled principles in police power and eminent domain
analysis. II The Dissent discusses at length the doctrine on "taking" in police power which occurs
when private property is destroyed or placed outside the commerce of man. Indeed, there is
a whole class of police power measures which justify the destruction of private property in
order to preserve public health, morals, safety or welfare. As earlier mentioned, these would
include a building on the verge of collapse or confiscated obscene materials as well as those
mentioned by the Dissent with regard to property used in violating a criminal statute or one
which constitutes a nuisance. In such cases, no compensation is required. However, it is equally
true that there is another class of police power measures which do not involve the destruction
of private property but merely regulate its use. The minimum wage law, zoning ordinances,
price control laws, laws regulating the operation of motels and hotels, laws limiting the working
hours to eight, and the like would fall under this category. The examples cited by the Dissent,
likewise, fall under this category: Article 157 of the Labor Code, Sections 19 and 18 of the Social
Security Law, and Section 7 of the Pag-IBIG Fund Law. These laws merely regulate or, to use
the term of the Dissent, burden the conduct of the affairs of business establishments. In such
cases, payment of just compensation is not required because they fall within the sphere of
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permissible police power measures. The senior citizen discount law falls under this latter
category. III The Dissent proceeds from the theory that the permanent reduction of profits or
income/gross sales, due to the 20% discount, is a "taking" of private property for public purpose
without payment of just compensation. At the outset, it must be emphasized that petitioners
never presented any evidence to establish that they were forced to suffer enormous losses or
operate at a loss due to the effects of the assailed law. They came directly to this Court and
provided a hypothetical computation of the loss they would allegedly suffer due to the
operation of the assailed law. The central premise of the Dissent’s argument that the 20%
discount results in a permanent reduction in profits or income/gross sales, or forces a business
establishment to operate at a loss is, thus, wholly unsupported by competent evidence. To be
sure, the Court can invalidate a law which, on its face, is arbitrary, oppressive or
confiscatory.97
But this is not the case here.
In the case at bar, evidence is indispensable before a determination of a constitutional

violation can be made because of the following reasons. First, the assailed law, by imposing
the senior citizen discount, does not take any of the properties used by a business
establishment like, say, the land on which a manufacturing plant is constructed or the
equipment being used to produce goods or services. Second, rather than taking specific
properties of a business establishment, the senior citizen discount law merely regulates the
prices of the goods or services being sold to senior citizens by mandating a 20% discount. Thus,
if a product is sold at ₱10.00 to the general public, then it shall be sold at ₱8.00 ( i.e., ₱10.00
less 20%) to senior citizens. Note that the law does not impose at what specific price the
product shall be sold, only that a 20% discount shall be given to senior citizens based on the
price set by the business establishment. A business establishment is, thus, free to adjust the
prices of the goods or services it provides to the general public. Accordingly, it can increase
the price of the above product to ₱20.00 but is required to sell it at ₱16.00 (i.e. , ₱20.00 less
20%) to senior citizens. Third, because the law impacts the prices of the goods or services of a
particular establishment relative to its sales to senior citizens, its profits or income/gross sales
are affected. The extent of the impact would, however, depend on the profit margin of the
business establishment on a particular good or service. If a product costs ₱5.00 to produce
and is sold at ₱10.00, then the profit98 is ₱5.0099 or a profit margin100 of 50%.101
Under the assailed law, the aforesaid product would have to be sold at ₱8.00 to senior citizens
yet the business would still earn ₱3.00102 or a 30%103 profit margin. On the other hand, if the
product costs ₱9.00 to produce and is required to be sold at ₱8.00 to senior citizens, then the
business would experience a loss of ₱1.00.104
But note that since not all customers of a business establishment are senior citizens, the business
establishment may continue to earn ₱1.00 from non-senior citizens which, in turn, can offset
any loss arising from sales to senior citizens.
Fourth, when the law imposes the 20% discount in favor of senior citizens, it does not prevent
the business establishment from revising its pricing strategy.
By revising its pricing strategy, a business establishment can recoup any reduction of profits or
income/gross sales which would otherwise arise from the giving of the 20% discount. To
illustrate, suppose A has two customers: X, a senior citizen, and Y, a non-senior citizen. Prior to
the law, A sells his products at ₱10.00 a piece to X and Y resulting in income/gross sales of
₱20.00 (₱10.00 + ₱10.00). With the passage of the law, A must now sell his product to X at ₱8.00
(i.e., ₱10.00 less 20%) so that his income/gross sales would be ₱18.00 (₱8.00 + ₱10.00) or lower
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by ₱2.00. To prevent this from happening, A decides to increase the price of his products to
₱11.11 per piece. Thus, he sells his product to X at ₱8.89 (i.e. , ₱11.11 less 20%) and to Y at
₱11.11. As a result, his income/gross sales would still be ₱20.00105 (₱8.89 + ₱11.11). The
capacity, then, of business establishments to revise their pricing strategy makes it possible for
them not to suffer any reduction in profits or income/gross sales, or, in the alternative, mitigate
the reduction of their profits or income/gross sales even after the passage of the law. In other
words, business establishments have the capacity to adjust their prices so that they may
remain profitable even under the operation of the assailed law.
The Dissent, however, states that – The explanation by the majority that private establishments
can always increase their prices to recover the mandatory discount will only encourage
private establishments to adjust their prices upwards to the prejudice of customers who do not
enjoy the 20% discount. It was likewise suggested that if a company increases its prices, despite
the application of the 20% discount, the establishment becomes more profitable than it was
before the implementation of R.A. 7432. Such an economic justification is self-defeating, for
more consumers will suffer from the price increase than will benefit from the 20% discount. Even
then, such ability to increase prices cannot legally validate a violation of the eminent domain
clause.106
But, if it is possible that the business establishment, by adjusting its prices, will suffer no reduction
in its profits or income/gross sales (or suffer some reduction but continue to operate profitably)
despite giving the discount, what would be the basis to strike down the law? If it is possible that
the business establishment, by adjusting its prices, will not be unduly burdened, how can there
be a finding that the assailed law is an unconstitutional exercise of police power or eminent
domain? That there may be a burden placed on business establishments or the consuming
public as a result of the operation of the assailed law is not, by itself, a ground to declare it
unconstitutional for this goes into the wisdom and expediency of the law.
The cost of most, if not all, regulatory measures of the government on business establishments
is ultimately passed on to the consumers but that, by itself, does not justify the wholesale
nullification of these measures. It is a basic postulate of our democratic system of government
that the Constitution is a social contract whereby the people have surrendered their sovereign
powers to the State for the common good.107
All persons may be burdened by regulatory measures intended for the common good or to
serve some important governmental interest, such as protecting or improving the welfare of a
special class of people for which the Constitution affords preferential concern. Indubitably,
the one assailing the law has the heavy burden of proving that the regulation is unreasonable,
oppressive or confiscatory, or has gone "too far" as to amount to a "taking." Yet, here, the
Dissent would have this Court nullify the law without any proof of such nature.
Further, this Court is not the proper forum to debate the economic theories or realities that
impelled Congress to shift from the tax credit to the tax deduction scheme. It is not within our
power or competence to judge which scheme is more or less burdensome to business
establishments or the consuming public and, thereafter, to choose which scheme the State
should use or pursue. The shift from the tax credit to tax deduction scheme is a policy
determination by Congress and the Court will respect it for as long as there is no showing, as
here, that the subject regulation has transgressed constitutional limitations. Unavoidably, the
lack of evidence constrains the Dissent to rely on speculative and hypothetical argumentation
when it states that the 20% discount is a significant amount and not a minimal loss (which
erroneously assumes that the discount automatically results in a loss when it is possible that the
profit margin is greater than 20% and/or the pricing strategy can be revised to prevent or
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mitigate any reduction in profits or income/gross sales as illustrated above),108 and not all
private establishments make a 20% profit margin (which conversely implies that there are those
who make more and, thus, would not be greatly affected by this regulation).109
In fine, because of the possible scenarios discussed above, we cannot assume that the 20%
discount results in a permanent reduction in profits or income/gross sales, much less that
business establishments are forced to operate at a loss under the assailed law. And, even if
we gratuitously assume that the 20% discount results in some degree of reduction in profits or
income/gross sales, we cannot assume that such reduction is arbitrary, oppressive or
confiscatory. To repeat, there is no actual proof to back up this claim, and it could be that the
loss suffered by a business establishment was occasioned through its fault or negligence in not
adapting to the effects of the assailed law. The law uniformly applies to all business
establishments covered thereunder. There is, therefore, no unjust discrimination as the
aforesaid business establishments are faced with the same constraints. The necessity of proof
is all the more pertinent in this case because, as similarly observed by Justice Velasco in his
Concurring Opinion, the law has been in operation for over nine years now. However, the grim
picture painted by petitioners on the unconscionable losses to be indiscriminately suffered by
business establishments, which should have led to the closure of numerous business
establishments, has not come to pass. Verily, we cannot invalidate the assailed law based on
assumptions and conjectures. Without adequate proof, the presumption of constitutionality
must prevail. IV At this juncture, we note that the Dissent modified its original arguments by
including a new paragraph, to wit:
Section 9, Article III of the 1987 Constitution speaks of private property without any distinction.
It does not state that there should be profit before the taking of property is subject to just
compensation. The private property referred to for purposes of taking could be inherited,
donated, purchased, mortgaged, or as in this case, part of the gross sales of private
establishments. They are all private property and any taking should be attended by
corresponding payment of just compensation. The 20% discount granted to senior citizens
belong to private establishments, whether these establishments make a profit or suffer a loss.
In fact, the 20% discount applies to non-profit establishments like country, social, or golf clubs
which are open to the public and not only for exclusive membership. The issue of profit or loss
to the establishments is immaterial.110
Two things may be said of this argument. First, it contradicts the rest of the arguments of the
Dissent. After it states that the issue of profit or loss is immaterial, the Dissent proceeds to argue
that the 20% discount is not a minimal loss111 and that the 20% discount forces business
establishments to operate at a loss.112
Even the obiter in Central Luzon Drug Corporation,113 which the Dissent essentially adopts and
relies on, is premised on the permanent reduction of total revenues and the loss that business
establishments will be forced to suffer in arguing that the 20% discount constitutes a "taking"
under the power of eminent domain. Thus, when the Dissent now argues that the issue of profit
or loss is immaterial, it contradicts itself because it later argues, in order to justify that there is a
"taking" under the power of eminent domain in this case, that the 20% discount forces business
establishments to suffer a significant loss or to operate at a loss. Second, this argument suffers
from the same flaw as the Dissent's original arguments. It is an erroneous characterization of
the 20% discount. According to the Dissent, the 20% discount is part of the gross sales and,
hence, private property belonging to business establishments. However, as previously
discussed, the 20% discount is not private property actually owned and/or used by the business
establishment. It should be distinguished from properties like lands or buildings actually used in
the operation of a business establishment which, if appropriated for public use, would amount
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to a "taking" under the power of eminent domain. Instead, the 20% discount is a regulatory
measure which impacts the pricing and, hence, the profitability of business establishments. At
the time the discount is imposed, no particular property of the business establishment can be
said to be "taken." That is, the State does not acquire or take anything from the business
establishment in the way that it takes a piece of private land to build a public road. While the
20% discount may form part of the potential profits or income/gross sales114 of the business
establishment, as similarly characterized by Justice Bersamin in his Concurring Opinion,
potential profits or income/gross sales are not private property, specifically cash or money,
already belonging to the business establishment. They are a mere expectancy because they
are potential fruits of the successful conduct of the business. Prior to the sale of goods or
services, a business establishment may be subject to State regulations, such as the 20% senior
citizen discount, which may impact the level or amount of profits or income/gross sales that
can be generated by such establishment. For this reason, the validity of the discount is to be
determined based on its overall effects on the operations of the business establishment.
Again, as previously discussed, the 20% discount does not automatically result in a 20%
reduction in profits, or, to align it with the term used by the Dissent, the 20% discount does not
mean that a 20% reduction in gross sales necessarily results. Because (1) the profit margin of a
product is not necessarily less than 20%, (2) not all customers of a business establishment are
senior citizens, and (3) the establishment may revise its pricing strategy, such reduction in profits
or income/gross sales may be prevented or, in the alternative, mitigated so that the business
establishment continues to operate profitably. Thus, even if we gratuitously assume that some
degree of reduction in profits or income/gross sales occurs because of the 20% discount, it
does not follow that the regulation is unreasonable, oppressive or confiscatory because the
business establishment may make the necessary adjustments to continue to operate
profitably. No evidence was presented by petitioners to show otherwise. In fact, no evidence
was presented by petitioners at all. Justice Leonen, in his Concurring and Dissenting Opinion,
characterizes "profits" (or income/gross sales) as an inchoate right. Another way to view it, as
stated by Justice Velasco in his Concurring Opinion, is that the business establishment merely
has a right to profits. The Constitution adverts to it as the right of an enterprise to a reasonable
return on investment.115
Undeniably, this right, like any other right, may be regulated under the police power of the
State to achieve important governmental objectives like protecting the interests and
improving the welfare of senior citizens. It should be noted though that potential profits or
income/gross sales are relevant in police power and eminent domain analyses because they
may, in appropriate cases, serve as an indicia when a regulation has gone "too far" as to
amount to a "taking" under the power of eminent domain. When the deprivation or reduction
of profits or income/gross sales is shown to be unreasonable, oppressive or confiscatory, then
the challenged governmental regulation may be nullified for being a "taking" under the power
of eminent domain. In such a case, it is not profits or income/gross sales which are actually
taken and appropriated for public use. Rather, when the regulation causes an establishment
to incur losses in an unreasonable, oppressive or confiscatory manner, what is actually taken
is capital and the right of the business establishment to a reasonable return on investment. If
the business losses are not halted because of the continued operation of the regulation, this
eventually leads to the destruction of the business and the total loss of the capital invested
therein. But, again, petitioners in this case failed to prove that the subject regulation is
unreasonable, oppressive or confiscatory.
V.
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The Dissent further argues that we erroneously used price and rate of return on investment
control laws to justify the senior citizen discount law. According to the Dissent, only profits from
industries imbued with public interest may be regulated because this is a condition of their
franchises. Profits of establishments without franchises cannot be regulated permanently
because there is no law regulating their profits. The Dissent concludes that the permanent
reduction of total revenues or gross sales of business establishments without franchises is a
taking of private property under the power of eminent domain. In making this argument, it is
unfortunate that the Dissent quotes only a portion of the ponencia – The subject regulation
may be said to be similar to, but with substantial distinctions from, price control or rate of return
on investment control laws which are traditionally regarded as police power measures. These
laws generally regulate public utilities or industries/enterprises imbued with public interest in
order to protect consumers from exorbitant or unreasonable pricing as well as temper
corporate greed by controlling the rate of return on investment of these corporations
considering that they have a monopoly over the goods or services that they provide to the
general public. The subject regulation differs therefrom in that (1) the discount does not
prevent the establishments from adjusting the level of prices of their goods and services, and
(2) the discount does not apply to all customers of a given establishment but only to the class
of senior citizens. x x x116
The above paragraph, in full, states –
The subject regulation may be said to be similar to, but with substantial distinctions from, price
control or rate of return on investment control laws which are traditionally regarded as police
power measures. These laws generally regulate public utilities or industries/enterprises imbued
with public interest in order to protect consumers from exorbitant or unreasonable pricing as
well as temper corporate greed by controlling the rate of return on investment of these
corporations considering that they have a monopoly over the goods or services that they
provide to the general public. The subject regulation differs therefrom in that (1) the discount
does not prevent the establishments from adjusting the level of prices of their goods and
services, and (2) the discount does not apply to all customers of a given establishment but
only to the class of senior citizens.
Nonetheless, to the degree material to the resolution of this case, the 20% discount may be
properly viewed as belonging to the category of price regulatory measures which affects the
profitability of establishments subjected thereto. (Emphasis supplied)
The point of this paragraph is to simply show that the State has, in the past, regulated prices
and profits of business establishments. In other words, this type of regulatory measures is
traditionally recognized as police power measures so that the senior citizen discount may be
considered as a police power measure as well. What is more, the substantial distinctions
between price and rate of return on investment control laws vis-à-vis the senior citizen discount
law provide greater reason to uphold the validity of the senior citizen discount law. As
previously discussed, the ability to adjust prices allows the establishment subject to the senior
citizen discount to prevent or mitigate any reduction of profits or income/gross sales arising
from the giving of the discount. In contrast, establishments subject to price and rate of return
on investment control laws cannot adjust prices accordingly. Certainly, there is no intention to
say that price and rate of return on investment control laws are the justification for the senior
citizen discount law. Not at all. The justification for the senior citizen discount law is the plenary
powers of Congress. The legislative power to regulate business establishments is broad and
covers a wide array of areas and subjects. It is well within Congress’ legislative powers to
regulate the profits or income/gross sales of industries and enterprises, even those without
franchises. For what are franchises but mere legislative enactments? There is nothing in the
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Constitution that prohibits Congress from regulating the profits or income/gross sales of
industries and enterprises without franchises. On the contrary, the social justice provisions of
the Constitution enjoin the State to regulate the "acquisition, ownership, use, and disposition"
of property and its increments.117
This may cover the regulation of profits or income/gross sales of all businesses, without
qualification, to attain the objective of diffusing wealth in order to protect and enhance the
right of all the people to human dignity.118
Thus, under the social justice policy of the Constitution, business establishments may be
compelled to contribute to uplifting the plight of vulnerable or marginalized groups in our
society provided that the regulation is not arbitrary, oppressive or confiscatory, or is not in
breach of some specific constitutional limitation. When the Dissent, therefore, states that the
"profits of private establishments which are non-franchisees cannot be regulated
permanently, and there is no such law regulating their profits permanently,"119 it is assuming
what it ought to prove. First, there are laws which, in effect, permanently regulate profits or
income/gross sales of establishments without franchises, and RA 9257 is one such law. And,
second, Congress can regulate such profits or income/gross sales because, as previously
noted, there is nothing in the Constitution to prevent it from doing so. Here, again, it must be
emphasized that petitioners failed to present any proof to show that the effects of the assailed
law on their operations has been unreasonable, oppressive or confiscatory. The permanent
regulation of profits or income/gross sales of business establishments, even those without
franchises, is not as uncommon as the Dissent depicts it to be. For instance, the minimum wage
law allows the State to set the minimum wage of employees in a given region or geographical
area. Because of the added labor costs arising from the minimum wage, a permanent
reduction of profits or income/gross sales would result, assuming that the employer does not
increase the prices of his goods or services. To illustrate, suppose it costs a company ₱5.00 to
produce a product and it sells the same at ₱10.00 with a 50% profit margin. Later, the State
increases the minimum wage. As a result, the company incurs greater labor costs so that it
now costs ₱7.00 to produce the same product. The profit per product of the company would
be reduced to ₱3.00 with a profit margin of 30%. The net effect would be the same as in the
earlier example of granting a 20% senior citizen discount. As can be seen, the minimum wage
law could, likewise, lead to a permanent reduction of profits. Does this mean that the minimum
wage law should, likewise, be declared unconstitutional on the mere plea that it results in a
permanent reduction of profits? Taking it a step further, suppose the company decides to
increase the price of its product in order to offset the effects of the increase in labor cost; does
this mean that the minimum wage law, following the reasoning of the Dissent, is
unconstitutional because the consuming public is effectively made to subsidize the wage of
a group of laborers, i.e., minimum wage earners? The same reasoning can be adopted
relative to the examples cited by the Dissent which, according to it, are valid police power
regulations. Article 157 of the Labor Code, Sections 19 and 18 of the Social Security Law, and
Section 7 of the Pag-IBIG Fund Law would effectively increase the labor cost of a business
establishment.1âwphi1 This would, in turn, be integrated as part of the cost of its goods or
services. Again, if the establishment does not increase its prices, the net effect would be a
permanent reduction in its profits or income/gross sales. Following the reasoning of the Dissent
that "any form of permanent taking of private property (including profits or income/gross
sales)120 is an exercise of eminent domain that requires the State to pay just
compensation,"121 then these statutory provisions would, likewise, have to be declared
unconstitutional. It does not matter that these benefits are deemed part of the employees’
legislated wages because the net effect is the same, that is, it leads to higher labor costs and
a permanent reduction in the profits or income/gross sales of the business establishments.122
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The point then is this – most, if not all, regulatory measures imposed by the State on business
establishments impact, at some level, the latter’s prices and/or profits or income/gross
sales.123
If the Court were to sustain the Dissent’s theory, then a wholesale nullification of such measures
would inevitably result. The police power of the State and the social justice provisions of the
Constitution would, thus, be rendered nugatory. There is nothing sacrosanct about profits or
income/gross sales. This, we made clear in Carlos Superdrug Corporation:124
presumption of validity which every law has in its favor.
xxxx
The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive
pricing component of the business. While the Constitution protects property rights petitioners
must the realities of business and the State, in the exercise of police power, can intervene in
the operations of a business which may result in an impairment of property rights in the process.
provides the percept for the protection of property, various laws and jurisprudence,
particularly on agrarian reform and the regulation of contracts and public utilities, continously
serve as a reminder for the promotion of public good.
Undeniably, the success of the senior citizens program rests largely on the support imparted
by petitioners and the other private establishments concerned. This being the case, the means
employed in invoking the active participation of the private sector, in order to achieve the
purpose or objective of the law, is reasonably and directly related. Without sufficient proof
that Section 4(a) of R.A. No. 9257 is arbitrary, and that the continued implementation of the
same would be unconscionably detrimental to petitioners, the Court will refrain form quashing
a legislative act.125
In conclusion, we maintain that the correct rule in determining whether the subject regulatory
measure has amounted to a "taking" under the power of eminent domain is the one laid down
in Alalayan v. National Power Corporation126 and followed in Carlos Superdurg
Corporation127 consistent with long standing principles in police power and eminent domain
analysis. Thus, the deprivation or reduction of profits or income. Gross sales must be clearly
shown to be unreasonable, oppressive or confiscatory. Under the specific circumstances of
this case, such determination can only be made upon the presentation of competent proof
which petitioners failed to do. A law, which has been in operation for many years and
promotes the welfare of a group accorded special concern by the Constitution, cannot and
should not be summarily invalidated on a mere allegation that it reduces the profits or
income/gross sales of business establishments.
WHEREFORE, the Petition is hereby DISMISSED for lack of merit.
SO ORDERED.
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Southern Luzon Drug Corporation Vs. The Department of Social Welfare and Development
G.R. No. 199669. April 25, 2017
Before the Court is a Petition for Review on Certiorari1under Rule 45 of the Rules of Court,
assailing the Decision2 dated June 17, 2011, and Resolution3 dated November 25, 2011 of the
Court of Appeals (CA) in CA-G.R. SP No. 102486, which dismissed the petition for prohibition
filed by Southern Luzon Drug Corporation (petitioner) against the Department of1 Social
Welfare and Development (DSWD), the National Council for the Welfare of Disabled Persons
(NCWDP) (now National Council on Disability Affairs or NCDA), the Department of Finance
(DOF) and the Bureau of: Internal Revenue (collectively, the respondents), which sought to
prohibit the implementation of Section 4(a) of Republic Act (R.A.) No. 9257, otherwise known
as the "Expanded Senior Citizens Act of 2003" and Section 32 of R.A. No. 9442, which amends
the "Magna Carta for Disabled Persons," particularly the granting of 20% discount on the
purchase of medicines by senior citizens and persons with disability (PWD),: respectively, and
treating them as tax deduction.
The petitioner is a domestic corporation engaged in the business of: drugstore operation in
the Philippines while the respondents are government' agencies, office and bureau tasked to
monitor compliance with R.A. Nos. 9257 and 9442, promulgate implementing rules and
regulations for their effective implementation, as well as prosecute and revoke licenses of
erring1 establishments.
Factual Antecedents
On April 23, 1992, R.A. No. 7432, entitled "An Act to Maximize the Contribution of Senior Citizens
to Nation-Building, Grant Benefits and Special Privileges and For Other Purposes," was
enacted. Under the said law, a senior citizen, who must be at least 60 years old and has an
annual income of not more than P60,000.00,4 may avail of the privileges provided in Section
4 thereof, one of which is 20% discount on the purchase of medicines. The said provision states:
Sec. 4. Privileges for the Senior Citizen. - x x x:
establishments may claim the cost as tax credit[.]
x x x x (Emphasis ours)
To recoup the amount given as discount to qualified senior citizens, covered establishments
can claim an equal amount as tax credit which can be applied against the income tax due
from them.
On February 26, 2004, then President Gloria Macapagal-Arroyo signed R.A. No. 9257,
amending some provisions of R.A. No. 7432. The new law retained the 20% discount on the
purchase of medicines but removed the annual income ceiling thereby qualifying all senior
citizens to the privileges under the law. Further, R.A. No. 9257 modified the tax treatment of the
discount granted to senior citizens, from tax credit to tax deduction from gross income,
computed based on the net cost of goods sold or services rendered. The pertinent provision,
as amended by R.A. No. 9257, reads as follows:
SEC. 4. Privileges for the Senior Citizens. - The senior citizens shall be entitled to the following:
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xxxx
of value-added tax if applicable, shall be included in their gross sales receipts for tax purposes
Revenue Code, as amended. (Emphasis ours)
On May 28, 2004, the DSWD issued the Implementing Rules and Regulations (IRR) of R.A. No.
9257. Article 8 of Rule VI of the said IRR provides:
Article 8. Tax Deduction of Establishments. - The establishment may claim the discounts
granted under Rule V, Section 4 - Discounts for Establishments; Section 9, Medical and Dental
Services in Private Facilities and Sections 10 and 11 -Air, Sea and Land Transportation as tax
deduction based on the net cost of the goods sold or services rendered. Provided, That the
cost of the discount shall be allowed as deduction from gross income for the same taxable
year that the discount is granted; Provided, further, That the total amount of the claimed tax
deduction net of value-added tax if applicable, shall be included in their gross sales receipts
National Internal Revenue Code, as amended; Provided, finally, that the implementation of
the tax deduction shall be subject to the Revenue Regulations to be issued by the Bureau of
Internal Revenue (BIR) and approved by the Department of Finance (DOF). (Emphasis ours)
The change in the tax treatment of the discount given to senior citizens did not sit well with
some drug store owners and corporations, claiming it affected the profitability of their business.
Thus, on January 13, 2005, I Carlos Superdrug Corporation (Carlos Superdrug), together with
other. corporation and proprietors operating drugstores in the Philippines, filed a Petition for
Prohibition with Prayer for Temporary Restraining Order (TRO) I and/or Preliminary Injunction
before this Court, entitled Carlos Superdrug I Corporation v. DSWD,5docketed as G.R. No.
166494, assailing the constitutionality of Section 4(a) of R.A. No. 9257 primarily on the ground
that it amounts to taking of private property without payment of just compensation. In a
Decision dated June 29, 2007, the Court upheld the constitutionality of the assailed provision,
holding that the same is a legitimate exercise of police power. The relevant portions of the
decision read, thus:
circumstances, thus assuring the greatest benefits. Accordingly, it has been described as "the
most essential, insistent and the least limitable of powers, extending as it does to all the great
public needs." It is "[t]he power vested in the legislature by the constitution to make, ordain,
and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either
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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."
rights must bow to the primacy of police power because property rights, though sheltered by
due process, must yield to general welfare.
xxxx
serve as a reminder that the right to property can be relinquished upon the command of the
State for the promotion of public good. Undeniably, the success of the senior citizens program
rests largely on the support imparted by petitioners and the other private establishments
concerned. This being the case, the means employed in invoking the active participation of
the private sector, in order to achieve the purpose or objective of the law, is reasonably and
directly related. Without sufficient proof that Section 4(a) of RA. No. 9257 is arbitrary, and that
the continued implementation of the same would be unconscionably detrimental to
petitioners, the Court will refrain from quashing a legislative act.
WHEREFORE, the petition is DISMISSED for lack of merit.6 (Citations omitted)
On August 1, 2007, Carlos Superdrug filed a motion for reconsideration of the foregoing
decision. Subsequently, the Court issued Resolution dated August 21, 2007, denying the said
motion with finality. 7
Meanwhile, on March 24, 1992, R.A. No. 7277 pertaining to the "Magna Carta for Disabled
Persons" was enacted, codifying the rights and privileges of PWDs. Thereafter, on April 30, 2007,
R.A. No. 9442 was enacted, amending R.A. No. 7277. One of the salient amendments in the
law is the insertion of Chapter 8 in Title 2 thereof, which enumerates the other privileges and
incentives of PWDs, including the grant of 20% discount on the purchase of medicines. Similar
to R.A. No. 9257, covered establishments shall claim the discounts given to PWDs as tax
deductions from the gross income, based on the net cost of goods sold or services rendered.
Section 32 ofR.A. No. 9442 reads:
CHAPTER 8. Other Privileges and Incentives
SEC. 32. Persons with disability shall be entitled to the following:
xxxx
(c) At least twenty percent (20%) discount for the purchase of medicines in all drugstores for
the exclusive use or enjoyment of persons with disability;
xxxx
The establishments may claim the discounts granted in subsections (a), (b), (c), (e), (t) and (g)
as taxdeductions based on the net cost of the goods sold or services rendered: Provided,
however, That the cost of the discount shall be allowed as deduction from gross income for
the same taxable year that the discount is granted: Provided, further, That the total amount
of the claimed tax deduction net of value-added tax if applicable, shall be included in their
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gross sales receipts for tax purposes and shall be subject to proper documentation and to the
provisions of the National Internal Revenue Code (NIRC), as amended. (Emphasis ours)
Pursuant to the foregoing, the IRR of R.A. No. 9442 was promulgated by the DSWD, Department
of Education, DOF, Department of Tourism and the Department of Transportation and
Communications.8Sections 5 .1 and 6.1.d thereof provide:
Sec. 5. Definition of Terms. For purposes of these Rules and Regulations, these terms are defined
as follows:
5.1. Persons with Disability are those individuals defined under Section 4 of RA 7277, "An Act
Providing for the Rehabilitation, Self-Development and Self-Reliance of Persons with Disability
as amended and their integration into the Mainstream of Society and for Other Purposes." This
is defined as a person suffering from restriction or different abilities, as a result of a mental,
physical or sensory impairment, to perform an activity in a manner or within the range
considered normal for human being. Disability shall mean: (1) a physical or mental impairment
that substantially limits one or more psychological, physiological or anatomical function of an
individual or activities of such individual; (2) a record of such an impairment; or (3) being
regarded as having such an impairment.
xxxx
6.1.d Purchase of Medicine - At least twenty percent (20%) discount on the purchase of
medicine for the exclusive use and enjoyment of persons with disability. All drug stores, hospital,
pharmacies, clinics and other similar establishments selling medicines are required to provide
at least twenty percent (20%) discount subject to the guidelines issued by DOH and
PHILHEALTH.
On February 26, 2008, the petitioner filed a Petition for Prohibition with Application for TRO
and/or Writ of Preliminary Injunction9 with the CA, seeking to declare as unconstitutional (a)
Section 4(a) of R.A. No. 9257, and (b) Section 32 of R.A. No. 9442 and Section 5.1 of its IRR,
insofar as these provisions only allow tax deduction on the gross income based on the net cost
of goods sold or services rendered as compensation to private establishments for the 20%
discount that they are required to grant to senior citizens and PWDs. Further, the petitioner
prayed that the respondents be permanently enjoined from implementing the assailed
provisions.
Ruling of the CA
On June 17, 2011, the CA dismissed the petition, reiterating the ruling of the Court in Carlos
Superdrug10particularly that Section 4(a) of R.A. No. 9257 was a valid exercise of police power.
Moreover, the CA held that considering that the same question had been raised by parties
similarly situated and was resolved in Carlos Superdrug, the rule of stare decisis stood as a
hindrance to any further attempt to relitigate the same issue. It further noted that jurisdictional
considerations also compel the dismissal of the action. It particularly emphasized that it has
no original or appellate jurisdiction to pass upon the constitutionality of the assailed laws, 11
the same pertaining to the Regional Trial Court (RTC). Even assuming that it had concurrent
jurisdiction with the RTC, the principle of hierarchy of courts mandates that the case be
commenced and heard by the lower court. 12 The CA further ruled that the petitioner resorted
to the wrong remedy as a petition for prohibition will not lie to restrain the actions of the
respondents for the simple reason that they do not exercise judicial, quasi-judicial or ministerial
duties relative to the issuance or implementation of the questioned provisions. Also, the
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POLICE POWER
petition was wanting of the allegations of the specific acts committed by the respondents that
demonstrate the exercise of these powers which may be properly challenged in a petition for
prohibition.13
The petitioner filed its Motion for Reconsideration 14 of the Decision dated June 17, 2011 of the
CA, but the same was denied in a Resolution 15 dated November 25, 2011.
Unyielding, the petitioner filed the instant petition, raising the following assignment of errors, to
wit:
THE CA SERIOUSLY ERRED WHEN IT RULED THAT A PETITION FOR PROHIBITION FILED WITH THE CA
IS AN IMPROPER REMEDY TO ASSAIL THE CONSTITUTIONALITY OF THE 20%, SALES DISCOUNT FOR
SENIOR CITIZENS AND PWDs;
II
THE CA SERIOUSLY ERRED WHEN IT HELD THAT THE SUPREME COURT'S RULING IN CARLOS
SUPERDRUG CONSTITUTES STARE DECISIS;
III
THE CA SERIOUSLY ERRED ON A QUESTION OF SUBSTANCE WHEN IT RULED THAT THE 20%, SALES
DISCOUNT FOR SENIOR CITIZENS AND PWDs IS A VALID EXERCISE OF POLICE POWER. ON THE
CONTRARY, IT IS AN INVALID EXERCISE OF THE POWER OF EMINENT DOMAIN BECAUSE IT FAILS
TO PROVIDE JUST COMPENSATION TO THE PETITIONER AND OTHER SIMILARLY SITUATED
DRUGSTORES;
IV
THE CA SERIOUSLY ERRED ON A QUESTION OF SUBSTANCE WHEN IT RULED THAT THE 20°/o SALES
DISCOUNT FOR SENIOR CITIZENS AND PWDs DOES NOT VIOLATE THE PETITIONER'S RIGHT TO
EQUAL PROTECTION OF THE LAW; and
THE CA SERIOUSLY ERRED ON A QUESTION OF SUBSTANCE WHEN IT RULED THAT THE DEFINITIONS
OF DISABILITIES AND PWDs ARE NOT VAGUE AND DO NOT VIOLATE THE PETITIONER'S RIGHT TO
DUE PROCESS OF LAW.16
Ruling of the Court
Prohibition may be filed to question

the constitutionality of a law
In the assailed decision, the CA noted that the action, although denominated as one for
prohibition, seeks the declaration of the unconstitutionality of Section 4(a) of R.A. No. 9257 and
Section 32 of R.A. No.9442. It held that in such a case, the proper remedy is not a special civil
1 action but a petition for declaratory relief, which falls under the exclusive original jurisdiction
of the RTC, in the first instance, and of the Supreme Court, on appeal. 17
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The Court clarifies.
Generally, the office of prohibition is to prevent the unlawful and oppressive exercise of
authority and is directed against proceedings that are done without or in excess of jurisdiction,
or with grave abuse of discretion, there being no appeal or other plain, speedy, and
adequate remedy in the ordinary course of law. It is the remedy to prevent inferior courts,
corporations, boards, or persons from usurping or exercising a jurisdiction or power with which
they have not been vested by law. 18 This is, however, not the lone office of an action for
prohibition. In Diaz, et al. v. The Secretary of Finance, et al., 19 prohibition was also recognized
as a proper remedy to prohibit or nullify acts of executive officials that amount to usurpation
of legislative authority. 20 And, in a number of jurisprudence, prohibition was allowed as a
proper action to assail the constitutionality of a law or prohibit its implementation.
In Social Weather Stations, Inc. v. Commission on Elections,21therein petitioner filed a petition

for prohibition to assail the constitutionality of Section 5.4 of R.A. No. 9006, or the "Fair Elections
Act," which prohibited the publication of surveys within 15 days before an election for national
candidates, and seven days for local candidates. Included in the petition is a prayer to
prohibit the Commission on Elections from enforcing the said provision. The Court granted the
Petition and struck down the assailed provision for being unconstitutional. 22
In Social Justice Society (SJS) v. Dangerous Drugs Board, et al.,23 therein petitioner assailed
the constitutionality of paragraphs (c ), (d), (f) and (g) of Section 36 of R.A. No. 9165, otherwise
known as the "Comprehensive Dangerous Drugs Act of 2002," on the ground that they
constitute undue delegation of legislative power for granting unbridled discretion to schools
and private employers in determining the manner of drug 'testing of their employees, and that
the law constitutes a violation of the right against unreasonable searches and seizures. It also
sought to enjoin the Dangerous Drugs Board and the Philippine Drug Enforcement Agency
from enforcing the challenged provision.24 The Court partially granted the petition by
declaring Section 36(f) and (g) of R.A. No. 9165 unconstitutional, and permanently enjoined
the concerned agencies from implementing them. 25
In another instance, consolidated petitions for prohibitions26 questioning the constitutionality

of the Priority Development Assistance Fund were deliberated upon by this Court which
ultimately granted the same.
Clearly, prohibition has been found an appropriate remedy to challenge the constitutionality
of various laws, rules, and regulations.
There is also no question regarding the jurisdiction of the CA to hear and decide a petition for
prohibition. By express provision of the law, particularly Section 9(1) of Batas Pambansa Bilang
129,27 the CA was granted "original jurisdiction to issue writs of mandamus, prohibition,
certiorari, habeas corpus, and quo warranto, and auxiliary writs or I processes, whether or not
in aid of its appellate jurisdiction." This authority· the CA enjoys concurrently with RTCs and this
Court.
In the same manner, the supposed violation of the principle of the ·. hierarchy of courts does
not pose any hindrance to the full deliberation of the issues at hand. It is well to remember that
"the judicial hierarchy of courts is not an iron-clad rule. It generally applies to cases involving
warring factual allegations. For this reason, litigants are required to [refer] to the trial courts at
the first instance to determine the truth or falsity of these contending allegations on the basis
of the evidence of the parties. Cases which depend on disputed facts for decision cannot be
brought immediately before appellate courts as they are not triers of facts. Therefore, a strict
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POLICE POWER
application of the rule of hierarchy of courts is not necessary when the cases brought before
the appellate courts do not involve factual but legal questions."28
Moreover, the principle of hierarchy of courts may be set aside for special and important
reasons, such as when dictated by public welfare and ' the advancement of public policy, or
demanded by the broader interest of justice.29 Thus, when based on the good judgment of
the court, the urgency and significance of the issues presented calls for its intervention, it
should not hesitate to exercise its duty to resolve.
The instant petition presents an exception to the principle as it basically raises a legal question
on the constitutionality of the mandatory discount and the breadth of its rightful beneficiaries.
More importantly, the resolution of the issues will redound to the benefit of the public as it will
put to rest the questions on the propriety of the granting of discounts to senior citizens and
PWDs amid the fervent insistence of affected establishments that the measure transgresses
their property rights. The Court, therefore, finds it to the best interest of justice that the instant
petition be resolved.
The instant case is not barred by

stare decisis
The petitioner contends that the CA erred in holding that the ruling in Carlos Superdrug
constitutes as stare decisis or law of the case which bars the relitigation of the issues that had
been resolved therein and had been raised anew in the instant petition. It argues that there
are substantial differences between Carlos Superdrug and the circumstances in the instant
case which take it out from the operation of the doctrine of stare decisis. It cites that in Carlos
Superdrug, the Court denied the petition because the petitioner therein failed to prove the
confiscatory effect of the tax deduction scheme as no proof of actual loss was submitted. It
believes that its submission of financial statements for the years 2006 and 2007 to prove the
confiscatory effect of the law is a material fact that distinguishes the instant case from that of
Carlos Superdrug. 30
The Court agrees that the ruling in Carlos Superdrug does not constitute stare decisis to the
instant case, not because of the petitioner's submission of financial statements which were
wanting in the first case, but because it had the good sense of including questions that had
not been raised or deliberated in the former case of Carlos Superdrug, i.e., validity of the 20%
discount granted to PWDs, the supposed vagueness of the provisions of R.A. No. 9442 and
violation of the equal protection clause.
Nonetheless, the Court finds nothing in the instant case that merits a reversal of the earlier
ruling of the Court in Carlos Superdrug. Contrary to the petitioner's claim, there is a very slim
difference between the issues in Carlos Superdrug and the instant case with respect to the
nature of the senior citizen discount. A perfunctory reading of the circumstances of the two
cases easily discloses marked similarities in the issues and the arguments raised by the
petitioners in both cases that semantics nor careful play of words can hardly obscure.
In both cases, it is apparent that what the petitioners are ultimately questioning is not the grant
of the senior citizen discount per se, but the manner by which they were allowed to recoup
the said discount. In particular, they are protesting the change in the tax treatment of the
senior citizen discount from tax credit to being merely a deduction from gross income which
they claimed to have significantly reduced their profits.
218
POLICE POWER
This question had been settled in Carlos Superdrug, where the Court ruled that the change in
the tax treatment of the discount was a valid exercise of police power, thus:
formed part of the gross sales of the private establishments, were it not for R.A. No. 9257.
xxxx
A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it
would not meet the definition of just compensation.
Having said that, this raises the question of whether the State, in promoting the health and
welfare of a special group of citizens, can impose upon private establishments the burden of
partly subsidizing a government program.
The Court believes so.
being as the State considers them an integral part of our society.
The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself.
Thus, the Act provides:
SEC. 2. [R.A.] No. 7432 is hereby amended to read as follows:
SEC. 1. Declaration of Policies and Objectives.- Pursuant to Article XV, Section 4 of the
xxxx
senior citizens and to actively seek their partnership.
citizens may claim the discount as a tax deduction.
219
POLICE POWER
most essential, insistent and the least limitable of powers, extending as it does to all the great
public needs." It is "[t]he power vested in the legislature by the constitution to make, ordain,
and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either
with penalties or without, not repugnant to the constitution, as they shall judge to be for the
good and welfare of the commonwealth, and of the subjects of the same."
rights must bow to the primacy of police power because proper rights, though sheltered by
due process, must yield to general welfare. 31 (Citations omitted and emphasis in the original)
Verily, it is the bounden duty of the State to care for the elderly as they reach the point in their
lives when the vigor of their youth has diminished and resources have become scarce. Not
much because of choice, they become needing of support from the society for whom they
presumably spent their productive days and for whose betterment they' exhausted their
energy, know-how and experience to make our days better to live.
In the same way, providing aid for the disabled persons is an equally important State
responsibility. Thus, the State is obliged to give full support to the improvement of the total well-
being of disabled persons and their integration into the mainstream of society. 32This entails
the creation of opportunities for them and according them privileges if only to balance the
playing field which had been unduly tilted against them because of their limitations.
The duty to care for the elderly and the disabled lies not only upon the State, but also on the
community and even private entities. As to the State, the duty emanates from its role as parens
patriae which holds it under obligation to provide protection and look after the welfare of its
people especially those who cannot tend to themselves. Parens patriae means parent of his
or her country, and refers to the State in its role as "sovereign", or the State in its capacity as a
provider of protection to those unable to care for themselves. 33 In fulfilling this duty, the State
may resort to the exercise of its inherent powers: police power, eminent domain and power of
taxation.
In Gerochi v. Department of Energy,34the Court passed upon one of the inherent powers of
the state, the police power, where it emphasized, thus:
[P]olice power is the power of the state to promote public welfare by restraining and
regulating the use of liberty and property. It is the most pervasive, the least limitable, and the
most demanding of the three fundamental powers of the State. The justification is found in the
Latin maxim salus populi est suprema lex (the welfare of the people is the supreme law) and
sic utere tuo ut alienum non laedas (so use your property as not to injure the property of others).
As an inherent attribute of sovereignty which virtually extends to all public needs, police power
grants a wide panoply of instruments through which the State, as parens patriae, gives effect
to a host of its regulatory powers. We have held that the power to "regulate" means the power
to protect, foster, promote, preserve, and control, with due regard for the interests, first and
foremost, of the public, then of the utility and of its patrons. 35 (Citations omitted)
It is in the exercise of its police power that the Congress enacted R.A. Nos. 9257 and 9442, the
laws mandating a 20% discount on purchases of medicines made by senior citizens and PWDs.
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POLICE POWER
It is also in further exercise of this power that the legislature opted that the said discount be
claimed as tax deduction, rather than tax credit, by covered establishments.
The petitioner, however, claims that the change in the tax treatment of the discount is illegal
as it constitutes taking without just compensation. It even submitted financial statements for
the years 2006 and 2007 to support its claim of declining profits when the change in the policy
was implemented.
The Court is not swayed.
To begin with, the issue of just compensation finds no relevance in the instant case as it had
already been made clear in Carlos Superdrug that the power being exercised by the State in
the imposition of senior citizen discount was its police power. Unlike in the exercise of the power
of eminent domain, just compensation is not required in wielding police power. This is precisely
because there is no taking involved, but only an imposition of burden.
In Manila Memorial Park, Inc., et al. v. Secretary of the DSWD, et al., 36 the Court ruled that by
examining the nature and the effects of R.A. No. 9257, it becomes apparent that the
challenged governmental act was an exercise of police power. It was held, thus:
[W]e now look at the nature and effects of the 20% discount to determine if it constitutes an
exercise of police power or eminent domain.
The 20% discount is intended to improve the welfare of senior citizens who, at their age, are
less likely to be gainfully employed, more prone to illnesses and other disabilities, and, thus, in
need of subsidy in purchasing basic commodities. It may not be amiss to mention also that the
discount serves to honor senior citizens who presumably spent the productive years of their
lives on contributing to the development and progress of the nation. This distinct cultural
Filipino practice of honoring the elderly is an integral part of this law.
As to its nature and effects, the 20% discount is a regulation affecting the ability of private
establishments to price their products and services relative to a special class of individuals,
senior citizens, for which the Constitution affords preferential concern. In turn, this affects the
amount of profits or income/gross sales that a private establishment can derive from senior
citizens. In other words, the subject regulation affects the pricing, and, hence, the profitability
of a private establishment. However, it does not purport to appropriate or burden specific
properties, used in the operation or conduct of the business of private establishments, for the
use or benefit of the public, or senior citizens for that matter, but merely regulates the pricing
of goods and services relative to, and the amount of profits or income/gross sales that such
private establishments may derive from, senior citizens.
The subject regulation may be said to be similar to, but with substantial distinctions from, price
control or rate of 'return on investment control laws which are traditionally regarded as police
power measures. x x x.37 (Citations omitted)
In the exercise of police power, "property rights of private individuals are subjected to restraints
and burdens in order to secure the general comfort, health, and prosperity of the State."38
Even then, the State's claim of police power cannot be arbitrary or unreasonable. After all, the
overriding purpose of the exercise of the power is to promote general welfare, public health
and safety, among others. It is a measure, which by sheer necessity, the State exercises, even
to the point of interfering with personal liberties or property rights in order to advance common
good. To warrant such interference, two requisites must concur: (a) the interests of the public
221
POLICE POWER
generally, as distinguished from those of a particular class, require the interference of the!
State; and (b) the means employed are reasonably necessary to the: attainment of the object
sought to be accomplished and not unduly oppressive upon individuals. In other words, the
proper exercise of the police power requires the concurrence of a lawful subject and a lawful
method.39
The subjects of R.A. Nos. 9257 and 9442, i.e., senior citizens and PWDs, are individuals whose
well-being is a recognized public duty. As a public duty, the responsibility for their care
devolves upon the concerted efforts of the State, the family and the community. In Article XIII,
Section 1 of the Constitution, the State is mandated to give highest priority to the enactment
of measures that protect and enhance the right of all the people to human dignity, reduce
social, economic, and political inequalities, and remove cultural inequities by equitably
diffusing wealth and political power1 for the common good. The more apparent manifestation
of these social inequities is the unequal distribution or access to healthcare services. To: abet
in alleviating this concern, the State is committed to adopt an integrated! and comprehensive
approach to health development which shall endeavor to make essential goods, health and
other social services available to all the people at affordable cost, with priority for the needs
of the underprivileged sick, elderly, disabled, women, and children.40
In the same manner, the family and the community have equally significant duties to perform
in reducing social inequality. The family as the basic social institution has the foremost duty to
care for its elderly members.41 On the other hand, the community, which include the private
sector, is recognized as an active partner of the State in pursuing greater causes. The private
sector, being recipients of the privilege to engage business in our land, utilize our goods as well
as the services of our people for proprietary purposes, it is only fitting to expect their support in
measures that contribute to common good. Moreover, their right to own, establish and
operate economic enterprises is always subject to the duty of the State to promote distributive
justice and to intervene when the common good so demands.42
The Court also entertains no doubt on the legality of the method taken by the legislature to
implement the declared policies of the subject laws, that is, to impose discounts on the
medical services and purchases of senior citizens and PWDs and to treat the said discounts as
tax deduction rather than tax credit. The measure is fair and reasonable and no credible proof
was presented to prove the claim that it was confiscatory. To be considered confiscatory,
there must be taking of property without just compensation.
Illuminating on this point is the discussion of the Court on the concept of taking in City of Manila
v. Hon. Laguio, Jr.,43 viz.:
There are two different types of taking that can be identified. A "possessory" taking occurs
when the government confiscates or physically occupies property. A "regulatory" taking
occurs when the government's regulation leaves no reasonable economically viable use of
the property.
xxxx
No formula or rule can be devised to answer the questions of what is too far and when
regulation becomes a taking. In Mahon, Justice Holmes recognized that it was "a question of
degree and therefore cannot be disposed of by general propositions." On many other
occasions as well, the U.S. Supreme Court has said that the issue of when regulation constitutes
a taking is a matter of considering the facts in each case. x x x.
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What is crucial in judicial consideration of regulatory takings is that government regulation is a

taking if it leaves no reasonable economically viable use of property in a manner that
interferes with reasonable expectations for use. A regulation that permanently denies all
economically beneficial or productive use of land is, from the owner's point of view, equivalent
to a "taking" unless principles of nuisance or property law that existed when the owner
acquired the land make the use prohibitable. When the owner of real property has been
called upon to sacrifice all economically beneficial uses in the name of the common good,
that is, to leave his property economically idle, he has suffered a taking.
xxxx
A restriction on use of property may also constitute a "taking" if not reasonably necessary to
the effectuation of a substantial public purpose or if it has an unduly harsh impact on the
distinct investment-backed expectations of the owner.44 (Citations omitted)
The petitioner herein attempts to prove its claim that the pertinent provisions of R.A. Nos. 9257
and 9442 amount to taking by presenting financial statements purportedly showing financial
losses incurred by them due to the adoption of the tax deduction scheme.
For the petitioner's clarification, the presentation of the financial statement is not of compelling
significance in justifying its claim for just compensation. What is imperative is for it to establish
that there was taking in the constitutional sense or that, in the imposition of the mandatory
discount, the power exercised by the state was eminent domain.
According to Republic of the Philippines v. Vda. de Castellvi,45five circumstances must be

present in order to qualify "taking" as an exercise of eminent domain. First, the expropriator
must enter a private property. Second, the entrance into private property must be for more
than a momentary period. Third, the entry into the property should be under warrant or color
of legal authority. Fourth, the property must be devoted to a public use or otherwise informally
appropriated or injuriously affected. Fifth, the utilization of the property for public use must be
in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property.
46
The first requirement speaks of entry into a private property which clearly does not obtain in
this case. There is no private property that is; invaded or appropriated by the State. As it is, the
petitioner precipitately deemed future profits as private property and then proceeded to
argue that the State took it away without full compensation. This seemed preposterous
considering that the subject of what the petitioner supposed as taking was not even earned
profits but merely an expectation of profits, which may not even occur. For obvious reasons,
there cannot be taking of a contingency or of a mere possibility because it lacks physical
existence that is necessary before there could be any taking. Further, it is impossible to quantify
the compensation for the loss of supposed profits before it is earned.
The supposed taking also lacked the characteristics of permanence 47 and

consistency.1âwphi1 The presence of these characteristics is significant because they can
establish that the effect of the questioned provisions is the same on all establishments and
those losses are indeed its unavoidable consequence. But apparently these indications are
wanting in this case. The reason is that the impact on the establishments varies depending on
their response to the changes brought about by the subject provisions. To be clear,
establishments, are not prevented from adjusting their prices to accommodate the effects of
the granting of the discount and retain their profitability while being fully compliant to the laws.
It follows that losses are not inevitable because establishments are free to take business
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measures to accommodate the contingency. Lacking in permanence and consistency, there

can be no taking in the constitutional sense. There cannot be taking in one establishment and
none in another, such that the former can claim compensation but the other may not. Simply
told, there is no taking to justify compensation; there is only poor business decision to blame.
There is also no ousting of the owner or deprivation of ownership. Establishments are neither
divested of ownership of any of their properties nor is anything forcibly taken from them. They
remain the owner of their goods and their profit or loss still depends on the performance of
their sales.
Apart from the foregoing, covered establishments are also provided with a mechanism to
recoup the amount of discounts they grant the senior citizens and PWDs. It is provided in
Section 4(a) of R.A. No. 9257 and Section 32 of R.A. No. 9442 that establishments may claim
the discounts as "tax deduction based on the net cost of the goods sold or services rendered."
Basically, whatever amount was given as discount, covered establishments may claim an
equal amount as an expense or tax deduction. The trouble is that the petitioner, in protesting
the change in the tax treatment of the discounts, apparently seeks tax incentive and not
merely a return of the amount given as discounts. It premised its interpretation of financial
losses in terms of the effect of the change in the tax treatment of the discount on its tax liability;
hence, the claim that the measure was confiscatory. However, as mentioned earlier in the
discussion, loss of profits is not the inevitable result of the change in tax treatment of the
discounts; it is more appropriately a consequence of poor business decision.
It bears emphasizing that the law does not place a cap on the amount of mark up that
covered establishments may impose on their items. This rests on the discretion of the
establishment which, of course, is expected to put in the price of the overhead costs,
expectation of profits and other considerations into the selling price of an item. In a simple
illustration, here is Drug A, with acquisition cost of ₱8.00, and selling price of ₱10.00. Then comes
a law that imposes 20% on senior citizens and PWDs, which affected Establishments 1, 2 and 3.
Let us suppose that the approximate number of patrons who purchases Drug A is 100, half of
which are senior citizens and PWDs. Before the passage of the law, all of the establishments
are earning the same amount from profit from the sale of Drug A, viz.:
Before the passage of the law:

Drug A Acquisition cost ₱8.00
Selling price ₱10.00
Number of patrons 100
Sales: 100 x ₱10.00 = ₱1,000.00
Profit: ₱200
After the passage of the law, the three establishments reacted differently. Establishment 1 was
passive and maintained the price of Drug A at ₱8.00 which understandably resulted in
diminution of profits.
Establishment 1
Senior Citizens/PWD 50
Sales 100 x ₱10.00 = ₱1,000.00
Deduction: ₱100.00
Profit: ₱100.00
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On the other hand, Establishment 2, mindful that the new law will affect the profitability of the
business, made a calculated decision by increasing the mark up of Drug A to ₱3.20, instead
of only ₱2.00. This brought a positive result to the earnings of the company.
Establishment 2
Number of patron 100
Senior Citizens/PWDs 50
Sales 100 x ₱10.00 = ₱1,000.00
Profit: ₱208.00
For its part, Establishment 3 raised the mark up on Drug A to only ₱3.00 just to even out the
effect of the law. This measure left a negligible effect on its profit, but Establishment 3 took it
as a social duty: to share in the cause being promoted by the government while still
maintaining profitability.
Establishment 3
Senior Citizens/PWD 50
Sales 100 x ₱10.00 = ₱1,000.00
Profit: ₱190.00
The foregoing demonstrates that it is not the law per se which occasioned the losses in the
covered establishments but bad business I judgment. One of the main considerations in
making business decisions is the law because its effect is widespread and inevitable. Literally,
anything can be a subject of legislation. It is therefore incumbent upon business managers to
cover this contingency and consider it in making business strategies. As shown in the illustration,
the better responses were exemplified by Establishments 2 and 3 which promptly put in the
additional costs brought about by the law into the price of Drug A. In doing so, they were able
to maintain the profitability of the business, even earning some more, while at the same time
being fully compliant with the law. This is not to mention that the illustration is even too simplistic
and not' the most ideal since it dealt only with a single drug being purchased by both regular
patrons and senior citizens and PWDs. It did not consider the accumulated profits from the
other medical and non-medical products being sold by the establishments which are
expected to further curb the effect of the granting of the discounts in the business.
It is therefore unthinkable how the petitioner could have suffered losses due to the mandated
discounts in R.A. Nos. 9257 and 9442, when a fractional increase in the prices of items could
bring the business standing at a balance even with the introduction of the subject laws. A level
adjustment in the pricing of items is a reasonable business measure to take in order to adapt
to the contingency. This could even make establishments earn more, as shown in the
illustration, since every fractional increase in the price of covered items translates to a wider
cushion to taper off the effect of the granting of discounts and ultimately results to additional
profits gained from the purchases of the same items by regular patrons who are not entitled
to the discount. Clearly, the effect of the subject laws in the financial standing of covered
companies depends largely on how they respond and forge a balance between profitability
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and their sense of social responsibility. The adaptation is entirely up to them and they are not
powerless to make adjustments to accommodate the subject legislations.
Still, the petitioner argues that the law is confiscatory in the sense that the State takes away a
portion of its supposed profits which could have gone into its coffers and utilizes it for public
purpose. The petitioner claims that the action of the State amounts to taking for which it should
be compensated.
To reiterate, the subject provisions only affect the petitioner's right to profit, and not earned
profits. Unfortunately for the petitioner, the right to profit is not a vested right or an entitlement
that has accrued on the person or entity such that its invasion or deprivation warrants
compensation. Vested rights are "fixed, unalterable, or irrevocable."48 More extensively, they
are depicted as follows:
Rights which have so completely and definitely accrued to or settled in a person that they are
not subject to be defeated or cancelled by the act of any other private person, and which it
is right and equitable that the government should recognize and protect, as being lawful in
themselves, and settled according to the then current rules of law, and of which the individual
could not be deprived arbitrarily without injustice, or of which he could not justly be deprived
otherwise than by the established methods of procedure and for the public welfare. x x x A
right is not 'vested' unless it is more than a mere expectation based on the anticipated
continuance of present laws; it must be an established interest in property, not open to doubt.
x x x To be vested in its accurate legal sense, a right must be complete and consummated,
and one of which the person to whom it belongs cannot be divested without his consent.x x
x.49 (Emphasis ours)
Right to profits does not give the petitioner the cause of action to ask for just compensation, it
being only an inchoate right or one that has not fully developed50 and therefore cannot be
claimed as one's own. An inchoate right is a mere expectation, which may or may not come
into existence. It is contingent as it only comes "into existence on an event or condition which
may not happen or be performed until some other event may prevent their vesting."51
Certainly, the petitioner cannot claim confiscation or taking of something that has yet to exist.
It cannot claim deprivation of profit before the consummation of a sale and the purchase by
a senior citizen or PWD.
Right to profit is not an accrued right; it is not fixed, absolute nor indefeasible. It does not come
into being until the occurrence or realization of a condition precedent. It is a mere
"contingency that might never eventuate into a right. It stands for a mere possibility of profit
but nothing might ever be payable under it."52
The inchoate nature of the right to profit precludes the possibility of compensation because it
lacks the quality or characteristic which is necessary before any act of taking or expropriation
can be effected. Moreover, there is no yardstick fitting to quantify a contingency or to
determine compensation for a mere possibility. Certainly, "taking" presupposes the existence
of a subject that has a quantifiable or determinable value, characteristics which a mere
contingency does not possess.
Anent the question regarding the shift from tax credit to tax deduction, suffice it is to say that
it is within the province of Congress to do so in the exercise of its legislative power. It has the
authority to choose the subject of legislation, outline the effective measures to achieve its
declared policies and even impose penalties in case of non-compliance. It has the sole
discretion to decide which policies to pursue and devise means to achieve them, and courts
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often do not interfere in this exercise for as long as it does not transcend constitutional
limitations. "In performing this duty, the legislature has no guide but its judgment and discretion
and the wisdom of experience."53 In Carter v. Carter Coal Co.,54legislative discretion has
been described as follows:
Legislative congressional discretion begins with the choice of means, and ends with the
adoption of methods and details to carry the delegated powers into effect. x x x [W]hile the
powers are rigidly limited to the enumerations of the Constitution, the means which may be
employed to carry the powers into effect are not restricted, save that they must be
appropriate, plainly adapted to the end, and not prohibited by, but consistent with, the letter
and spirit of the Constitution. x x x. 55 (Emphasis ours)
Corollary, whether to treat the discount as a tax deduction or tax credit is a matter addressed
to the wisdom of the legislature. After all, it is within its prerogative to enact laws which it deems
sufficient to address a specific public concern. And, in the process of legislation, a bill goes
through rigorous tests of validity, necessity and sufficiency in both houses of Congress before
enrolment. It undergoes close scrutiny of the members of Congress and necessarily had to
surpass the arguments hurled against its passage. Thus, the presumption of validity that goes
with every law as a form of deference to the process it had gone through and also to the
legislature's exercise of discretion. Thus, in lchong, etc., et al. v. Hernandez) etc., and
Sarmiento,56the Court emphasized, thus:
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.x x x.57
(Emphasis ours)
The legislature may also grant rights and impose additional burdens: It may also regulate
industries, in the exercise of police power, for the protection of the public. R.A. Nos. 9257 and
9442 are akin to regulatory laws, the issuance of which is within the ambit of police power. The
minimum wage law, zoning ordinances, price control laws, laws regulating the operation of
motels and hotels, laws limiting the working hours to eight, and the like fall under this category.
58
Indeed, regulatory laws are within the category of police power measures from which
affected persons or entities cannot claim exclusion or compensation. For instance, private
establishments cannot protest that the imposition of the minimum wage is confiscatory since
it eats up a considerable chunk of its profits or that the mandated remuneration is not
commensurate for the work done. The compulsory nature of the provision for minimum wages
underlies the effort of the State; as R.A. No. 672759 expresses it, to promote productivity-
improvement and gain-sharing measures to ensure a decent standard of living for the workers
and their families; to guarantee the rights of labor to its just share in the fruits of production; to
enhance employment generation in the countryside through industry dispersal; and to allow
business and industry reasonable returns on investment, expansion and growth, and as the
Constitution expresses it, to affirm labor as a primary social economic force. 60
Similarly, the imposition of price control on staple goods in R.A. No. 758161 is likewise a valid
exercise of police power and affected establishments cannot argue that the law was
depriving them of supposed gains. The law seeks to ensure the availability of basic necessities
and prime commodities at reasonable prices at all times without denying legitimate business
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a fair return on investment. It likewise aims to provide effective and sufficient protection to
consumers against hoarding, profiteering and cartels with respect to the supply, distribution,
marketing and pricing of said goods, especially during periods of calamity, emergency,
widespread illegal price manipulation and other similar situations.62
More relevantly, in Manila Memorial Park, Inc.,63it was ruled that it is within the bounds of the
police power of the state to impose burden on private entities, even if it may affect their profits,
such as in the imposition of price control measures. There is no compensable taking but only
a recognition of the fact that they are subject to the regulation of the State and that all
personal or private interests must bow down to the more paramount interest of the State.
This notwithstanding, the regulatory power of the State does not authorize the destruction of
the business. While a business may be regulated, such regulation must be within the bounds
of reason, i.e., the regulatory ordinance must be reasonable, and its provision cannot be
oppressive amounting to an arbitrary interference with the business or calling subject of
regulation. A lawful business or calling may not, under the guise of regulation, be unreasonably
interfered with even by the exercise of police power. 64 After all, regulation only signifies
control or restraint, it does not mean suppression or absolute prohibition. Thus, in Philippine
Communications Satellite Corporation v. Alcuaz, 65 the Court emphasized:
The power to regulate is not the power to destroy useful and harmless enterprises, but is the
power to protect, foster, promote, preserve, and control with due regard for the interest, first
and foremost, of the public, then of the utility and of its patrons. Any regulation, therefore,
which operates as an effective confiscation of private property or constitutes an arbitrary or
unreasonable infringement of property rights is void, because it is repugnant to the
constitutional guaranties of due process and equal protection of the laws. 66 (Citation
omitted)
Here, the petitioner failed to show that R.A. Nos. 9257 and 9442, under the guise of regulation,
allow undue interference in an otherwise legitimate business.1avvphi1 On the contrary, it was
shown that the questioned laws do not meddle in the business or take anything from it but only
regulate its realization of profits.
The subject laws do not violate the

equal protection clause
The petitioner argues that R.A. Nos. 9257 and 9442 are violative of the equal protection clause
in that it failed to distinguish between those who have the capacity to pay and those who do
not, in granting the 20% discount. R.A. No. 9257, in particular, removed the income
qualification in R.A. No. 7432 of'₱60,000.00 per annum before a senior citizen may be entitled
to the 20o/o discount.
The contention lacks merit.
The petitioner's argument is dismissive of the reasonable qualification on which the subject
laws were based. In City of Manila v. Hon. Laguio, Jr., 67 the Court emphasized:
Equal protection requires that all persons or things similarly situated should be treated alike,
both as to rights conferred and responsibilities imposed. Similar subjects, in other words, should
not be treated differently, so as to give undue favor to some and unjustly discriminate against
others. The guarantee means that no person or class of persons shall be denied the same
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protection of laws which is enjoyed by other persons or other classes in like circumstances.68
(Citations omitted)
"The equal protection clause is not infringed by legislation which applies only to those persons
falling within a specified class. If the groupings are characterized by substantial distinctions
that make real differences, one class may be treated and regulated differently from
another."69 For a classification to be valid, (1) it must be based upon 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 members of the same class. 70
To recognize all senior citizens as a group, without distinction as to income, is a valid

classification. The Constitution itself considered the elderly as a class of their own and deemed
it a priority to address their needs. When the Constitution declared its intention to prioritize the
predicament of the underprivileged sick, elderly, disabled, women, and children,71 it did not
make any reservation as to income, race, religion or any other personal circumstances. It was
a blanket privilege afforded the group of citizens in the enumeration in view of the vulnerability
of their class.
R.A. No. 9257 is an implementation of the avowed policy of the Constitution to enact measures
that protect and enhance the right of all the people to human dignity, reduce social,
economic, and political inequalities. 72 Specifically, it caters to the welfare of all senior citizens.
The classification is based on age and therefore qualifies all who have attained the age of 60.
Senior citizens are a class of their own, who are in need and should be entitled to government
support, and the fact that they may still be earning for their own sustenance should not
disqualify them from the privilege.
It is well to consider that our senior citizens have already reached the age when work
opportunities have dwindled concurrently as their physical health.1âwphi1 They are no longer
expected to work, but there are still those who continue to work and contribute what they
can to the country. Thus, to single them out and take them out of the privileges of the law for
continuing to strive and earn income to fend for themselves is inimical to a welfare state that
the Constitution envisions. It is tantamount to penalizing them for their persistence. It is
commending indolence rather than rewarding diligence. It encourages them to become
wards of the State rather than productive partners.
Our senior citizens were the laborers, professionals and overseas contract workers of the past.
While some may be well to do or may have the capacity to support their sustenance, the
discretion to avail of the privileges of the law is up to them. But to instantly tag them. as
undeserving of the privilege would be the height of ingratitude; it is an outright discrimination.
The same ratiocination may be said of the recognition of PWDs as a class in R.A. No. 9442 and
in granting them discounts.1âwphi1 It needs no further explanation that PWDs have special
needs which, for most,' last their entire lifetime. They constitute a class of their own, equally
deserving of government support as our elderlies. While some of them maybe willing to work
and earn income for themselves, their disability deters them from living their full potential. Thus,
the need for assistance from the government to augment the reduced income or productivity
brought about by their physical or intellectual limitations.
There is also no question that the grant of mandatory discount is germane to the purpose of
R.A. Nos. 9257 and 9442, that is, to adopt an integrated and comprehensive approach to
health development and make essential goods and other social services available to all the
people at affordable cost, with special priority given to the elderlies and the disabled, among
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others. The privileges granted by the laws ease their concerns and allow them to live more
comfortably.
The subject laws also address a continuing concern of the government for the welfare of the
senior citizens and PWDs. It is not some random predicament but an actual, continuing and
pressing concern that requires preferential attention. Also, the laws apply to all senior citizens
and PWDs, respectively, without further distinction or reservation. Without a doubt, all the
elements for a valid classification were met.
The definitions of "disabilities" and

"PWDs" are clear and unequivocal
Undeterred, the petitioner claims that R.A. No. 9442 is ambiguous particularly in defining the
terms "disability" and "PWDs," such that it lack comprehensible standards that men of common
intelligence must guess at its meaning. It likewise bewails the futility of the given safeguards to
prevent abuse since government officials who are neither experts nor practitioners of
medicine are given the authority to issue identification cards that authorizes the granting of
the privileges under the law.
The Court disagrees.
Section 4(a) of R.A. No. 7277, the precursor of R.A. No. 94421 defines "disabled persons" as
follows:
(a) Disabled persons are those suffering from restriction or different abilities, as a result of a
mental, physical or sensory impairment, to perform an activity in the manner or within the
range considered normal for a human being[.]
On the other hand, the term "PWDs" is defined in Section 5.1 of the IRR of R.A. No. 9442 as
follows:
5.1. PersonswithDisability are those individuals defined under Section 4 of [R.A. No.] 7277 [or]
An Act Providing for the Rehabilitation, Self-Development and Self-Reliance of Persons with
Disability as amended and their integration into the Mainstream of Society and for Other
Purposes. This is defined as a person suffering from restriction or different abilities, as a result of
a mental, physical or sensory impairment, to perform an activity in a manner or within the
range considered normal for human being. Disability shall mean (1) a physical 1or mental
impairment that substantially limits one or more psychological, physiological or anatomical
function of an individual or activities of such individual; (2) a record of such an impairment; or
(3) being regarded as having such an impairment.
The foregoing definitions have a striking conformity with the definition of "PWDs" in Article 1 of
the United Nations Convention on the Rights of Persons with Disabilities which reads:
Persons with disabilities include those who have long-term physical, mental, intellectual or
sensory impairments which in interaction with various barriers may hinder their full and effective
participation in society on an equal basis with others. (Emphasis and italics ours)
The seemingly broad definition of the terms was not without good reasons. It recognizes that
"disability is an evolving concept"73 and appreciates the "diversity of PWDs."74 The terms were
given comprehensive definitions so as to accommodate the various forms of disabilities, and
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not confine it to a particular case as this would effectively exclude other forms of physical,
intellectual or psychological impairments.
Moreover, in Estrada v. Sandiganbayan, 75 it was declared, thus:
A statute is not rendered uncertain and void merely because general terms are used therein,
or because of the employment of terms without defining them; much less do we have to
define every word we use. Besides, there is no positive constitutional or statutory command
requiring the legislature to define each and every word in an enactment. Congress is not
restricted in the form of expression of its will, and its inability to so define the words employed
in a statute will not necessarily result in the vagueness or ambiguity of the law so long as the
legislative will is clear, or at least, can be gathered from the whole act x x x.76 (Citation
omitted)
At any rate, the Court gathers no ambiguity in the provisions of R.A. No. 9442. As regards the
petitioner's claim that the law lacked reasonable standards in determining the persons entitled
to the discount, Section 32 thereof is on point as it identifies who may avail of the privilege and
the manner of its availment. It states:
Sec. 32. x x x
The abovementioned privileges are available only to persons with disability who are Filipino
citizens upon submission of any of the following as proof of his/her entitlement thereto:
(I) An identification card issued by the city or municipal mayor or the barangay captain of the
place where the persons with disability resides;
(II) The passport of the persons with disability concerned; or
(III) Transportation discount fare Identification Card (ID) issued by the National Council for the
Welfare of Disabled Persons (NCWDP).
It is, however, the petitioner's contention that the foregoing authorizes government officials
who had no medical background to exercise discretion in issuing identification cards to those
claiming to be PWDs. It argues that the provision lends to the indiscriminate availment of the
privileges even by those who are not qualified.
The petitioner's apprehension demonstrates a superficial understanding of the law and its
implementing rules. To be clear, the issuance of identification cards to PWDs does not depend
on the authority of the city or municipal mayor, the DSWD or officials of the NCDA (formerly
NCWDP). It is well to remember that what entitles a person to the privileges of the law is his
disability, the fact of which he must prove to qualify. Thus, in NCDA Administrative Order (A.O.)
No. 001, series of 2008, 77 it is required that the person claiming disability must submit the
following requirements before he shall be issued a PWD Identification Card:
1. Two "1 x l" recent ID pictures with the names, and signatures or thumb marks at the back of
the picture.
2. One (1) Valid ID
3. Document to confirm the medical or disability condition 78
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To confirm his disability, the person must obtain a medical certificate or assessment, as the
case maybe, issued by a licensed private or government physician, licensed teacher or head
of a business establishment attesting to his impairment. The issuing entity depends on whether
the disability is apparent or non-apparent. NCDAA.O. No. 001 further provides:79
DISABILITY DOCUMENT ISSUING ENTITY

Apparent Medical Licensed Private or Government Physician
Disability Certificate
School Licensed Teacher duly signed by the School Principal
Assessment
Certificate of • Head of the Business Establishment
Disability • Head of Non-Government Organization
Non- Medical Licensed Private or
Apparent Certificate Government Physician
Disability
To provide further safeguard, the Department of Health issued A.O. No. 2009-0011, providing
guidelines for the availment of the 20% discount on the purchase of medicines by PWDs. In
making a purchase, the individual must present the documents enumerated in Section VI(4)(b
), to wit:
i. PWD identification card x x x
ii. Doctor's prescription stating the name of the PWD, age, sex, address, date, generic name
of the medicine, dosage form, dosage strength, quantity, signature over printed name of
physician, physician's address, contact number of physician or dentist, professional license
number, professional tax receipt number and narcotic license number, if applicable. To
safeguard the health of PWDs and to prevent abuse of [R.A. No.] 9257, a doctor's prescription
is required in the purchase of over-the-counter medicines. x x x.
iii. Purchase booklet issued by the local social/health office to PWDs for free containing the
following basic information:
a) PWD ID number
b) Booklet control number
c) Name of PWD
d) Sex
e) Address
f) Date of Birth
g) Picture
h) Signature of PWD
i) Information of medicine purchased:
i.1 Name of medicine
i.2 Quantity
i.3 Attending Physician
i.4 License Number
i.5 Servicing drug store name
i.6 Name of dispensing pharmacist
j) Authorization letter of the PWD x x x in case the medicine is bought by the

representative or caregiver of the PWD.
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The PWD identification card also has a validity period of only three years which facilitate in the
monitoring of those who may need continued support and who have been relieved of their
disability, and therefore may be taken out of the coverage of the law.
At any rate, the law has penal provisions which give concerned establishments the option to
file a case against those abusing the privilege Section 46(b) of R.A. No. 9442 provides that
"[a]ny person who abuses the privileges granted herein shall be punished with imprisonment
of not less than six months or a fine of not less than Five Thousand pesos (₱5,000.00), but not
more than Fifty Thousand pesos (₱50,000.00), or both, at the discretion of the court." Thus,
concerned establishments, together with the proper government agencies, must actively
participate in monitoring compliance with the law so that only the intended beneficiaries of
the law can avail of the privileges.
Indubitably, the law is clear and unequivocal, and the petitioner claim of vagueness to cast
uncertainty in the validity of the law does not stand.
WHEREFORE, in view of the foregoing disquisition, Section 4(a) of Republic Act No. 9257 and
Section 32 of Republic Act No. 9442 are hereby declared CONSTITUTIONAL.
SO ORDERED.
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ESTOCONING VS. PEOPLE G.R. No. 231298, October 07, 2020
It appears that the senior citizen, the offended party in this case, was fond of soft drinks. Even
having been denied the senior citizen discount by the cooperative, and in spite of the other
possible establishments where he could have been provided the discount, he returned to the
same cooperative seven more times, each time asking for discount. After his eighth soft drink,
he decided to sue.
Laws enjoy a presumption of legality. When different laws seem to be in conflict with each
other, this Court is tasked to harmonize their provisions and interpret them in such a way that
"would provide a complete, consistent[,] and intelligible system to secure the rights of all
persons affected."1
This Court resolves a Petition for Review on Certiorari2 assailing the Court of Appeals Decision3
and Resolution,4 which affirmed the Regional Trial Court Decision5 convicting Roberto A.
Estoconing (Estoconing) of violating Republic Act 7432, as amended by Republic Act No. 9994,
or the Expanded Senior Citizens Act of 2010.
Estoconing is a professor at the Silliman University and the general manager of the Silliman
University Cooperative.6
On January 9, 2012, an Information7 was filed against Estoconing for violating the Expanded
Senior Citizens Act. It reads:
That on or about the following dates:
1. March 30, 2011 5. July 7, 2011

2. Apri130, 2011 6. July 16, 2011
3. May 16, 2011 7. July 18, 2011
4. June 14, 2011 8. September 22, 2011
in Dumaguete City, within the jurisdiction of the Honorable Court, the said accused ROBERTO
A. ESTOCONlNG being the General Manager of the Silliman University Cooperative Canteen,
did then and there willfully, unlawfully and criminally refuse to give discount to one MANUEL
UTZURRUM, JR., a bonafide Senior Citizen of Dumaguete City with I.D. No. 1535115 of soft drinks
he bought from said canteen, even after identifying himself as a senior citizen.
Contrary to law.8
Estoconing pleaded not guilty to the charge against him.9
Manuel Utzurrum (Utzurrum), the private complainant, testified that he was a member of the
Silliman University Cooperative and that he regularly bought Mountain Dew soft drinks in the
canteen managed by the cooperative. He identified himself and presented his Senior Citizen
ID every time he bought his soft drink, but the cooperative refused to grant him a 20% senior
citizen discount.10
Utzurrum further testified that he wrote Estoconing, as Silliman University Cooperative's general
manager, several letters in 2011 about the senior citizen discount, but Estoconing never
responded. He then filed a complaint with the Office of the Senior Citizen Affairs in
Dumaguete, but Estoconing still did not respond. Finally, on August 10, 2011, Utzurrum filed a
complaint with the barangay. He was able to talk to Estoconing, but they reached no
settlement. The barangay instead issued a certificate to file action on October 8, 2011.11
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In his defense, Estoconing testified that the Silliman University Cooperative, being a
cooperative registered under the Cooperative Development Authority, was exempted by law
from the coverage of the Expanded Senior Citizens Act. He also insisted that as a member-
owner of the Silliman University Cooperative, Utzurrum received the annual patronage refund,
so he was disqualified from demanding the 20% senior citizen discount under the law's no
double discount provision.12
Estoconing further claimed that the Silliman University Cooperative's Board of Directors also
opined that it was tax-exempt and not subject to the senior citizen discount:
He points out two (2) legal basis for this: R.A. No. 9520, which provides for the exemption of
cooperatives from taxes as well as the exemption from taxes on their transactions with
members; and R.A. No. 9994 which specifies that the 20% senior citizen deduction can be
charged as tax deduction of the entity. As the cooperative is already tax exempt, it cannot
pass on the amount of discount for its tax exemption purposes. In the end, it is the cooperative
that will bear that amount of discount which would lead to serious business losses.13
Finally, Estoconing insisted that the Expanded Senior Citizens Act should be read in conjunction
with Republic Act No. 9520, or the Philippine Cooperative Code of 2008.14
On July 18, 2014, the Municipal Trial Court m Cities found15 Estoconing guilty of the charge
against him.
The Municipal Trial Court in Cities ruled that since the Silliman University Cooperative sold meals,
drinks, and provided tables and chairs to its customers, it is considered a restaurant under Rule
III, Article 5 of the Expanded Senior Citizen Act's Implementing Rules and Regulations.16
The Municipal Trial Court in Cities also pointed out that the defense failed to substantiate its
claim of exemption:
The defense persists and insists on its alleged exemption from the application of RA 9994 being
a cooperative, yet it has not directly cited any provision of RA 9994 and even any provision
ofRA 9520, pointing to such exemption. On the contrary, Item No. No. 6 of the Terms and
Conditions of the Certificate of Tax Exemption above-cited would support the non-exemption
of SU Coop from the formulation of RA 9994 as it is clear that the tax exemption of a
cooperative is not absolute by virtue of the fact that even as a cooperative, SU Coop can still
be subject to "taxes for which it is directly liable and not otherwise exempted by any law x x
x." Neither has the defense presented any proof that the operation by SU Coop of an
establishment which engages in the selling of cooked food and short orders, coffee,
beverages and drinks, and even in the catering services part of those covered by the
Exemption from Income Tax on income from CDA-registered operations, or those covered by
the Exemption from value-added tax on CDA-registered sales or transactions as provided for
by the Tax Exemption Certificate.17 (Emphasis in the original)
The dispositive portion of the Municipal Trial Court m Cities' Decision reads:
WHEREFORE, in view of the foregoing disquisition, the Court finds the accused GUILTY beyond
reasonable doubt of the crime of Violation of RA 7432 as amended by RA 9994, and is hereby
sentenced to suffer an indeterminate penalty of 2 years as minimum to 3 years as maximum,
and a fine of P50,000.00.
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SO ORDERED.18 (Emphasis in the original)
Estoconing appealed19 the adverse Decision against him.
On December 18, 2014, the Regional Trial Court denied20 Estoconing's appeal. The dispositive
portion of its Decision reads:
WHEREFORE, the conviction of the accused by the court a quo is affirmed in toto,and to
reiterate, accused-appellant is hereby sentenced to suffer an indeterminate penalty of two
(2) years as minimum to three (3) years as maximum and a fine of Fifty Thousand Pesos
(P50,000.00).
The cash bond put up by the accused for his temporary liberty is ordered cancelled and
released in favor of the bondsman.
Estoconing then filed a Petition before the Court of Appeals, which gave it due course and
granted his motion to put up a new bail bond pending appeal.22
On July 29, 2016, the Court of Appeals dismissed23 the Petition. It ruled that the Expanded
Senior Citizens Act is applicable to cooperatives:
A reading of the Expanded Senior Citizen Act of 2010 under R.A. No. 9994, which amended
R.A. No. 7432, would reveal that there is no specific provision exempting a cooperative from
the mandatory 20% discount granted to a senior citizen. Neither is there any provision in the
Cooperative Code of the Philippines which explicitly granted a cooperative to be exempt
from the Senior Citizen Act. It is not for petitioner to rule on whether the Senior Citizen Act is
applicable to Cooperatives. In the absence of a judicial decision declaring it to be so or a
clarification from an authorized agency, petitioner should have presumed that the Senior
Citizen Act is applicable to the SU Coop.24
The Court of Appeals then held that there was no violation of the double discount provision
under the Expanded Senior Citizens Act. It pointed out that what was prohibited under that
provision was the "senior citizen discount on top of a promotional discount and a senior citizen's
discount on top of the PWD discount."25 It explained that the double discount provision did
not include patronage refund and interest on capital, which Utzurrum enjoyed as a member
of the Silliman University Cooperative, not as a senior citizen.26
The Court of Appeals also confirmed that despite its assertions to the contrary, the Silliman
University Cooperative was a restaurant.27
The Court of Appeals then rejected Estoconing's claim that "[Department of Trade and
Industry] Administrative Order No. 03-05 which exempts cooperatives from the scope of the
5% discount on basic necessities and prime commodities also includes an exemption of the
20% senior citizen discount."28
The Court of Appeals ruled that the Department of Trade and Industry's Administrative Order,
which originated from Section 4 of the Expanded Senior Citizens Act, only applied to prime
commodities and retailers who sell consumer products, while Utzurrum's claim for discount
related to his purchase from the Silliman University Cooperative operating as a canteen or
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restaurant, not as a retailer. The Court of Appeals ruled that when there is a discrepancy
between the law and an interpretative or administrative ruling, the law prevails.29
The Court of Appeals also rejected Estoconing's argument that the Silliman University
Cooperative's tax-exempt status meant that it would not be able to avail of the tax deduction
offered to retail establishments as an incentive. It reiterated the Metropolitan Trial Court in
Cities' ruling that Estoconing failed to substantiate his claim that the cooperative was exempt
from complying with the law. It also noted that the issue of its inability to take advantage of
the tax deduction, being a tax-exempt entity, should be threshed out in a case before the
Bureau of Internal Revenue. "The benefits granted to the senior citizens" under the law, the trial
court added, "should not be held hostage to this alleged problem without violating the plain
and categorical mandate of the law."30
The dispositive portion of the Court of Appeals Decision reads:
WHEREFORE, the instant petition is DISMISSED. The Decision dated December 18, 2014
rendered by the Regional Trial court, Branch 32 of Dumaguete City convicting the petitioner
for violating the Expanded Senior Citizens Act of 2010 is AFFIRMED> in toto.
In his Petition,32 petitioner Estoconing emphasizes that cooperatives registered with the
Cooperative Development Authority and the Bureau of Internal Revenue were exempt from
paying taxes. He then submits that the Silliman University Cooperative was exempted from
extending a 20% senior citizen discount to its members, as the discount was ultimately
chargeable to the government, not the business establishment, in the form of tax deductions.
Thus, he posits that if the cooperative were forced to extend senior citizen discounts, it would
have to shoulder the burden with no way to avail of the tax deductions, leading to financial
losses and possible bankruptcy.33
Petitioner then points out that the intention to exclude cooperatives from extending senior
citizen discounts was apparent in the Expanded Senior Citizens Act's Implementing Rules and
Regulations, which incorporated a Department and Trade and Industry order granting a 5%
discount to senior citizens for the purchase of basic necessities and prime commodities, but
exempted cooperative stores from its coverage.34 He insists that if a cooperative was
exempted for basic necessities and prime commodities, then with more reason should it be
exempted from issuing a discount for luxurious items like soft drinks.35
Petitioner then opines that the prohibition on double discount in the Expanded Senior Citizens
Act applies to its member-owners who are senior citizens, because they already enjoy annual
patronage refund and interest on capital, and are entitled to purchase goods on credit.36
In its Comment,37 respondent asserts that petitioner primarily raises questions of fact in his Rule
45 petition and failed to provide any ground for this Court to recalibrate the lower courts'
factual findings.38
Nonetheless, respondent insists that the lower courts did not err in convicting petitioner of
violating the Expanded Senior Citizens Act as the law did not provide any exceptions for
cooperatives.39 Additionally, it maintains that Silliman University Cooperative was rightfully
classified as a restaurant by the lower courts, obligated to extend a 20% senior citizen
discount.40
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Respondent also points out that the prohibition against double discount does not apply to the
availment of the senior citizen discount and receiving patronage refund and interest on
capital, which are privileges of a cooperative member.41
This Court directed petitioner to file a reply.42 However, he manifested43 that he would not
be filing one and instead asked this Court to accept the May 24, 2019 opinion44 submitted by
the Cooperative Development Authority.
The sole issue for this Court's resolution is whether or not a cooperative selling hot meals and
snacks is required to issue a 20% senior citizen discount to its member.
This Court's action on appeals filed before it is discretionary, as such review is "not a matter of
right, but of sound judicial discretion[.]"45 Additionally, under the Rules of Court, only questions
of law should be raised in a Rule 45 petition, as this Court is not a trier of facts.46 Respondent
asserts that the Petition should be promptly dismissed for raising the same questions of fact
already resolved by the lower courts.
Respondent is mistaken. Cheesman v. Intermediate Appellate Court47 distinguished questions

of law from questions of fact:
As distinguished from a question of law—which exists "when the doubt or difference arises as
to what the law is on a certain state of facts"—"there is a question of fact when the doubt or
difference arises as to the truth or the falsehood of alleged facts;" or when the "query
necessarily invites the calibration of the whole evidence considering mainly the credibility of
witnesses, existence and relevancy of specific surrounding circumstances, their relation to
each other and to the whole and the probabilities of the situation."48 (Citations omitted)
Here, while petitioner continues to dispute the lower courts' designation of the Silliman
University Cooperative as a restaurant,49 the more relevant issue for resolution is a question of
law: which between the Expanded Senior Citizens Act and the Cooperative Code applies to
purchases made from a cooperative by a senior citizen member. Hence, the Petition was
properly filed under Rule 45 of the Rules of Court.
To uphold the presumption of legality inherent in every law, this Court is also tasked to
harmonize the seemingly conflicting provisions, if any, between the Expanded Senior Citizens
Act and the Cooperative Code on the obligation of cooperatives to issue a senior citizen
discount. Valencia v. Court of Appeals50 explains:
Interpreting and harmonizing laws with laws is the best method of interpretation. Interpretare
et concordare leges legibus est optimus interpretandi modus. This manner of construction
would provide a complete, consistent and intelligible system to secure the rights of all persons
affected by different legislative and quasi-legislative acts. Where two (2) rules on the same
subject, or on related subjects, are apparently in conflict with each other, they are to be
reconciled by construction, so far as may be, on any fair and reasonable hypothesis. Validity
and legal effect should therefore be given to both, if this can be done without destroying the
evident intent and meaning of the later act. Every statute should receive such a construction
as will harmonize it with the pre-existing body of laws.51 (Citation omitted)
Thus, before ruling on the issues for resolution, it is imperative to first briefly discuss the two
separate laws involved here, as with the points of their intersection.
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II
Elderly people enjoy a revered status in our society, and we teach our children to treat them
with utmost respect.52 The respect we accord to the elderly is reflected in the Constitution,
which compels families and the State to care for their elderly members.53 Republic Act No.
7432,54 or the Senior Citizens Act, was passed into law on April 23, 1992 pursuant to the State's
responsibility towards the elderly, social justice,55 and the right of the elderly to an integrated
and comprehensive health delivery system.56
Republic Act No. 7432 granted senior citizens, defined as "any resident citizen of the Philippines
at least sixty (60) years old,"57 the following privileges:
SECTION 4. Privileges for the Senior Citizens. - The senior citizens shall be entitled to the following:
establishments may claim the cost as tax credit;
b) a minimum of twenty percent (20%) discount on admission fees charged by theaters,

cinema houses and concert halls, circuses, carnivals and other similar places of culture, leisure,
and amusement;
c) exemption from the payment of individual income taxes: Provided, That their annual
taxable income does not exceed the property level as determined by the National Economic
d) exemption from training fees for socioeconomic programs undertaken by the OSCAas part
of its work;
e) free medical and dental services in government establishment anywhere in the country,
subject to guidelines to be issued by the Department of Health, the Government Service
Insurance System and the Social Security System;
f) to the extent practicable and feasible, the continuance of the same benefits and privileges
given by the Government Service Insurance System (GSIS), Social Security System (SSS) and
PAG- IBIG, as the case may be, as are enjoyed by those in actual service.
The law then allowed private establishments to claim the costs of the discounts they extended
as tax credits.58
In Commissioner of Internal Revenue v. Central Luzon Drug Corporation,59 Mercury Drug

declared net losses from its operations in its annual income tax return for 1996. However, it also
filed a claim for tax refund/credit of P904,769.00, which allegedly represented the actual
discounts it extended to qualified senior citizens under the law. The Commissioner of Internal
Revenue denied its claim, prompting it to elevate its claim to the Court of Tax Appeals. The
Court of Tax Appeals initially denied Mercury Drug's claim, but later reversed its decision upon
motion for reconsideration, ordering the Commissioner of Internal Revenue to issue Mercury
Drug a tax credit certificate.60
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The Court of Appeals upheld the Court of Tax Appeals' decision and ordered the
Commissioner of Internal Revenue to issue Mercury Drug a tax credit certificate.61
In denying the Commissioner of Internal Revenue's petition, this Court affirmed that
establishments are entitled to a tax credit representing the cost of senior citizen discounts they
extended even if they operated at a loss, as the establishment may choose to use the tax
credit on a future tax liability.62 It then emphasized that Republic Act No. 7432 categorically
allowed business establishments to claim as tax credit the senior citizen discounts they
granted.63 Given the discount's nature, it should be treated as a tax credit, not a sales
discount or tax deduction:
When the law says that the cost of the discount may be claimed as a tax credit, it means that
the amount — when claimed — shall be treated as a reduction from any tax liability, plain and
simple. The option to avail of the tax credit benefit depends upon the existence of a tax
liability, but to limit the benefit to a sales discount — which is not even identical to the discount
privilege that is granted by law — does not define it at all and serves no useful purpose. The
definition must, therefore, be stricken down.64 (Emphasis in the original)
Commissioner of Internal Revenue added that the tax credit benefit was to be considered as
"just compensation for private property taken by the State for public use."65 This Court pointed
out that the concept of public use has evolved from the "traditional notion of use by the
public,"66 and now also includes "public interest, public benefit, public welfare, and public
convenience."67 It elaborated:
As a result of the 20 percent discount imposed by RA 7432, respondent becomes entitled to a

just compensation. This term refers not only to the issuance of tax credit certificate indicating
the correct amount of the discounts given, but also to the promptness in its release. Equivalent
to the payment of property taken by the State, such issuance- when not done within a
reasonable time from the grant of the discounts - cannot be considered as just compensation.
In effect, respondent is made to suffer the consequences of being immediately deprived of
its revenues while awaiting actual receipt, through the certificate, of the equivalent amount
it needs to cope with the reduction in its revenues.68 (Emphasis in the original, citation omitted)
On February 26, 2004, Republic Act No. 9257, or the Expanded Senior Citizens Act of 2003,
amended Republic Act No. 7432 and increased the privileges received by senior citizens, as
follows:
SECTION 4. Privileges for the Senior Citizens. - The senior citizens shall be entitled to the following:
(b) a minimum of twenty percent (20%) discount on admission fees charged by theaters,
cinema houses and concert halls, circuses, carnivals, and other similar places of culture, leisure
and amusement for the exclusive use or enjoyment of senior citizens;
(c) exemption from the payment of individual income taxes; Provided, That their annual
taxable income does not exceed the poverty level as determined by the National Economic
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(d) exemption from training fees for socio-economic programs;
(e) free medical and dental services, diagnostic and laboratory fees such as, but not limited
to, x-rays, computerized tomography scans and blood tests, in all government facilities,
subject to the guidelines to be issued by the Department of Health in coordination with the
Philippine Health Insurance Corporation (PHILHEALTH);
(f) the grant of twenty percent (20%) discount on medical and dental services, and diagnostic
and laboratory fees provided under Section 4(e) hereof, including professional fees of
attending doctors in all private hospitals and medical facilities, in accordance with the rules
and regulations to be issued by the Department of Health, in coordination with the Philippine
Health Insurance Corporation;
(g) the grant of twenty percent (20%) discount in fare for domestic air and sea travel for the
exclusive use or enjoyment of senior citizens;
(h) the grant of twenty percent (20%) discount in public railways, skyways[,] and bus fare for
the exclusive use and enjoyment of senior citizens;
(i) educational assistance to senior citizens to pursue post secondary, tertiary, post tertiary, as
well as vocational or technical education in both public and private schools through provision
of scholarship, grants, financial aid, subsidies and other incentives to qualified senior citizens,
including support for books, learning materials, and uniform allowance, to the extent feasible:
Provided, That senior citizens shall meet minimum admission requirements;
(j) to the extent practicable and feasible, the continuance of the same benefits and privileges
given by the Government Service Insurance System (GSIS), Social Security System (SSS)[,] and
PAG-IBIG, as the case may be, as are enjoyed by those in actual service.
(k) retirement benefits of retirees from both the government and private sector shall be
regularly reviewed to ensure their continuing responsiveness and sustainability, and to the
extent practicable and feasible, shall be upgraded to be at par with the current scale enjoyed
by those in actual service.
(l) to the extent possible, the government may grant special discounts in special programs for
senior citizens on purchase of basic commodities, subject to the guidelines to be issued for the
purpose by the Department of Trade and Industry (DTI) and the Department of Agriculture
(DA); and
(m) provision of express lanes for senior citizens in all commercial and government
establishments; in the absence thereof, priority shall be given to them.
In the availment of the privileges mentioned above, the senior citizen or elderly person may
submit as proof of his/her entitlement thereto any of the following:
(a) an ID issued by the city or municipal mayor or of the barangay captain of the place where
the senior citizen or the elderly resides;
(b) the passport of the elderly person or senior citizen concerned; and
(c) other documents that establish that the senior citizen or elderly person is a citizen of the
Republic and is at least sixty (60) years of age.
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The establishment may claim the discounts granted under (a), (f), (g)[,] and (h) as tax
deduction based on the net cost of the goods sold or services rendered: Provided, That the
cost of the discount shall be allowed as deduction from gross income for the same taxable
year that the discount is granted. Provided, further, That the total amount of the claimed tax
deduction net of value added tax if applicable, shall be included in their gross sales receipts
National Internal Revenue Code, as amended.
Aside from increasing the privileges to be enjoyed by senior citizens, Republic Act No. 9257
also abandoned Republic Act No. 7432's provision for a tax credit. Instead, it provided that
establishments may claim the discounts they granted "as tax deduction based on the net cost
of the goods sold or services rendered."69
In Carlos Superdrug Corporation v. Department of Social Welfare and Development,70 a

group of drugstore operators and owners assailed the constitutionality of Section 4(a) of
Republic Act No. 9257 for being confiscatory as it purportedly failed to provide a scheme
where drugstores can be justly compensated for the senior citizen discounts they granted.
This Court in Carlos Superdrug clarified that by virtue of its police power, the State, "in
promoting the health and welfare of a special group of citizens"71 can validly compel private
establishments to partly subsidize a government program. Carlos Superdrug stated that
although a tax deduction did not offer a full reimbursement of the extended senior citizen
discount, as it "does not reduce taxes owed on a peso for peso basis but merely offers a
fractional reduction in taxes owed[,]"72 the taking was still valid for being an exercise of the
State's police power:
most essential, insistent[,] and the least inimitable of powers, extending as it does to all the
great public needs. It is "[t]he power vested in the legislature by the constitution to make,
ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances,
either with penalties or without, not repugnant to the constitution, as they shall judge to be for
the good and welfare of the commonwealth, and of the subjects of the same."
For this reason, when the conditions so demand as determined by legislature, property rights
must bow to the primacy of police power because property rights, though sheltered by due
process, must yield to the general welfare.73 (Citations omitted)
Moreover, Carlos Superdrug highlighted that the petitioners failed to substantiate their claim
that granting a senior citizen discount was unduly oppressive. The petitioners, this Court held,
failed to include a financial statement supporting their assertions that the law led to their
operating at a great loss.74
On February 15, 2010, Republic Act No. 9994, or the Expanded Senior Citizens Act of 2010,
further amended Republic Act No. 7432 by exempting senior citizens from value-added tax
and according them a 5% discount on their monthly water and electricity bills, among other
privileges.75 However, Republic Act No. 9994 maintained the entitlement of private
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establishments to a tax deduction instead of the tax credit earlier bestowed on them by
Republic Act No. 7432.
Manila Memorial Park v. Department of Social Welfare and Development,76 affirmed the
constitutionality of the tax deduction scheme adopted by Republic Act No. 9257 and the
partial reimbursement to private establishments. It then reiterated77 Carlos Superdrug that the
tax deduction scheme was a legitimate exercise of police power. It also clarified that the
pronouncement in Commission on Internal Revenue—that the tax credit was in the form of just
compensation as a result of the State's power of eminent domain—was merely obiter. Hence,
it was not a binding precedent.78
As seen from this Court's previous rulings, whether through a peso- to-peso reimbursement in
the form of a tax credit or a return of a part of the discounts given through a tax deduction
scheme, it is clear that private establishments are entitled to recoup a portion of the senior
citizen discounts that they have extended to eligible recipients.
III
On the other hand, Republic Act No. 6938, as amended by Republic Act No. 9520,79 or the
Philippine Cooperative Code of 2008, defines a cooperative as:
. . . an autonomous and duly registered association of persons, with a common bond of

interest, who have voluntarily joined together to achieve their social, economic, and cultural
needs and aspirations by making equitable contributions to the capital required, patronizing
their products and services and accepting a fair share of the risks and benefits of the
undertaking in accordance with universally accepted cooperative principles.80
Recognizing cooperatives as legal personalities81 with beneficial social and economic

functions, the Constitution mandated the creation of "an agency to promote the viability and
growth of cooperatives as instruments for social justice and economic development."82 This
paved the way for the creation of the Cooperative Development Authority on March 10,
1990.83
In its May 24, 2019 opinion,84 the Cooperative Development Authority explained that
cooperatives do not operate for profit but to sustain its members, and whatever is earned
reverts to their members:
Therefore, cooperatives conduct their business activities not for profit but for the sustenance
of its members. The purpose of gaining profit is only a consequence thereto in order to meet
the need to serve the members which is the primary purpose of the cooperatives. Moreover,
being community based, the services that their members expect from the government are
given directly to them by their cooperative through [the] easiest, fastest[,] and most accessible
way. Hence, cooperatives are but partner-instruments of the State in promoting equity, social
justice and economic development.
To reiterate, they are not organized for profit. Rather, they are established by people to
provide them with products and services, or produce and dispose the fruits of their labor. They
own the means of production and the distribution facilities in common. Their existence is one
of service to their members. Whatever is earned, the same revert[s] to the members.85
(Emphasis in the original)
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Additionally, to encourage the formation and growth of cooperatives, the State extended
different types of privileges86 to them, and endowed them with a preferential tax treatment.87
In providing preferential tax treatment to cooperatives, Republic Act No. 9520 differentiated
between cooperatives that transacted only with their members and those that transacted
with both their members and the general public:
ARTICLE 60. Tax Treatment of Cooperative.— Duly registered cooperatives under this Code
which do not transact any business with non- members or the general public shall not be
subject to any taxes and fees imposed under the internal revenue laws and other tax laws.
Cooperatives not falling under this article shall be governed by the succeeding section.
ARTICLE 61. Tax and Other Exemptions. - Cooperatives transacting business with both members
and non-members shall not be subjected to tax on their transactions with members. In relation
to this, the transactions of members with the cooperative shall not be subject to any taxes and
fees, including not limited to final taxes on members' deposits and documentary tax.
Notwithstanding the provisions of any law or regulation to the contrary, such cooperatives
dealing with non[-]members shall enjoy the following tax exemptions:
(1) Cooperatives with accumulated reserves and undivided net savings of not more than Ten
million pesos (P10,000,000.00) shall be exempt from all national, city, provincial, municipal or
barangay taxes of whatever name and nature. Such cooperatives shall be exempt from
customs duties, advance sales or compensating taxes on their importation of machineries,
equipment and spare parts used by them and which are not available locally a certified by
the department of trade and industry (DTI). All tax free importations shall not be sold nor the
beneficial ownership thereof be transferred to any person until after five (5) years, otherwise,
the cooperative and the transferee or assignee shall be solidarily liable to pay twice the
amount of the imposed tax and/or duties.
(2) Cooperatives with accumulated reserves and divided net savings of more than Ten million
pesos (P10,000,000.00) shall fee the following taxes at the full rate:
(a) Income Tax - On the amount allocated for interest on capitals: Provided, That the same
tax is not consequently imposed on interest individually received by members: Provided,
further, That cooperatives regardless of classification, are exempt income tax from the date
of registration with the Authority;
(b) Value-Added Tax On transactions with non-members: Provided, however, That

cooperatives duly registered with the Authority; are exempt from the payment of value-added
tax; subject to Sec. 109, sub-sections L, M and N of Republic Act No. 9337, the National Internal
Revenue Code, as amended: Provided, That the exempt transaction under Sec. 109 (L) shall
include sales made by cooperatives duly registered with the Authority organized and
operated by its member to undertake the production and processing of raw materials or of
goods produced by its members into finished or process products for sale by the cooperative
to its members and non-members: Provided, further, That any processed product or its
derivative arising from the raw materials produced by its members, sold in their name and for
the account of the cooperative: Provided, finally, That at least twenty-five per centum (25%)
of the net income of the cooperatives is returned to the members in the form of interest and/or
patronage refunds;
(c) All other taxes unless otherwise provided herein; and
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(d) Donations to charitable, research and educational institutions and reinvestment to

socioeconomic projects within the area of operation of the cooperative may be tax
deductible.
(3) All cooperatives, regardless of the amount of accumulated reserves and undivided net
savings shall be exempt from payment of local taxes and taxes on transactions with banks
and insurance companies: Provided, That all sales or services rendered for non- members shall
be subject to the applicable percentage taxes sales made by producers, marketing or service
cooperatives: Provided further, That nothing in this article shall preclude the examination of
the books of accounts or other accounting records of the cooperative by duly authorized
internal revenue officers for internal revenue tax purposes only, after previous authorization by
the Authority.
(4) In areas where there are no available notaries public, the judge, exercising his ex officio
capacity as notary public, shall render service, free of charge, to any person or group of
persons requiring the administration of oath or the acknowledgment of articles of cooperation
and instruments of loan from cooperatives not exceeding Five Hundred Thousand Pesos
(P500,000.00).
(5) Any register of deeds shall accept for registration, free of charge, any instrument relative
to a loan made under this Code which does not exceed Two Hundred Fifty Thousand Pesos
(P250,000.00) or the deeds of title of any property acquired by the cooperative or any paper
or document drawn in connection with any action brought by the cooperative or with any
court judgment rendered in its favor or any instrument relative to a bond of any accountable
officer of a cooperative for the faithful performance of his duties and obligations.
(6) Cooperatives shall be exempt from the payment of all court and sheriffs fees payable to
the Philippine Government for and in connection with all actions brought under this Code, or
where such actions is brought by the Authority before the court, to enforce the payment of
obligations contracted in favor of the cooperative.1a⍵⍴h!1
(7) All cooperatives shall be exempt from putting up a bond for bringing an appeal against
the decision of an inferior court or for seeking to set aside any third party claim: Provided, That
a certification of the Authority showing that the net assets of the cooperative are in excess of
the amount of the bond required by the court in similar cases shall be accepted by the court
as a sufficient bond.
(8) Any security issued by cooperatives shall be exempt from the provisions of the Securities
Act provided such security shall not be speculative.
The clear intention of the Constitution to extend preferential tax treatment to cooperatives in
recognition of their vital role in society was reiterated in Dumaguete Cathedral Credit
Cooperative v. Commissioner of Internal Revenue:88
In closing, cooperatives, including their members, deserve a preferential tax treatment

because of the vital role they play in the attainment of economic development and social
justice. Thus, although taxes are the lifeblood of the government, the State's power to tax must
give way to foster the creation and growth of cooperatives. To borrow the words of Justice
Isagani A. Cruz: "The power of taxation, while indispensable, is not absolute and may be
subordinated to the demands of social justice."89 (Citation omitted)
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The scope of the legislative power to tax not only includes the power to determine the tax rate
and its method of collection, but also whom to tax or to exclude from taxation.90 In this
instance, the legislature deliberately opted not to exercise its power to tax when it came to
cooperatives to encourage their formation and development.
IV
The Silliman University Cooperative is a primary multi-purpose cooperative duly registered with
the Cooperative Development Authority on January 11, 2010.91 It provides the following
services to both its members and non-members alike:
a. Food and Catering Services
b. Dry Goods and Souvenir Items
c. Purchase Order System (PO)
d. Rental of Tables, Chairs and Catering Equipments (sic)
e. Vehicle and Appliance Credit Facility
f. Surety Loan Fund Credit Guarantee
g. Airline Ticketing Services for PAL and CEBU PACIFIC
h. Western Union Money Transfer Services92
The cooperative received its Certificate of Tax Exemption93 from the Bureau of Intemal
Revenue on May 15, 2012:
No. COOP-00038-12-RR12-RDO 079
CERTIFICATE OF TAX EXEMPTION

(For Cooperatives registered under Republic Act No. 9520)
THIS IS TO CERTIFY THAT SILLIMAN UNIVERSITY COOPERATIVE (SU COOP), a primary multi-purpose
cooperative, with address at 21 Corner Hibbard and Silliman Avenue, Dumaguete City, is a
duly-registered taxpayer of RDO No. 079 under Tax Identification No. 001-220-743 and is
registered with the Cooperative Development Authority under Registration Certificate No.
9520-07006045 dated January 11, 2010.
As a cooperative transacting with both members and non--members with accumulated

reserves and undivided net savings of not more than Ten million pesos (P10,000,000.00), SU
COOP is entitled to the following tax exemptions and incentives provided by Article 61 of
Republic Act No. 9520, as implemented by Section 8 of the Joint Rules and Regulations
Implementing Articles 60, 61 and 144 of RA No. 9520:
1. Exemption from Income tax on income from CDA-registered operations;
2. Exemption from Value-added tax on CDA-registered sales or transactions;
3. Exemption from other Percentage tax;
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4. Exemption from Donor's tax on donations to duly accredited charitable, research and
educational institutions, and reinvestment to socio-economic projects within the area of
operation of the cooperative;
5. Exemption from Excise tax for which it is directly liable;
6. Exemption from Documentary stamp tax: Provided, however, that the other party to the
taxable document/transaction who is not exempt shall be the one directly liable for the tax;
7. Exemption from payment of Annual Registration Fee of Five hundred pesos (P500.00); and
8. Exemption from all taxes on transactions with insurance companies and banks, including
but not limited to 20% final tax on interest deposits and 7.5% final income tax on interest income
derived from a depositary bank under the expanded foreign currency deposit system.
This Certificate of Registration shall be valid for five (5) years or until May 15, 2017 unless sooner
revoked by this Office for violation of any provisions of the Joint Revenue Regulations, the terms
and conditions on the reverse side hereof or upon withdrawal of the Certificate of Registration
by the CDA.94 (Emphasis in the original)
The Certificate of Tax Exemption enumerates the tax exemptions and privileges granted to it
under Section 61 of Republic Act No. 9520. Section 61 provides that cooperatives that transact
"business with both members and non-members shall not be subject to tax on their transactions
with members," while cooperatives that transact with non-members will only be taxable if their
"accumulated reserves and undivided net savings" are more than P10,000,000.00.
The power to tax is the strongest of all the government's power,95 as "taxes are the lifeblood
of the govemment."96 Nonetheless, the power to tax is not plenary. The Constitution provides
that the "[t]he rule of taxation shall be uniform and equitable";97 thus, "all taxable articles or
kinds of property of the same class [shall] be taxed at the same rate."98Cooperatives were
singled out by the legislature and accorded preferential treatment due to their constitutionally
recognized vital role in the economic development of our society's marginalized sectors.
Hence, a marked difference lies between cooperatives and other private establishments that
do not enjoy the same tax exemption.
Another constitutional limitation is that taxation must not amount to a "[deprivation] of

property without due process of law[.]"99 Chamber of Real Estate and Builders' Association,
Inc. v. Executive Secretary Romulo100 discussed the due process limitation inherent in the
power to tax:
As a general rule, the power to tax is plenary and unlimited in its range, acknowledging in its
very nature no limits, so that the principal check against its abuse is to be found only in the
responsibility of the legislature (which imposes the tax) to its constituency who are to pay it.
Nevertheless, it is circumscribed by constitutional limitations. At the same time, like any other
statute, tax legislation carries a presumption of constitutionality.1âшphi1
The constitutional safeguard of due process is embodied in the fiat "[no] person shall be
deprived of life, liberty or property without due process of law." In Sison, Jr. v. Ancheta, et al.,
we held that the due process clause may properly be invoked to invalidate, in appropriate
cases, a revenue measure when it amounts to a confiscation of property. But in the same
case, we also explained that we will not strike down a revenue measure as unconstitutional
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(for being violative of the due process clause) on the mere allegation of arbitrariness by the
taxpayer. There must be a factual foundation to such an unconstitutional taint. This merely
adheres to the authoritative doctrine that, where the due process clause is invoked,
considering that it is not a fixed rule but rather a broad standard, there is a need for proof of
such persuasive character.101 (Citations omitted)
Private establishments that issue senior citizen discounts are entitled to a return of the discounts
they extended. However, the legislature, in the exercise of its police power, watered down
their reimbursements to a tax deduction from what used to be a tax credit. Nonetheless,
whether through a tax credit or a tax deduction, there is no arguing that business
establishments are still entitled to recoup some of the discounts they issued to senior citizens.
As a tax-exempt entity, the Silliman University Cooperative could not have availed of a tax
deduction to offset a portion of the senior citizen discounts it issued to its clients, whether
member or non-member. Thus, to insist that it was nevertheless mandated to issue a 20%
discount would have been confiscatory and a deprivation of private property without due
process of law.
It is true that a business establishment's availment of a tax benefit is "merely permissive, not
imperative."102 A business establishment may even opt to ignore the tax credit or tax
deduction altogether and consider its issuance of senior citizen discounts "as an act of
beneficence, an expression of its social conscience."103 However, the option to avail of a tax
benefit must still be available to the business establishment and not be rendered illusory. Being
forced to act benevolently is antithetical to the entire concept of charitable giving.To
reiterate, the imposition of the senior citizen discount is a valid exercise of the State's police
power to address social justice and human rights. The tax deduction scheme emanates from
the State's exercise of its police power, which empowers it to "regulate the acquisition,
ownership, use, and disposition of property and its increments"104 and-not its power of
eminent domain.
"Profits are intangible personal property for which petitioners merely have an inchoate right.
These are types of property which cannot be 'taken."'105 Hence, private establishments are
not entitled to just compensation in the absence of an actual taking:
When the 20% discount is given to customers who are senior citizens, there is a perceived loss
for the establishment for that same amount at that precise moment. However, this moment is
fleeting and the perceived loss can easily be recouped by sales to ordinary citizens at higher
prices. The concern that more consumers will suffer as a result of a price increase is a matter
better addressed to the wisdom of the Congress. As it stands, Republic Act No. 9257 does not
establish a price control. For non-profit establishments, they may cut down on costs and make
other business decisions to optimize performance. Business decisions like these have been
made even before the 20% discount became law, and will continue to be made to adapt to
the ever changing market. We cannot consider this fluid concept of possible loss and potential
profit as private property belonging to private establishments. They are inchoate. They may or
may not exist depending on many factors, some of which are within the control of the private
establishments. There is nothing concrete, earmarked, actual or specific for taking in this
scenario. Necessarily, there is nothing to compensate.106 (Citation omitted)
Given the possible ambiguity in the interpretation of the two laws, we find that the prosecution
was unable to support its claim beyond reasonable doubt that the Silliman University
Cooperative, as a restaurant operator, was obligated to issue a 20% senior citizen discount to
senior citizen members and non-members alike.
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We sympathize with the senior citizen who claimed to be the offended party here. We
understand how difficult it may have been for him to be denied the senior citizen discount
from his favorite watering hole for his favorite soft drink. Yet, we must take a larger view. It does
not seem reasonable that cooperatives, favored by the State for social justice reasons, will be
at a disadvantage vis-a-vis private commercial establishments. The latter are allowed by law
to claim the senior citizen discount as a tax deduction, and the State is not compelling them
to reduce the potential benefits they could give to their owners. We acquit petitioner on the
ground of reasonable doubt that the law applies to him.
In so doing, we earnestly suggest that the offended senior citizen make a choice: to continue
with his habit of patronizing the cooperative, or to find a private establishment that will
certainly sell him his favorite drink with a certain discount
Life is full of choices; this is not the most difficult of them.
WHEREFORE, the Petition is GRANTED. The assailed Court of Appeals' July 29, 2016 Decision and
January 31, 2017 Resolution in CA-G.R. CEB-CR No. 02477 are REVERSED and SET ASIDE.
Let a copy of this Decision be provided to the Senate and the House of Representatives,
through the Senate President and the House Speaker, for remedial legislation, if necessary.
SO ORDERED.
Carandang, Lazaro-Javier, Zalameda, and Gaerlan, JJ., concur.
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Regulation of vehicular traffic
Luque vs. Villegas, et al. G.R. No. L-22545 November 28, 1969
Challenged as unconstitutional, illegal and unjust in these original proceedings for certiorari
and mandamus are two substantially identical bus ban measures: (1) Ordinance No. 4986 of
the City of Manila approved on July 13, 1964, entitled "An Ordinance Rerouting Traffic on
Roads and Streets in the City of Manila, and for Other Purposes," and (2) Administrative Order
No. 1, series of 1964, dated February 7, 1964, and Administrative Order No. 3, series of 1964,
dated April 21, 1964, both issued by Commissioner Enrique Medina (hereinafter referred to as
the Commissioner) of the Public Service Commission.
Original petitioners are passengers from the provinces of Cavite and Batangas who ride on
buses plying along the routes between the said provinces and Manila. Other petitioners are
public service operators operating PUB and PUJ public service vehicles from the provinces with
terminals in Manila, while the rest are those allegedly operating PUB, PUJ or AC motor vehicles
operating within Manila and suburbs.
Ordinance 4986, amongst others, provides that:
RULE II. ENTRY POINTS AND ROUTES OF PROVINCIAL PASSENGER BUSES AND JEEPNEYS
1. Provincial passenger buses and jeepneys (PUB and PUJ) shall be allowed to enter Manila,
but only through the following entry points and routes, from 6:30 A.M. to 8:30 P.M. every day
except Sundays and holidays:
xxx xxx xxx
(m) Those coming from the south through F. B. Harrison shall proceed to Mabini; turn right to
Harrison Boulevard; turn right to Taft Avenue and proceed towards Pasay City;
(n) Those coming from the south through Taft Avenue shall turn left at Vito Cruz; turn right to
Dakota; turn right to Harrison Boulevard; turn right to Taft Avenue; thence proceed towards
Pasay City;
Loading and unloading shall be allowed only at Harrison Boulevard, between A. Mabini and
Taft Avenue;
xxx xxx xxx
RULE III. FLEXIBLE SHUTTLE BUS SERVICE
1. In order that provincial commuters shall not be unduly inconvenienced as a result of the
implementation of these essential traffic control regulations, operators of provincial passenger
buses shall be allowed to provide buses to shuttle their passengers from their respective entry
control points, under the following conditions:
(a) Each provincial bus company or firm shall be allowed such number of shuttle buses
proportionate to the number of units authorized it, the ratio to be determined by the Chief,
Traffic Control Bureau, based on his observations as to the actual needs of commuters and
traffic volume; in no case shall the allocation be more than one shuttle bus for every 10
authorized units, or fraction thereof.
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(b) No shuttle bus shall enter Manila unless the same shall have been provided with
identification stickers as required under Rule IV hereof, which shall be furnished and allocated
by the Chief, Traffic Control Bureau to each provincial bus company or firm.
(c) All such shuttle buses are not permitted to load or unload or to pick and/or drop passengers
along the way but must do so only in the following places:
xxx xxx xxx
(3) South
(a) Harrison Boulevard, between Dakota and Taft Avenue.
Administrative Order No. 1, series of 1964, issued by the Commissioner, in part, provides:
2. All public utilities including jeepneys heretofore authorized to operate from the City of
Manila to any point in Luzon, beyond the perimeter of Greater Manila, shall carry the words
"For Provincial Operation" in bold and clear types on both sides or on one side and at the back
of the vehicle and must not be less than 12 inches in dimension. All such vehicles marked "For
Provincial Operation" are authorized to operate outside the perimeter of Greater Manila in
accordance with their respective certificates of public convenience, and are not authorized
to enter or to operate beyond the boundary line fixed in our order of March 12, 1963 and July
22, 1963, with the exception of those vehicles authorized to carry their provincial passengers
thru the boundary line up to their Manila terminal which shall be identified by a sticker signed
and furnished by the PSC and by the Mayors of the affected Cities and municipalities, and
which shall be carried on a prominent place of the vehicle about the upper middle part of
the windshield.
xxx xxx xxx
All such public utility vehicles authorized by this Order to enter the City of Manila and to carry
their passengers thru the boundary line, are not permitted to load or unload or to pick and/or
drop passengers along the way, but must do so only in the following places:
xxx xxx xxx
c. Vehicles coming from the SOUTH may load or unload at the San Andres-Taft Rotonda; at
Plaza Lawton or at the Corner of Harrison and Mabini Streets near the Manila Zoo.
On April 21, 1964, the Commissioner issued Administrative Order No. 3 which resolved motions
for reconsideration (of the first administrative order — Administrative Order No. 1, series of 1964)
filed by several affected operators. This order (No. 3), amongst others, states that only 10% of
the provincial buses and jeepneys shall be allowed to enter Manila; however, provincial buses
and jeepneys "operating within a radius of 50 kms. from Manila City Hall and whose business is
more on the Manila end than on the provincial end are given fifteen per cent to prevent a
dislocation of their business; provided that operators having less than five units are not
permitted to cross the boundary and shall operate exclusively on the provincial end." This order
also allocated the number of units each provincial bus operator is allowed to operate within
the City of Manila.
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1. On the main, nothing new there is in the present petition. For, the validity of Ordinance 4986
and the Commissioner's Administrative Order No. 1, series of 1964, here challenged, has
separately passed judicial tests in two cases brought before this Court.
In Lagman vs. City of Manila (June 30, 1966), 17 SCRA 579, petitioner Lagman was an operator
of PU auto trucks with fixed routes and regular terminals for the transportation of passengers
and freight on the Bocaue (Bulacan) — Parañaque (Rizal) line via Rizal Avenue, Plaza Goiti,
Sta. Cruz Bridge, Plaza Lawton, P. Burgos, Taft Avenue, and Taft Avenue Extension, Manila. He
sought to prohibit the City of Manila, its officers and agents, from enforcing Ordinance 4986.
His ground was that said ordinance was unconstitutional, illegal, ultra vires and null and void.
He alleged, amongst others, that (1) "the power conferred upon respondent City of Manila,
under said Section 18 (hh) of Republic Act No. 409, as amended, does not include the right to
enact an ordinance such as the one in question, which has the effect of amending or
modifying a certificate of public convenience granted by the Public Service Commission,
because any amendment or modification of said certificate is solely vested by law in the latter
governmental agency, and only after notice and hearing (Sec. 16 [m], Public Service Act);
but since this procedure was not adopted or followed by respondents in enacting the
disputed ordinance, the same is likewise illegal and null and void"; (2) "the enforcement of said
ordinance is arbitrary, oppressive and unreasonable because the city streets from which he
had been prevented to operate his buses are the cream of his business"; and (3) "even
assuming that Ordinance No. 4986 is valid, it is only the Public Service Commission which can
require compliance with its provisions (Sec. 17[j], Public Service Act), but since its
implementation is without the sanction or approval of the Commission, its enforcement is also
unauthorized and illegal." This Court, in a decision impressive because of its unanimity, upheld
the ordinance. Speaking through Mr. Justice J.B.L. Reyes, we ruled:
First, as correctly maintained by respondents, Republic Act No. 409, as amended, otherwise
known as the Revised Charter of the City of Manila, is a special law and of later enactment
than Commonwealth Act No. 548 and the Public Service Law (Commonwealth Act No. 146,
as amended), so that even if conflict exists between the provisions of the former act and the
latter acts, Republic Act No. 409 should prevail over both Commonwealth Acts Nos. 548 and
146. In Cassion vs. Banco Nacional Filipino, 89 Phil. 560, 561, this Court said:
". . . for with or without an express enactment it is a familiar rule of statutory construction that
to the extent of any necessary repugnancy between a general and a special law or provision,
the latter will control the former without regard to the respective dates of passage."
It is to be noted that Commonwealth Act No. 548 does not confer an exclusive power or
authority upon the Director of Public Works, subject to the approval of the Secretary of Public
Works and Communications, to promulgate rules and regulations relating to the use of and
traffic on national roads or streets. This being the case, section 18 (hh) of the Manila Charter is
deemed enacted as an exception to the provisions of Commonwealth Act No. 548.
xxx xxx xxx
Second, the same situation holds true with respect to the provision of the Public Service Act.
Although the Public Service Commission is empowered, under its Section 16(m), to amend,
modify or revoke certificates of public convenience after notice and hearing, yet there is no
provision, specific or otherwise, which can be found in this statute (Commonwealth Act No.
146) vesting power in the Public Service Commission to superintend, regulate, or control the
streets of respondent City or suspend its power to license or prohibit the occupancy thereof.
On the other hand, this right or authority, as hereinabove concluded is conferred upon
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respondent City of Manila. The power vested in the Public Service Commission under Section
16(m) is, therefore, subordinate to the authority granted to respondent City, under said section
18 (hh). . . .
xxx xxx xxx
That the powers conferred by law upon the Public Service Commission were not designed to
deny or supersede the regulatory power of local governments over motor traffic, in the streets
subject to their control is made evident by section 17 (j) of the Public Service Act
(Commonwealth Act No. 146) that provides as follows:
"SEC. 17. Proceedings of Commission without previous hearing. — The Commission shall have
power, without previous hearing, subject to established limitations and exceptions, and saving
provisions to the contrary:
xxx xxx xxx.
(j) To require any public service to comply with the laws of the Philippines, and with any
provincial resolution or municipal ordinance relating thereto, and to conform to the duties
imposed upon it thereby, or by the provisions of its own charter, whether obtained under any
general or special law of the Philippines." (Emphasis supplied)
The petitioner's contention that, under this section, the respective ordinances of the City can
only be enforced by the Commission alone is obviously unsound. Subsection (j) refers not only
to ordinances but also to "the laws of the Philippines," and it is plainly absurd to assume that
even laws relating to public services are to remain a dead letter without the placet of the
Commission; and the section makes no distinction whatever between enforcement of laws
and that of municipal ordinances.
The very fact, furthermore, that the Commission is empowered, but not required, to demand
compliance with apposite laws and ordinances proves that the Commission's powers are
merely supplementary to those of state organs, such as the police, upon which the
enforcement of laws primarily rests.
Third, the implementation of the ordinance in question cannot be validly assailed as arbitrary,
oppressive and unreasonable. Aside from the fact that there is no evidence to substantiate
this charge it is not disputed that petitioner has not been totally banned or prohibited from
operating all his buses, he having been allowed to operate two (2) "shuttle" buses within the
city limits.1
The second case for certiorari and prohibition, filed by same petitioner in the first case just
mentioned, is entitled "Lagman vs. Medina" (December 24, 1968), 26 SCRA 442. Put at issue
there is the validity of the Commissioner's Administrative Order No. 1, series of 1964, also
disputed herein. It was there alleged, inter alia, that "the provisions of the bus ban had not
been incorporated into his certificate of public convenience"; "to be applicable to a grantee
of such certificate subsequently to the issuance of the order establishing the ban, there should
be a decision, not merely by the Commissioner, but, also, by the PSC, rendered after due
notice and hearing, based upon material changes in the facts and circumstances under
which the certificate had been granted"; and "the ban is unfair, unreasonable and
oppressive." We dismissed this petition and upheld the validity of the questioned order of the
Commissioner. On the aforequoted issues, Chief Justice Roberto Concepcion, speaking for an
equally unanimous Court, said —
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Petitioner's claim is devoid of merit, inasmuch as:
1. The terms and conditions of the bus ban established by the Commissioner are substantially
identical to those contained in Ordinance No. 4986 of the City of Manila 'rerouting traffic on
roads and streets' therein, approved on July 30, 1964. In G.R. No. L-23305, entitled "Lagman vs.
City of Manila, petitioner herein assailed the validity of said ordinance," upon the ground,
among others, that it tended to amend or modify certificates of public conveniences issued
by the PSC; that the power therein exercised by the City of Manila belongs to the PSC; and
that the ordinance is arbitrary, oppressive and unreasonable. In a decision promulgated on
June 30, 1966, this Court rejected this pretense and dismissed Lagman's petition in said case.
2. Petitioner's certificate of public convenience, like all other similar certificates, was issued
subject to the condition that operators shall observe and comply [with] . . . all the rules and
regulations of the Commission relative to PUB service," and the contested orders — issued
pursuant to Sections 13 (a), 16 (g) and 17 (a) of Commonwealth Act 146, as amended —
partake of the nature of such rules and regulations.
xxx xxx xxx
4. The purpose of the ban — to minimize the "traffic problem in the City of Manila" and the
"traffic congestion, delays and even accidents" resulting from the free entry into the streets of
said City and the operation "around said streets, loading and unloading or picking up
passengers and cargoes" of PU buses in great "number and size" — and the letter and spirit of
the contested orders are inconsistent with the exclusion of Lagman or of those granted
certificates of public convenience subsequently to the issuance of said orders from the
operation thereof.
xxx xxx xxx
9. The theory to the effect that, to be valid, the aforementioned orders must be issued by the
PSC, not merely by its Commissioner, and only after due notice and hearing, is predicated
upon the premise that the bus ban operates as an amendment of petitioner's certificate of
public convenience, which is false, and was not sustained by this Court in its decision in G.R.
No. L-23305, which is binding upon Lagman, he being the petitioner in said case.2
The issues raised by Lagman in the two cases just mentioned were likewise relied upon by the
petitioners in the case now before us. But for the fact that the present petitioners raised other
issues, we could have perhaps written finis to the present case. The obvious reason is that we
find no cause or reason why we should break away from our ruling in said cases. Petitioners
herein, however, draw our attention to points which are not specifically ruled upon in the
Lagman cases heretofore mentioned.
2. Petitioners' other gripe against Ordinance 4986 is that it destroys vested rights of petitioning
public services to operate inside Manila and to proceed to their respective terminals located
in the City. They would want likewise to nullify said ordinance upon the averment that it impairs
the vested rights of petitioning bus passengers to be transported directly to downtown Manila.
It has been said that a vested right is one which is "fixed, unalterable, or irrevocable."3 Another
definition would give vested right the connotation that it is "absolute, complete, and
unconditional, to the exercise of which no obstacle exists . . . ."4 Petitioners' citation from 16
C.J.S., pp. 642-643,5 correctly expresses the view that when the "right to enjoyment, present or
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prospective, has become the property of some particular person or persons as a present
interest," that right is a vested right. Along the same lines is our jurisprudential concept. Thus, in
Benguet Consolidated Mining Co. vs. Pineda,6 we put forth the thought that a vested right is
"some right or interest in the property which has become fixed and established, and is no
longer open to doubt or controversy"; it is an "immediate fixed right of present and future
enjoyment"; it is to be contra-distinguished from a right that is "expectant or contingent." The
Benguet case also quoted from 16 C.J.S., Sec. 215, pp. 642-643, as follows: "Rights are vested
when the right to enjoyment, present or prospective, has become the property of some
particular person or persons as a present interest. The right must be absolute, complete, and
unconditional, independent of a contingency, and a mere expectancy of future benefit, or a
contingent interest in property founded on anticipated continuance of existing laws, does not
constitute a vested right. So, inchoate rights which have not been acted on are not vested."7
Of course, whether a right is vested or not, much depends upon the environmental facts.8
Contending that they possess valid and subsisting certificates of public convenience, the
petitioning public services aver that they acquired a vested right to operate their public utility
vehicles to and from Manila as appearing in their said respective certificates of public
convenience.
Petitioner's argument pales on the face of the fact that the very nature of a certificate of
public convenience is at cross purposes with the concept of vested rights. To this day, the
accepted view, at least insofar as the State is concerned, is that "a certificate of public
convenience constitutes neither a franchise nor a contract, confers no property right, and is a
mere license or privilege."9 The holder of such certificate does not acquire a property right in
the route covered thereby. Nor does it confer upon the holder any proprietary right or interest
of franchise in the public highways.10 Revocation of this certificate deprives him of no vested
right.11 Little reflection is necessary to show that the certificate of public convenience is
granted with so many strings attached. New and additional burdens, alteration of the
certificate, and even revocation or annulment thereof is reserved to the State.
We need but add that the Public Service Commission, a government agency vested by law
with "jurisdiction, supervision, and control over all public services and their franchises,
equipment, and other properties"12 is empowered, upon proper notice and hearing, amongst
others: (1) "[t]o amend, modify or revoke at any time a certificate issued under the provisions
of this Act [Commonwealth Act 146, as amended], whenever the facts and circumstances on
the strength of which said certificate was issued have been misrepresented or materially
changed";13 and (2) "[t]o suspend or revoke any certificate issued under the provisions of this
Act whenever the holder thereof has violated or wilfully and contumaciously refused to
comply with any order, rule or regulation of the Commission or any provision of this Act:
Provided, That the Commission, for good cause, may prior to the hearing suspend for a period
not to exceed thirty days any certificate or the exercise of any right or authority issued or
granted under this Act by order of the Commission, whenever such step shall in the judgment
of the Commission be necessary to avoid serious and irreparable damage or inconvenience
to the public or to private interests."14 Jurisprudence echoes the rule that the Commission is
authorized to make reasonable rules and regulations for the operation of public services and
to enforce them.15 In reality, all certificates of public convenience issued are subject to the
condition that all public services "shall observe and comply [with] ... all the rules and
regulations of the Commission relative to" the service.16 To further emphasize the control
imposed on public services, before any public service can "adopt, maintain, or apply
practices or measures, rules, or regulations to which the public shall be subject in its relation
with the public service," the Commission's approval must first be had.17
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And more. Public services must also reckon with provincial resolutions and municipal
ordinances relating to the operation of public utilities within the province or municipality
concerned. The Commission can require compliance with these provincial resolutions or
municipal ordinances.18
Illustrative of the lack of "absolute, complete, and unconditional" right on the part of public
services to operate because of the delimitations and restrictions which circumscribe the
privilege afforded a certificate of public convenience is the following from the early (March
31, 1915) decision of this Court in Fisher vs. Yangco Steamship Company, 31 Phil. 1, 18-19:
Common carriers exercise a sort of public office, and have duties to perform in which the
public is interested. Their business is, therefore, affected with a public interest, and is subject of
public regulation. (New Jersey Steam Nav. Co. vs. Merchants Banks, 6 How. 344, 382; Munn vs.
Illinois, 94 U.S. 113, 130.) Indeed, this right of regulation is so far beyond question that it is well
settled that the power of the state to exercise legislative control over railroad companies and
other carriers 'in all respects necessary to protect the public against danger, injustice and
oppression' may be exercised through boards of commissioners. (New York, etc. R. Co. vs.
Bristol, 151 U.S. 556, 571; Connecticut, etc. R. Co. vs. Woodruff, 153 U.S. 689.).
xxx xxx xxx
. . . . The right to enter the public employment as a common carrier and to offer one's services
to the public for hire does not carry with it the right to conduct that business as one pleases,
without regard to the interests of the public and free from such reasonable and just regulations
as may be prescribed for the protection of the public from the reckless or careless indifference
of the carrier as to the public welfare and for the prevention of unjust and unreasonable
discrimination of any kind whatsoever in the performance of the carrier's duties as a servant
of the public.
Business of certain kinds, including the business of a common carrier, holds such a peculiar
relation to the public interest that there is superinduced upon it the right of public regulation.
(Budd vs. New York, 143 U.S. 517, 533.) When private property is "affected with a public interest
it ceases to be juris privati only." Property becomes clothed with a public interest when used
in a manner to make it of public consequence and affect the community at large. "When,
therefore, one devotes his property to a use in which the public has an interest, he, in effect,
grants to the public an interest in that use, and must submit to be controlled by the public for
the common good, to the extent of the interest he has thus created. He may withdraw his
grant by discontinuing the use, but so long as he maintains the use he must submit to control."
(Munn vs. Illinois, 94 U.S. 113; Georgia R. & Bkg. Co. vs. Smith, 128 U.S. 174; Budd vs. New York,
143 U.S. 517; Louisville, etc. Ry. Co. vs. Kentucky, 161 U.S. 677, 695.).
The foregoing, without more, rejects the vested rights theory espoused by petitioning bus
operators.
Very little need be added to show that neither do bus passengers have a vested right to be
transported directly into the City of Manila. It would suffice if a statement be here made that
the alleged right of bus passengers, to a great extent, is dependent upon the manner public
services are allowed to operate within a given area. Because, regulations imposed upon
public services directly affect the bus passengers. It is quite obvious that if buses were allowed
to load or unload solely at specific or designated places, a passenger cannot legally demand
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or insist that the operator load or unload him at a place other than those specified or
designated.
It is no argument to support the vested rights theory that petitioning passengers have enjoyed
the privilege of having been continuously transported even before the outbreak of the war
directly without transfer from the provinces to places inside Manila up to the respective bus
terminals in said City. Times have changed. Vehicles have increased in number. Traffic
congestion has moved from bad to worse, from tolerable to critical. The number of people
who use the thoroughfares has multiplied.
3. It is because of all of these that it has become necessary for the police power of the State
to step in, not for the benefit of the few, but for the benefit of the many. Reasonable restrictions
have to be provided for the use of the thoroughfares.19 The operation of public services may
be subjected to restraints and burdens, in order to secure the general comfort.20 No franchise
or right can be availed of to defeat the proper exercise of police power21 — the authority "to
enact rules and regulations for the promotion of the general welfare." 22 So it is, that by the
exercise of the police power, which is a continuing one, a business lawful today may in the
future, because of the changed situation, the growth of population or other causes, become
a menace to the public health and welfare, and be required to yield to the public good."23
Public welfare, we have said, lies at the bottom of any regulatory measure designed "to relieve
congestion of traffic, which is, to say the least, a menace to public safety."24 As a corollary,
measures calculated to promote the safety and convenience of the people using the
thoroughfares by the regulation of vehicular traffic, present a proper subject for the exercise
of police power.25
Both Ordinance 4986 and the Commissioner's administrative orders fit into the concept of
promotion of the general welfare. Expressive of the purpose of Ordinance 4986 is Section 1
thereof, thus — "As a positive measure to relieve the critical traffic congestion in the City of
Manila, which has grown to alarming and emergency proportions, and in the best interest of
public welfare and convenience, the following traffic rules and regulations are hereby
promulgated." Along the same lines, the bus ban instituted by the Commissioner has for its
object "to minimize the 'traffic problem in the City of Manila' and the 'traffic congestion, delays
and even accidents' resulting from the free entry into the streets of said City and the operation
'around said streets, loading and unloading or picking up passengers and cargoes' of PU buses
in great 'number and size.'"26
Police power in both was properly exercised.
4. We find no difficulty in saying that, contrary to the assertion made by petitioners, Ordinance
4986 is not a class legislation.
It is true that inter-urban buses are allowed to enter the City of Manila, while provincial buses
are not given the same privilege, although they are allowed shuttle service into the City of
Manila. There is no point, however, in placing provincial buses on the same level as the inter-
urban buses plying to and from Manila and its suburban towns and cities (Makati, Pasay,
Mandaluyong, Caloocan, San Juan, Quezon City and Navotas). Inter-urban buses are used
for transporting passengers only. Provincial buses are used for passengers and freight.
Provincial buses, because of the freight or baggage which the passengers usually bring along
with them, take longer time to load or unload than inter-urban buses. Provincial buses
generally travel along national highways and provincial roads, cover long distances, have
fixed trip schedules. Provincial buses are greater in size and weight than inter-urban buses. The
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routes of inter-urban buses are short, covering contiguous municipalities and cities only. Inter-
urban buses mainly use city and municipal streets.
These distinctions generally hold true between provincial passenger jeepneys and inter-urban
passenger jeepneys.
No unjustified discrimination there is under the law.
The obvious inequality in treatment is but the result flowing from the classification made by the
ordinance and does not trench upon the equal protection clause.27 The least that can be
said is that persons engaged in the same business "are subjected to different restrictions or are
held entitled to different privileges under the same conditions."28
Neither is there merit to the charge that private vehicles are being unjustifiably favored over
public vehicles. Private vehicles are not geared for profit, usually have but one destination.
Public vehicles are operated primarily for profit and for this reason are continually operated to
make the most of time. Public and private vehicles belong to different classes. Differences in
class beget differences in privileges. And petitioners have no cause to complain.
The principles just enunciated have long been recognized. In Ichong vs. Hernandez,29 our
ruling is that the equal protection of the law clause "does not demand absolute equality
amongst residents; it merely requires that all persons shall be treated alike, under like
circumstances and conditions both as to privileges conferred and liabilities enforced"; and,
that the equal protection clause "is not infringed by legislation which applies only to those
persons falling within a specified class, if it applies alike to all persons within such class, and
reasonable grounds exist for making a distinction between those who fall within such class and
those who do not."30
FOR THE REASONS GIVEN, the petition herein is denied.
Costs against petitioners. So ordered.
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PANTALEON VS. METRO MANILA DEVELOPMENT AUTHORITY, G.R. No. 194335, November 17,
2020
Under Republic Act No. 7924, the Metro Manila Development Authority is vested with authority
to regulate the delivery of metro-wide services in Metropolitan Manila. Included in this
authority is the power to promulgate rules and regulations through its governing body, the
Metro Manila Council.ℒαwρhi৷ The Resolution re-implementing the number coding scheme to
public utility buses is within the rule-making power granted to the Metropolitan Manila
Development Authority or its Council to regulate traffic in Metropolitan Manila.
This is a Petition for Injunction (with Prayer for Temporary Restraining Order/Status Quo Ante
Order and Permanent Injunction)1 filed by public utility bus drivers, seeking this Court: (1) to
enjoin the Metropolitan Manila Development Authority from enforcing against public utility
buses its Unified Vehicular Volume Reduction Program, otherwise known as the number coding
scheme, as embodied in Metro Manila Development Authority Resolution No. 10-162 and
Metro Manila Development Authority Memorandum Circular No. 08, Series of 20103
(challenged issuances); and (2) to declare the nullity of these issuances.
Petitioners Samson V. Pantaleon, Eduardo A. Tacoyo, Jr., Jesus S. Bautista and Monico C.
Agustin are bus drivers who have been plying along the routes between SM Fairview and
Baclaran for three (3) to 27 years.4
Respondent Metropolitan Manila Development Authority is an administrative agency created

by virtue of Republic Act No. 79245 to administer the affairs of Metropolitan Manila. Under
Section 4 of Republic Act No. 7924, the Metro Manila Council6 is the governing board and
policy--making body of the Metropolitan Manila Development Authority.
To address the worsening traffic in Metro Manila, the Metro Manila Council issued Metro Manila
Development Authority Regulation No. 96-0057 on May 31, 1996 introducing the Unified
Vehicular Volume Reduction Program (UVVRP), known as the number coding scheme.8
Under the said program, motor vehicles, including tricycles and motorcycles, both public and
private, with license plates ending as shown below are prohibited from operating in all
national, city, and municipal roads of Metropolitan Manila, during the corresponding days of
the weeks from 7:00 a.m. to 7:00 p.m.:
Plate Ending No. Day of the Week

1 and 2 Monday
3 and 4 Tuesday
5 and 6 Wednesday
7 and 8 Thursday
9 and 0 Friday9
Certain vehicles, however, were exempted from this scheme such as ambulances, fire trucks,
government vehicles, and school buses.10 The regulation provided for a ₱300.00 fine per
violation.11
On July 15, 1996, the Metropolitan Manila Development Authority entered into a
Memorandum of Agreement with the Integrated Metropolitan Bus Operators Association,
Provincial Bus Operators Association of the Philippines, and Southern Luzon Bus Operators
Association, partially exempting the buses of these operators associations from the number
coding scheme. Under the Agreement, the Metropolitan Manila Development Authority has
the power to recall the exemption in the event of rampant violation of traffic rules and
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regulations committed by bus drivers or accidents due to recklessness by bus drivers or

negligence in the maintenance of their units.12
On October 15, 2010, the Metro Manila Council adopted Metro Manila Development
Authority Resolution No. 10-16, Series of 201013 re-implementing the number coding scheme
for all public utility buses, both provincial and city, on experimental basis "due to the recurring
heavy traffic along the major thoroughfares of Metro Manila, partly brought about by rampant
violation of traffic rules and regulations committed by bus drivers."14 The Resolution was to be
effective from November 15, 2010 to January 15, 2011.
On October 27, 2010, Metropolitan Manila Development Authority Chairman Francis N.

Tolentino issued Memorandum Circular No. 08, Series of 201015 to take effect on November
15, 2010. The Circular amended Memorandum Circular No. 04, Series of 2010, entitled "Revised
Guidelines on the Issuance of Exemptions from the Unified Vehicular Volume Reduction
Program (UVVRP) under MMDA Regulation No. 96-005, Amended." The amendment pertained
to the removal of public utility provincial and city buses from the list of vehicles exempted from
the number coding scheme.
On November 22, 2010, petitioners filed before this Court their Petition for Injunction (with
prayer for temporary restraining order/status quo ante order and permanent injunction). They
assail the validity of MMDA Resolution No. 10-16, Series of 2010 and Memorandum Circular No.
08, Series of 2010. They pray that: (1) upon receipt of the Petition, a temporary restraining order
or status quo ante order be issued enjoining the implementation of the number coding
scheme for public utility buses as ordered in the challenged issuances; and (2) after notice
and hearing, an order be issued declaring the challenged issuances null and void and
granting a permanent injunction stopping their implementation.16
Respondent filed their Comment17 on February 10, 2011, while petitioners filed their Reply18
on April 14, 2011.
Petitioners argue that Metro Manila Development Authority Resolution No. 10-16 and
Memorandum Circular No. 08, Series of 2010 contravene Republic Act No. 7924 as well as
decisions19 of this Court, which held that the Metro Manila Development Authority and Metro
Manila Council have no legislative and police power, as all its functions are administrative in
nature.20 According to petitioners, the administrative issuances constitute an exercise of rule-
making authority that is beyond the powers of the Metro Manila Council or the Chairman of
the Metro Manila Development Authority.21 They argue that a legislative enactment from the
respective local government units is necessary to uphold the implementation of the
challenged issuances.22
Even if the issuances were supported by the appropriate local ordinances, petitioners submit
that they would still be invalid and ineffective because they unduly encroached upon the
powers and prerogatives of the Land Transportation and Franchising Regulatory Board.
Petitioners argue that under Section 16 of Commonwealth Act No. 146,23 it is the Land
Transportation and Franchising Regulatory Board which has the exclusive jurisdiction to grant,
amend, modify or revoke franchises issued to public utility operators. They also cite Section 5
(a) and (b) of Executive Order No. 202,24 which provides:
SECTION 5. Powers and Functions of the Land Transportation Franchising and Regulatory
Board. - The Board shall have the following powers and functions:
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a. To prescribe and regulate routes of service, economically viable capacities and zones or
areas of operation of public land transportation services provided by motorized vehicles in
accordance with the public land transportation development plans and programs approved
by the Department of Transportation and Communications;
b. To issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits

authorizing the operation of public Land Transportation services provided by motorized
vehicles, and to prescribe the appropriate terms and conditions therefore; ...
By reducing and limiting the number of buses operating within Metro Manila per day, they
claim the challenged issuances added a restrictive condition on the existing franchises
granted to public utility bus operators. Moreover, petitioners point out that there is no approval
from the Department of Transportation and Communication of the number coding scheme,
as required under Section 2 of Executive Order No. 712:25
SECTION 2. Pending the review by the DOTC under Section 1 hereof of existing orders, rules
and regulations issued by LGUs, the Department of Interior and Local Government (DILG) shall,
subject to existing laws, advise LOUs to suspend (1) the establishment and operations of new
and existing transport terminals that charge fees and require compulsory use by public utility
vehicles, (2) the enforcement of re-routing schemes that violate the authorized routes as
provided for in the PUV franchises, (3) the issuance of new tricycle franchises while respecting
those that have been issued already, (4) the increase in local fees and charges applicable to
public transportation, and (5) the implementation of local programs, projects and ordinances
that have impact on the cost of operations of public utility vehicles without first coordinating
and getting the approval of the DOTC to ensure that these programs, projects and ordinances
do not prejudice public interest by way of higher transport fares.
In addition, petitioners argue that existing franchises of public utility bus operators were
effectively amended without notice and hearing as required by Commonwealth Act No. 146
and Article III, Section 1 of the 1987 Constitution. By decreasing the number of hours a bus was
allowed to operate, the challenged issuances effectively reduced the number of work hours
of petitioners, which resulted in lower take-home pay, and ultimately weakened their quality
of life.26 The issuances allegedly affected their right to work and earn a decent living without
due process.
Meanwhile, respondent counters that: (1) its issuance and implementation of the number
coding scheme within the thoroughfares of Metro Manila is a valid exercise of its power
granted by Republic Act No. 7924; (2) petitioners are not the real parties-in-interest who can
invoke Section 5, paragraphs (a) and (b) of Executive Order No. 202.27 Moreover, insofar as
the State is concerned, it argues that a certificate of public convenience does not confer
upon its holder a property right in the route covered by the certificate; and (3) petitioners'
exercise of their right to work may be subject to reasonable regulations.
The issues for this Court's resolution are:
First, whether or not this Court has original jurisdiction to take cognizance of the Petition;
Second, whether or not the Metro Manila Development Authority or the Metro Manila Council
has the legal authority to issue and implement Metro Manila Development Authority Resolution
No. 10-16 and Memorandum Circular No. 08, Series of 2010;
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Third, whether or not the Metro Manila Development Authority issuances are invalid and
ineffective for encroaching upon the powers of the Land Transportation and Franchising
Regulatory Board under Section 16 of Commonwealth Act No. 146 or the Public Service Act
and Section 5 (a) and (b) of Executive Order No. 202;
Fourth, whether or not petitioners are the real parties-in-interest who can properly invoke
Section 5, paragraphs (a) and (b) of Executive Order No. 202; and
Lastly, whether or not the challenged issuances violate the due process clause of the 1987
Constitution for having been issued without proper notice and hearing.
Petitioners urge this Court to take cognizance of their Petition in view of the transcendental
importance and urgency of the issues involved.28 Petitioners contend that the peculiar
circumstances as well as the public interest involved sufficiently justify a departure from the
rule on hierarchy of courts.29 They add that respondent's illegal acts-such as the use of traffic
citation tickets which was the subject of a permanent injunction;30 and threats to impound
public utility buses and to cancel their franchises should they violate the number coding
scheme-affect their source of livelihood as bus drivers.31 They also point out that the highly
volatile situation between the transport officials and bus operators remain unresolved, hence
their resort to this Court.
On the other hand, respondent submits that the Petition should be dismissed outright for lack
of jurisdiction. It argues that an action for injunction is not among the proceedings originally
cognizable by the Supreme Court.
We agree with respondent that it is the Regional Trial Court, not this Court, which has original
jurisdiction over an action for injunction.32
Article VIII, Section 5 of the 1987 Constitution and Rule 56, Section 1 of the 1997 Rules of Civil
Procedure, which enumerate the cases cognizable by this Court, do not include original
actions for injunction:
Article VIII, 1987 Constitution
SECTION 5. The Supreme Court shall have the following powers:
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and
consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas
corpus.
RULE 56, 1997 Rules of Civil Procedure
SECTION 1. Original Cases Cognizable. - Only petitions for certiorari, prohibition, mandamus,
quo warranto, habeas corpus, disciplinary proceedings against members of the judiciary and
attorneys, and cases affecting ambassadors, other public ministers and consuls may be filed
originally in the Supreme Court. (Emphasis in the original)
Actions for injunction lie within the original jurisdiction of the Regional Trial Court pursuant to
Chapter II, Section 19 of Batas Pambansa Blg. 129, which grants the Regional Trial Courts
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original exclusive jurisdiction over "all civil actions in which the subject of the litigation is
incapable of pecuniary estimation."33
Even if the Petition were to be treated as one for prohibition, the principle of hierarchy of courts
requires that it be filed before the appropriate lower court. While this Court has concurrent
jurisdiction with Regional Trial Courts and with the Court of Appeals to issue writs of certiorari,
prohibition and mandamus, such concurrence does not accord to parties an absolute,
unrestricted freedom of choice of court forum. The judicial hierarchy generally determines the
appropriate forum for petitions for these writs.34
The purpose for the doctrine requiring respect for the hierarchy of courts is to ensure that the
different levels of the judiciary perform their designated roles in an effective and efficient
manner.35 Observance of the rule frees up this Court of functions falling within the lower courts
so that it can focus on its fundamental tasks under the Constitution.36 As this Court explained
in The Diocese of Bacolod v. Commission on Elections:37
The doctrine that requires respect for the hierarchy of courts was created by this court to
ensure that every level of the judiciary performs its designated roles in an effective and
efficient manner. Trial courts do not only determine the facts from the evaluation of the
evidence presented before them. They are likewise competent to determine issues of law
which may include the validity of an ordinance, statute, or even an executive issuance in
relation to the Constitution. To effectively perform these functions, they are territorially
organized into regions and then into branches. Their writs generally reach within those territorial
boundaries. Necessarily, they mostly perform the all-important task of inferring the facts from
the evidence as these are physically presented before them. In many instances, the facts
occur within their territorial jurisdiction, which properly present the 'actual case' that makes
ripe a. determination of the constitutionality of such action. The consequences, of course,
would be national in scope. There are, however, some cases where resort to courts at their
level would not be practical considering their decisions could still be appealed before the
higher courts, such as the Court of Appeals.
The Court of Appeals is primarily designed as an appellate court that reviews the
determination of facts and law made by the trial courts. It is collegiate in nature. This nature
ensures more standpoints in the review of the actions of the trial court But the Court of Appeals
also has original jurisdiction over most special civil actions. Unlike the trial courts, its writs can
have a nationwide scope. It is competent to determine facts and, ideally, should act on
constitutional issues that may not necessarily be novel unless there are factual questions to
determine.
This court, on the other hand, leads the judiciary by breaking new ground or further reiterating
- in the light of new circumstances or in the light of some confusions of bench or bar - existing
precedents. Rather than a court of first instance or as a repetition of the actions of the Court
of Appeals, this court promulgates these doctrinal devices in order that it truly performs that
role.38 (Citations omitted)
Nonetheless, this Court had, in the past, taken cognizance of improper petitions where
"compelling reasons, or the nature and importance of the issues39 raised, warrant the
immediate exercise of its jurisdiction."40
For instance, in United Claimants Association of NEA v. National Electrification

Administration,41 the dismissal of more than 700 employees, or the entire plantilla of NEA, by
virtue of a resolution issued by the NEA Board was considered special and important reason
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for this Court's cognizance of an action for injunction. In Gamboa v. Finance Secretary
Teves,42 the issue on the definition of the term "capital" in Article XII, Section 11 of the
Constitution was deemed to have far-reaching implications for the national economy. Hence,
this Court treated the petition for declaratory relief as one for mandamus.
In Metropolitan Traffic Command West Traffic District v. Gonong,43 the issue of whether there
was a law or ordinance authorizing the removal of the license plates of illegally parked
vehicles was viewed important by this Court, urging it to address and resolve the question
directly despite non- compliance with the rule on hierarchy of courts. Similarly, in Agan Jr. v.
PIATCO,44 the rule on hierarchy of courts was relaxed in view of the transcendental
importance of the consolidated cases as they involved "the construction and operation of the
country's premier international airport."45 Moreover, the issues raised were considered of first
impression and entailed the interpretation of key provisions of the Constitution, the Build
Operate and Transfer Law and its Implementing Rules and Regulations.
Again, in Province of Batangas v. Romulo,46 this Court resolved the petition for certiorari,
prohibition and mandamus because the issue raised was purely legal, and because of the
"transcendental importance" of the case involving the application of the constitutional
principle on local autonomy.
In The Diocese of Bacolod v. Commission on Elections,47 this Court enumerated the following
exceptions to the doctrine on hierarchy of courts: (1) those involving genuine issues of
constitutionality that must be addressed at the most immediate time; (2) those where the issues
are of transcendental importance, and the threat to fundamental, constitutional rights are so
great as to outweigh the necessity for prudence; (3) cases of first impression, where no
jurisprudence yet exists that will guide the lower courts on such issues; (4) where the
constitutional issues raised are better decided after a thorough deliberation by a collegiate
body and with the concurrence of the majority of those who participated in its discussion; (5)
where time is of the essence; (6) where the act being questioned was that of a constitutional
body; (7) where there is no other plain, speedy, and adequate remedy in the ordinary course
of law that could free petitioner from the injurious effects of respondents' acts in violation of
their constitutional rights; and (8) the issues involve public welfare, the advancement of public
policy, the broader interest of justice, or where the orders complained of are patent nullities,
or where appeal can be considered as clearly an inappropriate remedy.
The present petition seeks to enjoin the Metro Manila Development Authority from
implementing its Resolution No. 10-16 and Circular No. 08, Series of 2010, on the ground that
said issuances exceeded the authority given in its Charter and violated other law. Although
captioned as a Petition for Injunction, it is actually one for Prohibition under this Court's
expanded power to determine grave abuse of discretion committed by a government
branch or instrumentality.48 The issue submitted is purely legal as it involves the scope of the
powers and authority of the Metro Manila Development Authority and the Metro Manila
Council.
Furthermore, public welfare and safety underlies the issuance of the regulatory measures.49
Metro Manila Development Authority Resolution No. 10-16 and Memorandum Circular No. 8,
Series of 2010 were issued due to the felt need to address the worsening traffic congestion in
Metro Manila which, as determined by the respondent, was caused by the increasing volume
of buses plying the major thoroughfares. The transcendental importance to the public of the
extent of the powers of the Metro Manila Development Authority and the Metro Manila
Council demands that we set aside procedural barriers and settle the matter definitely.
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II
Petitioners are not questioning the validity of Metro Manila Development Authority Regulation
No. 96-00550 dated May 31, 1996, the precursor of Metro Manila Development Authority
Resolution No. 10-16, Series of 2010. Administrative issuances benefit from the same
presumption of validity and constitutionality enjoyed by statutes.51 Not being contested by
petitioners, this Court deems Metro Manila Development Authority Regulation No. 96-005 to
be valid and to have been passed according to the procedure prescribed by law.
Metro Manila Development Authority Regulation No. 96-005 is the administrative rule that
originally imposed the number coding scheme on all motor vehicles plying all national, city
and municipal roads in Metropolitan Manila, except for certain exempted vehicles listed in
Section 2. Public utility buses were not included in the list of vehicles automatically exempted
under Section 2 of MMDA Regulation No. 96-005, and hence, were initially covered by the
number coding scheme.
However, by virtue of a Memorandum of Agreement between the Metro Manila Development

Authority and bus operators associations, public utility buses were partially exempted from the
number coding scheme, subject to the right of the former to recall the exemption under
certain conditions. What petitioners are questioning now is the re-implementation of the
number coding scheme to public utility buses through Metro Manila Development Authority
Resolution No. 10-16 and Memorandum Circular No. 08, Series of 2010.
Petitioners are not the proper parties to question the validity of Metro Manila Development
Authority Resolution No. 10-16, Series of 2010, which effectively revoked the exemption
granted to public utility buses, because they were not parties to the Memorandum of
Agreement executed between the Metro Manila Development Authority and the bus
operators associations. We hold that Metro Manila Development Authority Resolution No. 10-
16 and Memorandum Circular No. 08, series of2010 were validly issued pursuant to the Metro
Manila Development Authority's power to regulate traffic under Republic Act No. 7924.
As a rule, legislative power is generally non-delegable. A recognized exception, however, is

the grant of rule-making power to administrative agencies. "Delegated rule-making has
become a practical necessity in modern governance due to the increasing complexity and
variety of public functions."52 In Eastern Shipping Lines v. Philippine Overseas Employment
Administration:53
The principle of non-delegation of powers is applicable to all the three major powers of the
Government but is especially important in the case of the legislative power because of the
many instances when its delegation is permitted. The occasions are rare when executive or
judicial powers have to be delegated by the authorities to which they legally pertain. In the
case of the legislative power, however, such occasions have become more and more
frequent, if not necessary. This has led to the observation that the delegation of legislative
power has become the rule and its non-delegation the exception.
The reason is the increasing complexity of the task of government and the growing inability of
the legislature to cope directly with the myriad problems demanding its attention. The growth
of society has ramified its activities and created peculiar and sophisticated problems that the
legislature cannot be expected reasonably to comprehend. Specialization even in legislation
has become necessary. To many of the problems attendant upon present-day undertakings,
the legislature may not have the competence to provide the required direct and efficacious,
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not to say, specific solutions. These solutions may, however, be expected from its delegates,
who are supposed to be experts in the particular fields assigned to them.
The reasons given above for the delegation of legislative powers in general are particularly
applicable to administrative bodies. With the proliferation of specialized activities and their
attendant peculiar problems, the national legislature has found it more and more necessary
to entrust to administrative agencies the authority to issue rules to carry out the general
provisions of the statute. This is called the "power of subordinate legislation."
With this power, administrative bodies may implement the broad policies laid down in a statute
by "filling in" the details which the Congress may not have the opportunity or competence to
provide. This is effected by their promulgation of what are known as supplementary
regulations, such as the implementing rules issued by the Department of Labor on the new
Labor Code. These regulations have the force and effect of law.54
Thus, Congress may delegate the authority to promulgate rules to implement a law and
effectuate its policies.55 To be permissible, however, the delegation must satisfy; the
completeness and sufficient standard tests.56
In the face of the increasing complexity of modern lite, delegation of legislative power to
various specialized administrative agencies is allowed as an exception to this principle. Given
the volume and variety of interactions in today's society, it is doubtful if the legislature can
promulgate laws that will deal adequately with and respond promptly to the minutiae of
everyday life. Hence, the need to delegate to administrative bodies - the principal agencies
tasked to execute laws in their specialized fields - the authority to promulgate rules and
regulations to implement a given statute and effectuate its policies. All that is required for the
valid exercise of this power of subordinate legislation is that the regulation be germane to the
objects and purposes of the law and that the regulation be not in contradiction to, but in
conformity with, the standards prescribed by the law. These requirements are denominated
as the completeness test and the sufficient standard test.57 (Emphasis supplied)
The delegation of legislative power is valid only if:
... the law (a) is complete in itself, setting forth therein the policy to be executed, carried out,
or implemented by the delegate; and (b) fixes a standard - the limits of which are sufficiently
determinate and determinable - to which the delegate must conform in the performance of
his functions. A sufficient standard is one which defines legislative policy, marks its limits, maps
out its boundaries and specifies the public agency to apply it. It indicates the circumstances
under which the legislative command is to be effected.58
In addition to the substantive requisites of the completeness test and the sufficient standard
test, the Administrative Code of 1987 requires the filing of rules adopted by administrative
agencies with the University of the Philippines Law Center.59
Administrative rules and regulations that comply with the foregoing requisites have the force
and effect of law. Victorias Milling Co., Inc. v. Social Security Commission60 held:
Rules and regulations when promulgated in pursuance of the procedure or authority

conferred upon the administrative agency by law, partake of the nature of a statute, and
compliance therewith may be enforced by a penal sanction provided in the law. This is so
because statutes are usually couched in general terms, after expressing the policy, purposes,
objectives, remedies and sanctions intended by the legislature. The details and the manner of
266
POLICE POWER
carrying out the law are often times left to the administrative agency entrusted with its
enforcement. In this sense, it has been said that rules and regulations are the product of a
delegated power to create new or additional legal provisions that have the effect of law.61
Republic Act No. 7924 declared the Metropolitan Manila62 area as a "special development
and administrative region."63 It placed the administration of "metro-wide" basic services
affecting the region under the Metropolitan Manila Development Authority organized by
virtue of Executive Order No. 392, Series of 1990, which replaced the Metro Manila Authority.
Under the law, the Metropolitan Manila Development Authority is tasked with responsibilities
for the effective delivery of metro-wide services in Metropolitan Manila.64
Section 2 of Republic Act No. 7924 specifically authorizes the Metropolitan Manila
Development Authority to 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."
The Metropolitan Manila Development Authority's scope of services covers those 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 Metropolitan Manila.65
Section 3 of Republic Act No. 7924,provides for metro-wide services to include "transport and
traffic management," which, in turn, includes:
(1) 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;
(2) provision for the mass transport system and the institution of a system to regulate road users;
and
(3) 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.
Meanwhile, Section 5 of Republic Act No. 7924 grants the Metropolitan Manila Development
Authority the following powers and functions, among others:
(1) To set policies concerning traffic in Metropolitan Manila;
(2) To coordinate and regulate the implementation of all programs and projects concerning
traffic management; and
(3) to install and administer a single-ticketing system, fix, impose and collect fines and penalties
for all kinds of violations of traffic rules and regulations, and confiscate and suspend or revoke
driver's licenses in the enforcement of such traffic laws and regulations.
Through its governing and policy making body, the Metro Manila Council, the Metropolitan
Manila Development Authority is empowered to issue rules and regulations and resolutions
267
POLICE POWER
deemed necessary by it to carry out the purposes of the Act, prescribe and collect service
and regulatory fees, and impose and collect fines and penalties.66
Petitioners invoke the cases of MMDA v. Bel-Air Village Association, Inc,67 MMDA v. Viron
Transportation Co., Inc.,68 MMDA v. Garin69 and MMDA v. Trackworks Rail Transit Advertising,
Vending and Promotions, Inc.,70 to support its position that the Metropolitan Manila
Development Authority has no authority to issue the resolution and circular.
These are not squarely on point with the present case.
In MMDA v. Bel-Air Village Association, Inc,71 the Metro Manila Development Authority
claimed that it had the authority to open to public traffic a subdivision street owned by the
Bel-Air Village Association, Inc. and to cause the demolition of the village's perimeter wall
because it is an agent of the State endowed with police power in the delivery of basic services
in Metro Manila. From this, the Metro Manila Development Authority argued that there was no
need for the City of Makati to enact an ordinance opening Neptune Street to the public.
Tracing the legislative history of Republic Act No. 7924, this Court concluded that the Metro
Manila Development Authority is neither a local government unit nor a public corporation
endowed with legislative power, and, unlike its predecessor, the Metro Manila Commission, it
had no power to enact ordinances for the welfare of the community. Thus, in the absence of
an ordinance from the City of Makati, its own order to open the street was invalid. It is in the
sense that this Court stated that Republic Act No. 7924 did not grant the Metro Manila
Development Authority with police power, let alone legislative power, and that all its functions
are administrative in nature.
In MMDA v. Garin,72 respondent was issued a traffic violation receipt and his driver's license
was confiscated for parking illegally along Gandara Street, Binondo, Manila. Garin questioned
the validity of Section 5(f) of Republic Act No. 7924. He contended that the provision violated
the constitutional prohibition against undue delegation of legislative authority, because it
allowed the Metro Manila Development Authority to fix and impose unspecified-and therefore
w1limited-fines and other penalties on erring motorists.
While the case was pending in this Court, the Metro Manila Development Authority
implemented Memorandum Circular No. 04, Series of 2004 proscribing traffic enforcers from
confiscating licenses in traffic violations. Consequently, this Court held that, insofar as the
absence of a prima facie case to enjoin the petitioner from confiscating drivers' licenses is
concerned, the case was mooted by the implementation of MMDA Memorandum Circular
No. 04, series of 2004.
However, citing Bel Air, this Court further stated in Garin that the Metro Manila Development
Authority has no legislative power and that Section 5 (f) merely grants it the duty to enforce
existing traffic laws, rules and regulations enacted by the legislature or those agencies with
delegated legislative powers. This obiter dictum in Garin is erroneous. It contravenes Section 5
of Republic Act No. 7924, which expressly grants the Metro Manila Development Authority or
its Council the power to promulgate administrative rules and regulations in the implementation
of its functions, which include traffic management and instituting a system for road users. Even
Bel Air recognizes the delegated rule making power of the Metro Manila Council.
MMDA v. Viron Transportation Co., Inc.73 arose from the issuance of Executive Order No. 179
by former President Arroyo, declaring as operational the Greater Manila Transport System
Project and designating the Metro Manila Development Authority as the implementing
268
POLICE POWER
agency. The Project aimed to decongest traffic by eliminating the bus terminals located along
major Metro Manila thoroughfares and providing common mass transport terminal facilities.
Pursuant to the Executive Order, the Metro Manila Development Authority issued Resolution
No. 03-07 expressing full support for the immediate implementation of the Project.
This Court held that although the President had the authority to order the implementation of
the Project, the designation of the Metro Manila Development Authority as the implementing
agency for the Project was ultra vires for lack of legal basis. This Court held that the Department
of Transportation and Communication is, by law, the primary implementing and administrative
entity in the promotion, development and regulation of networks of transportation. Hence, it
is the Department of Transportation and Communication, not the Metro Manila Development
Authority, which had the power to administer the transportation project. This Court further ruled
that the elimination of bus terminals did not satisfy the standards of a valid police power
measure and was contrary to the provisions of the Public Service Act.
In MMDA v. Trackworks Rail Transit Advertising, Vending and Promotions, Inc.,74 this Court held
that MMDA had no power on its own to dismantle the billboards, signages and other
advertising media installed by Trackworks in the structures of the Metro Rail Transit 3. Citing Bel
Air, Garin and Viron, this Court reiterated that the Metro Manila Development Authority's
powers were limited to formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installing a system, and administration. Nothing
in Republic Act No. 7924 granted it police power, let alone legislative power.
Bel Air, Viron and Trackworks involved the outright deprivation of private property under the
pretext of traffic regulation and promotion of safe and convenient movement of motorists. On
the other hand, Garin was mooted by supervening events.
In the present case, there is no outright deprivation of property but merely a restriction in the
operation of public utility buses along the major roads of Metro Manila through the number
coding scheme.
Furthermore, Republic Act No. 7924 clearly confers upon the Metro Manila Development
Authority, through the Metro Manila Council, the power to issue regulations that provide for a
system to regulate traffic in the major thoroughfares of Metro Manila for the safety and
convenience of the public.
III
Administrative rules and regulations, to be valid, must conform to the terms and standards
prescribed by the law and carry its general policies into effect.75 They must not contravene
the Constitution and other laws.76
In Smart Communications Inc. v. National Telecommunications Commission:77
The rules and regulations that administrative agencies promulgate, which are the product of
a delegated legislative power to create new and additional legal provisions that have the
effect of law, should be within the scope of the statutory authority granted by the legislature
to the administrative agency. It is required that the regulation be germane to the objects and
purposes of the law, and be not in contradiction to, but in conformity with, the standards
prescribed by law. They must conform to and be consistent with the provisions of the enabling
statute in order for such rule or regulation to be valid. Constitutional and statutory provisions
control with respect to what rules and regulations may be promulgated by an administrative
269
POLICE POWER
body, as well as with respect to what fields are subject to regulation by it. It may not make
rules and regulations which are inconsistent with the provisions of the Constitution or a statute,
particularly the statute it is administering or which created it, or which are in derogation of, or
defeat, the purpose of a statute. In case of conflict between a statute and an administrative
order, the former must prevail.78
Metro Manila Development Authority Resolution No. 10-16, Series of 2010 and Metro Manila
Development Authority Circular No. 08-Series of 2010 were issued within the limits of the powers
granted to the Metropolitan Manila Development Authority. Its discretion to reimpose the
number coding scheme on public utility buses was a reasonably appropriate response to the
serious traffic problem pervading Metro Manila.79
Courts generally give much weight to the competence, expertness, experience and informed
judgment of the gove1nment agency officials charged with the implementation of the law.80
Contrary to petitioners' contention, the challenged issuances do not encroach upon the
regulatory powers of the Land Transportation and Franchising Regulatory Board over public
utility vehicles under Executive Order No. 202.
First, Republic Act No. 7924, otherwise known as the Metro Manila Development Authority
Charter, is a special law and of later enactment than Executive Order No. 202 and the Public
Service Law (Commonwealth Act No. 146, as amended). Hence, the provisions of Republic
Act No. 7924 should prevail in case of conflicts.
Second, Section 581 of Executive Order No. 202 enumerates the powers and functions of the
Land Transportation and Franchising Regulatory Board. The regulation of traffic is not included
in the powers enumerated.
Moreover, there is no provision in the Executive Order that confers to the Land Transportation
and Franchising Regulatory Board exclusive power or authority to regulate the operation of
public utility buses. It even provides for the Land Transportation and Franchising Regulatory
Board to "coordinate and cooperate with other government agencies and entities concerned
with any aspect involving public land transportation services with the end in view of effecting
continuing improvement of such services."82
Section 20, of the Implementing Rules and Regulations of Republic Act No. 7924 describes the
working relationship of the Metro Manila Development Authority with other national
government agencies on transport and traffic:
Sec. 20 Linkage with DOTC and DPWH on Transport and Traffic - The Authority shall undertake
transport and traffic management and enforcement operation in Metropolitan Manila in
coordination with the Department of Transportation and Communication. It shall formulate a
uniform set of rules and regulation for traffic in Metropolitan Manila and establish the regulation
thereof, in coordination with DOTC and DPWH and in consultation with all other agencies
concerned.
It shall deputize LGU traffic enforcers, duly licensed security guards, members of the Philippines
National Police and non-governmental organizations and personnel of national agencies
concerned to implement a single ticketing system.
The Authority shall likewise formulate standards for route capacity and volume of motor
vehicles for main thoroughfares.
270
POLICE POWER
The Land Transportation Franchising and Regulatory Board of the DOTC shall evaluate,
approve and issue franchise applications using the standards on route measured capacity,
and prescribe and regulate transportation routes and areas of operation of public land
transportation of public land transportation services, pursuant to the Metro Manila transport
plan.
The Land Transportation Office of the DOTC shall be responsible for the registration of motor
vehicles and licensing of drivers, conductors and dealers.
The DPWH may effect the gradual transfer of the operation, maintenance and improvement
of the Traffic Engineering Center facilities to the Authority, subject to mutual agreement of the
parties concerned. (Emphasis in the original)
The jurisdiction of the Metro Manila Development Authority was conferred by law to address
common problems involving basic services that transcended local boundaries. Particularly, it
was tasked to coordinate these basic services so that their flow and distribution will be
continuous. Pursuant to this function, the Metro Manila Development Authority through its
Council is expressly authorized to issue binding rules and regulations pertaining to traffic
management.
However, Section 2 of Republic Act No. 7924 provides that the Metro Manila Development
Authority's exercise of its powers is "without diminution of the autonomy of the local
government units concerning purely local matters." This means that the Metro Manila
Development Authority has the right to regulate traffic in Metro Manila, subject to the
jurisdiction of local government units to enact ordinances aligned with the Metro Manila
Development Authority's general policies.
Petitioners' contention that a legislative enactment from the respective local government units
is necessary to uphold the implementation of the Metro Manila Development Authority
issuances is untenable. Metro Manila Development Authority Resolution No. 10-16 was
approved by the Metro Manila Council, which is composed of the heads of the local
government units comprising Metro Manila. Hence, the local government units are presumed
to support and adopt the reimplementation of the number coding scheme to public utility
buses plying their respective territorial jurisdictions, unless they release an issuance to the
contrary.
IV
The challenged issuances are also not violative of the due process clause of the Constitution.
In City of Manila v. Laguio, Jr.,83 this Court expounded on the aspects of the guaranty of due
process of law as a limitation on the acts of government, viz.:
This clause has been interpreted as imposing two separate limits on government, usually called
"procedural due process" and "substantive due process".
Procedural due process, as the phrase implies, refers to the procedures that the government
must follow before it deprives a person of life, liberty, or property. Classic procedural due
process issues are concerned with that kind of notice and what form of hearing the
government must provide when it takes a particular action.
271
POLICE POWER
Substantive due process, as that phrase connotes, asks whether the government has an
adequate reason for taking away a person's life, liberty, or property. In other words, substantive
due process looks to whether there is sufficient justification for the government's action. Case
law in the United States (U.S.) tells us that whether there is such a justification depends very
much on the level of scrutiny used. For example, if a law is in an area where only rational basis
review is applied, substantive due process is met so long as the law is rationally related to a
legitimate government purpose. But if it is an area where strict scrutiny is used, such as for
protecting fundamental rights, then the government will meet substantive due process only if
it can prove that the law is necessary to achieve a compelling government purpose.84
Contrary to petitioners' view, lack of prior hearing in this case does not violate procedural due
process.85
Notice and hearing are not essential when an administrative agency acts pursuant to its rule-
making power. In Central Bank of the Philippines v. Cloribel:86
Previous notice and hearing, as elements of due process, are constitutionally required for the
protection of life or vested property rights, as well as of liberty, when its limitation or loss takes
place in consequence of a judicial or quasi-judicial proceeding, generally dependent upon
a past act or event which has to be established or ascertained. It is not essential to the validity
of general rules or regulations promulgated to govern future conduct of a class of persons or
enterprises, unless the law provides otherwise ...
It is also clear from the authorities that where the function of the administrative body is
legislative, notice of hearing is not required by due process of law. See Oppenheimer,
Administrative Law, 2 Md. L.R. 185, 204, supra, where it is said: 'If the nature of the administrative
agency is essentially legislative, the requirements of notice and hearing are not necessary. The
validity of a rule of future action which affects a group, if vested rights of liberty or property
are not involved, is not determined according to the same rules which apply in the case of
the direct application of a policy to a specific individual.' ... It is said in 73 C.J.S. Public
Administrative Bodies and Procedure, sec. 130, pages 452 and 453: Aside from statute, the
necessity of notice and hearing in an administrative proceeding depends on the character
of the proceeding and the circumstances involved. In so far as generalization is possible in
view of the great variety of administrative proceedings, it may be stated as a general rule that
notice and hearing are not essential to the validity of administrative action where the
administrative body acts in the exercise of executive, administrative, or legislative functions;
but where a public administrative body acts in a judicial or quasi-judicial matter, and its acts
are particular and immediate rather than general and prospective, the person whose rights
or property may be affected by the action is entitled to notice and hearing.87
Section 16 (m) of Commonwealth Act No. 146, invoked by petitioners, is not applicable.
SECTION 16. Proceedings of the Commission, upon notice and hearing. - The Commission shall
have power, upon proper notice and hearing in accordance with the rules and provisions of
this Act, subject to the limitations and exceptions mentioned and saving provisions to the
contrary:
....
(m) To amend, modify or revoke at any time any certificate issued under the provisions of this
Act, whenever the facts and circumstances on the strength of which said certificate was
issued have been misrepresented or materially changed. (Emphasis supplied)
272
POLICE POWER
Under this provision, prior notice and hearing is required when the revocation or modification
of the certificate is dependent upon a past act or event which has to be established or
ascertained in a judicial or quasi--judicial proceeding. In this case, the challenged issuances
partake the nature of general rules and regulations promulgated to govern future conduct of
persons.
It must be stressed though that publication and filing of administrative issuances with the
University of the Philippines Law Center Office of the National Administrative Register are
mandatory in order for these issuances to be effective.88
Metro Manila Development Authority Resolution No. 10-16, Series of 2010 was published in the
Manila Standard and The Manila Times on October 30, 2010,89 two (2) newspapers of general
circulation in the Philippines. It does not appear from the records whether a copy of the
Resolution was deposited with the Office of the National Administrative Register. However,
considering that petitioners do not raise this as an issue, we deem the issuances to have
complied with this requirement pursuant to the presumption of regularity accorded to the
government in the exercise of its official duties.
Meanwhile, Metro Manila Development Authority Circular No. 8, Series of 2010 was issued by
the Metro Manila Development Authority Chairman pursuant to its authority under Section 3
of Metro Manila Development Authority Regulation No. 96-005 to issue the necessary
implementing guidelines. The Circular merely removed the public utility buses in the list of
exempted vehicles in implementation of Metro Manila Development Authority Resolution No.
10-16. Thus, no prior publication and deposit with the Office of the National Administrative
Register are needed for its validity.
Petitioners further argue that by limiting the number of buses operating within Metro Manila
per day, the challenged issuances added a restrictive condition on the existing franchises
granted to public utility bus operators and effectively reduced the number of work hours of
petitioners, which resulted in lower take-home pay without due process of law.
Again, the bus owners/operators or franchisees, and not petitioners, are the real parties in
interest who can invoke any right invaded under their franchise. A real party in interest in
whose name an action must be prosecuted is one who is shown to be the present real owner
of the right sought to be enforced.90
Nonetheless, even if we consider petitioners as the real parties in interest, their position cannot
stand. A certificate of public convenience is a mere privilege and does not confer upon its
holder a property right.91 Luque v. Villegas92 explained:
Contending that they possess valid and subsisting certificates of public convenience, the
petitioning public services aver that they acquired a vested right to operate their public utility
vehicles to and from Manila as appearing in their said respective certificates of public
convenience.
Petitioner's argument pales on the face of the fact that the very nature of a certificate of
public convenience is at cross purposes with the concept of vested rights. To this day, the
accepted view, at least insofar as the State is concerned, is that "a certificate of public
convenience constitutes neither a franchise nor a contract, confers no property right, and is a
mere license or privilege." The holder of such certificate does not acquire a property right in
the route covered thereby. Nor does it confer upon the holder any proprietary right or interest
273
POLICE POWER
of franchise in the public highways. Revocation of this certificate deprives him of no vested
right. Little reflection is necessary to show that the certificate of public convenience is granted
with so many strings attached. New and additional burdens, alteration of the certificate, and
even revocation or annulment thereof is reserved to the State.93 (Citations omitted)
The operation of public utility buses is particularly imbued with public interest, and as such may
be subjected to restraints and burdens to secure the comfort and safety of many.94 This Court,
in Pangasinan Transportation Co., Inc. v. The Public Service Commission,95 held:
The business of a common carrier holds such a peculiar relation to the public interest that there
is superinduced upon it the right of public regulation. When private property is "affected with
a public interest it ceased to be juris privati only." When, therefore, one devotes his property
to a use in which the public has an interest, he, in effect, grants to the public an interest in that
use, and must submit to be controlled by the public for the common good, to the extent of
the interest he has thus created. He may withdraw his grant by discounting the use, but so long
as he maintains the use he must submit to control. Indeed, this right of regulation is so far
beyond question that it is well settled that the power of the state to exercise legislative control
over public utilities may be exercised through boards of commissioners. This right of the state
to regulate public utilities is founded upon the police power, and statutes for the control and
regulation of utilities are a legitimate exercise thereof, for the protection of the public as well
as of the utilities themselves. Such statutes are, therefore, not unconstitutional, either impairing
the obligation of contracts, taking property without due process, or denying the equal
protection of the laws, especially inasmuch as the question whether or not private property
shall be devoted to a public and the consequent burdens assumed is ordinarily for the owner
to decide; and if he voluntarily places his property in public service he cannot complain that
it becomes subject to the regulatory powers of the state in the light of authorities which hold
that a certificate of public convenience constitutes neither a franchise nor contract, confers
no property right, and is mere license or privilege.96 (Citations omitted)
While this Court recognizes the possible adverse effect of the reimplementation of the number
coding scheme to public utility buses on petitioners' source of livelihood, the promotion of the
general welfare is of paramount importance. Hence, petitioners' individual interests must be
subordinated to the benefit of the greater number.97
The validity of an administrative regulation must be upheld even if it will have the effect of
restricting the use of one's property, provided the means adopted are reasonably necessary
for the accomplishment of the purpose desired, not unduly oppressive, and in the interest of
the general public.98
In Bautista v. Juinio,99 this Court sustained a letter of instruction prohibiting heavy and extra-
heavy private vehicles from using public streets on weekends and holidays. The police
regulatory measure was found to be reasonable to address the problem of energy
conservation, and not violative of the due process clause of the Constitution. However, this
Court annulled as ultra vires the administrative regulation calling for the impounding of the
offending vehicles, for being without statutory justification.
In Mirasol v. Department of Public Works and Highways,100 this Court upheld the validity of
Administrative Order No. 1 issued by the Department of Public Works and Communications. In
rejecting petitioners' position that the prohibition on the use of motorcycles in toll ways unduly
deprived them of their right to travel, this Court held that public interest and safety require the
imposition of certain restrictions on toll ways. The right to travel does not mean the right to
274
POLICE POWER
choose any vehicle in traversing a toll way. Since the mode by which petitioners wish to travel
pertains to the manner of using the toll way, it can be validly limited by regulation.
In this case, petitioners failed to present a clear factual foundation to rebut the presumption
of validity of the challenged issuances. The arbitrariness, oppressiveness and
unreasonableness of the implementation of the issuances have not been sufficiently shown.
The buses driven by petitioners have not been totally banned or prohibited from plying the
Metro Manila roads. However, as in private vehicles, the operation of public utility buses in
Metro Manila was merely regulated with a view to curb traffic congestion.
WHEREFORE, the Petition for Injunction is DISMISSED.
Peralta, C. J., Perlas-Bernabe, Caguioa, Gesmundo, Hernando, Carandang, Lazaro-Javier,

Inting, Zalameda, Lopez, Delos Santos, Gaerlan, and Rosario, JJ., concur.
275

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CONSTITUTIONAL LAW 2- NOTES

Alfreda C. Abis, MPA

20%, DISCOUNT FOR SENIOR CITIZENS AND PWDs

Regulation of vehicular traffic

xxx xxx xxx

xxx xxx xxx

Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.

DECISION ON THE MOTION FOR A REHEARING, JANUARY 24, 1916.

If a billboard is so constructed as to offer no room for objections on sanitary or moral grounds,

The motion for a rehearing is therefore denied.

Arellano, C.J., Torres, and Carson, JJ., concur

Section 13 of Act No. 3071 is as follows:

Section 15 of the same Act is as follows:

xxx xxx xxx

xxx xxx xxx

Street, Malcolm, Avanceña, Villamor, Ostrand and Romualdez, JJ., concur.

Davao City's Charter, Commonwealth Act 51, in Section 14 (ee) provides:

xxx xxx xxx

xxx xxx xxx

xxx xxx xxx

xxx xxx xxx

Secondly, an adequate local telephone service is no longer a mere convenience but is

xxx xxx xxx

It cannot be seriously denied that Davao City is a Government entity.

WHEREFORE, the petition is hereby denied, without costs. So ordered.

It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in

In the light of the foregoing, the petition must be dismissed.

1. Bilateral agreements or understanding with the Philippines, and/or,

5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and workers of similar skills

xxx xxx xxx

7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS--Vacationing domestic

xxx xxx xxx

9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE) may, upon

1. Bilateral agreements or understanding with the Philippines, and/or,

xxx xxx xxx

The Constitution declares that:

WHEREFORE, the petition is DISMISSED. No costs.

Gutierrez, Jr. and Medialdea, JJ., are on leave.

While in the attainment of such public good, no infringement of constitutional rights is

requirement of further periodical submission of a sworn statement of assets and liabilities

So it is likewise in our jurisdiction. The right to privacy as such is accorded recognition

It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on

The antecedent facts are:

The sequestration or freeze order is deemed automatically lifted if no judicial action or

PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT SUMMARY OF ACCOMPLISHMENTS As of

1. CASH & OTHER CASH ITEMS

Funds turned over to

the treasury — Gen. Fund 592,350,799.00

Princeton Property with

PNB—New York 20,500,000.00

Proceeds of New Jersey

Proceeds of Auction Sale 17,231,429.00

SBTC (1st payment Seq. T/Ds) 250,000,000.00

UPCB Bal of Profit Sharing 77,678,854.00

Other Cash Items

Contribution to CARP 140,000,000.00

2. OTHER RECOVERED FUNDS

Government Funds in TRB/

(Casino Funds) 1,138,000,000.00

T-Bills delivered to the