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Case No.

THIRD DIVISION
[G.R. No. 129098. December 6, 2006.]

AMELIA CABRERA, petitioner, vs. MANUEL


LAPID, FERNANDO BALTAZAR, REYNALDO F.
CABRERA and DIONY VENTURA, respondents.

DECISION
TINGA, J p:

The instant petition for review on certiorari seeks the reversal of the
Resolution 1 dated 13 May 1996 and the Order 2 dated 21 March 1997,
both issued by the Office of the Ombudsman. The Resolution dismissed
the complaint-affidavit filed by petitioner against respondents and the
Order denied her motion for reconsideration.
The instant petition originated from a Complaint-Affidavit 3 filed in
November 1995 by petitioner Amelia M. Cabrera with the Office of the
Ombudsman ("Ombudsman"). Named respondents were Manuel Lapid,
Fernando Baltazar, Reynaldo F. Cabrera and Superintendent Diony
Ventura, respectively, in their capacities as Governor of Pampanga, Mayor
of Sasmuan, Pampanga, Vice-Mayor of Sasmuan, Pampanga and
Superintendent of the Philippine National Police (PNP)-Region 3,
Pampanga. In her three(3)-page affidavit, petitioner accused respondents
of violating Section 3(e) of the Anti-Graft and Corrupt Practices Act and
Article 324 of the Revised Penal Code.
In her Complaint-Affidavit, petitioner stated that she entered into a lease
agreement with the Municipality of Sasmuan over a tract of land for the
purpose of devoting it to fishpond operations. According to petitioner, she
had spent approximately P5,000,000.00 for its construction before the
fishpond operations commenced in August 1995. A month later, petitioner
learned from newspaper reports of the impending demolition of her
fishpond as it was purportedly illegal and blocked the flow of the Pasak
River. Thus, petitioner sent the fishpond administrator to dissuade
respondents from destroying her property. 4
Despite pleas from petitioner, respondents ordered the destruction of
petitioner's fishpond. The property was demolished on 10 October 1995 by
dynamite blasting. Petitioner alleged that the demolition was purposely
carried out in the presence of media representatives and other government
officials to gain media mileage. Petitioner imputed evident bad faith on
respondents Mayor Baltazar and Vice-Mayor Cabrera in allowing the
destruction of the fishpond despite their prior knowledge of the existence
of the lease agreement. She also charged respondents Governor Lapid and
Senior Superintendent Ventura with gross inexcusable negligence for
ordering the destruction of the fishpond without first verifying its
legality. 5
At the preliminary investigation, respondents, except Senior
Superintendent Ventura, submitted counter-affidavits, denying the
accusations against them. In the counter-affidavit jointly filed by Mayor
Baltazar and Vice-Mayor Cabrera, they insisted that contrary to
petitioner's claim, the fishpond was an illegal structure because it was
erected on the seashore, at the mouth of the Pasak River, and sat on an
inalienable land. They claimed that the demolition was done by the Task
Force Bilis Daloy upon the directive of then President Fidel V. Ramos. 6
In his Counter-Affidavit, 7 Governor Lapid averred that the contract of
lease between petitioner and the Municipality of Sasmuan, represented by
then Mayor Abelardo Panlaqui, was executed two weeks before
respondent Mayor Baltazar took his oath of office in 1995. Governor
Lapid also argued that under the law, the Department of Agriculture (DA)
is the government agency authorized to enter into licensing agreements for
fishpond operations, and as per certification by the DA Regional Director,
petitioner's fishpond operation was not covered by a fishpond lease
agreement or application. Governor Lapid also referred to the certification
by the Municipal Health Officer of Sasmuan issued before the actual
demolition of the fishpond, describing it as a nuisance per se and
recommending its abatement. 8
On 13 May 1996, the Ombudsman issued the assailed Resolution,
dismissing petitioner's complaint. The dismissal was based on the
declaration that the fishpond was a nuisance per seand, thus, may be
abated by respondents in the exercise of the police power of the State. 9
Petitioner sought reconsideration of the Resolution, arguing that under
Sec. 149 of Republic Act (R.A.) No. 7160, otherwise known as the Local
Government Code of 1991, the exclusive authority to grant fishery
privileges is vested in the municipalities. Petitioner also questioned the
certification by the Municipal Health Officer, alleging that the same was
issued before the ocular inspection of the property which took place only
on the day of the demolition. Petitioner also contended that a judicial
proceeding was necessary to determine whether the property indeed had
caused the flooding. 10 Respondents filed separate oppositions to
petitioner's motion for reconsideration. 11 Petitioner filed a reply to the
opposition 12 and respondent Governor Lapid filed a rejoinder to the
reply. 13
In the Order dated 21 March 1997, the Ombudsman affirmed its 13 May
1996 Resolution. It ruled that the repealing clause of R.A. No.
7160 expressly repealed only Sec. 2, 6 and 29 of Presidential Decree
(P.D.) No. 704 so that in harmonizing the remaining provisions of P.D. No.
704 and the provisions of R.A. No. 7160 applicable to the grant of fishery
privileges, the Bureau of Fisheries and Aquatic Resources (BFAR) is the
government agency authorized to grant fishpond license or permit in areas
not identified as municipal waters or not declared as alienable or
disposable by the Department of Environment and Natural Resources
(DENR). Since it appears from DENR records that the subject property
has not been declared disposable or included in areas devoted for fishpond
development, the Ombudsman concluded that the lease agreement entered
into by petitioner was void ab initio. In view of the illegality of the lease
agreement, the Ombudsman ruled that its demolition was justified. The
Ombudsman described the demolition as a valid exercise of police power
and in accordance with the provision of Sec. 28 of P.D. No. 704 directing
the removal of any fishpen or fishpond that obstructed the free navigation
of a stream or lake. It also upheld the authority of the district health officer
to determine the abatement of a nuisance without need of judicial
proceedings. 14
Petitioner elevated the matter to this Court via a petition for review
on certiorari under Rule 45 of the Rules of Court to assail the 13 May
1996 Resolution and 21 March 1997 Order of the Ombudsman. Petitioner
subsequently filed an amended petition for review on certiorari to implead
the Ombudsman as respondent, although in a petition for review
on certiorari, the tribunal whose issuance is assailed need not be
impleaded as respondent. acEHSI
The petition imputes the following errors on the Ombudsman:

I.
THE OFFICE OF THE OMBUDSMAN ERRED AND
EXCEEDED ITS AUTHORITY IN RULING THAT
THE LEASE CONTRACT BETWEEN THE
MUNICIPALITY OF SASMUAN AND PETITIONER
IS NULL AND VOID.
II.
THE OFFICE OF THE OMBUDSMAN ERRED IN
RULING THAT THE DEMOLITION OF THE
FISHPOND WAS VALIDLY MADE BY VIRTUE OF
THE DECLARATION BY THE HEALTH OFFICER
THAT IT WAS A NUISANCE PER SE.
III.
THE OFFICE OF THE OMBUDSMAN ERRED IN
RULING THAT THE DEMOLITION IS PART OF THE
PROPER EXERCISE OF THE POLICE POWER OF
THE STATE.
IV.
THE OFFICE OF THE OMBUDSMAN ERRED IN
RULING THAT PETITIONER WAS GIVEN DUE
NOTICE AND HEARING BEFORE THE FISHPOND
WAS BLASTED.
V.
THE OFFICE OF THE OMBUDSMAN ERRED IN
RULING THAT PROBABLE CAUSE DOES NOT
EXIST TO INDICT RESPONDENTS FOR VIOLATION
OF THE SUBJECT OFFENSES. 15
Clearly, this is an appeal from the questioned issuances of the
Ombudsman. However, such direct resort to this Court from a resolution
or order of the Ombudsman is not sanctioned by any rule of procedure.
Neither can petitioner avail of Sec. 27 16 of R.A. No. 6770, otherwise
known as The Ombudsman Act of 1989. The provision allowed direct
appeals in administrative disciplinary cases from the Office of the
Ombudsman to the Supreme Court. The right to appeal is granted only in
respect to orders or decisions of the Ombudsman in administrative
cases. 17 The provision does not cover resolutions of the Ombudsman in
criminal cases. More importantly, Sec. 27 of R.A. No. 6770 insofar as it
allowed a direct appeal to this Court was declared unconstitutional
inFabian v. Hon. Desierto. 18
However, an aggrieved party in criminal actions is not without any
recourse. Where grave abuse of discretion amounting to lack or excess of
jurisdiction taints the findings of the Ombudsman on the existence of
probable cause, the aggrieved party may file a petition for certiorari under
Rule 65. 19 The remedy from resolutions of the Ombudsman in
preliminary investigations of criminal cases is a petition
for certiorari under Rule 65, not a petition for review on certiorari under
Rule 45. 20
But in this case, petitioner has taken the position that the Ombudsman has
decided questions of substance contrary to law and the applicable
decisions of the Supreme Court. That is a ground under a Rule 45 petition.
Indeed, from a reading of the assignment of errors, it is clear that
petitioner does not impute grave abuse of discretion to the Ombudsman in
issuing the assailed Resolution and Order. Rather, she merely questions his
findings and conclusions. As stated earlier, direct appeal to the Supreme
Court via a petition for review on certiorari is not sanctioned by any rule
of procedure. By availing of a wrong remedy, the petition should be
dismissed outright. TAIDHa
Even if the Court treats the instant appeal as a petition for certiorari under
Rule 65, its dismissal is nevertheless warranted because petitioner failed to
present, much more substantiate, any grave abuse of discretion on the part
of the Ombudsman.
A careful reading of the questioned Resolution reveals that the
Ombudsman dismissed petitioner's criminal complaint because
respondents had validly resorted to the police power of the State when
they effected the demolition of the illegal fishpond in question following
the declaration thereof as a nuisance per se. Thus, the Ombudsman was of
the opinion that no violation of Section 3(e) 21 of the Anti-Graft and
Corrupt Practices Act or of Article 324 22 of the Revised Penal Code was
committed by respondents. In the words of the Ombudsman, "those who
participated in the blasting of the subject fishpond were only impelled by
their desire to serve the best interest of the general public; for the good and
the highest good." 23

By grave abuse of discretion is meant capricious and whimsical exercise


of judgment as is equivalent to lack of jurisdiction. Mere abuse of
discretion is not enough. It must be grave abuse of discretion as when the
power is exercised in an arbitrary or despotic manner by reason of passion
or personal hostility, and must be so patent and so gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law. 24
Grave abuse of discretion should be differentiated from an error in
judgment. An error of judgment is one which the court may commit in the
exercise of its jurisdiction, and which error is reversible only by an appeal.
As long as the court acts within its jurisdiction, any alleged errors
committed in the exercise of its discretion will amount to nothing more
than mere errors of judgment, correctible by an appeal or a petition for
review under Rule 45 of the Rules of Court. An error of jurisdiction is one
where the act complained of was issued by the court without or in excess
of jurisdiction and which error is correctible only by the extraordinary writ
of certiorari. 25
The other errors raised by petitioner pertain to the Ombudsman's opinion
on the lack of probable cause to indict respondents. These are purported
errors in judgment which can be corrected by an appeal, although not via a
direct appeal to this Court. Direct resort to this Court may be had only
through the extraordinary writ of certiorari and upon showing that the
Ombudsman committed grave abuse of discretion, which petitioner failed
to demonstrate.
Absent any grave abuse of discretion tainting it, the courts will not
interfere with the Ombudsman's supervision and control over the
preliminary investigation conducted by him. 26 It is beyond the ambit of
this Court to review the exercise of discretion of the Ombudsman in
prosecuting or dismissing a complaint filed before it. 27 The rule is based
not only upon respect for the investigatory and prosecutory powers
granted by the Constitution to the Office of the Ombudsman but upon
practicality as well. Otherwise, the functions of the courts will be
grievously hampered by innumerable petitions assailing the dismissal of
investigatory proceedings conducted by the Office of the Ombudsman
with regard to complaints filed before it, in much the same way that the
courts would be extremely swamped if they would be compelled to review
the exercise of discretion on the part of the fiscals or prosecuting attorneys
each time they decide to file an information in court or dismiss a
complaint by a private complainant. 28
WHEREFORE, the instant petition for review on certiorari is DENIED.
No costs. ICTaEH
SO ORDERED.
Case No. 2

EN BANC
[G.R. No. 166494. June 29, 2007.]

CARLOS SUPERDRUG CORP., doing business


under the name and style "Carlos Superdrug",
ELSIE M. CANO, doing business under the name and
style "Advance Drug", Dr. SIMPLICIO L. YAP, JR.,
doing business under the name and style "City
Pharmacy", MELVIN S. DELA SERNA, doing
business under the name and style "Botica dela
Serna", and LEYTE SERV-WELL CORP., doing
business under the name and style "Leyte Serv-Well
Drugstore", petitioners, vs. DEPARTMENT OF
SOCIAL WELFARE and DEVELOPMENT (DSWD),
DEPARTMENT OF HEALTH (DOH),
DEPARTMENT OF FINANCE (DOF),
DEPARTMENT OF JUSTICE (DOJ), and
DEPARTMENT OF INTERIOR and LOCAL
GOVERNMENT (DILG), respondents.
DECISION
AZCUNA, J p:

This is a petition 1 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. TCcSDE
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;
xxx xxx xxx
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 10 7 and 11 8
Air, Sea and Land Transportation as tax deduction based
on the net cost of the goods sold or services
rendered.Provided, That the cost of the discount shall be
allowed as deduction from gross income for the same
taxable year that the discount is granted; Provided,
further, That the total amount of the claimed tax
deduction net of value added tax if applicable, shall be
included in their gross sales receipts for tax purposes and
shall be subject to proper documentation and to the
provisions of the National Internal Revenue Code, as
amended; Provided, finally, that the implementation of
the tax deduction shall be subject to the Revenue
Regulations to be issued by the Bureau of Internal
Revenue (BIR) and approved by the Department of
Finance (DOF). 9 DSITEH
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. cDaEAS
A simple illustration might help amplify the points
discussed above, as follows:
Tax Deduction Tax Credit
Gross Sales x x x x x x x x x x x x
Less: Cost of goods sold x x x x x x x x x x

Net Sales x x x x x x x x x x x x
Less: Operating Expenses:
Tax Deduction on Discounts x x x x --
Other deductions: x x x x x x x x

Net Taxable Income x x x x x x x x x x
Tax Due x x x x x x
Less: Tax Credit -- x x

Net Tax Due -- x x
As shown above, under a tax deduction scheme, the tax
deduction on discounts was subtracted from Net Sales
together with other deductions which are considered as
operating expenses before the Tax Due was computed
based on the Net Taxable Income. On the other hand,
under a tax credit scheme, the amount of discounts
which is the tax credit item, was deducted directly from
the tax due amount. 10
Meanwhile, on October 1, 2004, Administrative Order (A.O.) No. 171 or
the Policies and Guidelines to Implement the Relevant Provisions of
Republic Act 9257, otherwise known as the "Expanded Senior Citizens Act
of 2003" 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. 177 12 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; EAcHCI
2) It violates the equal protection clause (Art. III, Sec. 1)
enshrined in our Constitution which states that
"no person shall be deprived of life, liberty or
property without due process of law, nor shall any
person be denied of the equal protection of the
laws;" and
3) The 20% discount on medicines violates the
constitutional guarantee in Article XIII, Section
11 that makes "essential goods, health and other
social services available to all people at affordable
cost." 14
Petitioners assert that Section 4 (a) of the law is unconstitutional because it
constitutes deprivation of private property. Compelling drugstore owners
and establishments to grant the discount will result in a loss of profit and
capital because 1) drugstores impose a mark-up of only 5% to 10% on
branded medicines; and 2) the law failed to provide a scheme whereby
drugstores will be justly compensated for the discount.

Examining petitioners' arguments, it is apparent that what petitioners are


ultimately questioning is the validity of the tax deduction scheme as a
reimbursement mechanism for the twenty percent (20%) discount that they
extend to senior citizens.
Based on the afore-stated DOF Opinion, the tax deduction scheme does
not fully reimburse petitioners for the discount privilege accorded to
senior citizens. This is because the discount is treated as a deduction, a
tax-deductible expense that is subtracted from the gross income and results
in a lower taxable income. Stated otherwise, it is an amount that is allowed
by law15 to reduce the income prior to the application of the tax rate to
compute the amount of tax which is due. 16 Being a tax deduction, the
discount does not reduce taxes owed on a peso for peso basis but merely
offers a fractional reduction in taxes owed.
Theoretically, the treatment of the discount as a deduction reduces the net
income of the private establishments concerned. The discounts given
would have entered the coffers and formed part of the gross sales of the
private establishments, were it not for R.A. No. 9257.
The permanent reduction in their total revenues is a forced subsidy
corresponding to the taking of private property for public use or
benefit. 17 This constitutes compensable taking for which petitioners
would ordinarily become entitled to a just compensation. TIcAaH
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 wordjust is used to intensify the meaning of
the word compensation, and to convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full and
ample. 18
A tax deduction does not offer full reimbursement of the senior citizen
discount. As such, it would not meet the definition of just
compensation. 19
Having said that, this raises the question of whether the State, in
promoting the health and welfare of a special group of citizens, can
impose upon private establishments the burden of partly subsidizing a
government program.
The Court believes so.
The Senior Citizens Act was enacted primarily to maximize the
contribution of senior citizens to nation-building, and to grant benefits and
privileges to them for their improvement and well-being as the State
considers them an integral part of our society. 20
The priority given to senior citizens finds its basis in the Constitution as
set forth in the law itself. Thus, the Act provides:
SEC. 2. Republic Act No. 7432 is hereby amended to
read as follows:
SECTION 1. Declaration of Policies and Objectives.
Pursuant to Article XV, Section 4 of the Constitution, it is
the duty of the family to take care of its elderly members
while the State may design programs of social security
for them. In addition to this, Section 10 in the Declaration
of Principles and State Policies provides: "The State shall
provide social justice in all phases of national
development." Further, Article XIII, Section 11, provides:
"The State shall adopt an integrated and comprehensive
approach to health development which shall endeavor to
make essential goods, health and other social services
available to all the people at affordable cost. There shall
be priority for the needs of the underprivileged sick,
elderly, disabled, women and children." Consonant with
these constitutional principles the following are the
declared policies of this Act:
xxx xxx xxx
(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 DAEIHT
To implement the above policy, the law grants a twenty percent discount to
senior citizens for medical and dental services, and diagnostic and
laboratory fees; admission fees charged by theaters, concert halls, circuses,
carnivals, and other similar places of culture, leisure and amusement; fares
for domestic land, air and sea travel; utilization of services in hotels and
similar lodging establishments, restaurants and recreation centers; and
purchases of medicines for the exclusive use or enjoyment of senior
citizens. As a form of reimbursement, the law provides that business
establishments extending the twenty percent discount to senior citizens
may claim the discount as a tax deduction.
The law is a legitimate exercise of police power which, similar to the
power of eminent domain, has general welfare for its object. Police power
is not capable of an exact definition, but has been purposely veiled in
general terms to underscore its comprehensiveness to meet all exigencies
and provide enough room for an efficient and flexible response to
conditions and circumstances, thus assuring the greatest
benefits. 22 Accordingly, it has been described as "the most essential,
insistent and the least limitable of powers, extending as it does to all the
great public needs." 23 It is "[t]he power vested in the legislature by the
constitution to make, ordain, and establish all manner of wholesome and
reasonable laws, statutes, and ordinances, either with penalties or without,
not repugnant to the constitution, as they shall judge to be for the good and
welfare of the commonwealth, and of the subjects of the same."24
For this reason, when the conditions so demand as determined by the
legislature, property rights must bow to the primacy of police power
because property rights, though sheltered by due process, must yield to
general welfare. 25
Police power as an attribute to promote the common good would be
diluted considerably if on the mere plea of petitioners that they will suffer
loss of earnings and capital, the questioned provision is invalidated.
Moreover, in the absence of evidence demonstrating the alleged
confiscatory effect of the provision in question, there is no basis for its
nullification in view of the presumption of validity which every law has in
its favor. 26
Given these, it is incorrect for petitioners to insist that the grant of the
senior citizen discount is unduly oppressive to their business, because
petitioners have not taken time to calculate correctly and come up with a
financial report, so that they have not been able to show properly whether
or not the tax deduction scheme really works greatly to their
disadvantage. 27
In treating the discount as a tax deduction, petitioners insist that they will
incur losses because, referring to the DOF Opinion, for every P1.00 senior
citizen discount that petitioners would give, P0.68 will be shouldered by
them as only P0.32 will be refunded by the government by way of a tax
deduction. cIDHSC
To illustrate this point, petitioner Carlos Super Drug cited the anti-
hypertensive maintenance drug Norvasc as an example. According to the
latter, it acquires Norvasc from the distributors at P37.57 per tablet, and
retails it at P39.60 (or at a margin of 5%). If it grants a 20% discount to
senior citizens or an amount equivalent to P7.92, then it would have to
sell Norvasc at P31.68 which translates to a loss from capital of P5.89 per
tablet. Even if the government will allow a tax deduction, only P2.53 per
tablet will be refunded and not the full amount of the discount which is
P7.92. In short, only 32% of the 20% discount will be reimbursed to the
drugstores. 28
Petitioners' computation is flawed. For purposes of reimbursement, the
law states that the cost of the discount shall be deducted from gross
income, 29 the amount of income derived from all sources before
deducting allowable expenses, which will result in net income. Here,
petitioners tried to show a loss on a per transaction basis, which should not
be the case. An income statement, showing an accounting of petitioners'
sales, expenses, and net profit (or loss) for a given period could have
accurately reflected the effect of the discount on their income. Absent any
financial statement, petitioners cannot substantiate their claim that they
will be operating at a loss should they give the discount. In addition, the
computation was erroneously based on the assumption that their customers
consisted wholly of senior citizens. Lastly, the 32% tax rate is to be
imposed on income, not on the amount of the discount.
Furthermore, it is unfair for petitioners to criticize the law because they
cannot raise the prices of their medicines given the cutthroat nature of the
players in the industry. It is a business decision on the part of petitioners to
peg the mark-up at 5%. Selling the medicines below acquisition cost, as
alleged by petitioners, is merely a result of this decision. Inasmuch as
pricing is a property right, petitioners cannot reproach the law for being
oppressive, simply because they cannot afford to raise their prices for fear
of losing their customers to competition.
The Court is not oblivious of the retail side of the pharmaceutical industry
and the competitive pricing component of the business. While the
Constitution protects property rights, petitioners must accept the realities
of business and the State, in the exercise of police power, can intervene in
the operations of a business which may result in an impairment of property
rights in the process.
Moreover, the right to property has a social dimension. While Article XIII
of the Constitution provides the precept for the protection of property,
various laws and jurisprudence, particularly on agrarian reform and the
regulation of contracts and public utilities, continuously serve as a
reminder that the right to property can be relinquished upon the command
of the State for the promotion of public good. 30
Undeniably, the success of the senior citizens program rests largely on the
support imparted by petitioners and the other private establishments
concerned. This being the case, the means employed in invoking the active
participation of the private sector, in order to achieve the purpose or
objective of the law, is reasonably and directly related. Without sufficient
proof that Section 4 (a) of R.A. No. 9257 is arbitrary, and that the
continued implementation of the same would be unconscionably
detrimental to petitioners, the Court will refrain from quashing a
legislative act. 31

WHEREFORE, the petition is DISMISSED for lack of merit. IDEScC


No costs.
SO ORDERED.
Puno, C.J., Ynares-Santiago, Carpio, Austria-Martinez, Corona, Carpio-
Morales, Tinga, Chico-Nazario, Garcia, Velasco, Jr. and Nachura,
JJ., concur.
Case No. 3
EN BANC
[G.R. No. 118127. April 12, 2005.]

CITY OF MANILA, HON. ALFREDO S. LIM as the


Mayor of the City of Manila HON. JOSELITO L.
ATIENZA, in his capacity as Vice-Mayor of the City
of Manila and Presiding Officer of the City Council of
Manila, HON. ERNESTO A. NIEVA, HON.
GONZALO P. GONZALES, HON. AVELINO S.
CAILIAN, HON. ROBERTO C. OCAMPO, HON.
ALBERTO DOMINGO, HON. HONORIO U.
LOPEZ, HON. FRANCISCO G. VARONA, JR.,
HON. ROMUALDO S. MARANAN, HON. NESTOR
C. PONCE, JR., HON. HUMBERTO B. BASCO,
HON. FLAVIANO F. CONCEPCION, JR., HON.
ROMEO G. RIVERA, HON. MANUEL M. ZARCAL,
HON. PEDRO S. DE JESUS, HON. BERNARDITO
C. ANG, HON. MANUEL L. QUIN, HON. JHOSEP
Y. LOPEZ, HON. CHIKA G. GO, HON.
VICTORIANO A. MELENDEZ, HON. ERNESTO
V.P. MACEDA, JR., HON. ROLANDO P. NIETO,
HON. DANILO V. ROLEDA, HON. GERINO A.
TOLENTINO, JR., HON. MA. PAZ E. HERRERA,
HON. JOEY D. HIZON, HON. FELIXBERTO D.
ESPIRITU, HON. KARLO Q. BUTIONG, HON.
ROGELIO P. DELA PAZ, HON. BERNARDO D.
RAGAZA, HON. MA. CORAZON R. CABALLES,
HON. CASIMIRO C. SISON, HON. BIENVENIDO
M. ABANTE, JR., HON. MA. LOURDES M. ISIP,
HON. ALEXANDER S. RICAFORT, HON.
ERNESTO F. RIVERA, HON. LEONARDO L.
ANGAT, and HON. JOCELYN B. DAWIS, in their
capacity as councilors of the City of
Manila, petitioners, vs. HON. PERFECTO A.S.
LAGUIO, JR., as Presiding Judge, RTC, Manila and
MALATE TOURIST DEVELOPMENT
CORPORATION, respondents.

DECISION
TINGA, J p:

I know only that what is moral is what you feel good after
and what is immoral is what you feel bad after.
Ernest Hemingway
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 Petition 1 under Rule 45 (then Rule 42) of the
Revised Rules on Civil Procedure seeking the reversal of the Decision 2 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 Order 7 (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 Council 9 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 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 EDSAac
2.Massage Parlors
3.Karaoke Bars
4.Beerhouses
5.Night Clubs
6.Day Clubs
7.Super Clubs
8.Discotheques
9.Cabarets
10.Dance Halls
11.Motels
12.Inns
SEC. 2.The City Mayor, the City Treasurer or any person
acting in behalf of the said officials are prohibited from
issuing permits, temporary or otherwise, or from
granting licenses and accepting payments for the
operation of business enumerated in the preceding
section.
SEC. 3.Owners and/or operator of
establishments engaged in, or devoted to, the businesses
enumerated in Section 1 hereof are hereby given three (3)
months from the date of approval of this ordinance within
which to wind up business operations or to transfer to
any place outside of the Ermita-Malate area or convert
said businesses to other kinds of business allowable
within the area, such as but not limited to:
1.Curio or antique shop
2.Souvenir Shops
3.Handicrafts display centers
4.Art galleries
5.Records and music shops
6.Restaurants
7.Coffee shops
8.Flower shops
9.Music lounge and sing-along restaurants, with well-
defined activities for wholesome family entertainment
that cater to both local and foreign clientele.
10.Theaters engaged in the exhibition, not only of motion
pictures but also of cultural shows, stage and theatrical
plays, art exhibitions, concerts and the like.
11.Businesses allowable within the law and medium
intensity districts as provided for in the zoning ordinances
for Metropolitan Manila, except new warehouse or open-
storage depot, dock or yard, motor repair shop, gasoline
service station, light industry with any machinery, or
funeral establishments.
SEC. 4.Any person violating any provisions of this
ordinance, shall upon conviction, be punished by
imprisonment of one (1) year or fine of FIVE
THOUSAND (P5,000.00) PESOS, or both, at the
discretion of the Court, PROVIDED, that in case of
juridical person, the President, the General Manager, or
person-in-charge of operation shall be liable thereof;
PROVIDED FURTHER, that in case of subsequent
violation and conviction, the premises of the erring
establishment shall be closed and padlocked
permanently.
SEC. 5.This ordinance shall take effect upon approval.
Enacted by the City Council of Manila at its regular
session today, March 9, 1993.
Approved by His Honor, the Mayor on March 30, 1993.
(Emphasis supplied)
In the RTC Petition, MTDC argued that the Ordinance erroneously and
improperly included in its enumeration of prohibited establishments,
motels and inns such as MTDC's Victoria Court considering that these
were not establishments for "amusement" or "entertainment" and they
were not "services or facilities for entertainment," nor did they use women
as "tools for entertainment," and neither did they "disturb the community,"
"annoy the inhabitants" or "adversely affect the social and moral welfare
of the community." 11
MTDC further advanced that the Ordinance was invalid and
unconstitutional for the following reasons: (1) The City Council has no
power to prohibit the operation of motels as Section 458 (a) 4 (iv) 12 of
the Local Government Code of 1991 (the Code) grants to the City Council
only the power to regulate the establishment, operation and maintenance
of hotels, motels, inns, pension houses, lodging houses and other similar
establishments; (2) The Ordinance is void as it is violative of Presidential
Decree (P.D.) No. 499 13 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 Ordinanceconstitutes a denial of equal protection under the
law as no reasonable basis exists for prohibiting the operation of motels
and inns, but not pension houses, hotels, lodging houses or other similar
establishments, and for prohibiting said business in the Ermita-Malate area
but not outside of this area. 14
In their Answer 15 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:
xxx xxx xxx

(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:
xxx xxx xxx
(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. cDIaAS
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
xxx xxx xxx
Section 18.Legislative powers. The Municipal Board
shall have the following legislative powers:
xxx xxx xxx
(kk)To enact all ordinances it may deem necessary and
proper for the sanitation and safety, the furtherance of the
prosperity, and the promotion of the morality, peace, good
order, comfort, convenience, and general welfare of the
city and its inhabitants, and such others as may be
necessary to carry into effect and discharge the powers
and duties conferred by this chapter; and to fix penalties
for the violation of ordinances which shall not exceed two
hundred pesos fine or six months' imprisonment, or both
such fine and imprisonment, for a single offense.
Further, the petitioners noted, the Ordinance had the presumption of
validity; hence, private respondent had the burden to prove its illegality or
unconstitutionality. 21
Petitioners also maintained that there was no inconsistency between P.D.
499 and the Ordinance as the latter simply disauthorized certain forms of
businesses and allowed the Ermita-Malate area to remain a commercial
zone. 22 The Ordinance, the petitioners likewise claimed, cannot be
assailed as ex post facto as it was prospective in
operation. 23 The Ordinance also did not infringe the equal protection
clause and cannot be denounced as class legislation as there existed
substantial and real differences between the Ermita-Malate area and other
places in the City of Manila. 24
On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge
Laguio) issued an ex-parte temporary restraining order against the
enforcement of the Ordinance. 25 And on 16 July 1993, again in an
intrepid gesture, he granted the writ of preliminary injunction prayed for
by MTDC. 26
After trial, on 25 November 1994, Judge Laguio rendered the
assailed Decision, enjoining the petitioners from implementing
the Ordinance. The dispositive portion of said Decision reads:27
WHEREFORE, judgment is hereby rendered declaring
Ordinance No. 778[3], Series of 1993, of the City of
Manila null and void, and making permanent the writ of
preliminary injunction that had been issued by this Court
against the defendant. No costs.
SO ORDERED. 28
Petitioners filed with the lower court a Notice of Appeal 29 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. 499 31 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 Memorandum 36 dated 27 May 1996, private respondent maintains
that the Ordinance is ultra vires and that it is void for being repugnant to
the general law. It reiterates that the questioned Ordinance is not a valid
exercise of police power; that it is violative of due process, confiscatory
and amounts to an arbitrary interference with its lawful business; that it is
violative of the equal protection clause; and that it confers on petitioner
City Mayor or any officer unregulated discretion in the execution of
the Ordinance absent rules to guide and control his actions.
This is an opportune time to express the Court's deep sentiment and
tenderness for the Ermita-Malate area being its home for several decades.
A long-time resident, the Court witnessed the area's many turn of events. It
relished its glory days and endured its days of infamy. Much as the Court
harks back to the resplendant era of the Old Manila and yearns to restore
its lost grandeur, it believes that the Ordinance is not the fitting means to
that end. The Court is of the opinion, and so holds, that the lower court did
not err in declaring the Ordinance, as it did, ultra vires and therefore null
and void.
The Ordinance is so replete with constitutional infirmities that almost
every sentence thereof violates a constitutional provision. The prohibitions
and sanctions therein transgress the cardinal rights of persons enshrined by
the Constitution. The Court is called upon to shelter these rights from
attempts at rendering them worthless.
The tests of a valid ordinance are well established. A long line of decisions
has held that for an ordinance to be valid, it must not only be within the
corporate powers of the local government unit to enact and must be passed
according to the procedure prescribed by law, it must also conform to the
following substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive; (3) must
not be partial or discriminatory; (4) must not prohibit but may regulate
trade; (5) must be general and consistent with public policy; and (6) must
not be unreasonable. 37
Anent the first criterion, ordinances shall only be valid when they are not
contrary to the Constitution and to the laws. 38 The Ordinance must
satisfy two requirements: it must pass muster under the test of
constitutionality and the test of consistency with the prevailing laws. That
ordinances should be constitutional uphold the principle of the supremacy
of the Constitution. The requirement that the enactment must not violate
existing law gives stress to the precept that local government units are able
to legislate only by virtue of their derivative legislative power, a
delegation of legislative power from the national legislature. The delegate
cannot be superior to the principal or exercise powers higher than those of
the latter. 39
This relationship between the national legislature and the local
government units has not been enfeebled by the new provisions in the
Constitution strengthening the policy of local autonomy. The national
legislature is still the principal of the local government units, which cannot
defy its will or modify or violate it. 40
The Ordinance was passed by the City Council in the exercise of its police
power, an enactment of the City Council acting as agent of Congress.
Local government units, as agencies of the State, are endowed with police
power in order to effectively accomplish and carry out the declared objects
of their creation. 41 This delegated police power is found in Section 16 of
the Code, known as the general welfare clause, viz:
SECTION 16.General Welfare. Every local
government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as
powers necessary, appropriate, or incidental for its
efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within
their respective territorial jurisdictions, local government
units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health
and safety, enhance the right of the people to a balanced
ecology, encourage and support the development of
appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic
prosperity and social justice, promote full employment
among their residents, maintain peace and order, and
preserve the comfort and convenience of their
inhabitants. STCDaI
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
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 despotically 57 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 rights 62 a violation
of the due process clause. aSDHCT
The Ordinance was enacted to address and arrest the social ills
purportedly spawned by the establishments in the Ermita-Malate area
which are allegedly operated under the deceptive veneer of legitimate,
licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses,
cocktail lounges, hotels and motels. Petitioners insist that even the Court
in the case of Ermita-Malate Hotel and Motel Operators Association,
Inc. v. City Mayor of Manila 63 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 theOrdinance 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 theOrdinance. 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.
(Catechism of the Catholic Church, Definitive Edition, p. 101; ECCE
and Word & Life Publications, Don Bosco Compound, Makati)
The problem, it needs to be pointed out, is not the establishment, which by
its nature cannot be said to be injurious to the health or comfort of the
community and which in itself is amoral, but the deplorable human
activity that may occur within its premises. While a motel may be used as
a venue for immoral sexual activity, it cannot for that reason alone be
punished. It cannot be classified as a house of ill-repute or as a
nuisance per se on a mere likelihood or a naked assumption. If that were
so and if that were allowed, then the Ermita-Malate area would not only be
purged of its supposed social ills, it would be extinguished of its soul as
well as every human activity, reprehensible or not, in its every nook and
cranny would be laid bare to the estimation of the authorities.

The Ordinance seeks to legislate morality but fails to address the core
issues of morality. Try as the Ordinance may to shape morality, it should
not foster the illusion that it can make a moral man out of it because
immorality is not a thing, a building or establishment; it is in the hearts of
men. The City Council instead should regulate human conduct that occurs
inside the establishments, but not to the detriment of liberty and privacy
which are covenants, premiums and blessings of democracy.
While petitioners' earnestness at curbing clearly objectionable social ills is
commendable, they unwittingly punish even the proprietors and operators
of "wholesome," "innocent" establishments. In the instant case, there is a
clear invasion of personal or property rights, personal in the case of those
individuals desirous of owning, operating and patronizing those motels
and property in terms of the investments made and the salaries to be paid
to those therein employed. If the City of Manila so desires to put an end to
prostitution, fornication and other social ills, it can instead impose
reasonable regulations such as daily inspections of the establishments for
any violation of the conditions of their licenses or permits; it may exercise
its authority to suspend or revoke their licenses for these violations; 66 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 Ordinancewithin 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. HCEcAa
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 faculties with which he has been endowed by his Creator,
subject only to such restraint as are necessary for the common
welfare." 67 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. 68
The U.S. Supreme Court in the case of Roth v. Board of
Regents, 69 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.
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. 70
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. 71 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. 72 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. 73
The concept of liberty compels respect for the individual whose claim to
privacy and interference demands respect. As the case of Morfe
v. Mutuc, 74 borrowing the words of Laski, so very aptly stated:
Man is one among many, obstinately refusing reduction
to unity. His separateness, his isolation, are indefeasible;
indeed, they are so fundamental that they are the basis on
which his civic obligations are built. He cannot abandon
the consequences of his isolation, which are, broadly
speaking, that his experience is private, and the will built
out of that experience personal to himself. If he
surrenders his will to others, he surrenders himself. If his
will is set by the will of others, he ceases to be a master
of himself. I cannot believe that a man no longer a master
of himself is in any real sense free.
Indeed, the right to privacy as a constitutional right was recognized
in Morfe, the invasion of which should be justified by a compelling state
interest. Morfe accorded recognition to the right to privacy independently
of its identification with liberty; in itself it is fully deserving of
constitutional protection. Governmental powers should stop short of
certain intrusions into the personal life of the citizen. 75
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. 76 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. 77 It is intrusive and
violative of the private property rights of individuals. EHTCAa
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. 78
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. 79
In the landmark case of Pennsylvania Coal v. Mahon, 80 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. 81

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. 82
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. 83 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. 84 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. 85
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. 86
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. 87
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 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." 88 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. 89
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. 90
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. 91
Thus, in Coates v. City of Cincinnati, 92 as cited in People
v. Nazario, 93 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.EATCcI
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, 94 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, 95 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. 96
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. 97 The guarantee means that no person or class of persons
shall be denied the same protection of laws which is enjoyed by other
persons or other classes in like circumstances. 98 The "equal protection of
the laws is a pledge of the protection of equal laws." 99 It limits
governmental discrimination. The equal protection clause extends to
artificial persons but only insofar as their property is concerned. 100
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. 101
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. 102 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. IEAacS
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. 103
In the Court's view, there are no substantial distinctions between motels,
inns, pension houses, hotels, lodging houses or other similar
establishments. By definition, all are commercial establishments providing
lodging and usually meals and other services for the public. No reason
exists for prohibiting motels and inns but not pension houses, hotels,
lodging houses or other similar establishments. The classification in the
instant case is invalid as similar subjects are not similarly treated, both as
to rights conferred and obligations imposed. It is arbitrary as it does not
rest on substantial distinctions bearing a just and fair relation to the
purpose of the Ordinance.
The Court likewise cannot see the logic for prohibiting the business and
operation of motels in the Ermita-Malate area but not outside of this area.
A noxious establishment does not become any less noxious if located
outside the area.
The standard "where women are used as tools for entertainment" is also
discriminatory as prostitution one of the hinted ills the Ordinance aims
to 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. 104 Thus, the discrimination is invalid.
Failing the test of constitutionality, the Ordinance likewise failed to pass
the test of consistency with prevailing laws.
C.The Ordinance is repugnant
to general laws; it is ultra vires
The Ordinance is in contravention of the Code as the latter merely
empowers local government units to regulate, and not prohibit, the
establishments enumerated in Section 1 thereof.
The power of the City Council to regulate by ordinances the
establishment, operation, and maintenance of motels, hotels and other
similar establishments is found in Section 458 (a) 4 (iv), which provides
that:
Section 458.Powers, Duties, Functions and
Compensation. (a) The sangguniang panlungsod, as
the legislative body of the city, shall enact ordinances,
approve resolutions and appropriate funds for the general
welfare of the city and its inhabitants pursuant to Section
16 of this Code and in the proper exercise of the
corporate powers of the city as provided for under
Section 22 of this Code, and shall:
xxx xxx xxx
(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:
xxx xxx xxx
(iv)Regulate the establishment, operation and
maintenance of cafes, restaurants, beerhouses,
hotels, motels, inns, pension houses, lodging
houses, and other similar establishments,
including tourist guides and transports. . . .
While its power to regulate the establishment, operation and maintenance
of any entertainment or amusement facilities, and to prohibit certain forms
of amusement or entertainment is provided under Section 458 (a) 4 (vii) of
the Code, which reads as follows:
Section 458.Powers, Duties, Functions and
Compensation. (a) The sangguniang panlungsod, as
the legislative body of the city, shall enact ordinances,
approve resolutions and appropriate funds for the general
welfare of the city and its inhabitants pursuant to Section
16 of this Code and in the proper exercise of the
corporate powers of the city as provided for under
Section 22 of this Code, and shall:
xxx xxx xxx
(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:
xxx xxx xxx
(vii)Regulate the establishment, operation, and
maintenance of any entertainment or amusement
facilities, including theatrical performances,
circuses, billiard pools, public dancing schools,
public dance halls, sauna baths, massage parlors,
and other places for entertainment or amusement;
regulate such other events or activities for
amusement or entertainment, particularly those
which tend to disturb the community or annoy the
inhabitants, or require the suspension or
suppression of the same; or, prohibit certain forms
of amusement or entertainment in order to protect
the social and moral welfare of the community.
Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns,
pension houses, lodging houses, and other similar establishments, the only
power of the City Council to legislate relative thereto is to regulate them
to promote the general welfare. The Code still withholds from cities the
power to suppress and prohibit altogether the establishment, operation and
maintenance of such establishments. It is well to recall the rulings of the
Court in Kwong Sing v. City of Manila 105 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. 106
And in People v. Esguerra, 107 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. 108
These doctrines still hold contrary to petitioners' assertion 109 that they
were modified by the Code vesting upon City Councils prohibitory
powers.
Similarly, the City Council exercises regulatory powers over public
dancing schools, public dance halls, sauna baths, massage parlors, and
other places for entertainment or amusement as found in the first clause of
Section 458 (a) 4 (vii). Its powers to regulate, suppress and suspend "such
other events or activities for amusement or entertainment, particularly
those which tend to disturb the community or annoy the inhabitants" and
to "prohibit certain forms of amusement or entertainment in order to
protect the social and moral welfare of the community" are stated in the
second and third clauses, respectively of the same Section. The several
powers of the City Council as provided in Section 458 (a) 4 (vii) of the
Code, it is pertinent to emphasize, are separated by semi-colons (;), the use
of which indicates that the clauses in which these powers are set forth are
independent of each other albeit closely related to justify being put
together in a single enumeration or paragraph. 110 These powers,
therefore, should not be confused, commingled or consolidated as to create
a conglomerated and unified power of regulation, suppression and
prohibition. 111
The Congress unequivocably specified the establishments and forms of
amusement or entertainment subject to regulation among which are
beerhouses, hotels, motels, inns, pension houses, lodging houses, and
other similar establishments (Section 458 (a) 4 (iv)), public dancing
schools, public dance halls, sauna baths, massage parlors, and other places
for entertainment or amusement (Section 458 (a) 4 (vii)). This
enumeration therefore cannot be included as among "other events or
activities for amusement or entertainment, particularly those which tend to
disturb the community or annoy the inhabitants" or "certain forms of
amusement or entertainment" which the City Council may suspend,
suppress or prohibit. AEDcIH
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. 112 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. 113
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, 114 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. 115 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. 116
Implied repeals are those which take place when a subsequently enacted
law contains provisions contrary to those of an existing law but no
provisions expressly repealing them. Such repeals have been divided into
two general classes: those which occur where an act is so inconsistent or
irreconcilable with an existing prior act that only one of the two can
remain in force and those which occur when an act covers the whole
subject of an earlier act and is intended to be a substitute therefor. The
validity of such a repeal is sustained on the ground that the latest
expression of the legislative will should prevail. 117
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. ESCacI
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. 118
Notably, the City Council was conferred powers to prevent and prohibit
certain activities and establishments in another section of the Code which
is reproduced as follows:
Section 458.Powers, Duties, Functions and
Compensation. (a) The sangguniang panlungsod, as
the legislative body of the city, shall enact ordinances,
approve resolutions and appropriate funds for the general
welfare of the city and its inhabitants pursuant to Section
16 of this Code and in the proper exercise of the
corporate powers of the city as provided for under
Section 22 of this Code, and shall:
(1)Approve ordinances and pass resolutions necessary for
an efficient and effective city government, and in this
connection, shall:
xxx xxx xxx
(v)Enact ordinances intended to prevent, suppress and
impose appropriate penalties for habitual drunkenness in
public places, vagrancy, mendicancy, prostitution,
establishment and maintenance of houses of ill repute,
gambling and other prohibited games of chance,
fraudulent devices and ways to obtain money or property,
drug addiction, maintenance of drug dens, drug pushing,
juvenile delinquency, the printing, distribution or
exhibition of obscene or pornographic materials or
publications, and such other activities inimical to the
welfare and morals of the inhabitants of the city;
xxx xxx xxx
If it were the intention of Congress to confer upon the City Council the
power to prohibit the establishments enumerated in Section 1 of
the Ordinance, it would have so declared in uncertain terms by adding
them to the list of the matters it may prohibit under the above-quoted
Section. The Ordinance now vainly attempts to lump these establishments
with houses of ill-repute and expand the City Council's powers in the
second and third clauses of Section 458 (a) 4 (vii) of the Code in an effort
to overreach its prohibitory powers. It is evident that these establishments
may only be regulated in their establishment, operation and maintenance.
It is important to distinguish the punishable activities from the
establishments themselves. That these establishments are recognized
legitimate enterprises can be gleaned from another Section of the
Code. Section 131 under the Title on Local Government Taxation
expressly mentioned proprietors or operators of massage clinics, sauna,
Turkish and Swedish baths, hotels, motels and lodging houses as among
the "contractors" defined in paragraph (h) thereof. The same Section also
defined "amusement" as a "pleasurable diversion and entertainment,"
"synonymous to relaxation, avocation, pastime or fun;" and "amusement
places" to include "theaters, cinemas, concert halls, circuses and other
places of amusement where one seeks admission to entertain oneself by
seeing or viewing the show or performances." Thus, it can be inferred that
the Code considers these establishments as legitimate enterprises and
activities. It is well to recall the maxim 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. 119
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. 120 As succinctly illustrated
in Solicitor General v. Metropolitan Manila Authority: 121
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. 122
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. 123
Conclusion
All considered, the Ordinance invades fundamental personal and property
rights and impairs personal privileges. It is constitutionally infirm.
The Ordinance contravenes statutes; it is discriminatory and unreasonable
in its operation; it is not sufficiently detailed and explicit that abuses may
attend the enforcement of its sanctions. And not to be forgotten, the City
Council under the Code had no power to enact the Ordinance and is
therefore ultra vires, null and void. cHCSDa
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., concurs in the result.
Ynares-Santiago, J., concurs in the result only.
||| (City of Manila v. Laguio, Jr., G.R. No. 118127, April 12, 2005)
Case No. 4
THIRD DIVISION
[G.R. No. 93891. March 11, 1991.]

POLLUTION ADJUDICATION
BOARD, petitioner, vs. COURT OF APPEALS and
SOLAR TEXTILE FINISHING
CORPORATION, respondents.

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


Leonardo A. Aurelio for respondent Solar Textile Finishing
Corp.

SYLLABUS

1. ADMINISTRATIVE LAW; POLLUTION ADJUDICATION BOARD;


MAY ISSUE CEASE AND DESIST ORDERS EX-PARTE; BASIS.
Section 7(a) of P.D. No. 984 authorized petitioner Board to issue ex
parte cease and desist orders. An ex parte cease and desist order may be
issued by the Board (a) whenever the wastes discharged by an
establishment pose an "immediate threat to life, public health, safety or
welfare, or to animal or plant life," or (b) whenever such discharges or
wastes exceed "the allowable standards set by the [NPCC]." On the one
hand, it is not essential that the Board prove that an "immediate threat to
life, public health, safety or welfare, or to animal or plant life" exists
before an ex parte cease and desist order may be issued. It is enough if the
Board finds that the wastes discharged do exceed "the allowable standards
set by the [NPCC]." In respect of discharges of wastes as to which
allowable standards have been set by the Commission, the Board may
issue an ex parte cease and desist order when there is prima facie evidence
of an establishment exceeding such allowable standards. Where, however,
the effluents or discharges have not yet been the subject matter of
allowable standards set by the Commission, then the Board may act on an
ex parte basis when it finds at leastprima facie proof that the wastewater
or material involved presents an "immediate threat to life, public health,
safety or welfare or to animal or plant life." Since the applicable standards
set by the Commission existing at any given time may well not cover
every possible or imaginable kind of effluent or waste discharge, the
general standard of an "immediate threat to life public health, safety or
welfare, or to animal and plant life" remains necessary.
2. POLITICAL LAW; POLICE POWER; ENACTMENT OF
POLLUTION CONTROL STATUTES AND IMPLEMENTING
REGULATIONS, AN EXERCISE THEREOF. The relevant pollution
control statute and implementing regulations were enacted and
promulgated in the exercise of that persuasive, sovereign power to protect
the safety, health, and general welfare and comfort of the public, as well as
the protection of plant and animal life, commonly designated as the police
power.
3. CONSTITUTIONAL LAW; DUE PROCESS; YIELDS TO THE
EXERCISE OF POLICE POWER. It is a constitutional common place
that the ordinary requirements of procedural due process yield to the
necessities of protecting vital public interests like those here involved,
through the exercise of police power.
4. ADMINISTRATIVE LAW; POLLUTION ADJUDICATION BOARD;
DUE PROCESS; HOLDING OF PUBLIC HEARING AFTER EX-
PARTE ISSUANCE OF A CEASE AND DESIST ORDER, SUFFICIENT
COMPLIANCE WITH DUE PROCESS CLAUSE. Where the
establishment affected by an ex parte cease and desist order contests the
correctness of the prima facie findings of the Board, the Board must hold a
public hearing where such establishment would have an opportunity to
controvert the basis of such ex parte order. That such an opportunity is
subsequently available is really all that is required by the due process
clause of the Constitution in situations like that we have here.
5. REMEDIAL LAW; ACTIONS; APPEAL; PROPER
REMEDY WHERE QUESTIONED ORDER AND WRIT OF
EXECUTION WHERE LAWFUL. Solar claims finally that the
petition for certiorari was the proper remedy as the questioned Order
and Writ of Execution issued by the Board were patent nullities. Since
we have concluded that Order and Writ of Execution were entirely
within the lawful authority of petitioner Board, the trial court did not
err when it dismissed Solar's petition for certiorari. It follows that the
proper remedy was an appeal from the trial court to the Court of
Appeals, as Solar did in fact appeal.

RE S O LUTI ON

FELICIANO, J p:

Petitioner Pollution Adjudication Board ("Board") asks us to review the


Decision and Resolution promulgated on 7 February 1990 and 10 May
1990, respectively, by the Court of Appeals in C.A.-G.R. No. SP 18821
entitled "Solar Textile Finishing Corporation v. Pollution Adjudication
Board." In that Decision and Resolution, the Court of Appeals reversed an
order of the Regional Trial Court, Quezon City, Branch 77, in Civil Case
No. Q-89-2287 dismissing private respondent Solar Textile Finishing
Corporation's ("Solar") petition for certiorari and remanded the case to the
trial court for further proceedings.
On 22 September 1988, petitioner Board issued an ex parte Order
directing Solar immediately to cease and desist from utilizing its
wastewater pollution source installations which were discharging
untreated wastewater directly into a canal leading to the adjacent Tullahan-
Tinejeros River. The Order signed by Hon. Fulgencio Factoran, Jr., as
Board Chairman, reads in full as follows:
"Respondent, Solar Textile Finishing Corporation with
plant and place of business at 999 General Pascual
Avenue, Malabon, Metro Manila is involved in bleaching,
rinsing and dyeing textiles with wastewater of about 30
gpm. being directly discharged untreated into the sewer.
Based on findings in the Inspections conducted on 05
November 1986 and 15 November 1986, the volume of
untreated wastewater discharged in the final outfall
outside of the plant's compound was even greater. The
result of inspection conducted on 06 September 1988
showed that respondent's Wastewater Treatment Plant
was noted unoperational and the combined wastewater
generated from its operation was about 30 gallons per
minute and 80% of the wastewater was being directly
discharged into a drainage canal leading to the Tullahan-
Tinejeros River by means of a by-pass and the remaining
20% was channeled into the plant's existing Wastewater
Treatment Plant (WTP). Result of the analyses of the
sample taken from the by - pass showed that the
wastewater is highly pollutive in terms of Color units,
BOD and Suspended Solids, among others. These acts of
respondent in spite of directives to comply with the
requirements are clearly in violation of Section 8
of Presidential Decree No. 984 and Section 103 of its
Implementing Rules and Regulations and the 1982
Effluent Regulations.
WHEREFORE, pursuant to Section 7 of P.D. 984 and
Section 38 of its Implementing Rules and Regulations,
respondent is hereby ordered to cease and desist from
utilizing its wastewater pollution source installations and
discharging its untreated wastewater directly into the
canal leading to the Tullahan-Tinejeros River effective
immediately upon receipt hereof and until such time
when it has fully complied with all the requirements and
until further orders from this Board.
SO ORDERED." 1
We note that the above Order was based on findings of several inspections
of Solar's plant:
a. inspections conducted on 5 November 1986 and 12
November 1986 by the National Pollution Control
Commission ("NPCC"), the predecessor of the
Board; 2 and
b. the inspection conducted on 6 September 1988 by the
Department of Environment and Natural Resources
("DENR").
The findings of these two (2) inspections were that Solar's wastewater
treatment plant was non-operational and that its plant generated about
30 gallons per minute of wastewater, 80% of which was being directly
discharged into a drainage canal leading to the Tullahan-Tinejeros
River. The remaining 20% of the wastewater was being channeled
through Solar's non-operational wastewater treatment plant. Chemical
analysis of samples of Solar's effluents showed the presence of
pollutants on a level in excess of what was permissible underP.D. No.
984 and its Implementing Regulations.
A copy of the above Order was received by Solar on 26 September 1988.
A Writ of Execution issued by the Board was received by Solar on 31
March 1989.
Meantime, Solar filed a motion for reconsideration appeal with prayer for
stay of execution of the Order dated 22 September 1988. Acting on this
motion, the Board issued an Order dated 24 April 1989 allowing Solar to
operate temporarily, to enable the Board to conduct another inspection and
evaluation of Solar's wastewater treatment facilities. In the same Order,
the Board directed the Regional Executive Director of the DENR NCR to
conduct the inspection and evaluation within thirty (30) days.
On 21 April 1989, however, Solar went to the Regional Trial Court of
Quezon City, Branch 77, on petition for certiorari with preliminary
injunction against the Board, the petition being docketed as Civil Case No.
Q-89-2287.
On 21 July 1989, the Regional Trial Court dismissed Solar's petition upon
two (2) grounds, i.e., that appeal and not certiorari from the questioned
Order of the Board as well as the Writ of Execution was the proper
remedy, and that the Board's subsequent Order allowing Solar to operate
temporarily had rendered Solar's petition moot and academic.
Dissatisfied, Solar went on appeal to the Court of Appeals which, in the
Decision here assailed, reversed the Order of dismissal of the trial court
and remanded the case to that court for further proceedings. In addition,
the Court of Appeals declared the Writ of Execution null and void. At the
same time, the Court of Appeals said in the dispositive portion of its
Decision that:
". . . Still and all, this decision is without prejudice to
whatever action the appellee [Board] may take relative to
the projected 'inspection and evaluation' of appellant's
[Solar's] water treatment facilities." 3
The Court of Appeals, in so ruling, held that certiorari was a proper
remedy since the Orders of petitioner Board may result in great and
irreparable injury to Solar; and that while the case might be moot and
academic, "larger issues" demanded that the question of due process be
settled. Petitioner Board moved for reconsideration, without success. prcd

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


that:
1. its ex parte Order dated 22 September 1988 and the
Writ of Execution were issued in accordance with
law and were not violative of the requirements of
due process; and
2. the ex parte Order and the Writ of Execution are not
the proper subjects of a petition for certiorari.
The only issue before us at this time is whether or not the Court of
Appeals erred in reversing the trial court on the ground that Solar had been
denied due process by the Board. LibLex
Petitioner Board claims that under P.D. No. 984, Section 7(a), it has legal
authority to issue ex parte orders to suspend the operations of an
establishment when there is prima facieevidence that such establishment is
discharging effluents or wastewater, the pollution level of which exceeds
the maximum permissible standards set by the NPCC (now, the Board).
Petitioner Board contends that the reports before it concerning the effluent
discharges of Solar into the Tullahan-Tinejeros River provided prima
facie evidence of violation by Solar of Section 5 of the 1982 Effluent
Code.
Solar, on the other hand, contends that under the Board's own rules and
regulations, an ex parte order may issue only if the effluents discharged
pose an "immediate threat to life, public health; safety or welfare, or to
animal and plant life." In the instant case, according to Solar, the
inspection reports before the Board made no finding that Solar's
wastewater discharged posed such a threat.
The Court is not persuaded by Solar's contention. Section 7(a) of P.D. No.
984 authorized petitioner Board to issue ex parte cease and desist orders
under the following circumstances:
"P.D. 984, Section 7, paragraph (a), provides:
(a) Public Hearing . . . Provided, That whenever the
Commission finds prima facie evidence that the
discharged sewage or wastes are of immediate threat to
life, public health, safety or welfare, or to animal or plant
life, or exceeds the allowable standards set by the
Commission, the Commissioner may issue an ex-parte
order directing the discontinuance of the same or
the temporary suspension or cessation of operation of the
establishment or person generating such sewage or
wastes without the necessity of a prior public hearing.
The said ex-parte order shall be immediately
executory and shall remain in force until said
establishment or person prevents or abates the said
pollution within the allowable standards or modified or
nullified by a competent court." (Emphasis supplied).
We note that under the above-quoted portion of Section 7(a) of P.D. No.
984, an ex parte cease and desist order may be issued by the Board (a)
whenever the wastes discharged by an establishment pose an "immediate
threat to life, public health, safety or welfare, or to animal or plant life," or
(b) whenever such discharges or wastes exceed "the allowable standards
set by the [NPCC]." On the one hand, it is not essential that the Board
prove that an "immediate threat to life, public health, safety or welfare, or
to animal or plant life" exists before an ex parte cease and desist order
may be issued. It is enough if the Board finds that the wastes discharged
do exceed "the allowable standards set by the [NPCC]." In respect of
discharges of wastes as to which allowable standards have been set by the
Commission, the Board may issue an ex parte cease and desist order when
there is prima facie evidence of an establishment exceeding such
allowable standards. Where, however, the effluents or discharges have not
yet been the subject matter of allowable standards set by the Commission,
then the Board may act on an ex parte basis when it finds at least prima
facie proof that the wastewater or material involved presents an
"immediate threat to life, public health, safety or welfare or to animal or
plant life." Since the applicable standards set by the Commission existing
at any given time may well not cover every possible or imaginable kind of
effluent or waste discharge, the general standard of an "immediate threat
to life public health, safety or welfare, or to animal and plant life" remains
necessary. Cdpr
Upon the other hand, the Court must assume that the extant allowable
standards have been set by the Commission or Board precisely in order to
avoid or neutralize an "immediate threat to life, public health, safety or
welfare, or to animal or plant life."
Section 5 of the Effluent Regulations of 1982 4 sets out the maximum
permissible levels of physical and chemical substances which effluents
from domestic wastewater treatment plants and industrial plants must not
exceed "when discharged into bodies of water classified as Class A, B, C,
D, SB and SC in accordance with the 1978 NPCC Rules and Regulations."
The waters of Tullahan-Tinejeros River are classified as inland waters
Class D under Section 68 of the 1978 NPCC Rules and
Regulations, 5 which in part provides that:
"Section 68. Water Usage and Classification. The
quality of Philippine waters shall be maintained in a safe
and satisfactory condition according to their best usages.
For this purpose, all water shall be classified according
to the following beneficial usages:
(a) Fresh Surface Water.
Classification Best usage
xxx xxx xxx
Class D For agriculture, irrigation,
live stock watering and
industrial cooling and
processing
xxx xxx xxx
(Emphases supplied)
The reports on the inspections carried on Solar's wastewater treatment
facilities on 5 and 12 November 1986 and 6 September 1988 set forth the
following identical finding:
"a. For legal action in [view of] violation of Section 103
of the implementing rules and regulations of P.D. No.
984 and Section 5 of the Effluent Regulations of 1982." 6
Placing the maximum allowable standards set in Section 5 of the Effluent
Regulations of 1982 alongside the findings of the November 1986 and
September 1988 inspection reports, we get the following results:
"Inland November September
Waters 1986 1988
(Class C & D) 7 Report 8 Report 9
Station 1 Station 1
a) Color in 100 a) Color units 250 125
platinum (Apparent
cobalt Color)
units
b) p H 6-8.5 b) pH 9.3 8.7
c) Tempera- 40 c) Temperature
ture in C (C)
d) Phenols in 0.1 d) Phenols in
mg./l. mg./l.
e) Suspended 75 e) Suspended 340 80
solids in solids in
mg./l. mg./l.
f) BOD in 80 f) BOD (5-day) 1,100 152
mg./l mg./l.
g) oil/Grease 10 g) Oil/Grease
in mg./l. mg./l.
h) Detergents 5 h) Detergents 2.93
in mg./l." mg./l. MBAS
i) Dissolved 0
Oxygen, mg./l.
j) Settleable 0.4 1.5
Matter, mg./l.
k) Total Dis- 800 610
solved Solids
mg./l.
l) Total Solids 1,400 690
mg./l.
m) Turbidity
NTU/ppm. SiO3 70
The November 1986 inspections report concluded that:
"Records of the Commission show that the plant under its
previous owner, Fine Touch Finishing Corporation, was
issued a Notice of Violation on 20 December 1985
directing same to cease and desist from conducting
dyeing operation until such time the waste treatment plant
is already completed and operational. The new owner
Solar Textile Corporation informed the Commission of
the plant acquisition thru its letter dated March 1986
(sic).
The new owner was summoned to a hearing held on 13
October 1986 based on the adverse findings during the
inspection/water sampling test conducted on 08 August
1986. As per instruction of the Legal Division a re-
inspection/sampling test should be conducted first before
an appropriate legal action is instituted; hence, this
inspection.
Based on the above findings, it is clear that the new
owner continuously violates the directive of the
Commission by undertaking dyeing operation without
completing first and operating its existing WTP. The
analysis of results on water samples taken showed that
the untreated wastewater from the firm pollutes our water
resources. In this connection, it is recommended that
appropriate legal action be instituted immediately against
the firm . . ." 10
The September 1988 inspection report's conclusions were:
"1. The plant was undertaking dyeing, bleaching and
rinsing operations during the inspection. The combined
wastewater generated from the said operations was
estimated at about 30 gallons per minute. About 80% of
the wastewater was traced directly discharged into a
drainage canal leading to the Tullahan - Tinejeros river by
means of a bypass. The remaining 20% was channeled
into the plant's existing wastewater treatment plant
(WTP).
2. The WTP was noted not yet fully operational some
accessories were not yet installed. Only the sump pit and
the holding/collecting tank are functional but appeared
seldom used. The wastewater mentioned channeled was
noted held indefinitely into the collection tank for
primary treatment. There was no effluent discharge [from
such collection tank].
3. A sample from the bypass wastewater was collected for
laboratory analyses. Result of the analyses show that the
bypass wastewater is polluted in terms of color units,
BOD and suspended solids, among others. (Please see
attached laboratory result)." 11
From the foregoing reports, it is clear to this Court that there was at
least prima facie evidence before the Board that the effluents emanating
from Solar's plant exceeded the maximum allowable levels of physical and
chemical substances set by the NPCC and that accordingly there was
adequate basis supporting the ex parte cease and desist order issued by the
Board. It is also well to note that the previous owner of the plant facility
Fine Touch Finishing Corporation had been issued a Notice of
Violation on 20 December 1985 directing it to cease and refrain from
carrying out dyeing operations until the water treatment plant was
completed and operational. Solar, the new owner, informed the NPCC of
the acquisition of the plant on March 1986. Solar was summoned by the
NPCC to a hearing on 13 October 1986 based on the results of the
sampling test conducted by the NPCC on 8 August 1986. Petitioner Board
refrained from issuing an ex parte cease and desist order until after the
November 1986 and September 1988 re-inspections were conducted and
the violation of applicable standards was confirmed. In other words,
petitioner Board appears to have been remarkably forbearing in its efforts
to enforce the applicable standards vis-a-vis Solar. Solar, on the other
hand, seemed very casual about its continued discharge of untreated,
pollutive effluents into the Tullahan-Tinejeros River, presumably loath to
spend the money necessary to put its Wastewater Treatment Plant ("WTP")
in an operating condition. cdrep

In this connection, we note that in Technology Developers, Inc. v. Court of


Appeals, et al., 12 the Court very recently upheld the summary closure
ordered by the Acting Mayor of Sta. Maria, Bulacan, of a pollution-
causing establishment, after finding that the records showed that:
"1. No mayor's permit had been secured. While it is true
that the matter of determining whether there is a pollution
of the environment that requires control if not prohibition
of the operation of a business is essentially addressed to
the then National Pollution Control Commission of the
Ministry of Human Settlements, now the Environmental
Management Bureau of the Department of Environment
and Natural Resources, it must be recognized that the
mayor of a town has as much responsibility to protect its
inhabitants from pollution, and by virtue of his police
power, he may deny the application for a permit to
operate a business or otherwise close the same unless
appropriate measures are taken to control and or avoid
injury to the health of the residents of the community
from the emission in the operation of the business.
2. The Acting Mayor, in a letter of February 16, 1989,
called the attention of petitioner to the pollution emitted
by the fumes of its plant whose offensive odor "not only
pollute the air in the locality but also affect the health of
the residents in the area," so that petitioner was ordered to
stop its operation until further orders and it was required
to bring the following:
xxx xxx xxx
(3) Region III-Department of Environment
and Natural Resources Anti-Pollution permit.
(Annex A-2, petition).
3. This action of the Acting Mayor was in response to the
complaint of the residents of Barangay Guyong, Sta.
Maria, Bulacan, directed to the Provincial Governor
through channels (Annex A-B, petition). . . .
4. The closure order of the Acting Mayor was issued only
after an investigation was made by Marivic Guina who in
her report of December 8, 1988 observed that the fumes
emitted by the plant of petitioner goes directly to the
surrounding houses and that no proper air pollution
device has been installed. (Annex A-9, petition).
xxx xxx xxx
6. While petitioner was able to present a temporary
permit to operate by the then National Pollution Control
Commission on December 15, 1987, the permit was good
only up to May 25, 1988 (Annex A-12, petition).
Petitioner had not exerted any effort to extend or validate
its permit much less to install any device to control the
pollution and prevent any hazard to the health of the
residents of the community."
In the instant case, the ex parte cease and desist Order was issued not by a
local government official but by the Pollution Adjudication Board, the
very agency of the Government charged with the task of determining
whether the effluents of a particular industrial establishment comply with
or violate applicable anti-pollution statutory and regulatory provisions.
Ex parte cease and desist orders are permitted by law and regulations in
situations like that here presented precisely because stopping the
continuous discharge of pollutive and untreated effluents into the rivers
and other inland waters of the Philippines cannot be made to wait until
protracted litigation over the ultimate correctness or propriety of such
orders has run its full course, including multiple and sequential appeals
such as those which Solar has taken, which of course may take several
years. The relevant pollution control statute and implementing regulations
were enacted and promulgated in the exercise of that persuasive, sovereign
power to protect the safety, health, and general welfare and comfort of the
public, as well as the protection of plant and animal life, commonly
designated as the police power. It is a constitutional common place that the
ordinary requirements of procedural due process yield to the necessities of
protecting vital public interests like those here involved, through the
exercise of police power. The Board's ex parte Order and Writ of
Execution would, of course, have compelled Solar temporarily to stop its
plant operations, a state of affairs Solar could in any case have avoided by
simply absorbing the bother and burden of putting its WTP on an
operational basis. Industrial establishments are not constitutionally entitled
to reduce their capitals costs and operating expenses and to increase their
profits by imposing upon the public threats and risks to its safety, health,
general welfare and comfort, by disregarding the requirements of anti-
pollution statutes and their implementing regulations. cdll
It should perhaps be made clear the Court is not here saying that the
correctness of the ex parte Order and Writ of Execution may not be
contested by Solar in a hearing before the Board itself. Where the
establishment affected by an ex parte cease and desist order contests the
correctness of the prima facie findings of the Board, the Board must hold a
public hearing where such establishment would have an opportunity to
controvert the basis of such ex parte order. That such an opportunity is
subsequently available is really all that is required by the due process
clause of the Constitution in situations like that we have here. The Board's
decision rendered after the public hearing may then be tested judicially by
an appeal to the Court of Appeals in accordance with Section 7(c) of P.D.
No. 984 and Section 42 of the Implementing Rules and Regulations. A
subsequent public hearing is precisely what Solar should have sought
instead of going to court to seek nullification of the Board's Order and
Writ of Execution and instead of appealing to the Court of Appeals. It will
be recalled that the Board in fact gave Solar authority temporarily to
continue operations until still another inspection of its wastewater
treatment facilities and then another analysis of effluent samples could be
taken and evaluated.
Solar claims finally that the petition for certiorari was the proper remedy
as the questioned Order and Writ of Execution issued by the Board were
patent nullities. Since we have concluded that Order and Writ of Execution
were entirely within the lawful authority of petitioner Board, the trial court
did not err when it dismissed Solar's petition for certiorari. It follows that
the proper remedy was an appeal from the trial court to the Court of
Appeals, as Solar did in fact appeal.
ACCORDINGLY, the Petition for Review is given DUE COURSE and the
Decision of the Court of Appeals dated 7 February 1990 and its Resolution
dated 10 May 1990 in A.C.-G.R. No. SP 18821 are hereby SET ASIDE.
The Order of petitioner Board dated 22 September 1988 and the Writ of
Execution, as well as the decision of the trial court dated 21 July 1989, are
hereby REINSTATED, without prejudice to the right of Solar to contest
the correctness of the basis of the Board's Order and Writ of Execution at a
public hearing before the Board.
Fernan, C.J., Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.
||| (Pollution Adjudication Board v. Court of Appeals, G.R. No. 93891
(Resolution), March 11, 1991)
Case No. 5
SECOND DIVISION
[G.R. No. 130230. April 15, 2005.]

METROPOLITAN MANILA DEVELOPMENT


AUTHORITY, petitioner, vs. DANTE O.
GARIN, respondent.

DECISION

CHICO-NAZARIO, J p:

At issue in this case is the validity of Section 5(f) of Republic Act No.
7924 creating the Metropolitan Manila Development Authority (MMDA),
which authorizes it to confiscate and suspend or revoke driver's licenses in
the enforcement of traffic laws and regulations.
The issue arose from an incident involving the respondent Dante O. Garin,
a lawyer, who was issued a traffic violation receipt (TVR) and his driver's
license confiscated for parking illegally along Gandara Street, Binondo,
Manila, on 05 August 1995. The following statements were printed on the
TVR:
YOU ARE HEREBY DIRECTED TO REPORT TO THE
MMDA TRAFFIC OPERATIONS CENTER PORT
AREA MANILA AFTER 48 HOURS FROM DATE OF
APPREHENSION FOR DISPOSITION/APPROPRIATE
ACTION THEREON. CRIMINAL CASE SHALL BE
FILED FOR FAILURE TO REDEEM LICENSE AFTER
30 DAYS.
VALID AS TEMPORARY DRIVER'S LICENSE FOR
SEVEN DAYS FROM DATE OF APPREHENSION. 1
Shortly before the expiration of the TVR's validity, the respondent
addressed a letter 2 to then MMDA Chairman Prospero Oreta requesting
the return of his driver's license, and expressing his preference for his case
to be filed in court.
Receiving no immediate reply, Garin filed the original complaint 3 with
application for preliminary injunction in Branch 260 of the Regional Trial
Court (RTC) of Paraaque, on 12 September 1995, contending that, in the
absence of any implementing rules and regulations, Sec. 5(f) of Rep. Act
No. 7924 grants the MMDA unbridled discretion to deprive erring
motorists of their licenses, pre-empting a judicial determination of the
validity of the deprivation, thereby violating the due process clause of the
Constitution. The respondent further contended that the provision violates
the constitutional prohibition against undue delegation of legislative
authority, allowing as it does the MMDA to fix and impose unspecified
and therefore unlimited fines and other penalties on erring
motorists. SaHTCE
In support of his application for a writ of preliminary injunction, Garin
alleged that he suffered and continues to suffer great and irreparable
damage because of the deprivation of his license and that, absent any
implementing rules from the Metro Manila Council, the TVR and the
confiscation of his license have no legal basis.
For its part, the MMDA, represented by the Office of the Solicitor
General, pointed out that the powers granted to it by Sec. 5(f) of Rep. Act
No. 7924 are limited to the fixing, collection and imposition of fines and
penalties for traffic violations, which powers are legislative and executive
in nature; the judiciary retains the right to determine the validity of the
penalty imposed. It further argued that the doctrine of separation of
powers does not preclude "admixture" of the three powers of government
in administrative agencies. 4
The MMDA also refuted Garin's allegation that the Metro Manila Council,
the governing board and policy making body of the petitioner, has as yet
to formulate the implementing rules for Sec. 5(f) of Rep. Act No. 7924 and
directed the court's attention to MMDA Memorandum Circular No. TT-95-
001 dated 15 April 1995. Respondent Garin, however, questioned the
validity of MMDA Memorandum Circular No. TT-95-001, as he claims
that it was passed by the Metro Manila Council in the absence of a
quorum.
Judge Helen Bautista-Ricafort issued a temporary restraining order on 26
September 1995, extending the validity of the TVR as a temporary driver's
license for twenty more days. A preliminary mandatory injunction was
granted on 23 October 1995, and the MMDA was directed to return the
respondent's driver's license.
On 14 August 1997, the trial court rendered the assailed decision 5 in
favor of the herein respondent and held that:
a. There was indeed no quorum in that First Regular
Meeting of the MMDA Council held on March 23, 1995,
hence MMDA Memorandum Circular No. TT-95-001,
authorizing confiscation of driver's licenses upon
issuance of a TVR, is void ab initio.
b. The summary confiscation of a driver's license without
first giving the driver an opportunity to be heard;
depriving him of a property right (driver's license)
without DUE PROCESS; not filling (sic) in Court the
complaint of supposed traffic infraction, cannot be
justified by any legislation (and is) hence
unconstitutional.
WHEREFORE, the temporary writ of preliminary
injunction is hereby made permanent; th(e) MMDA is
directed to return to plaintiff his driver's license; th(e)
MMDA is likewise ordered to desist from confiscating
driver's license without first giving the driver the
opportunity to be heard in an appropriate proceeding.
In filing this petition, 6 the MMDA reiterates and reinforces its argument
in the court below and contends that a license to operate a motor vehicle is
neither a contract nor a property right, but is a privilege subject to
reasonable regulation under the police power in the interest of the public
safety and welfare. The petitioner further argues that revocation or
suspension of this privilege does not constitute a taking without due
process as long as the licensee is given the right to appeal the revocation.
To buttress its argument that a licensee may indeed appeal the taking and
the judiciary retains the power to determine the validity of the
confiscation, suspension or revocation of the license, the petitioner points
out that under the terms of the confiscation, the licensee has three options:
1. To voluntarily pay the imposable fine,
2. To protest the apprehension by filing a protest with the
MMDA Adjudication Committee, or
3. To request the referral of the TVR to the Public
Prosecutor's Office.
The MMDA likewise argues that Memorandum Circular No. TT-95-001
was validly passed in the presence of a quorum, and that the lower court's
finding that it had not was based on a "misapprehension of facts," which
the petitioner would have us review. Moreover, it asserts that though the
circular is the basis for the issuance of TVRs, the basis for the summary
confiscation of licenses is Sec. 5(f) of Rep. Act No. 7924 itself, and that
such power is self-executory and does not require the issuance of any
implementing regulation or circular. SHacCD
Meanwhile, on 12 August 2004, the MMDA, through its Chairman Bayani
Fernando, implemented Memorandum Circular No. 04, Series of 2004,
outlining the procedures for the use of the Metropolitan Traffic Ticket
(MTT) scheme. Under the circular, erring motorists are issued an MTT,
which can be paid at any Metrobank branch. Traffic enforcers may no
longer confiscate drivers' licenses as a matter of course in cases of traffic
violations. All motorists with unredeemed TVRs were given seven days
from the date of implementation of the new system to pay their fines and
redeem their license or vehicle plates. 7
It would seem, therefore, that insofar as the absence of a prima facie case
to enjoin the petitioner from confiscating drivers' licenses is concerned,
recent events have overtaken the Court's need to decide this case, which
has been rendered moot and academic by the implementation
of Memorandum Circular No. 04, Series of 2004.
The petitioner, however, is not precluded from re-implementing
Memorandum Circular No. TT-95-001, or any other scheme, for that
matter, that would entail confiscating drivers' licenses. For the proper
implementation, therefore, of the petitioner's future programs, this Court
deems it appropriate to make the following observations:
1. A license to operate a motor vehicle is a privilege that the state may
withhold in the exercise of its police power.
The petitioner correctly points out that a license to operate a motor vehicle
is not a property right, but a privilege granted by the state, which may be
suspended or revoked by the state in the exercise of its police power, in the
interest of the public safety and welfare, subject to the procedural due
process requirements. This is consistent with our rulings in Pedro v.
Provincial Board of Rizal 8 on the license to operate a cockpit, Tan v.
Director of Forestry 9 and Oposa v. Factoran 10 on timber licensing
agreements, and Surigao Electric Co., Inc. v. Municipality of
Surigao 11 on a legislative franchise to operate an electric plant.
Petitioner cites a long list of American cases to prove this point, such
as State ex. Rel. Sullivan, 12 which states in part that, "the legislative
power to regulate travel over the highways and thoroughfares of the state
for the general welfare is extensive. It may be exercised in any reasonable
manner to conserve the safety of travelers and pedestrians. Since motor
vehicles are instruments of potential danger, their registration and the
licensing of their operators have been required almost from their first
appearance. The right to operate them in public places is not a natural and
unrestrained right, but a privilege subject to reasonable regulation, under
the police power, in the interest of the public safety and welfare. The
power to license imports further power to withhold or to revoke such
license upon noncompliance with prescribed conditions."
Likewise, the petitioner quotes the Pennsylvania Supreme Court
in Commonwealth v. Funk, 13 to the effect that: "Automobiles are vehicles
of great speed and power. The use of them constitutes an element of
danger to persons and property upon the highways. Carefully operated, an
automobile is still a dangerous instrumentality, but, when operated by
careless or incompetent persons, it becomes an engine of destruction. The
Legislature, in the exercise of the police power of the commonwealth, not
only may, but must, prescribe how and by whom motor vehicles shall be
operated on the highways. One of the primary purposes of a system of
general regulation of the subject matter, as here by the Vehicle Code, is to
insure the competency of the operator of motor vehicles. Such a general
law is manifestly directed to the promotion of public safety and is well
within the police power."

The common thread running through the cited cases is that it is the
legislature, in the exercise of police power, which has the power and
responsibility to regulate how and by whom motor vehicles may be
operated on the state highways. HIAEcT
2. The MMDA is not vested with police power.
In Metro Manila Development Authority v. Bel-Air Village Association,
Inc., 14 we categorically stated that Rep. Act No. 7924 does not grant the
MMDA with police power, let alone legislative power, and that all its
functions are administrative in nature.
The said case also involved the herein petitioner MMDA which claimed
that it had the authority to open a subdivision street owned by the Bel-Air
Village Association, Inc. to public traffic because it is an agent of the state
endowed with police power in the delivery of basic services in Metro
Manila. From this premise, the MMDA 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 Rep. Act No. 7924 creating the MMDA,
we concluded that the MMDA is not a local government unit or a public
corporation endowed with legislative power, and, unlike its predecessor,
the Metro Manila Commission, it has 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.
We restate here the doctrine in the said decision as it applies to the case at
bar: police power, as an inherent attribute of sovereignty, is the power
vested by the Constitution in the legislature to make, ordain, and establish
all manner of wholesome and reasonable laws, statutes and ordinances,
either with penalties or without, not repugnant to the Constitution, as they
shall judge to be for the good and welfare of the commonwealth, and for
the subjects of the same.
Having been lodged primarily in the National Legislature, it cannot be
exercised by any group or body of individuals not possessing legislative
power. The National Legislature, however, may delegate this power to the
president and administrative boards as well as the lawmaking bodies of
municipal corporations or local government units (LGUs). Once
delegated, the agents can exercise only such legislative powers as are
conferred on them by the national lawmaking body.
Our Congress delegated police power to the LGUs in the Local
Government Code of 1991. 15 A local government is a "political
subdivision of a nation or state which is constituted by law and has
substantial control of local affairs." 16 Local government units are the
provinces, cities, municipalities and barangays, which exercise police
power through their respective legislative bodies.
Metropolitan or Metro Manila is a body composed of several local
government units. With the passage of Rep. Act No. 7924 in 1995,
Metropolitan Manila was declared as a "special development and
administrative region" and the administration of "metro-wide" basic
services affecting the region placed under "a development authority"
referred to as the MMDA. Thus:
. . . [T]he powers of the MMDA are limited to the
following acts: formulation, coordination, regulation,
implementation, preparation, management, monitoring,
setting of policies, installation of a system and
administration. There is no syllable in R. A. No. 7924
that grants the MMDA police power, let alone legislative
power. Even the Metro Manila Council has not been
delegated any legislative power. Unlike the legislative
bodies of the local government units, there is no
provision in R. A. No. 7924 that empowers the MMDA
or its Council to "enact ordinances, approve
resolutions and appropriate funds for the general
welfare" of the inhabitants of Metro Manila. The
MMDA is, as termed in the charter itself, a "development
authority." It is an agency created for the purpose of
laying down policies and coordinating with the
various national government agencies, people's
organizations, non-governmental organizations and
the private sector for the efficient and expeditious
delivery of basic services in the vast metropolitan
area. All its functions are administrative in nature and
these are actually summed up in the charter itself, viz:
"Sec. 2. Creation of the Metropolitan Manila
Development Authority. . . .
The MMDA shall perform planning, monitoring
and coordinative functions, and in the process
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." IcHSCT
xxx xxx xxx
Clearly, the MMDA is not a political unit of government.
The power delegated to the MMDA is that given to the
Metro Manila Council to promulgate administrative rules
and regulations in the implementation of the MMDA's
functions. There is no grant of authority to enact
ordinances and regulations for the general welfare of
the inhabitants of the metropolis. 17(footnotes omitted,
emphasis supplied)
Therefore, insofar as Sec. 5(f) of Rep. Act No. 7924 is understood by the
lower court and by the petitioner to grant the MMDA the power to
confiscate and suspend or revoke drivers' licenses without need of any
other legislative enactment, such is an unauthorized exercise of police
power.
3. Sec. 5(f) grants the MMDA with the duty to enforce existing traffic
rules and regulations.
Section 5 of Rep. Act No. 7924 enumerates the "Functions and Powers of
the Metro Manila Development Authority." The contested clause in Sec.
5(f) states that the petitioner shall "install and administer a single ticketing
system, fix, impose and collect fines and penalties for all kinds of
violations of traffic rules and regulations, whether moving or nonmoving
in nature, and confiscate and suspend or revoke drivers' licenses in the
enforcement of such traffic laws and regulations, the provisions of Rep.
Act No. 4136 18 and P.D. No. 1605 19 to the contrary notwithstanding,"
and that "(f)or this purpose, the Authority shall enforce all traffic laws and
regulations in Metro Manila, through its traffic operation center, and may
deputize members of the PNP, traffic enforcers of local government units,
duly licensed security guards, or members of non-governmental
organizations to whom may be delegated certain authority, subject to such
conditions and requirements as the Authority may impose."
Thus, where there is a traffic law or regulation validly enacted by the
legislature or those agencies to whom legislative powers have been
delegated (the City of Manila in this case), the petitioner is not precluded
and in fact is duty-bound to confiscate and suspend or revoke
drivers' licenses in the exercise of its mandate of transport and traffic
management, as well as the administration and implementation of all
traffic enforcement operations, traffic engineering services and traffic
education programs. 20
This is consistent with our ruling in Bel-Air that the MMDA is a
development authority created for the purpose of laying down policies and
coordinating with the various national government agencies, people's
organizations, non-governmental organizations and the private sector,
which may enforce, but not enact, ordinances.
This is also consistent with the fundamental rule of statutory construction
that a statute is to be read in a manner that would breathe life into it, rather
than defeat it, 21 and is supported by the criteria in cases of this nature that
all reasonable doubts should be resolved in favor of the constitutionality of
a statute. 22
A last word. The MMDA was intended to coordinate services with metro-
wide impact that transcend local political boundaries or would entail huge
expenditures if provided by the individual LGUs, especially with regard to
transport and traffic management, 23 and we are aware of the valiant
efforts of the petitioner to untangle the increasingly traffic-snarled roads of
Metro Manila. But these laudable intentions are limited by the MMDA's
enabling law, which we can but interpret, and petitioner must be reminded
that its efforts in this respect must be authorized by a valid law, or
ordinance, or regulation arising from a legitimate source. AEDISC
WHEREFORE, the petition is dismissed.
SO ORDERED.
Puno, Austria-Martinez, Callejo, Sr. and Tinga, JJ., concur.
||| (MMDA v. Garin, G.R. No. 130230, April 15, 2005)

Case No. 6

SECOND DIVISION
[G.R. No. 126102. December 4, 2000.]

ORTIGAS & CO. LTD., petitioner, vs. THE COURT


OF APPEALS and ISMAEL G. MATHAY
III, respondents.

Atty. Eulogio R. Rodriguez for petitioner.


Puhawan Aldon & Associates Law Offices for private respondent.

SYNOPSIS

Petitioner Ortigas sold to the Hermosos a parcel of land in Greenhills


Subdivision. The contract of sale provided that the lot will be used for
single-family residential building only and this was annotated at the back
of the title of the lot. In 1981, the Metropolitan Commission enacted
MMC Ordinance No. 81-01 reclassifying as a commercial zone the stretch
of Ortigas Avenue from Roosevelt Street to Madison Street. Subsequently
in 1984, private respondent Mathay III leased the lot from Hermoso and
constructed a commercial building for Greenhills Autohaus, Inc., a car
sales company.
Petitioner filed Civil Case No. 4 seeking to enjoin the building by
respondent of structure on the lot and sought the demolition of the
commercial structure for having violated the terms and conditions of the
Deed of Sale. The trial court issued the injunctive order ruling that the
ordinance should be given prospective application. On certiorari,
however, the CA granted the petition, ruling that the trial court gravely
abused its discretion in refusing to treat MMC Ordinance No. 81-01 as
applicable to Civil Case No. 64931. CA held that the ordinance effectively
nullified the restrictions allowing only residential use of the property in
question.
In this petition, petitioner claims that even with the zoning ordinance, the
seller and buyer of the re-classified lot can voluntarily agree to an
exclusive residential use thereof; and that respondent Mathay III as a mere
lessee of the lot in question, is a total stranger to the deed of sale and is
thus barred from questioning the condition of said deed.
The Supreme Court denied the petition, ruling: that while as a rule, laws
are to be construed as having only prospective operation, one exception is
a law which involves police power, which could be given retroactive effect
and may reasonably impair vested rights or contracts; that the MMC
Ordinance No. 81-01 has been held to be a legitimate police power
measure to which the non-impairment of contracts or vested rights clauses
will have to yield; and that Mathay III in this case is clearly a real party in
interest because he holds the lot pursuant to a valid lease and it is his
building of a commercial structure which petitioner seeks to enjoin.

SYLLABUS
1. STATUTORY CONSTRUCTION; LAWS ARE GENERALLY GIVEN
PROSPECTIVE APPLICATION; LAW WHICH INVOLVES POLICE
POWER IS AN EXCEPTION. In general, we agree that laws are to be
construed as having only prospective operation. Lex prospicit, non
respicit. Equally settled, only laws existing at the time of the execution of
a contract are applicable thereto and are not later statutes, unless the latter
are specifically intended to have a retroactive effect. A later law which
enlarges, abridges, or in any manner changes the intent of the parties to the
contract necessarily impairs the contract itself and cannot be given
retroactive effect without violating the constitutional prohibition against
impairment of contracts. But, the foregoing principles do admit of certain
exceptions. One involves police power. A law enacted in the exercise of
police power to regulate or govern certain activities or transactions could
be given retroactive effect and may reasonably impair vested rights or
contracts. Police power legislation is applicable not only to future
contracts, but equally to those already in existence. Nonimpairment of
contracts or vested rights clauses will have to yield to the superior and
legitimate exercise by the State of police power to promote the health,
morals, peace, education, good order, safety, and general welfare of the
people. Moreover, statutes in exercise of valid police power must be read
into every contract.
2. CONSTITUTIONAL LAW; POLICE POWER; CONTRACTUAL
STIPULATIONS AND VESTED RIGHTS MUST YIELD TO POLICE
POWER; CASE AT BAR. Noteworthy, in Sangalang vs. Intermediate
Appellate Court, we already upheld MMC Ordinance No. 81-01 as a
legitimate police power measure. Following our ruling in Ortigas & Co.,
Ltd. vs. Feati Bank & Trust Co., 94 SCRA 533 (1979), the contractual
stipulations annotated on the Torrens Title, on which Ortigas relies, must
yield to the ordinance. When that stretch of Ortigas Avenue from
Roosevelt Street to Madison Street was reclassified as a commercial zone
by the Metropolitan Manila Commission in March 1981, the restrictions in
the contract of sale between Ortigas and Hermoso, limiting all
construction on the disputed lot to single-family residential buildings,
were deemed extinguished by the retroactive operation of the zoning
ordinance and could no longer be enforced. While our legal system
upholds the sanctity of contract so that a contract is deemed law between
the contracting parties, nonetheless, stipulations in a contract cannot
contravene "law, morals, good customs, public order, or public policy."
Otherwise such stipulations would be deemed null and void.
3. REMEDIAL LAW; CIVIL PROCEDURE; REAL PARTY IN
INTEREST; LESSEE WHO BUILT COMMERCIAL STRUCTURE
SOUGHT TO BE DEMOLISHED IS A REAL PARTY IN INTEREST.
By real interest is meant a present substantial interest, as distinguished
from a mere expectancy or a future, contingent, subordinate, or
consequential interest. Tested by the foregoing definition, private
respondent in this case is clearly a real party in interest. It is not disputed
that he is in possession of the lot pursuant to valid lease. He is a possessor
in the concept of a "holder of the thing" under Article 525 of the Civil
Code. He was impleaded as a defendant in the amended complaint in Civil
Case No. 64931. Further, what petitioner seeks to enjoin is the building by
respondent of a commercial structure on the lot. Clearly, it is private
respondent's acts which are in issue, and his interest in said issue cannot
be a mere incidental interest. In its amended complaint, petitioner prayed
for, among others, judgment "ordering the demolition of all improvements
illegally built on the lot in question." These show that it is petitioner
Mathay III, doing business as "Greenhills Autohaus, Inc.," and not only
the Hermosos, who will be adversely affected by the court's
decree. ACEIac

DECISION
QUISUMBING, J p:

This petition seeks to reverse the decision of the Court of Appeals, dated
March 25, 1996, in CA-G.R. SP No. 39193, which nullified the writ of
preliminary injunction issued by the Regional Trial Court of Pasig City,
Branch 261, in Civil Case No. 64931. It also assails the resolution of the
appellate court, dated August 13, 1996, denying petitioner's motion for
reconsideration. ATcEDS
The facts of this case, as culled from the records, are as follows:
On August 25, 1976, petitioner Ortigas & Company sold to Emilia
Hermoso, a parcel of land known as Lot 1, Block 21, Psd-66759, with an
area of 1,508 square meters, located in Greenhills Subdivision IV, San
Juan, Metro Manila, and covered by Transfer Certificate of Title No. 0737.
The contract of sale provided that the lot:
1. . . . (1) be used exclusively . . . for residential purposes
only, and not more than one single-family
residential building will be constructed thereon, . .
.
xxx xxx xxx
6. The BUYER shall not erect . . . any sign or billboard
on the roof . . . for advertising purposes . . .
xxx xxx xxx
11. No single-family residential building shall be erected .
. . until the building plans, specification . . . have
been approved by the SELLER . . .
xxx xxx xxx
14. . . . restrictions shall run with the land and shall be
construed as real covenants until December 31,
2025 when they shall cease and terminate . . . 1
These and the other conditions were duly annotated on the certificate of
title issued to Emilia.
In 1981, the Metropolitan Manila Commission (now Metropolitan Manila
Development Authority) enacted MMC Ordinance No. 81-01, also known
as the Comprehensive Zoning Area for the National Capital Region. The
ordinance reclassified as a commercial area a portion of Ortigas Avenue
from Madison to Roosevelt Streets of Greenhills Subdivision where the lot
is located.
On June 8, 1984, private respondent Ismael Mathay III leased the lot from
Emilia Hermoso and J.P. Hermoso Realty Corp.. The lease contract did not
specify the purposes of the lease. Thereupon, private respondent
constructed a single story commercial building for Greenhills Autohaus,
Inc., a car sales company.
On January 18, 1995, petitioner filed a complaint against Emilia Hermoso
with the Regional Trial Court of Pasig, Branch 261. Docketed as Civil
Case No. 64931, the complaint sought the demolition of the said
commercial structure for having violated the terms and conditions of the
Deed of Sale. Complainant prayed for the issuance of a temporary
restraining order and a writ of preliminary injunction to prohibit petitioner
from constructing the commercial building and/or engaging in commercial
activity on the lot. The complaint was later amended to implead Ismael G.
Mathay III and J.P. Hermoso Realty Corp., which has a ten percent (10%)
interest in the lot.
In his answer, Mathay III denied any knowledge of the restrictions on the
use of the lot and filed a cross-claim against the Hermosos.
On June 16, 1995, the trial court issued the writ of preliminary injunction.
On June 29, 1995, Mathay III moved to set aside the injunctive order, but
the trial court denied the motion.
Mathay III then filed with the Court of Appeals a special civil action
for certiorari, docketed as CA-G.R. SP No. 39193, ascribing to the trial
court grave abuse of discretion in issuing the writ of preliminary
injunction. He claimed that MMC Ordinance No. 81-01 classified the area
where the lot was located as commercial area and said ordinance must be
read into the August 25, 1976 Deed of Sale as a concrete exercise of police
power.

Ortigas and Company averred that inasmuch as the restrictions on the use
of the lot were duly annotated on the title it issued to Emilia Hermoso,
said restrictions must prevail over the ordinance, specially since these
restrictions were agreed upon before the passage of MMC Ordinance No.
81-01.
On March 25, 1996, the appellate court disposed of the case as follows:
WHEREFORE, in light of the foregoing, the petition is
hereby GRANTED. The assailed orders are hereby
nullified and set aside.
SO ORDERED. 2
In finding for Mathay III, the Court of Appeals held that the MMC
Ordinance No. 81-01 effectively nullified the restrictions allowing only
residential use of the property in question.
Ortigas seasonably moved for reconsideration, but the appellate court
denied it on August 13, 1996.
Hence, the instant petition.
In its Memorandum, petitioner now submits that the "principal issue in
this case is whether respondent Court of Appeals correctly set aside the
Order dated June 16, 1995 of the trial court which issued the writ of
preliminary injunction on the sole ground that MMC Ordinance No. 81-01
nullified the building restriction imposing exclusive residential use on the
property in question." 3 It also asserts that "Mathay III lacks legal capacity
to question the validity of conditions of the deed of sale; and he is barred
by estoppel or waiver to raise the same question like his principals, the
owners." 4 Lastly, it avers that the appellate court "unaccountably failed to
address" several questions of fact.
Principally, we must resolve the issue of whether the Court of Appeals
erred in holding that the trial court committed grave abuse of discretion
when it refused to apply MMC Ordinance No. 81-01 to Civil Case No.
64931.
But first, we must address petitioner's allegation that the Court of Appeals
"unaccountably failed to address" questions of fact. For basic is the rule
that factual issues may not be raised before this Court in a petition for
review and this Court is not duty-bound to consider said questions. 5 CA-
G.R. SP No. 39193 was a special civil action for certiorari, and the
appellate court only had to determine if the trial court committed grave
abuse of discretion amounting to want or excess of jurisdiction in issuing
the writ of preliminary injunction. Thus, unless vital to our determination
of the issue at hand, we shall refrain from further consideration of factual
questions.
Petitioner contends that the appellate court erred in limiting its decision to
the cited zoning ordinance. It avers that a contractual right is not
automatically discarded once a claim is made that it conflicts with police
power. Petitioner submits that the restrictive clauses in the questioned
contract is not in conflict with the zoning ordinance. For one, according to
petitioner, the MMC Ordinance No. 81-01 did not prohibit the
construction of residential buildings. Petitioner argues that even with the
zoning ordinance, the seller and buyer of the re-classified lot can
voluntarily agree to an exclusive residential use thereof. Hence, petitioner
concludes that the Court of Appeals erred in holding that the condition
imposing exclusive residential use was effectively nullified by the zoning
ordinance. EcHAaS
In its turn, private respondent argues that the appellate court correctly
ruled that the trial court had acted with grave abuse of discretion in
refusing to subject the contract to the MMC Ordinance No. 81-01. He
avers that the appellate court properly held the police power superior to
the non-impairment of contract clause in the Constitution. He concludes
that the appellate court did not err in dissolving the writ of preliminary
injunction issued by the trial court in excess of its jurisdiction.
We note that in issuing the disputed writ of preliminary injunction, the trial
court observed that the contract of sale was entered into in August 1976,
while the zoning ordinance was enacted only in March 1981. The trial
court reasoned that since private respondent had failed to show that MMC
Ordinance No. 81-01 had retroactive effect, said ordinance should be
given prospective application only, 6 citing Co vs. Intermediate Appellate
Court, 162 SCRA 390 (1988).
In general, we agree that laws are to be construed as having only
prospective operation. Lex prospicit, non respicit. Equally settled, only
laws existing at the time of the execution of a contract are applicable
thereto and not later statutes, unless the latter are specifically intended to
have retroactive effect. 7 A later law which enlarges, abridges, or in any
manner changes the intent of the parties to the contract necessarily impairs
the contract itself 8 and cannot be given retroactive effect without
violating the constitutional prohibition against impairment of contracts. 9
But, the foregoing principles do admit of certain exceptions. One involves
police power. A law enacted in the exercise of police power to regulate or
govern certain activities or transactions could be given retroactive effect
and may reasonably impair vested rights or contracts. Police power
legislation is applicable not only to future contracts, but equally to those
already in existence. 10 Non-impairment of contracts or vested rights
clauses will have to yield to the superior and legitimate exercise by the
State of police power to promote the health, morals, peace, education,
good order, safety, and general welfare of the people. 11 Moreover,
statutes in exercise of valid police power must be read into every
contract. 12 Noteworthy, inSangalang vs. Intermediate Appellate
Court, 13 we already upheld MMC Ordinance No. 81-01 as a legitimate
police power measure.
The trial court's reliance on the Co vs. IAC, 14 is misplaced. In Co, the
disputed area was agricultural and Ordinance No. 81-01 did not
specifically provide that "it shall have retroactive effect so as to
discontinue all rights previously acquired over lands located within the
zone which are neither residential nor light industrial in nature," 15 and
stated with respect to agricultural areas covered that "the zoning ordinance
should be given prospective operation only." 16 The area in this case
involves not agricultural but urban residential land. Ordinance No. 81-01
retroactively affected the operation of the zoning ordinance in Greenhills
by reclassifying certain locations therein as commercial.
Following our ruling in Ortigas & Co., Ltd. vs. Feati Bank & Trust Co., 94
SCRA 533 (1979), the contractual stipulations annotated on the Torrens
Title, on which Ortigas relies, must yield to the ordinance. When that
stretch of Ortigas Avenue from Roosevelt Street to Madison Street was
reclassified as a commercial zone by the Metropolitan Manila
Commission in March 1981, the restrictions in the contract of sale
between Ortigas and Hermoso, limiting all construction on the disputed lot
to single-family residential buildings, were deemed extinguished by the
retroactive operation of the zoning ordinance and could no longer be
enforced. While our legal system upholds the sanctity of contract so that a
contract is deemed law between the contracting parties, 17 nonetheless,
stipulations in a contract cannot contravene "law, morals, good customs,
public order, or public policy." 18 Otherwise such stipulations would be
deemed null and void. Respondent court correctly found that the trial court
committed in this case a grave abuse of discretion amounting to want of or
excess of jurisdiction in refusing to treat Ordinance No. 81-01 as
applicable to Civil Case No. 64931. In resolving matters in litigation,
judges are not only duty-bound to ascertain the facts and the applicable
laws, 19 they are also bound by their oath of office to apply the applicable
law. 20
As a secondary issue, petitioner contends that respondent Mathay III, as a
mere lessee of the lot in question, is a total stranger to the deed of sale and
is thus barred from questioning the conditions of said deed. Petitioner
points out that the owners of the lot voluntarily agreed to the restrictions
on the use of the lot and do not question the validity of these restrictions.
Petitioner argues that Mathay III as a lessee is merely an agent of the
owners, and could not override and rise above the status of his principals.
Petitioner submits that he could not have a higher interest than those of the
owners, the Hermosos, and thus had no locus standi to file CA-G.R. SP
No. 39193 to dissolve the injunctive writ issued by the RTC of Pasig City.
For his part, private respondent argues that as the lessee who built the
commercial structure, it is he and he alone who stands to be either
benefited or injured by the results of the judgment in Civil Case No.
64931. He avers he is the party with real interest in the subject matter of
the action, as it would be his business, not the Hermosos', which would
suffer had not the respondent court dissolved the writ of preliminary
injunction.
A real party in interest is defined as "the party who stands to be benefited
or injured by the judgment or the party entitled to the avails of the
suit." "Interest" within the meaning of the rule means material interest, an
interest in issue and to be affected by the decree, as distinguished from
mere interest in the question involved, or a mere incidental interest. 21 By
real interest is meant a present substantial interest, as distinguished from a
mere expectancy or a future, contingent, subordinate, or consequential
interest. 22
Tested by the foregoing definition, private respondent in this case is
clearly a real party in interest. It is not disputed that he is in possession of
the lot pursuant to a valid lease. He is a possessor in the concept of a
"holder of the thing" under Article 525 of the Civil Code. 23 He was
impleaded as a defendant in the amended complaint in Civil Case No.
64931. Further, what petitioner seeks to enjoin is the building by
respondent of a commercial structure on the lot. Clearly, it is private
respondent's acts which are in issue, and his interest in said issue cannot
be a mere incidental interest. In its amended complaint, petitioner prayed
for, among others, judgment "ordering the demolition of all improvements
illegally built on the lot in question."24 These show that it is petitioner
Mathay III, doing business as "Greenhills Autohaus, Inc.," and not only
the Hermosos, who will be adversely affected by the court's decree.

Petitioner also cites the rule that a stranger to a contract has no rights or
obligations under it, 25 and thus has no standing to challenge its
validity. 26 But in seeking to enforce the stipulations in the deed of sale,
petitioner impleaded private respondent as a defendant. Thus petitioner
must recognize that where a plaintiff has impleaded a party as a defendant,
he cannot subsequently question the latter's standing in court. 27
WHEREFORE, the instant petition is DENIED. The challenged decision
of the Court of Appeals dated March 25, 1996, as well as the assailed
resolution of August 13, 1996, in CA-G.R. SP No. 39193 is AFFIRMED.
Costs against petitioner.
SO ORDERED.
Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ ., concur.
Case No. 7

EN BANC
[G.R. No. 119694. May 22, 1995.]

PHILIPPINE PRESS INSTITUTE, INC., for and in


behalf of 139 members, represented by its President
Amado P. Macasaet and its Executive Director Ermin
F. Garcia, Jr., petitioner, vs. COMMISSION ON
ELECTIONS, respondent.

SYLLABUS

1. CONSTITUTIONAL LAW; BILL OF RIGHTS; PROHIBITION


AGAINST TAKING OF PRIVATE PROPERTY FOR PUBLIC USE
WITHOUT JUST COMPENSATION; COMPELLING PUBLISHERS TO
"DONATE" COMELEC SPACE, A VIOLATION OF. To compel print
media companies to donate "Comelec space" of the dimensions specified
in Section 2 of Resolution No. 2722 (not less than one-half page), amounts
to "taking" of private personal property for public use or purposes. Section
2 failed to specify the intended frequency of such compulsory "donation":
onlyonce during the period from 6 March 1995 (or 21 March 1995) until
12 May 1995? or everyday or once a week? or as often as Comelec may
direct during the same period? The extent of the taking or deprivation is
not insubstantial; this is not a case of a de minimis temporary limitation or
restraint upon the use of private property. The monetary value of the
compulsory "donation," measured by the advertising rates ordinarily
charged by newspaper publishers whether in cities or in non-urban areas,
may be very substantial indeed. The taking of private property for public
use is, of course, authorized by the Constitution, but not without payment
of "just compensation" (Article III, Section 9). And apparently the
necessity of paying compensation for "Comelec space" is precisely what is
sought to be avoided by respondent Commission, whether Section 2 of
Resolution No. 2772 is read as petitioner PPI reads it, as an assertion of
authority to require newspaper publishers to "donate" free print space for
Comelec purposes, or as an exhortation, or perhaps an appeal, to
publishers to donate free print space, as Section 1 of Resolution No. 2772-
A attempts to suggest. The threshold requisites for a lawful taking of
private property for public use need to be examined here: one is
thenecessity for the taking; another is the legal authority to effect the
taking. The element of necessity for the taking has not been shown by
respondent Comelec. It has not been suggested that the members of PPI
are unwilling to sell print space at their normal rates to Comelec for
election purposes. Indeed, the unwillingness or reluctance of Comelec to
buy print space lies at the heart of the problem. Similarly, it has not been
suggested, let alone demonstrated, that Comelec has been granted the
power of eminent domain either by the Constitution or by the legislative
authority. A reasonable relationship between that power and the
enforcement and administration of election laws by Comelec must be
shown; it is not casually to be assumed. . . . Section 2 does not constitute a
valid exercise of the power of eminent domain.
2. ID.; ID.; ID.; ID.; PUBLIC FUNDS, NOT PUBLISHERS SOLELY,
SHOULD BEAR COSTS FOR PUBLIC INFORMATION OF
ELECTORAL PROCESSES. The ruling here laid down by the Court is
entirely in line with the theory of democratic representative government.
The economic costs of informing the general public about the
qualifications and programs of those seeking elective office are most
appropriately distributed as widely as possible throughout our society by
the utilization of public funds, especially funds raised by taxation, rather
than cast solely on one small sector of society, i.e., print media enterprises.
The benefits which flow from a heightened level of information on and the
awareness of the electoral process are commonly thought to be
community-wide; the burdens should be allocated on the same basis.
3. ID.; POLICE POWER; REQUISITES FOR A VALID EXERCISE
THEREOF NOT COMPLIED WITH IN CASE AT BAR. As earlier
noted, the Solicitor General also contended that Section 2 of Resolution
No. 2772, even if read as compelling publishers to "donate" "Comelec
space," may be sustained as a valid exercise of the police power of the
state. This argument was, however, made too casually to require prolonged
consideration on our part. Firstly, there was no effort (and apparently no
inclination on the part of Comelec) to show that the police power
essentially a power of legislation has been constitutionally delegated to
respondent Commission. Secondly, while private property may indeed be
validly taken in the legitimate exercise of the police power of the state,
there was no attempt to show compliance in the instant case with the
requisites of a lawful taking under the police power. Section 2 of
Resolution No. 2772 is a blunt and heavy instrument that purports, without
a showing of existence of a national emergency or other imperious public
necessity, indiscriminately and without regard to the individual business
condition of particular newspapers or magazines located in differing parts
of the country, to take private property of newspaper or magazine
publishers. No attempt was made to demonstrate that a real and palpable
or urgent necessity for the taking of print space confronted the Comelec
and that Section 2 of Resolution No. 2772 was itself the only reasonable
and calibrated response to such necessity available to the Comelec.
Section 2 does not constitute a valid exercise of the police power of the
State.
4. ID.; SUPREME COURT; POWER OF JUDICIAL REVIEW;
CONSTITUTIONALITY OF SEC. 8 COMELEC RESOLUTION NO.
2772, WITHOUT ACTUAL CONTROVERSY, IS NOT RIPE FOR
JUDICIAL REVIEW; CASE AT BAR. Section 8 of Resolution No.
2772 should be viewed in the context of our decision in National Press
Club v. Commission on Elections. There the Court sustained the
constitutionality of Section 11 (b) of R.A. No. 6646, known as the
Electoral Reforms Law of 1987, which prohibits the sale or donation of
print space and airtime for campaign or other political purposes, except to
the Comelec. In doing so, the Court carefully distinguished (a) paid
political advertisements which are reached by the prohibition of Section
11 (b), from (b) the reporting of news, commentaries and expressions of
belief or opinion by reporters, broadcasters, editors, commentators or
columnists which fall outside the scope of Section 11 (b) and which are
protected by the constitutional guarantees of freedom of speech and of the
press. . . . Section 8 of Resolution No. 2772 appears to represent the effort
of the Comelec to establish a guideline for implementation of the above-
quoted distinction and doctrine in National Press Club, an effort not
blessed with evident success. Section 2 of Resolution No. 2772-A while
possibly helpful, does not add substantially to the utility of Section 8 of
Resolution No. 2772. The distinction between paid political
advertisements on the one hand and news reports, commentaries and
expressions of belief or opinion by reporters, broadcasters, editors, etc. on
the other hand, can realistically be given operative meaning only in actual
cases or controversies, on a case-to-case basis, in terms of very specific
sets of facts. At all events, the Court is bound to note that PPI has failed to
allege any specific affirmative action on the part of Comelec designed to
enforce or implement Section 8. PPI has not claimed that it or any of its
members has sustained actual or imminent injury by reason of Comelec
action under Section 8. Put a little differently, the Court considers that the
precise constitutional issue here sought to be raised whether or not
Section 8 of Resolution No. 2772 constitutes a permissible exercise of the
Comelec's power under Article IX, Section 4 of the Constitution . . . is not
ripe for judicial review for lack of an actual case or controversy involving,
as the very lis mota thereof, the constitutionality of Section 8.

RE S O LUTI ON

FELICIANO, J p:

The Philippine Press Institute, Inc. ("PPI") is before this Court


assailing the constitutional validity of Resolution No. 2772 issued by
respondent Commission on Elections ("Comelec") and its
corresponding Comelec directive dated 22 March 1995, through a
Petition for Certiorari and Prohibition. Petitioner PPI is a non-stock,
non-profit organization of newspaper and magazine publishers. cdphil
On 2 March 1995, Comelec promulgated Resolution No. 2772,
which reads in part:
xxx xxx xxx
Sec. 2. Comelec Space. The Commission shall procure
free print space of not less than one half (1/2) page in at
least one newspaper of general circulation in every
province or city for use as 'Comelec Space' from March
6, 1995 in the case of candidates for senators and from
March 21, 1995 until May 12, 1995. In the absence of
said newspaper, 'Comelec Space' shall be obtained from
any magazine or periodical of said province or city.
Sec. 3. Uses of Comelec Space. 'Comelec Space' shall
be allocated by the Commission, free of charge, among
all candidates within the area in which the newspaper,
magazine or periodical is circulated to enable the
candidates to make known their qualifications, their stand
on public issues and their platforms and programs of
government.
'Comelec Space' shall also be used by the Commission
for dissemination of vital election information.
Sec. 4. Allocation of Comelec Space. (a) 'Comelec
Space' shall be available to all candidates during the
periods stated in Section 2 hereof. Its allocation shall be
equal and impartial among all candidates for the same
office. All candidates concerned shall be furnished a copy
of the allocation of 'Comelec Space' for their information,
guidance and compliance.
(b) Any candidate desiring to avail himself of 'Comelec
Space' from newspapers or publications based in the
Metropolitan Manila Area shall submit an application
therefor, in writing, to the Committee on Mass Media of
the Commission. Any candidate desiring to avail himself
of 'Comelec Space' in newspapers or publications based
in the provinces shall submit his application therefor, in
writing, to the Provincial Election Supervisor concerned.
Applications for availment of 'Comelec Space' may be
filed at any time from the date of effectivity of this
Resolution.

(c) The Committee on Mass Media and the Provincial


Election Supervisors shall allocate available 'Comelec
Space' among the candidates concerned by lottery of
which said candidates shall be notified in advance, in
writing, to be present personally or by representative to
witness the lottery at the date, time and place specified in
the notice. Any party objecting to the result of the lottery
may appeal to the Commission.
(d) The candidates concerned shall be notified by the
Committee on Mass Media or the Provincial Election
Supervisor, as the case may be, sufficiently in advance
and in writing of the date of issue and the newspaper or
publication allocated to him, and the time within which
he must submit the written material for publication in the
'Comelec Space'.
xxx xxx xxx
Sec. 8. Undue Reference to Candidates/Political Parties
in Newspapers. No newspaper or publication shall
allow to be printed or published in the news, opinion,
features, or other sections of the newspaper or publication
accounts or comments which manifestly favor or oppose
any candidate or political party by unduly or repeatedly
referring to or including therein said candidate or political
party. However, unless the facts and circumstances
clearly indicate otherwise, the Commission will respect
the determination by the publisher and/or editors of the
newspapers or publication that the accounts or views
published are significant, newsworthy and of public
interest." (Emphasis supplied)
Apparently in implementation of this Resolution, Comelec
through Commissioner Regalado E. Maambong sent identical letters,
dated 22 March 1995, to various publishers of newspapers like
the Business World, the Philippine Star, the Malaya and the Philippine
Times Journal, all members of PPI. These letters read as follows:
"This is to advise you that pursuant to Resolution No.
2772 of the Commission on Elections, you are directed to
provide free print space of not less than one half ()
page for use as 'Comelec Space' or similar to the print
support which you have extended during the May 11,
1992 synchronized elections which was 2 full pages for
each political party fielding senatorial candidates, from
March 6, 1995 to May 6, 1995, to make known to their
qualifications, their stand on public issues and their
platforms and programs of government.
We shall be informing the political parties and
candidates to submit directly to you their pictures,
biographical data, stand on key public
issues and platforms of government, either as raw data
or in the form of positives or camera-ready materials.
Please be reminded that the political parties/candidates
may be accommodated in your publications any day upon
receipt of their materials until May 6, 1995 which is the
day for campaigning.
We trust you to extend your full support and cooperation
in this regard." (Emphasis supplied)
In this Petition for Certiorari and Prohibition with prayer for
the issuance of a Temporary restraining order, PPI asks us to declare
Comelec Resolution No. 2772 unconstitutional and void on the ground
that it violates the prohibition imposed by the Constitution upon the
government, and any of its agencies, against the taking of private
property for public use without just compensation. Petitioner also
contends that the 22 March 1995 letter directives of Comelec requiring
publishers to give free "Comelec Space" and at the same time process
raw data to make it camera-ready, constitute impositions of
involuntary servitude, contrary to the provisions of Section 18 (2),
Article III of the 1987 Constitution. Finally, PPI argues that Section 8
of Comelec Resolution No. 2772 is violative of the constitutionally
guaranteed freedom of speech, of the press and of expression. 1
On 20 April 1995, this Court issued a Temporary Restraining
Order enjoining Comelec from enforcing and implementing Section 2
of Resolution No. 2772, as well as the Comelec directives addressed to
various print media enterprises all dated 22 March 1995. The Court
also required the respondent to file a Comment on the Petition. prcd
The Office of the Solicitor General filed its Comment on behalf
of respondent Comelec alleging that Comelec Resolution No. 2772
does not impose upon the publishers any obligation to provide free
print space in the newspapers as it does not provide any criminal or
administrative sanction for non-compliance with that Resolution.
According to the Solicitor General, the questioned Resolution merely
established guidelines to be followed in connection with the
procurement of "Comelec space," the procedure for and mode of
allocation of such space to candidates and the conditions or
requirements for the candidate's utilization of the "Comelec space"
procured. At the same time, however, the Solicitor General argues
that even if the questioned Resolution and its implementing letter
directives are viewed as mandatory, the same would nevertheless be
valid as an exercise of the police power of the State. The Solicitor
general also maintains that Section 8 of Resolution No. 2772 is a
permissible exercise of the power of supervisor or regulation of the
Comelec over the communication and information operations of print
media enterprises during the election period to safeguard and ensure a
fair, impartial and credible election. 2
At the oral hearing of this case held on 28 April 1995,
respondent Comelec through its Chairman, Hon. Bernardo Pardo, in
response to inquiries from the Chief Justice and other Members of the
Court, stated that Resolution No. 2772, particularly Section 2 thereof
and the 22 March 1995 letters dispatched to various members of
petitioner PPI, were not intended to compel those members to supply
Comelec with free print space. Chairman Pardo represented to the
Court that that Resolution and the related letter-directives were merely
designed to solicit from the publishers the same free print space which
many publishers had voluntarily given to Comelec during the election
period relating to the 11 May 1992 elections. Indeed, the Chairman
stated that the Comelec would, that very afternoon, meet and adopt an
appropriate amending or clarifying resolution, a certified true copy of
which would forthwith be filed with the Court. cdrep
On 5 May 1995, the Court received from the Office of the
Solicitor general a manifestation which attached a copy of Comelec
resolution No. 2772-A dated 4 May 1995. The operative portion of this
Resolution follows:
NOW THEREFORE, pursuant to the powers vested in it
by the Constitution, the Omnibus Election Code,
Republic Acts No. 6646 and 7166 and other election
laws, the Commission on Elections RESOLVED to
clarify Sections 2 and 8 of Res. No. 2772 as follows:
1. Section 2 of Res. No. 2772 shall not be
construed to mean as requiring publishers
of the different mass media print
publications to provide print space under
pain of prosecution, whether
administrative, civil or criminal, there
being no sanction or penalty for violation
of said Section provided for either in said
Resolution or in Section 90 ofBatas
Pambansa Blg. 881, otherwise known as
the Omnibus Election Code, on the grant
of 'Comelec Space.'
2. Section 8 of Res. No. 2772 shall not be
construed to mean as constituting prior
restraint on the part of the publishers with
respect to the printing or publication of
materials in the news, opinion, features or
other sections of their respective
publications or other accounts or
comments, it being clear from the last
sentence of said Section 8 that the
Commission shall, 'unless the facts and
circumstances clearly indicate
otherwise . . . respect the determination by
the publishers and/or editors of the
newspapers or publications that the
accounts or views published are
significant, newsworthy and of public
interest.'
This Resolution shall take effect upon approval."
(Emphasis in the original)
While, at this point, the Court could perhaps simply dismiss the
petition for Certiorari and Prohibition as having become moot and
academic, we consider it not inappropriate to pass upon the first
constitutional issue raised in this case. Our hope is to put this issue to
rest and prevent its resurrection.
Section 2 of Resolution No. 2772 is not a model of clarity in
expression. Section 1 of Resolution No. 2772-A did not try to redraft
Section 2; accordingly, Section 2 of resolution No. 2772 persists in its
original form. Thus, we must point out that, as presently worded, and
in particular as interpreted and applied by the Comelec itself in its 22
March 1995 letter-directives to newspaper publishers, Section 2 of
Resolution No. 2772 is clearly susceptible of the reading that
petitioner PPI has given it. That Resolution No. 2772 does not, in
express terms, threaten publishers who would disregard it or its
implementing letters with some criminal or other sanction, does not by
itself demonstrate that the Comelec's original intention was simply to
solicit or request voluntary donations of print space from publishers. A
written communication officially directing a print media company
to supply free print space,dispatched by government (here a
constitutional) agency and signed by member of the Commission
presumably legally authorized to do so, is bound to produce a coercive
effect upon the company so addressed. That the agency may not be
legally authorized to impose, or cause the imposition of, criminal or
other sanctions for disregard of such direction, only aggravates the
constitutional difficulties inhering in the present situation. The
enactment or addition of such sanctions by the legislative authority
itself would be open to serious constitutional objection.
To compel print media companies to donate "Comelec space"
of the dimensions specified in Section 2 of Resolution No. 2772 (not
less than one-half Page), amounts to "taking" of private personal
property for public use or purposes. Section 2 failed to specify the
intended frequency of such compulsory "donation:" only once during
the period from 6 March 1995 (or 21 March 1995) until 12 May 1995?
or everyday or once a week? or has often as Comelec may direct
during the same period? the extent of the taking or deprivation is not
insubstantial; this is not a case of a de minimis temporary limitation or
restraint upon the use of private property. The monetary value of the
compulsory "donation," measured by the advertising rates ordinarily
charged by newspaper publishers whether in cities or in non-urban
areas, may be very substantial indeed. LexLib

The taking of print space here sought to be effected may first


be appraised under the rubric of expropriation of private personal
property for public use. The threshold requisites for a lawful taking of
private property for public use need to be examined here: one is
the necessity for the taking; another is the legal authority to effect the
taking. The element of necessity for the taking has not been shown by
respondent Comelec. It has not been suggested that the members of
PPI are unwilling to sell print space at their normal rates to Comelec
for election purposes. Indeed, the unwillingness or reluctance of
Comelec to buy print space lies at the heart of the
problem. 3 Similarly, it has not been suggested, let alone
demonstrated, that Comelec has been granted the power of imminent
domain either by the Constitution or by the legislative authority. A
reasonable relationship between that power and the enforcement and
administration of election laws by Comelec must be shown; it is not
casually to be assumed.
That the taking is designed to subserve "public use" is not
contested by petitioner PPI. We note only that, under Section 3 of
Resolution No. 2772, the free "Comelec space" sought by the
respondent Commission would be used not only for informing the
public about the identities, qualifications and programs of government
of candidates for elective office but also for "dissemination of vital
election information" (including, presumably, circulars, regulations,
notices, directives, etc. issued by Comelec). It seems to the Court a
matter of judicial notice that government offices and agencies
(including the Supreme Court) simply purchase print space, in the
ordinary course of events, when their rules and regulations, circulars,
notices and so forth need officially to be brought to the attention of the
general public.
The taking of private property for public use is, of course,
authorized by the Constitution, but not without payment of "just
compensation" (Article III, Section 9). And apparently the necessity of
paying compensation for "Comelec space" is precisely what is sought
to be avoided by respondent Commission, whether Section 2 of
Resolution No. 2772 is read as petitioner PPI reads it, as an assertion
of authority to require newspaper publishers to "donate" free print
space for Comelec purposes, or as an exhortion, or perhaps an appeal,
to publishers to donate free print space, as Section 1 of Resolution No.
2772-A attempts to suggest. There is nothing at all to prevent
newspaper and magazine publishers from voluntarily giving free print
space to Comelec for the purposes contemplated in Resolution No.
2772. Section 2 of Resolution No. 2772 does not, however, provide a
constitutional basis for compelling publishers, against their will, in the
kind of factual context here present, to provide free print space for
Comelec purposes. Section 2 does not constitute a valid exercise of the
power of eminent domain. Cdpr
We would note that the ruling here laid down by the Court is
entirely in line with the theory of democratic representative
government. The economic costs of informing the general public about
the qualifications and programs of those seeking elective office are
most appropriately distributed as widely as possible throughout our
society by the utilization of public funds, especially funds raised by
taxation, rather than cast solely on one small sector of society, i.e.,
print media enterprises. The benefits which flow from a heightened
level of information on and the awareness of the electoral process are
commonly thought to be community-wide; the burdens should be
allocated on the same basis.
As earlier noted, the Solicitor General also contended that
Section 2 of Resolution No. 2772, even if read as compelling
publishers to "donate" "Comelec space," may be sustained as a valid
exercise of the police power of the state. This argument was, however,
made too casually to require prolonged consideration on their part.
Firstly, there was no effort (and apparently no inclination on the part of
Comelec) to show that the police power essentially a power of
legislation has been constitutionally delegated to respondent
Commission. 4Secondly, while private property may indeed be validly
taken in the legitimate exercise of the police power of the state, there
was no attempt to show compliance in the instant case with the
requisites of a lawful taking under the police power. 5
Section 2 of Resolution No. 2772 is a blunt and heavy
instrument that purports, without a showing of existence of a national
emergency or other imperious public necessity, indiscriminately and
without regard to the individual business condition of particular
newspapers or magazines located in different parts of the country, to
take private property of newspaper or magazine publishers. No attempt
was made to demonstrate that a real and palpable or urgent necessity
for the taking of print space confronted the Comelec and that Section 2
of Resolution No. 2772 was itself the only reasonable and calibrated
response to such necessity available to Comelec. Section 2 does not
constitute a valid exercise of the police power of the State.
We turn to Section 8 of Resolution No. 2772, which needs to
be quoted in full again:
Sec. 8. Undue Reference to Candidates/Political
parties in Newspaper. No newspaper or publication
shall allow to be printed or published in the news,
opinion, features, or other sections of the newspaper or
publication accounts or comments which manifest favor
or oppose any candidate or political party by unduly or
repeatedly referring to or including therein said candidate
or political party. However, unless the facts and
circumstances clearly indicates otherwise, the
Commission will respect the determination by the
publisher and/or editors of the newspapers or publications
that the accounts or views published are significant,
newsworthy and of public interest."
It is not easy to understand why Section 8 was included at all in
Resolution No 2772. In any case, Section 8 should be viewed in the
context of our decision in National Press Club v. Commission on
Elections. 6 There the Court sustained the constitutionality of Section
11 (b) of R.A. No. 6646, known as the Electoral Reforms Law of
1987, which prohibits the sale or donation of print space and airtime
for campaign or other political purposes, except to the Comelec. In
doing so, the Court carefully distinguished (a) paid political
advertisementswhich are reached by the prohibition of Section 11 (b),
from (b) the reporting of news, commentaries and expressions of belief
or opinion by reporters, broadcasters, editors, commentators or
columnists which fall outside the scope of Section 11 (b) and which
are protected by the constitutional guarantees of freedom of speech
and of the press: LLjur
"Secondly, and more importantly, Section 11 (b) is
limited in its scope of application. Analysis of Section 11
(b) shows that it purports to apply only to the purchase
and sale, including purchase and sale disguised as a
donation, of print space and air time for campaign or
other political purposes. Section 11 (b) does not
purport in any way to restrict the reporting by
newspapers or radio or television stations of news or
news-noteworthy events relating to candidates, their
qualifications, political parties and programs of
government. Moreover, Section 11 (b) does not reach
commentaries and expressions of belief or opinion by
reporters or broadcasters or editors or commentators or
columnists in respect of candidates, their qualifications,
and programs and so forth, so long at least as such
comments, opinions and beliefs are not in fact
advertisements for particular candidates covertly paid for.
In sum Section 11 (b) is not to be read as reaching any
report or commentary or other coverage that, in
responsible media, is not paid for by candidates for
political office. We read Section 11 (b) as designed to
cover only paid political advertisements of particular
candidates.
The above limitation in scope of application of Section 11
(b) that it does not restrict either the reporting of or the
expression of belief or opinion or comment upon the
qualifications and programs and activities of any and all
candidates for office constitutes the critical distinction
which must be made between the instant case and that
of Sanidad v. Commission on Elections. . . ."7 (Citations
omitted; emphasis supplied)
Section 8 of Resolution No. 2772 appears to represent the
effort of the Comelec to establish a guidelines for implementation of
the above-quoted distinction and doctrine in National Press Club, an
effort not blessed with evident success. Section 2 of Resolution No.
2772-A while possibly helpful, does not add substantially to the utility
of Section 8 of Resolution No. 2772. The distinction between paid
political advertisements on the one hand and news reports,
commentaries and expressions of belief or opinion by reporters,
broadcasters, editors, etc. on the other hand, can realistically be given
operative meaning only in actual cases or controversies, on a case-to-
case basis, in terms of very specific sets of facts.
At all events, the Court is bound to note that PPI has failed to
allege any specific affirmative action on the part of Comelec designed
to enforce or implement Section 8. PPI has not claimed that it or any
of its members has sustained actual or imminent injury by reason of
Comelec action under Section 8. Put a little differently, the Court
considers that the precise constitutional issue here sought to be raised
whether or not Section 8 of Resolution No. 2772 constitutes a
permissible exercise of the Comelec's power under Article IX, Section
4 of the Constitution to
"supervise or regulate the enjoyment or utilization of all
franchise or permits for the operation of media of
communication or information [for the purpose of
ensuring] equal opportunity, time and space, and the right
of reply, including reasonable, equal rates therefor, for
public-information campaigns and forums among
candidates in connection with the objective of holding
free, orderly, honest, peaceful and credible elections "

is not ripe for judicial review for lack of an actual case or controversy
involving, as the very lis mota thereof, the constitutionality of Section
8.
1. Section 2 of Resolution No. 2772, in its present form and as
interpreted by Comelec in its 22 March 1995 letter directives, purports
to require print media enterprises to "donate" free print space to
Comelec. As such, Section 2 suffers from fatal constitutional vice and
must be set aside and nullified. cdll
2. To the extent it pertains to Section 8 of Resolution No. 2772,
the Petition for Certiorari and Prohibition must be dismissed for lack
of an actual, justiciable case or controversy.
WHEREFORE, for all the foregoing, the Petition for Certiorari
and Prohibition is GRANTED in part and Section 2 of Resolution No.
2772 in its present from and the related letter-directives dated 22
March 1995 are hereby SET ASIDE as null and void, and the
Temporary Restraining Order is hereby MADE PERMANENT. The
Petition is DISMISSED in part, to the extent it relates to Section 8 of
Resolution No. 2772. No pronouncement as to costs.
Narvasa, C.J ., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo,
Puno, Vitug, Kapunan, Mendoza and Francisco, JJ., concur.
Quiason, J., is on leave.
||| (Philippine Press Institute, Inc. v. COMELEC, G.R. No. 119694
(Resolution), May 22, 1995)
Case No. 8

SECOND DIVISION
[G.R. No. 144681. June 21, 2004.]

PROFESSIONAL REGULATION COMMISSION


(PRC), CHAIRMAN HERMOGENES P. POBRE,
ASSOCIATE COMMISSIONER ARMANDO
PASCUAL, BOARD OF MEDICINE, CHAIRMAN
RODOLFO P. DE GUZMAN, JOSE S. RAMIREZ,
JUANITO B. BILLOTE, RUBEN R. POLICARPIO,
EDGARDO T. FERNANDO and RICARDO D.
FULGENCIO II,petitioners, vs. ARLENE V. DE
GUZMAN, VIOLETA V. MENESES, CELERINA S.
NAVARRO, JOSE RAMONCITO P. NAVARRO,
ARNEL V. HERRERA and GERALDINE ELIZABETH
M. PAGILAGAN, ELNORA R. RAQUENO, MARISSA
A. REGODON, LAURA M. SANTOS, KARANGALAN
D. SERRANO, DANILO A. VILLAVER, MARIA
ROSARIO L. LEONOR, ALICIA S. LIZANO,
MARITEL M. ECHIVERRI, BERNADETTE T.
MENDOZA, FERNANDO F. MANDAPAT, ALELI A.
GOLLAYAN, ELCIN C. ARRIOLA, HERMINIGILDA
E. CONEJOS, SALLY B. BUNAGAN, ROGELIO B.
ANCHETA, OSCAR H. PADUA, JR., EVELYN D.
GRAJO, EVELYN S. ACOSTA, MARGARITA
BELINDA L. VICENCIO, VALENTINO P.
ARBOLEDA, EVELYN O. RAMOS, ACHILLES J.
PERALTA, CORAZON M. CRUZ, LEUVINA P.
CHICO, JOSEPH A. JAO, MA. LUISA S. GUTIERREZ,
LYDIA C. CHAN, OPHELIA C. HIDALGO,
FERNANDO T. CRUZ, MELVIN M. USITA, RAFAEL
I. TOLENTINO, GRACE E. UY, CHERYL R.
TRIGUERO, MICHAEL L. SERRANO, FEDERICO L.
CASTILLO, MELITA J. CAEDO, SAMUEL B.
BANGOY, BERNARDITA B. SY, GLORIA T.
JULARBAL, FREDERICK D. FRANCISCO, CARLOS
M. BERNARDO, JR., HUBERT S. NAZARENO,
CLARISSA B. BACLIG, DAYMINDA G. BONTUYAN,
BERNADETTE H. CABUHAT, NANCY J. CHAVEZ,
MARIO D. CUARESMA, ERNESTO L. CUE, EVELYN
C. CUNDANGAN, RHONEIL R. DEVERATURDA,
DERILEEN D. DORADO, SAIBZUR N. EDDING,
VIOLETA C. FELIPE, HERMINIO V. FERNANDEZ,
JR., MARIA VICTORIA M. LACSAMANA, NORMA
G. LAFAVILLA, RUBY B. LANTIN, MA. ELOISA Q.
MALLARI, CLARISA SJ. NICOLAS, PERCIVAL H.
PANGILINAN, ARNULFO A. SALVADOR, ROBERT
B. SANCHEZ, MERLY D. STA. ANA and YOLANDA P.
UNICA, respondents.

DECISION
TINGA, J p:

This petition for review under Rule 45 of the 1997 Rules of Civil
Procedure seeks to nullify the Decision, 1 dated May 16, 2000, of the
Court of Appeals in CA-G.R. SP No. 37283. The appellate court affirmed
the judgment 2 dated December 19, 1994, of the Regional Trial Court
(RTC) of Manila, Branch 52, in Civil Case No. 93-66530. The trial court
allowed the respondents to take their physician's oath and to register as
duly licensed physicians. Equally challenged is
the Resolution 3 promulgated on August 25, 2000 of the Court of Appeals,
denying petitioners' Motion for Reconsideration.
The facts of this case are as follows:
The respondents are all graduates of the Fatima College of Medicine,
Valenzuela City, Metro Manila. They passed the Physician Licensure
Examination conducted in February 1993 by the Board of Medicine
(Board). Petitioner Professional Regulation Commission (PRC) then
released their names as successful examinees in the medical licensure
examination.
Shortly thereafter, the Board observed that the grades of the seventy-nine
successful examinees from Fatima College in the two most difficult
subjects in the medical licensure exam, Biochemistry (Bio-Chem) and
Obstetrics and Gynecology (OB-Gyne), were unusually and exceptionally
high. Eleven Fatima examinees scored 100% in Bio-Chem and ten got
100% in OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one
scored 99% in OB-Gyne. The Board also observed that many of those who
passed from Fatima got marks of 95% or better in both subjects, and no
one got a mark lower than 90%. A comparison of the performances of the
candidates from other schools was made. The Board observed that
strangely, the unusually high ratings were true only for Fatima College
examinees. It was a record-breaking phenomenon in the history of the
Physician Licensure Examination.
On June 7, 1993, the Board issued Resolution No. 19, withholding the
registration as physicians of all the examinees from the Fatima College of
Medicine. 4 The PRC asked the National Bureau of Investigation (NBI) to
investigate whether any anomaly or irregularity marred the February 1993
Physician Licensure Examination.
Prior to the NBI investigation, the Board requested Fr. Bienvenido F.
Nebres, S.J., an expert mathematician and authority in statistics, and later
president of the Ateneo de Manila University, to conduct a statistical
analysis of the results in Bio-Chem and Ob-Gyne of the said examination.
On June 10, 1993, Fr. Nebres submitted his report. He reported that a
comparison of the scores in Bio-Chem and Ob-Gyne, of the Fatima
College examinees with those of examinees from De La Salle University
and Perpetual Help College of Medicine showed that the scores of Fatima
College examinees were not only incredibly high but unusually clustered
close to each other. He concluded that there must be some unusual reason
creating the clustering of scores in the two subjects. It must be a cause
"strong enough to eliminate the normal variations that one should expect
from the examinees [of Fatima College] in terms of talent, effort, energy,
etc." 5
For its part, the NBI found that "the questionable passing rate of Fatima
examinees in the [1993] Physician Examination leads to the conclusion
that the Fatima examinees gained early access to the test questions." 6
On July 5, 1993, respondents Arlene V. De Guzman, Violeta V. Meneses,
Celerina S. Navarro, Jose Ramoncito P. Navarro, Arnel V. Herrera, and
Geraldine Elizabeth M. Pagilagan (Arlene V. De Guzman et al., for
brevity) filed a special civil action for mandamus, with prayer for
preliminary mandatory injunction docketed as Civil Case No. 93-66530
with the Regional Trial Court (RTC) of Manila, Branch 52. Their petition
was adopted by the other respondents as intervenors.
Meanwhile, the Board issued Resolution No. 26, dated July 21, 1993,
charging respondents with "immorality, dishonest conduct, fraud, and
deceit" in connection with the Bio-Chem and Ob-Gyne examinations. It
recommended that the test results of the Fatima examinees be nullified.
The case was docketed as Adm. Case No. 1687 by the PRC.
On July 28, 1993, the RTC issued an Order in Civil Case No. 93-66530
granting the preliminary mandatory injunction sought by the respondents.
It ordered the petitioners to administer the physician's oath to Arlene V. De
Guzman et al., and enter their names in the rolls of the PRC.
The petitioners then filed a special civil action for certiorari with the
Court of Appeals to set aside the mandatory injunctive writ, docketed as
CA-G.R. SP No. 31701.
On October 21, 1993, the appellate court decided CA-G.R. SP No. 31701,
with the dispositive portion of the Decision ordaining as follows:
WHEREFORE, this petition is GRANTED. Accordingly,
the writ of preliminary mandatory injunction issued by
the lower court against petitioners is hereby nullified and
set aside.
SO ORDERED. 7
Arlene V. de Guzman, et al., then elevated the foregoing Decision to this
Court in G.R. No. 112315. In our Resolution dated May 23, 1994, we
denied the petition for failure to show reversible error on the part of the
appellate court. DcCEHI
Meanwhile, on November 22, 1993, during the pendency of the instant
petition, the pre-trial conference in Civil Case No. 93-66530 was held.
Then, the parties, agreed to reduce the testimonies of their respective
witnesses to sworn questions-and-answers. This was without prejudice to
cross-examination by the opposing counsel.
On December 13, 1993, petitioners' counsel failed to appear at the trial in
the mistaken belief that the trial was set for December 15. The trial court
then ruled that petitioners waived their right to cross-examine the
witnesses.
On January 27, 1994, counsel for petitioners filed a Manifestation and
Motion stating the reasons for her non-appearance and praying that the
cross-examination of the witnesses for the opposing parties be reset. The
trial court denied the motion for lack of notice to adverse counsel. It also
denied the Motion for Reconsideration that followed on the ground that
adverse counsel was notified less than three (3) days prior to the hearing.
Meanwhile, to prevent the PRC and the Board from proceeding with Adm.
Case No. 1687, the respondents herein moved for the issuance of a
restraining order, which the lower court granted in its Order dated April 4,
1994.
The petitioners then filed with this Court a petition for certiorari docketed
as G.R. No. 115704, to annul the Orders of the trial court dated November
13, 1993, February 28, 1994, and April 4, 1994. We referred the petition to
the Court of Appeals where it was docketed as CA-G.R. SP No. 34506.
On August 31, 1994, the appellate court decided CA-G.R. SP No. 34506
as follows:
WHEREFORE, the present petition for certiorari with
prayer for temporary restraining order/preliminary
injunction is GRANTED and the Orders of December 13,
1993, February 7, 1994, February 28, 1994, and April 4,
1994 of the RTC-Manila, Branch 52, and all further
proceedings taken by it in Special Civil Action No. 93-
66530 are hereby DECLARED NULL and VOID. The
said RTC-Manila is ordered to allow petitioners' counsel
to cross-examine the respondents' witnesses, to allow
petitioners to present their evidence in due course of trial,
and thereafter to decide the case on the merits on the
basis of the evidence of the parties. Costs against
respondents.
IT IS SO ORDERED. 8
The trial was then set and notices were sent to the parties.
A day before the first hearing, on September 22, 1994, the petitioners filed
an Urgent Ex-Parte Manifestation and Motion praying for the partial
reconsideration of the appellate court's decision in CA-G.R. SP No. 34506,
and for the outright dismissal of Civil Case No. 93-66530. The petitioners
asked for the suspension of the proceedings.
In its Order dated September 23, 1994, the trial court granted the aforesaid
motion, cancelled the scheduled hearing dates, and reset the proceedings
to October 21 and 28, 1994.
Meanwhile, on October 25, 1994, the Court of Appeals denied the partial
motion for reconsideration in CA-G.R. SP No. 34506. Thus, petitioners
filed with the Supreme Court a petition for review docketed as G.R. No.
117817, entitled Professional Regulation Commission, et al. v. Court of
Appeals, et al.

On November 11, 1994, counsel for the petitioners failed to appear at the
trial of Civil Case No. 93-66530. Upon motion of the respondents herein,
the trial court ruled that herein petitioners waived their right to cross-
examine the herein respondents. Trial was reset to November 28, 1994.
On November 25, 1994, petitioners' counsel moved for the inhibition of
the trial court judge for alleged partiality. On November 28, 1994, the day
the Motion to Inhibit was to be heard, petitioners failed to appear. Thus,
the trial court denied the Motion to Inhibit and declared Civil Case No. 93-
66530 deemed submitted for decision.
On December 19, 1994, the trial court handed down its judgment in Civil
Case No. 93-66530, the fallo of which reads:
WHEREFORE, judgment is rendered ordering the
respondents to allow the petitioners and intervenors
(except those with asterisks and footnotes in pages 1 & 2
of this decision) [sic], 9 to take the physician's oath and to
register them as physicians.
It should be made clear that this decision is without
prejudice to any administrative disciplinary action which
may be taken against any of the petitioners for such
causes and in the manner provided by law and consistent
with the requirements of the Constitution as any other
professionals.
No costs.
SO ORDERED. 10
As a result of these developments, petitioners filed with this Court a
petition for review on certiorari docketed as G.R. No. 118437,
entitled Professional Regulation Commission v. Hon.David G. Nitafan,
praying inter alia, that (1) G.R. No. 118437 be consolidated with G.R. No.
117817; (2) the decision of the Court of Appeals dated August 31, 1994 in
CA-G.R. SP No. 34506 be nullified for its failure to decree the dismissal
of Civil Case No. 93-66530, and in the alternative, to set aside the decision
of the trial court in Civil Case No. 93-66530, order the trial court judge to
inhibit himself, and Civil Case No. 93-66530 be re-raffled to another
branch.
On December 26, 1994, the petitioners herein filed their Notice of
Appeal 11 in Civil Case No. 93-66530, thereby elevating the case to the
Court of Appeals, where it was docketed as CA-G.R. SP No. 37283.
In our Resolution of June 7, 1995, G.R. No. 118437 was consolidated with
G.R. No. 117817.
On July 9, 1998, we disposed of G.R. Nos. 117817 and 118437 in this
wise:
WHEREFORE, the petition in G.R. No. 117817 is
DISMISSED for being moot. The petition in G.R. No.
118437 is likewise DISMISSED on the ground that there
is a pending appeal before the Court of Appeals. Assistant
Solicitor General Amparo M. Cabotaje-Tang is advised to
be more circumspect in her dealings with the courts as a
repetition of the same or similar acts will be dealt with
accordingly.
SO ORDERED. 12
While CA-G.R. SP No. 37283 was awaiting disposition by the appellate
court, Arnel V. Herrera, one of the original petitioners in Civil Case No.
93-66530, joined by twenty-seven intervenors, to wit: Fernando F.
Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-
Tan, Fernando T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-
Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat,
Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri,
Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R.
Raqueno-Rabaino, Saibzur N. Edding, Derileen D. Dorado-Edding, Robert
B. Sanchez, Maria Rosario L. Leonor-Lacandula, Geraldine Elizabeth M.
Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E.
Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose
Ramoncito P. Navarro, manifested that they were no longer interested in
proceeding with the case and moved for its dismissal. A similar
manifestation and motion was later filed by intervenors Mary Jean I.
Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A.
Salvador, Belinda C. Rabara, Yolanda P. Unica, Dayminda G. Bontuyan,
Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli
A. Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V.
Meneses, Melita J. Caedo, Clarisa SJ. Nicolas, Federico L. Castillo,
Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan,
and Melvin M. Usita. The Court of Appeals ruled that its decision in CA-
G.R. SP No. 37283 would not apply to them.
On May 16, 2000, the Court of Appeals decided CA-G.R. SP No. 37283,
with the following fallo, to wit:
WHEREFORE, finding no reversible error in the decision
appealed from, We hereby AFFIRM the same and
DISMISS the instant appeal.
No pronouncement as to costs.
SO ORDERED. 13
In sustaining the trial court's decision, the appellate court ratiocinated that
the respondents complied with all the statutory requirements for admission
into the licensure examination for physicians in February 1993. They all
passed the said examination. Having fulfilled the requirements of Republic
Act No. 2382, 14 they should be allowed to take their oaths as physicians
and be registered in the rolls of the PRC. aSDHCT
Hence, this petition raising the following issues:
I
WHETHER OR NOT RESPONDENTS HAVE A VALID
CAUSE OF ACTION FOR MANDAMUS AGAINST
PETITIONERS IN THE LIGHT OF THE
RESOLUTION OF THIS HONORABLE COURT IN
G.R. NO. 112315 AFFIRMING THE COURT OF
APPEALS' DECISION DECLARING THAT IF EVER
THERE IS SOME DOUBT AS TO THE MORAL
FITNESS OF EXAMINEES, THE ISSUANCE OF
LICENSE TO PRACTICE MEDICINE IS NOT
AUTOMATICALLY GRANTED TO THE
SUCCESSFUL EXAMINEES.
II
WHETHER OR NOT THE PETITION FOR
MANDAMUS COULD PROCEED DESPITE THE
PENDENCY OF ADMINISTRATIVE CASE NO. 1687,
WHICH WAS PRECISELY LODGED TO DETERMINE
THE MORAL FITNESS OF RESPONDENTS TO
BECOME DOCTORS. 15
To our mind, the only issue is: Did the Court of Appeals commit a
reversible error of law in sustaining the judgment of the trial court that
respondents are entitled to a writ of mandamus?
The petitioners submit that a writ of mandamus will not lie in this case.
They point out that for a writ of mandamus to issue, the applicant must
have a well-defined, clear and certain legal right to the thing demanded
and it is the duty of the respondent to perform the act required. Thus,
mandamus may be availed of only when the duty sought to be performed
is a ministerial and not a discretionary one. The petitioners argue that the
appellate court's decision in CA-G.R. SP No. 37283 upholding the
decision of the trial court in Civil Case No. 93-66530 overlooked its own
pronouncement in CA-G.R. SP No. 31701. The Court of Appeals held in
CA-G.R. SP No. 31701 that the issuance of a license to engage in the
practice of medicine becomes discretionary on the PRC if there exists
some doubt that the successful examinee has not fully met the
requirements of the law. The petitioners stress that this Court's Resolution
dated May 24, 1994 in G.R. No. 112315 held that there was no showing
"that the Court of Appeals had committed any reversible error in rendering
the questioned judgment" in CA-G.R. SP No. 31701. The petitioners point
out that our Resolution in G.R. No. 112315 has long become final and
executory.
Respondents counter that having passed the 1993 licensure examinations
for physicians, the petitioners have the obligation to administer to them the
oath as physicians and to issue their certificates of registration as
physicians pursuant to Section 20 16 of Rep. Act No. 2382. The Court of
Appeals in CA-G.R. SP No. 37283, found that respondents complied with
all the requirements of Rep. Act No. 2382. Furthermore, respondents were
admitted by the Medical Board to the licensure examinations and had
passed the same. Hence, pursuant to Section 20 of Rep. Act No. 2382, the
petitioners had the obligation to administer their oaths as physicians and
register them.
Mandamus is a command issuing from a court of competent jurisdiction,
in the name of the state or the sovereign, directed to some inferior court,
tribunal, or board, or to some corporation or person requiring the
performance of a particular duty therein specified, which duty results from
the official station of the party to whom the writ is directed, or from
operation of law. 17 Section 3 of Rule 65 18 of the 1997 Rules of Civil
Procedure outlines two situations when a writ of mandamus may issue,
when any tribunal, corporation, board, officer or person unlawfully (1)
neglects the performance of an act which the law specifically enjoins as a
duty resulting from an office, trust, or station; or (2) excludes another from
the use and enjoyment of a right or office to which the other is entitled.
We shall discuss the issues successively.
1. On The Existence of a Duty of the Board of Medicine To Issue
Certificates of Registration as Physicians under Rep. Act No. 2382.
For mandamus to prosper, there must be a showing that the officer, board,
or official concerned, has a clear legal duty, not involving
discretion. 19 Moreover, there must be statutory authority for the
performance of the act, 20 and the performance of the duty has been
refused. 21 Thus, it must be pertinently asked now: Did petitioners have
the duty to administer the Hippocratic Oath and register respondents as
physicians under the Medical Act of 1959?
As found by the Court of Appeals, on which we agree on the basis of the
records:
It bears emphasizing herein that petitioner-appellees and
intervenor-appellees have fully complied with all the
statutory requirements for admission into the licensure
examinations for physicians conducted and administered
by the respondent-appellants on February 12, 14, 20 and
21, 1993. Stress, too, must be made of the fact that all of
them successfully passed the same examinations. 22
The crucial query now is whether the Court of Appeals erred in
concluding that petitioners should allow the respondents to take their
oaths as physicians and register them, steps which would enable
respondents to practice the medical profession 23 pursuant to Section
20 of the Medical Act of 1959?

The appellate court relied on a single provision, Section 20 of Rep. Act


No. 2382, in concluding that the petitioners had the ministerial obligation
to administer the Hippocratic Oath to respondents and register them as
physicians. But it is a basic rule in statutory construction that each part of
a statute should be construed in connection with every other part to
produce a harmonious whole, not confining construction to only one
section. 24 The intent or meaning of the statute should be ascertained from
the statute taken as a whole, not from an isolated part of the provision.
Accordingly, Section 20, of Rep. Act No. 2382, as amended should be
read in conjunction with the other provisions of the Act. Thus, to
determine whether the petitioners had the ministerial obligation to
administer the Hippocratic Oath to respondents and register them as
physicians, recourse must be had to the entirety of the Medical Act of
1959.
A careful reading of Section 20 of the Medical Act of 1959 discloses that
the law uses the word "shall" with respect to the issuance of certificates of
registration. Thus, the petitioners "shallsign and issue certificates of
registration to those who have satisfactorily complied with the
requirements of the Board." In statutory construction the term "shall" is a
word of command. It is given imperative meaning. Thus, when an
examinee satisfies the requirements for the grant of his physician's license,
the Board is obliged to administer to him his oath and register him as a
physician, pursuant to Section 20 and par. (1) of Section 22 25 of the
Medical Act of 1959.
However, the surrounding circumstances in this case call for serious
inquiry concerning the satisfactory compliance with the Board
requirements by the respondents. The unusually high scores in the two
most difficult subjects was phenomenal, according to Fr. Nebres, the
consultant of PRC on the matter, and raised grave doubts about the
integrity, if not validity, of the tests. These doubts have to be appropriately
resolved.
Under the second paragraph of Section 22, the Board is vested with the
power to conduct administrative investigations and "disapprove
applications for examination or registration," pursuant to the objectives
of Rep. Act No. 2382 as outlined in Section 1 26 thereof. In this case, after
the investigation, the Board filed before the PRC, Adm. Case No. 1687
against the respondents to ascertain their moral and mental fitness to
practice medicine, as required by Section 9 27 of Rep. Act No. 2382. In
its Decision dated July 1, 1997, the Board ruled:
WHEREFORE, the BOARD hereby CANCELS the
respondents['] examination papers in the Physician
Licensure Examinations given in February 1993 and
further DEBARS them from taking any licensure
examination for a period of ONE (1) YEAR from the date
of the promulgation of this DECISION. They may, if they
so desire, apply for the scheduled examinations for
physicians after the lapse of the period imposed by the
BOARD.
SO ORDERED. 28
Until the moral and mental fitness of the respondents could be ascertained,
according to petitioners, the Board has discretion to hold in abeyance the
administration of the Hippocratic Oath and the issuance of the certificates
to them. The writ of mandamus does not lie to compel performance of an
act which is not duly authorized.
The respondents nevertheless argue that under Section 20, the Board shall
not issue a certificate of registration only in the following instances: (1) to
any candidate who has been convicted by a court of competent jurisdiction
of any criminal offense involving moral turpitude; (2) or has been found
guilty of immoral or dishonorable conduct after the investigation by the
Board; or (3) has been declared to be of unsound mind. They aver that
none of these circumstances are present in their case.
Petitioners reject respondents' argument. We are informed that in Board
Resolution No. 26, 29 dated July 21, 1993, the Board resolved to file
charges against the examinees from Fatima College of Medicine for
"immorality, dishonesty, fraud, and deceit in the Obstetrics-Gynecology
and Biochemistry examinations." It likewise sought to cancel the
examination results obtained by the examinees from the Fatima
College. cHaADC
Section 8 30 of Rep. Act No. 2382 prescribes, among others, that a person
who aspires to practice medicine in the Philippines, must have
"satisfactorily passed the corresponding Board Examination." Section 22,
in turn, provides that the oath may only be administered "to physicians
who qualified in the examinations." The operative word here is
"satisfactorily," defined as "sufficient to meet a condition or obligation" or
"capable of dispelling doubt or ignorance." 31 Gleaned from Board
Resolution No. 26, the licensing authority apparently did not find that the
respondents "satisfactorily passed" the licensure examinations. The Board
instead sought to nullify the examination results obtained by the
respondents.
2. On the Right Of The Respondents To Be Registered As Physicians
The function of mandamus is not to establish a right but to enforce one
that has been established by law. If no legal right has been violated, there
can be no application of a legal remedy, and the writ of mandamus is a
legal remedy for a legal right. 32 There must be a well-defined, clear and
certain legal right to the thing demanded. 33 It is long established rule that
a license to practice medicine is a privilege or franchise granted by the
government. 34
It is true that this Court has upheld the constitutional right 35 of every
citizen to select a profession or course of study subject to a fair,
reasonable, and equitable admission and academic requirements. 36 But
like all rights and freedoms guaranteed by the Charter, their exercise may
be so regulated pursuant to the police power of the State to safeguard
health, morals, peace, education, order, safety, and general welfare of the
people. 37 Thus, persons who desire to engage in the learned professions
requiring scientific or technical knowledge may be required to take an
examination as a prerequisite to engaging in their chosen careers. This
regulation takes particular pertinence in the field of medicine, to protect
the public from the potentially deadly effects of incompetence and
ignorance among those who would practice medicine. In a previous case,
it may be recalled, this Court has ordered the Board of Medical Examiners
to annul both its resolution and certificate authorizing a Spanish subject,
with the degree of Licentiate in Medicine and Surgery from the University
of Barcelona, Spain, to practice medicine in the Philippines, without first
passing the examination required by the Philippine Medical Act. 38 In
another case worth noting, we upheld the power of the State to upgrade the
selection of applicants into medical schools through admission tests. 39
It must be stressed, nevertheless, that the power to regulate the exercise of
a profession or pursuit of an occupation cannot be exercised by the State
or its agents in an arbitrary, despotic, or oppressive manner. A political
body that regulates the exercise of a particular privilege has the authority
to both forbid and grant such privilege in accordance with certain
conditions. Such conditions may not, however, require giving up ones
constitutional rights as a condition to acquiring the license. 40 Under the
view that the legislature cannot validly bestow an arbitrary power to grant
or refuse a license on a public agency or officer, courts will generally
strike down license legislation that vests in public officials discretion to
grant or refuse a license to carry on some ordinarily lawful business,
profession, or activity without prescribing definite rules and conditions for
the guidance of said officials in the exercise of their power. 41
In the present case, the aforementioned guidelines are provided for in Rep.
Act No. 2382, as amended, which prescribes the requirements for
admission to the practice of medicine, the qualifications of candidates for
the board examinations, the scope and conduct of the examinations, the
grounds for denying the issuance of a physician's license, or revoking a
license that has been issued. Verily, to be granted the privilege to practice
medicine, the applicant must show that he possesses all the qualifications
and none of the disqualifications. Furthermore, it must appear that he has
fully complied with all the conditions and requirements imposed by the
law and the licensing authority. Should doubt taint or mar the compliance
as being less than satisfactory, then the privilege will not issue. For said
privilege is distinguishable from a matter of right, which may be
demanded if denied. Thus, without a definite showing that the aforesaid
requirements and conditions have been satisfactorily met, the courts may
not grant the writ of mandamus to secure said privilege without thwarting
the legislative will.
3. On the Ripeness of the Petition for Mandamus
Lastly, the petitioners herein contend that the Court of Appeals should
have dismissed the petition for mandamus below for being premature.
They argue that the administrative remedies had not been exhausted. The
records show that this is not the first time that petitioners have sought the
dismissal of Civil Case No. 93-66530. This issue was raised in G.R. No.
115704, which petition we referred to the Court of Appeals, where it was
docketed as CA-G.R. SP No. 34506. On motion for reconsideration in CA-
G.R. SP No. 34506, the appellate court denied the motion to dismiss on
the ground that the prayers for the nullification of the order of the trial
court and the dismissal of Civil Case No. 93-66530 were inconsistent
reliefs. In G.R. No. 118437, the petitioners sought to nullify the decision
of the Court of Appeals in CA-G.R. SP No. 34506 insofar as it did not
order the dismissal of Civil Case No. 93-66530. In our consolidated
decision, dated July 9, 1998, in G.R. Nos. 117817 & 118437, this Court
speaking through Justice Bellosillo opined that:

Indeed, the issue as to whether the Court of Appeals erred


in not ordering the dismissal of Civil Case No. 93-66530
sought to be resolved in the instant petition has been
rendered meaningless by an event taking place prior to
the filing of this petition and denial thereof should follow
as a logical consequence. 42 There is no longer any
justiciable controversy so that any declaration thereon
would be of no practical use or value. 43 It should be
recalled that in its decision of 19 December 1994 the trial
court granted the writ of mandamus prayed for by private
respondents, which decision was received by petitioners
on 20 December 1994. Three (3) days after, or on 23
December 1994, petitioners filed the instant petition. By
then, the remedy available to them was to appeal the
decision to the Court of Appeals, which they in fact did,
by filing a notice of appeal on 26 December 1994. 44
The petitioners have shown no cogent reason for us to reverse the
aforecited ruling. Nor will their reliance upon the doctrine of the
exhaustion of administrative remedies in the instant case advance their
cause any.
Section 26 45 of the Medical Act of 1959 provides for the administrative
and judicial remedies that respondents herein can avail to question
Resolution No. 26 of the Board of Medicine, namely: (a) appeal the
unfavorable judgment to the PRC; (b) should the PRC ruling still be
unfavorable, to elevate the matter on appeal to the Office of the President;
and (c) should they still be unsatisfied, to ask for a review of the case or to
bring the case to court via a special civil action of certiorari. Thus, as a
rule, mandamus will not lie when administrative remedies are still
available. 46 However, the doctrine of exhaustion of administrative
remedies does not apply where, as in this case, a pure question of law is
raised. 47 On this issue, no reversible error may, thus, be laid at the door
of the appellate court in CA-G.R. SP No. 37283, when it refused to
dismiss Civil Case No. 93-66530.
As we earlier pointed out, herein respondents Arnel V. Herrera, Fernando
F. Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B.
Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma. Eloisa Q.
Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H.
Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M.
Echiverri, Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano,
Elnora R. Raqueno-Rabaino, Saibzur N. Edding, Derileen D. Dorado-
Edding, Robert B. Sanchez, Maria Rosario Leonor-Lacandula, Geraldine
Elizabeth M. Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla,
Herminigilda E. Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-
Ocampo, and Jose Ramoncito P. Navarro manifested to the Court of
Appeals during the pendency of CA-G.R. SP No. 37283, that they were no
longer interested in proceeding with the case and moved for its dismissal
insofar as they were concerned. A similar manifestation and motion were
later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano,
Norma G. Lafavilla, Arnulfo A. Salvador, Belinda C. Rabarra, Yolanda P.
Unica, Dayminda G. Bontuyan, Clarissa B. Baclig, Ma. Luisa S.
Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn C.
Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J. Caedo,
Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo
A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M. Usita. Following
these manifestations and motions, the appellate court in CA-G.R. SP No.
37283 decreed that its ruling would not apply to them. Thus, inasmuch as
the instant case is a petition for review of the appellate court's ruling in
CA-G.R. SP No. 37283, a decision which is inapplicable to the
aforementioned respondents will similarly not apply to them.
As to Achilles J. Peralta, Evelyn O. Ramos, Sally B. Bunagan, Rogelio B.
Ancheta, Oscar H. Padua, Jr., Evelyn D. Grajo, Valentino P. Arboleda,
Carlos M. Bernardo, Jr., Mario D. Cuaresma, Violeta C. Felipe, Percival
H. Pangilinan, Corazon M. Cruz and Samuel B. Bangoy, herein decision
shall not apply pursuant to the Orders of the trial court in Civil Case No.
93-66530, dropping their names from the suit.
Consequently, this Decision is binding only on the remaining respondents,
namely: Arlene V. de Guzman, Celerina S. Navarro, Rafael I. Tolentino,
Bernardita B. Sy, Gloria T. Jularbal, Hubert S. Nazareno, Nancy J.
Chavez, Ernesto L. Cue, Herminio V. Fernandez, Jr., Maria Victoria M.
Lacsamana and Merly D. Sta. Ana, as well as the petitioners.
WHEREFORE, the instant petition is GRANTED. Accordingly, (1) the
assailed decision dated May 16, 2000, of the Court of Appeals, in CA-
G.R. SP No. 37283, which affirmed the judgment dated December 19,
1994, of the Regional Trial Court of Manila, Branch 52, in Civil Case No.
93-66530, ordering petitioners to administer the physician's oath to herein
respondents as well as the resolution dated August 25, 2000, of the
appellate court, denying the petitioners' motion for reconsideration, are
REVERSED and SET ASIDE; and (2) the writ of mandamus, issued in
Civil Case No. 93-66530, and affirmed by the appellate court in CA-G.R.
SP No. 37283 is NULLIFIED AND SET ASIDE. EcICDT
SO ORDERED.
Puno and Callejo, Sr., JJ ., concur.
Quisumbing, J ., took no part.
Austria-Martinez, J ., took no part is on leave.
||| (Professional Regulation Commission v. De Guzman, G.R. No. 144681,
June 21, 2004)
Case No. 9

FIRST DIVISION
[G.R. No. 120095. August 5, 1996.]

JMM PROMOTION AND MANAGEMENT, INC.,


and KARY INTERNATIONAL, INC., petitioners, vs.
HON. COURT OF APPEALS, HON. MA. NIEVES
CONFESSOR, then Secretary of the Department of
Labor and Employment, HON. JOSE BRILLANTES,
in his capacity as acting Secretary of the Department
of Labor and Employment and HON. FELICISIMO
JOSON, in his capacity as Administrator of the
Philippine Overseas Employment
Administration, respondents.

Don P. Porciuncula for petitioner.


Ma. Bezen Ringpis Liban/Solicitor General for respondents.
SYLLABUS

1. POLITICAL LAW; INHERENT POWERS OF THE STATE; POLICE


POWER; NATURE AND SCOPE. The latin maxim salus populi est
suprema lex embodies the character of the entire spectrum of public laws
aimed at promoting the general welfare of the people under the State's
police power. As an inherent attribute of sovereignty which virtually
"extends to all public needs," this "least limitable" of governmental
powers grants a wide panoply of instruments through which the state,
as parens patriae gives effect to a host of its regulatory powers.
Describing the nature and scope of the police power, Justice Malcolm, in
the early case of Rubi v. Provincial Board of Mindoro (89 Phil. 660, 708,
[1919]) wrote: "The police power of the State," one court has said . . . 'is a
power coexistensive with self-protection, and is not inaptly termed 'the
law of overruling 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." Carried onward by the current of
legislature. the judiciary rarely attempts to dam the onrushing power of
legislative discretion, provided the purposes of the law do not go beyond
the great principles that mean security for the public welfare or do not
arbitrarily interfere with the right of the individual."
2. ID.; ID.; ID.; EXERCISE THEREOF ENJOYS A PRESUMED
VALIDITY UNLESS IT IS SHOWN THAT IT DOES NOT ENHANCE
THE PUBLIC WELFARE OR WAS EXERCISED ARBITRARILY OR
UNREASONABLY. Thus, police power concerns government
enactments which precisely interfere with personal liberty or property in
order to promote the general welfare or the common good. As the assailed
Department Order enjoys a presumed validity, it follows that the burden
rests upon petitioners to demonstrate that the said order, particularly its
ARB requirement, does not enhance the public welfare or was exercised
arbitrarily or unreasonably.
3. ID.; ID.; ID.; THE PROPER REGULATION OF A PROFESSION,
CALLING, BUSINESS OR TRADE IS A VALID EXERCISE THEREOF.
Nevertheless, no right is absolute, and the proper regulation of a
profession, calling business or trade has always been upheld as a
legitimate subject of a valid exercise of the police power by the state
particularly when their conduct affects either the execution of legitimate
governmental functions, the preservation of the State, the public health
and welfare and public morals. According to the maxim, sic utere tuo ut
alienum non laedas, it must of course be within the legitimate range of
legislative action to define the mode and manner in which every one may
so use his own property so as not to pose injury to himself or others.
4. ID.; ID.; ID.; WHERE THE LIBERTY CURTAILED AFFECTS AT
MOST THE RIGHT TO PROPERTY, THE PERMISSIBLE SCOPE OF
REGULATORY MEASURES IS MUCH WIDER. In any case, where
the liberty curtailed affects at most the rights of property, the permissible
scope of regulatory measures is certainly much wider. To pretend that
licensing or accreditation requirements violates the due process clause is
to ignore the settled practice, under the mantle of the police power, of
regulating entry to the practice of various trades or professions.
Professionals leaving for abroad are required to pass rigid written and
practical exams before they are deemed fit to practice their trade. Seamen
are required to take tests determining their seamanship. Locally, the
Professional Regulation Commission has began to require previously
licensed doctors and other professionals to furnish documentary proof that
they had either re-trained or had undertaken continuing education courses
as a requirement for renewal of their licenses. It is not claimed that these
requirements pose an unwarranted deprivation of a property right under
the due process clause. So long as professionals and other workers meet
reasonable regulatory standards no such deprivation exists.
5. CONSTITUTIONAL LAW; STATE POLICIES; THE STATE SHALL
AFFORD FULL PROTECTION TO LABOR; ELUCIDATED.
Protection to labor does not indicate promotion of employment alone.
Under the welfare and social justice provisions of the Constitution, the
promotion of full employment, while desirable, cannot take a backseat to
the government's constitutional duty to provide mechanisms for the
protection of our work-force, local or overseas. As this Court explained
in Philippine Association of Service Exporters (PASEI) v. Drilon, in
reference to the recurring problems faced by our overseas workers: 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.
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.
6. ID.; BILL OF RIGHTS; NON-IMPAIRMENT OF OBLIGATIONS OF
CONTRACTS; MUST YIELD TO THE STATE'S POLICE POWER. It
is a futile gesture on the part of petitioners to invoke the non-impairment
clause of the Constitution to support their argument that the government
cannot enact the assailed regulatory measures because they abridge the
freedom to contract. In Philippine Association of Service Exporters, Inc.
vs. Drilon, we held that "(t)he non-impairment clause of the
Constitution . . . must yield to the loftier purposes targeted by the
government." Equally important, into every contract is read provisions of
existing law, and always, a reservation of the police power for so long as
the agreement deals with a subject impressed with the public welfare.
7. ID.; ID.; EQUAL PROTECTION CLAUSE; MERELY REQUIRES
THAT ALL PERSONS BE TREATED ALIKE UNDER LIKE
CONDITIONS. The equal protection clause is directed principally
against undue favor and individual or class privilege. It is not intended to
prohibit legislation which is limited to the object to which it is directed or
by the territory in which it is to operate. It does not require absolute
equality, but merely that all persons be treated alike under like conditions
both as to privileges conferred and liabilities imposed. We have held, time
and again, that the equal protection clause of the Constitution does not
forbid classification for so long as such classification is based on real and
substantial differences having a reasonable relation to the subject of the
particular legislation. If classification is germane to the purpose of the law,
concerns all members of the class, and applies equally to present and
future conditions, the classification does not violate the equal protection
guarantee.

DECISION

KAPUNAN, J p:

This limits of government regulation under the State's police power are
once again at the vortex of the instant controversy. Assailed is the
government's power to control deployment of female entertainers to Japan
by requiring an Artist Record Book (ARB) as a precondition to the
processing by the POEA of any contract for overseas employment. By
contending that the right to overseas employment is a property right within
the meaning of the Constitution, petitioners vigorously aver that
deprivation thereof allegedly through the onerous requirement of an ARB
violates the due process clause and constitutes an invalid exercise of the
police power.
The factual antecedents are undisputed.
Following the much-publicized death of Maricris Sioson in 1991, former
President Corazon C. Aquino ordered a total ban against the deployment
of performing artists to Japan and other foreign destinations. The ban was,
however, rescinded after leaders of the overseas employment industry
promised to extend full support for a program aimed at removing kinks in
the system of deployment. In its place, the government, through the
Secretary of Labor and Employment, subsequently issued Department
Order No. 28 creating the Entertainment Industry Advisory Council
(EIAC). which was tasked with issuing guidelines on the training, testing
certification and deployment of performing artists abroad.
Pursuant to the EIAC's recommendations, 1 the Secretary of Labor, on
January 6, 1994, issued Department Order No. 3 establishing various
procedures and requirements for screening performing artists under a new
system of training, testing, certification and deployment of the former.
Performing artists successfully hurdling the test, training and certification
requirement were to be issued an Artist's Record Book (ARB), a necessary
prerequisite to processing of any contract of employment by the POEA.
Upon request of the industry, implementation of the process, originally
scheduled for April 1, 1994, was moved to October 1, 1994.
Thereafter, the Department of Labor, following the EIAC's
recommendation, issued a series of orders fine-tuning and implementing
the new system. Prominent among these orders were the following
issuances:
1. Department Order No. 3-A, providing for additional
guidelines on the training, testing, certification and
deployment of performing artists.
2. Department Order No. 3-B, pertaining to the Artist
Record Book (ARB) requirement, which could be
processed only after the artist could show proof of
academic and skills training and has passed the required
tests.
3. Department Order No. 3-E, providing the minimum
salary a performing artist ought to receive (not less than
US$600.00 for those bound for Japan) and the authorized
deductions therefrom.
4. Department Order No. 3-F, providing for the guidelines
on the issuance and use of the ARB by returning
performing artists who, unlike new artists, shall only
undergo a Special Orientation Program (shorter than the
basic program) although they must pass the academic
test.
In Civil No. 95-72750, the Federation of Entertainment Talent Managers
of the Philippines (FETMOP), on January 27, 1995 filed a class suit
assailing these department orders, principally contending that said orders
1) violated the constitutional right to travel; 2) abridged existing contracts
for employment; and 3) deprived individual artists of their licenses
without due process of law. FETMOP, likewise, averred that the issuance
of the Artist Record Book (ARB) was discriminatory and illegal and "in
gross violation of the constitutional right . . . to life liberty and property."
Said Federation consequently prayed for the issuance of a writ of
preliminary injunction against the aforestated orders.
On February 2, 1992, JMM Promotion and Management, Inc. and Kary
International, Inc., herein petitioners, filed a Motion for Intervention in
said civil case, which was granted by the trial court in an Order dated 15
February, 1995.
However, on February 21, 1995, the trial court issued an Order denying
petitioners' prayer for a writ of preliminary injunction and dismissed the
complaint.
On appeal from the trial court's Order, respondent court, in CA G.R. SP
No. 36713 dismissed the same. Tracing the circumstances which led to the
issuance of the ARB requirement and the assailed Department Order,
respondent court concluded that the issuances constituted a valid exercise
by the state of the police power.
We agree.
The latin maxim salus populi est suprema lex embodies the character of
the entire spectrum of public laws aimed at promoting the general welfare
of the people under the State's police power. As an inherent attribute of
sovereignty which virtually "extends to all public needs," 2 this "least
limitable" 3 of governmental powers grants a wide panoply of instruments
through which the state, as parens patriae gives effect to a host of its
regulatory powers.
Describing the nature and scope of the police power, Justice Malcolm, in
the early case of Rubi v. Provincial Board of Mindoro 4 wrote:
"The police power of the State," one court has said . . . 'is
a power coextensive with self-protection, and is not
inaptly termed 'the law of overruling 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." Carried onward
by the current of legislature, the judiciary rarely attempts
to dam the onrushing power of legislative discretion,
provided the purposes of the law do not go beyond the
great principles that mean security for the public welfare
or do not arbitrarily interfere with the right of the
individual." 5
Thus, police power concerns government enactments which precisely
interfere with personal liberty or property in order to promote the general
welfare or the common good. As the assailed Department Order enjoys a
presumed validity, it follows that the burden rests upon petitioners to
demonstrate that the said order, particularly, its ARB requirement, does not
enhance the public welfare or was exercised arbitrarily or unreasonably.
A through review of the facts and circumstances leading to the issuance of
the assailed orders compels us to rule that the Artist Record Book
requirement and the questioned Department Order related to its issuance
were issued by the Secretary of Labor pursuant to a valid exercise of the
police power.
In 1984, the Philippines emerged as the largest labor sending country in
Asia dwarfing the labor export of countries with mammoth populations
such as India and China. According to the National Statistics Office,
this diaspora was augmented annually by over 450,000 documented and
clandestine or illegal (undocumented) workers who left the country for
various destinations abroad, lured by higher salaries, better work
opportunities and sometimes better living conditions.
Of the hundreds of thousands of workers who left the country for greener
pastures in the last few years, women composed slightly close to half of
those deployed, constituting 47% between 1987-1991, exceeding this
proportion (58%) by the end of 1991, 6 the year former President Aquino
instituted the ban on deployment of performing artists to Japan and other
countries as a result of the gruesome death of Filipino entertainer Maricris
Sioson.
It was during the same period that this Court took judicial notice not only
of the trend, but also of the fact that most of our women, a large number
employed as domestic helpers and entertainers, worked under exploitative
conditions "marked by physical and personal abuse." 7 Even then, we
noted that "[t]he sordid tales of maltreatment suffered by migrant Filipina
workers, even rape and various forms of torture, confirmed by testimonies
of returning workers" compelled "urgent government action." 8
Pursuant to the alarming number of reports that a significant number of
Filipina performing artists ended up as prostitutes abroad (many of whom
were beaten, drugged and forced into prostitution), and following the
deaths of a number of these women, the government began instituting
measures aimed at deploying only those individuals who met set standards
which would qualify them as legitimate performing artists. In spite of
these measures, however, a number of our countrymen have nonetheless
fallen victim to unscrupulous recruiters, ending up as virtual slaves
controlled by foreign crime syndicates and forced into jobs other than
those indicated in their employment contracts. Worse, some of our women
have been forced into prostitution.
Thus, after a number of inadequate and failed accreditation schemes, the
Secretary of Labor issued on August 16, 1993, D.O. No. 28, establishing
the Entertainment Industry Advisory Council (EIAC), the policy advisory
body of DOLE on entertainment industry matters. 9 Acting on the
recommendations of the said body, the Secretary of Labor, on January 6,
1994, issued the assailed orders. These orders embodied EIAC's
Resolution No. 1, which called for guidelines on screening, testing and
accrediting performing overseas Filipino artists. Significantly, as the
respondent court noted, petitioners were duly represented in the
EIAC, 10 which gave the recommendations on which the ARB and other
requirements were based.
Clearly, the welfare of Filipino performing artists, particularly the women
was paramount in the issuance of Department Order No. 3. Short of a total
and absolute ban against the deployment of performing artists to "high-
risk" destinations, a measure which would only drive recruitment further
underground, the new scheme at the very least rationalizes the method of
screening performing artists by requiring reasonable educational and
artistic skills from them and limits deployment to only those individuals
adequately prepared for the unpredictable demands of employment as
artists abroad. It cannot be gainsaid that this scheme at least lessens the
room for exploitation by unscrupulous individuals and agencies.
Moreover, here or abroad, selection of performing artists is usually
accomplished by auditions, where those deemed unfit are usually weeded
out through a process which is inherently subjective and vulnerable to bias
and differences in taste. The ARB requirement goes one step further,
however, attempting to minimize the subjectivity of the process by
defining minimum skills required from entertainers and performing artists.
As the Solicitor General observed, this should be easily met by
experienced artists possessing merely basic skills. The tests are aimed at
segregating real artists or performers from those passing themselves off as
such, eager to accept any available job and therefore exposing themselves
to possible exploitation.
As to the other provisions of Department Order No. 3 questioned by
petitioners, we see nothing wrong with the requirement for document and
booking confirmation (D.O. 3-C), a minimum salary scale (D.O. 3-E), or
the requirement for registration of returning performers. The requirement
for a venue certificate or other documents evidencing the place and nature
of work allows the government closer monitoring of foreign employers
and helps keep our entertainers away from prostitution fronts and other
worksites associated with unsavory, immoral, illegal or exploitative
practices. Parenthetically, none of these issuances appear to us, by any
stretch of the imagination, even remotely unreasonable or arbitrary. They
address a felt need of according greater protection for an oft-exploited
segment of our OCW's. They respond to the industry's demand for clearer
and more practicable rules and guidelines. Many of these provisions were
fleshed out following recommendations by, and after consultations with,
the affected sectors and non-government organizations. On the whole, they
are aimed at enhancing the safety and security of entertainers and artists
bound for Japan and other destinations, without stifling the industry's
concerns for expansion and growth.
In any event, apart from the State's police power, the Constitution itself
mandates government to extend the fullest protection to our overseas
workers. The basic constitutional statement on labor, embodied in Section
18 of Article II of the Constitution provides:

Sec. 18. The State affirms labor as a primary social


economic force. It shall protect the rights of workers and
promote their welfare.
More emphatically, the social justice provision on labor of the 1987
Constitution in its first paragraph states:
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.
Obviously, protection to labor does not indicate promotion of employment
alone. Under the welfare and social justice provisions of the Constitution,
the promotion of full employment, while desirable, cannot take a backseat
to the government's constitutional duty to provide mechanisms for the
protection of our workforce, local or overseas. At this Court explained
inPhilippine Association of Service Exporters (PASEI) v. Drilon, 11 in
reference to the recurring problems faced by our overseas workers:
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.
We now go to petitioners' assertion that the police power cannot,
nevertheless, abridge the right of our performing workers to return to work
abroad after having earlier qualified under the old process, because,
having previously been accredited, their accreditation became a "property
right," protected by the due process clause. We find this contention
untenable.
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. 12
Nevertheless, no right is absolute, and the proper regulation of a
profession, calling, business or trade has always been upheld as a
legitimate subject of a valid exercise of the police power by the state
particularly when their conduct affects either the execution of legitimate
governmental functions, the preservation of the State, the public health
and welfare and public morals. According to the maxim, sic utere tuo ut
alienum non laedas, it must of course be within the legitimate range of
legislative action to define the mode and manner in which every one may
so use his own property so as not to pose injury to himself or others. 13
In any case, where the liberty curtailed affects at most the rights of
property, the permissible scope of regulatory measures is certainly much
wider. 14 To pretend that licensing or accreditation requirements violates
the due process clause is to ignore the settled practice, under the mantle of
the police power, of regulating entry to the practice of various trades or
professions. Professionals leaving for abroad are required to pass rigid
written and practical exams before they are deemed fit to practice their
trade. Seamen are required to take tests determining their seamanship.
Locally, the Professional Regulation Commission has began to require
previously licensed doctors and other professionals to furnish
documentary proof that they had either re-trained or had undertaken
continuing education courses as a requirement for renewal of their
licenses. It is not claimed that these requirements pose an unwarranted
deprivation of a property right under the due process clause. So long as
professionals and other workers meet reasonable regulatory standards no
such deprivation exists.
Finally, it is a futile gesture on the part of petitioners to invoke the non-
impairment clause of the Constitution to support their argument that the
government cannot enact the assailed regulatory measures because they
abridge the freedom to contract. In Philippine Association of Service
Exporters, Inc. vs. Drilon, we held that "[t]he non-impairment clause of
the Constitution . . . must yield to the loftier purposes targeted by the
government." 15 Equally important, into every contract is read provisions
of existing law, and always, a reservation of the police power for so long
as the agreement deals with a subject impressed with the public welfare.
A last point. Petitioners suggest that the singling out of entertainers and
performing artists under the assailed department orders constitutes class
legislation which violates the equal protection clause of the Constitution.
We do not agree.
The equal protection clause is directed principally against undue favor and
individual or class privilege. It is not intended to prohibit legislation which
is limited to the object to which it is directed or by the territory in which it
is to operate. It does not require absolute equality, but merely that all
persons be treated alike under like conditions both as to privileges
conferred and liabilities imposed. 16 We have held, time and again, that
the equal protection clause of the Constitution does not forbid
classification for so long as such classification is based on real and
substantial differences having a reasonable relation to the subject of the
particular legislation. 17 If classification is germane to the purpose of the
law, concerns all members of the class, and applies equally to present and
future conditions, the classification does not violate the equal protection
guarantee.
In the case at bar, the challenged Department Order clearly applies to all
performing artists and entertainers destined for jobs abroad. These orders,
we stressed hereinbefore, further the Constitutional mandate requiring
government to protect our workforce, particularly those who may be prone
to abuse and exploitation as they are beyond the physical reach of
government regulatory agencies. The tragic incidents must somehow stop,
but short of absolutely curtailing the right of these performers and
entertainers to work abroad, the assailed measures enable our government
to assume a measure of control.
WHEREFORE, finding no reversible error in the decision sought to be
reviewed, petition is hereby DENIED.
SO ORDERED.
Padilla, Bellosillo, Vitug and Hermosisima, Jr., JJ ., concur.
||| (JMM Promotion and Management, Inc. v. Court of Appeals, G.R. No.
120095, August 05, 1996)