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Carlos superdrug vs DSWD Revenue (BIR) and approved by the Department of Finance

This is a petition[1] for Prohibition with Prayer for Preliminary On July 10, 2004, in reference to the query of the Drug Stores
Injunction assailing the constitutionality of Section 4(a) of Association of the Philippines (DSAP) concerning the meaning of a
Republic Act (R.A.) No. 9257,[2] otherwise known as the Expanded tax deduction under the Expanded Senior Citizens Act, the DOF,
Senior Citizens Act of 2003. through Director IV Ma. Lourdes B. Recente, clarified as follows:

Petitioners are domestic corporations and proprietors operating 1) The difference between the Tax Credit (under the Old Senior
drugstores in the Philippines. Citizens Act) and Tax Deduction (under the Expanded Senior
Citizens Act).
Public respondents, on the other hand, include the Department of
Social Welfare and Development (DSWD), the Department of 1.1. The provision of Section 4 of R.A. No. 7432 (the old Senior
Health (DOH), the Department of Finance (DOF), the Department Citizens Act) grants twenty percent (20%) discount from all
of Justice (DOJ), and the Department of Interior and Local establishments relative to the utilization of transportation
Government (DILG) which have been specifically tasked to services, hotels and similar lodging establishment, restaurants and
monitor the drugstores compliance with the law; promulgate the recreation centers and purchase of medicines anywhere in the
implementing rules and regulations for the effective country, the costs of which may be claimed by the private
implementation of the law; and prosecute and revoke the licenses establishments concerned as tax credit.
of erring drugstore establishments.
Effectively, a tax credit is a peso-for-peso deduction from a
The antecedents are as follows: taxpayers tax liability due to the government of the amount of
discounts such establishment has granted to a senior citizen. The
On February 26, 2004, R.A. No. 9257, amending R.A. No. 7432,[3] establishment recovers the full amount of discount given to a
was signed into law by President Gloria Macapagal-Arroyo and it senior citizen and hence, the government shoulders 100% of the
became effective on March 21, 2004. Section 4(a) of the Act discounts granted.
It must be noted, however, that conceptually, a tax credit scheme
SEC. 4. Privileges for the Senior Citizens. The senior citizens shall under the Philippine tax system, necessitates that prior payments
be entitled to the following: of taxes have been made and the taxpayer is attempting to
recover this tax payment from his/her income tax due. The tax
(a) the grant of twenty percent (20%) discount from all credit scheme under R.A. No. 7432 is, therefore, inapplicable since
establishments relative to the utilization of services in hotels and no tax payments have previously occurred.
similar lodging establishments, restaurants and recreation
centers, and purchase of medicines in all establishments for the 1.2. The provision under R.A. No. 9257, on the other hand,
exclusive use or enjoyment of senior citizens, including funeral provides that the establishment concerned may claim the
and burial services for the death of senior citizens; 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.

The establishment may claim the discounts granted under (a), (f), Under this scheme, the establishment concerned is allowed to
(g) and (h) as tax deduction based on the net cost of the goods deduct from gross income, in computing for its tax liability, the
sold or services rendered: Provided, That the cost of the discount amount of discounts granted to senior citizens. Effectively, the
shall be allowed as deduction from gross income for the same government loses in terms of foregone revenues an amount
taxable year that the discount is granted. Provided, further, That equivalent to the marginal tax rate the said establishment is liable
the total amount of the claimed tax deduction net of value added to pay the government. This will be an amount equivalent to 32%
tax if applicable, shall be included in their gross sales receipts for of the twenty percent (20%) discounts so granted. The
tax purposes and shall be subject to proper documentation and to establishment shoulders the remaining portion of the granted
the provisions of the National Internal Revenue Code, as discounts.
It may be necessary to note that while the burden on [the]
government is slightly diminished in terms of its percentage share
On May 28, 2004, the DSWD approved and adopted the on the discounts granted to senior citizens, the number of
Implementing Rules and Regulations of R.A. No. 9257, Rule VI, potential establishments that may claim tax deductions, have
Article 8 of which states: however, been broadened. Aside from the establishments that
may claim tax credits under the old law, more establishments
Article 8. Tax Deduction of Establishments. The establishment may were added under the new law such as: establishments providing
claim the discounts granted under Rule V, Section 4 Discounts for medical and dental services, diagnostic and laboratory services,
Establishments;[5] Section 9, Medical and Dental Services in including professional fees of attending doctors in all private
Private Facilities[,][6] and Sections 10[7] and 11[8] Air, Sea and hospitals and medical facilities, operators of domestic air and sea
Land Transportation as tax deduction based on the net cost of the transport services, public railways and skyways and bus transport
goods sold or services rendered. Provided, That the cost of the services.
discount shall be allowed as deduction from gross income for the
same taxable year that the discount is granted; Provided, further, A simple illustration might help amplify the points discussed
That the total amount of the claimed tax deduction net of value above, as follows:
added tax if applicable, shall be included in their gross sales
receipts for tax purposes and shall be subject to proper Tax Deduction Tax Credit
documentation and to the provisions of the National Internal
Revenue Code, as amended; Provided, finally, that the Gross Sales x x x x x x x x x x x x
implementation of the tax deduction shall be subject to the Less : Cost of goods sold x x x x x x x x x x
Revenue Regulations to be issued by the Bureau of Internal Net Sales x x x x x x x x x x x x
Less: Operating Expenses: otherwise, it is an amount that is allowed by law[15] to reduce the
Tax Deduction on Discounts x x x x -- income prior to the application of the tax rate to compute the
Other deductions: x x x x x x x x amount of tax which is due.[16] Being a tax deduction, the
Net Taxable Income x x x x x x x x x x discount does not reduce taxes owed on a peso for peso basis but
Tax Due x x x x x x merely offers a fractional reduction in taxes owed.
Less: Tax Credit -- ______x x
Net Tax Due -- x x Theoretically, the treatment of the discount as a deduction
As shown above, under a tax deduction scheme, the tax deduction reduces the net income of the private establishments concerned.
on discounts was subtracted from Net Sales together with other The discounts given would have entered the coffers and formed
deductions which are considered as operating expenses before part of the gross sales of the private establishments, were it not
the Tax Due was computed based on the Net Taxable Income. On for R.A. No. 9257.
the other hand, under a tax credit scheme, the amount of
discounts which is the tax credit item, was deducted directly from The permanent reduction in their total revenues is a forced
the tax due amount.[10] 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
Meanwhile, on October 1, 2004, Administrative Order (A.O.) No. compensation.
171 or the Policies and Guidelines to Implement the Relevant
Provisions of Republic Act 9257, otherwise known as the Just compensation is defined as the full and fair equivalent of the
Expanded Senior Citizens Act of 2003[11] was issued by the DOH, property taken from its owner by the expropriator. The measure is
providing the grant of twenty percent (20%) discount in the not the takers gain but the owners loss. The word just is used to
purchase of unbranded generic medicines from all establishments intensify the meaning of the word compensation, and to convey
dispensing medicines for the exclusive use of the senior citizens. the idea that the equivalent to be rendered for the property to be
On November 12, 2004, the DOH issued Administrative Order No taken shall be real, substantial, full and ample.[18]
177[12] amending A.O. No. 171. Under A.O. No. 177, the twenty
percent discount shall not be limited to the purchase of A tax deduction does not offer full reimbursement of the senior
unbranded generic medicines only, but shall extend to both citizen discount. As such, it would not meet the definition of just
prescription and non-prescription medicines whether branded or compensation.[19]
generic. Thus, it stated that [t]he grant of twenty percent (20%)
discount shall be provided in the purchase of medicines from all Having said that, this raises the question of whether the State, in
establishments dispensing medicines for the exclusive use of the promoting the health and welfare of a special group of citizens,
senior citizens. can impose upon private establishments the burden of partly
subsidizing a government program.
Petitioners assail the constitutionality of Section 4(a) of the
Expanded Senior Citizens Act based on the following grounds:[13] The Court believes so.

1) The law is confiscatory because it infringes Art. III, Sec. The Senior Citizens Act was enacted primarily to maximize the
9 of the Constitution which provides that private property shall contribution of senior citizens to nation-building, and to grant
not be taken for public use without just compensation; benefits and privileges to them for their improvement and well-
being as the State considers them an integral part of our
2) It violates the equal protection clause (Art. III, Sec. 1) society.[20]
enshrined in our Constitution which states that no person shall be
deprived of life, liberty or property without due process of law, The priority given to senior citizens finds its basis in the
nor shall any person be denied of the equal protection of the laws; Constitution as set forth in the law itself. Thus, the Act provides:
SEC. 2. Republic Act No. 7432 is hereby amended to read as
3) The 20% discount on medicines violates the follows:
constitutional guarantee in Article XIII, Section 11 that makes
essential goods, health and other social services available to all SECTION 1. Declaration of Policies and Objectives. Pursuant to
people at affordable cost.[14] 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
Petitioners assert that Section 4(a) of the law is unconstitutional programs of social security for them. In addition to this, Section 10
because it constitutes deprivation of private property. Compelling in the Declaration of Principles and State Policies provides: The
drugstore owners and establishments to grant the discount will State shall provide social justice in all phases of national
result in a loss of profit development. Further, Article XIII, Section 11, provides: The State
shall adopt an integrated and comprehensive approach to health
and capital because 1) drugstores impose a mark-up of only 5% to development which shall endeavor to make essential goods,
10% on branded medicines; and 2) the law failed to provide a health and other social services available to all the people at
scheme whereby drugstores will be justly compensated for the affordable cost. There shall be priority for the needs of the
discount. underprivileged sick, elderly, disabled, women and children.
Consonant with these constitutional principles the following are
Examining petitioners arguments, it is apparent that what the declared policies of this Act:
petitioners are ultimately questioning is the validity of the tax
deduction scheme as a reimbursement mechanism for the twenty (f) To recognize the important role of the private sector in the
percent (20%) discount that they extend to senior citizens. improvement of the welfare of senior citizens and to actively seek
Based on the afore-stated DOF Opinion, the tax deduction scheme their partnership.[21]
does not fully reimburse petitioners for the discount privilege
accorded to senior citizens. This is because the discount is treated To implement the above policy, the law grants a twenty percent
as a deduction, a tax-deductible expense that is subtracted from discount to senior citizens for medical and dental services, and
the gross income and results in a lower taxable income. Stated diagnostic and laboratory fees; admission fees charged by
theaters, concert halls, circuses, carnivals, and other similar places expenses, and net profit (or loss) for a given period could have
of culture, leisure and amusement; fares for domestic land, air accurately reflected the effect of the discount on their income.
and sea travel; utilization of services in hotels and similar lodging Absent any financial statement, petitioners cannot substantiate
establishments, restaurants and recreation centers; and their claim that they will be operating at a loss should they give
purchases of medicines for the exclusive use or enjoyment of the discount. In addition, the computation was erroneously based
senior citizens. As a form of reimbursement, the law provides that on the assumption that their customers consisted wholly of senior
business establishments extending the twenty percent discount to citizens. Lastly, the 32% tax rate is to be imposed on income, not
senior citizens may claim the discount as a tax deduction. on the amount of the discount.

The law is a legitimate exercise of police power which, similar to Furthermore, it is unfair for petitioners to criticize the law because
the power of eminent domain, has general welfare for its object. they cannot raise the prices of their medicines given the cutthroat
Police power is not capable of an exact definition, but has been nature of the players in the industry. It is a business decision on
purposely veiled in general terms to underscore its the part of petitioners to peg the mark-up at 5%. Selling the
comprehensiveness to meet all exigencies and provide enough medicines below acquisition cost, as alleged by petitioners, is
room for an efficient and flexible response to conditions and merely a result of this decision. Inasmuch as pricing is a property
circumstances, thus assuring the greatest benefits. [22] right, petitioners cannot reproach the law for being oppressive,
Accordingly, it has been described as the most essential, insistent simply because they cannot afford to raise their prices for fear of
and the least limitable of powers, extending as it does to all the losing their customers to competition.
great public needs.[23] It is [t]he power vested in the legislature
by the constitution to make, ordain, and establish all manner of The Court is not oblivious of the retail side of the pharmaceutical
wholesome and reasonable laws, statutes, and ordinances, either industry and the competitive pricing component of the business.
with penalties or without, not repugnant to the constitution, as While the Constitution protects property rights, petitioners must
they shall judge to be for the good and welfare of the accept the realities of business and the State, in the exercise of
commonwealth, and of the subjects of the same.[24] police power, can intervene in the operations of a business which
may result in an impairment of property rights in the process.
For this reason, when the conditions so demand as determined by
the legislature, property rights must bow to the primacy of police Moreover, the right to property has a social dimension. While
power because property rights, though sheltered by due process, Article XIII of the Constitution provides the precept for the
must yield to general welfare.[25] protection of property, various laws and jurisprudence,
particularly on agrarian reform and the regulation of contracts
Police power as an attribute to promote the common good would and public utilities, continuously serve as a reminder that the right
be diluted considerably if on the mere plea of petitioners that to property can be relinquished upon the command of the State
they will suffer loss of earnings and capital, the questioned for the promotion of public good.[30]
provision is invalidated. Moreover, in the absence of evidence
demonstrating the alleged confiscatory effect of the provision in Undeniably, the success of the senior citizens program rests
question, there is no basis for its nullification in view of the largely on the support imparted by petitioners and the other
presumption of validity which every law has in its favor.[26] private establishments concerned. This being the case, the means
employed in invoking the active participation of the private sector,
Given these, it is incorrect for petitioners to insist that the grant of in order to achieve the purpose or objective of the law, is
the senior citizen discount is unduly oppressive to their business, reasonably and directly related. Without sufficient proof that
because petitioners have not taken time to calculate correctly and Section 4(a) of R.A. No. 9257 is arbitrary, and that the continued
come up with a financial report, so that they have not been able implementation of the same would be unconscionably
to show properly whether or not the tax deduction scheme really detrimental to petitioners, the Court will refrain from quashing a
works greatly to their disadvantage.[27] legislative act.[31]
WHEREFORE, the petition is DISMISSED for lack of merit.
In treating the discount as a tax deduction, petitioners insist that
they will incur losses because, referring to the DOF Opinion, for Fernando vs st. scholastica
every P1.00 senior citizen discount that petitioners would give,
P0.68 will be shouldered by them as only P0.32 will be refunded Before this Court is a petition for review on certiorari under Rule
by the government by way of a tax deduction. 45 of the Rules of Court, which seeks to set aside the December 1,
2003 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No.
To illustrate this point, petitioner Carlos Super Drug cited the anti- 75691.
hypertensive maintenance drug Norvasc as an example. According
to the latter, it acquires Norvasc from the distributors at P37.57 The Facts
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 Respondents St. Scholasticas College (SSC) and St. Scholasticas
to P7.92, then it would have to sell Norvasc at P31.68 which Academy-Marikina, Inc. (SSA-Marikina) are educational
translates to a loss from capital of P5.89 per tablet. Even if the institutions organized under the laws of the Republic of the
government will allow a tax deduction, only P2.53 per tablet will Philippines, with principal offices and business addresses at Leon
be refunded and not the full amount of the discount which is Guinto Street, Malate, Manila, and at West Drive, Marikina
P7.92. In short, only 32% of the 20% discount will be reimbursed Heights, Marikina City, respectively.2
to the drugstores.[28]
Respondent SSC is the owner of four (4) parcels of land measuring
Petitioners computation is flawed. For purposes of a total of 56,306.80 square meters, located in Marikina Heights
reimbursement, the law states that the cost of the discount shall and covered by Transfer Certificate Title (TCT) No. 91537. Located
be deducted from gross income,[29] the amount of income within the property are SSA-Marikina, the residence of the sisters
derived from all sources before deducting allowable expenses, of the Benedictine Order, the formation house of the novices, and
which will result in net income. Here, petitioners tried to show a the retirement house for the elderly sisters. The property is
loss on a per transaction basis, which should not be the case. An enclosed by a tall concrete perimeter fence built some thirty (30)
income statement, showing an accounting of petitioners sales,
years ago. Abutting the fence along the West Drive are buildings, WHEREAS, to gather as wide-range of opinions and comments on
facilities, and other improvements.3 this proposal, and as a requirement of the Local Government Code
of 1991 (R.A. 7160), the Sangguniang Bayan of Marikina invited
The petitioners are the officials of the City Government of presidents or officers of homeowners associations, and
Marikina. On September 30, 1994, the Sangguniang Panlungsod of commercial and industrial establishments in Marikina to two
Marikina City enacted Ordinance No. 192,4 entitled "Regulating public hearings held on July 28, 1994 and August 25, 1994;
the Construction of Fences and Walls in the Municipality of
Marikina." In 1995 and 1998, Ordinance Nos. 2175 and 2006 were WHEREAS, the rationale and mechanics of the proposed
enacted to amend Sections 7 and 5, respectively. Ordinance No. ordinance were fully presented to the attendees and no
192, as amended, is reproduced hereunder, as follows: vehement objection was presented to the municipal government;



ORDINANCE REGULATING THE CONSTRUCTION OF FENCES AND Section 1. Coverage: This Ordinance regulates the construction of
WALLS IN THE MUNICIPALITY OF MARIKINA all fences, walls and gates on lots classified or used for residential,
commercial, industrial, or special purposes.
WHEREAS, under Section 447.2 of Republic Act No. 7160
otherwise known as the Local Government Code of 1991 Section 2. Definition of Terms:
empowers the Sangguniang Bayan as the local legislative body of
the municipality to "x x x Prescribe reasonable limits and restraints a. Front Yard refers to the area of the lot fronting a street, alley
on the use of property within the jurisdiction of the municipality, x or public thoroughfare.
x x";
b. Back Yard the part of the lot at the rear of the structure
WHEREAS the effort of the municipality to accelerate its economic constructed therein.
and physical development, coupled with urbanization and
modernization, makes imperative the adoption of an ordinance c. Open fence type of fence which allows a view of "thru-see" of
which shall embody up-to-date and modern technical design in the inner yard and the improvements therein. (Examples: wrought
the construction of fences of residential, commercial and iron, wooden lattice, cyclone wire)
industrial buildings;
d. Front gate refers to the gate which serves as a passage of
WHEREAS, Presidential Decree No. 1096, otherwise known as the persons or vehicles fronting a street, alley, or public thoroughfare.
National Building Code of the Philippines, does not adequately
provide technical guidelines for the construction of fences, in Section 3. The standard height of fences or walls allowed under
terms of design, construction, and criteria; this ordinance are as follows:

WHEREAS, the adoption of such technical standards shall provide (1) Fences on the front yard shall be no more than one (1) meter
more efficient and effective enforcement of laws on public safety in height. Fences in excess of one (1) meter shall be of an open
and security; fence type, at least eighty percent (80%) see-thru; and

WHEREAS, it has occurred in not just a few occasions that high (2) Fences on the side and back yard shall be in accordance with
fences or walls did not actually discourage but, in fact, even the provisions of P.D. 1096 otherwise known as the National
protected burglars, robbers, and other lawless elements from the Building Code.
view of outsiders once they have gained ingress into these walls,
hence, fences not necessarily providing security, but becomes Section 4. No fence of any kind shall be allowed in areas
itself a "security problem"; specifically reserved or classified as parks.

WHEREAS, to discourage, suppress or prevent the concealment of Section 5. In no case shall walls and fences be built within the five
prohibited or unlawful acts earlier enumerated, and as guardian of (5) meter parking area allowance located between the front
the people of Marikina, the municipal government seeks to enact monument line and the building line of commercial and industrial
and implement rules and ordinances to protect and promote the establishments and educational and religious institutions.7
health, safety and morals of its constituents;
Section 6. Exemption.
WHEREAS, consistent too, with the "Clean and Green Program" of
the government, lowering of fences and walls shall encourage (1) The Ordinance does not cover perimeter walls of residential
people to plant more trees and ornamental plants in their yards, subdivisions.
and when visible, such trees and ornamental plants are expected
to create an aura of a clean, green and beautiful environment for (2) When public safety or public welfare requires, the Sangguniang
Marikeos; Bayan may allow the construction and/or maintenance of walls
higher than as prescribed herein and shall issue a special permit or
WHEREAS, high fences are unsightly that, in the past, people exemption.
planted on sidewalks to "beautify" the faade of their residences
but, however, become hazards and obstructions to pedestrians; Section 7. Transitory Provision. Real property owners whose
existing fences and walls do not conform to the specifications
WHEREAS, high and solid walls as fences are considered "un- herein are allowed adequate period of time from the passage of
neighborly" preventing community members to easily this Ordinance within which to conform, as follows:
communicate and socialize and deemed to create "boxed-in"
mentality among the populace; (1) Residential houses eight (8) years

(2) Commercial establishments five (5) years

restrain property rights for the protection of public safety, health,
(3) Industrial establishments three (3) years morals, or the promotion of public convenience and general
(4) Educational institutions five (5) years8 (public and privately
owned) On June 30, 2000, the RTC issued a writ of preliminary injunction,
enjoining the petitioners from implementing the demolition of the
Section 8. Penalty. Walls found not conforming to the provisions fence at SSCs Marikina property.14
of this Ordinance shall be demolished by the municipal
government at the expense of the owner of the lot or structure. Ruling of the RTC

Section 9. The Municipal Engineering Office is tasked to strictly On the merits, the RTC rendered a Decision,15 dated October 2,
implement this ordinance, including the issuance of the necessary 2002, granting the petition and ordering the issuance of a writ of
implementing guidelines, issuance of building and fencing permits, prohibition commanding the petitioners to permanently desist
and demolition of non-conforming walls at the lapse of the grace from enforcing or implementing Ordinance No. 192 on the
period herein provided. respondents property.

Section 10. Repealing Clause. All existing Ordinances and The RTC agreed with the respondents that the order of the
Resolutions, Rules and Regulations inconsistent with the foregoing petitioners to demolish the fence at the SSC property in Marikina
provisions are hereby repealed, amended or modified. and to move it back six (6) meters would amount to an
appropriation of property which could only be done through the
Section 11. Separability Clause. If for any reason or reasons, local exercise of eminent domain. It held that the petitioners could not
executive orders, rules and regulations or parts thereof in conflict take the respondents property under the guise of police power to
with this Ordinance are hereby repealed and/or modified evade the payment of just compensation.
It did not give weight to the petitioners contention that the
Section 12. Effectivity. This ordinance takes effect after parking space was for the benefit of the students and patrons of
publication. SSA-Marikina, considering that the respondents were already
providing for sufficient parking in compliance with the standards
APPROVED: September 30, 1994 under Rule XIX of the National Building Code.

(Emphases supplied) It further found that the 80% see-thru fence requirement could
run counter to the respondents right to privacy, considering that
On April 2, 2000, the City Government of Marikina sent a letter to the property also served as a residence of the Benedictine sisters,
the respondents ordering them to demolish and replace the fence who were entitled to some sense of privacy in their affairs. It also
of their Marikina property to make it 80% see-thru, and, at the found that the respondents were able to prove that the danger to
same time, to move it back about six (6) meters to provide parking security had no basis in their case. Moreover, it held that the
space for vehicles to park.9 On April 26, 2000, the respondents purpose of beautification could not be used to justify the exercise
requested for an extension of time to comply with the directive.10 of police power.
In response, the petitioners, through then City Mayor Bayani F.
Fernando, insisted on the enforcement of the subject ordinance. It also observed that Section 7 of Ordinance No. 192, as amended,
provided for retroactive application. It held, however, that such
Not in conformity, the respondents filed a petition for prohibition retroactive effect should not impair the respondents vested
with an application for a writ of preliminary injunction and substantive rights over the perimeter walls, the six-meter strips of
temporary restraining order before the Regional Trial Court, land along the walls, and the building, structures, facilities, and
Marikina, Branch 273 (RTC), docketed as SCA Case No. 2000-381- improvements, which would be destroyed by the demolition of
MK.11 the walls and the seizure of the strips of land.

The respondents argued that the petitioners were acting in excess The RTC also found untenable the petitioners argument that
of jurisdiction in enforcing Ordinance No. 192, asserting that such Ordinance No. 192 was a remedial or curative statute intended to
contravenes Section 1, Article III of the 1987 Constitution. That correct the defects of buildings and structures, which were
demolishing their fence and constructing it six (6) meters back brought about by the absence or insufficiency of laws. It ruled that
would result in the loss of at least 1,808.34 square meters, worth the assailed ordinance was neither remedial nor curative in
about 9,041,700.00, along West Drive, and at least 1,954.02 nature, considering that at the time the respondents perimeter
square meters, worth roughly 9,770,100.00, along East Drive. It wall was built, the same was valid and legal, and the ordinance did
would also result in the destruction of the garbage house, covered not refer to any previous legislation that it sought to correct.
walk, electric house, storage house, comfort rooms, guards room,
guards post, waiting area for visitors, waiting area for students, The RTC noted that the petitioners could still take action to
Blessed Virgin Shrine, P.E. area, and the multi-purpose hall, expropriate the subject property through eminent domain.
resulting in the permanent loss of their beneficial use. The
respondents, thus, asserted that the implementation of the The RTC, thus, disposed:
ordinance on their property would be tantamount to an
appropriation of property without due process of law; and that WHEREFORE, the petition is GRANTED. The writ of prohibition is
the petitioners could only appropriate a portion of their property hereby issued commanding the respondents to permanently
through eminent domain. They also pointed out that the goal of desist from enforcing or implementing Ordinance No. 192, Series
the provisions to deter lawless elements and criminality did not of 1994, as amended, on petitioners property in question located
exist as the solid concrete walls of the school had served as at Marikina Heights, Marikina, Metro Manila.
sufficient protection for many years.12
No pronouncement as to costs.
The petitioners, on the other hand, countered that the ordinance
was a valid exercise of police power, by virtue of which, they could SO ORDERED.16
In its December 1, 2003 Decision, the CA dismissed the
petitioners appeal and affirmed the RTC decision. In this case, the petitioners admit that Section 5 of the assailed
ordinance, pertaining to the five-meter setback requirement is, as
The CA reasoned out that the objectives stated in Ordinance No. held by the lower courts, invalid.20 Nonetheless, the petitioners
192 did not justify the exercise of police power, as it did not only argue that such invalidity was subsequently cured by Zoning
seek to regulate, but also involved the taking of the respondents Ordinance No. 303, series of 2000. They also contend that Section
property without due process of law. The respondents were 3, relating to the 80% see-thru fence requirement, must be
bound to lose an unquantifiable sense of security, the beneficial complied with, as it remains to be valid.
use of their structures, and a total of 3,762.36 square meters of
property. It, thus, ruled that the assailed ordinance could not be Ruling of the Court
upheld as valid as it clearly invaded the personal and property
rights of the respondents and "[f]or being unreasonable, and The ultimate question before the Court is whether Sections 3.1
undue restraint of trade."17 and 5 of Ordinance No. 192 are valid exercises of police power by
the City Government of Marikina.
It noted that although the petitioners complied with procedural
due process in enacting Ordinance No. 192, they failed to comply "Police power is the plenary power vested in the legislature to
with substantive due process. Hence, the failure of the make statutes and ordinances to promote the health, morals,
respondents to attend the public hearings in order to raise peace, education, good order or safety and general welfare of the
objections did not amount to a waiver of their right to question people."21 The State, through the legislature, has delegated the
the validity of the ordinance. exercise of police power to local government units, as agencies of
the State. This delegation of police power is embodied in Section
The CA also shot down the argument that the five-meter setback 1622 of the Local Government Code of 1991 (R.A. No. 7160),
provision for parking was a legal easement, the use and ownership known as the General Welfare Clause,23 which has two branches.
of which would remain with, and inure to, the benefit of the "The first, known as the general legislative power, authorizes the
respondents for whom the easement was primarily intended. It municipal council to enact ordinances and make regulations not
found that the real intent of the setback provision was to make repugnant to law, as may be necessary to carry into effect and
the parking space free for use by the public, considering that such discharge the powers and duties conferred upon the municipal
would cease to be for the exclusive use of the school and its council by law. The second, known as the police power proper,
students as it would be situated outside school premises and authorizes the municipality to enact ordinances as may be
beyond the school administrations control. necessary and proper for the health and safety, prosperity,
morals, peace, good order, comfort, and convenience of the
In affirming the RTC ruling that the ordinance was not a curative municipality and its inhabitants, and for the protection of their
statute, the CA found that the petitioner failed to point out any property."24
irregularity or invalidity in the provisions of the National Building
Code that required correction or cure. It noted that any correction White Light Corporation v. City of Manila,25 discusses the test of a
in the Code should be properly undertaken by the Congress and valid ordinance:
not by the City Council of Marikina through an ordinance.
The test of a valid ordinance is well established. A long line of
The CA, thus, disposed: decisions including City of Manila has held that for an ordinance to
be valid, it must not only be within the corporate powers of the
WHEREFORE, all foregoing premises considered, the instant local government unit to enact and pass according to the
appeal is DENIED.1wphi1 The October 2, 2002 Decision and the procedure prescribed by law, it must also conform to the
January 13, 2003 Order of the Regional Trial Court (RTC) of following substantive requirements: (1) must not contravene the
Marikina City, Branch 273, granting petitioners-appellees petition
for Prohibition in SCA Case No. 2000-381-MK are hereby Constitution or any statute; (2) must not be unfair or oppressive;
AFFIRMED. (3) must not be partial or discriminatory; (4) must not prohibit but
may regulate trade; (5) must be general and consistent with public
SO ORDERED.18 policy; and (6) must not be unreasonable.26

Aggrieved by the decision of the CA, the petitioners are now Ordinance No. 192 was passed by the City Council of Marikina in
before this Court presenting the following the apparent exercise of its police power. To successfully invoke
the exercise of police power as the rationale for the enactment of
ASSIGNMENT OF ERRORS an ordinance and to free it from the imputation of constitutional
infirmity, two tests have been used by the Court the rational
1. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED relationship test and the strict scrutiny test:
NOT A VALID EXERCISE OF POLICE POWER; We ourselves have often applied the rational basis test mainly in
analysis of equal protection challenges. Using the rational basis
2. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED examination, laws or ordinances are upheld if they rationally
IN RULING THAT THE AFOREMENTIONED ORDINANCE IS AN further a legitimate governmental interest. Under intermediate
EXERCISE OF THE CITY OF THE POWER OF EMINENT DOMAIN; review, governmental interest is extensively examined and the
availability of less restrictive measures is considered. Applying
3. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED strict scrutiny, the focus is on the presence of compelling, rather
IN DECLARING THAT THE CITY VIOLATED THE DUE PROCESS than substantial, governmental interest and on the absence of less
CLAUSE IN IMPLEMENTING ORDINANCE NO. 192, SERIES OF 1994; restrictive means for achieving that interest.27
Even without going to a discussion of the strict scrutiny test, impairment of a property is merely regulated or amounts to a
Ordinance No. 192, series of 1994 must be struck down for not compensable taking.32 The Court is of the view that the
being reasonably necessary to accomplish the Citys purpose. implementation of the setback requirement would be tantamount
More importantly, it is oppressive of private rights. to a taking of a total of 3,762.36 square meters of the
respondents private property for public use without just
Under the rational relationship test, an ordinance must pass the compensation, in contravention to the Constitution.
following requisites as discussed in Social Justice Society (SJS) v.
Atienza, Jr.:28 Anent the objectives of prevention of concealment of unlawful
acts and "un-neighborliness," it is obvious that providing for a
As with the State, local governments may be considered as having parking area has no logical connection to, and is not reasonably
properly exercised their police power only if the following necessary for, the accomplishment of these goals.
requisites are met: (1) the interests of the public generally, as
distinguished from those of a particular class, require its exercise Regarding the beautification purpose of the setback requirement,
and (2) the means employed are reasonably necessary for the it has long been settled that the State may not, under the guise of
accomplishment of the purpose and not unduly oppressive upon police power, permanently divest owners of the beneficial use of
individuals. In short, there must be a concurrence of a lawful their property solely to preserve or enhance the aesthetic
subject and lawful method.29 appearance of the community.33 The Court, thus, finds Section 5
to be unreasonable and oppressive as it will substantially divest
Lacking a concurrence of these two requisites, the police power the respondents of the beneficial use of their property solely for
measure shall be struck down as an arbitrary intrusion into private aesthetic purposes. Accordingly, Section 5 of Ordinance No. 192 is
rights and a violation of the due process clause.30 invalid.

Section 3.1 and 5 of the assailed ordinance are pertinent to the The petitioners, however, argue that the invalidity of Section 5
issue at hand, to wit: was properly cured by Zoning Ordinance No. 303,34 Series of
2000, which classified the respondents property to be within an
Section 3. The standard height of fences of walls allowed under institutional zone, under which a five-meter setback has been
this ordinance are as follows: required.

(1) Fences on the front yard shall be no more than one (1) meter The petitioners are mistaken. Ordinance No. 303, Series of 2000,
in height. Fences in excess of one (1) meter shall be an open fence has no bearing to the case at hand.
type, at least eighty percent (80%) see-thru;
The Court notes with displeasure that this argument was only
Section 5. In no case shall walls and fences be built within the five raised for the first time on appeal in this Court in the petitioners
(5) meter parking area allowance located between the front Reply. Considering that Ordinance No. 303 was enacted on
monument line and the building line of commercial and industrial December 20, 2000, the petitioners could very well have raised it
establishments and educational and religious institutions. in their defense before the RTC in 2002. The settled rule in this
jurisdiction is that a party cannot change the legal theory of this
The respondents, thus, sought to prohibit the petitioners from case under which the controversy was heard and decided in the
requiring them to (1) demolish their existing concrete wall, (2) trial court. It should be the same theory under which the review
build a fence (in excess of one meter) which must be 80% see- on appeal is conducted. Points of law, theories, issues, and
thru, and (3) build the said fence six meters back in order to arguments not adequately brought to the attention of the lower
provide a parking area. court will not be ordinarily considered by a reviewing court,
inasmuch as they cannot be raised for the first time on appeal.
Setback Requirement This will be offensive to the basic rules of fair play, justice, and
due process.35
The Court first turns its attention to Section 5 which requires the
five-meter setback of the fence to provide for a parking area. The Furthermore, the two ordinances have completely different
petitioners initially argued that the ownership of the parking area purposes and subjects. Ordinance No. 192 aims to regulate the
to be created would remain with the respondents as it would construction of fences, while Ordinance No. 303 is a zoning
primarily be for the use of its students and faculty, and that its use ordinance which classifies the city into specific land uses. In fact,
by the public on non-school days would only be incidental. In their the five-meter setback required by Ordinance No. 303 does not
Reply, however, the petitioners admitted that Section 5 was, in even appear to be for the purpose of providing a parking area.
fact, invalid for being repugnant to the Constitution.31
By no stretch of the imagination, therefore, can Ordinance No.
The Court agrees with the latter position. 303, "cure" Section 5 of Ordinance No. 192.

The Court joins the CA in finding that the real intent of the setback In any case, the clear subject of the petition for prohibition filed
requirement was to make the parking space free for use by the by the respondents is Ordinance No. 192 and, as such, the precise
public, considering that it would no longer be for the exclusive use issue to be determined is whether the petitioners can be
of the respondents as it would also be available for use by the prohibited from enforcing the said ordinance, and no other,
general public. Section 9 of Article III of the 1987 Constitution, a against the respondents.
provision on eminent domain, provides that private property shall
not be taken for public use without just compensation. 80% See-Thru Fence Requirement

The petitioners cannot justify the setback by arguing that the The petitioners argue that while Section 5 of Ordinance No. 192
ownership of the property will continue to remain with the may be invalid, Section 3.1 limiting the height of fences to one
respondents. It is a settled rule that neither the acquisition of title meter and requiring fences in excess of one meter to be at least
nor the total destruction of value is essential to taking. In fact, it is 80% see-thru, should remain valid and enforceable against the
usually in cases where the title remains with the private owner respondents.
that inquiry should be made to determine whether the
The Court cannot accommodate the petitioner. "Curative statutes are enacted to cure defects in a prior law or to
validate legal proceedings which would otherwise be void for
For Section 3.1 to pass the rational relationship test, the want of conformity with certain legal requirements. They are
petitioners must show the reasonable relation between the intended to supply defects, abridge superfluities and curb certain
purpose of the police power measure and the means employed evils. They are intended to enable persons to carry into effect that
for its accomplishment, for even under the guise of protecting the which they have designed or intended, but has failed of expected
public interest, personal rights and those pertaining to private legal consequence by reason of some statutory disability or
property will not be permitted to be arbitrarily invaded.36 irregularity in their own action. They make valid that which,
before the enactment of the statute was invalid. Their purpose is
The principal purpose of Section 3.1 is "to discourage, suppress or to give validity to acts done that would have been invalid under
prevent the concealment of prohibited or unlawful acts." The existing laws, as if existing laws have been complied with. Curative
ultimate goal of this objective is clearly the prevention of crime to statutes, therefore, by their very essence, are retroactive."41
ensure public safety and security. The means employed by the
petitioners, however, is not reasonably necessary for the The petitioners argue that Ordinance No. 192 is a curative statute
accomplishment of this purpose and is unduly oppressive to as it aims to correct or cure a defect in the National Building Code,
private rights. The petitioners have not adequately shown, and it namely, its failure to provide for adequate guidelines for the
does not appear obvious to this Court, that an 80% see-thru fence construction of fences. They ultimately seek to remedy an
would provide better protection and a higher level of security, or insufficiency in the law. In aiming to cure this insufficiency, the
serve as a more satisfactory criminal deterrent, than a tall solid petitioners attempt to add lacking provisions to the National
concrete wall. It may even be argued that such exposed premises Building Code. This is not what is contemplated by curative
could entice and tempt would-be criminals to the property, and statutes, which intend to correct irregularities or invalidity in the
that a see-thru fence would be easier to bypass and breach. It also law. The petitioners fail to point out any irregular or invalid
appears that the respondents concrete wall has served as more provision. As such, the assailed ordinance cannot qualify as
than sufficient protection over the last 40 years. ` curative and retroactive in nature.

As to the beautification purpose of the assailed ordinance, as At any rate, there appears to be no insufficiency in the National
previously discussed, the State may not, under the guise of police Building Code with respect to parking provisions in relation to the
power, infringe on private rights solely for the sake of the issue of the respondents. Paragraph 1.16.1, Rule XIX of the Rules
aesthetic appearance of the community. Similarly, the Court and Regulations of the said code requires an educational
cannot perceive how a see-thru fence will foster "neighborliness" institution to provide one parking slot for every ten classrooms. As
between members of a community. found by the lower courts, the respondents provide a total of 76
parking slots for their 80 classrooms and, thus, had more than
Compelling the respondents to construct their fence in sufficiently complied with the law.
accordance with the assailed ordinance is, thus, a clear
encroachment on their right to property, which necessarily Ordinance No. 192, as amended, is, therefore, not a curative
includes their right to decide how best to protect their property. statute which may be applied retroactively.

It also appears that requiring the exposure of their property via a Separability
see-thru fence is violative of their right to privacy, considering that
the residence of the Benedictine nuns is also located within the Sections 3.1 and 5 of Ordinance No. 192, as amended, are, thus,
property. The right to privacy has long been considered a invalid and cannot be enforced against the respondents.
fundamental right guaranteed by the Constitution that must be Nonetheless, "the general rule is that where part of a statute is
protected from intrusion or constraint. The right to privacy is void as repugnant to the Constitution, while another part is valid,
essentially the right to be let alone,37 as governmental powers the valid portion, if susceptible to being separated from the
should stop short of certain intrusions into the personal life of its invalid, may stand and be enforced."42 Thus, the other sections of
citizens.38 It is inherent in the concept of liberty, enshrined in the the assailed ordinance remain valid and enforceable.
Bill of Rights (Article III) in Sections 1, 2, 3(1), 6, 8, and 17, Article
III of the 1987 Constitution.39 Conclusion

The enforcement of Section 3.1 would, therefore, result in an Considering the invalidity of Sections 3.1 and 5, it is clear that the
undue interference with the respondents rights to property and petitioners were acting in excess of their jurisdiction in enforcing
privacy. Section 3.1 of Ordinance No. 192 is, thus, also invalid and Ordinance No. 192 against the respondents. The CA was correct in
cannot be enforced against the respondents. affirming the decision of the RTC in issuing the writ of prohibition.
The petitioners must permanently desist from enforcing Sections
No Retroactivity 3.1 and 5 of the assailed ordinance on the respondents' property
in Marikina City.
Ordinance No. 217 amended Section 7 of Ordinance No. 192 by
including the regulation of educational institutions which was WHEREFORE, the petition is DENIED. The October 2, 2002 Decision
unintentionally omitted, and giving said educational institutions of the Regional Trial Court in SCA Case No. 2000-381-MK is
five (5) years from the passage of Ordinance No. 192 (and not AFFIRMED but MODIFIED to read as follows:
Ordinance No. 217) to conform to its provisions.40 The petitioners
argued that the amendment could be retroactively applied WHEREFORE, the petition is GRANTED. The writ of prohibition is
because the assailed ordinance is a curative statute which is hereby issued commanding the respondents to permanently
retroactive in nature. desist from enforcing or implementing Sections 3.1 and 5 of
Ordinance No. 192, Series of 1994, as amended, on the
Considering that Sections 3.1 and 5 of Ordinance No. 192 cannot petitioners' property in question located in Marikina Heights,
be enforced against the respondents, it is no longer necessary to Marikina, Metro Manila.
rule on the issue of retroactivity. The Court shall, nevertheless, Aquino vs municipality of aklan
pass upon the issue for the sake of clarity.
Before the Court is a Petition for Review on Certiorari challenging EO 10 was partially implemented on June 10, 2011. Thereafter,
the Decision1 and the Resolution of the Court of Appeals (CA) in two more instances followed wherein respondents demolished
CA-G.R. SP No. 120042 dated August 13, 2013 and February 3, the improvements introduced by Boracay West Cove, the most
2014, respectively. The assailed rulings denied Crisostomo recent of which was made in February 2014.
Aquinos Petition for Certiorari for not being the proper remedy to
question the issuance and implementation of Executive Order No. Alleging that the order was issued and executed with grave abuse
10, Series of 2011 (EO 10), ordering the demolition of his hotel of discretion, petitioner filed a Petition for Certiorari with prayer
establishment. for injunctive relief with the CA. He argued that judicial
proceedings should first be conducted before the respondent
The Facts mayor could order the demolition of the companys
establishment; that Boracay West Cove was granted a FLAgT by
Petitioner is the president and chief executive officer of Boracay the DENR, which bestowed the company the right to construct
Island West Cove Management Philippines, Inc. (Boracay West permanent improvements on the area in question; that since the
Cove). On January 7, 2010, the company applied for a zoning area is a forestland, it is the DENRand not the municipality of
compliance with the municipal government of Malay, Aklan.2 Malay, or any other local government unit for that matterthat
While the company was already operating a resort in the area, the has primary jurisdiction over the area, and that the Regional
application sought the issuance of a building permit covering the Executive Director of DENR-Region 6 had officially issued an
construction of a three-storey hotel over a parcel of land opinion regarding the legal issues involved in the present case;
measuring 998 sqm. located in Sitio Diniwid, Barangay Balagab, that the Ordinance admits of exceptions; and lastly, that it is the
Boracay Island, Malay, Aklan, which is covered by a Forest Land mayor who should be blamed for not issuing the necessary
Use Agreement for Tourism Purposes (FLAgT) issued by the clearances in the companys favor.
Department of Environment and Natural Resources (DENR) in
favor of Boracay West Cove. In rebuttal, respondents contended that the FLAgT does not
excuse the company from complying with the Ordinance and
Through a Decision on Zoning dated January 20, 2010, the Presidential Decree No. 1096 (PD 1096), otherwise known as the
Municipal Zoning Administrator denied petitioners application on National Building Code of the Philippines. Respondents also
the ground that the proposed construction site was within the no argued that the demolition needed no court order because the
build zone demarcated in Municipal Ordinance 2000-131 municipal mayor has the express power under the Local
(Ordinance).3 As provided in the Ordinance: Government Code (LGC) to order the removal of illegally
constructed buildings.
SECTION 2. Definition of Terms. As used in this Ordinance, the
following words, terms and phrases shall mean as follows: Ruling of the Court of Appeals

In its assailed Decision dated August 13, 2013, the CA dismissed

(b) No Build Zone the space twenty-five (25) meters from the the petition solely on procedural ground, i.e., the special writ of
edge of the mean high water mark measured inland; certiorari can only be directed against a tribunal, board, or officer
exercising judicial or quasi-judicial functions and since the
issuance of EO 10 was done in the exercise of executive functions,
SECTION 3. No building or structure of any kind whether and not of judicial or quasi-judicial functions, certiorari will not lie.
temporary or permanent shall be allowed to be set up, erected or Instead, the proper remedy for the petitioner, according to the
constructed on the beaches around the Island of Boracay and in CA, is to file a petition for declaratory relief with the Regional Trial
its offshore waters. During the conduct of special activities or Court.
special events, the Sangguniang Bayan may, through a Resolution,
authorize the Office of the Mayor to issue Special Permits for Petitioner sought reconsideration but this was denied by the CA
construction of temporary structures on the beach for the on February 3, 2014 through the challenged Resolution. Hence,
duration of the special activity as embodied in the Resolution. the instant petition raising arguments on both procedure and
In due time, petitioner appealed the denial action to the Office of
the Mayor on February 1, 2010. The Issues

On May 13, 2010, petitioner followed up his appeal through a Stripped to the essentials, the pivotal issues in the extant case are
letter but no action was ever taken by the respondent mayor. On as follows:
April 5, 2011, however, a Notice of Assessment was sent to
petitioner asking for the settlement of Boracay West Coves The propriety under the premises of the filing of a petition for
unpaid taxes and other liabilities under pain of a recommendation certiorari instead of a petition for declaratory relief;
for closure in view of its continuous commercial operation since
2009 sans the necessary zoning clearance, building permit, and Whether or not declaratory relief is still available to petitioner;
business and mayors permit. In reply, petitioner expressed
willingness to settle the companys obligations, but the municipal Whether or not the CA correctly ruled that the respondent mayor
treasurer refused to accept the tendered payment. Meanwhile, was performing neither a judicial nor quasi-judicial function when
petitioner continued with the construction, expansion, and he ordered the closure and demolition of Boracay West Coves
operation of the resort hotel. hotel;

Subsequently, on March 28, 2011, a Cease and Desist Order was Whether or not respondent mayor committed grave abuse of
issued by the municipal government, enjoining the expansion of discretion when he issued EO 10;
the resort, and on June 7, 2011, the Office of the Mayor of Malay,
Aklan issued the assailed EO 10, ordering the closure and Whether or not petitioners right to due process was violated
demolition of Boracay West Coves hotel. when the respondent mayor ordered the closure and demolition
of Boracay West Coves hotel without first conducting judicial
modifying the proceedings of such tribunal, board or officer, and
Whether or not the LGUs refusal to issue petitioner the necessary granting such incidental reliefs as law and justice may require. x x
building permit and clearances was justified; x

Whether or not petitioners rights under the FLAgT prevail over For certiorari to prosper, the petitioner must establish the
the municipal ordinance providing for a no-build zone; and concurrence of the following requisites, namely:

Whether or not the DENR has primary jurisdiction over the The writ is directed against a tribunal, board, or officer exercising
controversy, not the LGU. judicial or quasi-judicial functions;

The Courts Ruling Such tribunal, board, or officer has acted without or in excess of
jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction; and
We deny the petition. There is no appeal or any plain speedy, and adequate remedy in
the ordinary course of law.5
Certiorari, not declaratory relief, is the proper remedy
Guilty of reiteration, the CA immediately dismissed the Petition
a. Declaratory relief no longer viable for Certiorari upon determining that the first element is wanting
that respondent mayor was allegedly not exercising judicial or
Resolving first the procedural aspect of the case, We find merit in quasi-judicial functions when he issued EO 10.
petitioners contention that the special writ of certiorari , and not
declaratory relief, is the proper remedy for assailing EO 10. As We are not persuaded.
provided under Sec. 1, Rule 63 of the Rules of Court:
The CA fell into a trap when it ruled that a mayor, an officer from
SECTION 1. Who may file petition. Any person interested under the executive department, exercises an executive function
a deed, will, contract or other written instrument, whose rights whenever he issues an Executive Order. This is tad too
are affected by a statute, executive order or regulation, ordinance presumptive for it is the nature of the act to be performed, rather
or any other governmental regulation may, before breach or than of the office, board, or body which performs it, that
violation thereof, bring an action in the appropriate Regional Trial determines whether or not a particular act is a discharge of
Court to determine any question of construction or validity judicial or quasi-judicial functions. The first requirement for
arising, and for a declaration of his rights or duties, thereunder. x certiorari is satisfied if the officers act judicially in making their
x x (emphasis added) decision, whatever may be their public
An action for declaratory relief presupposes that there has been
no actual breach of the instruments involved or of the rights It is not essential that the challenged proceedings should be
arising thereunder. Since the purpose of an action for declaratory strictly and technically judicial, in the sense in which that word is
relief is to secure an authoritative statement of the rights and used when applied to courts of justice, but it is sufficient if they
obligations of the parties under a statute, deed, or contract for are quasi-judicial.7 To contrast, a party is said to be exercising a
their guidance in the enforcement thereof, or compliance judicial function where he has the power to determine what the
therewith, and not to settle issues arising from an alleged breach law is and what legal rights of the parties are, and then
thereof, it may be entertained before the breach or violation of undertakes to determine these questions and adjudicate upon the
the statute, deed or contract to which it refers. A petition for rights of the parties, whereas quasi-judicial function is a term
declaratory relief gives a practical remedy for ending which applies to the actions, discretion, etc., of public
controversies that have not reached the state where another administrative officers or bodies x x x required to investigate facts
relief is immediately available; and supplies the need for a form of or ascertain the existence of facts, hold hearings, and draw
action that will set controversies at rest before they lead to a conclusions from them as a basis for their official action and to
repudiation of obligations, an invasion of rights, and a commission exercise discretion of a judicial nature.8cralawlawlibrary
of wrongs.4cralawlawlibrary
In the case at bench, the assailed EO 10 was issued upon the
In the case at bar, the petition for declaratory relief became respondent mayors finding that Boracay West Coves
unavailable by EO 10s enforcement and implementation. The construction, expansion, and operation of its hotel in Malay, Aklan
closure and demolition of the hotel rendered futile any possible is illegal. Such a finding of illegality required the respondent
guidelines that may be issued by the trial court for carrying out mayors exercise of quasi-judicial functions, against which the
the directives in the challenged EO 10. Indubitably, the CA erred special writ of certiorari may lie. Apropos hereto is Our ruling in
when it ruled that declaratory relief is the proper remedy given City Engineer of Baguio v. Baniqued:9cralawlawlibrary
such a situation.
There is no gainsaying that a city mayor is an executive official nor
b. Petitioner correctly resorted to certiorari is the matter of issuing demolition notices or orders not a
ministerial one. In determining whether or not a structure is illegal
On the propriety of filing a petition for certiorari , Sec. 1, Rule 65 or it should be demolished, property rights are involved thereby
of the Rules of Court provides: needing notices and opportunity to be heard as provided for in
the constitutionally guaranteed right of due process. In pursuit of
Section 1. Petition for certiorari . When any tribunal, board or these functions, the city mayor has to exercise quasi-judicial
officer exercising judicial or quasi-judicial functions has acted powers.
without or in excess of its or his jurisdiction, or with grave abuse
of discretion amounting to lack or excess of jurisdiction, and there With the foregoing discussion, the CA erred in ruling that the
is no appeal, or any plain, speedy, and adequate remedy in the respondent mayor was merely exercising his executive functions,
ordinary course of law, a person aggrieved thereby may file a for clearly, the first requisite for the special writ has been
verified petition in the proper court, alleging the facts with satisfied.
certainty and praying that judgment be rendered annulling or
Aside from the first requisite, We likewise hold that the third
element, i.e., the unavailability of a plain, speedy, or adequate Preliminarily, We agree with petitioners posture that the
remedy, is also present herein. While it may be argued that, under property involved cannot be classified as a nuisance per se, but
the LGC, Executive Orders issued by mayors are subject to review not for the reason he so offers. Property valuation, after all, is not
by provincial governors,10 this cannot be considered as an the litmus test for such a determination. More controlling is the
adequate remedy given the exigencies of petitioners propertys nature and conditions, which should be evaluated to
predicament. see if it qualifies as a nuisance as defined under the law.

In a litany of cases, We have held that it is inadequacy, not the As jurisprudence elucidates, nuisances are of two kinds: nuisance
mere absence of all other legal remedies and the danger of failure per se and nuisance per accidens. The first is recognized as a
of justice without the writ, that must usually determine the nuisance under any and all circumstances, because it constitutes a
propriety of certiorari . A remedy is plain, speedy and adequate if direct menace to public health or safety, and, for that reason, may
it will promptly relieve the petitioner from the injurious effects of be abated summarily under the undefined law of necessity. The
the judgment, order, or resolution of the lower court or agency. It second is that which depends upon certain conditions and
is understood, then, that a litigant need not mark time by circumstances, and its existence being a question of fact, it cannot
resorting to the less speedy remedy of appeal in order to have an be abated without due hearing thereon in a tribunal authorized to
order annulled and set aside for being patently void for failure of decide whether such a thing does in law constitute a
the trial court to comply with the Rules of nuisance.14cralawlawlibrary
In the case at bar, the hotel, in itself, cannot be considered as a
Before applying this doctrine, it must first be borne in mind that nuisance per se since this type of nuisance is generally defined as
respondents in this case have already taken measures towards an act, occupation, or structure, which is a nuisance at all times
implementing EO 10. In fact, substantial segments of the hotel and under any circumstances, regardless of location or
have already been demolished pursuant to the mayors directive. surrounding.15 Here, it is merely the hotels particular incident
It is then understandable why petitioner prayed for the issuance its locationand not its inherent qualities that rendered it a
of an injunctive writa provisional remedy that would otherwise nuisance. Otherwise stated, had it not been constructed in the no
have been unavailable had he sought a reversal from the office of build zone, Boracay West Cove could have secured the necessary
the provincial governor of Aklan. Evidently, petitioner correctly permits without issue. As such, petitioner is correct that the hotel
saw the urgent need for judicial intervention via certiorari . is not a nuisance per se, but to Our mind, it is still a nuisance per
In light of the foregoing, the CA should have proceeded to grab
the bull by its horns and determine the existence of the second b. Respondent mayor has the power to order the demolition of
element of certiorari whether or not there was grave abuse of illegal constructions
discretion on the part of respondents.
Generally, LGUs have no power to declare a particular thing as a
Upon Our finding that a petition for certiorari under Rule 65 is the nuisance unless such a thing is a nuisance per se.16 So it was held
appropriate remedy, We will proceed to resolve the core issues in in AC Enterprises v. Frabelle Properties Corp:17cralawlawlibrary
view of the urgency of the reliefs prayed for in the petition.
We agree with petitioners contention that, under Section
Respondents did not commit grave abuse of discretion 447(a)(3)(i) of R.A. No. 7160, otherwise known as the Local
Government Code, the Sangguniang Panglungsod is empowered
a. The hotels classification as a nuisance to enact ordinances declaring, preventing or abating noise and
other forms of nuisance. It bears stressing, however, that the
Article 694 of the Civil Code defines nuisance as any act, Sangguniang Bayan cannot declare a particular thing as a nuisance
omission, establishment, business, condition or property, or per se and order its condemnation. It does not have the power to
anything else that (1) injures or endangers the health or safety of find, as a fact, that a particular thing is a nuisance when such thing
others; (2) annoys or offends the senses; (3) shocks, defies or is not a nuisance per se; nor can it authorize the extrajudicial
disregards decency or morality; (4) obstructs or interferes with the condemnation and destruction of that as a nuisance which in its
free passage of any public highway or street, or any body of nature, situation or use is not such. Those things must be
water; or (5) hinders or impairs the use of determined and resolved in the ordinary courts of law. If a thing,
property.12cralawlawlibrary be in fact, a nuisance due to the manner of its operation, that
question cannot be determined by a mere resolution of the
In establishing a no build zone through local legislation, the LGU Sangguniang Bayan. (emphasis supplied)
effectively made a determination that constructions therein,
without first securing exemptions from the local council, qualify as Despite the hotels classification as a nuisance per accidens,
nuisances for they pose a threat to public safety. No build zones however, We still find in this case that the LGU may nevertheless
are intended for the protection of the public because the stability properly order the hotels demolition. This is because, in the
of the grounds foundation is adversely affected by the nearby exercise of police power and the general welfare clause,18
body of water. The ever present threat of high rising storm surges property rights of individuals may be subjected to restraints and
also justifies the ban on permanent constructions near the burdens in order to fulfill the objectives of the government.
shoreline. Indeed, the areas exposure to potential geo-hazards Otherwise stated, the government may enact legislation that may
cannot be ignored and ample protection to the residents of interfere with personal liberty, property, lawful businesses and
Malay, Aklan should be afforded. occupations to promote the general welfare.19cralawlawlibrary

Challenging the validity of the public respondents actuations, One such piece of legislation is the LGC, which authorizes city and
petitioner posits that the hotel cannot summarily be abated municipal governments, acting through their local chief
because it is not a nuisance per se, given the hundred million executives, to issue demolition orders. Under existing laws, the
peso-worth of capital infused in the venture. Citing Asilo, Jr. v. office of the mayor is given powers not only relative to its function
People,13 petitioner also argues that respondents should have as the executive official of the town; it has also been endowed
first secured a court order before proceeding with the demolition. with authority to hear issues involving property rights of
individuals and to come out with an effective order or resolution
thereon.20 Pertinent herein is Sec. 444 (b)(3)(vi) of the LGC, which
empowered the mayor to order the closure and removal of (e) Any building, structure, or contraption erected in any public
illegally constructed establishments for failing to secure the place within the Municipality of Malay such as but not limited to
necessary permits, to wit: streets, thoroughfares, sidewalks, plazas, beaches or in any other
public place are hereby declared as nuisance and illegal structure.
Section 444. The Chief Executive: Powers, Duties, Functions and Such building structure or contraption shall be demolished by the
Compensation. owner thereof or any of his authorized representative within ten
(10) days from receipt of the notice to demolish. Failure or refusal
xxxx on the part of the owner or any of his authorized representative
to demolish the illegal structure within the period herein above
(b) For efficient, effective and economical governance the purpose specified shall automatically authorize the government of the
of which is the general welfare of the municipality and its Municipality of Malay to demolish the same, gather and keep the
inhabitants pursuant to Section 16 of this Code, the municipal construction materials of the demolished structure. (emphasis
mayor shall: supplied)

(3) Initiate and maximize the generation of resources and Petitioner cannot justify his position by passing the blame onto
revenues, and apply the same to the implementation of the respondent mayor and the latters failure to act on his appeal
development plans, program objectives and priorities as provided for this does not, in any way, imply that petitioner can proceed
for under Section 18 of this Code, particularly those resources and with his infrastructure projects. On the contrary, this only means
revenues programmed for agro-industrial development and that the decision of the zoning administrator denying the
country-wide growth and progress, and relative thereto, shall: application still stands and that petitioner acquired no right to
construct on the no build zone. The illegality of the construction
(vi) Require owners of illegally constructed houses, buildings or cannot be cured by merely tendering payment for the necessary
other structures to obtain the necessary permit, subject to such fees and permits since the LGUs refusal rests on valid grounds.
fines and penalties as may be imposed by law or ordinance, or to
make necessary changes in the construction of the same when Instead of taking the law into his own hands, petitioner could have
said construction violates any law or ordinance, or to order the filed, as an alternative, a petition for mandamus to compel the
demolition or removal of said house, building or structure within respondent mayor to exercise discretion and resolve the
the period prescribed by law or ordinance. (emphasis supplied) controversy pending before his office. There is indeed an
exception to the rule that matters involving judgment and
c. Requirements for the exercise of the power are present discretion are beyond the reach of a writ of mandamus, for such
i. Illegality of structures writ may be issued to compel action in those matters, when
refused. Whether or not the decision would be for or against
In the case at bar, petitioner admittedly failed to secure the petitioner would be for the respondent mayor to decide, for while
necessary permits, clearances, and exemptions before the mandamus may be invoked to compel the exercise of discretion, it
construction, expansion, and operation of Boracay Wet Coves cannot compel such discretion to be exercised in a particular
hotel in Malay, Aklan. To recall, petitioner declared that the way.21 What would have been important was for the respondent
application for zoning compliance was still pending with the office mayor to immediately resolve the case for petitioner to be able to
of the mayor even though construction and operation were go through the motions that the zoning clearance application
already ongoing at the same time. As such, it could no longer be process entailed.
denied that petitioner openly violated Municipal Ordinance 2000-
131, which provides: Alas, petitioner opted to defy the zoning administrators ruling. He
consciously chose to violate not only the Ordinance but also Sec.
SECTION 9. Permits and Clearances. 301 of PD 1096, laying down the requirement of building permits,
which provides:
No building or structure shall be allowed to start construction Section 301. Building Permits. No person, firm or corporation,
unless a Building Permit therefore has been duly issued by the including any agency or instrumentality of the government shall
Office of the Municipal Engineer. Once issued, the building owner erect, construct, alter, repair, move, convert or demolish any
or any person in charge of the construction shall display on the lot building or structure or cause the same to be done without first
or on the building undergoing construction a placard containing obtaining a building permit therefor from the Building Official
the Building Permit Number and the date of its issue. The office of assigned in the place where the subject building is located or the
the Municipal Engineer shall not issue any building permit unless: building work is to be done.
The proposed construction has been duly issued a Zoning
Clearance by the Office of the Municipal Zoning Officer; This twin violation of law and ordinance warranted the LGUs
The proposed construction has been duly endorsed by the invocation of Sec. 444 (b)(3)(vi) of the LGC, which power is
Sangguniang Bayan through a Letter of Endorsement. separate and distinct from the power to summarily abate
(b) nuisances per se. Under the law, insofar as illegal constructions
Only buildings/structures which has complied with all the are concerned, the mayor can, after satisfying the requirement of
requirements for its construction as verified to by the Building due notice and hearing, order their closure and demolition.
Inspector and the Sangguniang Bayan shall be issued a Certificate ii. Observance of procedural due process rights
of Occupancy by the Office of the Municipal Engineer. In the case at bench, the due process requirement is deemed to
(c) have been sufficiently complied with. First, basic is the rule that
No Business or Mayors Permit shall be issued to businesses being public officers enjoy the presumption of regularity in the
undertaken on buildings or structures which were not issued a performance of their duties.22 The burden is on the petitioner
certificate of Occupancy beginning January 2001 and thereafter. herein to prove that Boracay West Cove was deprived of the
opportunity to be heard before EO 10 was issued. Regrettably,
copies of the Cease and Desist Order issued by the LGU and of the
SECTION 10. Penalties. assailed EO 10 itself were never attached to the petition before
this Court, which documents could have readily shed light on The argument does not persuade.
whether or not petitioner has been accorded the 10-day grace
period provided in Section 10 of the Ordinance. In view of this The rights granted to petitioner under the FLAgT are not
fact, the presumption of regularity must be sustained. Second, as unbridled. Forestlands, although under the management of the
quoted by petitioner in his petition before the CA, the assailed EO DENR, are not exempt from the territorial application of municipal
10 states that petitioner received notices from the municipality laws, for local government units legitimately exercise their powers
government on March 7 and 28, 2011, requiring Boracay West of government over their defined territorial jurisdiction.
Cove to comply with the zoning ordinance and yet it failed to do
so.23 If such was the case, the grace period can be deemed Furthermore, the conditions set forth in the FLAgT and the
observed and the establishment was already ripe for closure and limitations circumscribed in the ordinance are not mutually
demolition by the time EO 10 was issued in June. Third, the exclusive and are, in fact, cumulative. As sourced from Sec. 447
observance of the 10-day allowance for the owner to demolish (a)(5)(i) of the LGC:
the hotel was never questioned by petitioner so there is no need Section 447. Powers, Duties, Functions and Compensation.
to discuss the same. Verily, the only grounds invoked by petitioner
in crying due process violation are (1) the absence of a court order (a) The sangguniang bayan, as the legislative body of the
prior to demolition and (2) the municipal governments exercise of municipality, shall enact ordinances, approve resolutions and
jurisdiction over the controversy instead of the DENR. Therefore, appropriate funds for the general welfare of the municipality and
it can no longer be belatedly argued that the 10-day grace period its inhabitants pursuant to Section 16 of this Code and in the
was not observed because to entertain the same would result in proper exercise of the corporate powers of the municipality as
the violation of the respondents own due process rights. provided for under Section 22 of this Code, and shall:

Given the presence of the requirements under Sec. 444 (b)(3)(vi) (5) Approve ordinances which shall ensure the efficient and
of the LGC, whether the building constituted a nuisance per se or effective delivery of the basic services and facilities as provided for
a nuisance per accidens becomes immaterial. The hotel was under Section 17 of this Code, and in addition to said services and
demolished not exactly because it is a nuisance but because it facilities, shall:
failed to comply with the legal requirements prior to construction.
It just so happened that, in the case at bar, the hotels incident (i) Provide for the establishment, maintenance, protection, and
that qualified it as a nuisance per accidensits being constructed conservation of communal forests and watersheds, tree parks,
within the no build zonefurther resulted in the non-issuance of greenbelts, mangroves, and other similar forest development
the necessary permits and clearances, which is a ground for projects x x x. (emphasis added)
demolition under the LGC. Under the premises, a court order that
is required under normal circumstances is hereby dispensed with. Thus, aside from complying with the provisions in the FLAgT
granted by the DENR, it was incumbent on petitioner to likewise
d. The FLAgT cannot prevail over the municipal ordinance and comply with the no build zone restriction under Municipal
PD 1096 Ordinance 2000-131, which was already in force even before the
FLAgT was entered into. On this point, it is well to stress that
Petitioner next directs our attention to the following FLAgT Sections 6 and 8 of the Ordinance do not exempt petitioner from
provision complying with the restrictions since these provisions adverted to
grant exemptions from the ban on constructions on slopes and
VII. The SECOND PARTY may construct permanent and/or swamps, not on the no build zone.
temporary improvements or infrastructure in the FLAgT Area
necessary and appropriate for its development for tourism Additionally, the FLAgT does not excuse petitioner from complying
purposes pursuant to the approved SMP. Permanent with PD 1096. As correctly pointed out by respondents, the
Improvements refer to access roads, and buildings or structures agreement cannot and will not amend or change the law because
which adhere to the ground in a fixed and permanent manner. On a legislative act cannot be altered by mere contractual agreement.
the other hand, Temporary Improvements include those which Hence, petitioner has no valid reason for its failure to secure a
are detachable from the foundation or the ground introduced by building permit pursuant to Sec. 301 of the National Building
the SECOND PARTY in the FLAgT Area and which the SECOND Code.
PARTY may remove or dismantle upon expiration or cancellation
of this AGREEMENT x x x.24chanrobleslaw e. The DENR does not have primary jurisdiction over the
Taken in conjunction with the exceptions laid down in Sections 6
and 8 of the Ordinance, petitioner argues that Boracay West Cove Lastly, in ascribing grave abuse of discretion on the part of the
is exempted from securing permits from the LGU. Said exceptions respondent mayor, petitioner argued that the hotel site is a
read: forestland under the primary jurisdiction of the DENR. As such,
the merits of the case should have been passed upon by the
SECTION 6. No building or structure shall be allowed to be agency and not by the LGU. In the alternative, petitioner explains
constructed on a slope Twenty Five Percent (25%) or higher unless that even if jurisdiction over the matter has been devolved in
provided with soil erosion protective structures and authorized by favor of the LGU, the DENR still has the power of review and
the Department of Environment and Natural Resources. supervision over the formers rulings. As cited by the petitioner,
the LGC reads:
SECTION 8. No building or structure shall be allowed to be
constructed on a swamp or other water-clogged areas unless Section 17. Basic Services and Facilities.
authorized by the Department of Environment and Natural
Resources. (b) Such basic services and facilities include, but are not limited to,
the following
According to petitioner, the fact that it was issued a FLAgT
constitutes sufficient authorization from the DENR to proceed (2) For a Municipality:
with the construction of the three-storey hotel.
(ii) Pursuant to national policies and subject to supervision,
control and review of the DENR, implementation of community- SECTION 3. IMPOSITION. A special assessment equivalent to one-
based forestry projects which include integrated social forestry half percent (0.5%) on the assessed value of land in excess of One
programs and similar projects; management and control of Hundred Thousand Pesos (Php100,000.00) shall be collected by
communal forests with an area not exceeding fifty (50) square the City Treasurer which shall accrue to the Socialized Housing
kilometers; establishment of tree parks, greenbelts, and similar Programs of the Quezon City Government. The special assessment
forest development projects. (emphasis added) shall accrue to the General Fund under a special account to be
established for the purpose.
Petitioner has made much of the fact that in line with this
provision, the DENR Region 6 had issued an opinion favourable to Effective for five (5) years, the Socialized Housing Tax (SHT) shall
petitioner.25 To petitioner, the adverted opinion effectively be utilized by the Quezon City Government for the following
reversed the findings of the respondent mayor that the structure projects: (a) land purchase/land banking; (b) improvement of
introduced was illegally constructed. current/existing socialized housing facilities; (c) land development;
(d) construction of core houses, sanitary cores, medium-rise
We disagree. buildings and other similar structures; and (e) financing of public-
private partnership agreement of the Quezon City Government
In alleging that the case concerns the development and the and National Housing Authority (NHA) with the private sector.3
proper use of the countrys environment and natural resources, Under certain conditions, a tax credit shall be enjoyed by
petitioner is skirting the principal issue, which is Boracay West taxpayers regularly paying the special assessment:
Coves non-compliance with the permit, clearance, and zoning
requirements for building constructions under national and SECTION 7. TAX CREDIT. Taxpayers dutifully paying the special
municipal laws. He downplays Boracay West Coves omission in a assessment tax as imposed by this ordinance shall enjoy a tax
bid to justify ousting the LGU of jurisdiction over the case and credit. The tax credit may be availed of only after five (5) years of
transferring the same to the DENR. He attempts to blow the issue continue[d] payment. Further, the taxpayer availing this tax credit
out of proportion when it all boils down to whether or not the must be a taxpayer in good standing as certified by the City
construction of the three-storey hotel was supported by the Treasurer and City Assessor.
necessary documentary requirements.
The tax credit to be granted shall be equivalent to the total
Based on law and jurisprudence, the office of the mayor has amount of the special assessment paid by the property owner,
quasi-judicial powers to order the closing and demolition of which shall be given as follows:
establishments. This power granted by the LGC, as earlier
explained, We believe, is not the same power devolved in favor of Furthermore, only the registered owners may avail of the tax
the LGU under Sec. 17 (b)(2)(ii), as above-quoted, which is subject credit and may not be continued by the subsequent property
to review by the DENR. The fact that the building to be owners even if they are buyers in good faith, heirs or possessor of
demolished is located within a forestland under the a right in whatever legal capacity over the subject property.4
administration of the DENR is of no moment, for what is involved
herein, strictly speaking, is not an issue on environmental On the other hand, Ordinance No. SP-2235, S-20135 was enacted
protection, conservation of natural resources, and the on December 16, 2013 and took effect ten days after when it was
maintenance of ecological balance, but the legality or illegality of approved by respondent City Mayor.6 The proceeds collected
the structure. Rather than treating this as an environmental issue from the garbage fees on residential properties shall be deposited
then, focus should not be diverted from the root cause of this solely and exclusively in an earmarked special account under the
debaclecompliance. general fund to be utilized for garbage collections.7 Section 1 of
the Ordinance set forth the schedule and manner for the
Ultimately, the purported power of review by a regional office of collection of garbage fees:
the DENR over respondents actions exercised through an
instrumentality of an ex-parte opinion, in this case, finds no SECTION 1. The City Government of Quezon City in conformity
sufficient basis. At best, the legal opinion rendered, though with and in relation to Republic Act No. 7160, otherwise known as
perhaps informative, is not conclusive on the courts and should be the Local Government Code of 1991 HEREBY IMPOSES THE
WHEREFORE, in view of the foregoing, the petition is hereby
DENIED for lack of merit. The Decision and the Resolution of the a)
Court of Appeals in CA-G.R. SP No. 120042 dated August 13, 2013 High-rise Condominium The Homeowners Association of high-
and February 3, 2014, respectively, are hereby AFFIRMED. rise condominiums shall pay the annual garbage fee on the total
size of the entire condominium and socialized Housing Unit and an
Ferrer vs bautista additional garbage fee shall be collected based on area occupied
for every unit already sold or being amortized.
Before this Court is a petition for certiorari under Rule 65 of the b)
Rules of Court with prayer for the issuance of a temporary High-rise apartment units Owners of high-rise apartment units
restraining order (TRO) seeking to declare unconstitutional and shall pay the annual garbage fee on the total lot size of the entire
illegal Ordinance Nos. SP-2095, S-2011 and SP-2235, S-2013 on apartment and an additional garbage fee based on the schedule
the Socialized Housing Tax and Garbage Fee, respectively, which prescribed herein for every unit occupied.
are being imposed by the respondents. The collection of the garbage fee shall accrue on the first day of
January and shall be paid simultaneously with the payment of the
real property tax, but not later than the first quarter installment.8
The Case In case a household owner refuses to pay, a penalty of 25% of the
garbage fee due, plus an interest of 2% per month or a fraction
On October 17, 2011,1 respondent Quezon City Council enacted thereof, shall be charged.9ChanRoblesVirtualawlibrary
Ordinance No. SP-2095, S-2011,2 or the Socialized Housing Tax of
Quezon City, Section 3 of which provides:
Petitioner alleges that he is a registered co-owner of a 371- likewise is specific in providing that the power to impose a tax,
square-meter residential property in Quezon City which is covered fee, or charge, or to generate revenue shall be exercised by the
by Transfer Certificate of Title (TCT) No. 216288, and that, on sanggunian of the local government unit concerned through an
January 7, 2014, he paid his realty tax which already included the appropriate ordinance.16ChanRoblesVirtualawlibrary
garbage fee in the sum of
Php100.00.10ChanRoblesVirtualawlibrary Also, although the instant petition is styled as a petition for
certiorari, it essentially seeks to declare the unconstitutionality
The instant petition was filed on January 17, 2014. We issued a and illegality of the questioned ordinances. It, thus, partakes of
TRO on February 5, 2014, which enjoined the enforcement of the nature of a petition for declaratory relief over which this Court
Ordinance Nos. SP-2095 and SP-2235 and required respondents to has only appellate, not original,
comment on the petition without necessarily giving due course jurisdiction.17ChanRoblesVirtualawlibrary
Despite these, a petition for declaratory relief may be treated as
Respondents filed their Comment12 with urgent motion to one for prohibition or mandamus, over which We exercise original
dissolve the TRO on February 17, 2014. Thereafter, petitioner filed jurisdiction, in cases with far-reaching implications or one which
a Reply and a Memorandum on March 3, 2014 and September 8, raises transcendental issues or questions that need to be resolved
2014, respectively. for the public good.18 The judicial policy is that this Court will
entertain direct resort to it when the redress sought cannot be
Procedural Matters obtained in the proper courts or when exceptional and compelling
circumstances warrant availment of a remedy within and calling
A. Propriety of a Petition for Certiorari for the exercise of Our primary
Respondents are of the view that this petition for certiorari is
improper since they are not tribunals, boards or officers exercising Section 2, Rule 65 of the Rules of Court lay down under what
judicial or quasi-judicial functions. Petitioner, however, counters circumstances a petition for prohibition may be filed:
that in enacting Ordinance Nos. SP-2095 and SP-2235, the Quezon
City Council exercised quasi-judicial function because the SEC. 2. Petition for prohibition. - When the proceedings of any
ordinances ruled against the property owners who must pay the tribunal, corporation, board, officer or person, whether exercising
SHT and the garbage fee, exacting from them funds for basic judicial, quasi-judicial or ministerial functions, are without or in
essential public services that they should not be held liable. Even excess of its or his jurisdiction, or with grave abuse of discretion
if a Rule 65 petition is improper, petitioner still asserts that this amounting to lack or excess of jurisdiction, and there is no appeal
Court, in a number of cases like in Rosario v. Court of Appeals,13 or any other plain, speedy, and adequate remedy in the ordinary
has taken cognizance of an improper remedy in the interest of course of law, a person aggrieved thereby may file a verified
justice. petition in the proper court, alleging the facts with certainty and
praying that judgment be rendered commanding the respondent
We agree that respondents neither acted in any judicial or quasi- to desist from further proceeding in the action or matter specified
judicial capacity nor arrogated unto themselves any judicial or therein, or otherwise granting such incidental reliefs as law and
quasi-judicial prerogatives. justice may require.
A respondent is said to be exercising judicial function where he
has the power to determine what the law is and what the legal In a petition for prohibition against any tribunal, corporation,
rights of the parties are, and then undertakes to determine these board, or person whether exercising judicial, quasi-judicial, or
questions and adjudicate upon the rights of the parties. ministerial functions who has acted without or in excess of
jurisdiction or with grave abuse of discretion, the petitioner prays
Quasi-judicial function, on the other hand, is a term which that judgment be rendered, commanding the respondents to
applies to the actions, discretion, etc., of public administrative desist from further proceeding in the action or matter specified in
officers or bodies required to investigate facts or ascertain the the petition. In this case, petitioner's primary intention is to
existence of facts, hold hearings, and draw conclusions from them prevent respondents from implementing Ordinance Nos. SP-2095
as a basis for their official action and to exercise discretion of a and SP-2235. Obviously, the writ being sought is in the nature of a
judicial nature. prohibition, commanding desistance.

Before a tribunal, board, or officer may exercise judicial or quasi- We consider that respondents City Mayor, City Treasurer, and City
judicial acts, it is necessary that there be a law that gives rise to Assessor are performing ministerial functions. A ministerial
some specific rights of persons or property under which adverse function is one that an officer or tribunal performs in the context
claims to such rights are made, and the controversy ensuing of a given set of facts, in a prescribed manner and without regard
therefrom is brought before a tribunal, board, or officer clothed for the exercise of his or its own judgment, upon the propriety or
with power and authority to determine the law and adjudicate the impropriety of the act done.20 Respondent Mayor, as chief
respective rights of the contending parties.14 executive of the city government, exercises such powers and
performs such duties and functions as provided for by the LGC and
For a writ of certiorari to issue, the following requisites must other laws.21 Particularly, he has the duty to ensure that all taxes
concur: (1) it must be directed against a tribunal, board, or officer and other revenues of the city are collected, and that city funds
exercising judicial or quasi-judicial functions; (2) the tribunal, are applied to the payment of expenses and settlement of
board, or officer must have acted without or in excess of obligations of the city, in accordance with law or ordinance.22 On
jurisdiction or with grave abuse of discretion amounting to lack or the other hand, under the LGC, all local taxes, fees, and charges
excess of jurisdiction; and (3) there is no appeal or any plain, shall be collected by the provincial, city, municipal, or barangay
speedy, and adequate remedy in the ordinary course of law. The treasurer, or their duly-authorized deputies, while the assessor
enactment by the Quezon City Council of the assailed ordinances shall take charge, among others, of ensuring that all laws and
was done in the exercise of its legislative, not judicial or quasi- policies governing the appraisal and assessment of real properties
judicial, function. Under Republic Act (R.A.) No. 7160, or the Local for taxation purposes are properly executed.23 Anent the SHT, the
Government Code of 1991 (LGC), local legislative power shall be Department of Finance (DOF) Local Finance Circular No. 1-97,
exercised by the Sangguniang Panlungsod for the city.15 Said law dated April 16, 1997, is more specific:
prosecuted, he must appear to be the present real owner of the
6.3 The Assessors office of the Id.ntified LGU shall: right sought to be enforced."27
immediately undertake an inventory of lands within its jurisdiction
which shall be subject to the levy of the Social Housing Tax (SHT) Legal standing or locus standi calls for more than just a
by the local sanggunian concerned; generalized grievance.28 The concept has been defined as a
personal and substantial interest in the case such that the party
inform the affected registered owners of the effectivity of the has sustained or will sustain direct injury as a result of the
SHT; a list of the lands and registered owners shall also be posted governmental act that is being challenged.29 The gist of the
in 3 conspicuous places in the city/municipality; question of standing is whether a party alleges such personal
stake in the outcome of the controversy as to assure that concrete
furnish the Treasurers office and the local sanggunian concerned adverseness which sharpens the presentation of issues upon
of the list of lands affected; which the court depends for illumination of difficult constitutional
6.4 The Treasurers office shall: questions.30ChanRoblesVirtualawlibrary
collect the Social Housing Tax on top of the Real Property Tax, SEF
Tax and other special assessments; A party challenging the constitutionality of a law, act, or statute
must show not only that the law is invalid, but also that he has
report to the DOF, thru the Bureau of Local Government Finance, sustained or is in immediate, or imminent danger of sustaining
and the Mayors office the monthly collections on Social Housing some direct injury as a result of its enforcement, and not merely
Tax (SHT). An annual report should likewise be submitted to the that he suffers thereby in some indefinite way. It must be shown
HUDCC on the total revenues raised during the year pursuant to that he has been, or is about to be, denied some right or privilege
Sec. 43, R.A. 7279 and the manner in which the same was to which he is lawfully entitled, or that he is about to be subjected
disbursed. to some burdens or penalties by reason of the statute complained
Petitioner has adduced special and important reasons as to why of.31ChanRoblesVirtualawlibrary
direct recourse to Us should be allowed. Aside from presenting a
novel question of law, this case calls for immediate resolution Tested by the foregoing, petitioner in this case clearly has legal
since the challenged ordinances adversely affect the property standing to file the petition. He is a real party-in-interest to assail
interests of all paying constituents of Quezon City. As well, this the constitutionality and legality of Ordinance Nos. SP-2095 and
petition serves as a test case for the guidance of other local SP-2235 because respondents did not dispute that he is a
government units (LGUs). Indeed, the petition at bar is of registered co-owner of a residential property in Quezon City and
transcendental importance warranting a relaxation of the doctrine that he paid property tax which already included the SHT and the
of hierarchy of courts. In Social Justice Society (SJS) Officers, et al. garbage fee. He has substantial right to seek a refund of the
v. Lim,24 the Court cited the case of Senator Jaworski v. Phil. payments he made and to stop future imposition. While he is a
Amusement & Gaming Corp.,25 where We ratiocinated: lone petitioner, his cause of action to declare the validity of the
subject ordinances is substantial and of paramount interest to
Granting arguendo that the present action cannot be properly similarly situated property owners in Quezon City.
treated as a petition for prohibition, the transcendental
importance of the issues involved in this case warrants that we set C. Litis Pendentia
aside the technical defects and take primary jurisdiction over the
petition at bar. x x x This is in accordance with the well- Respondents move for the dismissal of this petition on the ground
entrenched principle that rules of procedure are not inflexible of litis pendentia. They claim that, as early as February 22, 2012, a
tools designed to hinder or delay, but to facilitate and promote case entitled Alliance of Quezon City Homeowners, Inc., et al., v.
the administration of justice. Their strict and rigid application, Hon. Herbert Bautista, et al., docketed as Civil Case No. Q-12-7-
which would result in technicalities that tend to frustrate, rather 820, has been pending in the Quezon City Regional Trial Court,
than promote substantial justice, must always be eschewed.26 Branch 104, which assails the legality of Ordinance No. SP-2095.
Relying on City of Makati, et al. v. Municipality (now City) of
B. Locus Standi of Petitioner Taguig, et al.,32 respondents assert that there is substantial
identity of parties between the two cases because petitioner
Respondents challenge petitioners legal standing to file this case herein and plaintiffs in the civil case filed their respective cases as
on the ground that, in relation to Section 3 of Ordinance No. SP- taxpayers of Quezon City.
2095, petitioner failed to allege his ownership of a property that
has an assessed value of more than Php100,000.00 and, with For petitioner, however, respondents contention is untenable
respect to Ordinance No. SP-2335, by what standing or personality since he is not a party in Alliance and does not even have the
he filed the case to nullify the same. According to respondents, remotest identity or association with the plaintiffs in said civil
the petition is not a class suit, and that, for not having specifically case. Moreover, respondents arguments would deprive this Court
alleged that petitioner filed the case as a taxpayer, it could only be of its jurisdiction to determine the constitutionality of laws under
surmised whether he is a party-in-interest who stands to be Section 5, Article VIII of the 1987
directly benefited or injured by the judgment in this case. Constitution.33ChanRoblesVirtualawlibrary
It is a general rule that every action must be prosecuted or
defended in the name of the real party-in-interest, who stands to Litis pendentia is a Latin term which literally means a pending
be benefited or injured by the judgment in the suit, or the party suit and is variously referred to in some decisions as lis pendens
entitled to the avails of the suit. and auter action pendant.34 While it is normally connected with
the control which the court has on a property involved in a suit
Jurisprudence defines interest as "material interest, an interest in during the continuance proceedings, it is more interposed as a
issue and to be affected by the decree, as distinguished from ground for the dismissal of a civil action pending in court.35 In
mere interest in the question involved, or a mere incidental Film Development Council of the Philippines v. SM Prime Holdings,
interest. By real interest is meant a present substantial interest, as Inc.,36 We elucidated:
distinguished from a mere expectancy or a future, contingent,
subordinate, or consequential interest." "To qualify a person to be Litis pendentia, as a ground for the dismissal of a civil action,
a real party-in-interest in whose name an action must be refers to a situation where two actions are pending between the
same parties for the same cause of action, so that one of them
becomes unnecessary and vexatious. It is based on the policy measures shall be in accordance with the provisions of this Code:
against multiplicity of suit and authorizes a court to dismiss a case Provided, That public hearings shall be conducted for the purpose
motu proprio. prior to the enactment thereof: Provided, further, That any
question on the constitutionality or legality of tax ordinances or
xxxx revenue measures may be raised on appeal within thirty (30) days
from the effectivity thereof to the Secretary of Justice who shall
The requisites in order that an action may be dismissed on the render a decision within sixty (60) days from the date of receipt of
ground of litis pendentia are: (a) the identity of parties, or at least the appeal: Provided, however, That such appeal shall not have
such as representing the same interest in both actions; (b) the the effect of suspending the effectivity of the ordinance and the
identity of rights asserted and relief prayed for, the relief being accrual and payment of the tax, fee, or charge levied therein:
founded on the same facts, and (c) the identity of the two cases Provided, finally, That within thirty (30) days after receipt of the
such that judgment in one, regardless of which party is successful, decision or the lapse of the sixty-day period without the Secretary
would amount to res judicata in the other. of Justice acting upon the appeal, the aggrieved party may file
appropriate proceedings with a court of competent jurisdiction.
The underlying principle of litis pendentia is the theory that a
party is not allowed to vex another more than once regarding the The provision, the constitutionality of which was sustained in
same subject matter and for the same cause of action. This theory Drilon v. Lim,40 has been construed as mandatory41 considering
is founded on the public policy that the same subject matter that
should not be the subject of controversy in courts more than A municipal tax ordinance empowers a local government unit to
once, in order that possible conflicting judgments may be avoided impose taxes. The power to tax is the most effective instrument to
for the sake of the stability of the rights and status of persons, and raise needed revenues to finance and support the myriad
also to avoid the costs and expenses incident to numerous suits. activities of local government units for the delivery of basic
services essential to the promotion of the general welfare and
Among the several tests resorted to in ascertaining whether two enhancement of peace, progress, and prosperity of the people.
suits relate to a single or common cause of action are: (1) whether Consequently, any delay in implementing tax measures would be
the same evidence would support and sustain both the first and to the detriment of the public. It is for this reason that protests
second causes of action; and (2) whether the defenses in one case over tax ordinances are required to be done within certain time
may be used to substantiate the complaint in the other. frames. x x x.42

The determination of whether there is an identity of causes of The obligatory nature of Section 187 was underscored in Hagonoy
action for purposes of litis pendentia is inextricably linked with Market Vendor Asso. v. Municipality of
that of res judicata, each constituting an element of the other. In Hagonoy:43cralawlawlibrary
either case, both relate to the sound practice of including, in a x x x [T]he timeframe fixed by law for parties to avail of their legal
single litigation, the disposition of all issues relating to a cause of remedies before competent courts is not a mere technicality
action that is before a court.37 that can be easily brushed aside. The periods stated in Section 187
of the Local Government Code are mandatory. x x x Being its
There is substantial identity of the parties when there is a lifeblood, collection of revenues by the government is of
community of interest between a party in the first case and a paramount importance. The funds for the operation of its
party in the second case albeit the latter was not impleaded in the agencies and provision of basic services to its inhabitants are
first case.38 Moreover, the fact that the positions of the parties largely derived from its revenues and collections. Thus, it is
are reversed, i.e., the plaintiffs in the first case are the defendants essential that the validity of revenue measures is not left
in the second case or vice-versa, does not negate the identity of uncertain for a considerable length of time. Hence, the law
parties for purposes of determining whether the case is provided a time limit for an aggrieved party to assail the legality of
dismissible on the ground of litis revenue measures and tax ordinances.44
Despite these cases, the Court, in Ongsuco, et al. v. Hon.
In this case, it is notable that respondents failed to attach any Malones,45 held that there was no need for petitioners therein to
pleading connected with the alleged civil case pending before the exhaust administrative remedies before resorting to the courts,
Quezon City trial court. Granting that there is substantial identity considering that there was only a pure question of law, the parties
of parties between said case and this petition, dismissal on the did not dispute any factual matter on which they had to present
ground of litis pendentia still cannot be had in view of the absence evidence. Likewise, in Cagayan Electric Power and Light Co., Inc. v.
of the second and third requisites. There is no way for Us to City of Cagayan de Oro,46 We relaxed the application of the rules
determine whether both cases are based on the same set of facts in view of the more substantive matters. For the same reasons,
that require the presentation of the same evidence. Even if this petition is an exception to the general rule.
founded on the same set of facts, the rights asserted and reliefs
prayed for could be different. Moreover, there is no basis to rule Substantive Issues
that the two cases are intimately related and/or intertwined with
one another such that the judgment that may be rendered in one, Petitioner asserts that the protection of real properties from
regardless of which party would be successful, would amount to informal settlers and the collection of garbage are basic and
res judicata in the other. essential duties and functions of the Quezon City Government. By
imposing the SHT and the garbage fee, the latter has shown a
D. Failure to Exhaust Administrative Remedies penchant and pattern to collect taxes to pay for public services
that could be covered by its revenues from taxes imposed on
Respondents contend that petitioner failed to exhaust property, idle land, business, transfer, amusement, etc., as well as
administrative remedies for his non-compliance with Section 187 the Internal Revenue Allotment (IRA) from the National
of the LGC, which mandates: Government. For petitioner, it is noteworthy that respondents did
not raise the issue that the Quezon City Government is in dire
Section 187. Procedure for Approval and Effectivity of Tax financial state and desperately needs money to fund housing for
Ordinances and Revenue Measures; Mandatory Public Hearings. informal settlers and to pay for garbage collection. In fact, it has
The procedure for approval of local tax ordinances and revenue
not denied that its revenue collection in 2012 is in the sum of the failure of respondent Quezon City Mayor and Council to
P13.69 billion. perform their duty to secure and protect real property owners
from informal settlers, thereby burdening them with the expenses
Moreover, the imposition of the SHT and the garbage fee cannot to provide funds for housing. For petitioner, the SHT cannot be
be justified by the Quezon City Government as an exercise of its viewed as a charity from real property owners since it is forced,
power to create sources of income under Section 5, Article X of not voluntary.
the 1987 Constitution.47 According to petitioner, the
constitutional provision is not a carte blanche for the LGU to tax Also, petitioner argues that the collection of the SHT is a kind of
everything under its territorial and political jurisdiction as the class legislation that violates the right of property owners to equal
provision itself admits of guidelines and limitations. protection of the laws since it favors informal settlers who occupy
property not their own and pay no taxes over law-abiding real
Petitioner further claims that the annual property tax is an ad property owners who pay income and realty taxes.
valorem tax, a percentage of the assessed value of the property,
which is subject to revision every three (3) years in order to reflect Petitioner further contends that respondents characterization of
an increase in the market value of the property. The SHT and the the SHT as nothing more than an advance payment on the real
garbage fee are actually increases in the property tax which are property tax has no statutory basis. Allegedly, property tax
not based on the assessed value of the property or its cannot be collected before it is due because, under the LGC,
reassessment every three years; hence, in violation of Sections chartered cities are authorized to impose property tax based on
232 and 233 of the LGC.48ChanRoblesVirtualawlibrary the assessed value and the general revision of assessment that is
made every three (3) years.
For their part, respondents relied on the presumption in favor of
the constitutionality of Ordinance Nos. SP-2095 and SP-2235, As to the rationale of SHT stated in Ordinance No. SP-2095, which,
invoking Victorias Milling Co., Inc. v. Municipality of Victorias, in turn, was based on Section 43 of the UDHA, petitioner asserts
etc.,49People v. Siton, et al.,50 and Hon. Ermita v. Hon. Aldecoa- that there is no specific provision in the 1987 Constitution stating
Delorino.51 They argue that the burden of establishing the that the ownership and enjoyment of property bear a social
invalidity of an ordinance rests heavily upon the party challenging function. And even if there is, it is seriously doubtful and far-
its constitutionality. They insist that the questioned ordinances fetched that the principle means that property owners should
are proper exercises of police power similar to Telecom. & provide funds for the housing of informal settlers and for home
Broadcast Attys. of the Phils., Inc. v. COMELEC52 and Social Justice site development. Social justice and police power, petitioner
Society (SJS), et al. v. Hon. Atienza, Jr.53 and that their enactment believes, does not mean imposing a tax on one, or that one has to
finds basis in the social justice principle enshrined in Section 9,54 give up something, for the benefit of another. At best, the
Article II of the 1987 Constitution. principle that property ownership and enjoyment bear a social
function is but a reiteration of the Civil Law principle that property
As to the issue of publication, respondents argue that where the should not be enjoyed and abused to the injury of other
law provides for its own effectivity, publication in the Official properties and the community, and that the use of the property
Gazette is not necessary so long as it is not punitive in character, may be restricted by police power, the exercise of which is not
citing Balbuna, et al. v. Hon. Secretary of Education, et al.55 and involved in this case.
Askay v. Cosalan.56 Thus, Ordinance No. SP-2095 took effect after
its publication, while Ordinance No. SP-2235 became effective Finally, petitioner alleges that 6 Bistekvilles will be constructed out
after its approval on December 26, 2013. of the SHT collected. Bistek is the monicker of respondent City
Mayor. The Bistekvilles makes it clear, therefore, that politicians
Additionally, the parties articulate the following positions: will take the credit for the tax imposed on real property owners.

On the Socialized Housing Tax On the Garbage Fee

Respondents emphasize that the SHT is pursuant to the social Respondents claim that Ordinance No. S-2235, which is an
justice principle found in Sections 1 and 2, Article XIII57 of the exercise of police power, collects on the average from every
1987 Constitution and Sections 2 (a)58 and 4359 of R.A. No. 7279, household a garbage fee in the meager amount of thirty-three
or the Urban Development and Housing Act of 1992 (UDHA). (33) centavos per day compared with the sum of P1,659.83 that
the Quezon City Government annually spends for every household
Relying on Manila Race Horse Trainers Assn., Inc. v. De La for garbage collection and waste
Fuente,60 and Victorias Milling Co., Inc. v. Municipality of management.62ChanRoblesVirtualawlibrary
Victorias, etc.,61 respondents assert that Ordinance No. SP-2095
applies equally to all real property owners without discrimination. In addition, there is no double taxation because the ordinance
There is no way that the ordinance could violate the equal involves a fee. Even assuming that the garbage fee is a tax, the
protection clause because real property owners and informal same cannot be a direct duplicate tax as it is imposed on a
settlers do not belong to the same class. different subject matter and is of a different kind or character.
Based on Villanueva, et al. v. City of Iloilo63 and Victorias Milling
Ordinance No. SP-2095 is also not oppressive since the tax rate Co., Inc. v. Municipality of Victorias, etc.,64 there is no taxing
being imposed is consistent with the UDHA. While the law twice because the real property tax is imposed on ownership
authorizes LGUs to collect SHT on properties with an assessed based on its assessed value, while the garbage fee is required on
value of more than P50,000.00, the questioned ordinance only the domestic household. The only reference to the property is the
covers properties with an assessed value exceeding P100,000.00. determination of the applicable rate and the facility of collection.
As well, the ordinance provides for a tax credit equivalent to the
total amount of the special assessment paid by the property Petitioner argues, however, that Ordinance No. S-2235 cannot be
owner beginning in the sixth (6th) year of the effectivity of the justified as an exercise of police power. The cases of Calalang v.
ordinance. Williams,65Patalinghug v. Court of Appeals,66 and Social Justice
Society (SJS), et al. v. Hon. Atienza, Jr.,67 which were cited by
On the contrary, petitioner claims that the collection of the SHT is respondents, are inapplicable since the assailed ordinance is a
tantamount to a penalty imposed on real property owners due to
revenue measure and does not regulate the disposal or other An ordinance must pass muster under the test of constitutionality
aspect of garbage. and the test of consistency with the prevailing laws.73 If not, it is
void.74 Ordinance should uphold the principle of the supremacy
The subject ordinance, for petitioner, is discriminatory as it of the Constitution.75 As to conformity with existing statutes,
collects garbage fee only from domestic households and not from Batangas CATV, Inc. v. Court of Appeals76 has this to say:
restaurants, food courts, fast food chains, and other commercial
dining places that spew garbage much more than residential It is a fundamental principle that municipal ordinances are inferior
property owners. in status and subordinate to the laws of the state. An ordinance in
conflict with a state law of general character and statewide
Petitioner likewise contends that the imposition of garbage fee is application is universally held to be invalid. The principle is
tantamount to double taxation because garbage collection is a frequently expressed in the declaration that municipal authorities,
basic and essential public service that should be paid out from under a general grant of power, cannot adopt ordinances which
property tax, business tax, transfer tax, amusement tax, infringe the spirit of a state law or repugnant to the general policy
community tax certificate, other taxes, and the IRA of the Quezon of the state. In every power to pass ordinances given to a
City Government. To bolster the claim, he states that the revenue municipality, there is an implied restriction that the ordinances
collection of the Quezon City Government reached Php13.69 shall be consistent with the general law. In the language of Justice
billion in 2012. A small portion of said amount could be spent for Isagani Cruz (ret.), this Court, in Magtajas vs. Pryce Properties
garbage collection and other essential services. Corp., Inc., ruled that:

It is further noted that the Quezon City Government already The rationale of the requirement that the ordinances should not
collects garbage fee under Section 4768 of R.A. No. 9003, or the contravene a statute is obvious. Municipal governments are only
Ecological Solid Waste Management Act of 2000, which authorizes agents of the national government. Local councils exercise only
LGUs to impose fees in amounts sufficient to pay the costs of delegated legislative powers conferred on them by Congress as
preparing, adopting, and implementing a solid waste management the national lawmaking body. The delegate cannot be superior to
plan, and that LGUs have access to the Solid Waste Management the principal or exercise powers higher than those of the latter. It
(SWM) Fund created under Section 4669 of the same law. Also, is a heresy to suggest that the local government units can undo
according to petitioner, it is evident that Ordinance No. S-2235 is the acts of Congress, from which they have derived their power in
inconsistent with R.A. No. 9003 for while the law encourages the first place, and negate by mere ordinance the mandate of the
segregation, composting, and recycling of waste, the ordinance statute.
only emphasizes the collection and payment of garbage fee; while
the law calls for an active involvement of the barangay in the Municipal corporations owe their origin to, and derive their
collection, segregation, and recycling of garbage, the ordinance powers and rights wholly from the legislature. It breathes into
skips such mandate. them the breath of life, without which they cannot exist. As it
creates, so it may destroy. As it may destroy, it may abridge and
Lastly, in challenging the ordinance, petitioner avers that the control. Unless there is some constitutional limitation on the right,
garbage fee was collected even if the required publication of its the legislature might, by a single act, and if we can suppose it
approval had not yet elapsed. He notes that on January 7, 2014, capable of so great a folly and so great a wrong, sweep from
he paid his realty tax which already included the garbage fee. existence all of the municipal corporations in the State, and the
corporation could not prevent it. We know of no limitation on the
The Courts Ruling right so far as to the corporation themselves are concerned. They
are, so to phrase it, the mere tenants at will of the legislature.
Respondents correctly argued that an ordinance, as in every law,
is presumed valid. This basic relationship between the national legislature and the
An ordinance carries with it the presumption of validity. The local government units has not been enfeebled by the new
question of reasonableness though is open to judicial inquiry. provisions in the Constitution strengthening the policy of local
Much should be left thus to the discretion of municipal autonomy. Without meaning to detract from that policy, we here
authorities. Courts will go slow in writing off an ordinance as confirm that Congress retains control of the local government
unreasonable unless the amount is so excessive as to be units although in significantly reduced degree now than under our
prohibitive, arbitrary, unreasonable, oppressive, or confiscatory. A previous Constitutions. The power to create still includes the
rule which has gained acceptance is that factors relevant to such power to destroy. The power to grant still includes the power to
an inquiry are the municipal conditions as a whole and the nature withhold or recall. True, there are certain notable innovations in
of the business made subject to imposition.70 the Constitution, like the direct conferment on the local
government units of the power to tax, which cannot now be
For an ordinance to be valid though, it must not only be within the withdrawn by mere statute. By and large, however, the national
corporate powers of the LGU to enact and must be passed legislature is still the principal of the local government units,
according to the procedure prescribed by law, it should also which cannot defy its will or modify or violate it.77
conform to the following requirements: (1) not contrary to the
Constitution or any statute; (2) not unfair or oppressive; (3) not LGUs must be reminded that they merely form part of the whole;
partial or discriminatory; (4) not prohibit but may regulate trade; that the policy of ensuring the autonomy of local governments
(5) general and consistent with public policy; and (6) not was never intended by the drafters of the 1987 Constitution to
unreasonable.71 As jurisprudence indicates, the tests are divided create an imperium in imperio and install an intra-sovereign
into the formal (i.e., whether the ordinance was enacted within political subdivision independent of a single sovereign state.78
the corporate powers of the LGU and whether it was passed in [M]unicipal corporations are bodies politic and corporate,
accordance with the procedure prescribed by law), and the created not only as local units of local self-government, but as
substantive (i.e., involving inherent merit, like the conformity of governmental agencies of the state. The legislature, by
the ordinance with the limitations under the Constitution and the establishing a municipal corporation, does not divest the State of
statutes, as well as with the requirements of fairness and reason, any of its sovereignty; absolve itself from its right and duty to
and its consistency with public administer the public affairs of the entire state; or divest itself of
policy).72ChanRoblesVirtualawlibrary any power over the inhabitants of the district which it possesses
before the charter was granted.79ChanRoblesVirtualawlibrary
these have no place in the interpretation of the taxing power of
LGUs are able to legislate only by virtue of a valid delegation of a municipal corporation. [Underscoring supplied]
legislative power from the national legislature; they are mere
agents vested with what is called the power of subordinate Per Section 5, Article X of the 1987 Constitution, the power to tax
legislation.80 Congress enacted the LGC as the implementing law is no longer vested exclusively on Congress; local legislative bodies
for the delegation to the various LGUs of the States great powers, are now given direct authority to levy taxes, fees and other
namely: the police power, the power of eminent domain, and the charges. Nevertheless, such authority is subject to such
power of taxation. The LGC was fashioned to delineate the specific guidelines and limitations as the Congress may provide.
parameters and limitations to be complied with by each LGU in
the exercise of these delegated powers with the view of making In conformity with Section 3, Article X of the 1987 Constitution,
each LGU a fully functioning subdivision of the State subject to the Congress enacted Republic Act No. 7160, otherwise known as the
constitutional and statutory Local Government Code of 1991. Book II of the LGC governs local
limitations.81ChanRoblesVirtualawlibrary taxation and fiscal matters.86

Specifically, with regard to the power of taxation, it is indubitably Indeed, LGUs have no inherent power to tax except to the extent
the most effective instrument to raise needed revenues in that such power might be delegated to them either by the basic
financing and supporting myriad activities of the LGUs for the law or by the statute.87 Under the now prevailing Constitution,
delivery of basic services essential to the promotion of the general where there is neither a grant nor a prohibition by statute, the tax
welfare and the enhancement of peace, progress, and prosperity power must be deemed to exist although Congress may provide
of the people.82 As this Court opined in National Power Corp. v. statutory limitations and guidelines. The basic rationale for the
City of Cabanatuan:83cralawlawlibrary current rule is to safeguard the viability and self-sufficiency of
In recent years, the increasing social challenges of the times local government units by directly granting them general and
expanded the scope of state activity, and taxation has become a broad tax powers. Nevertheless, the fundamental law did not
tool to realize social justice and the equitable distribution of intend the delegation to be absolute and unconditional; the
wealth, economic progress and the protection of local industries constitutional objective obviously is to ensure that, while the local
as well as public welfare and similar objectives. Taxation assumes government units are being strengthened and made more
even greater significance with the ratification of the 1987 autonomous, the legislature must still see to it that (a) the
Constitution. Thenceforth, the power to tax is no longer vested taxpayer will not be over-burdened or saddled with multiple and
exclusively on Congress; local legislative bodies are now given unreasonable impositions; (b) each local government unit will
direct authority to levy taxes, fees and other charges pursuant to have its fair share of available resources; (c) the resources of the
Article X, Section 5 of the 1987 Constitution, viz: national government will not be unduly disturbed; and (d) local
taxation will be fair, uniform, and
Section 5. Each Local Government unit shall have the power to just.88ChanRoblesVirtualawlibrary
create its own sources of revenue, to levy taxes, fees and charges
subject to such guidelines and limitations as the Congress may Subject to the provisions of the LGC and consistent with the basic
provide, consistent with the basic policy of local autonomy. Such policy of local autonomy, every LGU is now empowered and
taxes, fees and charges shall accrue exclusively to the local authorized to create its own sources of revenue and to levy taxes,
governments. fees, and charges which shall accrue exclusively to the local
government unit as well as to apply its resources and assets for
This paradigm shift results from the realization that genuine productive, developmental, or welfare purposes, in the exercise or
development can be achieved only by strengthening local furtherance of their governmental or proprietary powers and
autonomy and promoting decentralization of governance. For a functions.89 The relevant provisions of the LGC which establish
long time, the countrys highly centralized government structure the parameters of the taxing power of the LGUs are as follows:
has bred a culture of dependence among local government
leaders upon the national leadership. It has also dampened the SECTION 130. Fundamental Principles. The following
spirit of initiative, innovation and imaginative resilience in matters fundamental principles shall govern the exercise of the taxing and
of local development on the part of local government leaders. other revenue-raising powers of local government units:
The only way to shatter this culture of dependence is to give the
LGUs a wider role in the delivery of basic services, and confer (a) Taxation shall be uniform in each local government unit;
them sufficient powers to generate their own sources for the
purpose. To achieve this goal, Section 3 of Article X of the 1987 (b) Taxes, fees, charges and other impositions shall:
Constitution mandates Congress to enact a local government code
that will, consistent with the basic policy of local autonomy, set (1) be equitable and based as far as practicable on the taxpayers
the guidelines and limitations to this grant of taxing powers x x ability to pay;
(2) be levied and collected only for public purposes;
Fairly recently, We also stated in Pelizloy Realty Corporation v.
Province of Benguet85 that: (3) not be unjust, excessive, oppressive, or confiscatory;

The rule governing the taxing power of provinces, cities, (4) not be contrary to law, public policy, national economic policy,
municipalities and barangays is summarized in Icard v. City Council or in restraint of trade;
of Baguio:
(c) The collection of local taxes, fees, charges and other
It is settled that a municipal corporation unlike a sovereign state is impositions shall in no case be let to any private person;
clothed with no inherent power of taxation. The charter or statute
must plainly show an intent to confer that power or the (d) The revenue collected pursuant to the provisions of this Code
municipality, cannot assume it. And the power when granted is to shall inure solely to the benefit of, and be subject to the
be construed in strictissimi juris. Any doubt or ambiguity arising disposition by, the local government unit levying the tax, fee,
out of the term used in granting that power must be resolved charge or other imposition unless otherwise specifically provided
against the municipality. Inferences, implications, deductions all herein; and,
however, That the taxes, fees and charges levied and collected by
(e) Each local government unit shall, as far as practicable, evolve a highly urbanized and independent component cities shall accrue
progressive system of taxation. to them and distributed in accordance with the provisions of this
SECTION 133. Common Limitations on the Taxing Powers of Local
Government Units. Unless otherwise provided herein, the The rates of taxes that the city may levy may exceed the
exercise of the taxing powers of provinces, cities, municipalities, maximum rates allowed for the province or municipality by not
and barangays shall not extend to the levy of the following: more than fifty percent (50%) except the rates of professional and
amusement taxes.
(a) Income tax, except when levied on banks and other financial
institutions; SECTION 186. Power To Levy Other Taxes, Fees or Charges. Local
government units may exercise the power to levy taxes, fees or
(b) Documentary stamp tax; charges on any base or subject not otherwise specifically
enumerated herein or taxed under the provisions of the National
(c) Taxes on estates, inheritance, gifts, legacies and other Internal Revenue Code, as amended, or other applicable laws:
acquisitions mortis causa, except as otherwise provided herein; Provided, That the taxes, fees, or charges shall not be unjust,
excessive, oppressive, confiscatory or contrary to declared
(d) Customs duties, registration fees of vessel and wharfage on national policy: Provided, further, That the ordinance levying such
wharves, tonnage dues, and all other kinds of customs fees, taxes, fees or charges shall not be enacted without any prior
charges and dues except wharfage on wharves constructed and public hearing conducted for the purpose.
maintained by the local government unit concerned;
On the Socialized Housing Tax
(e) Taxes, fees, and charges and other impositions upon goods
carried into or out of, or passing through, the territorial Contrary to petitioners submission, the 1987 Constitution
jurisdictions of local government units in the guise of charges for explicitly espouses the view that the use of property bears a social
wharfage, tolls for bridges or otherwise, or other taxes, fees, or function and that all economic agents shall contribute to the
charges in any form whatsoever upon such goods or merchandise; common good.90 The Court already recognized this in Social
Justice Society (SJS), et al. v. Hon. Atienza, Jr.:91cralawlawlibrary
(f) Taxes, fees or charges on agricultural and aquatic products Property has not only an individual function, insofar as it has to
when sold by marginal farmers or fishermen; provide for the needs of the owner, but also a social function
insofar as it has to provide for the needs of the other members of
(g) Taxes on business enterprises certified to by the Board of society. The principle is this:
Investments as pioneer or non-pioneer for a period of six (6) and
four (4) years, respectively from the date of registration; Police power proceeds from the principle that every holder of
property, however absolute and unqualified may be his title, holds
(h) Excise taxes on articles enumerated under the National it under the implied liability that his use of it shall not be injurious
Internal Revenue Code, as amended, and taxes, fees or charges on to the equal enjoyment of others having an equal right to the
petroleum products; enjoyment of their property, nor injurious to the right of the
community. Rights of property, like all other social and
(i) Percentage or value-added tax (VAT) on sales, barters or conventional rights, are subject to reasonable limitations in their
exchanges or similar transactions on goods or services except as enjoyment as shall prevent them from being injurious, and to such
otherwise provided herein; reasonable restraints and regulations established by law as the
legislature, under the governing and controlling power vested in
(j) Taxes on the gross receipts of transportation contractors and them by the constitution, may think necessary and expedient.92
persons engaged in the transportation of passengers or freight by
hire and common carriers by air, land or water, except as provided Police power, which flows from the recognition that salus populi
in this Code; est suprema lex (the welfare of the people is the supreme law), is
the plenary power vested in the legislature to make statutes and
(k) Taxes on premiums paid by way of reinsurance or retrocession; ordinances to promote the health, morals, peace, education, good
order or safety and general welfare of the people.93 Property
(l) Taxes, fees or charges for the registration of motor vehicles and rights of individuals may be subjected to restraints and burdens in
for the issuance of all kinds of licenses or permits for the driving order to fulfill the objectives of the government in the exercise of
thereof, except tricycles; police power. 94 In this jurisdiction, it is well-entrenched that
taxation may be made the implement of the states police
(m) Taxes, fees, or other charges on Philippine products actually power.95ChanRoblesVirtualawlibrary
exported, except as otherwise provided herein;
Ordinance No. SP-2095 imposes a Socialized Housing Tax
(n) Taxes, fees, or charges, on Countryside and Barangay Business equivalent to 0.5% on the assessed value of land in excess of
Enterprises and cooperatives duly registered under R.A. No. 6810 Php100,000.00. This special assessment is the same tax referred
and Republic Act Numbered Sixty-nine hundred thirty-eight (R.A. to in R.A. No. 7279 or the UDHA.96 The SHT is one of the sources
No. 6938) otherwise known as the Cooperative Code of the of funds for urban development and housing program.97 Section
Philippines respectively; and 43 of the law provides:

(o) Taxes, fees or charges of any kind on the National Sec. 43. Socialized Housing Tax. Consistent with the
Government, its agencies and instrumentalities, and local constitutional principle that the ownership and enjoyment of
government units. property bear a social function and to raise funds for the Program,
all local government units are hereby authorized to impose an
SECTION 151. Scope of Taxing Powers. Except as otherwise additional one-half percent (0.5%) tax on the assessed value of all
provided in this Code, the city, may levy the taxes, fees, and lands in urban areas in excess of Fifty thousand pesos
charges which the province or municipality may impose: Provided, (P50,000.00).
accrue to its socialized housing programs and projects. The tax is
The rationale of the SHT is found in the preambular clauses of the not a pure exercise of taxing power or merely to raise revenue; it
subject ordinance, to wit: is levied with a regulatory purpose. The levy is primarily in the
exercise of the police power for the general welfare of the entire
WHEREAS, the imposition of additional tax is intended to provide city. It is greatly imbued with public interest. Removing slum areas
the City Government with sufficient funds to initiate, implement in Quezon City is not only beneficial to the underprivileged and
and undertake Socialized Housing Projects and other related homeless constituents but advantageous to the real property
preliminary activities; owners as well. The situation will improve the value of the their
property investments, fully enjoying the same in view of an
WHEREAS, the imposition of 0.5% tax will benefit the Socialized orderly, secure, and safe community, and will enhance the quality
Housing Programs and Projects of the City Government, of life of the poor, making them law-abiding constituents and
specifically the marginalized sector through the acquisition of better consumers of business products.
properties for human settlements;
Though broad and far-reaching, police power is subordinate to
WHEREAS, the removal of the urban blight will definitely increase constitutional limitations and is subject to the requirement that its
fair market value of properties in the city[.] exercise must be reasonable and for the public good.109 In the
words of City of Manila v. Hon. Laguio, Jr.:110cralawlawlibrary
The above-quoted are consistent with the UDHA, which the LGUs The police power granted to local government units must always
are charged to implement in their respective localities in be exercised with utmost observance of the rights of the people
coordination with the Housing and Urban Development to due process and equal protection of the law. Such power
Coordinating Council, the national housing agencies, the cannot be exercised whimsically, arbitrarily or despotically as its
Presidential Commission for the Urban Poor, the private sector, exercise is subject to a qualification, limitation or restriction
and other non-government organizations.98 It is the declared demanded by the respect and regard due to the prescription of
policy of the State to undertake a comprehensive and continuing the fundamental law, particularly those forming part of the Bill of
urban development and housing program that shall, among Rights. Individual rights, it bears emphasis, may be adversely
others, uplift the conditions of the underprivileged and homeless affected only to the extent that may fairly be required by the
citizens in urban areas and in resettlement areas, and provide for legitimate demands of public interest or public welfare. Due
the rational use and development of urban land in order to bring process requires the intrinsic validity of the law in interfering with
about, among others, reduction in urban dysfunctions, particularly the rights of the person to his life, liberty and property.
those that adversely affect public health, safety and ecology, and
access to land and housing by the underprivileged and homeless To successfully invoke the exercise of police power as the
citizens.99 Urban renewal and resettlement shall include the rationale for the enactment of the Ordinance, and to free it from
rehabilitation and development of blighted and slum areas100 the imputation of constitutional infirmity, not only must it appear
and the resettlement of program beneficiaries in accordance with that the interests of the public generally, as distinguished from
the provisions of the UDHA.101ChanRoblesVirtualawlibrary those of a particular class, require an interference with private
rights, but the means adopted must be reasonably necessary for
Under the UDHA, socialized housing102 shall be the primary the accomplishment of the purpose and not unduly oppressive
strategy in providing shelter for the underprivileged and upon individuals. It must be evident that no other alternative for
homeless.103 The LGU or the NHA, in cooperation with the the accomplishment of the purpose less intrusive of private rights
private developers and concerned agencies, shall provide can work. A reasonable relation must exist between the purposes
socialized housing or resettlement areas with basic services and of the police measure and the means employed for its
facilities such as potable water, power and electricity, and an accomplishment, for even under the guise of protecting the public
adequate power distribution system, sewerage facilities, and an interest, personal rights and those pertaining to private property
efficient and adequate solid waste disposal system; and access to will not be permitted to be arbitrarily invaded.
primary roads and transportation facilities.104 The provisions for
health, education, communications, security, recreation, relief and Lacking a concurrence of these two requisites, the police measure
welfare shall also be planned and be given priority for shall be struck down as an arbitrary intrusion into private rights
implementation by the LGU and concerned agencies in a violation of the due process clause.111
cooperation with the private sector and the beneficiaries
themselves.105ChanRoblesVirtualawlibrary As with the State, LGUs may be considered as having properly
exercised their police power only if there is a lawful subject and a
Moreover, within two years from the effectivity of the UDHA, the lawful method or, to be precise, if the following requisites are
LGUs, in coordination with the NHA, are directed to implement met: (1) the interests of the public generally, as distinguished from
the relocation and resettlement of persons living in danger areas those of a particular class, require its exercise and (2) the means
such as esteros, railroad tracks, garbage dumps, riverbanks, employed are reasonably necessary for the accomplishment of
shorelines, waterways, and other public places like sidewalks, the purpose and not unduly oppressive upon
roads, parks, and playgrounds.106 In coordination with the NHA, individuals.112ChanRoblesVirtualawlibrary
the LGUs shall provide relocation or resettlement sites with basic
services and facilities and access to employment and livelihood In this case, petitioner argues that the SHT is a penalty imposed on
opportunities sufficient to meet the basic needs of the affected real property owners because it burdens them with expenses to
families.107ChanRoblesVirtualawlibrary provide funds for the housing of informal settlers, and that it is a
class legislation since it favors the latter who occupy properties
Clearly, the SHT charged by the Quezon City Government is a tax which is not their own and pay no taxes.
which is within its power to impose. Aside from the specific
authority vested by Section 43 of the UDHA, cities are allowed to We disagree.
exercise such other powers and discharge such other functions
and responsibilities as are necessary, appropriate, or incidental to Equal protection requires that all persons or things similarly
efficient and effective provision of the basic services and facilities situated should be treated alike, both as to rights conferred and
which include, among others, programs and projects for low-cost responsibilities imposed.113 The guarantee means that no person
housing and other mass dwellings.108 The collections made or class of persons shall be denied the same protection of laws
which is enjoyed by other persons or other classes in like grant them the authority necessary to fulfill the same would lead
circumstances.114 Similar subjects should not be treated to an absurd result.127 As held in one U.S. case:
differently so as to give undue favor to some and unjustly
discriminate against others.115 The law may, therefore, treat and x x x When a municipality has general authority to regulate a
regulate one class differently from another class provided there particular subject matter, the manner and means of exercising
are real and substantial differences to distinguish one class from those powers, where not specifically prescribed by the legislature,
another.116ChanRoblesVirtualawlibrary are left to the discretion of the municipal authorities. x x x Leaving
the manner of exercising municipal powers to the discretion of
An ordinance based on reasonable classification does not violate municipal authorities "implies a range of reasonableness within
the constitutional guaranty of the equal protection of the law. The which a municipality's exercise of discretion will not be interfered
requirements for a valid and reasonable classification are: (1) it with or upset by the judiciary."128
must rest on substantial distinctions; (2) it must be germane to
the purpose of the law; (3) it must not be limited to existing In this jurisdiction, pursuant to Section 16 of the LGC and in the
conditions only; and (4) it must apply equally to all members of proper exercise of its corporate powers under Section 22 of the
the same class.117ChanRoblesVirtualawlibrary same, the Sangguniang Panlungsod of Quezon City, like other local
legislative bodies, is empowered to enact ordinances, approve
For the purpose of undertaking a comprehensive and continuing resolutions, and appropriate funds for the general welfare of the
urban development and housing program, the disparities between city and its inhabitants.129 Section 16 of the LGC provides:
a real property owner and an informal settler as two distinct
classes are too obvious and need not be discussed at length. The SECTION 16. General Welfare. Every local government unit shall
differentiation conforms to the practical dictates of justice and exercise the powers expressly granted, those necessarily implied
equity and is not discriminatory within the meaning of the therefrom, as well as powers necessary, appropriate, or incidental
Constitution. Notably, the public purpose of a tax may legally exist for its efficient and effective governance, and those which are
even if the motive which impelled the legislature to impose the essential to the promotion of the general welfare. Within their
tax was to favor one over another.118 It is inherent in the power respective territorial jurisdictions, local government units shall
to tax that a State is free to select the subjects of taxation.119 ensure and support, among other things, the preservation and
Inequities which result from a singling out of one particular class enrichment of culture, promote health and safety, enhance the
for taxation or exemption infringe no constitutional right of the people to a balanced ecology, encourage and support
limitation.120ChanRoblesVirtualawlibrary the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance
Further, the reasonableness of Ordinance No. SP-2095 cannot be economic prosperity and social justice, promote full employment
disputed. It is not confiscatory or oppressive since the tax being among their residents, maintain peace and order, and preserve
imposed therein is below what the UDHA actually allows. As the comfort and convenience of their inhabitants.
pointed out by respondents, while the law authorizes LGUs to
collect SHT on lands with an assessed value of more than The general welfare clause is the delegation in statutory form of
P50,000.00, the questioned ordinance only covers lands with an the police power of the State to LGUs.130 The provisions related
assessed value exceeding P100,000.00. Even better, on certain thereto are liberally interpreted to give more powers to LGUs in
conditions, the ordinance grants a tax credit equivalent to the accelerating economic development and upgrading the quality of
total amount of the special assessment paid beginning in the sixth life for the people in the community.131 Wide discretion is vested
(6th) year of its effectivity. Far from being obnoxious, the on the legislative authority to determine not only what the
provisions of the subject ordinance are fair and just. interests of the public require but also what measures are
necessary for the protection of such interests since the
On the Garbage Fee Sanggunian is in the best position to determine the needs of its
In the United States of America, it has been held that the
authority of a municipality to regulate garbage falls within its One of the operative principles of decentralization is that, subject
police power to protect public health, safety, and welfare.121 As to the provisions of the LGC and national policies, the LGUs shall
opined, the purposes and policy underpinnings of the police share with the national government the responsibility in the
power to regulate the collection and disposal of solid waste are: management and maintenance of ecological balance within their
(1) to preserve and protect the public health and welfare as well territorial jurisdiction.133 In this regard, cities are allowed to
as the environment by minimizing or eliminating a source of exercise such other powers and discharge such other functions
disease and preventing and abating nuisances; and (2) to defray and responsibilities as are necessary, appropriate, or incidental to
costs and ensure financial stability of the system for the benefit of efficient and effective provision of the basic services and facilities
the entire community, with the sum of all charges marshalled and which include, among others, solid waste disposal system or
designed to pay for the expense of a systemic refuse disposal environmental management system and services or facilities
scheme.122ChanRoblesVirtualawlibrary related to general hygiene and sanitation.134 R.A. No. 9003, or
the Ecological Solid Waste Management Act of 2000,135 affirms
Ordinances regulating waste removal carry a strong presumption this authority as it expresses that the LGUs shall be primarily
of validity.123 Not surprisingly, the overwhelming majority of U.S. responsible for the implementation and enforcement of its
cases addressing a city's authority to impose mandatory garbage provisions within their respective jurisdictions while establishing a
service and fees have upheld the ordinances against constitutional cooperative effort among the national government, other local
and statutory challenges.124ChanRoblesVirtualawlibrary government units, non-government organizations, and the private
A municipality has an affirmative duty to supervise and control the
collection of garbage within its corporate limits.125 The LGC Necessarily, LGUs are statutorily sanctioned to impose and collect
specifically assigns the responsibility of regulation and oversight of such reasonable fees and charges for services rendered.137
solid waste to local governing bodies because the Legislature Charges refer to pecuniary liability, as rents or fees against
determined that such bodies were in the best position to develop persons or property, while Fee means a charge fixed by law or
efficient waste management programs.126 To impose on local ordinance for the regulation or inspection of a business or
governments the responsibility to regulate solid waste but not activity.138ChanRoblesVirtualawlibrary
regulation exceeds the cost of the
The fee imposed for garbage collections under Ordinance No. SP- regulation.144ChanRoblesVirtualawlibrary
2235 is a charge fixed for the regulation of an activity. The basis
for this could be discerned from the foreword of said Ordinance, Petitioner argues that the Quezon City Government already
to wit: collects garbage fee under Section 47 of R.A. No. 9003, which
authorizes LGUs to impose fees in amounts sufficient to pay the
WHEREAS, Quezon City being the largest and premiere city in the costs of preparing, adopting, and implementing a solid waste
Philippines in terms of population and urban geographical areas, management plan, and that it has access to the SWM Fund under
apart from being competent and efficient in the delivery of public Section 46 of the same law. Moreover, Ordinance No. S-2235 is
service, apparently requires a big budgetary allocation in order to inconsistent with R.A. No. 9003, because the ordinance
address the problems relative and connected to the prompt and emphasizes the collection and payment of garbage fee with no
efficient delivery of basic services such as the effective system of concern for segregation, composting and recycling of wastes. It
waste management, public information programs on proper also skips the mandate of the law calling for the active
garbage and proper waste disposal, including the imposition of involvement of the barangay in the collection, segregation, and
waste regulatory measures; recycling of garbage.

WHEREAS, to help augment the funds to be spent for the citys We now turn to the pertinent provisions of R.A. No. 9003.
waste management system, the City Government through the
Sangguniang Panlungsod deems it necessary to impose a schedule Under R.A. No. 9003, it is the declared policy of the State to adopt
of reasonable fees or charges for the garbage collection services a systematic, comprehensive and ecological solid waste
for residential (domestic household) that it renders to the public. management program which shall, among others, ensure the
proper segregation, collection, transport, storage, treatment and
Certainly, as opposed to petitioners opinion, the garbage fee is disposal of solid waste through the formulation and adoption of
not a tax. In Smart Communications, Inc. v. Municipality of Malvar, the best environmental practices in ecological waste
Batangas,139 the Court had the occasion to distinguish these two management.145 The law provides that segregation and
concepts: collection of solid waste shall be conducted at the barangay level,
specifically for biodegradable, compostable and reusable wastes,
In Progressive Development Corporation v. Quezon City, the Court while the collection of non-recyclable materials and special wastes
declared that if the generating of revenue is the primary purpose shall be the responsibility of the municipality or city.146
and regulation is merely incidental, the imposition is a tax; but if Mandatory segregation of solid wastes shall primarily be
regulation is the primary purpose, the fact that incidentally conducted at the source, to include household, institutional,
revenue is also obtained does not make the imposition a tax. industrial, commercial and agricultural sources.147Segregation at
source refers to a solid waste management practice of separating,
In Victorias Milling Co., Inc. v. Municipality of Victorias, the Court at the point of origin, different materials found in solid waste in
reiterated that the purpose and effect of the imposition order to promote recycling and re-use of resources and to reduce
determine whether it is a tax or a fee, and that the lack of any the volume of waste for collection and disposal.148 Based on Rule
standards for such imposition gives the presumption that the XVII of the Department of Environment and Natural Resources
same is a tax. (DENR) Administrative Order No. 2001-34, Series of 2001,149
We accordingly say that the designation given by the municipal which is the Implementing Rules and Regulations (IRR) of R.A. No.
authorities does not decide whether the imposition is properly a 9003, barangays shall be responsible for the collection,
license tax or a license fee. The determining factors are the segregation, and recycling of biodegradable, recyclable,
purpose and effect of the imposition as may be apparent from the compostable and reusable wastes.150 For the purpose, a
provisions of the ordinance. Thus, [w]hen no police inspection, Materials Recovery Facility (MRF), which shall receive
supervision, or regulation is provided, nor any standard set for the biodegradable wastes for composting and mixed non-
applicant to establish, or that he agrees to attain or maintain, but biodegradable wastes for final segregation, re-use and recycling, is
any and all persons engaged in the business designated, without to be established in every barangay or cluster of
qualification or hindrance, may come, and a license on payment of barangays.151ChanRoblesVirtualawlibrary
the stipulated sum will issue, to do business, subject to no
prescribed rule of conduct and under no guardian eye, but According to R.A. 9003, an LGU, through its local solid waste
according to the unrestrained judgment or fancy of the applicant management board, is mandated by law to prepare a 10-year
and licensee, the presumption is strong that the power of solid waste management plan consistent with the National Solid
taxation, and not the police power, is being exercised. Waste Management Framework.152 The plan shall be for the re-
use, recycling and composting of wastes generated in its
In Georgia, U.S.A., assessments for garbage collection services jurisdiction; ensure the efficient management of solid waste
have been consistently treated as a fee and not a tax.140 In generated within its jurisdiction; and place primary emphasis on
another U.S. case,141 the garbage fee was considered as a implementation of all feasible re-use, recycling, and composting
"service charge" rather than a tax as it was actually a fee for a programs while identifying the amount of landfill and
service given by the city which had previously been provided at no transformation capacity that will be needed for solid waste which
cost to its citizens. cannot be re-used, recycled, or composted.153 One of the
components of the solid waste management plan is source
Hence, not being a tax, the contention that the garbage fee under reduction:
Ordinance No. SP-2235 violates the rule on double taxation142
must necessarily fail. (e) Source reduction The source reduction component shall
include a program and implementation schedule which shows the
Nonetheless, although a special charge, tax, or assessment may be methods by which the LGU will, in combination with the recycling
imposed by a municipal corporation, it must be reasonably and composting components, reduce a sufficient amount of solid
commensurate to the cost of providing the garbage service.143 To waste disposed of in accordance with the diversion requirements
pass judicial scrutiny, a regulatory fee must not produce revenue of Section 20.
in excess of the cost of the regulation because such fee will be
construed as an illegal tax when the revenue generated by the The source reduction component shall describe the following:
(c) distance of the transfer station to the waste management
(1) strategies in reducing the volume of solid waste generated at facility.
The fees shall be used to pay the actual costs incurred by the LGU
(2) measures for implementing such strategies and the resources in collecting the local fees. In determining the amounts of the
necessary to carry out such activities; fees, an LGU shall include only those costs directly related to the
adoption and implementation of the plan and the setting and
(3) other appropriate waste reduction technologies that may also collection of the local fees.
be considered, provided that such technologies conform with the
standards set pursuant to this Act; Rule XVII of the IRR of R.A. No. 9003 sets forth the details:

(4) the types of wastes to be reduced pursuant to Section 15 of Section 1. Power to Collect Solid Waste Management Fees. The
this Act; Local SWM Board/Local SWM Cluster Board shall impose fees on
the SWM services provided for by the LGU and/or any authorized
(5) the methods that the LGU will use to determine the categories organization or unit. In determining the amounts of the fees, a
of solid wastes to be diverted from disposal at a disposal facility Local SWM Board/Local SWM Cluster Board shall include only
through re-use, recycling and composting; and those costs directly related to the adoption and implementation
of the SWM Plan and the setting and collection of the local fees.
(6) new facilities and of expansion of existing facilities which will This power to impose fees may be ceded to the private sector and
be needed to implement re-use, recycling and composting. civil society groups which have been duly accredited by the Local
SWM Board/Local SWM Cluster Board; provided, the SWM fees
The LGU source reduction component shall include the evaluation shall be covered by a Contract or Memorandum of Agreement
and identification of rate structures and fees for the purpose of between the respective board and the private sector or civil
reducing the amount of waste generated, and other source society group.
reduction strategies, including but not limited to, programs and
economic incentives provided under Sec. 45 of this Act to reduce The fees shall pay for the costs of preparing, adopting and
the use of non-recyclable materials, replace disposable materials implementing a SWM Plan prepared pursuant to the Act. Further,
and products with reusable materials and products, reduce the fees shall also be used to pay the actual costs incurred in
packaging, and increase the efficiency of the use of paper, collecting the local fees and for project sustainability.
cardboard, glass, metal, and other materials. The waste reduction
activities of the community shall also take into account, among Section 2. Basis of SWM Service Fees
others, local capability, economic viability, technical
requirements, social concerns, disposition of residual waste and Reasonable SWM service fees shall be computed based on but not
environmental impact: Provided, That, projection of future limited to the following minimum factors:
facilities needed and estimated cost shall be incorporated in the
plan. x x x154 a) Types of solid waste to include special waste

The solid waste management plan shall also include an b) amount/volume of waste
implementation schedule for solid waste diversion:
c) distance of the transfer station to the waste management
SEC. 20. Establishing Mandatory Solid Waste Diversion. Each facility
LGU plan shall include an implementation schedule which shows
that within five (5) years after the effectivity of this Act, the LGU d) capacity or type of LGU constituency
shall divert at least 25% of all solid waste from waste disposal
facilities through re-use, recycling, and composting activities and e) cost of construction
other resource recovery activities: Provided, That the waste
diversion goals shall be increased every three (3) years thereafter: f) cost of management
Provided, further, That nothing in this Section prohibits a local
government unit from implementing re-use, recycling, and g) type of technology
composting activities designed to exceed the goal.
Section 3. Collection of Fees. Fees may be collected
The baseline for the twenty-five percent (25%) shall be derived corresponding to the following levels:
from the waste characterization result155 that each LGU is
mandated to undertake.156ChanRoblesVirtualawlibrary a) Barangay The Barangay may impose fees for collection and
segregation of biodegradable, compostable and reusable wastes
In accordance with Section 46 of R.A. No. 9003, the LGUs are from households, commerce, other sources of domestic wastes,
entitled to avail of the SWM Fund on the basis of their approved and for the use of Barangay MRFs. The computation of the fees
solid waste management plan. Aside from this, they may also shall be established by the respective SWM boards. The manner of
impose SWM Fees under Section 47 of the law, which states: collection of the fees shall be dependent on the style of
administration of respective Barangay Councils. However, all
SEC. 47. Authority to Collect Solid Waste Management Fees The transactions shall follow the Commission on Audit rules on
local government unit shall impose fees in amounts sufficient to collection of fees.
pay the costs of preparing, adopting, and implementing a solid
waste management plan prepared pursuant to this Act. The fees b) Municipality The municipal and city councils may impose fees
shall be based on the following minimum factors: on the barangay MRFs for the collection and transport of non-
recyclable and special wastes and for the disposal of these into
(a) types of solid waste; the sanitary landfill. The level and procedure for exacting fees
shall be defined by the Local SWM Board/Local SWM Cluster
(b) amount/volume of waste; and Board and supported by LGU ordinances, however, payments shall
be consistent with the accounting system of government.
not vary to a large degree; thus, a similar schedule of fee is both
c) Private Sector/Civil Society Group On the basis of the just and equitable.159ChanRoblesVirtualawlibrary
stipulations of contract or Memorandum of Agreement, the
private sector or civil society group shall impose fees for The rates being charged by the ordinance are unjust and
collection, transport and tipping in their SLFs. Receipts and inequitable: a resident of a 200 sq. m. unit in a condominium or
invoices shall be issued to the paying public or to the government. socialized housing project has to pay twice the amount than a
resident of a lot similar in size; unlike unit occupants, all occupants
From the afore-quoted provisions, it is clear that the authority of a of a lot with an area of 200 sq. m. and less have to pay a fixed rate
municipality or city to impose fees is limited to the collection and of Php100.00; and the same amount of garbage fee is imposed
transport of non-recyclable and special wastes and for the regardless of whether the resident is from a condominium or from
disposal of these into the sanitary landfill. Barangays, on the other a socialized housing project.
hand, have the authority to impose fees for the collection and
segregation of biodegradable, compostable and reusable wastes Indeed, the classifications under Ordinance No. S-2235 are not
from households, commerce, other sources of domestic wastes, germane to its declared purpose of promoting shared
and for the use of barangay MRFs. This is but consistent with responsibility with the residents to attack their common mindless
Section 10 of R.A. No. 9003 directing that segregation and attitude in over-consuming the present resources and in
collection of biodegradable, compostable and reusable wastes generating waste.160 Instead of simplistically categorizing the
shall be conducted at the barangay level, while the collection of payee into land or floor occupant of a lot or unit of a
non-recyclable materials and special wastes shall be the condominium, socialized housing project or apartment,
responsibility of the municipality or city. respondent City Council should have considered factors that could
truly measure the amount of wastes generated and the
In this case, the alleged bases of Ordinance No. S-2235 in appropriate fee for its collection. Factors include, among others,
imposing the garbage fee is the volume of waste currently household age and size, accessibility to waste collection,
generated by each person in Quezon City, which purportedly population density of the barangay or district, capacity to pay, and
stands at 0.66 kilogram per day, and the increasing trend of waste actual occupancy of the property. R.A. No. 9003 may also be
generation for the past three years.157 Respondents did not looked into for guidance. Under said law, SWM service fees may
elaborate any further. The figure presented does not reflect the be computed based on minimum factors such as types of solid
specific types of wastes generated whether residential, market, waste to include special waste, amount/volume of waste, distance
commercial, industrial, construction/demolition, street waste, of the transfer station to the waste management facility, capacity
agricultural, agro-industrial, institutional, etc. It is reasonable, or type of LGU constituency, cost of construction, cost of
therefore, for the Court to presume that such amount pertains to management, and type of technology. With respect to utility rates
the totality of wastes, without any distinction, generated by set by municipalities, a municipality has the right to classify
Quezon City constituents. To reiterate, however, the authority of consumers under reasonable classifications based upon factors
a municipality or city to impose fees extends only to those related such as the cost of service, the purpose for which the service or
to the collection and transport of non-recyclable and special the product is received, the quantity or the amount received, the
wastes. different character of the service furnished, the time of its use or
any other matter which presents a substantial difference as a
Granting, for the sake of argument, that the 0.66 kilogram of solid ground of distinction.161cralawlawlibrary
waste per day refers only to non-recyclable and special wastes, [A] lack of uniformity in the rate charged is not necessarily
still, We cannot sustain the validity of Ordinance No. S-2235. It unlawful discrimination. The establishment of classifications and
violates the equal protection clause of the Constitution and the the charging of different rates for the several classes is not
provisions of the LGC that an ordinance must be equitable and unreasonable and does not violate the requirements of equality
based as far as practicable on the taxpayers ability to pay, and not and uniformity. Discrimination to be unlawful must draw an unfair
unjust, excessive, oppressive, line or strike an unfair balance between those in like
confiscatory.158ChanRoblesVirtualawlibrary circumstances having equal rights and privileges. Discrimination
with respect to rates charged does not vitiate unless it is arbitrary
In the subject ordinance, the rates of the imposable fee depend and without a reasonable fact basis or justification.162
on land or floor area and whether the payee is an occupant of a
lot, condominium, social housing project or apartment. For easy On top of an unreasonable classification, the penalty clause of
reference, the relevant provision is again quoted below: Ordinance No. SP-2235, which states:

On all domestic households in Quezon City; SECTION 3. Penalty Clause A penalty of 25% of the garbage fee
due plus an interest of 2% per month or a fraction thereof
a) (interest) shall be charged against a household owner who refuses
High-rise Condominium The Homeowners Association of high to pay the garbage fee herein imposed.
rise condominiums shall pay the annual garbage fee on the total
size of the entire condominium and socialized Housing Unit and an lacks the limitation required by Section 168 of the LGC, which
additional garbage fee shall be collected based on area occupied provides:
for every unit already sold or being amortized.
b) SECTION 168. Surcharges and Penalties on Unpaid Taxes, Fees, or
High-rise apartment units Owners of high-rise apartment units Charges. The sanggunian may impose a surcharge not exceeding
shall pay the annual garbage fee on the total lot size of the entire twenty-five (25%) of the amount of taxes, fees or charges not paid
apartment and an additional garbage fee based on the schedule on time and an interest at the rate not exceeding two percent
prescribed herein for every unit occupied. (2%) per month of the unpaid taxes, fees or charges including
For the purpose of garbage collection, there is, in fact, no surcharges, until such amount is fully paid but in no case shall the
substantial distinction between an occupant of a lot, on one hand, total interest on the unpaid amount or portion thereof exceed
and an occupant of a unit in a condominium, socialized housing thirty-six (36) months. (Emphasis supplied)
project or apartment, on the other hand. Most likely, garbage
output produced by these types of occupants is uniform and does Finally, on the issue of publication of the two challenged
Petitioner argues that the garbage fee was collected even if the The case records are bereft of any evidence to prove petitioners
required publication of its approval had not yet elapsed. He notes negative allegation that respondents did not comply with the
that he paid his realty tax on January 7, 2014 which already posting and publication requirements of the law. Thus, We are
included the garbage fee. Respondents counter that if the law constrained not to give credit to his unsupported claim.
provides for its own effectivity, publication in the Official Gazette
is not necessary so long as it is not penal in nature. Allegedly, WHEREFORE, the petition is PARTIALLY GRANTED. The
Ordinance No. SP-2095 took effect after its publication while constitutionality and legality of Ordinance No. SP-2095, S-2011, or
Ordinance No. SP-2235 became effective after its approval on the Socialized Housing Tax of Quezon City, is SUSTAINED for
December 26, 2013. being consistent with Section 43 of Republic Act No. 7279. On the
other hand, Ordinance No. SP-2235, S-2013, which collects an
The pertinent provisions of the LGC state: annual garbage fee on all domestic households in Quezon City, is
SECTION 59. Effectivity of Ordinances or Resolutions. (a) Unless Respondents are DIRECTED to REFUND with reasonable dispatch
otherwise stated in the ordinance or the resolution approving the the sums of money collected relative to its enforcement.
local development plan and public investment program, the same
shall take effect after ten (10) days from the date a copy thereof is The temporary restraining order issued by the Court on February
posted in a bulletin board at the entrance of the provincial capitol 5, 2014 is LIFTED with respect to Ordinance No. SP-2095. In
or city, municipal, or barangay hall, as the case may be, and in at contrast, respondents are PERMANENTLY ENJOINED from taking
least two (2) other conspicuous places in the local government any further action to enforce Ordinance No. SP. 2235.
unit concerned.

(b) The secretary to the sanggunian concerned shall cause the

posting of an ordinance or resolution in the bulletin board at the
entrance of the provincial capitol and the city, municipal, or
barangay hall in at least two (2) conspicuous places in the local
government unit concerned not later than five (5) days after
approval thereof.

The text of the ordinance or resolution shall be disseminated and

posted in Filipino or English and in the language or dialect
understood by the majority of the people in the local government
unit concerned, and the secretary to the sanggunian shall record
such fact in a book kept for the purpose, stating the dates of
approval and posting.

(c) The gist of all ordinances with penal sanctions shall be

published in a newspaper of general circulation within the
province where the local legislative body concerned belongs. In
the absence of any newspaper of general circulation within the
province, posting of such ordinances shall be made in all
municipalities and cities of the province where the sanggunian of
origin is situated.

(d) In the case of highly urbanized and independent component

cities, the main features of the ordinance or resolution duly
enacted or adopted shall, in addition to being posted, be
published once in a local newspaper of general circulation within
the city: Provided, That in the absence thereof the ordinance or
resolution shall be published in any newspaper of general

SECTION 188. Publication of Tax Ordinances and Revenue

Measures. Within ten (10) days after their approval, certified
true copies of all provincial, city, and municipal tax ordinances or
revenue measures shall be published in full for three (3)
consecutive days in a newspaper of local circulation: Provided,
however, That in provinces, cities and municipalities where there
are no newspapers of local circulation, the same may be posted in
at least two (2) conspicuous and publicly accessible places.
(Emphasis supplied)

On October 17, 2011, respondent Quezon City Council enacted

Ordinance No. SP-2095, which provides that it would take effect
after its publication in a newspaper of general circulation.163 On
the other hand, Ordinance No. SP-2235, which was passed by the
City Council on December 16, 2013, provides that it would be
effective upon its approval.164 Ten (10) days after its enactment,
or on December 26, 2013, respondent City Mayor approved the