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Stone v.

Mississippi - Case Brief Summary

In Stone v. Mississippi (1879) 101 U.S. 814, the Supreme Court permitted prosecution of a state-chartered
corporation for conducting a lottery in violation of state law even though the company's charter, issued before the
law was enacted, expressly authorized that activity. In reaching its conclusion, the court made the identical
distinction found in United States Trust between a public contract impacted by a state's exercise of its police
powers and one involving use of its revenue and spending powers. The court first noted that the law at issue was
an appropriate exercise of the state's police powers: "When the government is untrammeled by any claim of
vested rights or chartered privileges, no one has ever supposed that lotteries could not lawfully be suppressed . .
. ." ( Id. at p. 818.)

The court then dismissed the corporation's claim that its corporate charter was a contract with the state that was
impermissibly impaired by the law banning lotteries, holding that "the contracts which the Constitution protects
are those that relate to property rights, not governmental." ( Id. at p. 820.) "We have held . . . that this clause the
contract clause protected a corporation in its charter exemptions from taxation. . . . But the power of governing is
a trust committed by the people to the government, no part of which can be granted away. . . . They may create
corporations, and give them, so to speak, a limited citizenship; but as citizens, limited in their privileges, or
otherwise, these creatures of the government creation are subject to such rules and regulations as may from time
to time be ordained and established for the preservation of health and morality." (Ibid.)
G.R. No. L-7995 May 31, 1957 prohibition against the establishment or opening by aliens actually engaged in the retail business of additional
stores or branches of retail business, (6) a provision requiring aliens actually engaged in the retail business to
LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and partnerships present for registration with the proper authorities a verified statement concerning their businesses, giving,
adversely affected. by Republic Act No. 1180, petitioner, among other matters, the nature of the business, their assets and liabilities and their offices and principal offices
vs. of judicial entities; and (7) a provision allowing the heirs of aliens now engaged in the retail business who die, to
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer of continue such business for a period of six months for purposes of liquidation.
Manila,respondents.
III. Grounds upon which petition is based-Answer thereto
Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates for petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for respondent Secretary of Petitioner, for and in his own behalf and on behalf of other alien residents corporations and partnerships
Finance. adversely affected by the provisions of Republic Act. No. 1180, brought this action to obtain a judicial declaration
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for respondent City Treasurer. that said Act is unconstitutional, and to enjoin the Secretary of Finance and all other persons acting under him,
Dionisio Reyes as Amicus Curiae. particularly city and municipal treasurers, from enforcing its provisions. Petitioner attacks the constitutionality of
Marcial G. Mendiola as Amicus Curiae. the Act, contending that: (1) it denies to alien residents the equal protection of the laws and deprives of their
Emiliano R. Navarro as Amicus Curiae. liberty and property without due process of law ; (2) the subject of the Act is not expressed or comprehended in
the title thereof; (3) the Act violates international and treaty obligations of the Republic of the Philippines; (4) the
LABRADOR, J.: provisions of the Act against the transmission by aliens of their retail business thru hereditary succession, and
those requiring 100% Filipino capitalization for a corporation or entity to entitle it to engage in the retail business,
violate the spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of the Constitution.
I. The case and issue, in general

In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) the Act was passed in the
This Court has before it the delicate task of passing upon the validity and constitutionality of a legislative
valid exercise of the police power of the State, which exercise is authorized in the Constitution in the interest of
enactment, fundamental and far-reaching in significance. The enactment poses questions of due process, police
national economic survival; (2) the Act has only one subject embraced in the title; (3) no treaty or international
power and equal protection of the laws. It also poses an important issue of fact, that is whether the conditions
obligations are infringed; (4) as regards hereditary succession, only the form is affected but the value of the
which the disputed law purports to remedy really or actually exist. Admittedly springing from a deep, militant, and
property is not impaired, and the institution of inheritance is only of statutory origin.
positive nationalistic impulse, the law purports to protect citizen and country from the alien retailer. Through it,
and within the field of economy it regulates, Congress attempts to translate national aspirations for economic
independence and national security, rooted in the drive and urge for national survival and welfare, into a concrete IV. Preliminary consideration of legal principles involved
and tangible measures designed to free the national retailer from the competing dominance of the alien, so that
the country and the nation may be free from a supposed economic dependence and bondage. Do the facts and a. The police power. —
circumstances justify the enactment?
There is no question that the Act was approved in the exercise of the police power, but petitioner claims that its
II. Pertinent provisions of Republic Act No. 1180 exercise in this instance is attended by a violation of the constitutional requirements of due process and equal
protection of the laws. But before proceeding to the consideration and resolution of the ultimate issue involved, it
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes the retail trade would be well to bear in mind certain basic and fundamental, albeit preliminary, considerations in the
business. The main provisions of the Act are: (1) a prohibition against persons, not citizens of the Philippines, determination of the ever recurrent conflict between police power and the guarantees of due process and equal
and against associations, partnerships, or corporations the capital of which are not wholly owned by citizens of protection of the laws. What is the scope of police power, and how are the due process and equal protection
the Philippines, from engaging directly or indirectly in the retail trade; (2) an exception from the above prohibition clauses related to it? What is the province and power of the legislature, and what is the function and duty of the
in favor of aliens actually engaged in said business on May 15, 1954, who are allowed to continue to engaged courts? These consideration must be clearly and correctly understood that their application to the facts of the
therein, unless their licenses are forfeited in accordance with the law, until their death or voluntary retirement in case may be brought forth with clarity and the issue accordingly resolved.
case of natural persons, and for ten years after the approval of the Act or until the expiration of term in case of
juridical persons; (3) an exception therefrom in favor of citizens and juridical entities of the United States; (4) a It has been said the police power is so far - reaching in scope, that it has become almost impossible to limit its
provision for the forfeiture of licenses (to engage in the retail business) for violation of the laws on nationalization, sweep. As it derives its existence from the very existence of the State itself, it does not need to be expressed or
control weights and measures and labor and other laws relating to trade, commerce and industry; (5) a defined in its scope; it is said to be co-extensive with self-protection and survival, and as such it is the most
positive and active of all governmental processes, the most essential, insistent and illimitable. Especially is it so balancing is the essence or, shall it be said, the indispensable means for the attainment of legitimate aspirations
under a modern democratic framework where the demands of society and of nations have multiplied to almost of any democratic society. There can be no absolute power, whoever exercise it, for that would be tyranny. Yet
unimaginable proportions; the field and scope of police power has become almost boundless, just as the fields of there can neither be absolute liberty, for that would mean license and anarchy. So the State can deprive persons
public interest and public welfare have become almost all-embracing and have transcended human foresight. of life, liberty and property, provided there is due process of law; and persons may be classified into classes and
Otherwise stated, as we cannot foresee the needs and demands of public interest and welfare in this constantly groups, provided everyone is given the equal protection of the law. The test or standard, as always, is reason.
changing and progressive world, so we cannot delimit beforehand the extent or scope of police power by which The police power legislation must be firmly grounded on public interest and welfare, and a reasonable relation
and through which the State seeks to attain or achieve interest or welfare. So it is that Constitutions do not define must exist between purposes and means. And if distinction and classification has been made, there must be a
the scope or extent of the police power of the State; what they do is to set forth the limitations thereof. The most reasonable basis for said distinction.
important of these are the due process clause and the equal protection clause.
e. Legislative discretion not subject to judicial review. —
b. Limitations on police power. —
Now, in this matter of equitable balancing, what is the proper place and role of the courts? It must not be
The basic limitations of due process and equal protection are found in the following provisions of our Constitution: overlooked, in the first place, that the legislature, which is the constitutional repository of police power and
exercises the prerogative of determining the policy of the State, is by force of circumstances primarily the judge
SECTION 1.(1) No person shall be deprived of life, liberty or property without due process of law, nor of necessity, adequacy or reasonableness and wisdom, of any law promulgated in the exercise of the police
any person be denied the equal protection of the laws. (Article III, Phil. Constitution) power, or of the measures adopted to implement the public policy or to achieve public interest. On the other
hand, courts, although zealous guardians of individual liberty and right, have nevertheless evinced a reluctance
to interfere with the exercise of the legislative prerogative. They have done so early where there has been a
These constitutional guarantees which embody the essence of individual liberty and freedom in democracies, are
clear, patent or palpable arbitrary and unreasonable abuse of the legislative prerogative. Moreover, courts are
not limited to citizens alone but are admittedly universal in their application, without regard to any differences of
not supposed to override legitimate policy, and courts never inquire into the wisdom of the law.
race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)

V. Economic problems sought to be remedied


c. The, equal protection clause. —

With the above considerations in mind, we will now proceed to delve directly into the issue involved. If the
The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile
disputed legislation were merely a regulation, as its title indicates, there would be no question that it falls within
discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is limited either in the
the legitimate scope of legislative power. But it goes further and prohibits a group of residents, the aliens, from
object to which it is directed or by territory within which is to operate. It does not demand absolute equality among
engaging therein. The problem becomes more complex because its subject is a common, trade or occupation, as
residents; it merely requires that all persons shall be treated alike, under like circumstances and conditions both
old as society itself, which from the immemorial has always been open to residents, irrespective of race, color or
as to privileges conferred and liabilities enforced. The equal protection clause is not infringed by legislation which
citizenship.
applies only to those persons falling within a specified class, if it applies alike to all persons within such class,
and reasonable grounds exists for making a distinction between those who fall within such class and those who
do not. (2 Cooley, Constitutional Limitations, 824-825.) a. Importance of retail trade in the economy of the nation. —

d. The due process clause. — In a primitive economy where families produce all that they consume and consume all that they produce, the
dealer, of course, is unknown. But as group life develops and families begin to live in communities producing
more than what they consume and needing an infinite number of things they do not produce, the dealer comes
The due process clause has to do with the reasonableness of legislation enacted in pursuance of the police
into existence. As villages develop into big communities and specialization in production begins, the dealer's
power. Is there public interest, a public purpose; is public welfare involved? Is the Act reasonably necessary for
importance is enhanced. Under modern conditions and standards of living, in which man's needs have multiplied
the accomplishment of the legislature's purpose; is it not unreasonable, arbitrary or oppressive? Is there sufficient
and diversified to unlimited extents and proportions, the retailer comes as essential as the producer, because
foundation or reason in connection with the matter involved; or has there not been a capricious use of the
thru him the infinite variety of articles, goods and needed for daily life are placed within the easy reach of
legislative power? Can the aims conceived be achieved by the means used, or is it not merely an unjustified
consumers. Retail dealers perform the functions of capillaries in the human body, thru which all the needed food
interference with private interest? These are the questions that we ask when the due process test is applied.
and supplies are ministered to members of the communities comprising the nation.
The conflict, therefore, between police power and the guarantees of due process and equal protection of the laws
is more apparent than real. Properly related, the power and the guarantees are supposed to coexist. The
There cannot be any question about the importance of the retailer in the life of the community. He ministers to the Assets Gross Sales
resident's daily needs, food in all its increasing forms, and the various little gadgets and things needed for home Year and Retailers No.- Per cent Per cent
Pesos Pesos
and daily life. He provides his customers around his store with the rice or corn, the fish, the salt, the vinegar, the Nationality Establishments Distribution Distribution
spices needed for the daily cooking. He has cloths to sell, even the needle and the thread to sew them or darn 1941:
the clothes that wear out. The retailer, therefore, from the lowly peddler, the owner of a small sari-sari store, to Filipino .......... 106,671 200,323,138 55.82 174,181,924 51.74
the operator of a department store or, a supermarket is so much a part of day-to-day existence.
Chinese ........... 15,356 118,348,692 32.98 148,813,239 44.21
Others ............ 1,646 40,187,090 11.20 13,630,239 4.05
b. The alien retailer's trait. —
1947:

The alien retailer must have started plying his trades in this country in the bigger centers of population (Time Filipino .......... 111,107 208,658,946 65.05 279,583,333 57.03
there was when he was unknown in provincial towns and villages). Slowly but gradually be invaded towns and Chinese ........... 13,774 106,156,218 33.56 205,701,134 41.96
villages; now he predominates in the cities and big centers of population. He even pioneers, in far away nooks Others ........... 354 8,761,260 .49 4,927,168 1.01
where the beginnings of community life appear, ministering to the daily needs of the residents and purchasing 1948: (Census)
their agricultural produce for sale in the towns. It is an undeniable fact that in many communities the alien has
Filipino .......... 113,631 213,342,264 67.30 467,161,667 60.51
replaced the native retailer. He has shown in this trade, industry without limit, and the patience and forbearance
of a slave. Chinese .......... 12,087 93,155,459 29.38 294,894,227 38.20
Others .......... 422 10,514,675 3.32 9,995,402 1.29
Derogatory epithets are hurled at him, but he laughs these off without murmur; insults of ill-bred and insolent 1949:
neighbors and customers are made in his face, but he heeds them not, and he forgets and forgives. The Filipino .......... 113,659 213,451,602 60.89 462,532,901 53.47
community takes note of him, as he appears to be harmless and extremely useful. Chinese .......... 16,248 125,223,336 35.72 392,414,875 45.36
Others .......... 486 12,056,365 3.39 10,078,364 1.17
c. Alleged alien control and dominance. — 1951:
Filipino ......... 119,352 224,053,620 61.09 466,058,052 53.07
There is a general feeling on the part of the public, which appears to be true to fact, about the controlling and
Chinese .......... 17,429 134,325,303 36.60 404,481,384 46.06
dominant position that the alien retailer holds in the nation's economy. Food and other essentials, clothing,
almost all articles of daily life reach the residents mostly through him. In big cities and centers of population he Others .......... 347 8,614,025 2.31 7,645,327 87
has acquired not only predominance, but apparent control over distribution of almost all kinds of goods, such as
lumber, hardware, textiles, groceries, drugs, sugar, flour, garlic, and scores of other goods and articles. And were
it not for some national corporations like the Naric, the Namarco, the Facomas and the Acefa, his control over
principal foods and products would easily become full and complete.
AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Petitioner denies that there is alien predominance and control in the retail trade. In one breath it is said that the
fear is unfounded and the threat is imagined; in another, it is charged that the law is merely the result of Item
Year and Retailer's Gross Sales
Assets
radicalism and pure and unabashed nationalism. Alienage, it is said, is not an element of control; also so many Nationality
(Pesos)
(Pesos)
unmanageable factors in the retail business make control virtually impossible. The first argument which brings up
an issue of fact merits serious consideration. The others are matters of opinion within the exclusive competence 1941:
of the legislature and beyond our prerogative to pass upon and decide.
Filipino ............................................. 1,878 1,633

The best evidence are the statistics on the retail trade, which put down the figures in black and white. Between Chinese .............................................. 7,707 9,691
the constitutional convention year (1935), when the fear of alien domination and control of the retail trade already
filled the minds of our leaders with fears and misgivings, and the year of the enactment of the nationalization of Others ............................................... 24,415 8,281
the retail trade act (1954), official statistics unmistakably point out to the ever-increasing dominance and control
by the alien of the retail trade, as witness the following tables: 1947:
Filipino ............................................. 1,878 2,516 d. Alien control and threat, subject of apprehension in Constitutional convention. —

Chinese ........................................... 7,707 14,934 It is this domination and control, which we believe has been sufficiently shown to exist, that is the legislature's
target in the enactment of the disputed nationalization would never have been adopted. The framers of our
Others .............................................. 24,749 13,919
Constitution also believed in the existence of this alien dominance and control when they approved a resolution
1948: (Census) categorically declaring among other things, that "it is the sense of the Convention that the public interest requires
the nationalization of the retail trade; . . . ." (II Aruego, The Framing of the Philippine Constitution, 662-663,
Filipino ............................................. 1,878 4,111 quoted on page 67 of Petitioner.) That was twenty-two years ago; and the events since then have not been either
pleasant or comforting. Dean Sinco of the University of the Philippines College of Law, commenting on the
Chinese ............................................. 7,707 24,398 patrimony clause of the Preamble opines that the fathers of our Constitution were merely translating the general
Others .............................................. 24,916 23,686
preoccupation of Filipinos "of the dangers from alien interests that had already brought under their control the
commercial and other economic activities of the country" (Sinco, Phil. Political Law, 10th ed., p. 114); and
1949: analyzing the concern of the members of the constitutional convention for the economic life of the citizens, in
connection with the nationalistic provisions of the Constitution, he says:
Filipino ............................................. 1,878 4,069

Chinese .............................................. 7,707 24,152 But there has been a general feeling that alien dominance over the economic life of the country is not
desirable and that if such a situation should remain, political independence alone is no guarantee to
Others .............................................. 24,807 20,737 national stability and strength. Filipino private capital is not big enough to wrest from alien hands the control
of the national economy. Moreover, it is but of recent formation and hence, largely inexperienced, timid and
1951: hesitant. Under such conditions, the government as the instrumentality of the national will, has to step in
and assume the initiative, if not the leadership, in the struggle for the economic freedom of the nation in
Filipino ............................................. 1,877 3,905
somewhat the same way that it did in the crusade for political freedom. Thus . . . it (the Constitution)
Chinese ............................................. 7,707 33,207 envisages an organized movement for the protection of the nation not only against the possibilities of
armed invasion but also against its economic subjugation by alien interests in the economic field. (Phil.
Others ............................................... 24,824 22,033 Political Law by Sinco, 10th ed., p. 476.)

(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality of Owners, Belief in the existence of alien control and predominance is felt in other quarters. Filipino businessmen,
Benchmark: 1948 Census, issued by the Bureau of Census and Statistics, Department of Commerce manufacturers and producers believe so; they fear the dangers coming from alien control, and they express
and Industry; pp. 18-19 of Answer.) sentiments of economic independence. Witness thereto is Resolution No. 1, approved on July 18, 1953, of the
Fifth National convention of Filipino Businessmen, and a similar resolution, approved on March 20, 1954, of the
Second National Convention of Manufacturers and Producers. The man in the street also believes, and fears,
The above statistics do not include corporations and partnerships, while the figures on Filipino establishments
alien predominance and control; so our newspapers, which have editorially pointed out not only to control but to
already include mere market vendors, whose capital is necessarily small..
alien stranglehold. We, therefore, find alien domination and control to be a fact, a reality proved by official
statistics, and felt by all the sections and groups that compose the Filipino community.
The above figures reveal that in percentage distribution of assests and gross sales, alien participation has
steadily increased during the years. It is true, of course, that Filipinos have the edge in the number of retailers,
e. Dangers of alien control and dominance in retail. —
but aliens more than make up for the numerical gap through their assests and gross sales which average
between six and seven times those of the very many Filipino retailers. Numbers in retailers, here, do not imply
superiority; the alien invests more capital, buys and sells six to seven times more, and gains much more. The But the dangers arising from alien participation in the retail trade does not seem to lie in the predominance alone;
same official report, pointing out to the known predominance of foreign elements in the retail trade, remarks that there is a prevailing feeling that such predominance may truly endanger the national interest. With ample capital,
the Filipino retailers were largely engaged in minor retailer enterprises. As observed by respondents, the native unity of purpose and action and thorough organization, alien retailers and merchants can act in such complete
investment is thinly spread, and the Filipino retailer is practically helpless in matters of capital, credit, price and unison and concert on such vital matters as the fixing of prices, the determination of the amount of goods or
supply. articles to be made available in the market, and even the choice of the goods or articles they would or would not
patronize or distribute, that fears of dislocation of the national economy and of the complete subservience of
national economy and of the consuming public are not entirely unfounded. Nationals, producers and consumers
alike can be placed completely at their mercy. This is easily illustrated. Suppose an article of daily use is desired interest of the public, nay of the national security itself, and indisputably falls within the scope of police power,
to be prescribed by the aliens, because the producer or importer does not offer them sufficient profits, or because thru which and by which the State insures its existence and security and the supreme welfare of its
a new competing article offers bigger profits for its introduction. All that aliens would do is to agree to refuse to citizens.VI. The Equal Protection Limitation
sell the first article, eliminating it from their stocks, offering the new one as a substitute. Hence, the producers or
importers of the prescribed article, or its consumers, find the article suddenly out of the prescribed article, or its a. Objections to alien participation in retail trade. — The next question that now poses solution is, Does the law
consumers, find the article suddenly out of circulation. Freedom of trade is thus curtailed and free enterprise deny the equal protection of the laws? As pointed out above, the mere fact of alienage is the root and cause of
correspondingly suppressed. the distinction between the alien and the national as a trader. The alien resident owes allegiance to the country of
his birth or his adopted country; his stay here is for personal convenience; he is attracted by the lure of gain and
We can even go farther than theoretical illustrations to show the pernicious influences of alien domination. Grave profit. His aim or purpose of stay, we admit, is neither illegitimate nor immoral, but he is naturally lacking in that
abuses have characterized the exercise of the retail trade by aliens. It is a fact within judicial notice, which courts spirit of loyalty and enthusiasm for this country where he temporarily stays and makes his living, or of that spirit of
of justice may not properly overlook or ignore in the interests of truth and justice, that there exists a general regard, sympathy and consideration for his Filipino customers as would prevent him from taking advantage of
feeling on the part of the public that alien participation in the retail trade has been attended by a pernicious and their weakness and exploiting them. The faster he makes his pile, the earlier can the alien go back to his beloved
intolerable practices, the mention of a few of which would suffice for our purposes; that at some time or other country and his beloved kin and countrymen. The experience of the country is that the alien retailer has shown
they have cornered the market of essential commodities, like corn and rice, creating artificial scarcities to justify such utter disregard for his customers and the people on whom he makes his profit, that it has been found
and enhance profits to unreasonable proportions; that they have hoarded essential foods to the inconvenience necessary to adopt the legislation, radical as it may seem.
and prejudice of the consuming public, so much so that the Government has had to establish the National Rice
and Corn Corporation to save the public from their continuous hoarding practices and tendencies; that they have Another objection to the alien retailer in this country is that he never really makes a genuine contribution to
violated price control laws, especially on foods and essential commodities, such that the legislature had to enact national income and wealth. He undoubtedly contributes to general distribution, but the gains and profits he
a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic deportation for price control makes are not invested in industries that would help the country's economy and increase national wealth. The
convictions; that they have secret combinations among themselves to control prices, cheating the operation of alien's interest in this country being merely transient and temporary, it would indeed be ill-advised to continue
the law of supply and demand; that they have connived to boycott honest merchants and traders who would not entrusting the very important function of retail distribution to his hands.
cater or yield to their demands, in unlawful restraint of freedom of trade and enterprise. They are believed by the
public to have evaded tax laws, smuggled goods and money into and out of the land, violated import and export
The practices resorted to by aliens in the control of distribution, as already pointed out above, their secret
prohibitions, control laws and the like, in derision and contempt of lawful authority. It is also believed that they
manipulations of stocks of commodities and prices, their utter disregard of the welfare of their customers and of
have engaged in corrupting public officials with fabulous bribes, indirectly causing the prevalence of graft and
the ultimate happiness of the people of the nation of which they are mere guests, which practices, manipulations
corruption in the Government. As a matter of fact appeals to unscrupulous aliens have been made both by the
and disregard do not attend the exercise of the trade by the nationals, show the existence of real and actual,
Government and by their own lawful diplomatic representatives, action which impliedly admits a prevailing feeling
positive and fundamental differences between an alien and a national which fully justify the legislative
about the existence of many of the above practices.
classification adopted in the retail trade measure. These differences are certainly a valid reason for the State to
prefer the national over the alien in the retail trade. We would be doing violence to fact and reality were we to
The circumstances above set forth create well founded fears that worse things may come in the future. The hold that no reason or ground for a legitimate distinction can be found between one and the other.
present dominance of the alien retailer, especially in the big centers of population, therefore, becomes a potential
source of danger on occasions of war or other calamity. We do not have here in this country isolated groups of
b. Difference in alien aims and purposes sufficient basis for distinction. —
harmless aliens retailing goods among nationals; what we have are well organized and powerful groups that
dominate the distribution of goods and commodities in the communities and big centers of population. They owe
no allegiance or loyalty to the State, and the State cannot rely upon them in times of crisis or emergency. While The above objectionable characteristics of the exercise of the retail trade by the aliens, which are actual and real,
the national holds his life, his person and his property subject to the needs of his country, the alien may even furnish sufficient grounds for legislative classification of retail traders into nationals and aliens. Some may
become the potential enemy of the State. disagree with the wisdom of the legislature's classification. To this we answer, that this is the prerogative of the
law-making power. Since the Court finds that the classification is actual, real and reasonable, and all persons of
one class are treated alike, and as it cannot be said that the classification is patently unreasonable and
f. Law enacted in interest of national economic survival and security. —
unfounded, it is in duty bound to declare that the legislature acted within its legitimate prerogative and it can not
declare that the act transcends the limit of equal protection established by the Constitution.
We are fully satisfied upon a consideration of all the facts and circumstances that the disputed law is not the
product of racial hostility, prejudice or discrimination, but the expression of the legitimate desire and
Broadly speaking, the power of the legislature to make distinctions and classifications among persons is not
determination of the people, thru their authorized representatives, to free the nation from the economic situation
curtailed or denied by the equal protection of the laws clause. The legislative power admits of a wide scope of
that has unfortunately been saddled upon it rightly or wrongly, to its disadvantage. The law is clearly in the
discretion, and a law can be violative of the constitutional limitation only when the classification is without Aliens are under no special constitutional protection which forbids a classification otherwise justified simply
reasonable basis. In addition to the authorities we have earlier cited, we can also refer to the case of Linsey vs. because the limitation of the class falls along the lines of nationality. That would be requiring a higher
Natural Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and succinctly defined the application of equal degree of protection for aliens as a class than for similar classes than for similar classes of American
protection clause to a law sought to be voided as contrary thereto: citizens. Broadly speaking, the difference in status between citizens and aliens constitutes a basis for
reasonable classification in the exercise of police power. (2 Am., Jur. 468-469.)
. . . . "1. The equal protection clause of the Fourteenth Amendment does not take from the state the power
to classify in the adoption of police laws, but admits of the exercise of the wide scope of discretion in that In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of hawkers and
regard, and avoids what is done only when it is without any reasonable basis, and therefore is purely peddlers, which provided that no one can obtain a license unless he is, or has declared his intention, to become
arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely a citizen of the United States, was held valid, for the following reason: It may seem wise to the legislature to limit
because it is not made with mathematical nicety, or because in practice it results in some inequality. 3. the business of those who are supposed to have regard for the welfare, good order and happiness of the
When the classification in such a law is called in question, if any state of facts reasonably can be conceived community, and the court cannot question this judgment and conclusion. In Bloomfield vs. State, 99 N. E. 309
that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. (Ohio, 1912), a statute which prevented certain persons, among them aliens, from engaging in the traffic of
4. One who assails the classification in such a law must carry the burden of showing that it does not rest liquors, was found not to be the result of race hatred, or in hospitality, or a deliberate purpose to discriminate, but
upon any reasonable basis but is essentially arbitrary." was based on the belief that an alien cannot be sufficiently acquainted with "our institutions and our life as to
enable him to appreciate the relation of this particular business to our entire social fabric", and was not, therefore,
c. Authorities recognizing citizenship as basis for classification. — invalid. In Ohio ex rel. Clarke vs. Deckebach, 274 U. S. 392, 71 L. ed. 115 (1926), the U.S. Supreme Court had
under consideration an ordinance of the city of Cincinnati prohibiting the issuance of licenses (pools and billiard
rooms) to aliens. It held that plainly irrational discrimination against aliens is prohibited, but it does not follow that
The question as to whether or not citizenship is a legal and valid ground for classification has already been
alien race and allegiance may not bear in some instances such a relation to a legitimate object of legislation as to
affirmatively decided in this jurisdiction as well as in various courts in the United States. In the case of Smith Bell
be made the basis of permitted classification, and that it could not state that the legislation is clearly wrong; and
& Co. vs. Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the Philippine Legislature was in issue,
that latitude must be allowed for the legislative appraisement of local conditions and for the legislative choice of
because of a condition therein limiting the ownership of vessels engaged in coastwise trade to corporations
methods for controlling an apprehended evil. The case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a
formed by citizens of the Philippine Islands or the United States, thus denying the right to aliens, it was held that
parallel case to the one at bar. In Asakura vs. City of Seattle, 210 P. 30 (Washington, 1922), the business of
the Philippine Legislature did not violate the equal protection clause of the Philippine Bill of Rights. The
pawn brooking was considered as having tendencies injuring public interest, and limiting it to citizens is within the
legislature in enacting the law had as ultimate purpose the encouragement of Philippine shibuilding and the
scope of police power. A similar statute denying aliens the right to engage in auctioneering was also sustained
safety for these Islands from foreign interlopers. We held that this was a valid exercise of the police power, and
in Wright vs. May, L.R.A., 1915 P. 151 (Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340 (Oregon,
all presumptions are in favor of its constitutionality. In substance, we held that the limitation of domestic
1924), the court said that aliens are judicially known to have different interests, knowledge, attitude, psychology
ownership of vessels engaged in coastwise trade to citizens of the Philippines does not violate the equal
and loyalty, hence the prohibitions of issuance of licenses to them for the business of pawnbroker, pool, billiard,
protection of the law and due process or law clauses of the Philippine Bill of Rights. In rendering said decision we
card room, dance hall, is not an infringement of constitutional rights. In Templar vs. Michigan State Board of
quoted with approval the concurring opinion of Justice Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as
Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting the licensing of aliens as barbers was held void, but
follows:
the reason for the decision was the court's findings that the exercise of the business by the aliens does not in any
way affect the morals, the health, or even the convenience of the community. In Takahashi vs. Fish and Game
"Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts licensing Commission, 92 L. ed. 1479 (1947), a California statute banning the issuance of commercial fishing licenses to
gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly of that character, person ineligible to citizenship was held void, because the law conflicts with Federal power over immigration, and
and forms part of an extensive system, the object of which is to encourage American shipping, and place because there is no public interest in the mere claim of ownership of the waters and the fish in them, so there
them on an equal footing with the shipping of other nations. Almost every commercial nation reserves to its was no adequate justification for the discrimination. It further added that the law was the outgrowth of antagonism
own subjects a monopoly of its coasting trade; and a countervailing privilege in favor of American shipping toward the persons of Japanese ancestry. However, two Justices dissented on the theory that fishing rights have
is contemplated, in the whole legislation of the United States on this subject. It is not to give the vessel an been treated traditionally as natural resources. In Fraser vs. McConway & Tarley Co., 82 Fed. 257
American character, that the license is granted; that effect has been correctly attributed to the act of her (Pennsylvania, 1897), a state law which imposed a tax on every employer of foreign-born unnaturalized male
enrollment. But it is to confer on her American privileges, as contra distinguished from foreign; and to persons over 21 years of age, was declared void because the court found that there was no reason for the
preserve the Government from fraud by foreigners; in surreptitiously intruding themselves into the American classification and the tax was an arbitrary deduction from the daily wage of an employee.
commercial marine, as well as frauds upon the revenue in the trade coastwise, that this whole system is
projected."
d. Authorities contra explained. —
The rule in general is as follows:
It is true that some decisions of the Federal court and of the State courts in the United States hold that the . . . . And the guaranty of due process, as has often been held, demands only that the law shall not be
distinction between aliens and citizens is not a valid ground for classification. But in this decision the laws unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial relation
declared invalid were found to be either arbitrary, unreasonable or capricious, or were the result or product of to the subject sought to be attained. . . . .
racial antagonism and hostility, and there was no question of public interest involved or pursued. In Yu Cong Eng
vs. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared invalid a Philippine law making So far as the requirement of due process is concerned and in the absence of other constitutional restriction
unlawful the keeping of books of account in any language other than English, Spanish or any other local dialect, a state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare,
but the main reasons for the decisions are: (1) that if Chinese were driven out of business there would be no and to enforce that policy by legislation adapted to its purpose. The courts are without authority either to
other system of distribution, and (2) that the Chinese would fall prey to all kinds of fraud, because they would be declare such policy, or, when it is declared by the legislature, to override it. If the laws passed are seen to
deprived of their right to be advised of their business and to direct its conduct. The real reason for the decision, have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the
therefore, is the court's belief that no public benefit would be derived from the operations of the law and on the requirements of due process are satisfied, and judicial determination to that effect renders a court functus
other hand it would deprive Chinese of something indispensable for carrying on their business. In Yick Wo vs. officio. . . . (Nebbia vs. New York, 78 L. ed. 940, 950, 957.)
Hopkins, 30 L. ed 220 (1885) an ordinance conferring powers on officials to withhold consent in the operation of
laundries both as to persons and place, was declared invalid, but the court said that the power granted was
Another authority states the principle thus:
arbitrary, that there was no reason for the discrimination which attended the administration and implementation of
the law, and that the motive thereof was mere racial hostility. In State vs. Montgomery, 47 A. 165 (Maine, 1900),
a law prohibiting aliens to engage as hawkers and peddlers was declared void, because the discrimination bore . . . . Too much significance cannot be given to the word "reasonable" in considering the scope of the police
no reasonable and just relation to the act in respect to which the classification was proposed. power in a constitutional sense, for the test used to determine the constitutionality of the means employed
by the legislature is to inquire whether the restriction it imposes on rights secured to individuals by the Bill
of Rights are unreasonable, and not whether it imposes any restrictions on such rights. . . .
The case at bar is radically different, and the facts make them so. As we already have said, aliens do not
naturally possess the sympathetic consideration and regard for the customers with whom they come in daily
contact, nor the patriotic desire to help bolster the nation's economy, except in so far as it enhances their profit, . . . . A statute to be within this power must also be reasonable in its operation upon the persons whom it
nor the loyalty and allegiance which the national owes to the land. These limitations on the qualifications of the affects, must not be for the annoyance of a particular class, and must not be unduly oppressive. (11 Am.
aliens have been shown on many occasions and instances, especially in times of crisis and emergency. We can Jur. Sec. 302., 1:1)- 1074-1075.)
do no better than borrow the language of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the reality and
significance of the distinction between the alien and the national, thus: In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:

. . . . It may be judicially known, however, that alien coming into this country are without the intimate . . . . To justify the state in thus interposing its authority in behalf of the public, it must appear, first, that the
knowledge of our laws, customs, and usages that our own people have. So it is likewise known that certain interests of the public generally, as distinguished from those of a particular class, require such interference;
classes of aliens are of different psychology from our fellow countrymen. Furthermore, it is natural and and second, that the means are reasonably necessary for the accomplishment of the purpose, and not
reasonable to suppose that the foreign born, whose allegiance is first to their own country, and whose unduly oppressive upon individuals. . . .
ideals of governmental environment and control have been engendered and formed under entirely different
regimes and political systems, have not the same inspiration for the public weal, nor are they as well Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of constitutionality:
disposed toward the United States, as those who by citizenship, are a part of the government itself. Further
enlargement, is unnecessary. I have said enough so that obviously it cannot be affirmed with absolute In determining whether a given act of the Legislature, passed in the exercise of the police power to regulate
confidence that the Legislature was without plausible reason for making the classification, and therefore the operation of a business, is or is not constitutional, one of the first questions to be considered by the
appropriate discriminations against aliens as it relates to the subject of legislation. . . . . court is whether the power as exercised has a sufficient foundation in reason in connection with the matter
involved, or is an arbitrary, oppressive, and capricious use of that power, without substantial relation to the
VII. The Due Process of Law Limitation. health, safety, morals, comfort, and general welfare of the public.

a. Reasonability, the test of the limitation; determination by legislature decisive. — b. Petitioner's argument considered. —

We now come to due process as a limitation on the exercise of the police power. It has been stated by the Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges long ago
highest authority in the United States that: recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful and honest
occupation and therefore beyond the power of the legislature to prohibit and penalized. This arguments overlooks
fact and reality and rests on an incorrect assumption and premise, i.e., that in this country where the occupation c. Law expressly held by Constitutional Convention to be within the sphere of legislative action. —
is engaged in by petitioner, it has been so engaged by him, by the alien in an honest creditable and
unimpeachable manner, without harm or injury to the citizens and without ultimate danger to their economic The framers of the Constitution could not have intended to impose the constitutional restrictions of due process
peace, tranquility and welfare. But the Legislature has found, as we have also found and indicated, that the on the attainment of such a noble motive as freedom from economic control and domination, thru the exercise of
privilege has been so grossly abused by the alien, thru the illegitimate use of pernicious designs and practices, the police power. The fathers of the Constitution must have given to the legislature full authority and power to
that he now enjoys a monopolistic control of the occupation and threatens a deadly stranglehold on the nation's enact legislation that would promote the supreme happiness of the people, their freedom and liberty. On the
economy endangering the national security in times of crisis and emergency. precise issue now before us, they expressly made their voice clear; they adopted a resolution expressing their
belief that the legislation in question is within the scope of the legislative power. Thus they declared the their
The real question at issue, therefore, is not that posed by petitioner, which overlooks and ignores the facts and Resolution:
circumstances, but this, Is the exclusion in the future of aliens from the retail trade unreasonable. Arbitrary
capricious, taking into account the illegitimate and pernicious form and manner in which the aliens have That it is the sense of the Convention that the public interest requires the nationalization of retail trade; but
heretofore engaged therein? As thus correctly stated the answer is clear. The law in question is deemed it abstain from approving the amendment introduced by the Delegate for Manila, Mr. Araneta, and others
absolutely necessary to bring about the desired legislative objective, i.e., to free national economy from alien on this matter because it is convinced that the National Assembly is authorized to promulgate a law which
control and dominance. It is not necessarily unreasonable because it affects private rights and privileges (11 Am. limits to Filipino and American citizens the privilege to engage in the retail trade. (11 Aruego, The Framing
Jur. pp. 1080-1081.) The test of reasonableness of a law is the appropriateness or adequacy under all of the Philippine Constitution, quoted on pages 66 and 67 of the Memorandum for the Petitioner.)
circumstances of the means adopted to carry out its purpose into effect (Id.) Judged by this test, disputed
legislation, which is not merely reasonable but actually necessary, must be considered not to have infringed the
It would do well to refer to the nationalistic tendency manifested in various provisions of the Constitution. Thus in
constitutional limitation of reasonableness.
the preamble, a principle objective is the conservation of the patrimony of the nation and as corollary the
provision limiting to citizens of the Philippines the exploitation, development and utilization of its natural
The necessity of the law in question is explained in the explanatory note that accompanied the bill, which later resources. And in Section 8 of Article XIV, it is provided that "no franchise, certificate, or any other form of
was enacted into law: authorization for the operation of the public utility shall be granted except to citizens of the Philippines." The
nationalization of the retail trade is only a continuance of the nationalistic protective policy laid down as a primary
This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not citizens of objective of the Constitution. Can it be said that a law imbued with the same purpose and spirit underlying many
the Philippines from having a strangle hold upon our economic life. If the persons who control this vital of the provisions of the Constitution is unreasonable, invalid and unconstitutional?
artery of our economic life are the ones who owe no allegiance to this Republic, who have no profound
devotion to our free institutions, and who have no permanent stake in our people's welfare, we are not The seriousness of the Legislature's concern for the plight of the nationals as manifested in the approval of the
really the masters of our destiny. All aspects of our life, even our national security, will be at the mercy of radical measures is, therefore, fully justified. It would have been recreant to its duties towards the country and its
other people. people would it view the sorry plight of the nationals with the complacency and refuse or neglect to adopt a
remedy commensurate with the demands of public interest and national survival. As the repository of the
In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are not citizens sovereign power of legislation, the Legislature was in duty bound to face the problem and meet, through
of the Philippines of their means of livelihood. While this bill seeks to take away from the hands of persons adequate measures, the danger and threat that alien domination of retail trade poses to national economy.
who are not citizens of the Philippines a power that can be wielded to paralyze all aspects of our national
life and endanger our national security it respects existing rights. d. Provisions of law not unreasonable. —

The approval of this bill is necessary for our national survival. A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the Legislature
has been. The law is made prospective and recognizes the right and privilege of those already engaged in the
If political independence is a legitimate aspiration of a people, then economic independence is none the less occupation to continue therein during the rest of their lives; and similar recognition of the right to continue is
legitimate. Freedom and liberty are not real and positive if the people are subject to the economic control and accorded associations of aliens. The right or privilege is denied to those only upon conviction of certain offenses.
domination of others, especially if not of their own race or country. The removal and eradication of the shackles In the deliberations of the Court on this case, attention was called to the fact that the privilege should not have
of foreign economic control and domination, is one of the noblest motives that a national legislature may pursue. been denied to children and heirs of aliens now engaged in the retail trade. Such provision would defeat the law
It is impossible to conceive that legislation that seeks to bring it about can infringe the constitutional limitation of itself, its aims and purposes. Beside, the exercise of legislative discretion is not subject to judicial review. It is well
due process. The attainment of a legitimate aspiration of a people can never be beyond the limits of legislative settled that the Court will not inquire into the motives of the Legislature, nor pass upon general matters of
authority. legislative judgment. The Legislature is primarily the judge of the necessity of an enactment or of any of its
provisions, and every presumption is in favor of its validity, and though the Court may hold views inconsistent The general rule is for the use of general terms in the title of a bill; it has also been said that the title need not be
with the wisdom of the law, it may not annul the legislation if not palpably in excess of the legislative power. an index to the entire contents of the law (I Sutherland, Statutory Construction, See. 4803, p. 345.) The above
Furthermore, the test of the validity of a law attacked as a violation of due process, is not its reasonableness, but rule was followed the title of the Act in question adopted the more general term "regulate" instead of "nationalize"
its unreasonableness, and we find the provisions are not unreasonable. These principles also answer various or "prohibit". Furthermore, the law also contains other rules for the regulation of the retail trade which may not be
other arguments raised against the law, some of which are: that the law does not promote general welfare; that included in the terms "nationalization" or "prohibition"; so were the title changed from "regulate" to "nationalize" or
thousands of aliens would be thrown out of employment; that prices will increase because of the elimination of "prohibit", there would have been many provisions not falling within the scope of the title which would have made
competition; that there is no need for the legislation; that adequate replacement is problematical; that there may the Act invalid. The use of the term "regulate", therefore, is in accord with the principle governing the drafting of
be general breakdown; that there would be repercussions from foreigners; etc. Many of these arguments are statutes, under which a simple or general term should be adopted in the title, which would include all other
directed against the supposed wisdom of the law which lies solely within the legislative prerogative; they do not provisions found in the body of the Act.
import invalidity.
One purpose of the constitutional directive that the subject of a bill should be embraced in its title is to apprise the
VIII. Alleged defect in the title of the law legislators of the purposes, the nature and scope of its provisions, and prevent the enactment into law of matters
which have received the notice, action and study of the legislators or of the public. In the case at bar it cannot be
A subordinate ground or reason for the alleged invalidity of the law is the claim that the title thereof is misleading claimed that the legislators have been appraised of the nature of the law, especially the nationalization and the
or deceptive, as it conceals the real purpose of the bill which is to nationalize the retail business and prohibit prohibition provisions. The legislators took active interest in the discussion of the law, and a great many of the
aliens from engaging therein. The constitutional provision which is claimed to be violated in Section 21 (1) of persons affected by the prohibitions in the law conducted a campaign against its approval. It cannot be claimed,
Article VI, which reads: therefore, that the reasons for declaring the law invalid ever existed. The objection must therefore, be overruled.

No bill which may be enacted in the law shall embrace more than one subject which shall be expressed in IX. Alleged violation of international treaties and obligations
the title of the bill.
Another subordinate argument against the validity of the law is the supposed violation thereby of the Charter of
What the above provision prohibits is duplicity, that is, if its title completely fails to appraise the legislators or the the United Nations and of the Declaration of the Human Rights adopted by the United Nations General
public of the nature, scope and consequences of the law or its operation (I Sutherland, Statutory Construction, Assembly. We find no merit in the Nations Charter imposes no strict or legal obligations regarding the rights and
Sec. 1707, p. 297.) A cursory consideration of the title and the provisions of the bill fails to show the presence of freedom of their subjects (Hans Kelsen, The Law of the United Nations, 1951 ed. pp. 29-32), and the Declaration
duplicity. It is true that the term "regulate" does not and may not readily and at first glance convey the idea of of Human Rights contains nothing more than a mere recommendation or a common standard of achievement for
"nationalization" and "prohibition", which terms express the two main purposes and objectives of the law. But all peoples and all nations (Id. p. 39.) That such is the import of the United Nations Charter aid of the Declaration
"regulate" is a broader term than either prohibition or nationalization. Both of these have always been included of Human Rights can be inferred the fact that members of the United Nations Organizations, such as Norway and
within the term regulation. Denmark, prohibit foreigners from engaging in retail trade, and in most nations of the world laws against
foreigners engaged in domestic trade are adopted.
Under the title of an act to "regulate", the sale of intoxicating liquors, the Legislature may prohibit the sale of
intoxicating liquors. (Sweet vs. City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.) The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18, 1947 is also
claimed to be violated by the law in question. All that the treaty guarantees is equality of treatment to the Chinese
nationals "upon the same terms as the nationals of any other country." But the nationals of China are not
Within the meaning of the Constitution requiring that the subject of every act of the Legislature shall be
discriminating against because nationals of all other countries, except those of the United States, who are
stated in the tale, the title to regulate the sale of intoxicating liquors, etc." sufficiently expresses the subject
granted special rights by the Constitution, are all prohibited from engaging in the retail trade. But even supposing
of an actprohibiting the sale of such liquors to minors and to persons in the habit of getting intoxicated;
that the law infringes upon the said treaty, the treaty is always subject to qualification or amendment by a
such matters being properly included within the subject of regulating the sale. (Williams vs. State, 48 Ind.
subsequent law (U. S. vs. Thompson, 258, Fed. 257, 260), and the same may never curtail or restrict the scope
306, 308, quoted in p. 42 of Answer.)
of the police power of the State (plaston vs. Pennsylvania, 58 L. ed. 539.)
The word "regulate" is of broad import, and necessarily implies some degree of restraint and prohibition of
X. Conclusion
acts usually done in connection with the thing to be regulated. While word regulate does not ordinarily
convey meaning of prohibit, there is no absolute reason why it should not have such meaning when used in
delegating police power in connection with a thing the best or only efficacious regulation of which involves Resuming what we have set forth above we hold that the disputed law was enacted to remedy a real actual
suppression. (State vs. Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of Answer.) threat and danger to national economy posed by alien dominance and control of the retail business and free
citizens and country from dominance and control; that the enactment clearly falls within the scope of the police corporation, whichever event comes first. The prohibition on corporations, the capital of which is not wholly
power of the State, thru which and by which it protects its own personality and insures its security and future; that owned by citizens of the Philippines, to engage in the retail business for a period of more than ten years from the
the law does not violate the equal protection clause of the Constitution because sufficient grounds exist for the date of the approval of the Act or beyond the term of their corporate existence, whichever event comes first, is
distinction between alien and citizen in the exercise of the occupation regulated, nor the due process of law valid and lawful, because the continuance of the existence of such corporations is subject to whatever the
clause, because the law is prospective in operation and recognizes the privilege of aliens already engaged in the Congress may impose reasonably upon them by subsequent legislation.1 But the prohibition to engage in the
occupation and reasonably protects their privilege; that the wisdom and efficacy of the law to carry out its retail business by associations and partnerships, the capital of which is not wholly owned by citizen of the
objectives appear to us to be plainly evident — as a matter of fact it seems not only appropriate but actually Philippines, after ten years from the date of the approval of the Act, even before the end of the term of their
necessary — and that in any case such matter falls within the prerogative of the Legislature, with whose power existence as agreed upon by the associates and partners, and by alien heirs to whom the retail business is
and discretion the Judicial department of the Government may not interfere; that the provisions of the law are transmitted by the death of an alien engaged in the business, or by his executor or administrator, amounts to a
clearly embraced in the title, and this suffers from no duplicity and has not misled the legislators or the segment deprivation of their property without due process of law. To my mind, the ten-year period from the date of the
of the population affected; and that it cannot be said to be void for supposed conflict with treaty obligations approval of the Act or until the expiration of the term of the existence of the association and partnership,
because no treaty has actually been entered into on the subject and the police power may not be curtailed or whichever event comes first, and the six-month period granted to alien heirs of a deceased alien, his executor or
surrendered by any treaty or any other conventional agreement. administrator, to liquidate the business, do not cure the defect of the law, because the effect of the prohibition is
to compel them to sell or dispose of their business. The price obtainable at such forced sale of the business
Some members of the Court are of the opinion that the radical effects of the law could have been made less would be inadequate to reimburse and compensate the associates or partners of the associations or partnership,
harsh in its impact on the aliens. Thus it is stated that the more time should have been given in the law for the and the alien heirs of a deceased alien, engaged in the retail business for the capital invested in it. The stock of
liquidation of existing businesses when the time comes for them to close. Our legal duty, however, is merely to merchandise bought and sold at retail does not alone constitute the business. The goodwill that the association,
determine if the law falls within the scope of legislative authority and does not transcend the limitations of due partnership and the alien had built up during a long period of effort, patience and perseverance forms part of
process and equal protection guaranteed in the Constitution. Remedies against the harshness of the law should such business. The constitutional provisions that no person shall be deprived of his property without due process
be addressed to the Legislature; they are beyond our power and jurisdiction. of law2 and that no person shall be denied the equal protection of the laws3 would have no meaning as applied to
associations or partnership and alien heirs of an alien engaged in the retail business if they were to be compelled
to sell or dispose of their business within ten years from the date of the approval of the Act and before the end of
The petition is hereby denied, with costs against petitioner.
the term of the existence of the associations and partnership as agreed upon by the associations and partners
and within six months after the death of their predecessor-in-interest.
Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur.
The authors of the Constitution were vigilant, careful and zealous in the safeguard of the ownership of private
Separate Opinions agricultural lands which together with the lands of the public domain constitute the priceless patrimony and
mainstay of the nation; yet, they did not deem it wise and prudent to deprive aliens and their heirs of such lands. 4
PADILLA, J., concurring and dissenting:
For these reasons, I am of the opinion that section 1 of the Act, insofar as it compels associations and
I agree to the proposition, principle or rule that courts may not inquire into the wisdom of an the Act passed by partnership referred to therein to wind up their retail business within ten years from the date of the approval of the
the Congress and duly approved by the President of the Republic. But the rule does not preclude courts from Act even before the expiry of the term of their existence as agreed upon by the associates and partners and
inquiring and determining whether the Act offends against a provision or provisions of the Constitution. I am section 3 of the Act, insofar as it compels the aliens engaged in the retail business in his lifetime his executor or
satisfied that the Act assailed as violative of the due process of law and the equal protection of the laws clauses administrator, to liquidate the business, are invalid, for they violate the due process of law and the equal
of the Constitution does not infringe upon them, insofar as it affects associations, partnership or corporations, the protection of the laws clauses of the Constitution.
capital of which is not wholly owned by the citizens of the Philippines, and aliens, who are not and have not been
engaged in the retail business. I am, however, unable to persuade myself that it does not violate said clauses Footnotes
insofar as the Act applies to associations and partnerships referred to in the Act and to aliens, who are and have
heretofore been engaged in said business. When they did engage in the retail business there was no prohibition 1 Section 76, Act No. 1459..
on or against them to engage in it. They assumed and believed in good faith they were entitled to engaged in the 2 Section 1 (1), Article III, of the Constitution..
business. The Act allows aliens to continue in business until their death or voluntary retirement from the business 3 Ibid.
or forfeiture of their license; and corporations, associations or partnership, the capital of which is not wholly 4 Section 5, Article XIII, of the Constitution.
owned by the citizens of the Philippines to continue in the business for a period of ten years from the date of the
approval of the Act (19 June 1954) or until the expiry of term of the existence of the association or partnership or
a graduated basis, on each picul of sugar manufactures; while section 3 levies on owners or persons in control of
[G.R. No. L-7859. December 22, 1955.] lands devoted to the cultivation of sugar cane and ceded to others for a consideration, on lease or otherwise —

WALTER LUTZ, as Judicial Administrator of the Intestate Estate of the deceased Antonio Jayme "a tax equivalent to the difference between the money value of the rental or consideration collected and the
Ledesma, Plaintiff-Appellant, v. J. ANTONIO ARANETA, as the Collector of Internal Revenue, Defendant- amount representing 12 per centum of the assessed value of such land."cralaw virtua1aw liy
Appellee.
According to section 6 of the law —
Ernesto J. Gonzaga for Appellant.
SEC. 6. All collections made under this Act shall accrue to a special fund in the Philippine Treasury, to be known
Solicitor General Ambrosio Padilla, First Assistant Solicitor General Guillermo E. Torres and Solicitor as the ’Sugar Adjustment and Stabilization Fund,’ and shall be paid out only for any or all of the following
Felicisimo R. Rosete for Appellee. purposes or to attain any or all of the following objectives, as may be provided by law.

SYLLABUS First, to place the sugar industry in a position to maintain itself despite the gradual loss of the preferential position
of the Philippine sugar in the United States market, and ultimately to insure its continued existence
1. CONSTITUTIONAL LAW; TAXATION; POWER OF STATE TO LEVY TAX IN AND SUPPORT OF SUGAR notwithstanding the loss of that market and the consequent necessity of meeting competition in the free markets
INDUSTRY. — As the protection and promotion of the sugar industry is a matter of public concern the Legislature of the world;
may determine within reasonable bounds what is necessary for its protection and expedient for its promotion.
Here, the legislative must be allowed full play, subject only to the test of reasonableness; and it is not contended Second, to readjust the benefits derived from the sugar industry by all of the component elements thereof — the
that the means provided in section 6 of Commonwealth Act No. 567 bear no relation to the objective pursued or mill, the landowner, the planter of the sugar cane, and the laborers in the factory and in the field — so that all
are oppressive in character. If objective an methods are alike constitutionally valid, no reason is seen why the might continue profitably to engage therein;
state may not levy taxes to raise funds for their prosecution and attainment. Taxation may be made the
implement. Taxation may be made the implement of the state’s police power (Great Atl. & Pac. Tea Co. v. Third, to limit the production of sugar to areas more economically suited to the production thereof; and
Grosjean, 301 U.S. 412, 81 L. Ed. 1193; U.S. v. Butler, 297 U.S. 1, 80 L. Ed. 477; M’Culloch v. Maryland, 4
Wheat, 316, 4 L. Ed. 579). Fourth, to afford labor employed in the industry a living wage and to improve their living and working conditions:
Provided, That the President of the Philippines may, until the adjournment of the next regular session of the
2. ID.; ID.; POWER OF STATE TO SELECT SUBJECT OF TAXATION. — It is inherent in the power to tax that a National Assembly, make the necessary disbursements from the fund herein created (1) for the establishment
state be free to select the subjects of taxation, and it has been repeatedly held that "inequalities which result from and operation of sugar experiment station or stations and the undertaking of researchers (a)to increase the
a singling out of one particular class for taxation or exemption infringe no constitutional limitation (Carmicheal v. recoveries of the centrifugal sugar factories with the view of reducing manufacturing costs, (b) to produce and
Southern Coal & Coke Co., 301 U.S. 495, 81 L. Ed. 1245, citing numerous authorities, at 1251). propagate higher yielding varieties of sugar cane more adaptable to different distinct conditions in the Philippines,
(c) to lower the costs of raising sugar cane, (d) to improve the buying quality of denatured alcohol from molasses
DECISION for motor fuel, (e) to determine the possibility of utilizing the other by-products of the industry, (f) to determine
REYES, J. B. L., J.: what crop or crops are suitable for rotation and for the utilization of excess cane lands, and (g) on other problems
the solution of which would help rehabilitated and stabilize the industry, and (2) for the improvement of living and
working conditions in sugar mills and sugar plantations, authorizing him to organize the necessary agency or
This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the taxes imposed agencies to take charge of the expenditure and allocation of said funds to carry out the purpose hereinbefore
by Commonwealth Act No. 567, otherwise known as the Sugar Adjustment Act. enumerated, and, likewise, authorizing the disbursement from the fund herein created of the necessary amount
of amounts needed for salaries, wages, travelling expenses, equipment, and other sundry expenses or said
Promulgated in 1940, the law in question opens (section 1) with a declaration of emergency, due to the threat to agency or agencies."cralaw virtua1aw library
our industry by the imminent imposition of export taxes upon sugar as provided in the Tydings-McDuffie Act, and
the "eventual loss of its preferential position in the United States market" ; wherefore, the national policy was Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma,
expressed "to obtain a readjustment of the benefits derived from the sugar industry by the component elements seeks to recover from the Collector of Internal Revenue the sum of P14,666.40 paid by the estate as taxes,
thereof" and "to stabilize the sugar industry so as to prepare it for the eventuality of the loss of its preferential under section 3 of the Act, for the crop years 1948-1949 and 1949-1950; alleging that such tax is unconstitutional
position in the United States market and the imposition of the export taxes."cralaw virtua1aw library and void, being levied for the aid and support of the sugar industry exclusively, which in plaintiff’s opinion is not a
public purpose for which a tax may be constitutionally levied. The action having been dismissed by the Court of
In section 2, Commonwealth Act 567 provides for an increase of the existing tax on the manufacture of sugar, on First Instance, the plaintiffs appealed the case directly to this Court (Judiciary Act, section 17).
overthrown because there are other instances to which it might have been applied;" and that the legislative
The basic defect in the plaintiff’s position is his assumption that the tax provided for in Commonwealth Act No. authority, exerted within its proper field, need not embrace all the evils within its reach" (N. L. R. B. v. Jones &
567 is a pure exercise of the taxing power. Analysis of the Act, and particularly of section 6 (heretofore quoted in Laughlin Steel Corp. 301 U. S. 1, 81 L. Ed. 893).
full), will show that the tax is levied with a regulatory purpose, to provide means for the rehabilitation and
stabilization of the threatened sugar industry. In other words, the act is primarily an exercise of the police power. Even from the standpoint that the Act is a pure tax measure, it cannot be said that the devotion of tax money to
experimental stations to seek increase of efficiency in sugar production, utilization of by- products and solution of
This Court can take judicial notice of the fact that sugar production in one of the great industries of our nation, allied problems, as well as to the improvement of living and working conditions in sugar mills or plantations,
sugar occupying a leading position among its export products; that it gives employment to thousands of laborers without any part of such money being channeled directly to private persons, constitutes expenditure of tax money
in fields and factories; that it is a great source of the state’s wealth, is one of the important sources of foreign for private purposes, (compare Everson v. Board of Education, 91 L. Ed. 472, 168 ALR 1392, 1400).
exchange needed by our government, and is thus pivotal in the plans of a regime committed to a policy of
currency stability. Its promotion, protection and advancement, therefore redounds greatly to the general welfare. The decision appealed from is affirmed, with costs against appellant. So ordered.
Hence it was competent for the legislature to find that the general welfare demanded that the sugar industry
should be stabilized in turn; and in the wide field of its police power, the law-making body could provide that the Paras, C.J., Bengzon, Padilla, Reyes, A., Jugo, Bautista Angelo, Labrador and Concepcion, JJ., concur.
distribution of benefits therefrom be readjusted among its components to enable it to resist the added strain of
the increase in taxes that it had to sustain (Sligh v. Kirkwood, 237 U. S. 52, 59 L. Ed. 835; Johnson v. State ex
rel. Marey, 99 Fla. 1311, 128 So 853; Maxcy Inc. v. Mayo, 103 Fla. 552, 139 So. 121).

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

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

Once it is conceded, as it must, that the protection and promotion of the sugar industry is a matter of public
concern, it follows that the Legislature may determine within reasonable bounds what is necessary for its
protection and expedient for its promotion. Here, the legislative discretion must be allowed full play, subject only
to the test of reasonableness; and it is not contended that the means provided in section 6 of the law (above
quoted) bear no relation to the objective pursued or are oppressive in character. If objective and methods are
alike constitutionally valid, no reason is seen why the state may not be levy taxes to raise funds for their
prosecution and attainment. Taxation may be made the implement of the state’s police power (Great Atl. & Pac.
Tea Co. v. Grosjean, 301 U. S. 412, 81 L. Ed. 1193; U. S. v. Butler, 297 U. S. 1, 80 L. Ed. 477; M’Culloch v.
Maryland, 4 Wheat. 318, 4 L. Ed. 579).

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

From the point of view we have taken it appears of no moment that the funds raised under the Sugar Stabilization
Act, now in question, should be exclusively spent in aid of the sugar industry, since it is that very enterprise that
is being protected. It may be that other industries are also in need of similar protection; but the legislature is not
required by the Constitution to adhere to a policy of "all or none." As ruled in Minnesota ex rel. Pearson v.
Probate Court, 309 U. S. 270, 84 L. Ed. 744, "if the law presumably hits the evil where it is most felt, it is not to be
G.R. No. L-75697 2. WHEREAS, videogram(s) establishments collectively earn around P600 Million per annum from
rentals, sales and disposition of videograms, and such earnings have not been subjected to tax, thereby
VALENTIN TIO doing business under the name and style of OMI ENTERPRISES, petitioner, depriving the Government of approximately P180 Million in taxes each year;
vs.
VIDEOGRAM REGULATORY BOARD, MINISTER OF FINANCE, METRO MANILA COMMISSION, CITY 3. WHEREAS, the unregulated activities of videogram establishments have also affected the viability of
MAYOR and CITY TREASURER OF MANILA, respondents. the movie industry, particularly the more than 1,200 movie houses and theaters throughout the country,
and occasioned industry-wide displacement and unemployment due to the shutdown of numerous
Nelson Y. Ng for petitioner. moviehouses and theaters;
The City Legal Officer for respondents City Mayor and City Treasurer.
4. "WHEREAS, in order to ensure national economic recovery, it is imperative for the Government to
MELENCIO-HERRERA, J.: create an environment conducive to growth and development of all business industries, including the
movie industry which has an accumulated investment of about P3 Billion;
This petition was filed on September 1, 1986 by petitioner on his own behalf and purportedly on behalf of other
videogram operators adversely affected. It assails the constitutionality of Presidential Decree No. 1987 entitled 5. WHEREAS, proper taxation of the activities of videogram establishments will not only alleviate the dire
"An Act Creating the Videogram Regulatory Board" with broad powers to regulate and supervise the videogram financial condition of the movie industry upon which more than 75,000 families and 500,000 workers
industry (hereinafter briefly referred to as the BOARD). The Decree was promulgated on October 5, 1985 and depend for their livelihood, but also provide an additional source of revenue for the Government, and at
took effect on April 10, 1986, fifteen (15) days after completion of its publication in the Official Gazette. the same time rationalize the heretofore uncontrolled distribution of videograms;

On November 5, 1985, a month after the promulgation of the abovementioned decree, Presidential Decree No. 6. WHEREAS, the rampant and unregulated showing of obscene videogram features constitutes a clear
1994 amended the National Internal Revenue Code providing, inter alia: and present danger to the moral and spiritual well-being of the youth, and impairs the mandate of the
Constitution for the State to support the rearing of the youth for civic efficiency and the development of
moral character and promote their physical, intellectual, and social well-being;
SEC. 134. Video Tapes. — There shall be collected on each processed video-tape cassette, ready for
playback, regardless of length, an annual tax of five pesos; Provided, That locally manufactured or
imported blank video tapes shall be subject to sales tax. 7. WHEREAS, civic-minded citizens and groups have called for remedial measures to curb these blatant
malpractices which have flaunted our censorship and copyright laws;
On October 23, 1986, the Greater Manila Theaters Association, Integrated Movie Producers, Importers and
Distributors Association of the Philippines, and Philippine Motion Pictures Producers Association, hereinafter 8. WHEREAS, in the face of these grave emergencies corroding the moral values of the people and
collectively referred to as the Intervenors, were permitted by the Court to intervene in the case, over petitioner's betraying the national economic recovery program, bold emergency measures must be adopted with
opposition, upon the allegations that intervention was necessary for the complete protection of their rights and dispatch; ... (Numbering of paragraphs supplied).
that their "survival and very existence is threatened by the unregulated proliferation of film piracy." The
Intervenors were thereafter allowed to file their Comment in Intervention. Petitioner's attack on the constitutionality of the DECREE rests on the following grounds:

The rationale behind the enactment of the DECREE, is set out in its preambular clauses as follows: 1. Section 10 thereof, which imposes a tax of 30% on the gross receipts payable to the local government is
a RIDER and the same is not germane to the subject matter thereof;
1. WHEREAS, the proliferation and unregulated circulation of videograms including, among others,
videotapes, discs, cassettes or any technical improvement or variation thereof, have greatly prejudiced 2. The tax imposed is harsh, confiscatory, oppressive and/or in unlawful restraint of trade in violation of the
the operations of moviehouses and theaters, and have caused a sharp decline in theatrical attendance by due process clause of the Constitution;
at least forty percent (40%) and a tremendous drop in the collection of sales, contractor's specific,
amusement and other taxes, thereby resulting in substantial losses estimated at P450 Million annually in 3. There is no factual nor legal basis for the exercise by the President of the vast powers conferred upon
government revenues; him by Amendment No. 6;

4. There is undue delegation of power and authority;


5. The Decree is an ex-post facto law; and regulates, discourages, or even definitely deters the activities taxed. 8 The power to impose taxes is one so
unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is subject to any
6. There is over regulation of the video industry as if it were a nuisance, which it is not. restrictions whatever, except such as rest in the discretion of the authority which exercises it. 9 In imposing a tax,
the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and
oppressive taxation. 10
We shall consider the foregoing objections in seriatim.

The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the
1. The Constitutional requirement that "every bill shall embrace only one subject which shall be expressed in the
realization that earnings of videogram establishments of around P600 million per annum have not been subjected
title thereof" 1 is sufficiently complied with if the title be comprehensive enough to include the general purpose
to tax, thereby depriving the Government of an additional source of revenue. It is an end-user tax, imposed on
which a statute seeks to achieve. It is not necessary that the title express each and every end that the statute
retailers for every videogram they make available for public viewing. It is similar to the 30% amusement tax
wishes to accomplish. The requirement is satisfied if all the parts of the statute are related, and are germane to
imposed or borne by the movie industry which the theater-owners pay to the government, but which is passed on
the subject matter expressed in the title, or as long as they are not inconsistent with or foreign to the general
to the entire cost of the admission ticket, thus shifting the tax burden on the buying or the viewing public. It is a
subject and title. 2An act having a single general subject, indicated in the title, may contain any number of
tax that is imposed uniformly on all videogram operators.
provisions, no matter how diverse they may be, so long as they are not inconsistent with or foreign to the general
subject, and may be considered in furtherance of such subject by providing for the method and means of carrying
out the general object." 3 The rule also is that the constitutional requirement as to the title of a bill should not be The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the
so narrowly construed as to cripple or impede the power of legislation. 4 It should be given practical rather than video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights,
technical construction. 5 and the proliferation of pornographic video tapes. And while it was also an objective of the DECREE to protect
the movie industry, the tax remains a valid imposition.
Tested by the foregoing criteria, petitioner's contention that the tax provision of the DECREE is a rider is without
merit. That section reads, inter alia: The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the
tax was to favor one industry over another. 11
Section 10. Tax on Sale, Lease or Disposition of Videograms. — Notwithstanding any provision of law to
the contrary, the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate, as It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been
the case may be, for every sale, lease or disposition of a videogram containing a reproduction of any repeatedly held that "inequities which result from a singling out of one particular class for taxation or
motion picture or audiovisual program. Fifty percent (50%) of the proceeds of the tax collected shall accrue exemption infringe no constitutional limitation". 12 Taxation has been made the implement of the state's
to the province, and the other fifty percent (50%) shall acrrue to the municipality where the tax is collected; police power.13
PROVIDED, That in Metropolitan Manila, the tax shall be shared equally by the City/Municipality and the
Metropolitan Manila Commission. At bottom, the rate of tax is a matter better addressed to the taxing legislature.

The foregoing provision is allied and germane to, and is reasonably necessary for the accomplishment of, 3. Petitioner argues that there was no legal nor factual basis for the promulgation of the DECREE by the former
the general object of the DECREE, which is the regulation of the video industry through the Videogram President under Amendment No. 6 of the 1973 Constitution providing that "whenever in the judgment of the
Regulatory Board as expressed in its title. The tax provision is not inconsistent with, nor foreign to that President ... , there exists a grave emergency or a threat or imminence thereof, or whenever the interim
general subject and title. As a tool for regulation 6 it is simply one of the regulatory and control mechanisms Batasang Pambansa or the regular National Assembly fails or is unable to act adequately on any matter for any
scattered throughout the DECREE. The express purpose of the DECREE to include taxation of the video reason that in his judgment requires immediate action, he may, in order to meet the exigency, issue the
industry in order to regulate and rationalize the heretofore uncontrolled distribution of videograms is evident necessary decrees, orders, or letters of instructions, which shall form part of the law of the land."
from Preambles 2 and 5, supra. Those preambles explain the motives of the lawmaker in presenting the
measure. The title of the DECREE, which is the creation of the Videogram Regulatory Board, is In refutation, the Intervenors and the Solicitor General's Office aver that the 8th "whereas" clause sufficiently
comprehensive enough to include the purposes expressed in its Preamble and reasonably covers all its summarizes the justification in that grave emergencies corroding the moral values of the people and betraying
provisions. It is unnecessary to express all those objectives in the title or that the latter be an index to the the national economic recovery program necessitated bold emergency measures to be adopted with dispatch.
body of the DECREE. 7 Whatever the reasons "in the judgment" of the then President, considering that the issue of the validity of the
exercise of legislative power under the said Amendment still pends resolution in several other cases, we reserve
2. Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive, confiscatory, and in resolution of the question raised at the proper time.
restraint of trade. However, it is beyond serious question that a tax does not cease to be valid merely because it
4. Neither can it be successfully argued that the DECREE contains an undue delegation of legislative power. The Applied to the challenged provision, there is no question that there is a rational connection between the fact
grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct assistance of other agencies proved, which is non-registration, and the ultimate fact presumed which is violation of the DECREE, besides the
and units of the government and deputize, for a fixed and limited period, the heads or personnel of such agencies fact that the prima facie presumption of violation of the DECREE attaches only after a forty-five-day period
and units to perform enforcement functions for the Board" is not a delegation of the power to legislate but merely counted from its effectivity and is, therefore, neither retrospective in character.
a conferment of authority or discretion as to its execution, enforcement, and implementation. "The true distinction
is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, 6. We do not share petitioner's fears that the video industry is being over-regulated and being eased out of
and conferring authority or discretion as to its execution to be exercised under and in pursuance of the law. The existence as if it were a nuisance. Being a relatively new industry, the need for its regulation was apparent. While
first cannot be done; to the latter, no valid objection can be made." 14 Besides, in the very language of the decree, the underlying objective of the DECREE is to protect the moribund movie industry, there is no question that
the authority of the BOARD to solicit such assistance is for a "fixed and limited period" with the deputized public welfare is at bottom of its enactment, considering "the unfair competition posed by rampant film piracy; the
agencies concerned being "subject to the direction and control of the BOARD." That the grant of such authority erosion of the moral fiber of the viewing public brought about by the availability of unclassified and unreviewed
might be the source of graft and corruption would not stigmatize the DECREE as unconstitutional. Should the video tapes containing pornographic films and films with brutally violent sequences; and losses in government
eventuality occur, the aggrieved parties will not be without adequate remedy in law. revenues due to the drop in theatrical attendance, not to mention the fact that the activities of video
establishments are virtually untaxed since mere payment of Mayor's permit and municipal license fees are
5. The DECREE is not violative of the ex post facto principle. An ex post facto law is, among other categories, required to engage in business. 17
one which "alters the legal rules of evidence, and authorizes conviction upon less or different testimony than the
law required at the time of the commission of the offense." It is petitioner's position that Section 15 of the The enactment of the Decree since April 10, 1986 has not brought about the "demise" of the video industry. On
DECREE in providing that: the contrary, video establishments are seen to have proliferated in many places notwithstanding the 30% tax
imposed.
All videogram establishments in the Philippines are hereby given a period of forty-five (45) days after the
effectivity of this Decree within which to register with and secure a permit from the BOARD to engage in the In the last analysis, what petitioner basically questions is the necessity, wisdom and expediency of the DECREE.
videogram business and to register with the BOARD all their inventories of videograms, including These considerations, however, are primarily and exclusively a matter of legislative concern.
videotapes, discs, cassettes or other technical improvements or variations thereof, before they could be
sold, leased, or otherwise disposed of. Thereafter any videogram found in the possession of any person
Only congressional power or competence, not the wisdom of the action taken, may be the basis for
engaged in the videogram business without the required proof of registration by the BOARD, shall be prima
declaring a statute invalid. This is as it ought to be. The principle of separation of powers has in the main
facie evidence of violation of the Decree, whether the possession of such videogram be for private showing
wisely allocated the respective authority of each department and confined its jurisdiction to such a sphere.
and/or public exhibition.
There would then be intrusion not allowable under the Constitution if on a matter left to the discretion of a
coordinate branch, the judiciary would substitute its own. If there be adherence to the rule of law, as there
raises immediately a prima facie evidence of violation of the DECREE when the required proof of registration of ought to be, the last offender should be courts of justice, to which rightly litigants submit their controversy
any videogram cannot be presented and thus partakes of the nature of an ex post facto law. precisely to maintain unimpaired the supremacy of legal norms and prescriptions. The attack on the validity
of the challenged provision likewise insofar as there may be objections, even if valid and cogent on its
The argument is untenable. As this Court held in the recent case of Vallarta vs. Court of Appeals, et al. 15 wisdom cannot be sustained. 18

... it is now well settled that "there is no constitutional objection to the passage of a law providing that the In fine, petitioner has not overcome the presumption of validity which attaches to a challenged statute. We find no
presumption of innocence may be overcome by a contrary presumption founded upon the experience of clear violation of the Constitution which would justify us in pronouncing Presidential Decree No. 1987 as
human conduct, and enacting what evidence shall be sufficient to overcome such presumption of unconstitutional and void.
innocence" (People vs. Mingoa 92 Phil. 856 [1953] at 858-59, citing 1 COOLEY, A TREATISE ON THE
CONSTITUTIONAL LIMITATIONS, 639-641). And the "legislature may enact that when certain facts have WHEREFORE, the instant Petition is hereby dismissed.
been proved that they shall be prima facie evidence of the existence of the guilt of the accused and shift
the burden of proof provided there be a rational connection between the facts proved and the ultimate facts
No costs.
presumed so that the inference of the one from proof of the others is not unreasonable and arbitrary
because of lack of connection between the two in common experience". 16
SO ORDERED.
G.R. No. L-77194 March 15, 1988 PER PICUL FROM SUGAR PROCEEDS OF THE SUGAR PRODUCERS COMMENCING THE YEAR
1978-79 UNTIL THE PRESENT AS STABILIZATION FUND PURSUANT TO P.D. # 388.
VIRGILIO GASTON, HORTENCIA STARKE, ROMEO GUANZON, OSCAR VILLANUEVA, JOSE ABELLO,
REMO RAMOS, CAROLINA LOPEZ, JESUS ISASI, MANUEL LACSON, JAVIER LACSON, TITO TAGARAO, Respondent Bank does not take issue with either petitioners or its correspondents as it has no beneficial or
EDUARDO SUATENGCO, AUGUSTO LLAMAS, RODOLFO SIASON, PACIFICO MAGHARI, JR., JOSE equitable interest that may be affected by the ruling in this Petition, but welcomes the filing of the Petition since it
JAMANDRE, AURELIO GAMBOA, ET AL., petitioners, will settle finally the issue of legal ownership of the questioned shares of stock.
vs.
REPUBLIC PLANTERS BANK, PHILIPPINE SUGAR COMMISSION, and SUGAR REGULATORY Respondents PHILSUCOM and SRA, for their part, squarely traverse the petition arguing that no trust results
ADMINISTRATION, respondents, ANGEL H. SEVERINO, JR., GLICERIO JAVELLANA, GLORIA P. DE LA from Section 7 of P.D. No. 388; that the stabilization fees collected are considered government funds under the
PAZ, JOEY P. DE LA PAZ, ET AL., and NATIONAL FEDERATION OF SUGARCANE PLANTERS, intervenors Government Auditing Code; that the transfer of shares of stock from PHILSUCOM to the sugar producers would
be irregular, if not illegal; and that this suit is barred by laches.
MELENCIO-HERRERA, J.:
The Solicitor General aptly summarizes the basic issues thus: (1) whether the stabilization fees collected from
Petitioners are sugar producers, sugarcane planters and millers, who have come to this Court in their individual sugar planters and millers pursuant to Section 7 of P.D. No. 388 are funds in trust for them, or public funds; and
capacities and in representation of other sugar producers, planters and millers, said to be so numerous that it is (2) whether shares of stock in respondent Bank paid for with said stabilization fees belong to the PHILSUCOM or
impracticable to bring them all before the Court although the subject matter of the present controversy is of to the different sugar planters and millers from whom the fees were collected or levied.
common interest to all sugar producers, whether parties in this action or not.
P. D. No. 388, promulgated on February 2,1974, which created the PHILSUCOM, provided for the collection of a
Respondent Philippine Sugar Commission (PHILSUCOM, for short) was formerly the government office tasked Stabilization Fund as follows:
with the function of regulating and supervising the sugar industry until it was superseded by its co-respondent
Sugar Regulatory Administration (SRA, for brevity) under Executive Order No. 18 on May 28, 1986. Although SEC. 7. Capitalization, Special Fund of the Commission, Development and Stabilization Fund. — There is
said Executive Order abolished the PHILSUCOM, its existence as a juridical entity was mandated to continue for hereby established a fund for the commission for the purpose of financing the growth and development of
three (3) more years "for the purpose of prosecuting and defending suits by or against it and enables it to settle the sugar industry and all its components, stabilization of the domestic market including the foreign
and close its affairs, to dispose of and convey its property and to distribute its assets." market to be administered in trust by the Commission and deposited in the Philippine National Bank
derived in the manner herein below cited from the following sources:
Respondent Republic Planters Bank (briefly, the Bank) is a commercial banking corporation.
a. Stabilization fund shall be collected as provided for in the various provisions of this Decree.
Angel H. Severino, Jr., et al., who are sugarcane planters planting and milling their sugarcane in different mill
districts of Negros Occidental, were allowed to intervene by the Court, since they have common cause with b. Stabilization fees shall be collected from planters and millers in the amount of Two (P2.00) Pesos for
petitioners and respondents having interposed no objection to their intervention. Subsequently, on January every picul produced and milled for a period of five years from the approval of this Decree and One (Pl.00)
14,1988, the National Federation of Sugar Planters (NFSP) also moved to intervene, which the Court allowed on Peso for every picul produced and milled every year thereafter.
February 16,1988.
Provided: That fifty (P0.50) centavos per picul of the amount levied on planters, millers and traders under
Petitioners and Intervenors have come to this Court praying for a Writ of mandamus commanding respondents: Section 4(c) of this Decree will be used for the payment of salaries and wages of personnel, fringe benefits
and allowances of officers and employees for the purpose of accomplishing and employees for the purpose
TO IMPLEMENT AND ACCOMPLISH THE PRIVATIZATION OF REPUBLIC PLANTERS BANK BY THE of accomplishing the efficient performance of the duties of the Commission.
TRANSFER AND DISTRIBUTION OF THE SHARES OF STOCK IN THE SAID BANK; NOW HELD BY
AND STILL CARRIED IN THE NAME OF THE PHILIPPINE SUGAR COMMISSION, TO THE SUGAR Provided, further: That said amount shall constitute a lien on the sugar quedan and/or warehouse receipts
PRODUCERS, PLANTERS AND MILLERS, WHO ARE THE TRUE BENEFICIAL OWNERS OF THE and shall be paid immediately by the planters and mill companies, sugar centrals and refineries to the
761,416 COMMON SHARES VALUED AT P36,548.000.00, AND 53,005,045 PREFERRED SHARES (A, B Commission. (paragraphing and bold supplied).
& C) WITH A TOTAL PAR VALUE OF P254,424,224.72, OR A TOTAL INVESTMENT OF
P290,972,224.72, THE SAID INVESTMENT HAVING BEEN FUNDED BY THE DEDUCTION OF Pl.00
Section 7 of P.D. No. 388 does provide that the stabilization fees collected "shall be administered in trust by the
Commission." However, while the element of an intent to create a trust is present, a resulting trust in favor of the
sugar producers, millers and planters cannot be said to have ensued because the presumptive intention of the From the legal standpoint, we find basis for the opinion of the Commission on Audit reading:
parties is not reasonably ascertainable from the language of the statute itself.
That the government, PHILSUCOM or its successor-in-interest, Sugar Regulatory Administration, in
The doctrine of resulting trusts is founded on the presumed intention of the parties; and as a general rule, it particular, owns and stocks. While it is true that the collected stabilization fees were set aside by
arises where, and only where such may be reasonably presumed to be the intention of the parties, as PHILSUCOM to pay its subscription to RPB, it did not collect said fees for the account of the sugar
determined from the facts and circumstances existing at the time of the transaction out of which it is sought producers. That stabilization fees are charges/levies on sugar produced and milled which accrued to
to be established (89 C.J.S. 947). PHILSUCOM under PD 338, as amended. ...

No implied trust in favor of the sugar producers either can be deduced from the imposition of the levy. "The The stabilization fees collected are in the nature of a tax, which is within the power of the State to impose for the
essential Idea of an implied trust involves a certain antagonism between the cestui que trust and the trustee even promotion of the sugar industry (Lutz vs. Araneta, 98 Phil. 148). They constitute sugar liens (Sec. 7[b], P.D. No.
when the trust has not arisen out of fraud nor out of any transaction of a fraudulent or immoral character (65 CJ 388). The collections made accrue to a "Special Fund," a "Development and Stabilization Fund," almost Identical
222). It is not clearly shown from the statute itself that the PHILSUCOM imposed on itself the obligation of to the "Sugar Adjustment and Stabilization Fund" created under Section 6 of Commonwealth Act 567. 1 The tax
holding the stabilization fund for the benefit of the sugar producers. It must be categorically demonstrated that the collected is not in a pure exercise of the taxing power. It is levied with a regulatory purpose, to provide means for
very administrative agency which is the source of such regulation would place a burden on itself (Batchelder v. the stabilization of the sugar industry. The levy is primarily in the exercise of the police power of the State (Lutz
Central Bank of the Philippines, L-25071, July 29,1972,46 SCRA 102, citing People v. Que Po Lay, 94 Phil. 640 vs. Araneta, supra.).
[1954]).
The protection of a large industry constituting one of the great sources of the state's wealth and therefore
Neither can petitioners place reliance on the history of respondents Bank. They recite that at the beginning, the directly or indirectly affecting the welfare of so great a portion of the population of the State is affected to
Bank was owned by the Roman-Rojas Group. Because it underwent difficulties early in the year 1978, Mr. such an extent by public interests as to be within the police power of the sovereign. (Johnson vs. State ex
Roberto S. Benedicto, then Chairman of the PHILSUCOM, submitted a proposal to the Central Bank for the rel. Marey, 128 So. 857, cited in Lutz vs. Araneta, supra).
rehabilitation of the Bank. The Central Bank acted favorably on the proposal at the meeting of the Monetary
Board on March 31, 1978 subject to the infusion of fresh capital by the Benedicto Group. Petitioners maintain that The stabilization fees in question are levied by the State upon sugar millers, planters and producers for a special
this infusion of fresh capital was accomplished, not by any capital investment by Mr. Benedicto, but by purpose — that of "financing the growth and development of the sugar industry and all its components,
PHILSUCOM, which set aside the proceeds of the P1.00 per picul stabilization fund to pay for its subscription in stabilization of the domestic market including the foreign market the fact that the State has taken possession of
shares of stock of respondent Bank. It is petitioners' submission that all shares were placed in PHILSUCOM's moneys pursuant to law is sufficient to constitute them state funds, even though they are held for a special
name only out of convenience and necessity and that they are the true and beneficial owners thereof. purpose (Lawrence vs. American Surety Co., 263 Mich 586, 249 ALR 535, cited in 42 Am. Jur. Sec. 2, p. 718).
Having been levied for a special purpose, the revenues collected are to be treated as a special fund, to be, in the
In point of fact, we cannot see our way clear to upholding petitioners' position that the investment of the proceeds language of the statute, "administered in trust' for the purpose intended. Once the purpose has been fulfilled or
from the stabilization fund in subscriptions to the capital stock of the Bank were being made for and on their abandoned, the balance, if any, is to be transferred to the general funds of the Government. That is the essence
behalf. That could have been clarified by the Trust Agreement, dated May 28, 1986, entered into between of the trust intended (See 1987 Constitution, Article VI, Sec. 29(3), lifted from the 1935 Constitution, Article VI,
PHILSUCOM, as "Trustor" acting through Mr. Fred J. Elizalde as Officer-in-Charge, and respondent RPB- Trust Sec. 23(l]). 2
Department' as "Trustee," acknowledging that PHILSUCOM holds said shares for and in behalf of the sugar
producers," the latter "being the true and beneficial owners thereof." The Agreement, however, did not get off the The character of the Stabilization Fund as a special fund is emphasized by the fact that the funds are deposited
ground because it failed to receive the approval of the PHILSUCOM Board of Commissioners as required in the in the Philippine National Bank and not in the Philippine Treasury, moneys from which may be paid out only in
Agreement itself. pursuance of an appropriation made by law (1987) Constitution, Article VI, Sec. 29[1],1973 Constitution, Article
VIII, Sec. 18[l]).
The SRA, which succeeded PHILSUCOM, neither approved the Agreement because of the adverse opinion of
the SRA, Resident Auditor, dated June 25,1986, which was aimed by the Chairman of the Commission on Audit, That the fees were collected from sugar producers, planters and millers, and that the funds were channeled to
on January 26,1987. the purchase of shares of stock in respondent Bank do not convert the funds into a trust fired for their benefit nor
make them the beneficial owners of the shares so purchased. It is but rational that the fees be collected from
On February 19, 1987, the SRA, resolved to revoke the Trust Agreement "in the light of the ruling of the them since it is also they who are to be benefited from the expenditure of the funds derived from it. The
Commission on Audit that the aforementioned Agreement is of doubtful validity." investment in shares of respondent Bank is not alien to the purpose intended because of the Bank's character as
a commodity bank for sugar conceived for the industry's growth and development. Furthermore, of note is the
fact that one-half, (1/2) or PO.50 per picul, of the amount levied under P.D. No. 388 is to be utilized for the
"payment of salaries and wages of personnel, fringe benefits and allowances of officers and employees of
PHILSUCOM" thereby immediately negating the claim that the entire amount levied is in trust for sugar,
producers, planters and millers.

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

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

This Decision is immediately executory.

SO ORDERED.

Teehankee, C.J., Yap, Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento,
Cortes and Griño-Aquino, JJ., concur.

Fernan, J., took no part.

Footnotes

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

xxx xxx xxx

2 (5) All money collected on any tax levied for a special purpose shall be treated as a special fund and paid
out for such purpose only. If the purpose for which a special fund was created has been fulfilled or
abandoned, the balance, if any, shall be transferred to the general funds of the Government." (1987
Constitution, Art. VI, Sec. 28[3]).
G.R. No. 99886 March 31, 1993 result of the reduction of domestic prices of petroleum products, the amount of the underrecovery being left for
determination by the Ministry of Finance.
JOHN H. OSMEÑA, petitioner,
vs. Now, the petition alleges that the status of the OPSF as of March 31, 1991 showed a "Terminal Fund Balance
OSCAR ORBOS, in his capacity as Executive Secretary; JESUS ESTANISLAO, in his capacity as deficit" of some P12.877 billion;8 that to abate the worsening deficit, "the Energy Regulatory Board . . issued an
Secretary of Finance; WENCESLAO DELA PAZ, in his capacity as Head of the Office of Energy Affairs; Order on December 10, 1990, approving the increase in pump prices of petroleum products," and at the rate of
REX V. TANTIONGCO, and the ENERGY REGULATORY BOARD, respondents. recoupment, the OPSF deficit should have been fully covered in a span of six (6) months, but this
notwithstanding, the respondents — Oscar Orbos, in his capacity as Executive Secretary; Jesus Estanislao, in
Nachura & Sarmiento for petitioner. his capacity as Secretary of Finance; Wenceslao de la Paz, in his capacity as Head of the Office of Energy
Affairs; Chairman Rex V. Tantiongco and the Energy Regulatory Board — "are poised to accept, process and
pay claims not authorized under P.D. 1956."9
The Solicitor General for public respondents.

The petition further avers that the creation of the trust fund violates §
NARVASA, C.J.:
29(3), Article VI of the Constitution, reading as follows:
The petitioner seeks the corrective,1 prohibitive and coercive remedies provided by Rule 65 of the Rules of
(3) All money collected on any tax levied for a special purpose shall be treated as a special fund and paid
Court,2upon the following posited grounds, viz.:3
out for such purposes only. If the purpose for which a special fund was created has been fulfilled or
abandoned, the balance, if any, shall be transferred to the general funds of the Government.
1) the invalidity of the "TRUST ACCOUNT" in the books of account of the Ministry of Energy (now, the Office of
Energy Affairs), created pursuant to § 8, paragraph 1, of P.D. No. 1956, as amended, "said creation of a trust
The petitioner argues that "the monies collected pursuant to . . P.D. 1956, as amended, must be treated as a
fund being contrary to Section 29 (3), Article VI of the . . Constitution;4
'SPECIAL FUND,' not as a 'trust account' or a 'trust fund,' and that "if a special tax is collected for a specific
purpose, the revenue generated therefrom shall 'be treated as a special fund' to be used only for the purpose
2) the unconstitutionality of § 8, paragraph 1 (c) of P.D. No. 1956, as amended by Executive Order No. 137, for indicated, and not channeled to another government objective." 10 Petitioner further points out that since "a
"being an undue and invalid delegation of legislative power . . to the Energy Regulatory Board;"5 'special fund' consists of monies collected through the taxing power of a State, such amounts belong to the State,
although the use thereof is limited to the special purpose/objective for which it was created." 11
3) the illegality of the reimbursements to oil companies, paid out of the Oil Price Stabilization Fund,6 because it
contravenes § 8, paragraph 2 (2) of He also contends that the "delegation of legislative authority" to the ERB violates § 28 (2). Article VI of the
P. D. 1956, as amended; and Constitution, viz.:

4) the consequent nullity of the Order dated December 10, 1990 and the necessity of a rollback of the pump (2) The Congress may, by law, authorize the President to fix, within specified limits, and subject to such
prices and petroleum products to the levels prevailing prior to the said Order. limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage
dues, and other duties or imposts within the framework of the national development program of the
It will be recalled that on October 10, 1984, President Ferdinand Marcos issued P.D. 1956 creating a Special Government;
Account in the General Fund, designated as the Oil Price Stabilization Fund (OPSF). The OPSF was designed to
reimburse oil companies for cost increases in crude oil and imported petroleum products resulting from exchange and, inasmuch as the delegation relates to the exercise of the power of taxation, "the limits, limitations and
rate adjustments and from increases in the world market prices of crude oil. restrictions must be quantitative, that is, the law must not only specify how to tax, who (shall) be taxed (and)
what the tax is for, but also impose a specific limit on how much to tax." 12
Subsequently, the OPSF was reclassified into a "trust liability account," in virtue of E.O. 1024,7 and ordered
released from the National Treasury to the Ministry of Energy. The same Executive Order also authorized the The petitioner does not suggest that a "trust account" is illegal per se, but maintains that the monies collected,
investment of the fund in government securities, with the earnings from such placements accruing to the fund. which form part of the OPSF, should be maintained in a special account of the general fund for the reason that
the Constitution so provides, and because they are, supposedly, taxes levied for a special purpose. He assumes
President Corazon C. Aquino, amended P.D. 1956. She promulgated Executive Order No. 137 on February 27, that the Fund is formed from a tax undoubtedly because a portion thereof is taken from collections of ad
1987, expanding the grounds for reimbursement to oil companies for possible cost underrecovery incurred as a valorem taxes and the increases thereon.
It thus appears that the challenge posed by the petitioner is premised primarily on the view that the powers the domestic consumer prices of oil and petroleum products are stabilized, instead of fluctuating every so
granted to the ERB under P.D. 1956, as amended, partake of the nature of the taxation power of the State. The often, and oil companies are allowed to recover those portions of their costs which they would not otherwise
Solicitor General observes that the "argument rests on the assumption that the OPSF is a form of revenue recover given the level of domestic prices existing at any given time. To the extent that some tax revenues
measure drawing from a special tax to be expended for a special purpose." 13 The petitioner's perceptions are, in are also put into it, the OPSF is in effect a device through which the domestic prices of petroleum products
the Court's view, not quite correct. are subsidized in part. It appears to the Court that the establishment and maintenance of the OPSF is well
within that pervasive and non-waivable power and responsibility of the government to secure the physical
To address this critical misgiving in the position of the petitioner on these issues, the Court recalls its holding and economic survival and well-being of the community, that comprehensive sovereign authority we
in Valmonte v. Energy Regulatory Board, et al. 14 — designate as the police power of the State. The stabilization, and subsidy of domestic prices of petroleum
products and fuel oil — clearly critical in importance considering, among other things, the continuing high
level of dependence of the country on imported crude oil — are appropriately regarded as public purposes.
The foregoing arguments suggest the presence of misconceptions about the nature and functions of the
OPSF. The OPSF is a "Trust Account" which was established "for the purpose of minimizing the frequent
price changes brought about by exchange rate adjustment and/or changes in world market prices of crude oil Also of relevance is this Court's ruling in relation to the sugar stabilization fund the nature of which is not far
and imported petroleum products." 15 Under P.D. No. 1956, as amended by Executive Order No. 137 dated different from the OPSF. In Gaston v. Republic Planters Bank, 16 this Court upheld the legality of the sugar
27 February 1987, this Trust Account may be funded from any of the following sources: stabilization fees and explained their nature and character, viz.:

a) Any increase in the tax collection from ad valorem tax or customs duty imposed on petroleum The stabilization fees collected are in the nature of a tax, which is within the power of the State to impose
products subject to tax under this Decree arising from exchange rate adjustment, as may be determined by for the promotion of the sugar industry (Lutz v. Araneta, 98 Phil. 148). . . . The tax collected is not in a pure
the Minister of Finance in consultation with the Board of Energy; exercise of the taxing power. It is levied with a regulatory purpose, to provide a means for the stabilization
of the sugar industry. The levy is primarily in the exercise of the police power of the State (Lutz v.
Araneta, supra).
b) Any increase in the tax collection as a result of the lifting of tax exemptions of government corporations,
as may be determined by the Minister of Finance in consultation with the Board of Energy:
The stabilization fees in question are levied by the State upon sugar millers, planters and producers for a
special purpose — that of "financing the growth and development of the sugar industry and all its
c) Any additional amount to be imposed on petroleum products to augment the resources of the Fund
components, stabilization of the domestic market including the foreign market." The fact that the State has
through an appropriate Order that may be issued by the Board of Energy requiring payment of persons or
taken possession of moneys pursuant to law is sufficient to constitute them state funds, even though they are
companies engaged in the business of importing, manufacturing and/or marketing petroleum products;
held for a special purpose (Lawrence v. American Surety Co. 263 Mich. 586, 249 ALR 535, cited in 42 Am
Jur Sec. 2, p. 718). Having been levied for a special purpose, the revenues collected are to be treated as a
d) Any resulting peso cost differentials in case the actual peso costs paid by oil companies in the special fund, to be, in the language of the statute, "administered in trust" for the purpose intended. Once the
importation of crude oil and petroleum products is less than the peso costs computed using the reference purpose has been fulfilled or abandoned, the balance if any, is to be transferred to the general funds of the
foreign exchange rate as fixed by the Board of Energy. Government. That is the essence of the trust intended (SEE 1987 Constitution, Article VI, Sec. 29(3), lifted
from the 1935 Constitution, Article VI, Sec. 23(1). 17
The fact that the world market prices of oil, measured by the spot market in Rotterdam, vary from day to day
is of judicial notice. Freight rates for hauling crude oil and petroleum products from sources of supply to the The character of the Stabilization Fund as a special kind of fund is emphasized by the fact that the funds are
Philippines may also vary from time to time. The exchange rate of the peso vis-a-vis the U.S. dollar and other deposited in the Philippine National Bank and not in the Philippine Treasury, moneys from which may be paid
convertible foreign currencies also changes from day to day. These fluctuations in world market prices and in out only in pursuance of an appropriation made by law (1987) Constitution, Article VI, Sec. 29 (3), lifted from
tanker rates and foreign exchange rates would in a completely free market translate into corresponding the 1935 Constitution, Article VI, Sec. 23(1). (Emphasis supplied).
adjustments in domestic prices of oil and petroleum products with sympathetic frequency. But domestic
prices which vary from day to day or even only from week to week would result in a chaotic market with
Hence, it seems clear that while the funds collected may be referred to as taxes, they are exacted in the exercise
unpredictable effects upon the country's economy in general. The OPSF was established precisely to protect
of the police power of the State. Moreover, that the OPSF is a special fund is plain from the special treatment
local consumers from the adverse consequences that such frequent oil price adjustments may have upon the
given it by E.O. 137. It is segregated from the general fund; and while it is placed in what the law refers to as a
economy. Thus, the OPSF serves as a pocket, as it were, into which a portion of the purchase price of oil and
"trust liability account," the fund nonetheless remains subject to the scrutiny and review of the COA. The Court is
petroleum products paid by consumers as well as some tax revenues are inputted and from which amounts
satisfied that these measures comply with the constitutional description of a "special fund." Indeed, the practice is
are drawn from time to time to reimburse oil companies, when appropriate situations arise, for increases in,
not without precedent.
as well as underrecovery of, costs of crude importation. The OPSF is thus a buffer mechanism through which
With regard to the alleged undue delegation of legislative power, the Court finds that the provision conferring the consequences of pump rate fluctuations. "Where the standards set up for the guidance of an administrative
authority upon the ERB to impose additional amounts on petroleum products provides a sufficient standard by officer and the action taken are in fact recorded in the orders of such officer, so that Congress, the courts and the
which the authority must be exercised. In addition to the general policy of the law to protect the local consumer public are assured that the orders in the judgment of such officer conform to the legislative standard, there is no
by stabilizing and subsidizing domestic pump rates, § 8(c) of P.D. 1956 18 expressly authorizes the ERB to failure in the performance of the legislative functions." 22
impose additional amounts to augment the resources of the Fund.
This Court thus finds no serious impediment to sustaining the validity of the legislation; the express purpose for
What petitioner would wish is the fixing of some definite, quantitative restriction, or "a specific limit on how much which the imposts are permitted and the general objectives and purposes of the fund are readily discernible, and
to tax." 19 The Court is cited to this requirement by the petitioner on the premise that what is involved here is the they constitute a sufficient standard upon which the delegation of power may be justified.
power of taxation; but as already discussed, this is not the case. What is here involved is not so much the power
of taxation as police power. Although the provision authorizing the ERB to impose additional amounts could be In relation to the third question — respecting the illegality of the reimbursements to oil companies, paid out of the
construed to refer to the power of taxation, it cannot be overlooked that the overriding consideration is to enable Oil Price Stabilization Fund, because allegedly in contravention of § 8, paragraph 2 (2) of P.D. 1956,
the delegate to act with expediency in carrying out the objectives of the law which are embraced by the police amended 23 — the Court finds for the petitioner.
power of the State.
The petition assails the payment of certain items or accounts in favor of the petroleum companies (i.e., inventory
The interplay and constant fluctuation of the various factors involved in the determination of the price of oil and losses, financing charges, fuel oil sales to the National Power Corporation, etc.) because not authorized by law.
petroleum products, and the frequently shifting need to either augment or exhaust the Fund, do not conveniently Petitioner contends that "these claims are not embraced in the enumeration in § 8 of P.D. 1956 . . since none of
permit the setting of fixed or rigid parameters in the law as proposed by the petitioner. To do so would render the them was incurred 'as a result of the reduction of domestic prices of petroleum products,'" 24 and since these
ERB unable to respond effectively so as to mitigate or avoid the undesirable consequences of such fluidity. As items are reimbursements for which the OPSF should not have responded, the amount of the P12.877 billion
such, the standard as it is expressed, suffices to guide the delegate in the exercise of the delegated power, deficit "should be reduced by P5,277.2 million." 25 It is argued "that under the principle of ejusdem generis . . . the
taking account of the circumstances under which it is to be exercised. term 'other factors' (as used in § 8 of P.D. 1956) . . can only include such 'other factors' which necessarily result
in the reduction of domestic prices of petroleum products." 26
For a valid delegation of power, it is essential that the law delegating the power must be (1) complete in itself,
that is it must set forth the policy to be executed by the delegate and (2) it must fix a standard — limits of which The Solicitor General, for his part, contends that "(t)o place said (term) within the restrictive confines of the rule
are sufficiently determinate or determinable — to which the delegate must conform. 20 of ejusdem generis would reduce (E.O. 137) to a meaningless provision."

. . . As pointed out in Edu v. Ericta: "To avoid the taint of unlawful delegation, there must be a standard, This Court, in Caltex Philippines, Inc. v. The Honorable Commissioner on Audit, et al., 27 passed upon the
which implies at the very least that the legislature itself determines matters of principle and lays down application of ejusdem generis to paragraph 2 of § 8 of P.D. 1956, viz.:
fundamental policy. Otherwise, the charge of complete abdication may be hard to repel. A standard thus
defines legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply
The rule of ejusdem generis states that "[w]here words follow an enumeration of persons or things, by
it. It indicates the circumstances under which the legislative command is to be effected. It is the criterion by
words of a particular and specific meaning, such general words are not to be construed in their widest
which the legislative purpose may be carried out. Thereafter, the executive or administrative office
extent, but are held to be as applying only to persons or things of the same kind or class as those
designated may in pursuance of the above guidelines promulgate supplemental rules and regulations. The
specifically mentioned." 28 A reading of subparagraphs (i) and (ii) easily discloses that they do not have a
standard may either be express or implied. If the former, the non-delegation objection is easily met. The
common characteristic. The first relates to price reduction as directed by the Board of Energy while the
standard though does not have to be spelled out specifically. It could be implied from the policy and
second refers to reduction in internal ad valorem taxes. Therefore, subparagraph (iii) cannot be limited by
purpose of the act considered as a whole. 21
the enumeration in these subparagraphs. What should be considered for purposes of determining the
"other factors" in subparagraph (iii) is the first sentence of paragraph (2) of the Section which explicitly
It would seem that from the above-quoted ruling, the petition for prohibition should fail. allows the cost underrecovery only if such were incurred as a result of the reduction of domestic prices of
petroleum products.
The standard, as the Court has already stated, may even be implied. In that light, there can be no ground upon
which to sustain the petition, inasmuch as the challenged law sets forth a determinable standard which guides The Court thus holds, that the reimbursement of financing charges is not authorized by paragraph 2 of § 8 of P.D.
the exercise of the power granted to the ERB. By the same token, the proper exercise of the delegated power 1956, for the reason that they were not incurred as a result of the reduction of domestic prices of petroleum
may be tested with ease. It seems obvious that what the law intended was to permit the additional imposts for as products. Under the same provision, however, the payment of inventory losses is upheld as valid, being clearly a
long as there exists a need to protect the general public and the petroleum industry from the adverse
result of domestic price reduction, when oil companies incur a cost underrecovery for yet unsold stocks of oil in 7 Issued on 9 May 1985.
inventory acquired at a higher price. 8 Rollo, pp. 8-9.
9 Rollo, p. 11; emphasis supplied.
Reimbursement for cost underrecovery from the sales of oil to the National Power Corporation is equally 10 Id., pp. 13-4.
permissible, not as coming within the provisions of P.D. 1956, but in virtue of other laws and regulations as held
in Caltex 29 and which have been pointed to by the Solicitor General. At any rate, doubts about the propriety of
11 Id., p. 15.
such reimbursements have been dispelled by the enactment of R.A. 6952, establishing the Petroleum Price 12 Rollo, p. 17.
Standby Fund, § 2 of which specifically authorizes the reimbursement of "cost underrecovery incurred as a result 13 Comment of the Respondents; Rollo, p. 63.
of fuel oil sales to the National Power Corporation." 14 G.R. Nos. L-79501-03 [23 June 1988] 162 SCRA 521; Decided jointly with Citizen's
Alliance for Consumer Protection v. Energy Regulatory Board et al., G.R. Nos. L-78888-90,
Anent the overpayment refunds mentioned by the petitioner, no substantive discussion has been presented to and Kilusang Mayo Uno Labor Center v. Energy Regulatory Board, et al., G.R. Nos. L-79590-
show how this is prohibited by P.D. 1956. Nor has the Solicitor General taken any effort to defend the propriety of 92; emphasis supplied.
this refund. In fine, neither of the parties, beyond the mere mention of overpayment refunds, has at all bothered
to discuss the arguments for or against the legality of the so-called overpayment refunds. To be sure, the
15 Citing E.O. No. 137, Sec. 1 (amending § 8 of P.D. 1956).
absence of any argument for or against the validity of the refund cannot result in its disallowance by the Court. 16 158 SCRA 626, emphasis supplied.
Unless the impropriety or illegality of the overpayment refund has been clearly and specifically shown, there can 17 "(3) All money collected on any tax levied for a special purpose shall be treated as a
be no basis upon which to nullify the same. special fund and paid out for such purpose only. If the purpose for which a special fund was
created has been fulfilled or abandoned, the balance, if any, shall be transferred to the
Finally, the Court finds no necessity to rule on the remaining issue, the same having been rendered moot and general funds of the government." (1987 Constitution, Art. VI, Sec. 28[3]).
academic. As of date hereof, the pump rates of gasoline have been reduced to levels below even those prayed 18 Supra; see footnote 14 and related text.
for in the petition.
19 Rollo, p. 17.
20 SEE Vigan Electric Light Co., Inc. v. Public Service Commission, G.R. No.
WHEREFORE, the petition is GRANTED insofar as it prays for the nullification of the reimbursement of financing
charges, paid pursuant to E.O. 137, and DISMISSED in all other respects. L-19850, 30 January 1964 and Pelaez v. Auditor General, G.R. No. L-23825, 24 December
1965; see also Gonzales, N. Administrative Law — A Text, (1979) at 29.
SO ORDERED. 21 De La Llana v. Alba, 112 SCRA 294, citing Edu v. Ericta, 35 SCRA 481: Cf. Agustin v. Edu,
88 SCRA 195.
Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Bellosillo, Melo, Campos, 22 Hirabayashi v. U.S., 390 U.S. 99.
Jr., and Quiason, JJ., concur. 23 When this petition was filed, the amount involved was P5,277.4 million.
24 Rollo, p. 20.
Gutierrez, Jr., J., is on leave. 25 Id., p. 21.
26 Id., p. 20.
# Footnotes 27 Caltex Philippines, Inc. v. The Honorable Commissioner on Audit, et al., G.R. No. 92585, 8
May 1992, En Banc. N.B. — The Solicitor General seems to have taken a different position in
1 The writ of certiorari is, of course, available only as against tribunals, boards or officers this case, with respect to the application of ejusdem generis.
exercising judicial or quasi-judicial functions. 28 Smith Bell and Co., Ltd. v. Register of Deeds of Davao, 96 Phil. 53 [1954], citing BLACK on
2 The petition alleges separate causes or grounds for each extraordinary writ sought. Interpretation of Law, 2nd ed. at 203: see also Republic v. Migriño 189 SCRA 289 [1990].
3 Rollo, pp. 1 to 4. 29 Supra at note 25; SEE also Maceda v. Hon. Catalino Macaraig, Jr., et al., G.R. No. 88291,
4 Rollo, p. 2. 197 SCRA 771 (1991).
5 Id.
6 When this petition was filed, the amount involved was P5,277.4 million.
G.R. No. 78742 July 14, 1989 Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful Antaeus
weakened and died.
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B.
ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of life and
GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, death, of men and women who, like Antaeus need the sustaining strength of the precious earth to stay alive.
ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA,
FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & "Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious
NAPOLEON S. FERRER, petitioners, resource among our people. But it is more than a slogan. Through the brooding centuries, it has become a battle-
vs. cry dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as their place in
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent. the sun.

G.R. No. 79310 July 14, 1989 Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and
economic security of all the people," 1 especially the less privileged. In 1973, the new Constitution affirmed this
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO goal adding specifically that "the State shall regulate the acquisition, ownership, use, enjoyment and disposition
GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, of private property and equitably diffuse property ownership and profits." 2 Significantly, there was also the
Negros Occidental, petitioners, specific injunction to "formulate and implement an agrarian reform program aimed at emancipating the tenant
vs. from the bondage of the soil." 3
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole
G.R. No. 79744 July 14, 1989 and separate Article XIII on Social Justice and Human Rights, containing grandiose but undoubtedly sincere
provisions for the uplift of the common people. These include a call in the following words for the adoption by the
INOCENTES PABICO, petitioner, State of an agrarian reform program:
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and
ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of
TALENTO, JAIME ABOGADO, CONRADO AVANCENA and ROBERTO TAAY, respondents. other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention
G.R. No. 79777 July 14, 1989 limits as the Congress may prescribe, taking into account ecological, developmental, or equity
considerations and subject to the payment of just compensation. In determining retention limits, the State
shall respect the right of small landowners. The State shall further provide incentives for voluntary land-
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
sharing.
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES, respondents. Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been enacted
by the Congress of the Philippines on August 8, 1963, in line with the above-stated principles. This was
substantially superseded almost a decade later by P.D. No. 27, which was promulgated on October 21, 1972,
CRUZ, J.
along with martial law, to provide for the compulsory acquisition of private lands for distribution among tenant-
farmers and to specify maximum retention limits for landowners.
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his way to
Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung his adversary to the
The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian reform.
ground thinking him dead, but Antaeus rose even stronger to resume their struggle. This happened several times
Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in favor
to Hercules' increasing amazement. Finally, as they continued grappling, it dawned on Hercules that Antaeus
of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued lands covered by the decree as
was the son of Gaea and could never die as long as any part of his body was touching his Mother Earth. Thus
well as the manner of their payment. This was followed on July 22, 1987 by Presidential Proclamation No. 131,
forewarned, Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed him to
death.
instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for its The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the lands
implementation. occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse, the measure
would not solve the agrarian problem because even the small farmers are deprived of their lands and the
Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative power retention rights guaranteed by the Constitution.
from the President and started its own deliberations, including extensive public hearings, on the improvement of
the interests of farmers. The result, after almost a year of spirited debate, was the enactment of R.A. No. 6657, In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier cases
otherwise known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino signed on June ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of the Philippines, Inc.
10, 1988. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them v. The National Land Reform Council. 9 The determination of just compensation by the executive authorities
suppletory effect insofar as they are not inconsistent with its provisions. 4 conformably to the formula prescribed under the questioned order is at best initial or preliminary only. It does not
foreclose judicial intervention whenever sought or warranted. At any rate, the challenge to the order is premature
The above-captioned cases have been consolidated because they involve common legal questions, including because no valuation of their property has as yet been made by the Department of Agrarian Reform. The
serious challenges to the constitutionality of the several measures mentioned above. They will be the subject of petitioners are also not proper parties because the lands owned by them do not exceed the maximum retention
one common discussion and resolution, The different antecedents of each case will require separate treatment, limit of 7 hectares.
however, and will first be explained hereunder.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention limits
G.R. No. 79777 on tenanted lands and that in any event their petition is a class suit brought in behalf of landowners with
landholdings below 24 hectares. They maintain that the determination of just compensation by the administrative
authorities is a final ascertainment. As for the cases invoked by the public respondent, the constitutionality of
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.
P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was the validity of the
imposition of martial law.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas
Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and 229
Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified farmers under
(except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this statute should
P.D. No. 27.
itself also be declared unconstitutional because it suffers from substantially the same infirmities as the earlier
measures.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of
powers, due process, equal protection and the constitutional limitation that no private property shall be taken for
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1. 83- hectare
public use without just compensation.
land, who complained that the DAR was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite
a compromise agreement he had reached with his tenant on the payment of rentals. In a subsequent motion
They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said dated April 10, 1989, he adopted the allegations in the basic amended petition that the above- mentioned
measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to provide for retention enactments have been impliedly repealed by R.A. No. 6657.
limits for small landowners. Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of
a valid appropriation.
G.R. No. 79310
In connection with the determination of just compensation, the petitioners argue that the same may be made only
The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros
by a court of justice and not by the President of the Philippines. They invoke the recent cases of EPZA v.
Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400 planter-members. This
Dulay 5 andManotok v. National Food Authority. 6 Moreover, the just compensation contemplated by the Bill of
petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.
Rights is payable in money or in cash and not in the form of bonds or other things of value.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as decreed by the
In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of
Constitution belongs to Congress and not the President. Although they agree that the President could exercise
their property rights as protected by due process. The equal protection clause is also violated because the order
legislative power until the Congress was convened, she could do so only to enact emergency measures during
places the burden of solving the agrarian problems on the owners only of agricultural lands. No similar obligation
the transition period. At that, even assuming that the interim legislative power of the President was properly
is imposed on the owners of other properties.
exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for violating the constitutional Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing
provisions on just compensation, due process, and equal protection. evidence the necessity for the exercise of the powers of eminent domain, and the violation of the fundamental
right to own property.
They also argue that under Section 2 of Proc. No. 131 which provides:
The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the said land
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform Fund, an for an amount equal to the government assessor's valuation of the land for tax purposes. On the other hand, if
initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the the landowner declares his own valuation he is unjustly required to immediately pay the corresponding taxes on
Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the receipts of the the land, in violation of the uniformity rule.
sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received through the
Presidential Commission on Good Government and such other sources as government may deem appropriate. In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in favor of
The amounts collected and accruing to this special fund shall be considered automatically appropriated for the Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as explained in the
purpose authorized in this Proclamation the amount appropriated is in futuro, not in esse. The money needed to "whereas" clauses of the Proclamation and submits that, contrary to the petitioner's contention, a pilot project to
cover the cost of the contemplated expropriation has yet to be raised and cannot be appropriated at this time. determine the feasibility of CARP and a general survey on the people's opinion thereon are not indispensable
prerequisites to its promulgation.
Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is
traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section 5 of the E.O. On the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to
No. 229. On the contrary, Section 6, thereof provides that the Land Bank of the Philippines "shall compensate the a different class and should be differently treated. The Comment also suggests the possibility of Congress first
landowner in an amount to be established by the government, which shall be based on the owner's declaration of distributing public agricultural lands and scheduling the expropriation of private agricultural lands later. From this
current fair market value as provided in Section 4 hereof, but subject to certain controls to be defined and viewpoint, the petition for prohibition would be premature.
promulgated by the Presidential Agrarian Reform Council." This compensation may not be paid fully in money but
in any of several modes that may consist of part cash and part bond, with interest, maturing periodically, or direct The public respondent also points out that the constitutional prohibition is against the payment of public money
payment in cash or bond as may be mutually agreed upon by the beneficiary and the landowner or as may be without the corresponding appropriation. There is no rule that only money already in existence can be the subject
prescribed or approved by the PARC. of an appropriation law. Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund, although
denominated as an initial amount, is actually the maximum sum appropriated. The word "initial" simply means
The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful study that additional amounts may be appropriated later when necessary.
of the sugar planters' situation. There is no tenancy problem in the sugar areas that can justify the application of
the CARP to them. To the extent that the sugar planters have been lumped in the same legislation with other On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the
farmers, although they are a separate group with problems exclusively their own, their right to equal protection constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano contends that the measure
has been violated. is unconstitutional because:

A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters (NASP) (1) Only public lands should be included in the CARP;
which claims a membership of at least 20,000 individual sugar planters all over the country. On September 10,
1987, another motion for intervention was filed, this time by Manuel Barcelona, et al., representing coconut and
(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;
riceland owners. Both motions were granted by the Court.
(3) The power of the President to legislate was terminated on July 2, 1987; and
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in any
event, the appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of Proc. No. 131
and Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion pesos and thus specifies (4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the
the minimum rather than the maximum authorized amount. This is not allowed. Furthermore, the stated initial House of Representatives.
amount has not been certified to by the National Treasurer as actually available.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process and The incumbent president shall continue to exercise legislative powers until the first Congress is convened.
the requirement for just compensation, placed his landholding under the coverage of Operation Land Transfer.
Certificates of Land Transfer were subsequently issued to the private respondents, who then refused payment of On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21. 1972,
lease rentals to him. the tenant-farmer of agricultural land was deemed the owner of the land he was tilling. The leasehold rentals paid
after that date should therefore be considered amortization payments.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under Operation
Land transfer and asked for the recall and cancellation of the Certificates of Land Transfer in the name of the In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on
private respondents. He claims that on December 24, 1986, his petition was denied without hearing. On February December 14, 1987. An appeal to the Office of the President would be useless with the promulgation of E.O.
17, 1987, he filed a motion for reconsideration, which had not been acted upon when E.O. Nos. 228 and 229 Nos. 228 and 229, which in effect sanctioned the validity of the public respondent's acts.
were issued. These orders rendered his motion moot and academic because they directly effected the transfer of
his land to the private respondents.
G.R. No. 78742

The petitioner now argues that:


The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn lands
not exceeding seven hectares as long as they are cultivating or intend to cultivate the same. Their respective
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines. lands do not exceed the statutory limit but are occupied by tenants who are actually cultivating such lands.

(2) The said executive orders are violative of the constitutional provision that no private property shall be According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
taken without due process or just compensation.
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed from
(3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution. his farmholding until such time as the respective rights of the tenant- farmers and the landowner shall have
been determined in accordance with the rules and regulations implementing P.D. No. 27.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is
anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power granted to The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because
the President under the Transitory Provisions refers only to emergency measures that may be promulgated in the the Department of Agrarian Reform has so far not issued the implementing rules required under the above-
proper exercise of the police power. quoted decree. They therefore ask the Court for a writ of mandamus to compel the respondent to issue the said
rules.
The petitioner also invokes his rights not to be deprived of his property without due process of law and to the
retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the Constitution. He In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any
likewise argues that, besides denying him just compensation for his land, the provisions of E.O. No. 228 right of retention from persons who own other agricultural lands of more than 7 hectares in aggregate area or
declaring that: lands used for residential, commercial, industrial or other purposes from which they derive adequate income for
their family. And even assuming that the petitioners do not fall under its terms, the regulations implementing P.D.
Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be considered No. 27 have already been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention
as advance payment for the land. by Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No. 11 dated April
21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated December
is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even small 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR
landowners in the program along with other landowners with lands consisting of seven hectares or more is Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for Landowners to Apply for Retention
undemocratic. and/or to Protest the Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27).
For failure to file the corresponding applications for retention under these measures, the petitioners are now
barred from invoking this right.
In his Comment, the Solicitor General submits that the petition is premature because the motion for
reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the issuance of
E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section 6, Article XVIII of the Transitory The public respondent also stresses that the petitioners have prematurely initiated this case notwithstanding the
Provisions of the 1987 Constitution which reads: pendency of their appeal to the President of the Philippines. Moreover, the issuance of the implementing rules,
assuming this has not yet been done, involves the exercise of discretion which cannot be controlled through the
writ of mandamus. This is especially true if this function is entrusted, as in this case, to a separate department of The other above-mentioned requisites have also been met in the present petitions.
the government.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with constitutional
In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they do not issues like the ones now before it, it will not hesitate to declare a law or act invalid when it is convinced that this
own more than seven hectares of agricultural land. Moreover, assuming arguendo that the rules were intended to must be done. In arriving at this conclusion, its only criterion will be the Constitution as God and its conscience
cover them also, the said measures are nevertheless not in force because they have not been published as give it the light to probe its meaning and discover its purpose. Personal motives and political considerations are
required by law and the ruling of this Court in Tanada v. Tuvera.10 As for LOI 474, the same is ineffective for the irrelevancies that cannot influence its decision. Blandishment is as ineffectual as intimidation.
additional reason that a mere letter of instruction could not have repealed the presidential decree.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the hammer
I fall, and heavily," to use Justice Laurel's pithy language, where the acts of these departments, or of any public
official, betray the people's will as expressed in the Constitution.
Although holding neither purse nor sword and so regarded as the weakest of the three departments of the
government, the judiciary is nonetheless vested with the power to annul the acts of either the legislative or the It need only be added, to borrow again the words of Justice Laurel, that —
executive or of both when not conformable to the fundamental law. This is the reason for what some quarters call
the doctrine of judicial supremacy. Even so, this power is not lightly assumed or readily exercised. The doctrine ... when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over
of separation of powers imposes upon the courts a proper restraint, born of the nature of their functions and of the other departments; it does not in reality nullify or invalidate an act of the Legislature, but only asserts
their respect for the other departments, in striking down the acts of the legislative and the executive as the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of
unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that authority under the Constitution and to establish for the parties in an actual controversy the rights which
before the act was done or the law was enacted, earnest studies were made by Congress or the President, or that instrument secures and guarantees to them. This is in truth all that is involved in what is termed
both, to insure that the Constitution would not be breached. "judicial supremacy" which properly is the power of judicial review under the Constitution. 16

In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality, requiring The cases before us categorically raise constitutional questions that this Court must categorically resolve. And so
therefor the concurrence of a majority of the members of the Supreme Court who took part in the deliberations we shall.
and voted on the issue during their session en banc.11 And as established by judge made doctrine, the Court will
assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial
II
inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the constitutional question must have been
opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the We proceed first to the examination of the preliminary issues before resolving the more serious challenges to the
decision of the case itself. 12 constitutionality of the several measures involved in these petitions.

With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already
is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue. As for the
an immediate injury as a result of the acts or measures complained of. 13 And even if, strictly speaking, they are power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized
not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.
remove the impediment to its addressing and resolving the serious constitutional questions raised.
The said measures were issued by President Aquino before July 27, 1987, when the Congress of the Philippines
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the was formally convened and took over legislative power from her. They are not "midnight" enactments intended to
constitutionality of several executive orders issued by President Quirino although they were invoking only an pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc.
indirect and general interest shared in common with the public. The Court dismissed the objection that they were No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to say that these measures
not proper parties and ruled that "the transcendental importance to the public of these cases demands that they ceased to be valid when she lost her legislative power for, like any statute, they continue to be in force unless
be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." We have since then modified or repealed by subsequent law or declared invalid by the courts. A statute does not ipso facto become
applied this exception in many other cases. 15 inoperative simply because of the dissolution of the legislature that enacted it. By the same token, President
Aquino's loss of legislative power did not have the effect of invalidating all the measures enacted by her when
and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially affirmed the Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could not have repealed P.D.
challenged measures and has specifically provided that they shall be suppletory to R.A. No. 6657 whenever not No. 27 because the former was only a letter of instruction. The important thing is that it was issued by President
inconsistent with its provisions. 17 Indeed, some portions of the said measures, like the creation of the P50 billion Marcos, whose word was law during that time.
fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by reference
in the CARP Law. 18 But for all their peremptoriness, these issuances from the President Marcos still had to comply with the
requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless published in the Official
That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the requirements Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect if they were
of a valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation among those enactments successfully challenged in that case. LOI 474 was published, though, in the Official
measure even if it does provide for the creation of said fund, for that is not its principal purpose. An appropriation Gazette dated November 29,1976.)
law is one the primary and specific purpose of which is to authorize the release of public funds from the
treasury. 19 The creation of the fund is only incidental to the main objective of the proclamation, which is agrarian Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus cannot
reform. issue to compel the performance of a discretionary act, especially by a specific department of the government.
That is true as a general proposition but is subject to one important qualification. Correctly and categorically
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of Article stated, the rule is that mandamus will lie to compel the discharge of the discretionary duty itself but not to control
VI, are not applicable. With particular reference to Section 24, this obviously could not have been complied with the discretion to be exercised. In other words, mandamus can issue to require action only but not specific action.
for the simple reason that the House of Representatives, which now has the exclusive power to initiate
appropriation measures, had not yet been convened when the proclamation was issued. The legislative power Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the
was then solely vested in the President of the Philippines, who embodied, as it were, both houses of Congress. exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the
extraordinary legal remedy of mandamus to compel action. If the duty is purely ministerial, the courts will
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they require specific action. If the duty is purely discretionary, the courts by mandamus will require action only.
do not provide for retention limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. For example, if an inferior court, public official, or board should, for an unreasonable length of time, fail to
R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact is one of its most decide a particular question to the great detriment of all parties concerned, or a court should refuse to take
controversial provisions. This section declares: jurisdiction of a cause when the law clearly gave it jurisdiction mandamus will issue, in the first case to
require a decision, and in the second to require that jurisdiction be taken of the cause. 22
Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors governing And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and adequate
a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as remedy available from the administrative authorities, resort to the courts may still be permitted if the issue raised
determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall is a question of law. 23
retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of
the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) III
that he is actually tilling the land or directly managing the farm; Provided, That landowners whose lands
have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by
There are traditional distinctions between the police power and the power of eminent domain that logically
them thereunder, further, That original homestead grantees or direct compulsory heirs who still own the
preclude the application of both powers at the same time on the same subject. In the case of City of Baguio v.
original homestead at the time of the approval of this Act shall retain the same areas as long as they
NAWASA, 24for example, where a law required the transfer of all municipal waterworks systems to the NAWASA
continue to cultivate said homestead.
in exchange for its assets of equivalent value, the Court held that the power being exercised was eminent domain
because the property involved was wholesome and intended for a public use. Property condemned under the
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one subject, to police power is noxious or intended for a noxious purpose, such as a building on the verge of collapse, which
be expressed in its title, deserves only short attention. It is settled that the title of the bill does not have to be a should be demolished for the public safety, or obscene materials, which should be destroyed in the interest of
catalogue of its contents and will suffice if the matters embodied in the text are relevant to each other and may be public morals. The confiscation of such property is not compensable, unlike the taking of property under the
inferred from the title. 20 power of expropriation, which requires the payment of just compensation to the owner.

The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name it was In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police power in a
called, had the force and effect of law because it came from President Marcos. Such are the ways of despots. famous aphorism: "The general rule at least is that while property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking." The regulation that went "too far" was a law prohibiting Once the object is within the authority of Congress, the right to realize it through the exercise of eminent
mining which might cause the subsidence of structures for human habitation constructed on the land surface. domain is clear.
This was resisted by a coal company which had earlier granted a deed to the land over its mine but reserved all
mining rights thereunder, with the grantee assuming all risks and waiving any damage claim. The Court held the For the power of eminent domain is merely the means to the end. 28
law could not be sustained without compensating the grantor. Justice Brandeis filed a lone dissent in which he
argued that there was a valid exercise of the police power. He said:
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S Supreme Court
sustained the respondent's Landmarks Preservation Law under which the owners of the Grand Central Terminal
Every restriction upon the use of property imposed in the exercise of the police power deprives the owner had not been allowed to construct a multi-story office building over the Terminal, which had been designated a
of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property historic landmark. Preservation of the landmark was held to be a valid objective of the police power. The
without making compensation. But restriction imposed to protect the public health, safety or morals from problem, however, was that the owners of the Terminal would be deprived of the right to use the airspace above
dangers threatened is not a taking. The restriction here in question is merely the prohibition of a noxious it although other landowners in the area could do so over their respective properties. While insisting that there
use. The property so restricted remains in the possession of its owner. The state does not appropriate it or was here no taking, the Court nonetheless recognized certain compensatory rights accruing to Grand Central
make any use of it. The state merely prevents the owner from making a use which interferes with Terminal which it said would "undoubtedly mitigate" the loss caused by the regulation. This "fair compensation,"
paramount rights of the public. Whenever the use prohibited ceases to be noxious — as it may because of as he called it, was explained by Prof. Costonis in this wise:
further changes in local or social conditions — the restriction will have to be removed and the owner will
again be free to enjoy his property as heretofore.
In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to transfer to
neighboring properties the authorized but unused rights accruing to the site prior to the Terminal's designation as
Recent trends, however, would indicate not a polarization but a mingling of the police power and the power of a landmark — the rights which would have been exhausted by the 59-story building that the city refused to
eminent domain, with the latter being used as an implement of the former like the power of taxation. The countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were proportionately relaxed,
employment of the taxing power to achieve a police purpose has long been accepted. 26 As for the power of theoretically enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to others
expropriation, Prof. John J. Costonis of the University of Illinois College of Law (referring to the earlier case of the right to construct larger, hence more profitable buildings on the transferee sites. 30
Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power) makes the
following significant remarks:
The cases before us present no knotty complication insofar as the question of compensable taking is concerned.
To the extent that the measures under challenge merely prescribe retention limits for landowners, there is an
Euclid, moreover, was decided in an era when judges located the Police and eminent domain powers on exercise of the police power for the regulation of private property in accordance with the Constitution. But where,
different planets. Generally speaking, they viewed eminent domain as encompassing public acquisition of to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in
private property for improvements that would be available for public use," literally construed. To the police excess of the maximum area allowed, there is definitely a taking under the power of eminent domain for which
power, on the other hand, they assigned the less intrusive task of preventing harmful externalities a point payment of just compensation is imperative. The taking contemplated is not a mere limitation of the use of the
reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster its support of zoning. So land. What is required is the surrender of the title to and the physical possession of the said excess and all
long as suppression of a privately authored harm bore a plausible relation to some legitimate "public beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the
purpose," the pertinent measure need have afforded no compensation whatever. With the progressive police power but of the power of eminent domain.
growth of government's involvement in land use, the distance between the two powers has contracted
considerably. Today government often employs eminent domain interchangeably with or as a useful
Whether as an exercise of the police power or of the power of eminent domain, the several measures before us
complement to the police power-- a trend expressly approved in the Supreme Court's 1954 decision in
are challenged as violative of the due process and equal protection clauses.
Berman v. Parker, which broadened the reach of eminent domain's "public use" test to match that of the
police power's standard of "public purpose." 27
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are prescribed
has already been discussed and dismissed. It is noted that although they excited many bitter exchanges during
The Berman case sustained a redevelopment project and the improvement of blighted areas in the District of
the deliberation of the CARP Law in Congress, the retention limits finally agreed upon are, curiously enough, not
Columbia as a proper exercise of the police power. On the role of eminent domain in the attainment of this
being questioned in these petitions. We therefore do not discuss them here. The Court will come to the other
purpose, Justice Douglas declared:
claimed violations of due process in connection with our examination of the adequacy of just compensation as
required under the power of expropriation.
If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as
sanitary, there is nothing in the Fifth Amendment that stands in the way.
The argument of the small farmers that they have been denied equal protection because of the absence of This brings us now to the power of eminent domain.
retention limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too have not
questioned the area of such limits. There is also the complaint that they should not be made to share the burden IV
of agrarian reform, an objection also made by the sugar planters on the ground that they belong to a particular
class with particular interests of their own. However, no evidence has been submitted to the Court that the
Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended
requisites of a valid classification have been violated.
for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary
Classification has been defined as the grouping of persons or things similar to each other in certain particulars deed of sale may be agreed upon by the parties. 35 It is only where the owner is unwilling to sell, or cannot
and different from each other in these same particulars. 31 To be valid, it must conform to the following accept the price or other conditions offered by the vendee, that the power of eminent domain will come into
requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; play to assert the paramount authority of the State over the interests of the property owner. Private rights
(3) it must not be limited to existing conditions only; and (4) it must apply equally to all the members of the must then yield to the irresistible demands of the public interest on the time-honored justification, as in the
class. 32 The Court finds that all these requisites have been met by the measures here challenged as arbitrary case of the police power, that the welfare of the people is the supreme law.
and discriminatory.
But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is
Equal protection simply means that all persons or things similarly situated must be treated alike both as to the absolute). The limitation is found in the constitutional injunction that "private property shall not be taken for public
rights conferred and the liabilities imposed. 33 The petitioners have not shown that they belong to a different class use without just compensation" and in the abundant jurisprudence that has evolved from the interpretation of this
and entitled to a different treatment. The argument that not only landowners but also owners of other properties principle. Basically, the requirements for a proper exercise of the power are: (1) public use and (2) just
must be made to share the burden of implementing land reform must be rejected. There is a substantial compensation.
distinction between these two classes of owners that is clearly visible except to those who will not see. There is
no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first
classification. Its decision is accorded recognition and respect by the courts of justice except only where its
distribute public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing property
discretion is abused to the detriment of the Bill of Rights.
rights by forcibly acquiring private agricultural lands. Parenthetically, it is not correct to say that only public
agricultural lands may be covered by the CARP as the Constitution calls for "the just distribution of all agricultural
It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a lands." In any event, the decision to redistribute private agricultural lands in the manner prescribed by the CARP
concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public generally as was made by the legislative and executive departments in the exercise of their discretion. We are not justified in
distinguished from those of a particular class require the interference of the State and, no less important, the reviewing that discretion in the absence of a clear showing that it has been abused.
means employed are reasonably necessary for the attainment of the purpose sought to be achieved and not
unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform have been laid down by the
A becoming courtesy admonishes us to respect the decisions of the political departments when they decide what
Constitution itself, we may say that the first requirement has been satisfied. What remains to be examined is the
is known as the political question. As explained by Chief Justice Concepcion in the case of Tañada v. Cuenco: 36
validity of the method employed to achieve the constitutional goal.
The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It
One of the basic principles of the democratic system is that where the rights of the individual are concerned, the
refers to "those questions which, under the Constitution, are to be decided by the people in their sovereign
end does not justify the means. It is not enough that there be a valid objective; it is also necessary that the
capacity; or in regard to which full discretionary authority has been delegated to the legislative or executive
means employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional
branch of the government." It is concerned with issues dependent upon the wisdom, not legality, of a
shortcuts. There is no question that not even the strongest moral conviction or the most urgent public need,
particular measure.
subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration
to say that a, person invoking a right guaranteed under Article III of the Constitution is a majority of one even as
against the rest of the nation who would deny him that right. It is true that the concept of the political question has been constricted with the enlargement of judicial power,
which now includes the authority of the courts "to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
That right covers the person's life, his liberty and his property under Section 1 of Article III of the Constitution.
Government." 37 Even so, this should not be construed as a license for us to reverse the other departments
With regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar rule
simply because their views may not coincide with ours.
that private property shall not be taken for public use without just compensation.
The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the redistribution of Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of
private landholdings (even as the distribution of public agricultural lands is first provided for, while also continuing the condemned property, as "the compensation is a public charge, the good faith of the public is pledged for its
apace under the Public Land Act and other cognate laws). The Court sees no justification to interpose its payment, and all the resources of taxation may be employed in raising the amount." 43 Nevertheless, Section
authority, which we may assert only if we believe that the political decision is not unwise, but illegal. We do not 16(e) of the CARP Law provides that:
find it to be so.
Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from
In U.S. v. Chandler-Dunbar Water Power Company,38 it was held: the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in
cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land
Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river between and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of
the American bank and the international line, as well as all of the upland north of the present ship canal, the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the
throughout its entire length, was "necessary for the purpose of navigation of said waters, and the waters qualified beneficiaries.
connected therewith," that determination is conclusive in condemnation proceedings instituted by the
United States under that Act, and there is no room for judicial review of the judgment of Congress ... . Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the
administrative authorities in violation of judicial prerogatives. Specific reference is made to Section 16(d), which
As earlier observed, the requirement for public use has already been settled for us by the Constitution itself No provides that in case of the rejection or disregard by the owner of the offer of the government to buy his land-
less than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural lands are to be
taken from their owners, subject to the prescribed maximum retention limits. The purposes specified in P.D. No. ... the DAR shall conduct summary administrative proceedings to determine the compensation for the land
27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that the State adopt by requiring the landowner, the LBP and other interested parties to submit evidence as to the just
the necessary measures "to encourage and undertake the just distribution of all agricultural lands to enable compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the
farmers who are landless to own directly or collectively the lands they till." That public use, as pronounced by the above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30)
fundamental law itself, must be binding on us. days after it is submitted for decision.

The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful To be sure, the determination of just compensation is a function addressed to the courts of justice and may not
examination. be usurped by any other branch or official of the government. EPZA v. Dulay 44 resolved a challenge to several
decrees promulgated by President Marcos providing that the just compensation for property under expropriation
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the should be either the assessment of the property by the government or the sworn valuation thereof by the owner,
expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the taker's gain but the whichever was lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E.
owner's loss. 40 The word "just" is used to intensify the meaning of the word "compensation" to convey the idea Gutierrez, Jr.:
that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample. 41
The method of ascertaining just compensation under the aforecited decrees constitutes impermissible
It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation of encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this
the use of private lands under the police power. We deal here with an actual taking of private agricultural lands Constitution is reserved to it for final determination.
that has dispossessed the owners of their property and deprived them of all its beneficial use and enjoyment, to
entitle them to the just compensation mandated by the Constitution. Thus, although in an expropriation proceeding the court technically would still have the power to determine
the just compensation for the property, following the applicable decrees, its task would be relegated to
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following conditions simply stating the lower value of the property as declared either by the owner or the assessor. As a
concur: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary necessary consequence, it would be useless for the court to appoint commissioners under Rule 67 of the
period; (3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to public Rules of Court. Moreover, the need to satisfy the due process clause in the taking of private property is
use or otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for public seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking.
use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. All these However, the strict application of the decrees during the proceedings would be nothing short of a mere
requisites are envisioned in the measures before us. formality or charade as the court has only to choose between the valuation of the owner and that of the
assessor, and its choice is always limited to the lower of the two. The court cannot exercise its discretion or
independence in determining what is just or fair. Even a grade school pupil could substitute for the judge (1) Cash payment, under the following terms and conditions:
insofar as the determination of constitutional just compensation is concerned.
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned — Twenty-five
In the present petition, we are once again confronted with the same question of whether the courts under percent (25%) cash, the balance to be paid in government financial instruments negotiable at any
P.D. No. 1533, which contains the same provision on just compensation as its predecessor decrees, still time.
have the power and authority to determine just compensation, independent of what is stated by the decree
and to this effect, to appoint commissioners for such purpose. (b) For lands above twenty-four (24) hectares and up to fifty (50) hectares — Thirty percent (30%)
cash, the balance to be paid in government financial instruments negotiable at any time.
This time, we answer in the affirmative.
(c) For lands twenty-four (24) hectares and below — Thirty-five percent (35%) cash, the balance to
It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax be paid in government financial instruments negotiable at any time.
documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court (2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets
promulgated only after expert commissioners have actually viewed the property, after evidence and or other qualified investments in accordance with guidelines set by the PARC;
arguments pro and con have been presented, and after all factors and considerations essential to a fair and
just determination have been judiciously evaluated.
(3) Tax credits which can be used against any tax liability;

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that
(4) LBP bonds, which shall have the following features:
rendered the challenged decrees constitutionally objectionable. Although the proceedings are described as
summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence
on the real value of the property. But more importantly, the determination of the just compensation by the DAR is (a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of
not by any means final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly the bonds shall mature every year from the date of issuance until the tenth (10th) year: Provided, That
provides: should the landowner choose to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;
Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation. (b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors-in-
interest or his assigns, up to the amount of their face value, for any of the following:
The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the
courts of justice will still have the right to review with finality the said determination in the exercise of what is (i) Acquisition of land or other real properties of the government, including assets under the Asset
admittedly a judicial function. Privatization Program and other assets foreclosed by government financial institutions in the same
province or region where the lands for which the bonds were paid are situated;
The second and more serious objection to the provisions on just compensation is not as easily resolved.
(ii) Acquisition of shares of stock of government-owned or controlled corporations or shares of stock
owned by the government in private corporations;
This refers to Section 18 of the CARP Law providing in full as follows:
(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or for
SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner in such
performance bonds;
amount as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the
criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally
determined by the court, as the just compensation for the land. (iv) Security for loans with any government financial institution, provided the proceeds of the loans shall
be invested in an economic enterprise, preferably in a small and medium- scale industry, in the same
province or region as the land for which the bonds are paid;
The compensation shall be paid in one of the following modes, at the option of the landowner:
(v) Payment for various taxes and fees to government: Provided, That the use of these bonds for these Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable and
purposes will be limited to a certain percentage of the outstanding balance of the financial instruments; constant standard of compensation. 48
Provided, further, That the PARC shall determine the percentages mentioned above;
"Just compensation" for property taken by condemnation means a fair equivalent in money, which must be
(vi) Payment for tuition fees of the immediate family of the original bondholder in government paid at least within a reasonable time after the taking, and it is not within the power of the Legislature to
universities, colleges, trade schools, and other institutions; substitute for such payment future obligations, bonds, or other valuable advantage. 49(Emphasis supplied.)

(vii) Payment for fees of the immediate family of the original bondholder in government hospitals; and It cannot be denied from these cases that the traditional medium for the payment of just compensation is money
and no other. And so, conformably, has just compensation been paid in the past solely in that medium. However,
(viii) Such other uses as the PARC may from time to time allow. we do not deal here with the traditional excercise of the power of eminent domain. This is not an ordinary
expropriation where only a specific property of relatively limited area is sought to be taken by the State from its
owner for a specific and perhaps local purpose.
The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar as it
requires the owners of the expropriated properties to accept just compensation therefor in less than money,
which is the only medium of payment allowed. In support of this contention, they cite jurisprudence holding that: What we deal with here is a revolutionary kind of expropriation.

The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled to a The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as
just compensation, which should be neither more nor less, whenever it is possible to make the assessment, they are in excess of the maximum retention limits allowed their owners. This kind of expropriation is intended for
than the money equivalent of said property. Just compensation has always been understood to be the just the benefit not only of a particular community or of a small segment of the population but of the entire Filipino
and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the nation, from all levels of our society, from the impoverished farmer to the land-glutted owner. Its purpose does
expropriation . 45 (Emphasis supplied.) not cover only the whole territory of this country but goes beyond in time to the foreseeable future, which it hopes
to secure and edify with the vision and the sacrifice of the present generation of Filipinos. Generations yet to
come are as involved in this program as we are today, although hopefully only as beneficiaries of a richer and
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be
forgotten that it is no less than the Constitution itself that has ordained this revolution in the farms, calling for "a
It is well-settled that just compensation means the equivalent for the value of the property at the time of its just distribution" among the farmers of lands that have heretofore been the prison of their dreams but can now
taking. Anything beyond that is more, and anything short of that is less, than just compensation. It means a become the key at least to their deliverance.
fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain
would accrue to the expropriating entity. The market value of the land taken is the just compensation to
Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast areas
which the owner of condemned property is entitled, the market value being that sum of money which a
of land subject to expropriation under the laws before us, we estimate that hundreds of billions of pesos will be
person desirous, but not compelled to buy, and an owner, willing, but not compelled to sell, would agree on
needed, far more indeed than the amount of P50 billion initially appropriated, which is already staggering as it is
as a price to be given and received for such property. (Emphasis supplied.)
by our present standards. Such amount is in fact not even fully available at this time.
In the United States, where much of our jurisprudence on the subject has been derived, the weight of authority is
We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian reform
also to the effect that just compensation for property expropriated is payable only in money and not otherwise.
as a top priority project of the government. It is a part of this assumption that when they envisioned the
Thus —
expropriation that would be needed, they also intended that the just compensation would have to be paid not in
the orthodox way but a less conventional if more practical method. There can be no doubt that they were aware
The medium of payment of compensation is ready money or cash. The condemnor cannot compel the of the financial limitations of the government and had no illusions that there would be enough money to pay in
owner to accept anything but money, nor can the owner compel or require the condemnor to pay him on cash and in full for the lands they wanted to be distributed among the farmers. We may therefore assume that
any other basis than the value of the property in money at the time and in the manner prescribed by the their intention was to allow such manner of payment as is now provided for by the CARP Law, particularly the
Constitution and the statutes. When the power of eminent domain is resorted to, there must be a standard payment of the balance (if the owner cannot be paid fully with money), or indeed of the entire amount of the just
medium of payment, binding upon both parties, and the law has fixed that standard as money in compensation, with other things of value. We may also suppose that what they had in mind was a similar scheme
cash. 47 (Emphasis supplied.) of payment as that prescribed in P.D. No. 27, which was the law in force at the time they deliberated on the new
Charter and with which they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical agreement among the or city assessor for tax purposes. On the contrary, the CARP Law says that the just compensation shall be
members regarding the meaning to be given the concept of just compensation as applied to the comprehensive ascertained on the basis of the factors mentioned in its Section 17 and in the manner provided for in Section 16.
agrarian reform program being contemplated. There was the suggestion to "fine tune" the requirement to suit the
demands of the project even as it was also felt that they should "leave it to Congress" to determine how payment The last major challenge to CARP is that the landowner is divested of his property even before actual payment to
should be made to the landowner and reimbursement required from the farmer-beneficiaries. Such innovations him in full of just compensation, in contravention of a well- accepted principle of eminent domain.
as "progressive compensation" and "State-subsidized compensation" were also proposed. In the end, however,
no special definition of the just compensation for the lands to be expropriated was reached by the Commission. 50
The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator
only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here
On the other hand, there is nothing in the records either that militates against the assumptions we are making of and in other democratic jurisdictions. Thus:
the general sentiments and intention of the members on the content and manner of the payment to be made to
the landowner in the light of the magnitude of the expenditure and the limitations of the expropriator.
Title to property which is the subject of condemnation proceedings does not vest the condemnor until the
judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the date on
With these assumptions, the Court hereby declares that the content and manner of the just compensation which the petition under the Eminent Domain Act, or the commissioner's report under the Local Improvement Act,
provided for in the afore- quoted Section 18 of the CARP Law is not violative of the Constitution. We do not mind is filed. 51
admitting that a certain degree of pragmatism has influenced our decision on this issue, but after all this Court is
not a cloistered institution removed from the realities and demands of society or oblivious to the need for its
... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the
enhancement. The Court is as acutely anxious as the rest of our people to see the goal of agrarian reform
property taken remains in the owner until payment is actually made. 52 (Emphasis supplied.)
achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing
decades. We are aware that invalidation of the said section will result in the nullification of the entire program,
killing the farmer's hopes even as they approach realization and resurrecting the spectre of discontent and In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property does not
dissent in the restless countryside. That is not in our view the intention of the Constitution, and that is not what pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to be
we shall decree today. uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was held that "actual payment to the owner
of the condemned property was a condition precedent to the investment of the title to the property in the State"
albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York said
Accepting the theory that payment of the just compensation is not always required to be made fully in money, we
that the construction upon the statutes was that the fee did not vest in the State until the payment of the
find further that the proportion of cash payment to the other things of value constituting the total payment, as
compensation although the authority to enter upon and appropriate the land was complete prior to the payment.
determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner. It is
Kennedy further said that "both on principle and authority the rule is ... that the right to enter on and use the
noted that the smaller the land, the bigger the payment in money, primarily because the small landowner will be
property is complete, as soon as the property is actually appropriated under the authority of law for a public
needing it more than the big landowners, who can afford a bigger balance in bonds and other things of value. No
use, but that the title does not pass from the owner without his consent, until just compensation has been made
less importantly, the government financial instruments making up the balance of the payment are "negotiable at
to him."
any time." The other modes, which are likewise available to the landowner at his option, are also not
unreasonable because payment is made in shares of stock, LBP bonds, other properties or assets, tax credits,
and other things of value equivalent to the amount of just compensation. Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:

Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be
inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute
countrymen of ours, conscious as we know they are of the need for their forebearance and even sacrifice, will not reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until
begrudge us their indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our pursuit of compensation is paid ... . (Emphasis supplied.)
this elusive goal will be like the quest for the Holy Grail.
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared
The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be viable that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except that "no title to
any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the CARP Law. the land owned by him was to be actually issued to him unless and until he had become a full-fledged member of
This repeats the requisites of registration as embodied in the earlier measure but does not provide, as the latter a duly recognized farmers' cooperative." It was understood, however, that full payment of the just compensation
did, that in case of failure or refusal to register the land, the valuation thereof shall be that given by the provincial also had to be made first, conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that: the pursuit of agrarian reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and
expected difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to use
All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they Justice Holmes's words, "it is an experiment, as all life is an experiment," and so we learn as we venture forward,
acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.) and, if necessary, by our own mistakes. We cannot expect perfection although we should strive for it by all
means. Meantime, we struggle as best we can in freeing the farmer from the iron shackles that have
unconscionably, and for so long, fettered his soul to the soil.
it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged
membership in the farmers' cooperatives and full payment of just compensation. Hence, it was also perfectly
proper for the Order to also provide in its Section 2 that the "lease rentals paid to the landowner by the farmer- By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program are
beneficiary after October 21, 1972 (pending transfer of ownership after full payment of just compensation), shall removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be released
be considered as advance payment for the land." not only from want but also from the exploitation and disdain of the past and from his own feelings of inadequacy
and helplessness. At last his servitude will be ended forever. At last the farm on which he toils will be his farm. It
will be his portion of the Mother Earth that will give him not only the staff of life but also the joy of living. And
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government
where once it bred for him only deep despair, now can he see in it the fruition of his hopes for a more fulfilling
on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in
future. Now at last can he banish from his small plot of earth his insecurities and dark resentments and "rebuild in
cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. 57 No outright
it the music and the dream."
change of ownership is contemplated either.

WHEREFORE, the Court holds as follows:


Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before the
land is fully paid for must also be rejected.
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the
constitutional objections raised in the herein petitions.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as recognized
under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should counter-balance the
express provision in Section 6 of the said law that "the landowners whose lands have been covered by 2. Title to all expropriated properties shall be transferred to the State only upon full payment of
Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, That compensation to their respective owners.
original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the
approval of this Act shall retain the same areas as long as they continue to cultivate said homestead." 3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and recognized.

In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the 4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the
petitioners with the Office of the President has already been resolved. Although we have said that the doctrine of retention rights granted by R.A. No. 6657 under the conditions therein prescribed.
exhaustion of administrative remedies need not preclude immediate resort to judicial action, there are factual
issues that have yet to be examined on the administrative level, especially the claim that the petitioners are not 5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement as to
covered by LOI 474 because they do not own other agricultural lands than the subjects of their petition. costs.

Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet SO ORDERED.
exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are entitled to the new
retention rights provided for by R.A. No. 6657, which in fact are on the whole more liberal than those granted by
Fernan, (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento,
the decree.
Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

The CARP Law and the other enactments also involved in these cases have been the subject of bitter attack
from those who point to the shortcomings of these measures and ask that they be scrapped entirely. To be sure,
these enactments are less than perfect; indeed, they should be continuously re-examined and rehoned, that they
may be sharper instruments for the better protection of the farmer's rights. But we have to start somewhere. In
[G.R. No. 126102. December 4, 2000] engaging in commercial activity on the lot. The complaint was later amended to implead Ismael G. Mathay III and J.P.
Hermoso Realty Corp., which has a ten percent (10%) interest in the lot.
ORTIGAS & CO. LTD., petitioner, vs. THE COURT OF APPEALS and ISMAEL G. MATHAY III, respondents.
In his answer, Mathay III denied any knowledge of the restrictions on the use of the lot and filed a cross-claim
DECISION against the Hermosos.
On June 16, 1995, the trial court issued the writ of preliminary injunction. On June 29, 1995, Mathay III moved to
QUISUMBING, J.: set aside the injunctive order, but the trial court denied the motion.
This petition seeks to reverse the decision of the Court of Appeals, dated March 25, 1996, in CA-G.R. SP No. Mathay III then filed with the Court of Appeals a special civil action for certiorari, docketed as CA-G.R. SP No.
39193, which nullified the writ of preliminary injunction issued by the Regional Trial Court of Pasig City, Branch 261, in 39193, ascribing to the trial court grave abuse of discretion in issuing the writ of preliminary injunction. He claimed that
Civil Case No. 64931. It also assails the resolution of the appellate court, dated August 13, 1996, denying petitioners MMC Ordinance No. 81-01 classified the area where the lot was located as commercial area and said ordinance must
motion for reconsideration. be read into the August 25, 1976 Deed of Sale as a concrete exercise of police power.
The facts of this case, as culled from the records, are as follows: Ortigas and Company averred that inasmuch as the restrictions on the use of the lot were duly annotated on the
On August 25, 1976, petitioner Ortigas & Company sold to Emilia Hermoso, a parcel of land known as Lot 1, Block title it issued to Emilia Hermoso, said restrictions must prevail over the ordinance, specially since these restrictions were
21, Psd-66759, with an area of 1,508 square meters, located in Greenhills Subdivision IV, San Juan, Metro Manila, and agreed upon before the passage of MMC Ordinance No. 81-01.
covered by Transfer Certificate of Title No. 0737. The contract of sale provided that the lot: On March 25, 1996, the appellate court disposed of the case as follows:
1. (1) be used exclusivelyfor residential purposes only, and not more than one single-family residential building
will be constructed thereon, WHEREFORE, in light of the foregoing, the petition is hereby GRANTED. The assailed orders are hereby nullified and
set aside.
xxx
6. The BUYER shall not erectany sign or billboard on the rooffor advertising purposes SO ORDERED.[2]

xxx
In finding for Mathay III, the Court of Appeals held that the MMC Ordinance No. 81-01 effectively nullified the
11. No single-family residential building shall be erecteduntil the building plans, specificationhave been restrictions allowing only residential use of the property in question.
approved by the SELLER
Ortigas seasonably moved for reconsideration, but the appellate court denied it on August 13, 1996.
xxx
Hence, the instant petition.
14....restrictions shall run with the land and shall be construed as real covenants until December 31, 2025
In its Memorandum, petitioner now submits that the principal issue in this case is whether respondent Court of
when they shall cease and terminate[1]
Appeals correctly set aside the Order dated June 16, 1995 of the trial court which issued the writ of preliminary injunction
These and the other conditions were duly annotated on the certificate of title issued to Emilia. on the sole ground that MMC Ordinance No. 81-01 nullified the building restriction imposing exclusive residential use on
the property in question.[3] It also asserts that Mathay III lacks legal capacity to question the validity of conditions of the
In 1981, the Metropolitan Manila Commission (now Metropolitan Manila Development Authority) enacted MMC deed of sale; and he is barred by estoppel or waiver to raise the same question like his principals, the owners. [4] Lastly,
Ordinance No. 81-01, also known as the Comprehensive Zoning Area for the National Capital Region. The ordinance it avers that the appellate court unaccountably failed to address several questions of fact.
reclassified as a commercial area a portion of Ortigas Avenue from Madison to Roosevelt Streets of Greenhills
Subdivision where the lot is located. Principally, we must resolve the issue of whether the Court of Appeals erred in holding that the trial court committed
grave abuse of discretion when it refused to apply MMC Ordinance No.81-01 to Civil Case No. 64931.
On June 8, 1984, private respondent Ismael Mathay III leased the lot from Emilia Hermoso and J.P. Hermoso
Realty Corp.. The lease contract did not specify the purposes of the lease. Thereupon, private respondent constructed a But first, we must address petitioners allegation that the Court of Appeals unaccountably failed to address
single story commercial building for Greenhills Autohaus, Inc., a car sales company. questions of fact. For basic is the rule that factual issues may not be raised before this Court in a petition for review and
this Court is not duty-bound to consider said questions.[5] CA-G.R. SP No. 39193 was a special civil action for certiorari,
On January 18, 1995, petitioner filed a complaint against Emilia Hermoso with the Regional Trial Court of Pasig, and the appellate court only had to determine if the trial court committed grave abuse of discretion amounting to want or
Branch 261. Docketed as Civil Case No. 64931, the complaint sought the demolition of the said commercial structure for excess of jurisdiction in issuing the writ of preliminary injunction. Thus, unless vital to our determination of the issue at
having violated the terms and conditions of the Deed of Sale. Complainant prayed for the issuance of a temporary hand, we shall refrain from further consideration of factual questions.
restraining order and a writ of preliminary injunction to prohibit petitioner from constructing the commercial building and/or
Petitioner contends that the appellate court erred in limiting its decision to the cited zoning ordinance. It avers that deemed null and void. Respondent court correctly found that the trial court committed in this case a grave abuse of
a contractual right is not automatically discarded once a claim is made that it conflicts with police power. Petitioner discretion amounting to want of or excess of jurisdiction in refusing to treat Ordinance No. 81-01 as applicable to Civil
submits that the restrictive clauses in the questioned contract is not in conflict with the zoning ordinance. For one, Case No. 64931. In resolving matters in litigation, judges are not only duty-bound to ascertain the facts and the applicable
according to petitioner, the MMC Ordinance No. 81-01 did not prohibit the construction of residential buildings. Petitioner laws,[19] they are also bound by their oath of office to apply the applicable law. [20]
argues that even with the zoning ordinance, the seller and buyer of the re-classified lot can voluntarily agree to an
exclusive residential use thereof. Hence, petitioner concludes that the Court of Appeals erred in holding that the condition As a secondary issue, petitioner contends that respondent Mathay III, as a mere lessee of the lot in question, is a
imposing exclusive residential use was effectively nullified by the zoning ordinance. total stranger to the deed of sale and is thus barred from questioning the conditions of said deed. Petitioner points out
that the owners of the lot voluntarily agreed to the restrictions on the use of the lot and do not question the validity of
In its turn, private respondent argues that the appellate court correctly ruled that the trial court had acted with grave these restrictions.Petitioner argues that Mathay III as a lessee is merely an agent of the owners, and could not override
abuse of discretion in refusing to subject the contract to the MMC Ordinance No. 81-01. He avers that the appellate court and rise above the status of his principals. Petitioner submits that he could not have a higher interest than those of the
properly held the police power superior to the non-impairment of contract clause in the Constitution. He concludes that owners, the Hermosos, and thus had no locus standi to file CA-G.R. SP No. 39193 to dissolve the injunctive writ issued
the appellate court did not err in dissolving the writ of preliminary injunction issued by the trial court in excess of its by the RTC of Pasig City.
jurisdiction.
For his part, private respondent argues that as the lessee who built the commercial structure, it is he and he alone
We note that in issuing the disputed writ of preliminary injunction, the trial court observed that the contract of sale who stands to be either benefited or injured by the results of the judgment in Civil Case No. 64931. He avers he is the
was entered into in August 1976, while the zoning ordinance was enacted only in March 1981. The trial court reasoned party with real interest in the subject matter of the action, as it would be his business, not the Hermosos, which would
that since private respondent had failed to show that MMC Ordinance No. 81-01 had retroactive effect, said ordinance suffer had not the respondent court dissolved the writ of preliminary injunction.
should be given prospective application only,[6] citing Co vs. Intermediate Appellate Court, 162 SCRA 390 (1988).
A real party in interest is defined as the party who stands to be benefited or injured by the judgment or the party
In general, we agree that laws are to be construed as having only prospective operation. Lex prospicit, non entitled to the avails of the suit. Interest within the meaning of the rule means material interest, an interest in issue and
respicit. Equally settled, only laws existing at the time of the execution of a contract are applicable thereto and not later to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental
statutes, unless the latter are specifically intended to have retroactive effect.[7] A later law which enlarges, abridges, or in interest.[21] By real interest is meant a present substantial interest, as distinguished from a mere expectancy or a future,
any manner changes the intent of the parties to the contract necessarily impairs the contract itself[8] and cannot be given contingent, subordinate, or consequential interest.[22]
retroactive effect without violating the constitutional prohibition against impairment of contracts.[9]
Tested by the foregoing definition, private respondent in this case is clearly a real party in interest. It is not disputed
But, the foregoing principles do admit of certain exceptions. One involves police power. A law enacted in the that he is in possession of the lot pursuant to a valid lease. He is a possessor in the concept of a holder of the thing under
exercise of police power to regulate or govern certain activities or transactions could be given retroactive effect and may Article 525 of the Civil Code.[23] He was impleaded as a defendant in the amended complaint in Civil Case No.
reasonably impair vested rights or contracts. Police power legislation is applicable not only to future contracts, but equally 64931. Further, what petitioner seeks to enjoin is the building by respondent of a commercial structure on the lot. Clearly,
to those already in existence.[10] Nonimpairment of contracts or vested rights clauses will have to yield to the superior it is private respondents acts which are in issue, and his interest in said issue cannot be a mere incidental interest. In its
and legitimate exercise by the State of police power to promote the health, morals, peace, education, good order, safety, amended complaint, petitioner prayed for, among others, judgment ordering the demolition of all improvements illegally
and general welfare of the people.[11] Moreover, statutes in exercise of valid police power must be read into every built on the lot in question.[24] These show that it is petitioner Mathay III, doing business as Greenhills Autohaus, Inc., and
contract.[12] Noteworthy, in Sangalang vs. Intermediate Appellate Court,[13] we already upheld MMC Ordinance No. 81- not only the Hermosos, who will be adversely affected by the courts decree.
01 as a legitimate police power measure.
Petitioner also cites the rule that a stranger to a contract has no rights or obligations under it,[25] and thus has no
The trial courts reliance on the Co vs. IAC,[14] is misplaced. In Co, the disputed area was agricultural and Ordinance standing to challenge its validity.[26] But in seeking to enforce the stipulations in the deed of sale, petitioner impleaded
No. 81-01 did not specifically provide that it shall have retroactive effect so as to discontinue all rights previously acquired private respondent as a defendant. Thus petitioner must recognize that where a plaintiff has impleaded a party as a
over lands located within the zone which are neither residential nor light industrial in nature,[15] and stated with respect to defendant, he cannot subsequently question the latters standing in court.[27]
agricultural areas covered that the zoning ordinance should be given prospective operation only.[16] The area in this case
involves not agricultural but urban residential land. Ordinance No. 81-01 retroactively affected the operation of the zoning WHEREFORE, the instant petition is DENIED. The challenged decision of the Court of Appeals dated March 25,
ordinance in Greenhills by reclassifying certain locations therein as commercial. 1996, as well as the assailed resolution of August 13, 1996, in CA-G.R. SP No. 39193 is AFFIRMED. Costs against
petitioner.
Following our ruling in Ortigas & Co., Ltd. vs. Feati Bank & Trust Co., 94 SCRA 533 (1979), the contractual
stipulations annotated on the Torrens Title, on which Ortigas relies, must yield to the ordinance. When that stretch of SO ORDERED.
Ortigas Avenue from Roosevelt Street to Madison Street was reclassified as a commercial zone by the Metropolitan
Manila Commission in March 1981, the restrictions in the contract of sale between Ortigas and Hermoso, limiting all
construction on the disputed lot to single-family residential buildings, were deemed extinguished by the retroactive
operation of the zoning ordinance and could no longer be enforced. While our legal system upholds the sanctity of
contract so that a contract is deemed law between the contracting parties,[17] nonetheless, stipulations in a contract
cannot contravene law, morals, good customs, public order, or public policy. [18] Otherwise such stipulations would be
[G.R. No. 104528. January 18, 1996] 1 .The Office of the President erred in applying P.D. 957 because said law was enacted only on July 12, 1976,
while the subject mortgage was executed on December 18, 1975; and
PHILIPPINE NATIONAL BANK, petitioner, vs. OFFICE OF THE PRESIDENT, HOUSING AND LAND USE
REGULATORY BOARD, ALFONSO MAGLAYA, ANGELINA MAGLAYA P. REYES, JORGE C. BERNARDINO, 2. Petitioner Bank is not privy to the contracts between private respondents and mortgagor-subdivision
CORAZON DE LEON, VICTORIANO ACAYA, FLORENCIA CULTURA, MARIA CAMPOS, ERNESTO developer, hence, the Office of the President erred in ordering petitioner Bank to accept private respondents
SARMIENTO, SANTIAGO TAMONAN, APOLONIA TADIAQUE, SIMEON DE LEON, NATIVIDAD J. CRUZ, remaining amortizations and issue the corresponding titles after payment thereof.
NATIVIDAD B. LORESCO, FELICIDAD GARCIA, ANA ANITA TAN, LUCAS SERVILLION, JOSE NARAWAL,
represented by their duly authorized Attorney-in-Fact, CORAZONDE LEON AND SPOUSES LEOPOLDO AND
Normally, pursuant to Article 4 of the Civil Code, (1)aws shall have no retroactive effect, unless the contrary is
CARMEN SEBASTIAN, respondents.
provided. However, it is obvious and indubitable that P.D. 957 was intended to cover even those real estate
mortgages, like the one at issue here, executed prior to its enactment, and such intent (as succinctly captured in
RESOLUTION
the preamble quoted below) must be given effect if the laudable purpose of protecting innocent purchasers is to
PANGANIBAN, J.: be achieved:

May a buyer of a property at a foreclosure sale dispossess prior purchasers on installment of individual lots WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent human settlement and
therein, or compel them to pay again for the lots which they previously bought from the defaulting mortgagor- to provide them with ample opportunities for improving their quality of life;
subdivision developer, on the theory that P.D. 957, The Subdivision and Condominium Buyers Protective Decree,
is not applicable to the mortgage contract in question, the same having been executed prior to the enactment of WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or
P.D. 957? This is the question confronting the Court in this Petition challenging the Decision dated March 10, sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads,
1992 of the Office of the President of the Philippines in O.P. Case No. 4249, signed by. the Executive Secretary, drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus endangering the
Franklin M. Drilon, by authority of the President. health and safety of home and lot buyers;
Private respondents were buyers on installment of subdivision lots from Marikina Village, Inc. (represented
by spouses Antonio and Susana Astudillo). Notwithstanding the land purchase agreements it executed over said WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations
lots, the subdivision developer mortgaged the lots in favor of the petitioner, Philippine National Bank. Unaware of perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles
this mortgage, private respondents duly complied with their obligations as lot buyers and constructed their houses to the buyers or titles free from liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the
on the lots in question. same subdivision lots to different innocent purchasers for value; (Italics supplied).

Subsequently, the subdivision developer defaulted and PNB foreclosed on the mortgage. As highest bidder While P.D. 957 did not expressly provide for retroactivity in its entirety, yet the same can be plainly inferred
at the foreclosure sale, the bank became owner of the lots. from the, unmistakable intent of the law to protect innocent lot buyers from scheming subdivision developers. As
between these small lot buyers and the gigantic financial institutions which the developers deal with, it is obvious
Acting on suits brought by private respondents (which were later consolidated), the HLURB Office of Appeals,
that the law -- as an instrument of social justice -- must favor the weak. Indeed, the petitioner Bank had at its
Adjudication and Legal Affairs (OAALA) in a decision rendered on October 28, 1988 ruled that PNB -- without
disposal vast resources with which it could adequately protect its loan activities, and therefore is presumed to have
prejudice to seeking relief against Marikina Village, -- Inc. may collect from private respondents only the remaining
conducted the usual due diligence checking and ascertained (whether thru ocular inspection or other modes of
amortizations, in accordance with the land purchase agreements they had previously entered into with Marikina
investigation) the actual status, condition, utilization and occupancy of the property offered as collateral. It could
Village, Inc., and cannot compel private respondents to pay all over again for the lots they had already bought from
not have been unaware that the property had been built on by small lot buyers. On the other hand, private
said subdivision developer. On May 2, 1989, the Housing and Land Use Regulatory Board affirmed this decision.
respondents obviously were powerless to discover the attempt of the land developer to hypothecate the property
On March 10, 1992, the Office of the President, invoking P.D. 957, likewise concurred with the HLURB. Hence, the
being sold to them. It was precisely in order to deal with this kind of situation that P.D. 957 was enacted, its very
present recourse to this Court.
essence and intendment being to provide a protective mantle over helpless citizens who may fall prey to the
Under Revised Administrative Circular No. 1-95, appeals from judgments or final orders of the x x x Office of razzmatazz of what P.D. 957 termed unscrupulous subdivision and condominium sellers.1
the President x x x may be taken to the Court of Appeals x x x. However, in order to hasten the resolution of this
The intent of the law, as culled from its preamble and from the situation, circumstances and condition it
case, which was deemed submitted for decision three years ago, the Court resolved to make an exception to the
sought to remedy, must be enforced. Sutherland, in his well-known treatise on Statutory Construction (quoted with
said Circular in the interest of speedy justice.
approval by this Court in an old case of consequence, Ongsiako vs. Gamboa2), says:
Petitioner bank raised the following issues:
The intent of a statute is the law. If a statute is valid it is to have effect according to the purpose and intent of the SEC. 23. Non-Forfeiture of Payments. -No installment payment made by a buyer in a subdivision or
lawmaker. The intent is the vital part, the essence of the law, and the primary rule of construction is to ascertain condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer
and give effect to the intent. The intention of the legislature in enacting a law is the law itself, and must be when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the
enforced when ascertained, although it may not be consistent with the strict letter of the statute. Courts will not owner or developer to develop the subdivision or condominium project according to the approved plans and
follow the letter of a statute when it leads away- from the true intent and purpose of the legislature and to within the time limit for complying with the same. Such buyer may, at his option, be reimbursed the total amount
conclusions inconsistent with the general purpose of the act. Intent is the spirit which gives life to a legislative paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate.
enactment. In construing statutes the proper course is to start out and follow the true intent of the legislature and (Italics supplied)
to adopt that sense which harmonizes best with the context and promotes in the fullest manner the apparent
policy and, objects of the legislature.3 As for objections about a possible violation of the impairment clause, we find the following statements of
Justice Isagani Cruz enlightening and pertinent to the case at bench:
Truly, this Court cannot allow the injustice that will be wrought by a strictly prospective application of the law.
Little people who have toiled for years through blood and tears would be deprived of their homes through no fault Despite the impairment clause, a contract valid at the time of its execution may be legally modified or even
of their own. As the Solicitor General, in his comment, argues: completely invalidated by a subsequent law. If the law is a proper exercise of the police power, it will prevail over
the contract.
Verily, if P.D. 957 were to exclude from its coverage the aforecited mortgage contract, the vigorous regulation
which PD. 957 seeks to impose on unconscientious subdivision sellers will be translated into a feeble exercise of Into each contract are read the provisions of existing law and, always, a reservation of the police power as long
police power just because the iron hand of the State cannot particularly touch mortgage contracts badged with as the agreement deals with a matter affecting the public welfare. Such a contract, it has been held, suffers a
the fortunate accident of having been constituted prior to the enactment of P.D. 957. Indeed, it would be illogical congenital infirmity, and this is its susceptibility to change by the legislature as a postulate of the legal order.
in the extreme if P.D. 957 is to be given full force and effect and yet, the fraudulent practices and manipulations it
seeks to curb in the first instance can nevertheless be liberally perpetrated precisely because PD. 957 cannot be
This Court ruled along similar lines in Juarez vs. Court of Appeals6:
applied to existing antecedent mortgage contracts. The legislative intent could not have conceivably permitted a
loophole which all along works to the prejudice of subdivision lot buyers (private respondents).4
The petitioner complains that the retroactive application of the law would violate the impairment clause. The
argument does not impress. The impairment clause is now no longer inviolate; in fact, there are many who now
Likewise noteworthy are certain provisions of P.D. 957, which themselves constitute strong arguments in
believe it is an anachronism in the present-day society. It was quite useful before in protecting the integrity of
favor of the retroactivity of PD. 957 as a whole. These are Sections 20, 21 and 23 thereof, which by their very terms
private agreements from government meddling, but that was when such agreements did not affect the community
have retroactive effect and will impact upon even those contracts and transactions entered into prior to PD.
in general. They were indeed purely private agreements then. Any interference with them at that time was really
9575 enactment:
an unwarranted intrusion that could properly struck down.

SEC. 20. Time of Completion. - Every owner or developer shall construct and provide the facilities,
But things are different now. More and more, the interests of the public have become involved in what are
improvements, infrastructures and other forms of development, including water supply and lighting facilities,
supposed to be still private agreements, which have as a result been removed from the protection of the
which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus,
impairment clause. These agreements have come within the embrace of the police power, that obtrusive
printed matters, letters or in any form of advertisement, within one year from the date of the issuance of the
protector of the public interest. It is a ubiquitous policeman indeed. As long as the contract affects the public
license for the subdivision or condominium project or such other period of time as may be fixed by the Authority.
welfare one way or another so as to require the interference of the State, then must the police power be
asserted, and prevail, over the impairment clausq.
SEC. 21. Sales Prior to Decree. - In cases of subdivision lots or condominium units sold or disposed of prior to
the effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or
The decision of the Court of Appeals in Breta and Hamor vs. Lao, et al.7, penned by then Court of Appeals
condominium project to complete compliance with his or its obligations as provided in the preceding section
Associate Justice Jose A. R. Melo, now a respected member of this Court, is persuasive, the. factual circumstances
within two years from the date of this Decree unless otherwise extended by the Authority or unless an adequate
therein being of great similarity to the antecedent facts of the case at bench:
performance bond is filed in accordance with Section 6 hereof.
Protection must be afforded small homeowners who toil and save if only to purchase on installment a tiny home
Failure of the owner or developer to comply with the obligations under this and the preceding provisions shall
lot they can call their own. The consuming dream of every Filipino is to be able to buy a lot, no matter how small,
constitute a violation punishable under Section 38 and 39 of this Decree.
so that he may somehow build a house. It has, however, been seen of late that these honest, hard-living
individuals are taken advantage of, with the delivery of titles delayed, the subdivision facilities, including the most
essential such as water installations not completed, or worse yet, as in the instant case, after almost completing instrument for the implementation of state policies so cherished in our fundamental law. These consideration are
the payments for the property and after constructing a house, the buyer is suddenly confronted by the stark obviously far more weighty than the winning of any particular suit or the acquisition of any specific property. Thus,
reality, contrived or otherwise, in which another person would now appear to be owner. as the country strives to move ahead towards economic self-sufficiency and to achieve dreams of NIC-hood and
social well-being for the majority of our countrymen, we hold that petitioner Bank, the premier bank in the country,
We cannot over emphasize the fact that the BANK cannot barefacedly argue that simply because the title or titles which has in recent years made record earnings and acquired an enviable international stature, with branches and
offered as security were clean of any encumbrance or lien, that it was thereby relieved of taking any other step to subsidiaries in key financial centers around the world, should be equally as happy with the disposition of this case
verify the over-reaching implications should the subdivision be auctioned on foreclosure. The BANK could not as the private respondents, who were almost deprived and dispossessed of their very homes purchased through
have closed its eyes that it was dealing over a subdivision where there were already houses constructed. Did it their hard work and with their meager savings.
not enter the mind of the responsible officers of the BANK that there may even be subdivision residents who WHEREFORE, in view of the foregoing considerations, the petition is hereby DENIED, petitioner having
have almost completed their installment payments? (Id., pp. 7 & 9). failed to show any REVERSIBLE ERROR or GRAVE ABUSE OF DISCRETION in the assailed decision. No costs.

By the foregoing citation, this Court thus adopts by reference the foregoing as part of this Decision. SO ORDERED.

The real estate mortgage in the above cited case, although constituted in 1975 and outside the beneficial Narvasa, C.J. (Chairman), Davide Jr., Melo, and Francisco, JJ., concur.
aegis of P.D. 957, was struck down by the Court of Appeals which found in favor of subdivision lot buyers when
the rights of the latter clashed with the mortgagee banks right to foreclose the property. The Court of Appeals in
that case upheld the decision of the trial court declaring the real estate mortgage as null and void. 1 Preamble, Presidential Decree No. 957.
2 2 86 Phil. 50 (April 8, 1950).
As to the second issue of non-privity, petitioner avers that, in view of the provisions of Article 13 11 of the 3 Vol. II,Sutherland, Statutory Construction, pp. 693-695.
Civil Code, PNB, being a total stranger to the land purchase agreement, cannot be made to take the developers 4 Comment filed by the Solicitor General on behalf of the public -respondent, p. 9;
place. 5 Rollo, p. 78.
6 6 214 SCRA 475,480 (October 7, 1992).
We disagree. P.D. 957 being applicable, Section 18 of said law obliges petitioner Bank to accept the payment 7 CA-G.R. No. 58728-R, promulgated on November 11, 1981.
of the remaining unpaid amortizations tendered by private respondents.

SEC. 18. Mortgages. - No mortgage on any unit or lot shall be made by the owner or developer without prior
written approval of the Authority. Such approval shall not be granted unless it is shown that the proceeds of the
mortgage loan shall be used for the development of the condominium or subdivision project and effective
measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the
mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The
buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the
payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a
view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereof. (Italics supplied)

Privity of contracts as a defense does not apply in this case for the law explicitly grants to the buyer the option
to pay the installment payment for his lot or unit directly to the mortgagee (petitioner), which is required to apply
such payments to reduce the corresponding portion of the mortgage indebtedness secured by the particular lot or
unit being paid for. And, as stated earlier, this is without prejudice to petitioner Banks seeking relief against the
subdivision developer.
Finally, before closing this Resolution, we enjoin petitioner Bank to focus not only on the strictly legal issues
involved in this case but also to take another look at the larger issues including social justice and the protection of
human rights as enshrined in the Constitution; firstly, because legal issues are raised and decided not in a vacuum
but within the context of existing social, economic and political conditions, law being merely a brick in the up-
building of the social edifice; and secondly, petitioner, being THE state bank, is for all intents and purposes an
[G.R. No. 144681. June 21, 2004] 99% in OB-Gyne. The Board also observed that many of those who passed from Fatima got marks of 95% or better
in both subjects, and no one got a mark lower than 90%. A comparison of the performances of the candidates from
PROFESSIONAL REGULATION COMMISSION (PRC), CHAIRMAN HERMOGENES P. POBRE, ASSOCIATE other schools was made. The Board observed that strangely, the unusually high ratings were true only
COMMISSIONER ARMANDO PASCUAL, BOARD OF MEDICINE, CHAIRMAN RODOLFO P. DE GUZMAN, for Fatima College examinees. It was a record-breaking phenomenon in the history of the Physician Licensure
JOSE S. RAMIREZ, JUANITO B. BILLOTE, RUBEN R. POLICARPIO, EDGARDO T. FERNANDO and Examination.
RICARDO D. FULGENCIO II, petitioners, vs. ARLENE V. DE GUZMAN, VIOLETA V. MENESES, CELERINA S.
NAVARRO, JOSE RAMONCITO P. NAVARRO, ARNEL V. HERRERA and GERALDINE ELIZABETH M. On June 7, 1993, the Board issued Resolution No. 19, withholding the registration as physicians of all the
PAGILAGAN, ELNORA R. RAQUENO, MARISSA A. REGODON, LAURA M. SANTOS, KARANGALAN D. examinees from the Fatima College of Medicine.[4] The PRC asked the National Bureau of Investigation (NBI) to
SERRANO, DANILO A. VILLAVER, MARIA ROSARIO L. LEONOR, ALICIA S. LIZANO, MARITEL M. investigate whether any anomaly or irregularity marred the February 1993 Physician Licensure Examination.
ECHIVERRI, BERNADETTE T. MENDOZA, FERNANDO F. MANDAPAT, ALELI A. GOLLAYAN, ELCIN C. Prior to the NBI investigation, the Board requested Fr. Bienvenido F. Nebres, S.J., an expert mathematician
ARRIOLA, HERMINIGILDA E. CONEJOS, SALLY B. BUNAGAN, ROGELIO B. ANCHETA, OSCAR H. PADUA, and authority in statistics, and later president of the Ateneo de Manila University, to conduct a statistical analysis
JR., EVELYN D. GRAJO, EVELYN S. ACOSTA, MARGARITA BELINDA L. VICENCIO, VALENTINO P. of the results in Bio-Chem and Ob-Gyne of the said examination.
ARBOLEDA, EVELYN O. RAMOS, ACHILLES J. PERALTA, CORAZON M. CRUZ, LEUVINA P. CHICO,
JOSEPH A. JAO, MA. LUISA S. GUTIERREZ, LYDIA C. CHAN, OPHELIA C. HIDALGO, FERNANDO T. CRUZ, On June 10, 1993, Fr. Nebres submitted his report. He reported that a comparison of the scores in Bio-Chem
MELVIN M. USITA, RAFAEL I. TOLENTINO, GRACE E. UY, CHERYL R. TRIGUERO, MICHAEL L. SERRANO, and Ob-Gyne, of the Fatima College examinees with those of examinees from De La Salle University and Perpetual
FEDERICO L. CASTILLO, MELITA J. CAEDO, SAMUEL B. BANGOY, BERNARDITA B. SY, GLORIA T. Help College of Medicine showed that the scores of Fatima College examinees were not only incredibly high but
JULARBAL, FREDERICK D. FRANCISCO, CARLOS M. BERNARDO, JR., HUBERT S. NAZARENO, CLARISSA unusually clustered close to each other. He concluded that there must be some unusual reason creating the
B. BACLIG, DAYMINDA G. BONTUYAN, BERNADETTE H. CABUHAT, NANCY J. CHAVEZ, MARIO D. clustering of scores in the two subjects. It must be a cause strong enough to eliminate the normal variations that
CUARESMA, ERNESTO L. CUE, EVELYN C. CUNDANGAN, RHONEIL R. DEVERATURDA, DERILEEN D. one should expect from the examinees [of Fatima College] in terms of talent, effort, energy, etc.[5]
DORADO, SAIBZUR N. EDDING, VIOLETA C. FELIPE, HERMINIO V. FERNANDEZ, JR., MARIA VICTORIA M.
For its part, the NBI found that the questionable passing rate of Fatima examinees in the [1993] Physician
LACSAMANA, NORMA G. LAFAVILLA, RUBY B. LANTIN, MA. ELOISA Q. MALLARI, CLARISA SJ. NICOLAS,
Examination leads to the conclusion that the Fatima examinees gained early access to the test questions.[6]
PERCIVAL H. PANGILINAN, ARNULFO A. SALVADOR, ROBERT B. SANCHEZ, MERLY D. STA. ANA and
YOLANDA P. UNICA, respondents. On July 5, 1993, respondents Arlene V. De Guzman, Violeta V. Meneses, Celerina S. Navarro, Jose
Ramoncito P. Navarro, Arnel V. Herrera, and Geraldine Elizabeth M. Pagilagan (Arlene V. De Guzman et al., for
DECISION brevity) filed a special civil action for mandamus, with prayer for preliminary mandatory injunction docketed as Civil
Case No. 93-66530 with the Regional Trial Court (RTC) of Manila, Branch 52. Their petition was adopted by the
TINGA, J.:
other respondents as intervenors.

This petition for review under Rule 45 of the 1997 Rules of Civil Procedure seeks to nullify Meanwhile, the Board issued Resolution No. 26, dated July 21, 1993, charging respondents with immorality,
the Decision,[1] dated May 16, 2000, of the Court of Appeals in CA-G.R. SP No. 37283. The appellate court affirmed dishonest conduct, fraud, and deceit in connection with the Bio-Chem and Ob-Gyne examinations. It recommended
the judgment[2] dated December 19, 1994, of the Regional Trial Court (RTC) of Manila, Branch 52, in Civil Case that the test results of the Fatima examinees be nullified. The case was docketed as Adm. Case No. 1687 by the
No. 93-66530. The trial court allowed the respondents to take their physicians oath and to register as duly licensed PRC.
physicians. Equally challenged is the Resolution[3] promulgated on August 25, 2000 of the Court of Appeals,
On July 28, 1993, the RTC issued an Order in Civil Case No. 93-66530 granting the preliminary mandatory
denying petitioners Motion for Reconsideration.
injunction sought by the respondents. It ordered the petitioners to administer the physicians oath to Arlene V. De
The facts of this case are as follows: Guzman et al., and enter their names in the rolls of the PRC.

The respondents are all graduates of the Fatima College of Medicine, Valenzuela City, Metro Manila. They The petitioners then filed a special civil action for certiorari with the Court of Appeals to set aside the
passed the Physician Licensure Examination conducted in February 1993 by the Board of Medicine (Board). mandatory injunctive writ, docketed as CA-G.R. SP No. 31701.
Petitioner Professional Regulation Commission (PRC) then released their names as successful examinees in the
On October 21, 1993, the appellate court decided CA-G.R. SP No. 31701, with the dispositive portion of
medical licensure examination.
the Decision ordaining as follows:
Shortly thereafter, the Board observed that the grades of the seventy-nine successful examinees
from Fatima College in the two most difficult subjects in the medical licensure exam, Biochemistry (Bio-Chem) and WHEREFORE, this petition is GRANTED. Accordingly, the writ of preliminary mandatory injunction issued by the
Obstetrics and Gynecology (OB-Gyne), were unusually and exceptionally high. Eleven Fatima examinees scored lower court against petitioners is hereby nullified and set aside.
100% in Bio-Chem and ten got 100% in OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one scored
SO ORDERED.[7] Meanwhile, on October 25, 1994, the Court of Appeals denied the partial motion for reconsideration in CA-
G.R. SP No. 34506. Thus, petitioners filed with the Supreme Court a petition for review docketed as G.R. No.
Arlene V. de Guzman, et al., then elevated the foregoing Decision to this Court in G.R. No. 112315. In 117817, entitled Professional Regulation Commission, et al. v. Court of Appeals, et al.
our Resolution dated May 23, 1994, we denied the petition for failure to show reversible error on the part of the On November 11, 1994, counsel for the petitioners failed to appear at the trial of Civil Case No. 93-66530.
appellate court. Upon motion of the respondents herein, the trial court ruled that herein petitioners waived their right to cross-
Meanwhile, on November 22, 1993, during the pendency of the instant petition, the pre-trial conference in examine the herein respondents. Trial was reset to November 28, 1994.
Civil Case No. 93-66530 was held. Then, the parties, agreed to reduce the testimonies of their respective witnesses On November 25, 1994, petitioners counsel moved for the inhibition of the trial court judge for alleged
to sworn questions-and-answers. This was without prejudice to cross-examination by the opposing counsel. partiality. On November 28, 1994, the day the Motion to Inhibit was to be heard, petitioners failed to appear. Thus,
On December 13, 1993, petitioners counsel failed to appear at the trial in the mistaken belief that the trial the trial court denied the Motion to Inhibit and declared Civil Case No. 93-66530 deemed submitted for decision.
was set for December 15. The trial court then ruled that petitioners waived their right to cross-examine the On December 19, 1994, the trial court handed down its judgment in Civil Case No. 93-66530, the fallo of
witnesses. which reads:
On January 27, 1994, counsel for petitioners filed a Manifestation and Motion stating the reasons for her non-
appearance and praying that the cross-examination of the witnesses for the opposing parties be reset. The trial WHEREFORE, judgment is rendered ordering the respondents to allow the petitioners and intervenors (except
court denied the motion for lack of notice to adverse counsel. It also denied the Motion for Reconsideration that those with asterisks and footnotes in pages 1 & 2 of this decision) [sic],[9] to take the physicians oath and to
followed on the ground that adverse counsel was notified less than three (3) days prior to the hearing. register them as physicians.
Meanwhile, to prevent the PRC and the Board from proceeding with Adm. Case No. 1687, the respondents
herein moved for the issuance of a restraining order, which the lower court granted in its Order dated April 4, 1994. It should be made clear that this decision is without prejudice to any administrative disciplinary action which may
be taken against any of the petitioners for such causes and in the manner provided by law and consistent with
The petitioners then filed with this Court a petition for certiorari docketed as G.R. No. 115704, to annul the requirements of the Constitution as any other professionals.
the Orders of the trial court dated November 13, 1993, February 28, 1994, and April 4, 1994. We referred the
petition to the Court of Appeals where it was docketed as CA-G.R. SP No. 34506. No costs.
On August 31, 1994, the appellate court decided CA-G.R. SP No. 34506 as follows:
SO ORDERED.[10]
WHEREFORE, the present petition for certiorari with prayer for temporary restraining order/preliminary injunction
is GRANTED and the Orders of December 13, 1993, February 7, 1994, February 28, 1994, and April 4, 1994 of As a result of these developments, petitioners filed with this Court a petition for review on certiorari docketed
the RTC-Manila, Branch 52, and all further proceedings taken by it in Special Civil Action No. 93-66530 are as G.R. No. 118437, entitled Professional Regulation Commission v. Hon. David G. Nitafan, praying inter alia, that
hereby DECLARED NULL and VOID. The said RTC-Manila is ordered to allow petitioners counsel to cross- (1) G.R. No. 118437 be consolidated with G.R. No. 117817; (2) the decision of the Court of Appeals dated August
examine the respondents witnesses, to allow petitioners to present their evidence in due course of trial, and 31, 1994 in CA-G.R. SP No. 34506 be nullified for its failure to decree the dismissal of Civil Case No. 93-66530,
thereafter to decide the case on the merits on the basis of the evidence of the parties. Costs against and in the alternative, to set aside the decision of the trial court in Civil Case No. 93-66530, order the trial court
respondents. judge to inhibit himself, and Civil Case No. 93-66530 be re-raffled to another branch.
On December 26, 1994, the petitioners herein filed their Notice of Appeal[11] in Civil Case No. 93-66530,
IT IS SO ORDERED.[8] thereby elevating the case to the Court of Appeals, where it was docketed as CA-G.R. SP No. 37283.

The trial was then set and notices were sent to the parties. In our Resolution of June 7, 1995, G.R. No. 118437 was consolidated with G.R. No. 117817.

A day before the first hearing, on September 22, 1994, the petitioners filed an Urgent Ex-Parte Manifestation On July 9, 1998, we disposed of G.R. Nos. 117817 and 118437 in this wise:
and Motion praying for the partial reconsideration of the appellate courts decision in CA-G.R. SP No. 34506, and
for the outright dismissal of Civil Case No. 93-66530. The petitioners asked for the suspension of the proceedings. WHEREFORE, the petition in G.R. No. 117817 is DISMISSED for being moot. The petition in G.R. No. 118437 is
likewise DISMISSED on the ground that there is a pending appeal before the Court of Appeals. Assistant
In its Order dated September 23, 1994, the trial court granted the aforesaid motion, cancelled the scheduled Solicitor General Amparo M. Cabotaje-Tang is advised to be more circumspect in her dealings with the courts as
hearing dates, and reset the proceedings to October 21 and 28, 1994. a repetition of the same or similar acts will be dealt with accordingly.
SO ORDERED.[12] WHETHER OR NOT THE PETITION FOR MANDAMUS COULD PROCEED DESPITE THE PENDENCY OF
ADMINISTRATIVE CASE NO. 1687, WHICH WAS PRECISELY LODGED TO DETERMINE THE MORAL
While CA-G.R. SP No. 37283 was awaiting disposition by the appellate court, Arnel V. Herrera, one of the FITNESS OF RESPONDENTS TO BECOME DOCTORS.[15]
original petitioners in Civil Case No. 93-66530, joined by twenty-seven intervenors, to wit: Fernando F. Mandapat,
Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma. To our mind, the only issue is: Did the Court of Appeals commit a reversible error of law in sustaining the
Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, judgment of the trial court that respondents are entitled to a writ of mandamus?
Laura M. Santos, Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R.
Raqueno-Rabaino, Saibzur N. Edding, Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario L. Leonor- The petitioners submit that a writ of mandamus will not lie in this case. They point out that for a writ of
Lacandula, Geraldine Elizabeth M. Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. mandamus to issue, the applicant must have a well-defined, clear and certain legal right to the thing demanded
Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro, manifested that they and it is the duty of the respondent to perform the act required. Thus, mandamus may be availed of only when the
were no longer interested in proceeding with the case and moved for its dismissal. A similar manifestation and duty sought to be performed is a ministerial and not a discretionary one. The petitioners argue that the appellate
motion was later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo courts decision in CA-G.R. SP No. 37283 upholding the decision of the trial court in Civil Case No. 93-66530
A. Salvador, Belinda C. Rabara, Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B. Baclig, Ma. Luisa S. overlooked its own pronouncement in CA-G.R. SP No. 31701. The Court of Appeals held in CA-G.R. SP No. 31701
Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. that the issuance of a license to engage in the practice of medicine becomes discretionary on the PRC if there
Meneses, Melita J. Caedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver, exists some doubt that the successful examinee has not fully met the requirements of the law. The petitioners
Grace E. Uy, Lydia C. Chan, and Melvin M. Usita. The Court of Appeals ruled that its decision in CA-G.R. SP No. stress that this Courts Resolution dated May 24, 1994 in G.R. No. 112315 held that there was no showing that the
37283 would not apply to them. Court of Appeals had committed any reversible error in rendering the questioned judgment in CA-G.R. SP No.
31701. The petitioners point out that our Resolution in G.R. No. 112315 has long become final and executory.
On May 16, 2000, the Court of Appeals decided CA-G.R. SP No. 37283, with the following fallo, to wit:
Respondents counter that having passed the 1993 licensure examinations for physicians, the petitioners
have the obligation to administer to them the oath as physicians and to issue their certificates of registration as
WHEREFORE, finding no reversible error in the decision appealed from, We hereby AFFIRM the same and physicians pursuant to Section 20[16] of Rep. Act No. 2382. The Court of Appeals in CA-G.R. SP No. 37283, found
DISMISS the instant appeal. that respondents complied with all the requirements of Rep. Act No. 2382. Furthermore, respondents were admitted
by the Medical Board to the licensure examinations and had passed the same. Hence, pursuant to Section 20 of
No pronouncement as to costs. Rep. Act No. 2382, the petitioners had the obligation to administer their oaths as physicians and register them.

SO ORDERED.[13] Mandamus is a command issuing from a court of competent jurisdiction, in the name of the state or the
sovereign, directed to some inferior court, tribunal, or board, or to some corporation or person requiring the
performance of a particular duty therein specified, which duty results from the official station of the party to whom
In sustaining the trial courts decision, the appellate court ratiocinated that the respondents complied with all the writ is directed, or from operation of law.[17] Section 3 of Rule 65[18] of the 1997 Rules of Civil Procedure outlines
the statutory requirements for admission into the licensure examination for physicians in February 1993. They all two situations when a writ of mandamus may issue, when any tribunal, corporation, board, officer or person
passed the said examination. Having fulfilled the requirements of Republic Act No. 2382,[14] they should be allowed unlawfully (1) neglects the performance of an act which the law specifically enjoins as a duty resulting from an
to take their oaths as physicians and be registered in the rolls of the PRC. office, trust, or station; or (2) excludes another from the use and enjoyment of a right or office to which the other is
Hence, this petition raising the following issues: entitled.

I We shall discuss the issues successively.


1. On The Existence of a Duty of the Board of Medicine To Issue Certificates of Registration as Physicians
WHETHER OR NOT RESPONDENTS HAVE A VALID CAUSE OF ACTION FOR MANDAMUS AGAINST under Rep. Act No. 2382.
PETITIONERS IN THE LIGHT OF THE RESOLUTION OF THIS HONORABLE COURT IN G.R. NO. 112315
AFFIRMING THE COURT OF APPEALS DECISION DECLARING THAT IF EVER THERE IS SOME DOUBT AS For mandamus to prosper, there must be a showing that the officer, board, or official concerned, has a clear
TO THE MORAL FITNESS OF EXAMINEES, THE ISSUANCE OF LICENSE TO PRACTICE MEDICINE IS NOT legal duty, not involving discretion.[19] Moreover, there must be statutory authority for the performance of the
AUTOMATICALLY GRANTED TO THE SUCCESSFUL EXAMINEES. act,[20] and the performance of the duty has been refused.[21] Thus, it must be pertinently asked now: Did petitioners
have the duty to administer the Hippocratic Oath and register respondents as physicians under the Medical Act of
1959?
II
As found by the Court of Appeals, on which we agree on the basis of the records:
It bears emphasizing herein that petitioner-appellees and intervenor-appellees have fully complied with all the Until the moral and mental fitness of the respondents could be ascertained, according to petitioners, the
statutory requirements for admission into the licensure examinations for physicians conducted and administered Board has discretion to hold in abeyance the administration of the Hippocratic Oath and the issuance of the
by the respondent-appellants on February 12, 14, 20 and 21, 1993. Stress, too, must be made of the fact that all certificates to them. The writ of mandamus does not lie to compel performance of an act which is not duly
of them successfully passed the same examinations.[22] authorized.
The respondents nevertheless argue that under Section 20, the Board shall not issue a certificate of
The crucial query now is whether the Court of Appeals erred in concluding that petitioners should allow the registration only in the following instances: (1) to any candidate who has been convicted by a court of competent
respondents to take their oaths as physicians and register them, steps which would enable respondents to practice jurisdiction of any criminal offense involving moral turpitude; (2) or has been found guilty of immoral or dishonorable
the medical profession[23] pursuant to Section 20 of the Medical Act of 1959? conduct after the investigation by the Board; or (3) has been declared to be of unsound mind. They aver that none
The appellate court relied on a single provision, Section 20 of Rep. Act No. 2382, in concluding that the of these circumstances are present in their case.
petitioners had the ministerial obligation to administer the Hippocratic Oath to respondents and register them as Petitioners reject respondents argument. We are informed that in Board Resolution No. 26,[29] dated July 21,
physicians. But it is a basic rule in statutory construction that each part of a statute should be construed in 1993, the Board resolved to file charges against the examinees from Fatima College of Medicine for immorality,
connection with every other part to produce a harmonious whole, not confining construction to only one dishonesty, fraud, and deceit in the Obstetrics-Gynecology and Biochemistry examinations. It likewise sought to
section.[24] The intent or meaning of the statute should be ascertained from the statute taken as a whole, not from cancel the examination results obtained by the examinees from the Fatima College.
an isolated part of the provision. Accordingly, Section 20 of Rep. Act No. 2382, as amended should be read in
conjunction with the other provisions of the Act. Thus, to determine whether the petitioners had the ministerial Section 8[30] of Rep. Act No. 2382 prescribes, among others, that a person who aspires to practice medicine
obligation to administer the Hippocratic Oath to respondents and register them as physicians, recourse must be in the Philippines, must have satisfactorily passed the corresponding Board Examination. Section 22, in turn,
had to the entirety of the Medical Act of 1959. provides that the oath may only be administered to physicians who qualified in the examinations. The operative
word here is satisfactorily, defined as sufficient to meet a condition or obligation or capable of dispelling doubt or
A careful reading of Section 20 of the Medical Act of 1959 discloses that the law uses the word shall with ignorance.[31] Gleaned from Board Resolution No. 26, the licensing authority apparently did not find that the
respect to the issuance of certificates of registration. Thus, the petitioners shallsign and issue certificates of respondents satisfactorily passed the licensure examinations. The Board instead sought to nullify the examination
registration to those who have satisfactorily complied with the requirements of the Board. In statutory construction results obtained by the respondents.
the term shall is a word of command. It is given imperative meaning. Thus, when an examinee satisfies the
requirements for the grant of his physicians license, the Board is obliged to administer to him his oath and register 2. On the Right Of The Respondents To Be Registered As Physicians
him as a physician, pursuant to Section 20 and par. (1) of Section 22[25] of the Medical Act of 1959.
The function of mandamus is not to establish a right but to enforce one that has been established by law. If
However, the surrounding circumstances in this case call for serious inquiry concerning the satisfactory no legal right has been violated, there can be no application of a legal remedy, and the writ of mandamus is a legal
compliance with the Board requirements by the respondents. The unusually high scores in the two most difficult remedy for a legal right.[32] There must be a well-defined, clear and certain legal right to the thing demanded.[33] It
subjects was phenomenal, according to Fr. Nebres, the consultant of PRC on the matter, and raised grave doubts is long established rule that a license to practice medicine is a privilege or franchise granted by the government.[34]
about the integrity, if not validity, of the tests. These doubts have to be appropriately resolved.
It is true that this Court has upheld the constitutional right [35] of every citizen to select a profession or course
Under the second paragraph of Section 22, the Board is vested with the power to conduct administrative of study subject to a fair, reasonable, and equitable admission and academic requirements. [36] But like all rights
investigations and disapprove applications for examination or registration, pursuant to the objectives of Rep. Act and freedoms guaranteed by the Charter, their exercise may be so regulated pursuant to the police power of the
No. 2382 as outlined in Section 1[26] thereof. In this case, after the investigation, the Board filed before the PRC, State to safeguard health, morals, peace, education, order, safety, and general welfare of the people. [37] Thus,
Adm. Case No. 1687 against the respondents to ascertain their moral and mental fitness to practice medicine, as persons who desire to engage in the learned professions requiring scientific or technical knowledge may be
required by Section 9[27] of Rep. Act No. 2382. In its Decision dated July 1, 1997, the Board ruled: required to take an examination as a prerequisite to engaging in their chosen careers. This regulation takes
particular pertinence in the field of medicine, to protect the public from the potentially deadly effects of
WHEREFORE, the BOARD hereby CANCELS the respondents[] examination papers in the Physician Licensure incompetence and ignorance among those who would practice medicine. In a previous case, it may be recalled,
Examinations given in February 1993 and further DEBARS them from taking any licensure examination for a this Court has ordered the Board of Medical Examiners to annul both its resolution and certificate authorizing a
period of ONE (1) YEAR from the date of the promulgation of this DECISION. They may, if they so desire, apply Spanish subject, with the degree of Licentiate in Medicine and Surgery from the University of Barcelona, Spain, to
for the scheduled examinations for physicians after the lapse of the period imposed by the BOARD. practice medicine in the Philippines, without first passing the examination required by the Philippine Medical
Act.[38] In another case worth noting, we upheld the power of the State to upgrade the selection of applicants into
SO ORDERED.[28] medical schools through admission tests.[39]
It must be stressed, nevertheless, that the power to regulate the exercise of a profession or pursuit of an
occupation cannot be exercised by the State or its agents in an arbitrary, despotic, or oppressive manner. A political
body that regulates the exercise of a particular privilege has the authority to both forbid and grant such privilege in unfavorable judgment to the PRC; (b) should the PRC ruling still be unfavorable, to elevate the matter on appeal
accordance with certain conditions. Such conditions may not, however, require giving up ones constitutional rights to the Office of the President; and (c) should they still be unsatisfied, to ask for a review of the case or to bring the
as a condition to acquiring the license.[40] Under the view that the legislature cannot validly bestow an arbitrary case to court via a special civil action of certiorari. Thus, as a rule, mandamus will not lie when administrative
power to grant or refuse a license on a public agency or officer, courts will generally strike down license legislation remedies are still available.[46] However, the doctrine of exhaustion of administrative remedies does not apply
that vests in public officials discretion to grant or refuse a license to carry on some ordinarily lawful business, where, as in this case, a pure question of law is raised.[47] On this issue, no reversible error may, thus, be laid at
profession, or activity without prescribing definite rules and conditions for the guidance of said officials in the the door of the appellate court in CA-G.R. SP No. 37283, when it refused to dismiss Civil Case No. 93-66530.
exercise of their power.[41]
As we earlier pointed out, herein respondents Arnel V. Herrera, Fernando F. Mandapat, Ophelia C. Hidalgo,
In the present case, the aforementioned guidelines are provided for in Rep. Act No. 2382, as amended, which Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-
prescribes the requirements for admission to the practice of medicine, the qualifications of candidates for the board Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos,
examinations, the scope and conduct of the examinations, the grounds for denying the issuance of a physicians Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino,
license, or revoking a license that has been issued. Verily, to be granted the privilege to practice medicine, the Saibzur N. Edding, Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario Leonor-Lacandula, Geraldine
applicant must show that he possesses all the qualifications and none of the disqualifications. Furthermore, it must Elizabeth M. Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos, Leuvina P. Chico-
appear that he has fully complied with all the conditions and requirements imposed by the law and the licensing Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro manifested to the Court of Appeals during the
authority. Should doubt taint or mar the compliance as being less than satisfactory, then the privilege will not issue. pendency of CA-G.R. SP No. 37283, that they were no longer interested in proceeding with the case and moved
For said privilege is distinguishable from a matter of right, which may be demanded if denied. Thus, without a for its dismissal insofar as they were concerned. A similar manifestation and motion were later filed by intervenors
definite showing that the aforesaid requirements and conditions have been satisfactorily met, the courts may not Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A. Salvador, Belinda C. Rabarra,
grant the writ of mandamus to secure said privilege without thwarting the legislative will. Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda,
Aleli A. Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J. Caedo, Clarisa SJ.
3. On the Ripeness of the Petition for Mandamus Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin
Lastly, the petitioners herein contend that the Court of Appeals should have dismissed the petition for M. Usita. Following these manifestations and motions, the appellate court in CA-G.R. SP No. 37283 decreed that
mandamus below for being premature. They argue that the administrative remedies had not been exhausted. The its ruling would not apply to them. Thus, inasmuch as the instant case is a petition for review of the appellate courts
records show that this is not the first time that petitioners have sought the dismissal of Civil Case No. 93-66530. ruling in CA-G.R. SP No. 37283, a decision which is inapplicable to the aforementioned respondents will similarly
This issue was raised in G.R. No. 115704, which petition we referred to the Court of Appeals, where it was docketed not apply to them.
as CA-G.R. SP No. 34506. On motion for reconsideration in CA-G.R. SP No. 34506, the appellate court denied the As to Achilles J. Peralta, Evelyn O. Ramos, Sally B. Bunagan, Rogelio B. Ancheta, Oscar H. Padua, Jr.,
motion to dismiss on the ground that the prayers for the nullification of the order of the trial court and the dismissal Evelyn D. Grajo, Valentino P. Arboleda, Carlos M. Bernardo, Jr., Mario D. Cuaresma, Violeta C. Felipe, Percival
of Civil Case No. 93-66530 were inconsistent reliefs. In G.R. No. 118437, the petitioners sought to nullify the H. Pangilinan, Corazon M. Cruz and Samuel B. Bangoy, herein decision shall not apply pursuant to the Orders of
decision of the Court of Appeals in CA-G.R. SP No. 34506 insofar as it did not order the dismissal of Civil Case the trial court in Civil Case No. 93-66530, dropping their names from the suit.
No. 93-66530. In our consolidated decision, dated July 9, 1998, in G.R. Nos. 117817 & 118437, this Court speaking
through Justice Bellosillo opined that: Consequently, this Decision is binding only on the remaining respondents, namely: Arlene V. de Guzman,
Celerina S. Navarro, Rafael I. Tolentino, Bernardita B. Sy, Gloria T. Jularbal, Hubert S. Nazareno, Nancy J. Chavez,
Indeed, the issue as to whether the Court of Appeals erred in not ordering the dismissal of Civil Case No. 93- Ernesto L. Cue, Herminio V. Fernandez, Jr., Maria Victoria M. Lacsamana and Merly D. Sta. Ana, as well as the
66530 sought to be resolved in the instant petition has been rendered meaningless by an event taking place prior petitioners.
to the filing of this petition and denial thereof should follow as a logical consequence.[42] There is no longer any WHEREFORE, the instant petition is GRANTED. Accordingly, (1) the assailed decision dated May 16, 2000,
justiciable controversy so that any declaration thereon would be of no practical use or value.[43] It should be of the Court of Appeals, in CA-G.R. SP No. 37283, which affirmed the judgment dated December 19, 1994, of the
recalled that in its decision of 19 December 1994 the trial court granted the writ of mandamus prayed for by Regional Trial Court of Manila, Branch 52, in Civil Case No. 93-66530, ordering petitioners to administer the
private respondents, which decision was received by petitioners on 20 December 1994. Three (3) days after, or physicians oath to herein respondents as well as the resolution dated August 25, 2000, of the appellate court,
on 23 December 1994, petitioners filed the instant petition. By then, the remedy available to them was to appeal denying the petitioners motion for reconsideration, are REVERSED and SET ASIDE; and (2) the writ of mandamus,
the decision to the Court of Appeals, which they in fact did, by filing a notice of appeal on 26 December 1994.[44] issued in Civil Case No. 93-66530, and affirmed by the appellate court in CA-G.R. SP No. 37283 is NULLIFIED
AND SET ASIDE.
The petitioners have shown no cogent reason for us to reverse the aforecited ruling. Nor will their reliance
upon the doctrine of the exhaustion of administrative remedies in the instant case advance their cause any. SO ORDERED.

Section 26[45] of the Medical Act of 1959 provides for the administrative and judicial remedies that Puno, (Chairman), and Callejo, Sr., JJ., concur.
respondents herein can avail to question Resolution No. 26 of the Board of Medicine, namely: (a) appeal the Quisumbing, J., no part.
Austria-Martinez, J., no part - on leave. upon it by this article with the view of maintaining the ethical and professional standards of the medical profession; (4)
to subpoena or subpoena duces tecum witnesses for all purposes required in the discharge of its duties; and (5) to promulgate, with the
approval of the Commissioner of Civil Service (now Professional Regulation Commission), such rules and regulations as it may deem
necessary for the performance of its duties in harmony with the provisions of this Act and necessary for the proper practice of medicine in the
[1] Rollo, pp. 44-67. Penned by Associate Justice Cancio C. Garcia, with Associate Justices B.A. Adefuin-De la Cruz, and Renato C. Dacudao Philippines.
concurring. Administrative investigations shall be conducted by at least two members of the Medical Board with one legal officer sitting during the
[2] CA Rollo, pp. 140-175. investigation, otherwise the proceedings shall be considered void. The existing rules of evidence shall be observed during all administrative
[3] Supra, note 1 at 408. Penned by Associate Justice Cancio C. Garcia, with Associate Justices B.A. Adefuin-De la Cruz, and Renato C. investigations. The Board may disapprove applications for examination or registration, reprimand erring physicians, or suspend or revoke
Dacudao, concurring. registration certificates, if the respondents are found guilty after due investigation. (As amended by Rep. Act No. 4224, effective June 19,
[4] Id. at 69. 1965.)
[5] Id. at 96. [26] SEC. 1. Objectives. This Act provides for and shall govern (a) the standardization and regulation of medical education; (b) the examination
[6] Id. at 92. for registration of physicians; and (c) the supervision, control, and regulation of the practice of medicine in the Philippines.
[7] Id. at 175. Penned by Associate Justice Alfredo L. Benipayo and concurred in by Presiding Justice Santiago M. Kapunan (later a member [27] SEC. 9. Candidates for board examinations. Candidates for Board examinations shall have the following qualifications:

of the Supreme Court and now retired) and Associate Justice Ma. Alicia Austria-Martinez (now a member of the Second Division of the (1) He shall be a citizen of the Philippines or a citizen of any foreign country who has submitted competent and conclusive documentary
Supreme Court). evidence, confirmed by the Department of Foreign Affairs, showing that his countrys existing laws permit citizens of the Philippines to practice
[8] Rollo, pp. 199-200. Penned by Associate Justice Jaime M. Lantin, with Associate Justices Angelina S. Gutierrez (now a member of the medicine under the same rules and regulations governing citizens thereof;
Supreme Court), and Conchita Carpio Morales (likewise a present member of the Supreme Court) concurring. (2) He shall be of good moral character;
[9] Of the intervenors in Civil Case No. 93-66530, Achilles Peralta and Evelyn Ramos were dropped as parties per Order of the trial court (3) He shall be of sound mind;
dated August 24, 1993. The case was dismissed as to Sally Bunagan, Reogelio Ancheta, Oscar Padua, Evelyn Grajo, Valentino Arboleda, (4) He shall not have been convicted by a court of competent jurisdiction of any offense involving moral turpitude;
Carlos Bernardo, Jr., Mario Cuaresma, Violeta Felipe, and Percival Pangilinan as per Order dated November 25, 1994. Corazon Cruz and (5) He shall be a holder of the Degree of Doctor of Medicine or its equivalent conferred by a college of medicine duly recognized by the
Samuel Bangoy were deemed by the trial court no longer entitled to the avails of the suit for seeking extrajudicial relief from the Board of Government; and
Medicine, as per its Order dated November 25, 1994. See CA Rollo, pp. 140-141. (6) He must have completed a calendar year of technical training known as internship the nature of which shall be prescribed by the Board of
[10] CA Rollo, pp. 174-175. Medical Education undertaken in hospitals and health centers approved by the Board. (As amended by Rep. Act No. 5946, approved June
[11] Id. at 205. 21, 1969).
[12] G.R. Nos. 117817 and 118437, 9 July 1998, 292 SCRA 155, 167. Penned by Associate Justice Josue N. Bellosillo, with Associate Justices [28] Rollo, p. 419.

Hilario G. Davide, Jr., Jose C. Vitug, Artemio V. Panganiban, and Leonardo A. Quisumbing concurring. [29] Id. at 99.
[13] Rollo, p. 67. [30] SEC. 8. Prerequisite to the practice of medicine. No person shall engage in the practice of medicine in the Philippines unless he is at least
[14] The Medical Act of 1959. twenty-one years of age, has satisfactorily passed the corresponding Board Examination, and is a holder of a valid Certificate of Registration
[15] Rollo, pp. 28-29. duly issued to him by the Board of Medical Examiners (now Medical Board).
[16] SEC. 20. Issuance of Certificates of Registration, grounds for refusal of [the] same. The Commissioner of Civil Service (now Professional [31] WEBSTERS NEW INTERNATIONAL DICTIONARY 2017 (1993 ed.).

Regulation Commission) the chairman, the members and the Secretary of the Board of Medical Examiners (now Medical Board) shall sign [32] See Fosdick v. Terry, 117 So. 2d 397, 398; Puritan Coal Corp. v. Davis, 42 S.E. 2d 807, 813.

and issue certificates of registration to those who have satisfactorily complied with the requirements of the Board. They shall not issue a [33] Lemi v. Valencia, No. L-20768, 29 November 1968, 26 SCRA 203, 210; Ocampo v. Subido, No. L-28344, 27 August 1976, 72 SCRA 443,

certificate of registration to any candidate who has been convicted by a court of competent jurisdiction of any criminal offense involving moral 452-453.
turpitude, or has been found guilty of immoral or dishonorable conduct after the investigation by the Board of Medical Examiners (now [34] See Morse v. State Board of Medical Examiners, 122 S.W. 446, 448 (1909).

Medical Board), or has been declared to be of unsound mind. (As amended by Rep. Act No. 4224, which took effect June 19, 1965). [35] CONST. Art. XIV, Sec. 5 (3).
[17] See United States v. Boutwell, 17 Wall (US) 604, 21 L. Ed 721; Laizure v. Baker, 11 P. 2d 560; State ex rel Lyons v. McDowell, 57 A. 2d [36] Reyes v. Court of Appeals, G.R. Nos. 94961 and 96491, 25 February 1991, 194 SCRA 402, 409-410.

94; Rader v. Burton, 122 N.E. 2d 856; Board of Managers v. City of Wilmington, 70 S.E. 2d 833. [37] Primicias v. Fugoso, No. L-1800, 27 January 1948, 80 Phil. 71, 75.
[18] SEC. 3. Petition for mandamus. When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act [38] Philippine Medical Association v. Board of Medical Examiners, No. L-25135, 21 September 1968, 25 SCRA 29.

which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and [39] Tablarin v. Judge Angelina S. Gutierrez, No. L-78164, 31 July 1987, 152 SCRA 730, 743.

enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course [40] See Manchester Press Club v. State Liquor Commission, 200 A. 407, 116 ALR 1093.

of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment [41] See Yick Wo v. Hopkins, 118 US 356, 30 L.Ed. 220, 6 S. Ct. 1064; City Council of Montgomery v. West, 42 So. 1000; In Re Porterfield,

be rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to 168 P. 2d 706, 167 ALR 675; Anderson v. City of Wellington, 19 P. 719; State v. Harris, 6 S.E. 2d 854.
protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent. [42] Citing Bautista v. Board of Energy, G.R. No. 75016, 13 January 1989, 169 SCRA 167.

The petition shall also contain a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. [43] Citing Gancho-on v. Secretary of Labor and Employment, G.R. No. 108033, 14 April 1997, 271 SCRA 204, 208.
[19] See Potter v. Anderson, 392 P. 2d 650; State ex rel Jester v. Paige, 213 P. 2d 441; State ex rel. Sharp v. Cross, 211 P. 2d 760; St. [44] Rollo, pp. 340-341.

George v. Hanson, et al., 78 S.E. 2d 885; State ex rel Vander v. Board of County Comrs. et al., 135 N.E. 2d 701. [45] SEC. 26. Appeal from judgment. The decision of the Board of Medical Examiners (now Medical Board) shall automatically become final
[20] See State ex rel Jester v. Paige, supra; Pedroso v. De Walt, et al., 340 S.W. 2d 566. thirty days after the date of its promulgation unless the respondent, during the same period, has appealed to the Commissioner of the Civil
[21] See State Board of Barber Examiners v. Walker, 192 P. 2d 723; State ex rel Sharp v. Cross, supra; State ex rel Hacharedi v. Baxter, 74 Service (now Professional Regulation Commission) and later to the Office of the President of the Philippines. If the final decision is not
N.E. 2d 242, 332 US 827, 92 L. Ed 402, 68 S. Ct 209. satisfactory, the respondent may ask for a review of the case, or may file in court a petition for certiorari.
[22] Rollo, p. 58. [46] Ang Tuan Kai & Co. v. Import Control Commission, No. L-4427, 21 April 1952, 91 Phil. 143, 145; Peralta v. Salcedo, etc., No. L-10771, 30
[23] Id. at 59. April 1957, 101 Phil. 452, 454.
[24] Sotto v. Sotto, No. 17768, 1 September 1922, 43 Phil. 688, 694. See also Araneta v. Concepcion and Araneta, No. L-9667, 31 July 1956, [47] See Madrigal v. Lecaroz, G.R. No. 46218, 23 October 1990, 191 SCRA 20, 26.

99 Phil. 709, 712.


[25] SEC. 22. Administrative investigations. In addition to the functions provided for in the preceding sections, the Board of Medical Examiners

(now Medical Board) shall perform the following duties: (1) to administer oath to physicians who qualified in the examinations (stress
supplied); (2) to study the conditions affecting the practice of medicine in all parts of the Philippines; (3) to exercise the powers conferred
[G.R. No. 157036. June 9, 2004] WE CANNOT DISREGARD THE PARAMOUNT NEED FOR LAW AND ORDER. JUST AS WE CANNOT BE
HEEDLESS OF OUR PEOPLES ASPIRATIONS FOR PEACE.
FRANCISCO I. CHAVEZ, petitioner, vs. HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS EXECUTIVE
SECRETARY; DIRECTOR GENERAL HERMOGENES E. EBDANE, JR., IN HIS CAPACITY AS THE CHIEF Acting on President Arroyos directive, respondent Ebdane issued the assailed Guidelines quoted as follows:
OF THE PNP, et al., respondents.
TO : All Concerned
DECISION
SANDOVAL-GUTIERREZ, J.: FROM : Chief, PNP

The right of individuals to bear arms is not absolute, but is subject to regulation. The maintenance of peace SUBJECT : Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside
and order[1] and the protection of the people against violence are constitutional duties of the State, and the right to of Residence.
bear arms is to be construed in connection and in harmony with these constitutional duties.
DATE : January 31, 2003
Before us is a petition for prohibition and injunction seeking to enjoin the implementation of the Guidelines in
the Implementation of the Ban on the Carrying of Firearms Outside of Residence[2] (Guidelines) issued on January
1. Reference: PD 1866 dated June 29, 1983 and its Implementing Rules and Regulations.
31, 2003, by respondent Hermogenes E. Ebdane, Jr., Chief of the Philippine National Police (PNP).
The facts are undisputed: 2. General:
In January 2003, President Gloria Macapagal-Arroyo delivered a speech before the members of the PNP
stressing the need for a nationwide gun ban in all public places to avert the rising crime incidents. She directed the The possession and carrying of firearms outside of residence is a privilege granted by the State to its
then PNP Chief, respondent Ebdane, to suspend the issuance of Permits to Carry Firearms Outside of Residence citizens for their individual protection against all threats of lawlessness and security.
(PTCFOR), thus:
As a rule, persons who are lawful holders of firearms (regular license, special permit, certificate of
THERE IS ALSO NEED TO FOCUS ON THE HIGH PROFILE CRIMES THAT TEND TO DISTURB THE registration or MR) are prohibited from carrying their firearms outside of residence. However, the Chief,
PSYCHOLOGICAL PERIMETERS OF THE COMMUNITY THE LATEST BEING THE KILLING OF FORMER Philippine National Police may, in meritorious cases as determined by him and under conditions as he may
NPA LEADER ROLLY KINTANAR. I UNDERSTAND WE ALREADY HAVE THE IDENTITY OF THE impose, authorize such person or persons to carry firearms outside of residence.
CULPRIT. LET US BRING THEM TO THE BAR OF JUSTICE.
3. Purposes:
THE NPA WILL FIND IT MORE DIFFICULT TO CARRY OUT THEIR PLOTS IF OUR LAW ENFORCEMENT
AGENCIES CAN RID THEMSELVES OF RASCALS IN UNIFORM, AND ALSO IF WE ENFORCE A GUN BAN This Memorandum prescribes the guidelines in the implementation of the ban on the carrying of firearms
IN PUBLIC PLACES. outside of residence as provided for in the Implementing Rules and Regulations, Presidential Decree
No. 1866, dated June 29, 1983 and as directed by PGMA. It also prescribes the conditions, requirements
THUS, I AM DIRECTING THE PNP CHIEF TO SUSPEND INDEFINITELY THE ISSUANCE OF PERMIT TO and procedures under which exemption from the ban may be granted.
CARRY FIREARMS IN PUBLIC PLACES. THE ISSUANCE OF PERMITS WILL NOW BE LIMITED ONLY TO
OWNERSHIP AND POSSESSION OF GUNS AND NOT TO CARRYING THEM IN PUBLIC PLACES. FROM 4. Specific Instructions on the Ban on the Carrying of Firearms:
NOW ON, ONLY THE UNIFORMED MEN IN THE MILITARY AND AUTHORIZED LAW ENFORCEMENT
OFFICERS CAN CARRY FIREARMS IN PUBLIC PLACES, AND ONLY PURSUANT TO EXISTING a. All PTCFOR are hereby revoked. Authorized holders of licensed firearms covered with valid
LAW.CIVILIAN OWNERS MAY NO LONGER BRING THEIR FIREARMS OUTSIDE THEIR PTCFOR may re-apply for a new PTCFOR in accordance with the conditions hereinafter
RESIDENCES. THOSE WHO WANT TO USE THEIR GUNS FOR TARGET PRACTICE WILL BE GIVEN prescribed.
SPECIAL AND TEMPORARY PERMITS FROM TIME TO TIME ONLY FOR THAT PURPOSE. AND THEY MAY
NOT LOAD THEIR GUNS WITH BULLETS UNTIL THEY ARE IN THE PREMISES OF THE FIRING RANGE. b. All holders of licensed or government firearms are hereby prohibited from carrying their firearms
outside their residence except those covered with mission/letter orders and duty detail orders
issued by competent authority pursuant to Section 5, IRR, PD 1866, provided, that the said h. NBI Clearance;
exception shall pertain only to organic and regular employees.
i. Two (2) ID pictures (2 x 2) taken not earlier than one (1) year from date of filing of application; and
5. The following persons may be authorized to carry firearms outside of residence.
j. Proof of Payment
a. All persons whose application for a new PTCFOR has been approved, provided, that the persons and
security of those so authorized are under actual threat, or by the nature of their position, occupation 7. Procedures:
and profession are under imminent danger.
a. Applications may be filed directly to the Office of the PTCFOR Secretariat in Camp Crame. In the
b. All organic and regular employees with Mission/Letter Orders granted by their respective agencies so provinces, the applications may also be submitted to the Police Regional Offices (PROs) and
authorized pursuant to Section 5, IRR, PD 1866, provided, that such Mission/Letter Orders is valid only Provincial/City Police Offices (P/CPOs) for initial processing before they are forwarded to the office of
for the duration of the official mission which in no case shall be more than ten (10) days. the PTCFOR Secretariat. The processors, after ascertaining that the documentary requirements are in
order, shall issue the Order of Payment (OP) indicating the amount of fees payable by the applicant,
c. All guards covered with Duty Detail Orders granted by their respective security agencies so authorized who in turn shall pay the fees to the Land Bank.
pursuant to Section 4, IRR, PD 1866, provided, that such DDO shall in no case exceed 24-hour
duration. b. Applications, which are duly processed and prepared in accordance with existing rules and regulations,
shall be forwarded to the OCPNP for approval.
d. Members of duly recognized Gun Clubs issued Permit to Transport (PTT) by the PNP for purposes of
practice and competition, provided, that such firearms while in transit must not be loaded with c. Upon approval of the application, OCPNP will issue PTCFOR valid for one (1) year from date of issue.
ammunition and secured in an appropriate box or case detached from the person.
d. Applications for renewal of PTCFOR shall be processed in accordance with the provisions of par. 6
e. Authorized members of the Diplomatic Corps. above.

6. Requirements for issuance of new PTCFOR: e. Application for possession and carrying of firearms by diplomats in the Philippines shall be processed in
accordance with NHQ PNP Memo dated September 25, 2000, with Subj: Possession and Carrying of
a. Written request by the applicant addressed to Chief, PNP stating his qualification to possess firearm and Firearms by Diplomats in the Philippines.
the reasons why he needs to carry firearm outside of residence.
8. Restrictions in the Carrying of Firearms:
b. Xerox copy of current firearm license duly authenticated by Records Branch, FED;
a. The firearm must not be displayed or exposed to public view, except those authorized in uniform and in
c. Proof of actual threat, the details of which should be issued by the Chief of Police/Provincial or City the performance of their official duties.
Directors and duly validated by C, RIID;
b. The firearm shall not be brought inside public drinking and amusement places, and all other commercial
d. Copy of Drug Test Clearance, duly authenticated by the Drug Testing Center, if photocopied; or public establishments.

e. Copy of DI/ RIID clearance, duly authenticated by ODI/RIID, if photocopied; Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR has been issued, requested the
Department of Interior and Local Government (DILG) to reconsider the implementation of the assailed
f. Copy of Neuro-Psychiatric Clearance duly authenticated by NP Testing Center, if photocopied; Guidelines. However, his request was denied. Thus, he filed the present petition impleading public respondents
Ebdane, as Chief of PNP; Alberto G. Romulo, as Executive Secretary; and Gerry L. Barias, as Chief of the PNP-
Firearms and Explosives Division. He anchored his petition on the following grounds:
g. Copy of Certificate of Attendance to a Gun Safety Seminar, duly validated by Chief, Operations Branch,
FED; I
THE PRESIDENT HAS NO POWER OR AUTHORITY MUCH LESS BY A MERE SPEECH TO ALTER, MODIFY 1) THE RIGHT TO OWN AND CARRY A FIREARM IS NECESSARILY INTERTWINED WITH THE PEOPLES
OR AMEND THE LAW ON FIREARMS BY IMPOSING A GUN BAN AND CANCELING EXISTING PERMITS INHERENT RIGHT TO LIFE AND TO PROTECT LIFE. THUS, THE PNP GUIDELINES DEPRIVE PETITIONER
FOR GUNS TO BE CARRIED OUTSIDE RESIDENCES. OF THIS RIGHT WITHOUT DUE PROCESS OF LAW FOR:

II A) THE PNP GUIDELINES DEPRIVE PETITIONER OF HIS MOST POTENT, IF NOT HIS ONLY, MEANS TO
DEFEND HIMSELF.
OFFICIALLY, THERE IS NO PRESIDENTIAL ISSUANCE ON THE GUN BAN; THE PRESIDENTIAL SPEECH
NEVER INVOKED POLICE POWER TO JUSTIFY THE GUN BAN; THE PRESIDENTS VERBAL B) THE QUESTIONED GUIDELINES STRIPPED PETITIONER OF HIS MEANS OF PROTECTION AGAINST
DECLARATION ON GUN BAN VIOLATED THE PEOPLES RIGHT TO PROTECT LIFE AND THEIR PROPERTY CRIME DESPITE THE FACT THAT THE STATE COULD NOT POSSIBLY PROTECT ITS CITIZENS DUE TO
RIGHT TO CARRY FIREARMS. THE INADEQUACY AND INEFFICIENCY OF THE POLICE FORCE.

III 2) THE OWNESHIP AND CARRYING OF FIREARMS ARE CONSTITUTIONALLY PROTECTED PROPERTY
RIGHTS WHICH CANNOT BE TAKEN AWAY WITHOUT DUE PROCESS OF LAW AND WITHOUT JUST
THE PNP CHIEF HAS NO POWER OR AUTHORITY TO ISSUE THE QUESTIONED GUIDELINES BECAUSE: CAUSE.

1) THERE IS NO LAW, STATUTE OR EXECUTIVE ORDER WHICH GRANTS THE PNP CHIEF THE VI
AUTHORITY TO PROMULGATE THE PNP GUIDELINES.
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES WERE ISSUED IN THE EXERCISE OF POLICE
POWER, THE SAME IS AN INVALID EXERCISE THEREOF SINCE THE MEANS USED THEREFOR ARE
UNREASONABLE AND UNNCESSARY FOR THE ACCOMPLISHMENT OF ITS PURPOSE TO DETER AND
PREVENT CRIME THEREBY BECOMING UNDULY OPPRESSIVE TO LAW-ABIDING GUN-OWNERS.
2) THE IMPLEMENTING RULES AND REGULATIONS OF PD 1866 CANNOT BE THE SUBJECT OF
ANOTHER SET OF IMPLEMENTING GUIDELINES.
VII
3) THE PRESIDENTS SPEECH CANNOT BE A BASIS FOR THE PROMULGATION OF IMPLEMENTNG
GUIDELINES ON THE GUN BAN. THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND CONFISCATORY SINCE IT REVOKED ALL
EXISTING PERMITS TO CARRY WITHOUT, HOWEVER, REFUNDING THE PAYMENT THE PNP RECEIVED
FROM THOSE WHO ALREADY PAID THEREFOR.
IV

VIII
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES IMPLEMENT PD 1866, AND THE AMENDMENTS
THERETO, THE PNP CHIEF STILL HAS NO POWER OR AUTHORITY TO ISSUE THE SAME BECAUSE
THE PNP GUIDELINES VIOLATE THE EQUAL PROTECTION CLAUSE OF THE CONSTITUTION BECAUSE
THEY ARE DIRECTED AT AND OPPRESSIVE ONLY TO LAW-ABIDING GUN OWNERS WHILE LEAVING
1) PER SEC 6, RA 8294, WHICH AMENDS PD 1866, THE IRR SHALL BE PROMULGATED JOINTLY BY THE
OTHER GUN-OWNERS THE LAWBREAKERS (KIDNAPPERS, ROBBERS, HOLD-UPPERS, MNLF, MILF, ABU
DOJ AND THE DILG.
SAYYAF COLLECTIVELY, AND NPA) UNTOUCHED.
2) SEC. 8, PD 1866 STATES THAT THE IRR SHALL BE PROMULGATED BY THE CHIEF OF THE PHILIPPINE
IX
CONSTABULARY.

THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND UNFAIR BECAUSE THEY WERE IMPLEMENTED
V
LONG BEFORE THEY WERE PUBLISHED.
THE PNP GUIDELINES VIOLATE THE DUE PROCESS CLAUSE OF THE CONSTITUTION BECAUSE:
X
THE PNP GUIDELINES ARE EFFECTIVELY AN EX POST FACTO LAW SINCE THEY APPLY power is unconstitutional and void, on the principle that delegata potestas non potest delegari delegated power
RETROACTIVELY AND PUNISH ALL THOSE WHO WERE ALREADY GRANTED PERMITS TO CARRY may not be delegated.[6]
OUTSIDE OF RESIDENCE LONG BEFORE THEIR PROMULGATION.
The rule which forbids the delegation of legislative power, however, is not absolute and inflexible. It
admits of exceptions. An exception sanctioned by immemorial practice permits the legislative body to delegate its
Petitioners submissions may be synthesized into five (5) major issues: licensing power to certain persons, municipal corporations, towns, boards, councils, commissions, commissioners,
auditors, bureaus and directors.[7] Such licensing power includes the power to promulgate necessary rules and
First, whether respondent Ebdane is authorized to issue the assailed Guidelines; regulations.[8]

Second, whether the citizens right to bear arms is a constitutional right?; The evolution of our laws on firearms shows that since the early days of our Republic, the legislatures
tendency was always towards the delegation of power. Act No. 1780,[9] delegated upon the Governor-General (now
the President) the authority (1) to approve or disapprove applications of any person for a license to deal in firearms
Third, whether the revocation of petitioners PTCFOR pursuant to the assailed Guidelines is a violation of his right or to possess the same for personal protection, hunting and other lawful purposes; and (2) to revoke such license
to property?; any time.[10] Further, it authorized him to issue regulations which he may deem necessary for the proper
enforcement of the Act. [11] With the enactment of Act No. 2711, the Revised Administrative Code of 1917, the laws
Fourth, whether the issuance of the assailed Guidelines is a valid exercise of police power?; and on firearms were integrated.[12] The Act retained the authority of the Governor General provided in Act No.
1780. Subsequently, the growing complexity in the Office of the Governor-General resulted in the delegation of his
Fifth, whether the assailed Guidelines constitute an ex post facto law? authority to the Chief of the Constabulary. On January 21, 1919, Acting Governor-General Charles E. Yeater issued
Executive Order No. 8[13] authorizing and directing the Chief of Constabulary to act on his behalf in approving and
The Solicitor General seeks the dismissal of the petition pursuant to the doctrine of hierarchy of disapproving applications for personal, special and hunting licenses. This was followed by Executive Order
courts. Nonetheless, in refutation of petitioners arguments, he contends that: (1) the PNP Chief is authorized to No. 61[14] designating the Philippine Constabulary (PC) as the government custodian of all firearms, ammunitions
issue the assailed Guidelines; (2) petitioner does not have a constitutional right to own and carry firearms; (3) the and explosives. Executive Order No. 215,[15] issued by President Diosdado Macapagal on December 3, 1965,
assailed Guidelines do not violate the due process clause of the Constitution; and (4) the assailed Guidelines do granted the Chief of the Constabulary, not only the authority to approve or disapprove applications for personal,
not constitute an ex post facto law. special and hunting license, but also the authority to revoke the same. With the foregoing developments, it is
accurate to say that the Chief of the Constabulary had exercised the authority for a long time. In fact, subsequent
Initially, we must resolve the procedural barrier. issuances such as Sections 2 and 3 of the Implementing Rules and Regulations of Presidential Decree No.
1866[16] perpetuate such authority of the Chief of the Constabulary. Section 2 specifically provides that any person
On the alleged breach of the doctrine of hierarchy of courts, suffice it to say that the doctrine is not an iron-
or entity desiring to possess any firearm shall first secure the necessary permit/license/authority from the
clad dictum. In several instances where this Court was confronted with cases of national interest and of serious
Chief of the Constabulary. With regard to the issuance of PTCFOR, Section 3 imparts: The Chief of
implications, it never hesitated to set aside the rule and proceed with the judicial determination of the cases.[3] The
Constabulary may, in meritorious cases as determined by him and under such conditions as he may
case at bar is of similar import as it involves the citizens right to bear arms.
impose, authorize lawful holders of firearms to carry them outside of residence. These provisions are issued
I pursuant to the general power granted by P.D. No. 1866 empowering him to promulgate rules and regulations
for the effective implementation of the decree.[17] At this juncture, it bears emphasis that P.D. No. 1866 is the
Authority of the PNP Chief chief law governing possession of firearms in the Philippines and that it was issued by President Ferdinand E.
Relying on the principle of separation of powers, petitioner argues that only Congress can withhold his right Marcos in the exercise of his legislative power.[18]
to bear arms. In revoking all existing PTCFOR, President Arroyo and respondent Ebdane transgressed the settled In an attempt to evade the application of the above-mentioned laws and regulations, petitioner argues that
principle and arrogated upon themselves a power they do not possess the legislative power. the Chief of the PNP is not the same as the Chief of the Constabulary, the PC being a mere unit or component of
We are not persuaded. the newly established PNP. He contends further that Republic Act No. 8294[19] amended P.D. No. 1866 such that
the authority to issue rules and regulations regarding firearms is now jointly vested in the Department of Justice
It is true that under our constitutional system, the powers of government are distributed among three and the DILG, not the Chief of the Constabulary.[20]
coordinate and substantially independent departments: the legislative, the executive and the judiciary. Each has
exclusive cognizance of the matters within its jurisdiction and is supreme within its own sphere.[4] Petitioners submission is bereft of merit.

Pertinently, the power to make laws the legislative power is vested in Congress.[5] Congress may not escape By virtue of Republic Act No. 6975,[21] the Philippine National Police (PNP) absorbed the Philippine
its duties and responsibilities by delegating that power to any other body or authority. Any attempt to abdicate the Constabulary (PC). Consequently, the PNP Chief succeeded the Chief of the Constabulary and, therefore,
assumed the latters licensing authority. Section 24 thereof specifies, as one of PNPs powers, the issuance of
licenses for the possession of firearms and explosives in accordance with law.[22] This is in conjunction with A well regulated militia, being necessary for the security of free state, the right of the people to keep and bear
the PNP Chiefs power to issue detailed implementing policies and instructions on such matters as may be Arms, shall not be infringed.
necessary to effectively carry out the functions, powers and duties of the PNP.[23]
Contrary to petitioners contention, R.A. No. 8294 does not divest the Chief of the Constabulary (now the PNP An examination of the historical background of the foregoing provision shows that it pertains to the
Chief) of his authority to promulgate rules and regulations for the effective implementation of P.D. No. 1866. For citizens collective right to take arms in defense of the State, not to the citizens individual right to own and possess
one, R.A. No. 8294 did not repeal entirely P.D. No. 1866. It merely provides for the reduction of penalties for illegal arms. The setting under which the right was contemplated has a profound connection with the keeping and
possession of firearms. Thus, the provision of P.D. No. 1866 granting to the Chief of the Constabulary the authority maintenance of a militia or an armed citizenry. That this is how the right was construed is evident in early American
to issue rules and regulations regarding firearms remains effective. Correspondingly, the Implementing Rules and cases.
Regulations dated September 15, 1997 jointly issued by the Department of Justice and the DILG pursuant to The first case involving the interpretation of the Second Amendment that reached the United States Supreme
Section 6 of R.A. No. 8294 deal only with the automatic review, by the Director of the Bureau of Corrections or the Court is United States vs. Miller.[26] Here, the indictment charged the defendants with transporting an unregistered
Warden of a provincial or city jail, of the records of convicts for violations of P.D. No. 1866. The Rules seek to give Stevens shotgun without the required stamped written order, contrary to the National Firearms Act. The defendants
effect to the beneficent provisions of R.A. No. 8294, thereby ensuring the early release and reintegration of the filed a demurrer challenging the facial validity of the indictment on the ground that the National Firearms Act offends
convicts into the community. the inhibition of the Second Amendment. The District Court sustained the demurrer and quashed the
Clearly, both P.D. No. 1866 and R.A. No. 6975 authorize the PNP Chief to issue the assailed guidelines. indictment. On appeal, the Supreme Court interpreted the right to bear arms under the Second Amendment
as referring to the collective right of those comprising the Militia a body of citizens enrolled for military
Corollarily, petitioner disputes President Arroyos declaration of a nationwide gun ban, arguing that she has discipline. It does not pertain to the individual right of citizen to bear arm. Miller expresses its holding as
no authority to alter, modify, or amend the law on firearms through a mere speech. follows:
First, it must be emphasized that President Arroyos speech was just an expression of her policy and a
In the absence of any evidence tending to show that possession or use of a shotgun having a barrel of less than
directive to her subordinate. It cannot, therefore, be argued that President Arroyo enacted a law through a mere
eighteen inches in length at this time has some reasonable relationship to the preservation or efficiency of a
speech.
well regulated militia, we cannot say that the Second Amendment guarantees the right to keep and bear
Second, at the apex of the entire executive officialdom is the President. Section 17, Article VII of the such an instrument. Certainly it is not within judicial notice that this weapon is any part of the ordinary military
Constitution specifies his power as Chief Executive, thus: The President shall have control of all the executive equipment or that its use could contribute to the common defense.
departments, bureaus and offices. He shall ensure that the laws be faithfully executed. As Chief Executive,
President Arroyo holds the steering wheel that controls the course of her government. She lays down policies in The same doctrine was re-echoed in Cases vs. United States.[27] Here, the Circuit Court of Appeals held that
the execution of her plans and programs. Whatever policy she chooses, she has her subordinates to implement the Federal Firearms Act, as applied to appellant, does not conflict with the Second Amendment. It ruled that:
them. In short, she has the power of control. Whenever a specific function is entrusted by law or regulation to
her subordinate, she may act directly or merely direct the performance of a duty.[24] Thus, when President While [appellants] weapon may be capable of military use, or while at least familiarity with it might be regarded as
Arroyo directed respondent Ebdane to suspend the issuance of PTCFOR, she was just directing a subordinate to of value in training a person to use a comparable weapon of military type and caliber, still there is no evidence
perform an assigned duty. Such act is well within the prerogative of her office. that the appellant was or ever had been a member of any military organization or that his use of the
II weapon under the circumstances disclosed was in preparation for a military career. In fact, the only
inference possible is that the appellant at the time charged in the indictment was in possession of,
Right to bear arms: Constitutional or Statutory? transporting, and using the firearm and ammunition purely and simply on a frolic of his own and without
any thought or intention of contributing to the efficiency of the well regulated militia which the Second
Petitioner earnestly contends that his right to bear arms is a constitutionally-protected right. This, he mainly
amendment was designed to foster as necessary to the security of a free state.
anchors on various American authorities. We therefore find it imperative to determine the nature of the right in light
of American jurisprudence.
With the foregoing jurisprudence, it is erroneous to assume that the US Constitution grants upon the
The bearing of arms is a tradition deeply rooted in the English and American society. It antedates not only American people the right to bear arms. In a more explicit language, the United States vs.
the American Constitution but also the discovery of firearms.[25] Cruikshank[28] decreed: The right of the people to keep and bear arms is not a right granted by the
Constitution. Neither is it in any way dependent upon that instrument. Likewise, in People vs. Persce,[29] the
A provision commonly invoked by the American people to justify their possession of firearms is the Second
Court of Appeals said: Neither is there any constitutional provision securing the right to bear arms which prohibits
Amendment of the Constitution of the United States of America, which reads:
legislation with reference to such weapons as are specifically before us for consideration. The provision in the
Constitution of the United States that the right of the people to keep and bear arms shall not be infringed III
is not designed to control legislation by the state.
Vested Property Right
With more reason, the right to bear arms cannot be classified as fundamental under the 1987 Philippine
Constitution. Our Constitution contains no provision similar to the Second Amendment, as we aptly observed in the Section 1, Article III of the Constitution provides that no person shall be deprived of life, liberty or property
early case of United States vs. Villareal:[30] without due process of law. Petitioner invokes this provision, asserting that the revocation of his PTCFOR pursuant
to the assailed Guidelines deprived him of his vested property right without due process of law and in violation of
the equal protection of law.
The only contention of counsel which would appear to necessitate comment is the claim that the statute
penalizing the carrying of concealed weapons and prohibiting the keeping and the use of firearms without a Petitioner cannot find solace to the above-quoted Constitutional provision.
license, is in violation of the provisions of section 5 of the Philippine Bill of Rights.
In evaluating a due process claim, the first and foremost consideration must be whether life, liberty or property
interest exists.[32] The bulk of jurisprudence is that a license authorizing a person to enjoy a certain privilege is
Counsel does not expressly rely upon the prohibition in the United States Constitution against the
neither a property nor property right. In Tan vs. The Director of Forestry,[33] we ruled that a license is merely a
infringement of the right of the people of the United States to keep and bear arms (U. S. Constitution,
permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority granting it
amendment 2), which is not included in the Philippine Bill. But it may be well, in passing, to point out that
and the person to whom it is granted; neither is it property or a property right, nor does it create a vested
in no event could this constitutional guaranty have any bearing on the case at bar, not only because it
right. In a more emphatic pronouncement, we held in Oposa vs. Factoran, Jr.[34] that:
has not been expressly extended to the Philippine Islands, but also because it has been uniformly held
that both this and similar provisions in State constitutions apply only to arms used in civilized warfare
(see cases cited in 40 Cyc., 853, note 18); x x x. Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract,
property or a property right protected by the due process clause of the Constitution.
Evidently, possession of firearms by the citizens in the Philippines is the exception, not the rule. The
right to bear arms is a mere statutory privilege, not a constitutional right. It is a mere statutory creation. What then Petitioner, in arguing that his PTCFOR is a constitutionally protected property right, relied heavily on Bell vs.
are the laws that grant such right to the Filipinos? The first real firearm law is Act No. 1780 enacted by the Burson[35] wherein the U.S. Supreme Court ruled that once a license is issued, continued possession may become
Philippine Commission on October 12, 1907. It was passed to regulate the importation, acquisition, possession, essential in the pursuit of livelihood. Suspension of issued licenses thus involves state action that adjudicates
use and transfer of firearms. Section 9 thereof provides: important interest of the licensees.
Petitioners reliance on Bell is misplaced. This case involves a drivers license, not a license to bear arms. The
SECTION 9. Any person desiring to possess one or more firearms for personal protection, or for use in catena of American jurisprudence involving license to bear arms is perfectly in accord with our ruling that a
hunting or other lawful purposes only, and ammunition therefor, shall make application for a license to PTCFOR is neither a property nor a property right. In Erdelyi vs. OBrien,[36] the plaintiff who was denied a license
possess such firearm or firearms or ammunition as hereinafter provided. Upon making such application, to carry a firearm brought suit against the defendant who was the Chief of Police of the City of Manhattan Beach,
and before receiving the license, the applicant shall make a cash deposit in the postal savings bank in the sum of on the ground that the denial violated her constitutional rights to due process and equal protection of the laws. The
one hundred pesos for each firearm for which the license is to be issued, or in lieu thereof he may give a bond in United States Court of Appeals Ninth Circuit ruled that Erdelyi did not have a property interest in obtaining a license
such form as the Governor-General may prescribe, payable to the Government of the Philippine Islands, in the to carry a firearm, ratiocinating as follows:
sum of two hundred pesos for each such firearm: PROVIDED, HOWEVER, That persons who are actually
members of gun clubs, duly formed and organized at the time of the passage of this Act, who at such time have a Property interests protected by the Due Process Clause of the Fourteenth Amendment do not arise
license to possess firearms, shall not be required to make the deposit or give the bond prescribed by this section, whenever a person has only an abstract need or desire for, or unilateral expectation of a benefit.x x x
and the bond duly executed by such person in accordance with existing law shall continue to be security for the Rather, they arise from legitimate claims of entitlement defined by existing rules or understanding that
safekeeping of such arms. stem from an independent source, such as state law. x x x

The foregoing provision was restated in Section 887[31] of Act No. 2711 that integrated the firearm Concealed weapons are closely regulated by the State of California. x x x Whether the statute creates a
laws. Thereafter, President Ferdinand E. Marcos issued P.D. No. 1866. It codified the laws on illegal possession, property interest in concealed weapons licenses depends largely upon the extent to which the statute
manufacture, dealing in, acquisition of firearms, ammunitions or explosives and imposed stiffer penalties for their contains mandatory language that restricts the discretion of the [issuing authority] to deny licenses to
violation. R.A. No. 8294 amended some of the provisions of P.D. No. 1866 by reducing the imposable applicants who claim to meet the minimum eligibility requirements. x x x Where state law gives the
penalties. Being a mere statutory creation, the right to bear arms cannot be considered an inalienable or absolute issuing authority broad discretion to grant or deny license application in a closely regulated field, initial
right. applicants do not have a property right in such licenses protected by the Fourteenth Amendment. See
Jacobson, supra, 627 F.2d at 180 (gaming license under Nevada law);
Similar doctrine was announced in Potts vs. City of Philadelphia,[37] Conway vs. King,[38] Nichols vs. County Deeper reflection will reveal that the test merely reiterates the essence of the constitutional guarantees of
of Sta. Clara,[39] and Gross vs. Norton.[40] These cases enunciated that the test whether the statute creates a substantive due process, equal protection, and non-impairment of property rights.
property right or interest depends largely on the extent of discretion granted to the issuing authority.
It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace and order
In our jurisdiction, the PNP Chief is granted broad discretion in the issuance of PTCFOR. This is evident from in the society. Owing to the proliferation of crimes, particularly those committed by the New Peoples Army (NPA),
the tenor of the Implementing Rules and Regulations of P.D. No. 1866 which state that the Chief of Constabulary which tends to disturb the peace of the community, President Arroyo deemed it best to impose a nationwide gun
may, in meritorious cases as determined by him and under such conditions as he may impose, authorize ban. Undeniably, the motivating factor in the issuance of the assailed Guidelines is the interest of the public in
lawful holders of firearms to carry them outside of residence. Following the American doctrine, it is indeed logical general.
to say that a PTCFOR does not constitute a property right protected under our Constitution.
The only question that can then arise is whether the means employed are appropriate and reasonably
Consequently, a PTCFOR, just like ordinary licenses in other regulated fields, may be revoked any time. It necessary for the accomplishment of the purpose and are not unduly oppressive.In the instant case, the assailed
does not confer an absolute right, but only a personal privilege to be exercised under existing restrictions, and such Guidelines do not entirely prohibit possession of firearms. What they proscribe is merely the carrying of firearms
as may thereafter be reasonably imposed.[41] A licensee takes his license subject to such conditions as the outside of residence. However, those who wish to carry their firearms outside of their residences may re-apply for
Legislature sees fit to impose, and one of the statutory conditions of this license is that it might be revoked by a new PTCFOR. This we believe is a reasonable regulation. If the carrying of firearms is regulated, necessarily,
the selectmen at their pleasure. Such a license is not a contract, and a revocation of it does not deprive the crime incidents will be curtailed. Criminals carry their weapon to hunt for their victims; they do not wait in the comfort
defendant of any property, immunity, or privilege within the meaning of these words in the Declaration of of their homes. With the revocation of all PTCFOR, it would be difficult for criminals to roam around with their
Rights.[42] The US Supreme Court, in Doyle vs. Continental Ins. Co,[43]held: The correlative power to revoke or guns. On the other hand, it would be easier for the PNP to apprehend them.
recall a permission is a necessary consequence of the main power. A mere license by the State is always
revocable. Notably, laws regulating the acquisition or possession of guns have frequently been upheld as reasonable
exercise of the police power.[45] In State vs. Reams,[46] it was held that the legislature may regulate the right to bear
The foregoing jurisprudence has been resonating in the Philippines as early as 1908. Thus, in The arms in a manner conducive to the public peace. With the promotion of public peace as its objective and the
Government of the Philippine Islands vs. Amechazurra[44] we ruled: revocation of all PTCFOR as the means, we are convinced that the issuance of the assailed Guidelines constitutes
a reasonable exercise of police power. The ruling in United States vs. Villareal,[47] is relevant, thus:
x x x no private person is bound to keep arms. Whether he does or not is entirely optional with himself, but if, for
his own convenience or pleasure, he desires to possess arms, he must do so upon such terms as the We think there can be no question as to the reasonableness of a statutory regulation prohibiting the carrying of
Government sees fit to impose, for the right to keep and bear arms is not secured to him by law. The concealed weapons as a police measure well calculated to restrict the too frequent resort to such weapons in
Government can impose upon him such terms as it pleases. If he is not satisfied with the terms imposed, he moments of anger and excitement. We do not doubt that the strict enforcement of such a regulation would tend to
should decline to accept them, but, if for the purpose of securing possession of the arms he does agree to such increase the security of life and limb, and to suppress crime and lawlessness, in any community wherein the
conditions, he must fulfill them. practice of carrying concealed weapons prevails, and this without being unduly oppressive upon the individual
owners of these weapons. It follows that its enactment by the legislature is a proper and legitimate exercise of the
IV police power of the state.

Police Power V
At any rate, assuming that petitioners PTCFOR constitutes a property right protected by the Constitution, the Ex post facto law
same cannot be considered as absolute as to be placed beyond the reach of the States police power. All property
in the state is held subject to its general regulations, necessary to the common good and general welfare. In Mekin vs. Wolfe,[48] an ex post facto law has been defined as one (a) which makes an action done before
the passing of the law and which was innocent when done criminal, and punishes such action; or (b) which
In a number of cases, we laid down the test to determine the validity of a police measure, thus: aggravates a crime or makes it greater than it was when committed; or (c) which changes the punishment and
inflicts a greater punishment than the law annexed to the crime when it was committed; or (d) which alters the legal
(1) The interests of the public generally, as distinguished from those of a particular class, require the exercise of rules of evidence and receives less or different testimony than the law required at the time of the commission of
the police power; and the offense in order to convict the defendant.
We see no reason to devote much discussion on the matter. Ex post facto law prohibits retrospectivity of
(2) The means employed are reasonably necessary for the accomplishment of the purpose and not unduly
penal laws.[49] The assailed Guidelines cannot be considered as an ex post facto law because it is prospective in
oppressive upon individuals.
its application. Contrary to petitioners argument, it would not result in the punishment of acts previously committed.
WHEREFORE, the petition is hereby DISMISSED. SEC. 887. License required for individual keeping arms for personal use. Security to be given. Any person
desiring to possess one or more firearms for personal protection or for use in hunting or other lawful purposes
SO ORDERED. only, and ammunition thereof, shall make application for a license to possess such firearm or firearms or
Davide, Jr., C.J., Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, ammunition as hereinafter provided. Upon making such application, and before receiving the license, the
Carpio-Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur. applicant shall, for the purpose of security, make a cash deposit in the postal savings bank in the sum of one
hundred pesos for each firearm for which the license is to be issued, and shall indorse the certificated of deposit
[1] Section 5, Article II of the 1987 Philippine Constitution. therefor to the Insular Treasurer; or in lieu thereof he may give a bond in such form as the Governor-General may
[2] Annex A of the Petition, Rollo at 60-62. prescribed, payable to the Government of the Philippine Islands, in the sum of two hundred pesos for each such
[3] See Buklod ng Kawaning EIIB vs. Zamora, G.R. Nos. 142801-802, July 10, 2001, 360 SCRA 718; Fortich vs. firearms.
Corona, G.R. No. 131457, April 24, 1998, 289 SCRA 624; Dario vs. Mison, G.R. No. 81954, August 8, 1989, 176 SEC. 888. Mode of making application and acting upon the same. An application for a personal license to
SCRA 84. possess firearms and ammunition, as herein provided, made by a resident of the City of Manila, shall be directed
[4] People vs. Vera, 65 Phil. 56 (1937). to the Mayor of said city, whose duty it shall be to forward the application to the Governor-General, with his
[5] Section 1, Article VI of the 1987 Constitution. recommendation. Applications made by residents of a province shall be directed to the governor of the same,
[6] Freund, Sutherland, Howe, Brown, Constitutional Law Cases and Other Problems, Fourth Edition, 1977, at who shall make his recommendation thereon and forward them to the Governor-General, who may approve or
653. disapprove any such application.
[7] 51 Am. Jur. 2d 51. SEC. 889. Duration of personal license. A personal firearms license shall continue in force until the death or legal
[8]51 Am Jur 2d 52. disability of the licensee, unless, prior thereto, the license shall be surrendered by him or revoked by authority of
[9] AN ACT TO REGULATE THE IMPORTATION, ACQUISITION, POSSESSION, USE, AND TRANSFER OF the Governor-General.
FIREARMS, AND TO PROHIBIT THE POSSESSION OF SAME EXCEPT IN COMPLIANCE WITH THE SEC. 899. Revocation of firearms license by Governor-General. Any firearms license may be revoked at any time
PROVISIONS OF THIS ACT. by order of the Governor-General.
[10] SECTION 11. An application for a personal license to possess firearms and ammunition, as herein provided SEC. 905. Forms and regulations to be prescribed by Governor-General. The Governor-General shall prescribe
for, made by a resident of the city of Manila, shall be directed to the chief of police of said city, and it shall be the such forms and promulgate such regulations as he shall deem necessary for the proper enforcement of this law.
[13] (Delegating the CPC to Approve/Disapprove Applications)
duty of the chief of the police to forward the application to the Governor-General with his recommendations. Any
such application made by a resident of a province shall be directed to the governor of the province who shall 15. In carrying out the provisions of Sections eight hundred and eighty-one, eight hundred and eighty-two, eighty
make his recommendations thereon and forward the application to the senior inspector of the Constabulary of the hundred and eighty-eight, as amended by Section two of Act two thousand seven hundred and seventy-four,
province, who in turn shall make his recommendations thereon and forward the application, through official eight hundred and ninety-one and eight hundred and ninety-two of the Administrative Code, empowering the
channels, to the Governor-General. The Governor-General may approve or disapprove any such Governor-General to approve and disapprove applications for personal, special, and hunting licenses to possess
application, and, in the event of the approval, the papers shall be transmitted to the Director of firearms and ammunition, the Chief of Constabulary is authorized and directed to act for the Governor-General.
[14] Issued on December 5, 1924 by Governor-General Leonard Wood.
Constabulary with instructions to issue the license as hereinbefore provided. The Director of Constabulary,
[15] Pursuant to the provisions of Section 905, Administrative Code, as amended, empowering the President of
upon receiving and approving the bond, or receiving the certificate of deposit duly endorsed to the order of the
Insular Treasurer, shall issue the license for the time fixed for such license as hereinafter provided, and the the Philippines to prescribe regulations for the enforcement of the provisions of the law relating to the
Director of Constabulary shall transmit the license direct to the applicant, and shall notify the chief of police of the possession, use of firearms, etc., the following regulations are hereby promulgated.
city of Manila if the applicant resides in Manila, otherwise the senior inspector of Constabulary of the province in SECTION 1. In carrying out the provision of Sections 881, 882 and 888 of the Revised Administrative Code,
which the applicant resides. The Director of Constabulary shall file the certificate of deposit in his office. It shall empowering the President of the Philippines to approve or disapprove applications for personal, special and
be the duty of all officers through whom applications for licenses to possess firearms are transmitted to expedite hunting license to possess firearms and ammunition, the Chief of Constabulary or his representative is
the same. authorized and directed to act for the President.
[11] SECTION 30. The Governor-General is hereby authorized to issue executive orders prescribing the forms and SECTION 2. In carrying out the provisions of Section 899 of the Revised Administrative Code, empowering the
regulations which he may deem necessary for the proper enforcement of the provisions of this Act. President of the Philippines to revoke any firearm license anytime, the Chief of Constabulary is authorized and
[12] SEC. 882. Issuance of special hunting permits. The Department Head may authorize the Chief of directed to act for the President.
[16]CODIFYING THE LAWS ON ILLEGAL/UNLAWFUL POSSESSION, MANUFACTURE, DEALING IN,
Constabulary to issue special hunting permits to persons temporarily visiting the Philippine Islands, without
requiring a bond or deposit as a guarantee of security for their arms and ammunition. Such special hunting permit ACQUISITION OR DISPOSITION, OF FIREARMS, AMMUNITION OR EXPLOSIVES OR INSTRUMENTS USED
shall be valid only during the temporary sojourn of the holder in the Islands, shall be nontransferable, and shall IN THE MANUFACTURE OF FIREARMS, AMMUNITION OR EXPLOSIVES, AND IMPOSING STIFFER
be revocable at the pleasure of the Department Head. PENALTIES FOR CERTAIN VIOLATIONS THEREOF AND FOR RELEVANT PURPOSES.
[17] Section 8 of P.D. No. 1866.
[18] Baylosis vs. Chavez, Jr., G.R. No. 95136, October 3, 1991, 202 SCRA 405.
[19] AN ACT AMENDING THE PROVISIONS OF PRESIDENTIAL DECREE NO. 1866, AS AMENDED, the subject and it is necessary for the public safety that the subjects, which are protestants, should provide and
ENTITLED CODIFYING THE LAWS ON ILLEGAL/UNLAWFUL POSSESSION, MANUFACTURE, DEALING IN, keep arms for the common defense; And that the arms which have been seized, and taken from them, be
ACQUISITION OR DISPOSITION OF FIREARMS, AMMUNITION OR EXPLOSIVES OR INSTRUMENTS USED restored. The House of Lords changed this to a more concise statement: That the subjects which are Protestant
IN THE MANUFACTURE OF FIREARMS, AMMUNITION OR EXPLOSIVES, AND IMPOSING STIFFER may have arms for their defense suitable to their conditions and as allowed by law.
PENALTIES FOR EXPLOSIVES, AND IMPOSING STIFFER PENALTIES FOR CERTAIN VIOLATIONS In the colonies, the prevalence of hunting as means of livelihood and the need for defense led to armament
THEREOF, AND FOR RELEVANT PURPOSES. Issued on June 29, 1983. statutes comparable to those of the early Saxon times. When the British government began to increase its
[20] Section 6 of R.A. No. 8294 provides: military presence therein in the mid-eighteenth century, Massachusetts responded by calling upon its citizens to
SECTION 6. Rules and Regulations. The Department of Justice and the Department of the Interior and arm themselves in defense. In September 1774, an incorrect rumor that British troops killed colonists prompted
Local Government shall jointly issue, within ninety (90) days after the approval of this Act, the necessary 60,000 citizens to take arms. A few months later, when Patrick Henry delivered his famed Give me liberty or give
rules and regulations pertaining to the administrative aspect of the provisions hereof, furnishing the me death speech, he spoke in support of a proposition that a well regulated militia, composed of gentlemen and
Committee on Public Order and Security and the Committee on Justice and Human Rights of both Houses of freemen, is the natural strength and only security of a free government
Congress copies of such rules and regulations within thirty (30) days from the promulgation hereof. When the first Congress convened for the purpose of drafting a Bill of Rights, it delegated the task to James
[21] AN ACT ESTABLISHING THE PHILIPPINE NATIONAL POLICE UNDER A REORGANIZED DEPARMENT Madison. Madison did not write upon a blank tablet. Instead, he obtained a pamphlet listing the States proposals
OF THE INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER PURPOSES. Approved December 13, for a Bill of Rights and sought to produce a briefer version incorporating all the vital proposals of such
1990. States. Madison proposed among other rights: The right of the people to keep and bear arms shall not be
[22] Under Section 2 (11), Chapter 1, Book 7 of Executive Order No. 292, the Administrative Code of 1987, the infringed; a well armed and regulated militia being the best security of a free country; but no person religiously
term licensing includes agency process involving the grant, renewal, denial, revocation, suspension, scrupulous of bearing arms shall be compelled to render military service. In the House, this was initially modified
annulment, withdrawal, limitation, amendment, modification or conditioning of a license. so that the militia clause came before the proposal recognizing the right. The proposal finally passed the House
[23] Section 26 of R.A. No. 6975. in its present form: A well regulated militia, being necessary for the security of free state, the right of the people to
[24] Chapter 7, Book IV of E.O. No. 292. keep and bear arms, shall not be infringed. In this form it was submitted to the Senate, which passed it the
following day.
[25]Under the laws of Alfred the Great, whose reign began in 872 A.D., all English citizens, from the nobility to the [26] 307 U.S. 174 (1939).
peasants, were obliged to privately purchase weapons and be available for military duty.[25] This body of armed [27] 131 Federal Reporter, 2d Series, 916.
[28] 92 U.S. 542, 23 L. Ed. 588.
citizens was known as the fyrd. [29] 204 N.Y. 397, 97 N.E. 877.
Following the Norman conquest, many of the Saxon rights were abridged, however, the right and duty of arms [30] 28 Phil. 390 (1914).
possession was retained. Under the Assize of Arms of 1181, the whole community of freemen is required to [31] Supra.
possess arms and to demonstrate to the Royal officials that each of them is appropriately armed. [32] Bzdzuich vs. U.S. Drug Enforcement Admin., 76 F 3d 738, 1996 FED App. 59P (6th Cir. 1996).
The Tudor monarchs continued the system of arm ownership and Queen Elizabeth added to it by creating what [33] G.R. No. L-24548, October 27, 1983, 125 SCRA 302. See also Pedro vs. Provincial Board of Rizal, 56 Phil. 123 (1931).
came to be known as train bands that is, the selected portions of the citizenry chosen for special [34] G.R. No. 101083, July 30, 1993, 224 SCRA 792, penned by Chief Justice Hilario G. Davide, Jr.

training. These trained bands were distinguished from the militia which term was first used during the Spanish [35] 402 U.S. 535 (1971).

Armada crisis to designate the entire of the armed citizenry. [36] 680 F 2d 61 (1982).
[37] 01-CV-3247, August 2002.
The militia played a pivotal role in the English political system. When civil war broke out in 1642, the critical issue
[38] 718 F. Supp. 1059 (1989).
was whether the King or Parliament had the right to control the militia. After the war, England, which was then [39] 223 Cal. App. 3d 1236, 273 Cal. Rptr. 84 (1990).
under the control of a military government, ordered its officers to search for and seize all arms owned by [40] 120 F. 3d 877 (1997).
Catholics, opponents of the government, or any other person whom the commissioners had judged dangerous to [41] Stone vs. Fritts, 82 NE 792 (1907) citing Calder vs. Kurby, 5 Gray [Mass.] 597; Freleigh vs. State, 8 Mo. 606; People vs.
the peace of the Commonwealth. New York Tax, etc., Comrs, 47 N.Y. 501; State vs. Burgoyne, 75 Tenn. 173, 40 Am. Rep. 60.
The restoration of Charles II ended the military government. Charles II opened his reign with a variety of [42] Commonwealth vs. Kinsley, 133 Mass. 578.
repressive legislation. In 1662, a Militia Act was enacted empowering officials to search and to seize all arms in [43] 94 U.S. 535, 540 24 L.Ed.148.

the custody or possession of any person or persons whom the said lieutenants or any two or more of their [44] 10 Phil. 637 (1908).

deputies shall judge dangerous to the peace of the kingdom. Such seizures of arms continued under James I, [45] Calvan vs. Superior Court of San Francisco, 70 Cal 2d 851, 76 Cal Rptr 642, 452 P2d 930; State vs. Robinson (Del Sup)

who directed them particularly against the Irish population. 251 A2d 552; People vs. Brown, 253 Mich 537, 235 NW 245, 82 ALR 341.
[46] 121 N.C. 556, 557, 27 S.E. 1004, 1005 (1897).
In 1668, the government of James was overturned in a peaceful uprising which came to be known as The [47] 28 Phil. 390 (1914).
Glorious Revolution. Parliament promulgated a Declaration of Rights, later enacted as the Bill of Rights. Before [48] 2 Phil. 74 (1903).
coronation, James successor, William of Orange, was required to swear to respect these rights. The Bill of [49] Lacson vs. The Executive Secretary G.R. No. 128096, January 20, 1999, 301 SCRA 298.
Rights, as drafted in the House of Commons, simply provided that the acts concerning the militia are grievous to
[G.R. No. 135190. April 3, 2002] On February 16, 1994, while the RED Mines case was pending, Marcopper assigned its EP No. 133 to
petitioner Southeast Mindanao Gold Mining Corporation (SEM),[8] which in turn applied for an integrated MPSA
SOUTHEAST MINDANAO GOLD MINING CORPORATION, petitioner, vs. BALITE PORTAL MINING over the land covered by the permit.
COOPERATIVE and others similarly situated; and THE HONORABLE ANTONIO CERILLES, in his capacity as
Secretary of the Department of Environment and Natural Resources (DENR), PROVINCIAL MINING In due time, the Mines and Geosciences Bureau Regional Office No. XI in Davao City (MGB-XI) accepted
REGULATORY BOARD OF DAVAO (PMRB-Davao), respondents. and registered the integrated MPSA application of petitioner. After publication of the application, the following filed
their oppositions:
DECISION
a) MAC Case No. 004(XI) - JB Management Mining Corporation;
YNARES-SANTIAGO, J.: b) MAC Case No. 005(XI) - Davao United Miners Cooperative;
c) MAC Case No. 006(XI) - Balite Integrated Small Scale Miners Cooperative;
This is a petition for review of the March 19, 1998 decision of the Court of Appeals in CA-G.R. SP No. 44693, d) MAC Case No. 007(XI) - Monkayo Integrated Small Scale Miners Association, Inc.;
dismissing the special civil action for certiorari, prohibition and mandamus, and the resolution dated August 19, e) MAC Case No. 008(XI) - Paper Industries Corporation of the Philippines;
1998 denying petitioners motion for reconsideration. f) MAC Case No. 009(XI) - Rosendo Villaflor, et al.;
g) MAC Case No. 010(XI) - Antonio Dacudao;
The instant case involves a rich tract of mineral land situated in the Agusan-Davao-Surigao Forest Reserve h) MAC Case No. 011(XI) - Atty. Jose T. Amacio;
known as the Diwalwal Gold Rush Area. Located at Mt. Diwata in the municipalities of Monkayo and Cateel in i) MAC Case No. 012(XI) - Puting-Bato Gold Miners Cooperative;
Davao Del Norte, the land has been embroiled in controversy since the mid-80s due to the scramble over gold j) MAC Case No. 016(XI) - Balite Communal Portal Mining Cooperative; and
deposits found within its bowels. k) MAC Case No. 97-01(XI) - Romeo Altamera, et al.
From 1985 to 1991, thousands of people flocked to Diwalwal to stake their respective claims. Peace and
order deteriorated rapidly, with hundreds of people perishing in mine accidents, man-made or otherwise, brought In the meantime, on March 3, 1995, Republic Act No. 7942, the Philippine Mining Act, was enacted. Pursuant
about by unregulated mining activities. The multifarious problems spawned by the gold rush assumed gargantuan to this statute, the above-enumerated MAC cases were referred to a Regional Panel of Arbitrators (RPA) tasked
proportions, such that finding a win-win solution became a veritable needle in a haystack. to resolve disputes involving conflicting mining rights. The RPA subsequently took cognizance of the RED Mines
case, which was consolidated with the MAC cases.
On March 10, 1988, Marcopper Mining Corporation (Marcopper) was granted Exploration Permit No. 133
(EP No. 133) over 4,491 hectares of land, which included the hotly-contested Diwalwal area.[1]Marcoppers On April 1, 1997, Provincial Mining Regulatory Board of Davao passed Resolution No. 26, Series of 1997,
acquisition of mining rights over Diwalwal under its EP No. 133 was subsequently challenged before this Court authorizing the issuance of ore transport permits (OTPs) to small-scale miners operating in the Diwalwal mines.
in Apex Mining Co., Inc., et al. v. Hon. Cancio C. Garcia, et al.,[2] where Marcoppers claim was sustained over that Thus, on May 30, 1997, petitioner filed a complaint for damages before the Regional Trial Court of Makati
of another mining firm, Apex Mining Corporation (Apex). The Court found that Apex did not comply with the City, Branch 61, against the DENR Secretary and PMRB-Davao. SEM alleged that the illegal issuance of the OTPs
procedural requisites for acquiring mining rights within forest reserves. allowed the extraction and hauling of P60,000.00 worth of gold ore per truckload from SEMs mining claim.
Not long thereafter, Congress enacted on June 27, 1991 Republic Act No. 7076, or the Peoples Small-Scale Meanwhile, on June 13, 1997, the RPA resolved the Consolidated Mines cases and decreed in an Omnibus
Mining Act. The law established a Peoples Small-Scale Mining Program to be implemented by the Secretary of the Resolution as follows:
DENR[3] and created the Provincial Mining Regulatory Board (PMRB) under the DENR Secretarys direct
supervision and control.[4] The statute also authorized the PMRB to declare and set aside small-scale mining areas
VIEWED IN THE LIGHT OF THE FOREGOING, the validity of Exploration Permit No. 133 is hereby reiterated
subject to review by the DENR Secretary[5] and award mining contracts to small-scale miners under certain
and all the adverse claims against MPSAA No. 128 are DISMISSED.[9]
conditions.[6]
On December 21, 1991, DENR Secretary Fulgencio S. Factoran issued Department Administrative Order On June 24, 1997, the DENR Secretary issued Memorandum Order No. 97-03[10] which provided, among
(DAO) No. 66, declaring 729 hectares of the Diwalwal area as non-forest land open to small-scale mining.[7] The others, that:
issuance was made pursuant to the powers vested in the DENR Secretary by Proclamation No. 369, which
established the Agusan-Davao-Surigao Forest Reserve. 1. The DENR shall study thoroughly and exhaustively the option of direct state utilization of the mineral resources
Subsequently, a petition for the cancellation of EP No. 133 and the admission of a Mineral Production Sharing in the Diwalwal Gold-Rush Area. Such study shall include, but shall not be limited to, studying and weighing the
Arrangement (MPSA) proposal over Diwalwal was filed before the DENR Regional Executive Director, docketed feasibility of entering into management agreements or operating agreements, or both, with the appropriate
as RED Mines Case No. 8-8-94 entitled, Rosendo Villaflor, et al. v. Marcopper Mining Corporation. government instrumentalities or private entities, or both, in carrying out the declared policy of rationalizing the
mining operations in the Diwalwal Gold Rush Area; such agreements shall include provisions for profit- II. THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE ERROR IN HOLDING THAT
sharing between the state and the said parties, including profit-sharing arrangements with small-scale miners, as AN ACTION ON THE VALIDITY OF ORE TRANSPORT PERMIT (OTP) IS VESTED IN THE
well as the payment of royalties to indigenous cultural communities, among others. The Undersecretary for Field REGIONAL PANEL OF ARBITRATORS.[15]
Operations, as well as the Undersecretary for Legal and Legislative Affairs and Attached Agencies, and the
Director of the Mines and Geo-sciences Bureau are hereby ordered to undertake such studies. x x x[11] In a resolution dated September 11, 2000, the appealed Consolidated Mines cases, docketed as G.R. Nos.
132475 and 132528, were referred to the Court of Appeals for proper disposition pursuant to Rule 43 of the 1997
Rules of Civil Procedure.[16] These cases, which were docketed as CA-G.R. SP Nos. 61215 and 61216, are still
On July 16, 1997, petitioner filed a special civil action for certiorari, prohibition and mandamus before the pending before the Court of Appeals.
Court of Appeals against PMRB-Davao, the DENR Secretary and Balite Communal Portal Mining Cooperative
(BCPMC), which represented all the OTP grantees. It prayed for the nullification of the above-quoted Memorandum In the first assigned error, petitioner insists that the Court of Appeals erred when it concluded that the assailed
Order No. 97-03 on the ground that the direct state utilization espoused therein would effectively impair its vested memorandum order did not adopt the direct state utilization scheme in resolving the Diwalwal dispute. On the
rights under EP No. 133; that the DENR Secretary unduly usurped and interfered with the jurisdiction of the RPA contrary, petitioner submits, said memorandum order dictated the said recourse and, in effect, granted
which had dismissed all adverse claims against SEM in the Consolidated Mines cases; and that the memorandum management or operating agreements as well as provided for profit sharing arrangements to illegal small-scale
order arbitrarily imposed the unwarranted condition that certain studies be conducted before mining and miners.
environmental laws are enforced by the DENR.
According to petitioner, MO 97-03 was issued to preempt the resolution of the Consolidated Mines cases. The
Meanwhile, on January 6, 1998, the MAB rendered a decision in the Consolidated Mines cases, setting aside direct state utilization scheme espoused in the challenged memorandum is nothing but a legal shortcut, designed
the judgment of the RPA.[12] This MAB decision was then elevated to this Court by way of a consolidated petition, to divest petitioner of its vested right to the gold rush area under its EP No. 133.
docketed as G.R. Nos. 132475 and 132528.
We are not persuaded.
On March 19, 1998, the Court of Appeals, through a division of five members voting 3-2,[13] dismissed the
petition in CA-G.R. SP No. 44693. It ruled that the DENR Secretary did not abuse his discretion in issuing We agree with the Court of Appeals ruling that the challenged MO 97-03 did not conclusively adopt direct
Memorandum Order No. 97-03 since the same was merely a directive to conduct studies on the various options state utilization as a policy in resolving the Diwalwal dispute. The terms of the memorandum clearly indicate that
available to the government for solving the Diwalwal conflict. The assailed memorandum did not conclusively adopt what was directed thereunder was merely a study of this option and nothing else. Contrary to petitioners contention,
direct state utilization as official government policy on the matter, but was simply a manifestation of the DENRs it did not grant any management/operating or profit-sharing agreement to small-scale miners or to any party, for
intent to consider it as one of its options, after determining its feasibility through studies. MO 97-03 was only the that matter, but simply instructed the DENR officials concerned to undertake studies to determine its feasibility. As
initial step in the ladder of administrative process and did not, as yet, fix any obligation, legal relationship or right. It the Court of Appeals extensively discussed in its decision:
was thus premature for petitioner to claim that its constitutionally-protected rights under EP No. 133 have been
encroached upon, much less, violated by its issuance. x x x under the Memorandum Order, the State still had to study prudently and exhaustively the various options
available to it in rationalizing the explosive and ever perilous situation in the area, the debilitating adverse effects
Additionally, the appellate court pointed out that petitioners rights under EP No. 133 are not inviolable, of mining in the community and at the same time, preserve and enhance the safety of the mining operations and
sacrosanct or immutable. Being in the nature of a privilege granted by the State, the permit can be revoked, ensure revenues due to the government from the development of the mineral resources and the exploitation
amended or modified by the Chief Executive when the national interest so requires. The Court of Appeals, however, thereof. The government was still in earnest search of better options that would be fair and just to all parties
declined to rule on the validity of the OTPs, reasoning that said issue was within the exclusive jurisdiction of the concerned, including, notably, the Petitioner. The direct state utilization of the mineral resources in the area was
RPA. only one of the options of the State. Indeed, it is too plain to see, x x x that before the State will settle on an
Petitioner filed a motion for reconsideration of the above decision, which was denied for lack of merit on option, x x x an extensive and intensive study of all the facets of a direct state exploitation was directed by the
August 19, 1998.[14] Public Respondent DENR Secretary. And even if direct state exploitation was opted by the government, the
DENR still had to promulgate rules and regulations to implement the same x x x, in coordination with the other
Hence this petition, raising the following errors: concerned agencies of the government.[17]
I. THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE ERROR, AND HAS
DECIDED A QUESTION OF SUBSTANCE NOT THERETOFORE DETERMINED BY THIS Consequently, the petition was premature. The said memorandum order did not impose any obligation on
HONORABLE SUPREME COURT, OR HAS DECIDED IT IN A WAY PROBABLY NOT IN the claimants or fix any legal relation whatsoever between and among the parties to the dispute.At this stage,
ACCORD WITH LAW OR WITH APPLICABLE DECISIONS OF THIS HONORABLE COURT IN petitioner can show no more than a mere apprehension that the State, through the DENR, would directly take over
UPHOLDING THE QUESTIONED ACTS OF RESPONDENT DENR SECRETARY WHICH ARE the mines after studies point to its viability. But until the DENR actually does so and petitioners fears turn into
IN VIOLATION OF MINING LAWS AND IN DEROGATION OF PETITIONERS VESTED RIGHTS reality, no valid objection can be entertained against MO 97-03 on grounds which are purely speculative and
OVER THE AREA COVERED BY ITS EP NO. 133; anticipatory.[18]
With respect to the alleged vested rights claimed by petitioner, it is well to note that the same is invariably impairment of contract and due process clauses of the Constitution,[21] since the State, under its all-encompassing
based on EP No. 133, whose validity is still being disputed in the Consolidated Mines cases. A reading of the police power, may alter, modify or amend the same, in accordance with the demands of the general welfare.[22]
appealed MAB decision reveals that the continued efficacy of EP No. 133 is one of the issues raised in said cases,
with respondents therein asserting that Marcopper cannot legally assign the permit which purportedly had Additionally, there can be no valid opposition raised against a mere study of an alternative which the State,
expired. In other words, whether or not petitioner actually has a vested right over Diwalwal under EP No. 133 is through the DENR, is authorized to undertake in the first place. Worth noting is Article XII, Section 2, of the 1987
still an indefinite and unsettled matter. And until a positive pronouncement is made by the appellate court in the Constitution, which specifically provides:
Consolidated Mines cases, EP No. 133 cannot be deemed as a source of any conclusive rights that can be impaired
by the issuance of MO 97-03. SEC. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by
Similarly, there is no merit in petitioners assertion that MO 97-03 sanctions violation of mining laws by the State. With the exception of agricultural lands, all other natural resources shall not be
allowing illegal miners to enter into mining agreements with the State. Again, whether or not respondent BCMC alienated. The exploration, development, and utilization of natural resources shall be under the full control and
and the other mining entities it represents are conducting illegal mining activities is a factual matter that has yet to supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint
be finally determined in the Consolidated Mines cases. We cannot rightfully conclude at this point that respondent venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per
BCMC and the other mining firms are illegitimate mining operators. Otherwise, we would be preempting the centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-
resolution of the cases which are still pending before the Court of Appeals.[19] five years, renewable for not more than twenty-five years, and under such terms and conditions as may be
Petitioners reliance on the Apex Mining case to justify its rights under E.P. No. 133 is misplaced. For one, provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the
the said case was litigated solely between Marcopper and Apex Mining Corporation and cannot thus be deemed development of water power, beneficial use may be the measure and limit of the grant. (Underscoring ours)
binding and conclusive on respondent BCMC and the other mining entities presently involved. While petitioner may
be regarded as Marcoppers successor to EP No. 133 and therefore bound by the judgment rendered in the Apex Likewise, Section 4, Chapter II of the Philippine Mining Act of 1995 states:
Mining case, the same cannot be said of respondent BCMC and the other oppositor mining firms, who were not
impleaded as parties therein. SEC. 4. Ownership of Mineral Resources. - Mineral Resources are owned by the State and the exploration,
development, utilization, and processing thereof shall be under its full control and supervision. The State may
Neither can the Apex Mining case foreclose any question pertaining to the continuing validity of EP No. 133 directly undertake such activities or it may enter into mineral agreements with contractors. (Underscoring ours)
on grounds which arose after the judgment in said case was promulgated. While it is true that the Apex Mining case
settled the issue of who between Apex and Marcopper validly acquired mining rights over the disputed area by
availing of the proper procedural requisites mandated by law, it certainly did not deal with the question raised by Thus, the State may pursue the constitutional policy of full control and supervision of the exploration,
the oppositors in the Consolidated Mines cases, i.e. whether EP No. 133 had already expired and remained development and utilization of the countrys natural mineral resources, by either directly undertaking the same or
valid subsequent to its transfer by Marcopper to petitioner.Besides, as clarified in our decision in the Apex by entering into agreements with qualified entities. The DENR Secretary acted within his authority when he ordered
Mining case: a study of the first option, which may be undertaken consistently in accordance with the constitutional policy
enunciated above. Obviously, the State may not be precluded from considering a direct takeover of the mines, if it
is the only plausible remedy in sight to the gnawing complexities generated by the gold rush. As implied earlier, the
x x x is conclusive only between the parties with respect to the particular issue herein raised and under the set of State need be guided only by the demands of public interest in settling for this option, as well as its material and
circumstances herein prevailing. In no case should the decision be considered as a precedent to resolve or settle logistic feasibility.
claims of persons/entities not parties hereto. Neither is it intended to unsettle rights of persons/entities which
have been acquired or which may have accrued upon reliance on laws passed by appropriate agencies.[20] In this regard, petitioners imputation of bad faith on the part of the DENR Secretary when the latter issued
MO 97-03 is not well-taken. The avowed rationale of the memorandum order is clearly and plainly stated in its
Clearly then, the Apex Mining case did not invest petitioner with any definite right to the Diwalwal mines which whereas clauses.[23] In the absence of any concrete evidence that the DENR Secretary violated the law or abused
it could now set up against respondent BCMC and the other mining groups. his discretion, as in this case, he is presumed to have regularly issued the memorandum with a lawful intent and
pursuant to his official functions.
Incidentally, it must likewise be pointed out that under no circumstances may petitioners rights under EP No.
133 be regarded as total and absolute. As correctly held by the Court of Appeals in its challenged decision, EP No. Given these considerations, petitioners first assigned error is baseless and premised on tentative
133 merely evidences a privilege granted by the State, which may be amended, modified or rescinded when the assumptions. Petitioner cannot claim any absolute right to the Diwalwal mines pending resolution of the
national interest so requires. This is necessarily so since the exploration, development and utilization of the Consolidated Mines cases, much less ask us to assume, at this point, that respondent BCMC and the other mining
countrys natural mineral resources are matters impressed with great public interest. Like timber permits, mining firms are illegal miners. These factual issues are to be properly threshed out in CA G.R. SP Nos. 61215 and 61216,
exploration permits do not vest in the grantee any permanent or irrevocable right within the purview of the non- which have yet to be decided by the Court of Appeals. Any objection raised against MO 97-03 is likewise premature
at this point, inasmuch as it merely ordered a study of an option which the State is authorized by law to undertake.
We see no need to rule on the matter of the OTPs, considering that the grounds invoked by petitioner for WHEREAS, the adverse environmental, safety, health, and sanitation conditions in the area resulting from the
invalidating the same are inextricably linked to the issues raised in the Consolidated Mines cases. mining operations are major concerns that need to be addressed immediately;
WHEREAS, tenurial and mining rights in the area have been characterized by conflicting claims which have to be
WHEREFORE, in view of the foregoing, the instant petition is DENIED. The decision of the Court of Appeals addressed in an atmosphere of peaceful coexistence among the various stakeholders, and within the framework
in CA-G.R. SP No. 44693 is AFFIRMED. of the law, so that a comprehensive development of the area can be carried out;
SO ORDERED. WHEREAS, a rationalized gold-mining operation in the area offers the opportunity of putting in place viable
measures that would ensure the sustained livelihood of the stakeholders therein, and would optimize the benefits
Davide, Jr., C.J., (Chairman), and Kapunan, J., concur. which may be derived from the irreplaceable mineral resources, in accordance with the sustainable development
Puno, J., on official leave. strategy of the government;
WHEREAS, appropriate measures have to be set in place so that the necessary sanctions and penalties can be
[1] Rollo, pp. 131-132. imposed, and the appropriate compensation schemes may be applied in cases involving environmental
[2] G.R. No. 92605, 199 SCRA 278 (1991). degradation and also for the purpose of preventing its further occurrence;
[3] R.A. No. 7076, Section 4.
WHEREAS, the government must take adequate measures within the framework of the law to protect the
[4] Ibid., at Section 24.
livelihood of the people; minimize, if not eliminate, the adverse effects of mining in the community; enhance
[5] Id., at Section 5.
safety in mining operations, and ensure that revenues due the government from the development of mineral
[6] Id., at Section 9.
resources are properly paid and collected;
[7] CA Rollo, p. 187.
WHEREAS, the government still has to study prudently and exhaustively the various options available to it in
[8] Rollo, p. 128.
rationalizing the Diwalwal Gold Rush Area situation, as well as seek better options, if any, in coming out with a
[9] Ibid., p.174.
rationalization plan that would be just and fair to all concerned parties in the Diwalwal Gold Rush Area; x x x.
[10] Id., pp. 177-179.
[11] Id., p.178.
[12] Id., pp. 232-257.
[13] Mr. Justice Romeo J. Callejo, Sr., ponente; Messrs. Justices Quirino D. Abad-Santos, Jr. and Eduardo G.

Montenegro, concurring; Mr. Justice Omar U. Amin and Mme. Justice Angelina Sandoval-Gutierrez, dissenting.
[14] Rollo, p. 122.
[15] Id., pp. 27-28.
[16] Per Resolution of the Second Division of the Supreme Court dated September 11, 2000.
[17] Rollo, pp. 85-86.
[18] See Mariano v. Commission on Elections, 242 SCRA 211, 221 (1995) and Board of Optometry v. Colet, 260

SCRA 88, 104 (1996), citing Garcia v. Executive Secretary, 204 SCRA 516 (1991).
[19] See Sta. Rosa Mining Co., Inc. v. Leido, Jr., 156 SCRA 1 (1987). In this analogous case, the Court refused to

recognize the continuing validity of petitioners mining claim, due to the pendency of an appeal to the Office of the
President from a decision of the Secretary of Natural Resources, upholding the Director of Mines ruling that said
mining claim was cancelled and abandoned for failure to comply with legal requirements under applicable laws.
[20] Minutes of the Court En Banc, November 26, 1992.
[21] See Sta. Ines Melale Forest Products Corporation v. Macaraig, Jr., 299 SCRA 491, 514-515 (1998), citing

Tan v. Director of Forestry, 125 SCRA 302, 325-326 (1983); Oposa v. Factoran, 224 SCRA 792, 811-812 (1993).
[22] See Ysmael, Jr. & Co., Inc. v. Deputy Executive Secretary, 190 SCRA 673, 684 (1990), citing Tan v. Director

of Forestry, supra; Miners Association of the Philippines, Inc. v. Factoran, 240 SCRA 100, 118-120 (1995) and
cases cited therein.
[23] WHEREAS, tens of thousands of miners, local entrepreneurs, and service providers are earning their

livelihood from the mining operations in the Diwalwal Gold Rush Area in Mt. Diwata, Monkayo, Davao Del Norte;
WHEREAS, the advent of gold mining in the area contributed substantially in arresting the insurgency problem in
the province, and in improving the local and regional economy;
The MMDA also refuted Garins allegation that the Metro Manila Council, the governing board and policy
[G.R. No. 130230. April 15, 2005] making body of the petitioner, has as yet to formulate the implementing rules for Sec. 5(f) of Rep. Act No. 7924
and directed the courts attention to MMDA Memorandum Circular No. TT-95-001 dated 15 April 1995. Respondent
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs. DANTE O. GARIN, respondent. Garin, however, questioned the validity of MMDA Memorandum Circular No. TT-95-001, as he claims that it was
passed by the Metro Manila Council in the absence of a quorum.
DECISION Judge Helen Bautista-Ricafort issued a temporary restraining order on 26 September 1995, extending the
CHICO-NAZARIO, J.: validity of the TVR as a temporary drivers license for twenty more days. A preliminary mandatory injunction was
granted on 23 October 1995, and the MMDA was directed to return the respondents drivers license.
At issue in this case is the validity of Section 5(f) of Republic Act No. 7924 creating the Metropolitan Manila On 14 August 1997, the trial court rendered the assailed decision [5] in favor of the herein respondent and
Development Authority (MMDA), which authorizes it to confiscate and suspend or revoke drivers licenses in the held that:
enforcement of traffic laws and regulations.
The issue arose from an incident involving the respondent Dante O. Garin, a lawyer, who was issued a traffic a. There was indeed no quorum in that First Regular Meeting of the MMDA Council held on March 23, 1995,
violation receipt (TVR) and his drivers license confiscated for parking illegally along Gandara Street, Binondo, hence MMDA Memorandum Circular No. TT-95-001, authorizing confiscation of drivers licenses upon issuance
Manila, on 05 August 1995. The following statements were printed on the TVR: of a TVR, is void ab initio.

YOU ARE HEREBY DIRECTED TO REPORT TO THE MMDA TRAFFIC OPERATIONS CENTER PORT AREA b. The summary confiscation of a drivers license without first giving the driver an opportunity to be heard;
MANILA AFTER 48 HOURS FROM DATE OF APPREHENSION FOR DISPOSITION/APPROPRIATE ACTION depriving him of a property right (drivers license) without DUE PROCESS; not filling (sic) in Court the complaint
THEREON. CRIMINAL CASE SHALL BE FILED FOR FAILURE TO REDEEM LICENSE AFTER 30 DAYS. of supposed traffic infraction, cannot be justified by any legislation (and is) hence unconstitutional.

VALID AS TEMPORARY DRIVERS LICENSE FOR SEVEN DAYS FROM DATE OF APPREHENSION.[1] WHEREFORE, the temporary writ of preliminary injunction is hereby made permanent; th(e) MMDA is directed to
return to plaintiff his drivers license; th(e) MMDA is likewise ordered to desist from confiscating drivers license
without first giving the driver the opportunity to be heard in an appropriate proceeding.
Shortly before the expiration of the TVRs validity, the respondent addressed a letter[2] to then MMDA
Chairman Prospero Oreta requesting the return of his drivers license, and expressing his preference for his case
to be filed in court. In filing this petition,[6] the MMDA reiterates and reinforces its argument in the court below and contends that
a license to operate a motor vehicle is neither a contract nor a property right, but is a privilege subject to reasonable
Receiving no immediate reply, Garin filed the original complaint [3] with application for preliminary injunction regulation under the police power in the interest of the public safety and welfare. The petitioner further argues that
in Branch 260 of the Regional Trial Court (RTC) of Paraaque, on 12 September 1995, contending that, in the revocation or suspension of this privilege does not constitute a taking without due process as long as the licensee
absence of any implementing rules and regulations, Sec. 5(f) of Rep. Act No. 7924 grants the MMDA unbridled is given the right to appeal the revocation.
discretion to deprive erring motorists of their licenses, pre-empting a judicial determination of the validity of the
deprivation, thereby violating the due process clause of the Constitution. The respondent further contended that To buttress its argument that a licensee may indeed appeal the taking and the judiciary retains the power to
the provision violates the constitutional prohibition against undue delegation of legislative authority, allowing as it determine the validity of the confiscation, suspension or revocation of the license, the petitioner points out that
does the MMDA to fix and impose unspecified and therefore unlimited - fines and other penalties on erring under the terms of the confiscation, the licensee has three options:
motorists. 1. To voluntarily pay the imposable fine,
In support of his application for a writ of preliminary injunction, Garin alleged that he suffered and continues 2. To protest the apprehension by filing a protest with the MMDA Adjudication Committee, or
to suffer great and irreparable damage because of the deprivation of his license and that, absent any implementing
rules from the Metro Manila Council, the TVR and the confiscation of his license have no legal basis. 3. To request the referral of the TVR to the Public Prosecutors Office.
For its part, the MMDA, represented by the Office of the Solicitor General, pointed out that the powers granted The MMDA likewise argues that Memorandum Circular No. TT-95-001 was validly passed in the presence
to it by Sec. 5(f) of Rep. Act No. 7924 are limited to the fixing, collection and imposition of fines and penalties for of a quorum, and that the lower courts finding that it had not was based on a misapprehension of facts, which the
traffic violations, which powers are legislative and executive in nature; the judiciary retains the right to determine petitioner would have us review. Moreover, it asserts that though the circular is the basis for the issuance of TVRs,
the validity of the penalty imposed. It further argued that the doctrine of separation of powers does not preclude the basis for the summary confiscation of licenses is Sec. 5(f) of Rep. Act No. 7924 itself, and that such power is
admixture of the three powers of government in administrative agencies.[4] self-executory and does not require the issuance of any implementing regulation or circular.
Meanwhile, on 12 August 2004, the MMDA, through its Chairman Bayani Fernando, implemented In Metro Manila Development Authority v. Bel-Air Village Association, Inc.,[14] we categorically stated that
Memorandum Circular No. 04, Series of 2004, outlining the procedures for the use of the Metropolitan Traffic Ticket Rep. Act No. 7924 does not grant the MMDA with police power, let alone legislative power, and that all its functions
(MTT) scheme. Under the circular, erring motorists are issued an MTT, which can be paid at any Metrobank branch. are administrative in nature.
Traffic enforcers may no longer confiscate drivers licenses as a matter of course in cases of traffic violations. All
motorists with unredeemed TVRs were given seven days from the date of implementation of the new system to The said case also involved the herein petitioner MMDA which claimed that it had the authority to open a
pay their fines and redeem their license or vehicle plates. [7] subdivision street owned by the Bel-Air Village Association, Inc. to public traffic because it is an agent of the state
endowed with police power in the delivery of basic services in Metro Manila. From this premise, the MMDA argued
It would seem, therefore, that insofar as the absence of a prima facie case to enjoin the petitioner from that there was no need for the City of Makati to enact an ordinance opening Neptune Street to the public.
confiscating drivers licenses is concerned, recent events have overtaken the Courts need to decide this case,
which has been rendered moot and academic by the implementation of Memorandum Circular No. 04, Series of Tracing the legislative history of Rep. Act No. 7924 creating the MMDA, we concluded that the MMDA is not
2004. a local government unit or a public corporation endowed with legislative power, and, unlike its predecessor, the
Metro Manila Commission, it has no power to enact ordinances for the welfare of the community. Thus, in the
The petitioner, however, is not precluded from re-implementing Memorandum Circular No. TT-95-001, or any absence of an ordinance from the City of Makati, its own order to open the street was invalid.
other scheme, for that matter, that would entail confiscating drivers licenses. For the proper implementation,
therefore, of the petitioners future programs, this Court deems it appropriate to make the following observations: We restate here the doctrine in the said decision as it applies to the case at bar: police power, as an inherent
attribute of sovereignty, is the power vested by the Constitution in the legislature to make, ordain, and establish all
1. A license to operate a motor vehicle is a privilege that the state may withhold in the exercise of its police power. manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not
repugnant to the Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the
The petitioner correctly points out that a license to operate a motor vehicle is not a property right, but a subjects of the same.
privilege granted by the state, which may be suspended or revoked by the state in the exercise of its police power,
in the interest of the public safety and welfare, subject to the procedural due process requirements. This is Having been lodged primarily in the National Legislature, it cannot be exercised by any group or body of
consistent with our rulings in Pedro v. Provincial Board of Rizal[8] on the license to operate a cockpit, Tan v. Director individuals not possessing legislative power. The National Legislature, however, may delegate this power to the
of Forestry[9] and Oposa v. Factoran[10] on timber licensing agreements, and Surigao Electric Co., Inc. v. president and administrative boards as well as the lawmaking bodies of municipal corporations or local government
Municipality of Surigao[11] on a legislative franchise to operate an electric plant. units (LGUs). Once delegated, the agents can exercise only such legislative powers as are conferred on them by
the national lawmaking body.
Petitioner cites a long list of American cases to prove this point, such as State ex. Rel. Sullivan,[12] which
states in part that, the legislative power to regulate travel over the highways and thoroughfares of the state for the Our Congress delegated police power to the LGUs in the Local Government Code of 1991. [15] A local
general welfare is extensive. It may be exercised in any reasonable manner to conserve the safety of travelers and government is a political subdivision of a nation or state which is constituted by law and has substantial control of
pedestrians. Since motor vehicles are instruments of potential danger, their registration and the licensing of their local affairs.[16] Local government units are the provinces, cities, municipalities and barangays, which exercise
operators have been required almost from their first appearance. The right to operate them in public places is not police power through their respective legislative bodies.
a natural and unrestrained right, but a privilege subject to reasonable regulation, under the police power, in the
interest of the public safety and welfare. The power to license imports further power to withhold or to revoke such Metropolitan or Metro Manila is a body composed of several local government units. With the passage of
license upon noncompliance with prescribed conditions. Rep. Act No. 7924 in 1995, Metropolitan Manila was declared as a "special development and administrative region"
and the administration of "metro-wide" basic services affecting the region placed under "a development authority"
Likewise, the petitioner quotes the Pennsylvania Supreme Court in Commonwealth v. Funk,[13] to the effect referred to as the MMDA. Thus:
that: Automobiles are vehicles of great speed and power. The use of them constitutes an element of danger to
persons and property upon the highways. Carefully operated, an automobile is still a dangerous instrumentality, . . . [T]he powers of the MMDA are limited to the following acts: formulation, coordination, regulation,
but, when operated by careless or incompetent persons, it becomes an engine of destruction. The Legislature, in implementation, preparation, management, monitoring, setting of policies, installation of a system and
the exercise of the police power of the commonwealth, not only may, but must, prescribe how and by whom motor administration. There is no syllable in R. A. No. 7924 that grants the MMDA police power, let alone
vehicles shall be operated on the highways. One of the primary purposes of a system of general regulation of the legislative power. Even the Metro Manila Council has not been delegated any legislative power. Unlike the
subject matter, as here by the Vehicle Code, is to insure the competency of the operator of motor vehicles. Such legislative bodies of the local government units, there is no provision in R. A. No. 7924 that empowers the
a general law is manifestly directed to the promotion of public safety and is well within the police power. MMDA or its Council to "enact ordinances, approve resolutions and appropriate funds for the general
The common thread running through the cited cases is that it is the legislature, in the exercise of police welfare" of the inhabitants of Metro Manila. The MMDA is, as termed in the charter itself, a "development
power, which has the power and responsibility to regulate how and by whom motor vehicles may be operated on authority." It is an agency created for the purpose of laying down policies and coordinating with the
the state highways. various national government agencies, people's organizations, non-governmental organizations and the
private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area. All
2. The MMDA is not vested with police power. its functions are administrative in nature and these are actually summed up in the charter itself, viz:
Sec. 2. Creation of the Metropolitan Manila Development Authority. -- -x x x. law, which we can but interpret, and petitioner must be reminded that its efforts in this respect must be authorized
by a valid law, or ordinance, or regulation arising from a legitimate source.
The MMDA shall perform planning, monitoring and coordinative functions, and in the process exercise WHEREFORE, the petition is DISMISSED.
regulatory and supervisory authority over the delivery of metro-wide services within Metro Manila, without
diminution of the autonomy of the local government units concerning purely local matters. SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that given to the
Metro Manila Council to promulgate administrative rules and regulations in the implementation of the MMDAs
functions. There is no grant of authority to enact ordinances and regulations for the general welfare of the
inhabitants of the metropolis. [17] (footnotes omitted, emphasis supplied) [1] Records, p. 10.
[2] Id., p. 11.
Therefore, insofar as Sec. 5(f) of Rep. Act No. 7924 is understood by the lower court and by the petitioner to [3] Id., p. 1.
grant the MMDA the power to confiscate and suspend or revoke drivers licenses without need of any other [4] Memorandum for Defendants, Records, pp. 178 -185.
legislative enactment, such is an unauthorized exercise of police power. [5] Id., pp. 187-190, penned by Hon. Helen Bautista-Ricafort.
[6] Records, pp. 197-225.
3. Sec. 5(f) grants the MMDA with the duty to enforce existing traffic rules and regulations. [7] Sec. 7, Mem. Circ. No. 04, Series of 2004.

Section 5 of Rep. Act No. 7924 enumerates the Functions and Powers of the Metro Manila Development [8] 56 Phil 123 (1931).

Authority. The contested clause in Sec. 5(f) states that the petitioner shall install and administer a single ticketing [9] G.R. No. L-24548, 27 October 1983, 125 SCRA 302.

system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and regulations, whether [10] G.R. No. 101083, 30 July 1993, 224 SCRA 792.

moving or nonmoving in nature, and confiscate and suspend or revoke drivers licenses in the enforcement of such [11] G.R. No. L-22766, 30 August 1968, 24 SCRA 898.

traffic laws and regulations, the provisions of Rep. Act No. 4136[18] and P.D. No. 1605[19] to the contrary [12] 63 P. 2d 653, 108 ALR 1156, 1159.

notwithstanding, and that (f)or this purpose, the Authority shall enforce all traffic laws and regulations in Metro [13] 323 Pa. 390, 186 A. 65 (108 ALR 1161).

Manila, through its traffic operation center, and may deputize members of the PNP, traffic enforcers of local [14] G.R. No. 135962, 27 March 2000, 328 SCRA 836, penned by Justice Reynato S. Puno.

government units, duly licensed security guards, or members of non-governmental organizations to whom may be [15] Sec. 16 of Book I of the Local Government Code of 1991 states:

delegated certain authority, subject to such conditions and requirements as the Authority may impose. General Welfare.-Every local government unit shall exercise the powers expressly granted, those necessarily
implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
Thus, where there is a traffic law or regulation validly enacted by the legislature or those agencies to whom governance, and those which are essential to the promotion of the general welfare. Within their respective
legislative powers have been delegated (the City of Manila in this case), the petitioner is not precluded and in fact territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and
is duty-bound to confiscate and suspend or revoke drivers licenses in the exercise of its mandate of transport and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology,
traffic management, as well as the administration and implementation of all traffic enforcement operations, traffic encourage and support the development of appropriate and self-reliant scientific and technological capabilities,
engineering services and traffic education programs.[20] improve public morals, enhance economic prosperity and social justice, promote full employment among their
This is consistent with our ruling in Bel-Air that the MMDA is a development authority created for the purpose residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.
[16] Supra, Note 18, p. 844, citing Bernas, The 1987 Constitution of the Philippines, A Commentary, pp. 95-98
of laying down policies and coordinating with the various national government agencies, peoples organizations,
non-governmental organizations and the private sector, which may enforce, but not enact, ordinances. [1996], citing UP Law Center Revision Project, Part II, 712 [1970] citing Sady, Improvement of Local Government
Administration for Development Purpose, Journal of Local Administration Overseas 135 [July 1962].
This is also consistent with the fundamental rule of statutory construction that a statute is to be read in a [17] Ibid., pp. 849-860.

manner that would breathe life into it, rather than defeat it,[21] and is supported by the criteria in cases of this nature [18] Entitled An Act to Compile the Laws Relative to Land Transportation and Traffic Rules, to Create a Land

that all reasonable doubts should be resolved in favor of the constitutionality of a statute. [22] Transportation Commission and for Other Purposes, approved on 20 June 1964. Sec. 29 thereof states:
Confiscation of drivers license.- Law enforcement and peace officers duly designated by the Commissioner shall,
A last word. The MMDA was intended to coordinate services with metro-wide impact that transcend local
in apprehending any driver for violations of this Act or of any regulations issued pursuant thereto, or of local traffic
political boundaries or would entail huge expenditures if provided by the individual LGUs, especially with regard to
rules and regulations, confiscate the license of the driver concerned and issue a receipt prescribed and issued by
transport and traffic management,[23] and we are aware of the valiant efforts of the petitioner to untangle the
the Commission therefore which shall authorize the driver to operate a motor vehicle for a period not exceeding
increasingly traffic-snarled roads of Metro Manila. But these laudable intentions are limited by the MMDAs enabling
seventy-two hours from the time and date of issue of said receipt. The period so fixed in the receipt shall not be
extended, and shall become invalid thereafter. Failure of the driver to settle his case within fifteen days from the July 1987 152 SCRA 540; Peralta v. COMELEC, G.R. No. L-47791, 11 March 1978, 82 SCRA 55; People v.
date of apprehension will cause suspension and revocation of his license. (emphasis supplied) Vera, GR No. 45685, 65 Phil 56 [1937].)
[19] Entitled Granting the Metropolitan Manila Commission Certain Powers Related to Traffic Management and [23] Section 3(b), Republic Act No. 7924.

Control in Metropolitan Manila, Providing Penalties, and for Other Purposes, dated 21 November 1978.
SEC. 5.- In case of traffic violations, the drivers license shall not be confiscated but the erring driver shall be
immediately issued a traffic citation ticket prescribed by the Metropolitan Manila Commission which shall state
the violation committed, the amount of fine imposed for the violation and an advice that he can make payment to
the city or municipal treasurer where the violation was committed or to the Philippine National Bank or Philippine
Veterans Bank or their branches within seven days from the date of issuance of the citation ticket. (emphasis
supplied)
[20] Section 3(b), Rep. Act No. 7924.
[21] Thus, in Briad Agro Development Corporation v. dela Serna, (G.R. No. 82805, 29 June 1989, 174 SCRA 524)

we upheld the grant of concurrent jurisdiction between the Secretary of Labor or its Regional Directors and the
Labor Arbiters to pass upon money claims, among other cases, the provisions of Article 217 of this Code to the
contrary notwithstanding, as enunciated in Executive Order No. 111. Holding that E.O. 111 was a curative law
intended to widen workers access to the Government for redress of grievances, we held,the Executive Order
vests in Regional Directors jurisdiction, [t]he provisions of Article 217 of this Code to the contrary notwithstanding,
it would have rendered such a proviso - and the amendment itself - useless to say that they (Regional Directors)
retained the self-same restricted powers, despite such an amendment. It is fundamental that a statute is to be
read in a manner that would breathe life into it, rather than defeat it. (See also Philtread Workers Union v.
Confessor, G.R. No. 117169, 12 March 1997, 269 SCRA 393.)
[22] In Heirs of Ardona v. Reyes, (G.R. No. 60549, 26 October 1983, 125 SCRA 221) we upheld the

constitutionality of Presidential Decree No. 564, the Revised Charter of the Philippine Tourism Authority, and
Proclamation No. 2052 declaring certain municipalities in the province of Cebu as tourist zones. The law granted
the Philippine Tourism authority the right to expropriate 282 hectares of land to establish a resort complex
notwithstanding the claim that certificates of land transfer and emancipation patents had already been issued to
them thereby making the lands expropriated within the coverage of the land reform area under Presidential
Decree No. 2, and that the agrarian reform program occupies a higher level in the order of priorities than other
State policies like those relating to the health and physical well-being of the people, and that property already
taken for public use may not be taken for another public use. We held that, (t)he petitioners have failed to
overcome the burden of anyone trying to strike down a statute or decree whose avowed purpose is the legislative
perception of the public good. A statute has in its favor the presumption of validity. All reasonable doubts should
be resolved in favor of the constitutionality of a law. The courts will not set aside a law as violative of the
Constitution except in a clear case (People v. Vera, 65 Phil. 56). And in the absence of factual findings or
evidence to rebut the presumption of validity, the presumption prevails (Ermita-Malate Hotel, etc. v. Mayor of
Manila, 20 SCRA 849; Morfe v. Mutuc, 22 SCRA 424).
In the same manner, we upheld in Dumlao v. COMELEC (G.R. No. L-52245, 22 January 1980, 95 SCRA 392)
the first paragraph of Section 4 of Batas Pambansa Bilang 52 providing that any retired elective provincial, city or
municipal official, who has received payment of the retirement benefits and who shall have been 65 years of age
at the commencement of the term of office to which he seeks to be elected is disqualified to run for the same
elective local office from which he has retired. Invoking the need for the emergence of younger blood in local
politics, we affirmed that the constitutional guarantee is not violated by a reasonable classification based upon
substantial distinctions, where the classification is germane to the purpose of the law and applies to all those
belonging to the same class. (See also Tropical Homes, Inc, v. National Housing Authority, G.R. No. L-48672, 31
EN BANC
drugstores compliance with the law; promulgate the implementing rules and regulations for the effective
CARLOS SUPERDRUG CORP., G.R. No. 166494 implementation of the law; and prosecute and revoke the licenses of erring drugstore establishments.
doing business under the name
and style Carlos Superdrug, Present: The antecedents are as follows:
ELSIE M. CANO, doing business On February 26, 2004, R.A. No. 9257, amending R.A. No. 7432, [3] was signed into law by President
under the name and style Advance PUNO, C.J.,
Drug, Dr. SIMPLICIO L. YAP, JR., QUISUMBING,* Gloria Macapagal-Arroyo and it became effective on March 21, 2004. Section 4(a) of the Act states:
doing business under the name and YNARES-SANTIAGO,
style City Pharmacy, MELVIN S. SANDOVAL-GUTIERREZ,** SEC. 4. Privileges for the Senior Citizens. The senior citizens shall be entitled to the following:
DELA SERNA, doing business under CARPIO,
the name and style Botica dela Serna, AUSTRIA-MARTINEZ, (a) the grant of twenty percent (20%) discount from all establishments relative to the
and LEYTE SERV-WELL CORP., CORONA, utilization of services in hotels and similar lodging establishments, restaurants and recreation
doing business under the name and CARPIO MORALES, centers, and purchase of medicines in all establishments for the exclusive use or enjoyment of
style Leyte Serv-Well Drugstore, AZCUNA, senior citizens, including funeral and burial services for the death of senior citizens;
Petitioners, TINGA,
CHICO-NAZARIO, ...
- versus - GARCIA,
VELASCO, JR., and The establishment may claim the discounts granted under (a), (f), (g) and (h) as tax
DEPARTMENT OF SOCIAL NACHURA, JJ. deduction based on the net cost of the goods sold or services rendered: Provided, That the cost
WELFARE and DEVELOPMENT of the discount shall be allowed as deduction from gross income for the same taxable year that the
(DSWD), DEPARTMENT OF Promulgated: discount is granted. Provided, further, That the total amount of the claimed tax deduction net of
HEALTH (DOH), DEPARTMENT value added tax if applicable, shall be included in their gross sales receipts for tax purposes and
OF FINANCE (DOF), DEPARTMENT June 29, 2007 shall be subject to proper documentation and to the provisions of the National Internal Revenue
OF JUSTICE (DOJ), and Code, as amended.[4]
DEPARTMENT OF INTERIOR and
LOCAL GOVERNMENT (DILG),
Respondents. On May 28, 2004, the DSWD approved and adopted the Implementing Rules and Regulations of R.A.
x ---------------------------------------------------------------------------------------- x
No. 9257, Rule VI, Article 8 of which states:
DECISION
Article 8. Tax Deduction of Establishments. The establishment may claim the discounts
granted under Rule V, Section 4 Discounts for Establishments;[5] Section 9, Medical and Dental
AZCUNA, J.: Services in Private Facilities[,][6] and Sections 10[7] and 11[8] Air, Sea and Land Transportation as
tax deduction based on the net cost of the goods sold or services rendered. Provided, That the
This is a petition[1] for Prohibition with Prayer for Preliminary Injunction assailing the constitutionality of cost of the discount shall be allowed as deduction from gross income for the same taxable year
Section 4(a) of Republic Act (R.A.) No. 9257,[2] otherwise known as the Expanded Senior Citizens Act of 2003. that the discount is granted; Provided, further, That the total amount of the claimed tax deduction
net of value added tax if applicable, shall be included in their gross sales receipts for tax purposes
and shall be subject to proper documentation and to the provisions of the National Internal Revenue
Petitioners are domestic corporations and proprietors operating drugstores in the Philippines. Code, as amended; Provided, finally, that the implementation of the tax deduction shall be subject
to the Revenue Regulations to be issued by the Bureau of Internal Revenue (BIR) and approved
Public respondents, on the other hand, include the Department of Social Welfare and Development (DSWD), the by the Department of Finance (DOF).[9]
Department of Health (DOH), the Department of Finance (DOF), the Department of Justice (DOJ), and the
Department of Interior and Local Government (DILG) which have been specifically tasked to monitor the
A simple illustration might help amplify the points discussed above, as follows:
On July 10, 2004, in reference to the query of the Drug Stores Association of the Philippines (DSAP)
concerning the meaning of a tax deduction under the Expanded Senior Citizens Act, the DOF, through Tax Deduction Tax Credit
Director IV Ma. Lourdes B. Recente, clarified as follows:
Gross Sales x x x x x x x x x x x x
1) The difference between the Tax Credit (under the Old Senior Citizens Act) and
Less : Cost of goods sold x x x x x x x x x x
Tax Deduction (under the Expanded Senior Citizens Act).
Net Sales x x x x x x x x x x x x
1.1. The provision of Section 4 of R.A. No. 7432 (the old Senior Citizens Act) grants twenty
percent (20%) discount from all establishments relative to the utilization of transportation services, Less: Operating Expenses:
hotels and similar lodging establishment, restaurants and recreation centers and purchase of Tax Deduction on Discounts x x x x --
medicines anywhere in the country, the costs of which may be claimed by the private
establishments concerned as tax credit. Other deductions: x x x x x x x x
Net Taxable Income x x x x x x x x x x
Effectively, a tax credit is a peso-for-peso deduction from a taxpayers tax liability due to the
government of the amount of discounts such establishment has granted to a senior citizen. The Tax Due x x x x x x
establishment recovers the full amount of discount given to a senior citizen and hence, the Less: Tax Credit -- ______x x
government shoulders 100% of the discounts granted.
Net Tax Due -- x x
It must be noted, however, that conceptually, a tax credit scheme under the Philippine tax
system, necessitates that prior payments of taxes have been made and the taxpayer is attempting
As shown above, under a tax deduction scheme, the tax deduction on
to recover this tax payment from his/her income tax due. The tax credit scheme under R.A. No.
discounts was subtracted from Net Sales together with other deductions which are considered
7432 is, therefore, inapplicable since no tax payments have previously occurred.
as operating expenses before the Tax Due was computed based on the Net Taxable Income.
On the other hand, under a tax credit scheme, the amount of discounts which is the tax
1.2. The provision under R.A. No. 9257, on the other hand, provides that the
credit item, was deducted directly from the tax due amount.[10]
establishment concerned may claim the discounts under Section 4(a), (f), (g) and (h) as tax
deduction from gross income, based on the net cost of goods sold or services rendered.
Meanwhile, on October 1, 2004, Administrative Order (A.O.) No. 171 or the Policies and Guidelines to
Under this scheme, the establishment concerned is allowed to deduct from gross income, in
computing for its tax liability, the amount of discounts granted to senior citizens. Effectively, the Implement the Relevant Provisions of Republic Act 9257, otherwise known as the Expanded Senior Citizens Act
government loses in terms of foregone revenues an amount equivalent to the marginal tax rate the of 2003[11] was issued by the DOH, providing the grant of twenty percent (20%) discount in the purchase of
said establishment is liable to pay the government. This will be an amount equivalent to 32% of the
twenty percent (20%) discounts so granted. The establishment shoulders the remaining portion of unbranded generic medicines from all establishments dispensing medicines for the exclusive use of the senior
the granted discounts. citizens.
It may be necessary to note that while the burden on [the] government is slightly diminished On November 12, 2004, the DOH issued Administrative Order No 177[12] amending A.O. No. 171. Under A.O. No.
in terms of its percentage share on the discounts granted to senior citizens, the number of potential
177, the twenty percent discount shall not be limited to the purchase of unbranded generic medicines only, but
establishments that may claim tax deductions, have however, been broadened. Aside from the
establishments that may claim tax credits under the old law, more establishments were added shall extend to both prescription and non-prescription medicines whether branded or generic. Thus, it stated that
under the new law such as: establishments providing medical and dental services, diagnostic and
laboratory services, including professional fees of attending doctors in all private hospitals and [t]he grant of twenty percent (20%) discount shall be provided in the purchase of medicines from all establishments
medical facilities, operators of domestic air and sea transport services, public railways and skyways dispensing medicines for the exclusive use of the senior citizens.
and bus transport services.
Petitioners assail the constitutionality of Section 4(a) of the Expanded Senior Citizens Act based on the following The permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private
grounds:[13] property for public use or benefit.[17] This constitutes compensable taking for which petitioners would ordinarily
become entitled to a just compensation.
1) The law is confiscatory because it infringes Art. III, Sec. 9 of the Constitution
which provides that private property shall not be taken for public use without just compensation; Just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator. The measure is not the takers gain but the owners loss. The word just is used to intensify the meaning
2) It violates the equal protection clause (Art. III, Sec. 1) enshrined in our
Constitution which states that no person shall be deprived of life, liberty or property without due of the word compensation, and to convey the idea that the equivalent to be rendered for the property to be taken
process of law, nor shall any person be denied of the equal protection of the laws; and shall be real, substantial, full and ample.[18]
3) The 20% discount on medicines violates the constitutional guarantee in Article
XIII, Section 11 that makes essential goods, health and other social services available to all people A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would not
at affordable cost.[14]
meet the definition of just compensation.[19]
Having said that, this raises the question of whether the State, in promoting the health and welfare of a
Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation of private
special group of citizens, can impose upon private establishments the burden of partly subsidizing a government
property. Compelling drugstore owners and establishments to grant the discount will result in a loss of profit and
program.
capital because 1) drugstores impose a mark-up of only 5% to 10% on branded medicines; and 2) the law failed to
The Court believes so.
provide a scheme whereby drugstores will be justly compensated for the discount.
The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens to nation-
Examining petitioners arguments, it is apparent that what petitioners are ultimately questioning is the
building, and to grant benefits and privileges to them for their improvement and well-being as the State considers
validity of the tax deduction scheme as a reimbursement mechanism for the twenty percent (20%) discount that
them an integral part of our society.[20]
they extend to senior citizens.
The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself. Thus,
Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners
the Act provides:
for the discount privilege accorded to senior citizens. This is because the discount is treated as a deduction, a tax-
deductible expense that is subtracted from the gross income and results in a lower taxable income. Stated SEC. 2. Republic Act No. 7432 is hereby amended to read as follows:
otherwise, it is an amount that is allowed by law[15] to reduce the income prior to the application of the tax rate to SECTION 1. Declaration of Policies and Objectives. Pursuant to Article XV, Section 4 of
compute the amount of tax which is due.[16] Being a tax deduction, the discount does not reduce taxes owed on a the Constitution, it is the duty of the family to take care of its elderly members while the State may
design programs of social security for them. In addition to this, Section 10 in the Declaration of
peso for peso basis but merely offers a fractional reduction in taxes owed. Principles and State Policies provides: The State shall provide social justice in all phases of national
development. Further, Article XIII, Section 11, provides: The State shall adopt an integrated and
Theoretically, the treatment of the discount as a deduction reduces the net income of the private
comprehensive approach to health development which shall endeavor to make essential goods,
establishments concerned. The discounts given would have entered the coffers and formed part of the gross sales health and other social services available to all the people at affordable cost. There shall be priority
for the needs of the underprivileged sick, elderly, disabled, women and children. Consonant with
of the private establishments, were it not for R.A. No. 9257. these constitutional principles the following are the declared policies of this Act:
(f) To recognize the important role of the private sector in the improvement of the
welfare of senior citizens and to actively seek their partnership.[21] financial report, so that they have not been able to show properly whether or not the tax deduction scheme really
works greatly to their disadvantage.[27]
To implement the above policy, the law grants a twenty percent discount to senior citizens for medical and dental
services, and diagnostic and laboratory fees; admission fees charged by theaters, concert halls, circuses, carnivals, In treating the discount as a tax deduction, petitioners insist that they will incur losses because, referring
and other similar places of culture, leisure and amusement; fares for domestic land, air and sea travel; utilization to the DOF Opinion, for every P1.00 senior citizen discount that petitioners would give, P0.68 will be shouldered
of services in hotels and similar lodging establishments, restaurants and recreation centers; and purchases of by them as only P0.32 will be refunded by the government by way of a tax deduction.
medicines for the exclusive use or enjoyment of senior citizens. As a form of reimbursement, the law provides that To illustrate this point, petitioner Carlos Super Drug cited the anti-hypertensive maintenance
business establishments extending the twenty percent discount to senior citizens may claim the discount as a tax drug Norvasc as an example. According to the latter, it acquires Norvasc from the distributors at P37.57 per tablet,
deduction. and retails it at P39.60 (or at a margin of 5%). If it grants a 20% discount to senior citizens or an amount equivalent
to P7.92, then it would have to sell Norvasc at P31.68 which translates to a loss from capital of P5.89 per tablet.
The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare Even if the government will allow a tax deduction, only P2.53 per tablet will be refunded and not the full amount of
for its object. Police power is not capable of an exact definition, but has been purposely veiled in general terms to the discount which is P7.92. In short, only 32% of the 20% discount will be reimbursed to the drugstores.[28]
underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible Petitioners computation is flawed. For purposes of reimbursement, the law states that the cost of the
response to conditions and circumstances, thus assuring the greatest benefits. [22] Accordingly, it has been discount shall be deducted from gross income,[29] the amount of income derived from all sources before deducting
described as the most essential, insistent and the least limitable of powers, extending as it does to all the great allowable expenses, which will result in net income. Here, petitioners tried to show a loss on a per transaction
public needs.[23] It is [t]he power vested in the legislature by the constitution to make, ordain, and establish all basis, which should not be the case. An income statement, showing an accounting of petitioners sales, expenses,
manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not and net profit (or loss) for a given period could have accurately reflected the effect of the discount on their income.
repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the Absent any financial statement, petitioners cannot substantiate their claim that they will be operating at a loss
subjects of the same.[24] should they give the discount. In addition, the computation was erroneously based on the assumption that their
For this reason, when the conditions so demand as determined by the legislature, property rights must customers consisted wholly of senior citizens. Lastly, the 32% tax rate is to be imposed on income, not on the
bow to the primacy of police power because property rights, though sheltered by due process, must yield to general amount of the discount.
welfare.[25]
Police power as an attribute to promote the common good would be diluted considerably if on the mere Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices of their
plea of petitioners that they will suffer loss of earnings and capital, the questioned provision is invalidated. medicines given the cutthroat nature of the players in the industry. It is a business decision on the part of petitioners
Moreover, in the absence of evidence demonstrating the alleged confiscatory effect of the provision in question, to peg the mark-up at 5%. Selling the medicines below acquisition cost, as alleged by petitioners, is merely a result
there is no basis for its nullification in view of the presumption of validity which every law has in its favor.[26] of this decision. Inasmuch as pricing is a property right, petitioners cannot reproach the law for being oppressive,
Given these, it is incorrect for petitioners to insist that the grant of the senior citizen discount is unduly simply because they cannot afford to raise their prices for fear of losing their customers to competition.
oppressive to their business, because petitioners have not taken time to calculate correctly and come up with a
(On Official Leave)
The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive pricing LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO
Associate Justice Associate Justice
component of the business. While the Constitution protects property rights, petitioners must accept the realities of
business and the State, in the exercise of police power, can intervene in the operations of a business which may
(On Leave)
result in an impairment of property rights in the process.
Moreover, the right to property has a social dimension. While Article XIII of the Constitution provides the
ANGELINA SANDOVAL-GUTIERREZ ANTONIO T. CARPIO
precept for the protection of property, various laws and jurisprudence, particularly on agrarian reform and the Associate Justice Associate Justice

regulation of contracts and public utilities, continuously serve as a reminder that the right to property can be
relinquished upon the command of the State for the promotion of public good.[30]
Undeniably, the success of the senior citizens program rests largely on the support imparted by
petitioners and the other private establishments concerned. This being the case, the means employed in invoking MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA
Associate Justice Associate Justice
the active participation of the private sector, in order to achieve the purpose or objective of the law, is reasonably
and directly related. Without sufficient proof that Section 4(a) of R.A. No. 9257 is arbitrary, and that the continued
implementation of the same would be unconscionably detrimental to petitioners, the Court will refrain from quashing
a legislative act.[31]
WHEREFORE, the petition is DISMISSED for lack of merit. CONCHITA CARPIO MORALES DANTE O. TINGA
Associate Justice Associate Justice
No costs.

SO ORDERED.

ADOLFO S. AZCUNA MINITA V. CHICO-NAZARIO CANCIO C. GARCIA


Associate Justice Associate Justice Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA
Associate Justice Associate Justice

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the
above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.
[16] Commissioner of Internal Revenue v. Central Luzon Drug Corporation, G.R. No. 159647, April 15, 2005, 456 SCRA 414,
428-429 citing Smith, Wests Tax Law Dictionary (1993), pp. 177-178, 196.
[17] The concept of public use is no longer confined to the traditional notion of use by the public, but held synonymous with public
REYNATO S. PUNO
Chief Justice interest, public benefit, public welfare, and public convenience. The discount privilege to which senior citizens are
entitled is actually a benefit enjoyed by the general public to which these citizens belong (Commissioner of Internal
Revenue v. Central Luzon Drug Corporation, supra note 14, at 444; Land Bank of the Philippines v. De Leon, 437
* On Official Leave.
Phil. 347, 359 [2002] citing Estate of Salud Jimenez v. Philippine Export Processing Zone, G.R. No. 137285, January
** On Leave.
[1] Under Rule 65 of the Rules of Court.
16, 2001, 349 SCRA 240, 264).
[18] National Power Corporation v. Manubay Agro-Industrial Development Corporation, G.R. No. 150936, August 18, 2004, 437
[2] An Act Granting Additional Benefits and Privileges to Senior Citizens Amending for the Purpose Republic Act No. 7432,
SCRA 60, 68 citing Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
otherwise known as An Act to Maximize the Contribution of Senior Citizens to Nation Building, Grant Benefits and
No. 78742, July 14, 1989, 175 SCRA 343.
Special Privileges and for other Purposes. [19] In the case of Commissioner of Internal Revenue v. Central Luzon Drug Corporation, supra note 14, the Court held that just
[3] Otherwise known as the Senior Citizens Act.
[4] Emphasis supplied.
compensation confers the right to receive an equivalent amount for the discount given and the prompt payment of
[5] Section 4. Discounts from Establishments The grant of twenty percent (20%) discount on all prices of goods and services
such amount. The advantage of a tax deduction is that the cost of the discount can immediately be refunded, though
not fully, by declaring it as a deductible expense in computing for taxable income. In a tax credit, one has to await
offered to the general public regardless of the amount purchased from all establishments, irrespective of
the issuance of a tax credit certificate indicating the correct amount of the discounts given before the latter can be
classification, relative to the utilization of services for the exclusive use of senior citizen in the following:
refunded. Thus, the availment of a tax credit necessitates prior payment of income tax.
... [20] Article XV of the Constitution states: Section 1. The State recognizes the Filipino family as the foundation of the
d) DRUG STORES, HOSPITAL PHARMACIES, MEDICAL AND OPTICAL CLINICS AND SIMILAR
nation. Accordingly, it shall strengthen its solidarity and actively promote its total development.
ESTABLISHMENTS DISPENSING MEDICINES The discount for purchases of drugs/medicines shall be [21] Emphasis supplied.
subject to the Guidelines to be issued by the Bureau of Food and Drugs, Department of Health (BFAD- [22] Sangalang v. IAC, G.R. No. 71169, August 25, 1989, 176 SCRA 719.
DOH), in coordination with the Philippine Health Insurance Corporation (PHILHEALTH). [23] Ermita-Malate Hotel and Motel Operators Association , Inc. v. City Mayor of Manila, L-24693, July 31, 1967, 20 SCRA 849
[6] Section 9. Medical and Dental Services in Private Facilities. - The senior citizen shall be granted twenty percent (20%)
citing Noble State Bank v. Haskell, 219 U.S. 412 (1911).
discount on medical and dental services and diagnostic and laboratory fees such as but not limited to x-ray, [24] U.S. v. Toribio, 15 Phil.85 (1910) citing Commonwealth v. Alger, 7 Cush., 53 (Mass. 1851); U.S. v. Pompeya, 31 Phil. 245,
computerized tomography scans and blood tests, including professional fees of attending doctors in all private
253-254 (1915).
hospitals and medical facilities, in accordance with the rules and regulations to be issued by the Department of [25] Alalayan v. National Power Corporation, 24 Phil. 172 (1968).
Health, in coordination with the Philippine Health Insurance Corporation. [26] Id.
[7] Section 10. Air and Transportation Privileges. At least twenty percent (20%) discount in fare for domestic air, and sea travel
[27] The person who impugns the validity of a statute must have personal interest in the case such that he has sustained, or will
based on the actual fare, including the promotional fare, advance booking and similar discounted fare shall be
sustain, direct injury as a result of its enforcement (People v. Vera, 65 Phil. 56 [1937]).
granted for the exclusive use and enjoyment of senior citizens. [28] Rollo, p. 11.
[8] Section 11. Public Land Transportation Privileges. - Twenty percent (20%) discount in public railways, including LRT, MRT,
[29] Section 27(E)(4) of the National Internal Revenue Code (NIRC) provides that for purposes of applying the minimum corporate
PNR, Skyways and fares in buses (PUB), jeepneys (PUJ), taxi and shuttle services (AUV) shall be granted for the
income tax on domestic corporations, the term gross income shall mean gross sales less sales returns, discounts
exclusive use and enjoyment of senior citizens.
[9] Rollo, p. 57.
and allowances and cost of goods sold. For a trading or merchandising concern, cost of goods sold shall include the
[10] Id. at 67-69; emphasis supplied.
invoice cost of the goods sold, plus import duties, freight in transporting the goods to the place where the goods are
[11] The A.O. became effective on October 9, 2004, after its publication in two national newspapers of general circulation.
actually sold including insurance while the goods are in transit.
[30] By the general police power of the State, persons and property are subjected to all kinds of restraints and burdens, in order
[12] Amendment to Administrative Order No. 171, s. 2004 on the Policies and Guidelines to Implement the Relevant Provisions
to secure the general comfort, health, and prosperity of the State; of the perfect right in the legislature to do which,
of Republic Act 9257, otherwise known as the Expanded Senior Citizens Act of 2003.
[13] Rollo, pp. 17-24.
no question ever was, or, upon acknowledged and general principles, ever can be made, so far as natural persons
[14] According to petitioners, of the five (5) million Filipinos who are 60 years old and above, only 500,000 are in Metro Manila
are concerned. (U.S. v. Toribio, supra note 24, at 98-99, citing Thorpe v. Rutland & Burlington R.R. Co. (27 Vt., 140,
149).
and thus, have access to Mercury Drug which, because of the bulk discounts it gets from pharmaceutical companies [31] Subject to the determination of the courts as to what is a proper exercise of police power using the due process clause and
and suppliers, can afford to give the 20% discount. Unlike Mercury Drug, small- to medium-scale drugstores similar
the equal protection clause as yardsticks, the State may interfere wherever the public interests demand it, and in
to those of petitioners, however, can only impose minimal mark-ups for competitive pricing but are constrained to
this particular a large discretion is necessarily vested in the legislature to determine, not only what interests of the
raise the prices of their medicines so that they would be able to recoup the 20% discount that they extend to senior
public require, but what measures are necessary for the protection of such interests (U.S. v. Toribio, supra note 24,
citizens. In the end, roughly 4.5 million senior citizens in the provinces or in the areas where Mercury Drug is not
at 98, citingLawton v. Steele, 152 U.S. 133,136; Barbier v. Connoly, 113 U.S. 27; Kidd v. Pearson, 128 U.S. 1).
present will not be able to benefit fully from the discount that the law provides.

[15] Under Section 34 of the Tax Code, the itemized deductions considered as allowable deductions from gross income include
ordinary and necessary expenses, interest, taxes, losses, bad debts, depreciation, depletion of oil and gas wells and
mines, charitable and other contributions, research and development expenditures, and pension trust contributions.
[G.R. No. 127249. February 27, 1998] Section 10. Enforcement Powers and Remedies. -- In the exercise of its power of supervision and control over
electric cooperatives and other borrower, supervised or controlled entities, the NEA is empowered to issue
CAMARINES NORTE ELECTRIC COOPERATIVE, INC. (CANORE-CO); RUBEN N. BARRAMEDA; ELVIS L. orders, rules and regulations and motu proprio or upon petition of third parties, to conduct investigations,
ESPIRITU; MERARDO G. ENERO, JR.; MARCELITO B. ABAS; and REYNALDO V. ABUNDO, petitioners, referenda and other similar actions in all matters affecting said electric cooperatives and other borrower, or
vs. HON. RUBEN D. TORRES, in his capacity as Executive Secretary; REX TANTIONGCO; HONESTO DE supervised or controlled entities.
JESUS; ANDRES IBASCO; TEODULO M. MEA; and VICENTE LUKBAN, respondent.
Finally, the repealing clause (Article 127) of the Cooperative Code provides:
DECISION
DAVIDE, JR., J.: Provided, however, That nothing in this Code shall be interpreted to mean the amendment or repeal of any
provision of Presidential Decree No. 269: Provided, further, That the electric cooperatives which qualify as such
under this Code shall fall under the coverage thereof.
May the Office of the President validly constitute an ad hoc committee to take over and manage the affairs
of an electric cooperative?
CANORECO registered with the CDA pursuant to R.A. No. 6938 and R.A. No. 6939. On 8 March 1993, the
This is the key issue in this original action for certiorari and prohibition under Rule 65 of the Rules of Court CDA issued a Certificate of Provisional Registration (T-003-93) to CANORECO effective for two years.[1] On 1
wherein the petitioners seek to (a) annul and set aside Memorandum Order No. 409 of the Office of the President March 1995, the CDA extended this provisional registration until 4 May 1997.[2] However, on 10 July 1996,
dated 3 December 1996 constituting an Ad Hoc Committee to take over and manage the affairs of the Camarines CANORECO filed with the CDA its approved amendments to its Articles of Cooperation converting itself from a
Norte Electric Cooperative, Inc., (hereafter CANORECO) until such time as a general membership meeting can be non-stock to a stock cooperative pursuant to the provisions of R.A. No. 6938 and the Omnibus Implementing Rules
called to decide the serious issues affecting the said cooperative and normalcy in operations is restored"; and (b) and Regulations on Electric Cooperatives. On the same date the CDA issued a Certificate of Registration[3] of the
prohibit the respondents from performing acts or continuing proceedings pursuant to the Memorandum Order. amendments to CANORECO Articles of Cooperation certifying that CANORECO is registered as a full-[f]ledged
cooperative under and by virtue of R.A. 6938.
The factual backdrop of this case is not complicated.
Previously, on 11 March 1995, the Board of Directors of CANORECO[4] approved Resolution No. 22
Petitioner CANORECO is an electric cooperative organized under the provisions of P.D. No. 269, otherwise
appointing petitioner Reynaldo V. Abundo as permanent General Manager. The Board was composed of
known as the National Electrification Administration Decree, as amended by P.D. No. 1645.
On 10 March 1990, then President Corazon C. Aquino signed into law R.A. No. 6938 and R.A. No. 6939. The Ruben N. Barrameda – President
former is the Cooperative Code of the Philippines, while the latter created the Cooperative Development Authority
(CDA) and vested solely upon the CDA the power to register cooperatives. Elvis L. Espiritu -- Vice president
Article 122 of the Cooperative Code expressly provides that electric cooperatives shall be covered by the
Code. Article 128 of the said Code and Section 17 of R.A. No. 6939 similarly provide that cooperatives created Merardo G. Enero, Jr. -- Secretary
under P.D. No. 269, as amended by P.D. No. 1645, shall have three years within which to qualify and register with
the CDA and that after they shall have so qualified and registered, the provisions of Sections 3 and 5 of P.D. No. Marcelito B. Abas -- Treasurer
1645 shall no longer be applicable to them. These Sections 3 and 5 read as follows:
Antonio R. Obias -- Director
SEC. 3. Section 5(a), Chapter II of Presidential Decree No. 269 is hereby amended by adding sub-paragraph (6)
to read as follows: Luis A. Pascua -- Director

(6) To authorize the NEA Administrator to designate, subject to the confirmation of the Board Administrators, an Norberto Z. Ochoa -- Director
Acting General Manager and/or Project Supervisor for a Cooperative where vacancies in the said positions occur
and/or when the interest of the Cooperative and the program so requires, and to prescribe the functions of said Leonida Z. Manalo -- OIC GM/Ex-Officio
Acting General Manager and/or Project Supervisor, which powers shall not be nullified, altered or diminished by
any policy or resolution of the Board of Directors of the Cooperative concerned. On 28 May 1995, Antonio Obias, Norberto Ochoa, Luis Pascua, and Felicito Ilan held a special meeting of
the Board of Directors of CANORECO. The minutes of the meeting[5] showed that President Ruben Barrameda,
SEC. 5. Section 10, Chapter II of Presidential Decree No. 269 is hereby amended to read as follows: Vice-President Elvis Espiritu, and Treasurer Marcelito Abas were absent; that Obias acted as temporary chairman;
that the latter informed those present that it was the responsibility of the Board after the annual meeting to meet Likewise, the election of respondents Norberto Ochoa, Antonio Obias, Felicito Ilan, and Luis Pascua, as
and elect the new set of officers, but that despite the fact that he had called the attention of President Barrameda President, Vice-President, Secretary, and Treasurer, respectively, of CANORECO is hereby declared NULL AND
and Directors Abas and Espiritu for the holding thereof, the three chose not to appear; and that those present in VOID AB INITIO.
the special meeting declared all positions in the board vacant and thereafter proceeded to hold elections by secret
balloting with all the directors present considered candidates for the positions. The following won and were declared Hence, respondents Norberto Ochoa, Antonio Obias, Felicito Ilan, and Luis Pascua are hereby ordered to refrain
as the newly elected officers of the CANORECO: from representing themselves as President, Vice-President, Secretary, and Treasurer, respectively, of
CANORECO. The same respondents are further ordered to refrain from acting as authorized signatories to the
President . . . . . . . . Norberto Ochoa bank accounts of CANORECO.

Vice President . . . . Antonio Obias Further respondent Felicito Ilan is hereby ordered to refrain from exercising the duties and functions of a member
of the Board of CANORECO until the election protest is resolved with finality by the proper forum. In the
Secretary . . . . . . . . Felicito Ilan meantime, the incumbency of petitioner Merardo Enero, Jr. as Director of the CANORECO Board is hereby
recognized.
Treasurer. . . . . . . . Luis Pascua
A status quo is hereby ordered as regards the position of General Manager, being held by Mr. Reynaldo Abundo,
Thereupon, these newly elected officers approved the following resolutions: considering that the recall of his appointment was done under a void Resolution, and that the designation of Mr.
Oscar Acodera as Officer-in-Charge, under the same void Resolution, has no force and effect.
1) Resolution No. 27, c.s. -- confirming the election of the new set of officers of the Board of Directors
of CANORECO Finally, respondents Antonio Obias, Norberto Ochoa, Luisito Pascua, and petitioners Ruben Barrameda, Elvis
Espiritu, Marcelito Abas and Merardo Enero, Jr. are hereby ordered to work together, as Board of Directors, for
2) Resolution No. 28, c.s. -- recalling Resolution No. 22, c.s. appointing Mr. Reynaldo V. Abundo as the common good of CANORECO and its consumer-members, and to maintain an atmosphere of sincere
permanent General Manager in view of the fact that such appointment was in violation of the provisions of cooperation among the officers and members of CANORECO.
R.A. 6713; declaring the position of General Manager as vacant; and designating Mr. Oscar Acobera as
Officer-in-Charge On 28 June 1996, in defiance of the abovementioned Resolution of the CDA and with the active participation
of some officials of the National Electrification Administration (NEA), the group of Norberto Ochoa, Antonio Obias,
3) Resolution No. 29, c.s. -- authorizing the Board President, or in his absence, the Vice- Felicito Ilan, and Luis Pascua forcibly took possession of the offices of CANORECO and assumed the duties as
President, countersigned by the Treasurer, or in his absence, the Secretary, to be the only officers who can officers thereof.[8]
transfer funds from savings to current accounts; and authorizing the Officer-in-Charge, Mr. Acobera, to On 26 September 1996, pursuant to the writ of execution and order to vacate issued by the CDA, the
issue checks without countersignature in an amount not to exceed P3,000.00 and in excess thereof, to be petitioners were able to reassume control of the CANORECO and to perform their respective functions. [9]
countersigned by the President and/or the Treasurer
On 3 December 1996, the President of the Philippines issued Memorandum Order No. 409 [10] onstituting
4) Resolution No. 30, c.s. -- hiring the services of Atty. Juanito Subia as retainer-lawyer for an Ad Hoc Committee to temporarily take over and manage the affairs of CANORECO. It reads as follows:
CANORECO.[6]
To efficiently and effectively address the worsening problem of the Camarines Norte Electric Cooperative, Inc.
The petitioners challenged the above resolutions and the election of officers by filing with the CDA a Petition (CANORECO) and in order not to prejudice and endanger the interest of the people who rely on the said
for Declaration of Nullity of Board Resolutions and Election of Officers with Prayer for Issuance of cooperative for their supply of electricity, an AD HOC Committee is hereby constituted to take over and manage
Injunction/Temporary Restraining Order, which the CDA docketed as CDA-CO Case No. 95-010. the affairs of CANORECO until such time as a general membership meeting can be called to decide the serious
issues affecting the said cooperative and normalcy in operations is restored. Further, if and when warranted, the
In its Resolution of 15 February 1996,[7] the CDA resolved the petition in favor of the petitioners and decreed present Board of Directors may be called upon by the Committee for advisory services without prejudice to the
as follows: receipt of their per diems as may be authorized by existing rules and regulations.

WHEREFORE, premises considered, the Board Meeting of May 28, 1995, participated by the respondents, and The AD HOC Committee shall be composed of the following:
all the Resolutions issued on such occasion, are hereby declared NULL AND VOID AB INITIO.
REX TANTIONGCO -- Chairman On 11 December 1996, the petitioners filed this petition wherein they claim that

Presidential Assistant on Energy Affairs


I. THE PRESIDENT HAS NO POWER TO TAKE OVER AND MANAGE OR TO ORDER THE TAKE-
OVER OR MANAGEMENT OF CANORECO.
HONESTO DE JESUS -- Member II. [THE] TAKE-OVER OF CANORECO BY THE AD HOC COMMITTEE IS UNLAWFUL DESPITE
DESIGNATION OF CANORECO CONSUMERS AS MEMBERS OF AD HOC COMMITTEE.
Cooperative Development Authority Nominee
III. [THE] RELEGATION OF PETITIONERS AS MERE ADVISERS TO THE AD HOC COMMITTEE
AMOUNTS TO REMOVAL FROM OFFICE WHICH THE PRESIDENT HAS NO POWER TO
ANDRES IBASCO -- Member
DO.MOREOVER, PETITIONERS REMOVAL VIOLATES PETITIONERS RIGHT TO DUE
PROCESS OF LAW.
Cooperative Development Authority Nominee
IV. THE PRESIDENT IS LIKEWISE WITHOUT POWER TO DESIGNATE OR ORDER THE
TEODULO M. MEA -- Member DESIGNATION OF AN ACTING GENERAL MANAGER FOR CANORECO AND TO CONSIDER
THE INCUMBENT REYNALDO V. ABUNDO TO BE ON LEAVE.
National Electrification Administration Nominee The petitioners assert that there is no provision in the Constitution or in a statute expressly, or even impliedly,
authorizing the President or his representatives to take over or order the take-over of electric
VICENTE LUKBAN -- Member cooperatives. Although conceding that while the State, through its police power, has the right to interfere with
private business or commerce, they maintain that the exercise thereof is generally limited to the regulation of the
National Electrification Administration Nominee business or commerce and that the power to regulate does not include the power to take over, control, manage,
or direct the operation of the business. Accordingly, the creation of the Ad Hoc Committee for the purpose of take-
The said Committee shall have the following functions: over was illegal and void.
The petitioners further claim that Memorandum Order No. 409 removed them from their positions as
1. Designate the following upon the recommendation of the Chairman: members of the Board of Directors of CANORECO. The President does not have the authority to appoint, much
less to remove, members of the board of directors of a private enterprise including electric cooperatives. He cannot
1.1 an Acting General Manager who shall handle the day-to-day operations of the Cooperative. In the rely on his power of supervision over the NEA to justify the designation of an acting general manager for
meantime, the General Manager shall be deemed to be on leave without prejudice to the payment of his CANORECO under P.D. No. 269 as amended by P.D. No. 1645, for CANORECO had already registered with the
salaries legally due him; and CDA pursuant to R.A. No. 6938 and R.A. No. 6939; hence, the latter laws now govern the internal affairs of
CANORECO.
1.2 a Comptroller who shall handle the financial affairs of the Cooperative.
On 3 January 1997, the petitioners filed an Urgent Motion for Issuance of a Temporary Restraining Order.

2. Ensure that: On 9 January 1997, the petitioners filed a Manifestation and Motion informing the Court that on 8 January
1997 respondent Rex Tantiongco notified the petitioners that the Ad HocCommittee was taking over the affairs and
The AD HOC Committee shall submit a written report to the President, through the Office of the Executive management of CANORECO effective as of that date.[11] They reiterated their plea for the issuance of a temporary
Secretary, every two (2) weeks from the effectivity of this Order. restraining order because the Ad Hoc Committee has taken control of CANORECO and usurped the functions of
the individual petitioners.
A General Membership Meeting shall be called by the AD HOC Committee to determine whether or not there is a In the Resolution dated 13 January 1997, we required respondents to comment on the petition.
need to change the composition of the membership of the Cooperatives Board of Directors. If the need exists, the
AD HOC Committee shall call for elections. Once the composition of the Board of Directors is finally settled, it Despite four extensions granted it, the Office of the Solicitor General (OSG) failed to file its Comment. Hence,
shall decide on the appointment of a General Manager in accordance with prescribed laws, rules and in the resolution of 16 July 1997 we deemed the OSG to have waived the filing of its Comment and declared this
regulations. Upon the appointment of a General Manager, the Committee shall become functus officio. case submitted for decision. The OSGs motion to admit its Comment, as well as the attached Comment, belatedly
filed on 24 July 1997 was merely noted without action in the resolution of 13 August 1997. We also subsequently
denied for lack of merit its motion for reconsideration.
This Memorandum Order shall take effect immediately.
We find the instant petition impressed with merit. shall decide on the appointment of a general manager. In the meantime, it authorized the Committee to designate
upon the recommendation of the Chairman an Acting Manager, with the lawfully appointed Manager considered
Having registered itself with the CDA pursuant to Section 128 of R.A. No. 6938 and Section 17 of R.A. No. on leave, but who is, however, entitled to the payment of his salaries.
6939, CANORECO was brought under the coverage of said laws. Article 38 of R.A. No. 6938 vests upon the board
of directors the conduct and management of the affairs of cooperatives, and Article 39 provides for the powers of Nothing in law supported the take-over of the management of the affairs of CANORECO, and the suspension,
the board of directors. These sections read: if not removal, of the Board of Directors and the officers thereof.
It must be pointed out that the controversy which resulted in the issuance of the Memorandum Order
Article 38. Composition of the Board of Directors. -- The conduct and management of the affairs of a cooperative stemmed from a struggle between two groups vying for control of the management of CANORECO. One faction
shall be vested in a board of directors which shall be composed of not less than five (5) nor more than fifteen (15) was led by the group of Norberto Ochoa, while the other was petitioners group whose members were, at that time,
members elected by the general assembly for a term fixed in the by-laws but not exceeding a term of two (2) the incumbent directors and officers. It was the action of Ochoa and his cohorts in holding a special meeting on 28
years and shall hold office until their successors are duly elected and qualified, or until duly removed. However, May 1995 and then declaring vacant the positions of cooperative officers and thereafter electing themselves to the
no director shall serve for more than three (3) consecutive terms. positions of president, vice-president, treasurer, and secretary of CANORECO which compelled the petitioners to
file a petition with the CDA. The CDA thereafter came out with a decision favorable to the petitioners.
Article 39. Powers of the Board of Directors. -- The board of directors shall direct and supervise the business,
manage the property of the cooperative and may, by resolution, exercise all such powers of the cooperative as Obviously there was a clear case of intra-cooperative dispute. Article 121 of the Cooperative Code is explicit
are not reserved for the general assembly under this Code and the by-laws. on how the dispute should be resolved; thus:

As to the officers of cooperatives, Article 43 of the Code provides: ART. 121. Settlement of Disputes. -- Disputes among members, officers, directors, and committee members, and
intra-cooperative disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or
ART. 43. Officers of the Cooperatives. The board of directors shall elect from among themselves only the mediation mechanisms embodied in the by-laws of the cooperative, and in applicable laws.
chairman and vice-chairman, and elect or appoint other officers of the cooperative from outside of the board in
accordance with their by-laws. All officers shall serve during good behavior and shall not be removed except for Should such a conciliation/mediation proceeding fail, the matter shall be settled in a court of competent
cause and after due hearing. Loss of confidence shall not be a valid ground for removal unless evidenced by acts jurisdiction.
or omissions causing loss of confidence in the honesty and integrity of such officer. No two (2) or more persons
with relationship up to the third degree of consanguinity or affinity shall serve as elective or appointive officers in Complementing this Article is Section 8 of R.A. No. 6939, which provides:
the same board.[12]
SEC. 8. Mediation and Conciliation. Upon request of either or both or both parties, the [CDA] shall mediate and
Under Article 34 of the Code, the general assembly of cooperatives has the exclusive power, which cannot be conciliate disputes with the cooperative or between cooperatives: Provided, That if no mediation or conciliation
delegated, to elect or appoint the members of the board of directors and to remove them for cause. Article 51 succeeds within three (3) months from request thereof, a certificate of non-resolution shall be issued by the
thereof provides for removal of directors and officers as follows: commission prior to the filing of appropriate action before the proper courts.

ART. 51. Removal. -- An elective officer, director, or committee member may be removed by a vote of two-thirds Even granting for the sake of argument that the party aggrieved by a decision of the CDA could pursue an
(2/3) of the voting members present and constituting a quorum, in a regular or special general assembly meeting administrative appeal to the Office of the President on the theory that the CDA is an agency under its direct
called for the purpose. The person involved shall be given an opportunity to be heard at said assembly. supervision and control, still the Office of the President could not in this case, motu proprio or upon request of a
party, supplant or overturn the decision of the CDA. The record does not disclose that the group of Norberto Ochoa
Memorandum Order No. 409 clearly removed from the Board of Directors of CANORECO the power to appealed from the decision of the CDA in CDA-CO Case No. 95-010 to the Office of the President as the head of
manage the affairs of CANORECO and transferred such power to the Ad HocCommittee, albeit the Executive Department exercising supervision and control over said agency. In fact the CDA had already issued
temporarily. Considering that (1) the take-over will be until such time that a general membership meeting can be a Cease and Desist Order dated 14 August 1996 ordering Antonio Obias, Norberto Ochoa, Luis Pascua, Felicito
called to decide the serious issues affecting the said cooperative and normalcy in operations is restored, and (2) Ilan and their followers to cease and desist from acting as the Board of Directors and Officers of Camarines Norte
the date such meeting shall be called and the determination of whether there is a need to change the composition Electric Cooperative (CANORECO) and to refrain from implementing their Resolution calling for the District V
of the membership of CANORECOs Board of Directors are exclusively left to the Ad Hoc Committee, it necessarily Election on August 17 and 24, 1996.[13] Consequently, the said decision of the CDA had long become final and
follows that the incumbent directors were, for all intents and purposes, suspended at the least, and removed, at executory when Memorandum Order No. 409 was issued on 3 December 1996. That Memorandum cannot then
the most, from their office. The said Memorandum did no less to the lawfully appointed General Manager by be considered as one reversing the decision of the CDA which had attained finality.
directing that upon the settlement of the issue concerning the composition of the board of directors the Committee
Under Section 15, Chapter III of Book VII of the Administrative Code of 1987 (Executive Order No. 292),
decisions of administrative agencies become final and executory fifteen days after receipt of a copy thereof by the
party adversely affected unless within that period an administrative appeal or judicial review, if proper, has been
perfected. One motion for reconsideration is allowed. A final resolution or decision of an administrative agency also [1] Annex B of Petition, Rollo, 34.
binds the Office of the President even if such agency is under the administrative supervision and control of the
latter. [2] Annex C of Petition, Id., 35.
We have stated before, and reiterate it now, that administrative decisions must end sometime, as fully as [3] Annex D of Petition, Id., 36-37.
public policy demands that finality be written on judicial controversies. Public interest requires that proceedings [4] Annex E of Petition, Id., 38-39.
already terminated should not be altered at every step, for the rule of non quieta movere prescribes that what had
already been terminated should not be disturbed. A disregard of this principle does not commend itself to sound [5] Annex F of Petition, Id., 40-43.
public policy.[14]
[6] Rollo, 41-43.
Neither can police power be invoked to clothe with validity the assailed Memorandum Order No. 409. Police
power is the power inherent in a government to enact laws, within constitutional limits, to promote the order, safety,
[7] Annex G of Petition, Rollo, 44-52.
health, morals, and general welfare of society.[15] It is lodged primarily in the legislature. By virtue of a valid [8] Rollo, 8.
delegation of legislative power, it may also be exercised by the President and administrative boards, as well as the
lawmaking bodies on all municipal levels, including the barangay.[16] Delegation of legislative powers to the [9] Ibid.
President is permitted in Sections 23(2) and 28(2) of Article VI of the Constitution.[17] The pertinent laws on [10] Id., 31.
cooperatives, namely, R.A. No. 6938, R.A. No. 6939, and P.D. No. 269 as amended by P.D. No. 1645 do not
provide for the President or any other administrative body to take over the internal management of a [11] Rollo, 96.
cooperative. Article 98 of R.A. 6938 instead provides:
This is a substantial departure from Section 26 of P.D. No. 269 which provided that the officers of a
[12]

cooperative shall consist of a president, vice-president, secretary and treasurer, who shall be elected annually by
ART. 98. Regulation of Public Service Cooperatives. -- (1) The internal affairs of public service cooperatives such and from the board; that when a person holding such office ceases to be a director, he shall ipso facto cease to
as the rights and privileges of members, the rules and procedures for meetings of the general assembly, board of hold such office; that the offices of secretary and of treasurer may be held by the same person; that the board
directors and committees; for the election and qualification of officers, directors, and committee members; may also elect or appoint such other officers, agents, or employees as it deems necessary or advisable; and that
allocation and distribution of surpluses, and all other matters relating to their internal affairs shall be governed by any officer may be removed from said office and his successor elected in the manner prescribed in the by-laws.
this Code. [13] Rollo, 142.
We do not then hesitate to rule that Memorandum Order No. 409 has no constitutional and statutory basis. It [14] Antique Sawmills, Inc. v. Zayco, 17 SCRA 316, 320-321 [1966].
violates the basic underlying principle enshrined in Article 4(2) of R.A. No. 6938 that cooperatives are democratic [15] 16 C.J.S. Constitutional Law 195 (1956).
organizations and that their affairs shall be administered by persons elected or appointed in a manner agreed upon
by the members. Likewise, it runs counter to the policy set forth in Section 1 of R.A. No. 6939 that the State shall, [16] Isagani A. Cruz, Constitutional Law 44 (1995).
except as provided in said Act, maintain a policy of non-interference in the management and operation of
cooperatives.
[17] These sections read as follows:

WHEREFORE, the instant petition is GRANTED and Memorandum Order No. 409 of the President is hereby Sec. 23.
declared INVALID. (2) times of war or other national emergency, the Congress may, by law, authorize the President, for a limited period
and subject to such restrictions as it may prescribe, to exercise powers necessary and proper to carry out a declared
SO ORDERED. national policy. Unless sooner withdrawn by resolution of the Congress, such powers shall cease upon the next
adjournment thereof.
Narvasa, Regalado, Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban,and Martinez,
JJ., concur. Sec. 28.
Quisumbing, No part. Involve in O.P. matter.
Purisima, No part. Did not take in the deliberation. (2) The Congress may, by law, authorize the president to fix within specified limits, and subject to such limitations and
restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or
imposts within the framework of the national development program of the Government.
[G.R. No. 135962. March 27, 2000] Chairman"[1]

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs. BEL-AIR VILLAGE ASSOCIATION, On the same day, respondent was apprised that the perimeter wall separating the subdivision from the adjacent
INC., respondent. Kalayaan Avenue would be demolished. Sppedsc

DECISION On January 2, 1996, respondent instituted against petitioner before the Regional Trial Court, Branch 136, Makati City,
Civil Case No. 96-001 for injunction. Respondent prayed for the issuance of a temporary restraining order and
PUNO, J.: preliminary injunction enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter wall. The
trial court issued a temporary restraining order the following day.
Not infrequently, the government is tempted to take legal shortcuts to solve urgent problems of the people. But even
when government is armed with the best of intention, we cannot allow it to run roughshod over the rule of law. Again, On January 23, 1996, after due hearing, the trial court denied issuance of a preliminary injunction. [2] Respondent
we let the hammer fall and fall hard on the illegal attempt of the MMDA to open for public use a private road in a private questioned the denial before the Court of Appeals in CA-G.R. SP No. 39549. The appellate court conducted an ocular
subdivision. While we hold that the general welfare should be promoted, we stress that it should not be achieved at the inspection of Neptune Street[3] and on February 13, 1996, it issued a writ of preliminary injunction enjoining the
expense of the rule of law. h Y implementation of the MMDAs proposed action.[4]

Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Respondent Bel- On January 28, 1997, the appellate court rendered a Decision on the merits of the case finding that the MMDA has no
Air Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose members are homeowners in Bel-Air authority to order the opening of Neptune Street, a private subdivision road and cause the demolition of its perimeter
Village, a private subdivision in Makati City. Respondent BAVA is the registered owner of Neptune Street, a road inside walls. It held that the authority is lodged in the City Council of Makati by ordinance. The decision disposed of as
Bel-Air Village. follows: Jurissc

On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December 22, 1995 "WHEREFORE, the Petition is GRANTED; the challenged Order dated January 23, 1995, in Civil Case No. 96-
requesting respondent to open Neptune Street to public vehicular traffic starting January 2, 1996. The notice 001, is SET ASIDE and the Writ of Preliminary Injunction issued on February 13, 1996 is hereby made
reads: Court permanent.

"SUBJECT: NOTICE of the Opening of Neptune Street to Traffic "For want of sustainable substantiation, the Motion to Cite Roberto L. del Rosario in contempt is denied. [5]

"Dear President Lindo, "No pronouncement as to costs.

"Please be informed that pursuant to the mandate of the MMDA law or Republic Act No. 7924 which requires the "SO ORDERED."[6]
Authority to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of persons,
Neptune Street shall be opened to vehicular traffic effective January 2, 1996. The Motion for Reconsideration of the decision was denied on September 28, 1998. Hence, this recourse. Jksm

"In view whereof, the undersigned requests you to voluntarily open the points of entry and exit on said street. Petitioner MMDA raises the following questions:

"Thank you for your cooperation and whatever assistance that may be extended by your association to the "I
MMDA personnel who will be directing traffic in the area.
HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) THE MANDATE TO OPEN
"Finally, we are furnishing you with a copy of the handwritten instruction of the President on the matter. NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT TO ITS REGULATORY AND POLICE POWERS?

"Very truly yours, II

PROSPERO I. ORETA IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT BEFORE THE MMDA MAY ORDER THE
OPENING OF SUBDIVISION ROADS TO PUBLIC TRAFFIC?
III entity representing the inhabitants of its territory.[18] Local government units are the provinces, cities, municipalities and
barangays.[19] They are also the territorial and political subdivisions of the state. [20]
IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM DENYING OR ASSAILING THE
AUTHORITY OF THE MMDA TO OPEN THE SUBJECT STREET? Jlexj Our Congress delegated police power to the local government units in the Local Government Code of 1991.
This delegation is found in Section 16 of the same Code, known as the general welfare clause, viz: Chief
V
"Sec. 16. General Welfare.Every local government unit shall exercise the powers expressly granted, those
WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL MEETINGS HELD BETWEEN necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and
MMDA AND THE AFFECTED BEL-AIR RESIDENTS AND BAVA OFFICERS? effective governance, and those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced
V ecology, encourage and support the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment
HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?"[7] among their residents, maintain peace and order, and preserve the comfort and convenience of their
inhabitants."[21]
Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village, a private residential
subdivision in the heart of the financial and commercial district of Makati City. It runs parallel to Kalayaan Avenue, a Local government units exercise police power through their respective legislative bodies. The legislative body
national road open to the general public. Dividing the two (2) streets is a concrete perimeter wall approximately fifteen of the provincial government is the sangguniang panlalawigan, that of the city government is the sangguniang
(15) feet high. The western end of Neptune Street intersects Nicanor Garcia, formerly Reposo Street, a subdivision panlungsod, that of the municipal government is the sangguniang bayan, and that of the barangay is
road open to public vehicular traffic, while its eastern end intersects Makati Avenue, a national road. Both ends of the sangguniang barangay. The Local Government Code of 1991 empowers the sangguniang panlalawigan,
Neptune Street are guarded by iron gates. Edp mis sangguniang panlungsod and sangguniang bayan to "enact ordinances, approve resolutions and appropriate funds
for the general welfare of the [province, city or municipality, as the case may be], and its inhabitants pursuant to
Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is an agent of the Section 16 of the Code and in the proper exercise of the corporate powers of the [province, city municipality] provided
state endowed with police power in the delivery of basic services in Metro Manila. One of these basic services is traffic under the Code x x x."[22] The same Code gives the sangguniang barangay the power to "enact ordinances as may be
management which involves the regulation of the use of thoroughfares to insure the safety, convenience and welfare of necessary to discharge the responsibilities conferred upon it by law or ordinance and to promote the general welfare of
the general public. It is alleged that the police power of MMDA was affirmed by this Court in the consolidated cases of the inhabitants thereon."[23]
Sangalang v. Intermediate Appellate Court.[8] From the premise that it has police power, it is now urged that there is no
need for the City of Makati to enact an ordinance opening Neptune street to the public.[9] Metropolitan or Metro Manila is a body composed of several local government units - i.e., twelve (12) cities and
five (5) municipalities, namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon,
Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the Muntinlupa, Las Pinas, Marikina, Paranaque and Valenzuela, and the municipalities of Malabon, , Navotas, , Pateros,
legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, San Juan and Taguig. With the passage of Republic Act (R. A.) No. 7924[24] in 1995, Metropolitan Manila was
either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of declared as a "special development and administrative region" and the Administration of "metro-wide" basic
the commonwealth, and for the subjects of the same.[10] The power is plenary and its scope is vast and pervasive, services affecting the region placed under "a development authority" referred to as the MMDA.[25]
reaching and justifying measures for public health, public safety, public morals, and the general welfare.[11]
"Metro-wide services" are those "services which have metro-wide impact and transcend local political boundaries or
It bears stressing that police power is lodged primarily in the National Legislature.[12] It cannot be exercised by any entail huge expenditures such that it would not be viable for said services to be provided by the individual local
group or body of individuals not possessing legislative power.[13] The National Legislature, however, may delegate this government units comprising Metro Manila."[26] There are seven (7) basic metro-wide services and the scope of these
power to the President and administrative boards as well as the lawmaking bodies of municipal corporations or local services cover the following: (1) development planning; (2) transport and traffic management; (3) solid waste disposal
government units.[14]Once delegated, the agents can exercise only such legislative powers as are conferred on them by and management; (4) flood control and sewerage management; (5) urban renewal, zoning and land use planning, and
the national lawmaking body.[15] shelter services; (6) health and sanitation, urban protection and pollution control; and (7) public safety. The basic
service of transport and traffic management includes the following: Lexjuris
A local government is a "political subdivision of a nation or state which is constituted by law and has substantial control
of local affairs."[16] The Local Government Code of 1991 defines a local government unit as a "body politic and "(b) Transport and traffic management which include the formulation, coordination, and monitoring of
corporate"[17]-- one endowed with powers as a political subdivision of the National Government and as a corporate policies, standards, programs and projects to rationalize the existing transport operations, infrastructure
requirements, the use of thoroughfares, and promotion of safe and convenient movement of persons
and goods; provision for the mass transport system and the institution of a system to regulate road The implementation of the MMDAs plans, programs and projects is undertaken by the local government units,
users; administration and implementation of all traffic enforcement operations, traffic engineering national government agencies, accredited peoples organizations, non-governmental organizations, and the private
services and traffic education programs, including the institution of a single ticketing system in sector as well as by the MMDA itself. For this purpose, the MMDA has the power to enter into contracts, memoranda of
Metropolitan Manila;"[27] agreement and other cooperative arrangements with these bodies for the delivery of the required services within Metro
Manila.[28]
In the delivery of the seven (7) basic services, the MMDA has the following powers and functions: Esm
The governing board of the MMDA is the Metro Manila Council. The Council is composed of the mayors of the
"Sec. 5. Functions and powers of the Metro Manila Development Authority.The MMDA shall: component 12 cities and 5 municipalities, the president of the Metro Manila Vice-Mayors League and the president of
the Metro Manila Councilors League.[29] The Council is headed by a Chairman who is appointed by the President and
vested with the rank of cabinet member. As the policy-making body of the MMDA, the Metro Manila Council approves
(a) Formulate, coordinate and regulate the implementation of medium and long-term plans and programs for the metro-wide plans, programs and projects, and issues the necessary rules and regulations for the implementation of
delivery of metro-wide services, land use and physical development within Metropolitan Manila, consistent with
said plans; it approves the annual budget of the MMDA and promulgates the rules and regulations for the delivery of
national development objectives and priorities; basic services, collection of service and regulatory fees, fines and penalties. These functions are particularly
enumerated as follows: LEX
(b) Prepare, coordinate and regulate the implementation of medium-term investment programs for metro-wide
services which shall indicate sources and uses of funds for priority programs and projects, and which shall "Sec. 6. Functions of the Metro Manila Council. -
include the packaging of projects and presentation to funding institutions; Esmsc
(a) The Council shall be the policy-making body of the MMDA;
(c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific services
under its jurisdiction, subject to the approval of the Council. For this purpose, MMDA can create appropriate
project management offices; (b) It shall approve metro-wide plans, programs and projects and issue rules and regulations deemed necessary
by the MMDA to carry out the purposes of this Act;
(d) Coordinate and monitor the implementation of such plans, programs and projects in Metro Manila; identify
bottlenecks and adopt solutions to problems of implementation; (c) It may increase the rate of allowances and per diems of the members of the Council to be effective during the
term of the succeeding Council. It shall fix the compensation of the officers and personnel of the MMDA, and
approve the annual budget thereof for submission to the Department of Budget and Management (DBM);
(e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and regulate
the implementation of all programs and projects concerning traffic management, specifically pertaining
to enforcement, engineering and education. Upon request, it shall be extended assistance and (d) It shall promulgate rules and regulations and set policies and standards for metro-wide application governing
cooperation, including but not limited to, assignment of personnel, by all other government agencies and the delivery of basic services, prescribe and collect service and regulatory fees, and impose and collect fines and
offices concerned; penalties." Jj sc

(f) Install and administer a single ticketing system, fix, impose and collect fines and penalties for all Clearly, the scope of the MMDAs function is limited to the delivery of the seven (7) basic services. One of these is
kinds of violations of traffic rules and regulations, whether moving or non-moving in nature, and transport and traffic management which includes the formulation and monitoring of policies, standards and projects to
confiscate and suspend or revoke drivers licenses in the enforcement of such traffic laws and rationalize the existing transport operations, infrastructure requirements, the use of thoroughfares and promotion of the
regulations, the provisions of RA 4136 and PD 1605 to the contrary notwithstanding. For this purpose, safe movement of persons and goods. It also covers the mass transport system and the institution of a system of road
the Authority shall impose all traffic laws and regulations in Metro Manila, through its traffic operation regulation, the administration of all traffic enforcement operations, traffic engineering services and traffic education
center, and may deputize members of the PNP, traffic enforcers of local government units, duly licensed programs, including the institution of a single ticketing system in Metro Manila for traffic violations. Under this service,
security guards, or members of non-governmental organizations to whom may be delegated certain the MMDA is expressly authorized "to set the policies concerning traffic" and "coordinate and regulate the
authority, subject to such conditions and requirements as the Authority may impose; and implementation of all traffic management programs." In addition, the MMDA may "install and administer a single
ticketing system," fix, impose and collect fines and penalties for all traffic violations. Ca-lrsc
(g) Perform other related functions required to achieve the objectives of the MMDA, including the undertaking of
delivery of basic services to the local government units, when deemed necessary subject to prior coordination It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation,
with and consent of the local government unit concerned." Jurismis implementation, preparation, management, monitoring, setting of policies, installation of a system and
administration. There is no syllable in R. A. No. 7924 that grants the MMDA police power, let alone legislative
power. Even the Metro Manila Council has not been delegated any legislative power. Unlike the legislative bodies of
the local government units, there is no provision in R. A. No. 7924 that empowers the MMDA or its Council to "enact
ordinances, approve resolutions and appropriate funds for the general welfare" of the inhabitants of Metro Manila. The In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street was warranted by the demands of
MMDA is, as termed in the charter itself, a "development authority."[30] It is an agency created for the purpose of laying the common good in terms of "traffic decongestion and public convenience." Jupiter was opened by the Municipal
down policies and coordinating with the various national government agencies, peoples organizations, non- Mayor to alleviate traffic congestion along the public streets adjacent to the Village. [38] The same reason was given for
governmental organizations and the private sector for the efficient and expeditious delivery of basic services in the vast the opening to public vehicular traffic of Orbit Street, a road inside the same village. The destruction of the gate in Orbit
metropolitan area. All its functions are administrative in nature and these are actually summed up in the charter Street was also made under the police power of the municipal government. The gate, like the perimeter wall along
itself, viz: Jupiter, was a public nuisance because it hindered and impaired the use of property, hence, its summary abatement by
the mayor was proper and legal.[39]
"Sec. 2. Creation of the Metropolitan Manila Development Authority. -- x x x.
Contrary to petitioners claim, the two Sangalang cases do not apply to the case at bar. Firstly, both involved
The MMDA shall perform planning, monitoring and coordinative functions, and in the process zoning ordinances passed by the municipal council of Makati and the MMC. In the instant case, the basis for the
exercise regulatory and supervisory authority over the delivery of metro-wide services within Metro Manila, proposed opening of Neptune Street is contained in the notice of December 22, 1995 sent by petitioner to respondent
without diminution of the autonomy of the local government units concerning purely local matters."[31] BAVA, through its president. The notice does not cite any ordinance or law, either by the Sangguniang Panlungsod of
Makati City or by the MMDA, as the legal basis for the proposed opening of Neptune Street. Petitioner MMDA simply
relied on its authority under its charter "to rationalize the use of roads and/or thoroughfares for the safe and convenient
Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate Court[32] where we upheld a movement of persons." Rationalizing the use of roads and thoroughfares is one of the acts that fall within the scope of
zoning ordinance issued by the Metro Manila Commission (MMC), the predecessor of the MMDA, as an exercise of transport and traffic management. By no stretch of the imagination, however, can this be interpreted as an express or
police power. The first Sangalang decision was on the merits of the petition,[33] while the second decision denied implied grant of ordinance-making power, much less police power. Misjuris
reconsideration of the first case and in addition discussed the case of Yabut v. Court of Appeals.[34]
Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the forerunner of
Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA and three residents of Bel-Air the present MMDA, an examination of Presidential Decree (P. D.) No. 824, the charter of the MMC, shows that
Village against other residents of the Village and the Ayala Corporation, formerly the Makati Development Corporation, the latter possessed greater powers which were not bestowed on the present MMDA. Jjlex
as the developer of the subdivision. The petitioners sought to enforce certain restrictive easements in the deeds of sale
over their respective lots in the subdivision. These were the prohibition on the setting up of commercial and advertising
signs on the lots, and the condition that the lots be used only for residential purposes. Petitioners alleged that Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824. It comprised the Greater Manila
respondents, who were residents along Jupiter Street of the subdivision, converted their residences into commercial Area composed of the contiguous four (4) cities of Manila, Quezon, Pasay and Caloocan, and the thirteen (13)
establishments in violation of the "deed restrictions," and that respondent Ayala Corporation ushered in the full municipalities of Makati, Mandaluyong, San Juan, Las Pinas, Malabon, Navotas, Pasig, Pateros, Paranaque, Marikina,
commercialization" of Jupiter Street by tearing down the perimeter wall that separated the commercial from the Muntinlupa and Taguig in the province of Rizal, and Valenzuela in the province of Bulacan.[40] Metropolitan Manila was
residential section of the village.[35] created as a response to the finding that the rapid growth of population and the increase of social and economic
requirements in these areas demand a call for simultaneous and unified development; that the public services rendered
by the respective local governments could be administered more efficiently and economically if integrated under a
The petitions were dismissed based on Ordinance No. 81 of the Municipal Council of Makati and Ordinance No. 81-01
system of central planning; and this coordination, "especially in the maintenance of peace and order and the
of the Metro Manila Commission (MMC). Municipal Ordinance No. 81 classified Bel-Air Village as a Class A Residential eradication of social and economic ills that fanned the flames of rebellion and discontent [were] part of reform
Zone, with its boundary in the south extending to the center line of Jupiter Street. The Municipal Ordinance was measures under Martial Law essential to the safety and security of the State."[41]
adopted by the MMC under the Comprehensive Zoning Ordinance for the National Capital Region and promulgated as
MMC Ordinance No. 81-01. Bel-Air Village was indicated therein as bounded by Jupiter Street and the block adjacent
thereto was classified as a High Intensity Commercial Zone.[36] Metropolitan Manila was established as a "public corporation" with the following powers: Calrs-pped

We ruled that since both Ordinances recognized Jupiter Street as the boundary between Bel-Air Village and the "Section 1. Creation of the Metropolitan Manila.There is hereby created a public corporation, to be known as
commercial district, Jupiter Street was not for the exclusive benefit of Bel-Air residents. We also held that the perimeter the Metropolitan Manila, vested with powers and attributes of a corporation including the power to make
wall on said street was constructed not to separate the residential from the commercial blocks but simply for security contracts, sue and be sued, acquire, purchase, expropriate, hold, transfer and dispose of property and
reasons, hence, in tearing down said wall, Ayala Corporation did not violate the "deed restrictions" in the deeds of such other powers as are necessary to carry out its purposes. The Corporation shall be administered by a
sale. Scc-alr Commission created under this Decree."[42]

We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate exercise of police power.[37] The The administration of Metropolitan Manila was placed under the Metro Manila Commission (MMC) vested with the
power of the MMC and the Makati Municipal Council to enact zoning ordinances for the general welfare prevailed over following powers:
the "deed restrictions".
"Sec. 4. Powers and Functions of the Commission. - The Commission shall have the following powers and 14. To submit within thirty (30) days after the close of each fiscal year an annual report to the President of the
functions: Philippines and to submit a periodic report whenever deemed necessary; and

1. To act as a central government to establish and administer programs and provide services common to 15. To perform such other tasks as may be assigned or directed by the President of the Philippines." Sc jj
the area;
The MMC was the "central government" of Metro Manila for the purpose of establishing and administering programs
2. To levy and collect taxes and special assessments, borrow and expend money and issue bonds, revenue providing services common to the area. As a "central government" it had the power to levy and collect taxes and
certificates, and other obligations of indebtedness. Existing tax measures should, however, continue to be special assessments, the power to charge and collect fees; the power to appropriate money for its operation, and at the
operative until otherwise modified or repealed by the Commission; same time, review appropriations for the city and municipal units within its jurisdiction. It was bestowed the power to
enact or approve ordinances, resolutions and fix penalties for violation of such ordinances and resolutions. It also had
3. To charge and collect fees for the use of public service facilities; the power to review, amend, revise or repeal all ordinances, resolutions and acts of any of the four (4) cities and
thirteen (13) municipalities comprising Metro Manila.
4. To appropriate money for the operation of the metropolitan government and review appropriations for the city
and municipal units within its jurisdiction with authority to disapprove the same if found to be not in accordance P. D. No. 824 further provided:
with the established policies of the Commission, without prejudice to any contractual obligation of the local
government units involved existing at the time of approval of this Decree; "Sec. 9. Until otherwise provided, the governments of the four cities and thirteen municipalities in the
Metropolitan Manila shall continue to exist in their present form except as may be inconsistent with this
5. To review, amend, revise or repeal all ordinances, resolutions and acts of cities and municipalities Decree. The members of the existing city and municipal councils in Metropolitan Manila shall, upon
within Metropolitan Manila; promulgation of this Decree, and until December 31, 1975, become members of the Sangguniang Bayan
which is hereby created for every city and municipality of Metropolitan Manila.
6. To enact or approve ordinances, resolutions and to fix penalties for any violation thereof which shall
not exceed a fine of P10,000.00 or imprisonment of six years or both such fine and imprisonment for a In addition, the Sangguniang Bayan shall be composed of as many barangay captains as may be determined
single offense; and chosen by the Commission, and such number of representatives from other sectors of the society as may be
appointed by the President upon recommendation of the Commission.
7. To perform general administrative, executive and policy-making functions;
x x x.
8. To establish a fire control operation center, which shall direct the fire services of the city and municipal
governments in the metropolitan area; The Sangguniang Bayan may recommend to the Commission ordinances, resolutions or such measures
as it may adopt; Provided, that no such ordinance, resolution or measure shall become effective, until
after its approval by the Commission; and Provided further, that the power to impose taxes and other
9. To establish a garbage disposal operation center, which shall direct garbage collection and disposal in the
levies, the power to appropriate money and the power to pass ordinances or resolutions with penal
metropolitan area; sanctions shall be vested exclusively in the Commission."

10. To establish and operate a transport and traffic center, which shall direct traffic activities; Jjjuris The creation of the MMC also carried with it the creation of the Sangguniang Bayan. This was composed of the
members of the component city and municipal councils, barangay captains chosen by the MMC and sectoral
11. To coordinate and monitor governmental and private activities pertaining to essential services such as representatives appointed by the President. The Sangguniang Bayan had the power to recommend to the MMC the
transportation, flood control and drainage, water supply and sewerage, social, health and environmental adoption of ordinances, resolutions or measures. It was the MMC itself, however, that possessed legislative
services, housing, park development, and others; powers. All ordinances, resolutions and measures recommended by the Sangguniang Bayan were subject to the
MMCs approval. Moreover, the power to impose taxes and other levies, the power to appropriate money, and the
12. To insure and monitor the undertaking of a comprehensive social, economic and physical planning and power to pass ordinances or resolutions with penal sanctions were vested exclusively in the MMC. Sce-dp
development of the area;
Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully possessed legislative and
13. To study the feasibility of increasing barangay participation in the affairs of their respective local governments police powers. Whatever legislative powers the component cities and municipalities had were all subject to
and to propose to the President of the Philippines definite programs and policies for implementation; review and approval by the MMC.
After President Corazon Aquino assumed power, there was a clamor to restore the autonomy of the local When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrative
government units in Metro Manila. Hence, Sections 1 and 2 of Article X of the 1987 Constitution provided: Sj cj region" and the MMDA a "special development authority" whose functions were "without prejudice to the
autonomy of the affected local government units." The character of the MMDA was clearly defined in the
"Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, legislative debates enacting its charter.
municipalities and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as
herein provided. R. A. No. 7924 originated as House Bill No. 14170/ 11116 and was introduced by several legislators led by Dante
Tinga, Roilo Golez and Feliciano Belmonte. It was presented to the House of Representatives by the Committee on
Section 2. The territorial and political subdivisions shall enjoy local autonomy." Local Governments chaired by Congressman Ciriaco R. Alfelor. The bill was a product of Committee consultations with
the local government units in the National Capital Region (NCR), with former Chairmen of the MMC and MMA,[50] and
career officials of said agencies. When the bill was first taken up by the Committee on Local Governments, the
The Constitution, however, recognized the necessity of creating metropolitan regions not only in the existing National following debate took place:
Capital Region but also in potential equivalents in the Visayas and Mindanao.[43] Section 11 of the same Article X thus
provided:
"THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been debated a long time ago, you
know. Its a special we can create a special metropolitan political subdivision. Supreme
"Section 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite
as set forth in Section 10 hereof. The component cities and municipalities shall retain their basic autonomy and
shall be entitled to their own local executives and legislative assemblies. The jurisdiction of the metropolitan Actually, there are only six (6) political subdivisions provided for in the Constitution: barangay, municipality, city,
authority that will thereby be created shall be limited to basic services requiring coordination." province, and we have the Autonomous Region of Mindanao and we have the Cordillera. So we have 6. Now.

The Constitution itself expressly provides that Congress may, by law, create "special metropolitan political HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the Autonomous Region, that is also
subdivisions" which shall be subject to approval by a majority of the votes cast in a plebiscite in the political units specifically mandated by the Constitution.
directly affected; the jurisdiction of this subdivision shall be limited to basic services requiring coordination; and the
cities and municipalities comprising this subdivision shall retain their basic autonomy and their own local executive and THE CHAIRMAN: Thats correct. But it is considered to be a political subdivision. What is the meaning of a
legislative assemblies.[44] Pending enactment of this law, the Transitory Provisions of the Constitution gave the political subdivision? Meaning to say, that it has its own government, it has its own political personality,
President of the Philippines the power to constitute the Metropolitan Authority, viz: it has the power to tax, and all governmental powers: police power and everything. All right. Authority is
different; because it does not have its own government. It is only a council, it is an organization of
"Section 8. Until otherwise provided by Congress, the President may constitute the Metropolitan Authority to be political subdivision, powers, no, which is not imbued with any political power. Esmmis
composed of the heads of all local government units comprising the Metropolitan Manila area."[45]
If you go over Section 6, where the powers and functions of the Metro Manila Development Authority, it
In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted the Metropolitan Manila is purely coordinative. And it provides here that the council is policy-making. All right.
Authority (MMA). The powers and functions of the MMC were devolved to the MMA. [46] It ought to be stressed,
however, that not all powers and functions of the MMC were passed to the MMA. The MMAs power was limited Under the Constitution is a Metropolitan Authority with coordinative power. Meaning to say, it coordinates all of
to the "delivery of basic urban services requiring coordination in Metropolitan Manila." [47] The MMAs governing the different basic services which have to be delivered to the constituency. All right.
body, the Metropolitan Manila Council, although composed of the mayors of the component cities and
municipalities, was merely given the power of: (1) formulation of policies on the delivery of basic services There is now a problem. Each local government unit is given its respective as a political subdivision. Kalookan has its
requiring coordination and consolidation; and (2) promulgation of resolutions and other issuances, approval powers, as provided for and protected and guaranteed by the Constitution. All right, the exercise. However, in the
of a code of basic services and the exercise of its rule-making power.[48] exercise of that power, it might be deleterious and disadvantageous to other local government units. So, we are
forming an authority where all of these will be members and then set up a policy in order that the basic services can be
Under the 1987 Constitution, the local government units became primarily responsible for the governance of their effectively coordinated. All right. justice
respective political subdivisions. The MMAs jurisdiction was limited to addressing common problems involving basic
services that transcended local boundaries. It did not have legislative power. Its power was merely to provide the Of course, we cannot deny that the MMDA has to survive. We have to provide some funds, resources.
local government units technical assistance in the preparation of local development plans. Any semblance of legislative But it does not possess any political power. We do not elect the Governor. We do not have the power to
power it had was confined to a "review [of] legislation proposed by the local legislative assemblies to ensure tax. As a matter of fact, I was trying to intimate to the author that it must have the power to sue and be sued
consistency among local governments and with the comprehensive development plan of Metro Manila," and to "advise because it coordinates. All right. It coordinates practically all these basic services so that the flow and the
the local governments accordingly."[49] distribution of the basic services will be continuous. Like traffic, we cannot deny that. Its before our eyes.
Sewerage, flood control, water system, peace and order, we cannot deny these. Its right on our face. We have to
look for a solution. What would be the right solution? All right, we envision that there should be a coordinating THE CHAIRMAN: So instead of ordinances, say rules and regulations.
agency and it is called an authority. All right, if you do not want to call it an authority, its alright. We may call it a
council or maybe a management agency. HON. BELMONTE: Or resolutions. Actually, they are actually considering resolutions now.

Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that given to the THE CHAIRMAN: Rules and resolutions.
Metro Manila Council to promulgate administrative rules and regulations in the implementation of the MMDAs
functions. There is no grant of authority to enact ordinances and regulations for the general welfare of the
inhabitants of the metropolis. This was explicitly stated in the last Committee deliberations prior to the bills HON. BELMONTE: Rules, regulations and resolutions."[52]
presentation to Congress. Thus: Ed-p
The draft of H. B. No. 14170/ 11116 was presented by the Committee to the House of Representatives. The
explanatory note to the bill stated that the proposed MMDA is a "development authority" which is a "national agency,
"THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I think this was already approved
before, but it was reconsidered in view of the proposals, set-up, to make the MMDA stronger. Okay, so if there is not a political government unit."[53] The explanatory note was adopted as the sponsorship speech of the Committee on
no objection to paragraph "f" And then next is paragraph "b," under Section 6. "It shall approve metro-wide Local Governments. No interpellations or debates were made on the floor and no amendments introduced. The bill was
plans, programs and projects and issue ordinances or resolutions deemed necessary by the MMDA to approved on second reading on the same day it was presented.[54]
carry out the purposes of this Act." Do you have the powers? Does the MMDA because that takes the
form of a local government unit, a political subdivision. When the bill was forwarded to the Senate, several amendments were made. These amendments, however, did not
affect the nature of the MMDA as originally conceived in the House of Representatives.[55]
HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we say that it has the policies, its very clear
that those policies must be followed. Otherwise, whats the use of empowering it to come out with policies. Now, It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed with
the policies may be in the form of a resolution or it may be in the form of a ordinance. The term "ordinance" in legislative power. It is not even a "special metropolitan political subdivision" as contemplated in Section 11, Article X
this case really gives it more teeth, your honor. Otherwise, we are going to see a situation where you have the of the Constitution. The creation of a "special metropolitan political subdivision" requires the approval by a majority of
power to adopt the policy but you cannot really make it stick as in the case now, and I think here is Chairman the votes cast in a plebiscite in the political units directly affected.[56] R. A. No. 7924 was not submitted to the
Bunye. I think he will agree that that is the case now. Youve got the power to set a policy, the body wants to inhabitants of Metro Manila in a plebiscite. The Chairman of the MMDA is not an official elected by the people, but
follow your policy, then we say lets call it an ordinance and see if they will not follow it. appointed by the President with the rank and privileges of a cabinet member. In fact, part of his function is to perform
such other duties as may be assigned to him by the President,[57] whereas in local government units, the President
THE CHAIRMAN: Thats very nice. I like that. However, there is a constitutional impediment. You are making merely exercises supervisory authority. This emphasizes the administrative character of the MMDA. Newmiso
this MMDA a political subdivision. The creation of the MMDA would be subject to a plebiscite. That is
what Im trying to avoid. Ive been trying to avoid this kind of predicament. Under the Constitution it Clearly then, the MMC under P. D. No. 824 is not the same entity as the MMDA under R. A. No. 7924. Unlike the
states: if it is a political subdivision, once it is created it has to be subject to a plebiscite. Im trying to MMC, the MMDA has no power to enact ordinances for the welfare of the community. It is the local government
make this as administrative. Thats why we place the Chairman as a cabinet rank. units, acting through their respective legislative councils, that possess legislative power and police power. In the case
at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of
HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there is . Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and the respondent Court of Appeals did not
err in so ruling. We desist from ruling on the other issues as they are unnecessary. Esmso
THE CHAIRMAN: In setting up ordinances, it is a political exercise. Believe me.
We stress that this decision does not make light of the MMDAs noble efforts to solve the chaotic traffic condition in Metro
Manila. Everyday, traffic jams and traffic bottlenecks plague the metropolis. Even our once sprawling boulevards and avenues
HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of rules and regulations. That are now crammed with cars while city streets are clogged with motorists and pedestrians. Traffic has become a social malaise
would be it shall also be enforced. Jksm affecting our peoples productivity and the efficient delivery of goods and services in the country. The MMDA was created to
put some order in the metropolitan transportation system but unfortunately the powers granted by its charter are limited. Its
HON. BELMONTE: Okay, I will . good intentions cannot justify the opening for public use of a private street in a private subdivision without any legal warrant.
The promotion of the general welfare is not antithetical to the preservation of the rule of law. Sdjad

HON. LOPEZ: And you can also say that violation of such rule, you impose a sanction. But you know,
ordinance has a different legal connotation. IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 39549
are affirmed. Sppedsc

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


SO ORDERED.
ERNESTO B. FRANCISCO, JR., G.R. No. 166501
Petitioner,
Present: We dismiss the petition.

PANGANIBAN, C.J., PUNO, QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ,


- versus - CARPIO, A citizen can raise a constitutional question only when (1) he can show that he has personally suffered some actual or
AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, CALLEJO, SR., AZCUNA, TINGA, CHICO-NAZARIO,
threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the
GARCIA, and VELASCO, JJ. HON. BAYANI F. FERNANDO, in his capacity as Chairman of the
Metropolitan Manila Development Authority, and METROPOLITAN MANILA DEVELOPMENT Promulgated: challenged action; and (3) a favorable action will likely redress the injury.[3] On the other hand, a party suing as a taxpayer
AUTHORITY,
must specifically show that he has a sufficient interest in preventing the illegal expenditure of money raised by taxation
Respondents. November 16, 2006 and that he will sustain a direct injury as a result of the enforcement of the questioned statute. [4] Petitioner meets none
x--------------------------------------------------x
of the requirements under either category.

RESOLUTION
Nor is there merit to petitioners claim that the Court should relax the standing requirement because of the transcendental
CARPIO, J.: importance of the issues the petition raises. As an exception to the standing requirement, the transcendental importance
Petitioner Ernesto B. Francisco, Jr. (petitioner), as member of the Integrated Bar of the Philippines and taxpayer, filed of the issues raised relates to the merits of the petition.[5] Thus, the party invoking it must show, among others, the
this original action for the issuance of the writs of Prohibition and Mandamus. Petitioner prays for the Prohibition writ to presence of a clear disregard of a constitutional or statutory prohibition.[6] Petitioner has not shown such clear
enjoin respondents Bayani F. Fernando, Chairman of the Metropolitan Manila Development Authority (MMDA) and the constitutional or statutory violation.
MMDA (respondents) from further implementing its wet flag scheme (Flag Scheme).[1] The Mandamus writ is to compel
On the Flag Schemes alleged lack of legal basis, we note that all the cities and municipalities within the MMDAs
respondents to respect and uphold the x x x rights of pedestrians to due process x x x and equal protection of the laws
jurisdiction,[7] except Valenzuela City, have each enacted anti-jaywalking ordinances or traffic management codes with
x x x.
provisions for pedestrian regulation. Such fact serves as sufficient basis for respondents implementation of schemes, or
Petitioner contends that the Flag Scheme: (1) has no legal basis because the MMDAs governing body, the ways and means, to enforce the anti-jaywalking ordinances and similar regulations. After all, the MMDA is an
Metro Manila Council, did not authorize it; (2) violates the Due Process Clause because it is a summary punishment for administrative agency tasked with the implementation of rules and regulations enacted by proper authorities. [8] The
jaywalking; (3) disregards the Constitutional protection against cruel, degrading, and inhuman punishment; and (4) absence of an anti-jaywalking ordinance in Valenzuela City does not detract from this conclusion absent any proof that
violates pedestrian rights as it exposes pedestrians to various potential hazards.[2] respondents implemented the Flag Scheme in that city.
In their Comment, respondents sought the dismissal of the petition for petitioners lack of standing to litigate and for Further, the petition ultimately calls for a factual determination of whether the Flag Scheme is a reasonable enforcement
violation of the doctrine of hierarchy of courts. Alternatively, respondents contended that the Flag Scheme is a valid of anti-jaywalking ordinances and similar enactments.This Court is not a trier of facts. [9] The petition proffers mere
preventive measure against jaywalking. surmises and speculations on the potential hazards of the Flag Scheme. This Court cannot determine the
reasonableness of the Flag Scheme based on mere surmises and speculations.
Petitioner filed a Reply, claiming that the Court should take cognizance of the case as it raises issues of paramount and
Lastly, petitioner violated the doctrine of hierarchy of courts when he filed this petition directly with us. This Courts
transcendental importance. Petitioner also contended that he filed this petition directly with the Court because the issues jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, and habeas corpus, while concurrent with
raised in the petition deserve the direct x x x intervention of the x x x [C]ourt x x x. the Regional Trial Courts and the Court of Appeals, does not give litigants unrestrained freedom of choice of forum from
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Resolution were reached in consultation before
which to seek such relief.[10] We relax this rule only in exceptional and compelling circumstances.[11] This is not the case the case was assigned to the writer of the opinion of the Court.

here. ARTEMIO V. PANGANIBAN


Chief Justice

WHEREFORE, we DISMISS the petition.


[1] As first implemented on 17 January 2005, respondents describe the Flag Scheme as follows: [F]ifteen mobile units bearing wet white flags,
measuring seven (7) by five (5) feet with the words MAGLAKAD AT MAG-ABANG SA BANGKETA, were deployed along major
SO ORDERED. Metro Manila thoroughfares. Specifically, the wet flags are hung on the right side of the MMDA mobile units, perpendicular to the
sidewalks and in full view of pedestrians and commuters awaiting for a ride, which move slowly along the street. (Rollo, pp. 74-75)
[2] Petitioner listed the following as the hazards likely to result from the Flag Schemes implementation (rollo, pp. 34-35):
ANTONIO T. CARPIO
a) Pedestrians walking ahead of a [sic] MMDA moving vehicle with their backs towards the latter are likely
to be hit by the wet flag even before they will come to know that the wet flag is behind them;
Associate Justice b) The scheme is likely to cause accident and injuries in case of a sudden scampering of pedestrians to
avoid getting hit by the wet flag;
c) Employees going to work are likely to miss a days work or be late for work because either they have to
WE CONCUR:
change clothes or wait for the clothes they are wearing to dry;
ARTEMIO V. PANGANIBAN
d) Students going to school are likely to miss school or be late for school because either they have to
Chief Justice
change clothes or wait for their wet clothes to dry;
e) Women are subjected to indignities because if drenched, sensitive parts of their bodies may be
exposed, or they might end up using just any place wherein to change clothes or to dry their clothes;
REYNATO S. PUNO LEONARDO A. QUISUMBING
f) As a matter of fact, anyone hit by the wet flag or wet [sic] or drenched with water is likely to get sick if
Associate Justice Associate Justice
he or she does not change clothes;
g) Employees coming back from strenuous work are likely to have health problems if hit by the wet flag or
wet or drenched with water;
h) Old men and women and children are most likely to be hit and drenched by the wet flag because they
CONSUELO YNARES-SANTIAGO ANGELINA SANDOVAL-GUTIERREZ
do not have the speed and agility to avoid the wet flag on board a moving MMDA vehicle;
Associate Justice Associate Justice
i) As observed, the manner of throwing water into the wet flag is so crude and primitive that other
pedestrians and bystanders on the sidewalk are likely to get wet by spilled water as water is being thrown
by a [sic] MMDA personnel into the wet flag; and,
MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA
j) Likewise, as observed, the wet flag itself is already so dirty after just a day or two of use that using it to
Associate Justice Associate Justice
wet or drench pedestrians is so unsanitary and exposes pedestrians to possible health problems.
[3] Telecommunications & Broadcast Attorneys of the Philippines, Inc. v. COMELEC, 352 Phil. 153 (1998).
[4] Id.
CONCHITA CARPIO MORALES ROMEO J. CALLEJO, SR. [5] Id.
Associate Justice Associate Justice [6] Senate of the Philippines v. Ermita, G.R. No. 169777, 20 April 2006.
[7] MMDA has jurisdiction over the cities of Caloocan, Las Pias, Makati, Malabon, Mandaluyong, Manila, Marikina, Muntinlupa,

Paraaque, Pasay, Pasig, Quezon, San Juan, Taguig, and Valenzuela and the municipalities of Navotas and Pateros.
[8] Metropolitan Manila Development Authority v. Bel-Air Village Association, 385 Phil. 586 (2000); Metropolitan Manila Development Authority

v. Garin, G.R. No. 130230, 15 April 2005, 456 SCRA 176.


ADOLFO S. AZCUNA DANTE O. TINGA [9] Chavez v. Public Estates Authority, 433 Phil. 506 (2002).
Associate Justice Associate Justice [10] People v. Cuaresma, G.R. No. 67787, 18 April 1989, 172 SCRA 415.
[11] Santiago v. Vasquez, G.R. Nos. 99289-90, 27 January 1993, 217 SCRA 633.

MINITA V. CHICO-NAZARIO CANCIO C. GARCIA


Associate Justice Associate Justice

PRESBITERO J. VELASCO, JR.


Associate Justice

CERTIFICATION
THE METROPOLITAN MANILADEVELOPMENT G.R. No. 170656
AUTHORITY and BAYANI FERNANDO as Chairman of the have remained unchecked and have reverberated to this day. Traffic jams continue to clog the streets of Metro Manila,
Metropolitan Manila Development Authority, Present: bringing vehicles to a standstill at main road arteries during rush hour traffic and sapping peoples energies and patience
Petitioners,
PUNO, C.J., in the process.
QUISUMBING,
- versus - YNARES-SANTIAGO, The present petition for review on certiorari, rooted in the traffic congestion problem, questions the authority
SANDOVAL-GUTIERREZ, of the Metropolitan Manila Development Authority (MMDA) to order the closure of provincial bus terminals along Epifanio
CARPIO,
AUSTRIA-MARTINEZ, de los Santos Avenue (EDSA) and major thoroughfares of Metro Manila.
VIRON TRANSPORTATION CO., INC., CORONA,
Respondent. CARPIO MORALES, Specifically challenged are two Orders issued by Judge Silvino T. Pampilo, Jr. of the Regional Trial Court
AZCUNA, (RTC) of Manila, Branch 26 in Civil Case Nos. 03-105850 and 03-106224.
TINGA,
CHICO-NAZARIO, The first assailed Order of September 8, 2005,[2] which resolved a motion for reconsideration filed by herein
GARCIA,
respondents, declared Executive Order (E.O.) No. 179, hereafter referred to as the E.O., unconstitutional as it constitutes
VELASCO, JR.,
NACHURA, and an unreasonable exercise of police power. The second assailed Order of November 23, 2005[3] denied petitioners motion
REYES, JJ.
x --------------------------------------------- x for reconsideration.
HON. ALBERTO G. ROMULO, Executive Secretary, the G.R. No. 170657
The following facts are not disputed:
METROPOLITAN MANILADEVELOPMENT AUTHORITY
and BAYANI FERNANDO as Chairman of the President Gloria Macapagal Arroyo issued the E.O. on February 10, 2003, PROVIDING FOR THE ESTABLISHMENT
Metropolitan Manila Development Authority,
Petitioners, OF GREATER MANILA MASS TRANSPORT SYSTEM, the pertinent portions of which read:
WHEREAS, Metro Manila continues to be the center of employment opportunities, trade and commerce of the
- versus - Greater Metro Manila area;

MENCORP TRANSPORTATION SYSTEM, INC., WHEREAS, the traffic situation in Metro Manila has affected the adjacent provinces of Bulacan, Cavite,
Respondent. Promulgated: Laguna, and Rizal, owing to the continued movement of residents and industries to more affordable
and economically viable locations in these provinces;
August 15, 2007
x-----------------------------------------------------------------------------------------x WHEREAS, the Metropolitan Manila Development Authority (MMDA) is tasked to undertake measures to ease
traffic congestion in Metro Manila and ensure the convenient and efficient travel of commuters within
its jurisdiction;
DECISION
WHEREAS, a primary cause of traffic congestion in Metro Manila has been the numerous buses plying the
CARPIO MORALES, J.:
streets that impedes [sic] the flow of vehicles and commuters due to the inefficient connectivity of
the different transport modes;
The following conditions in 1969, as observed by this Court:
WHEREAS, the MMDA has recommended a plan to decongest traffic by eliminating the bus terminals now
located along major Metro Manila thoroughfares and providing more convenient access to the mass
Vehicles have increased in number. Traffic congestion has moved from bad to worse, from tolerable
transport system to the commuting public through the provision of mass transport terminal
to critical. The number of people who use the thoroughfares has multiplied x x x,[1]
facilities that would integrate the existing transport modes, namely the buses, the rail-based
systems of the LRT, MRT and PNR and to facilitate and ensure efficient travel through the improved
connectivity of the different transport modes;
WHEREAS, the national government must provide the necessary funding requirements to immediately
implement and render operational these projects; and extent to MMDA such other assistance as Manila thoroughfares and providing more and convenient access to the mass transport system to the commuting public
may be warranted to ensure their expeditious prosecution. through the provision of mass transport terminal facilities[6] which plan is referred to under the E.O. as the Greater Manila
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines, by virtue of the Mass Transport System Project (the Project).
powers vested in me by law, do hereby order:

Section 1. THE PROJECT. The project shall be identified as GREATER MANILA TRANSPORT SYSTEM The E.O. thus designated the MMDA as the implementing agency for the Project.
Project.

Section 2. PROJECT OBJECTIVES. In accordance with the plan proposed by MMDA, the project aims to
develop four (4) interim intermodal mass transport terminals to integrate the different transport Pursuant to the E.O., the Metro Manila Council (MMC), the governing board and policymaking body of the
modes, as well as those that shall hereafter be developed, to serve the commuting public in the MMDA, issued Resolution No. 03-07 series of 2003[7]expressing full support of the Project. Recognizing the imperative
northwest, north, east, south, and southwest of Metro Manila. Initially, the project shall concentrate
on immediately establishing the mass transport terminals for the north and south Metro Manila to integrate the different transport modes via the establishment of common bus parking terminal areas, the MMC cited
commuters as hereinafter described.
the need to remove the bus terminals located along major thoroughfares of Metro Manila. [8]
Section 3. PROJECT IMPLEMENTING AGENCY. The Metropolitan Manila Development Authority
(MMDA), is hereby designated as the implementing Agency for the project. For this purpose, MMDA
is directed to undertake such infrastructure development work as may be necessary and, thereafter, On February 24, 2003, Viron Transport Co., Inc. (Viron), a domestic corporation engaged in the business of public
manage the project until it may be turned-over to more appropriate agencies, if found suitable and
transportation with a provincial bus operation,[9] filed a petition for declaratory relief[10] before the RTC[11] of Manila.
convenient. Specifically, MMDA shall have the following functions and responsibilities:
In its petition which was docketed as Civil Case No. 03-105850, Viron alleged that the MMDA, through
a) Cause the preparation of the Master Plan for the projects, including the designs and
costing; Chairman Fernando, was poised to issue a Circular, Memorandum or Order closing, or tantamount to closing, all
b) Coordinate the use of the land and/or properties needed for the project with the provincial bus terminals along EDSA and in the whole of the Metropolis under the pretext of traffic regulation. [12] This
respective agencies and/or entities owning them;
c) Supervise and manage the construction of the necessary structures and facilities; impending move, it stressed, would mean the closure of its bus terminal in Sampaloc, Manila and two others in Quezon
d) Execute such contracts or agreements as may be necessary, with the appropriate
government agencies, entities, and/or private persons, in accordance with existing City.
laws and pertinent regulations, to facilitate the implementation of the project; Alleging that the MMDAs authority does not include the power to direct provincial bus operators to abandon
e) Accept, manage and disburse such funds as may be necessary for the construction
and/or implementation of the projects, in accordance with prevailing accounting and their existing bus terminals to thus deprive them of the use of their property, Viron asked the court to construe the scope,
audit polices and practice in government.
f) Enlist the assistance of any national government agency, office or department, extent and limitation of the power of the MMDA to regulate traffic under R.A. No. 7924, AN ACT CREATING THE
including local government units, government-owned or controlled corporations, as METROPOLITAN MANILA DEVELOPMENT AUTHORITY, DEFINING ITS POWERS AND FUNCTIONS, PROVIDING
may be necessary;
g) Assign or hire the necessary personnel for the above purposes; and FUNDS THEREFOR AND FOR OTHER PURPOSES.
h) Perform such other related functions as may be necessary to enable it to
accomplish the objectives and purposes of this Executive Order.[4] (Emphasis in the Viron also asked for a ruling on whether the planned closure of provincial bus terminals would contravene the
original; underscoring supplied) Public Service Act and related laws which mandate public utilities to provide and maintain their own terminals as a
requisite for the privilege of operating as common carriers. [13]
As the above-quoted portions of the E.O. noted, the primary cause of traffic congestion in Metro Manila has
Mencorp Transportation System, Inc. (Mencorp), another provincial bus operator, later filed a similar petition
been the numerous buses plying the streets and the inefficient connectivity of the different transport modes;[5] and the
for declaratory relief[14] against Executive Secretary Alberto G. Romulo and MMDA Chairman Fernando.
MMDA had recommended a plan to decongest traffic by eliminating the bus terminals now located along major Metro
Mencorp asked the court to declare the E.O. unconstitutional and illegal for transgressing the possessory rights Hence, this petition, which faults the trial court for failing to rule that: (1) the requisites of declaratory relief are
of owners and operators of public land transportation units over their respective terminals. not present, there being no justiciable controversy in Civil Case Nos. 03-105850 and 03-106224; and (2) the President
Averring that MMDA Chairman Fernando had begun to implement a plan to close and eliminate all provincial has the authority to undertake or cause the implementation of the Project.[19]
bus terminals along EDSA and in the whole of the metropolis and to transfer their operations to common bus Petitioners contend that there is no justiciable controversy in the cases for declaratory relief as nothing in the
terminals,[15] Mencorp prayed for the issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction body of the E.O. mentions or orders the closure and elimination of bus terminals along the major thoroughfares of Metro
to restrain the impending closure of its bus terminals which it was leasing at the corner of EDSA and New York Street in Manila. Viron and Mencorp, they argue, failed to produce any letter or communication from the Executive Department
Cubao and at the intersection of Blumentritt, Laon Laan and Halcon Streets in Quezon City. The petition was docketed apprising them of an immediate plan to close down their bus terminals.
as Civil Case No. 03-106224 and was raffled to Branch 47 of the RTC of Manila. And petitioners maintain that the E.O. is only an administrative directive to government agencies to coordinate
Mencorps petition was consolidated on June 19, 2003 with Virons petition which was raffled to Branch 26 of with the MMDA and to make available for use government property along EDSA and South Expressway corridors. They
the RTC, Manila. add that the only relation created by the E.O. is that between the Chief Executive and the implementing officials, but not
Mencorps prayer for a TRO and/or writ of injunction was denied as was its application for the issuance of a between third persons.
preliminary injunction.[16] The petition fails.
In the Pre-Trial Order[17] issued by the trial court, the issues were narrowed down to whether 1) the MMDAs It is true, as respondents have pointed out, that the alleged deficiency of the consolidated petitions to meet the
power to regulate traffic in Metro Manila included the power to direct provincial bus operators to abandon and close their requirement of justiciability was not among the issues defined for resolution in the Pre-Trial Order of January 12, 2004. It
duly established and existing bus terminals in order to conduct business in a common terminal; (2) the E.O. is consistent is equally true, however, that the question was repeatedly raised by petitioners in their Answer to Virons petition, [20] their
with the Public Service Act and the Constitution; and (3) provincial bus operators would be deprived of their real properties Comment of April 29, 2003 opposing Mencorps prayer for the issuance of a TRO, [21] and their Position Paper of August
without due process of law should they be required to use the common bus terminals. 23, 2004.[22]
Upon the agreement of the parties, they filed their respective position papers in lieu of hearings. In bringing their petitions before the trial court, both respondents pleaded the existence of the essential
By Decision[18] of January 24, 2005, the trial court sustained the constitutionality and legality of the E.O. requisites for their respective petitions for declaratory relief,[23] and refuted petitioners contention that a justiciable
pursuant to R.A. No. 7924, which empowered the MMDA to administer Metro Manilas basic services including those of controversy was lacking.[24] There can be no denying, therefore, that the issue was raised and discussed by the parties
transport and traffic management. before the trial court.
The trial court held that the E.O. was a valid exercise of the police power of the State as it satisfied the two The following are the essential requisites for a declaratory relief petition: (a) there must be a justiciable
tests of lawful subject matter and lawful means, hence, Virons and Mencorps property rights must yield to police power. controversy; (b) the controversy must be between persons whose interests are adverse; (c) the party seeking declaratory
On the separate motions for reconsideration of Viron and Mencorp, the trial court, by Order of September 8, relief must have a legal interest in the controversy; and (d) the issue invoked must be ripe for judicial determination.[25]
2005, reversed its Decision, this time holding that the E.O. was an unreasonable exercise of police power; that the The requirement of the presence of a justiciable controversy is satisfied when an actual controversy or
authority of the MMDA under Section (5)(e) of R.A. No. 7924 does not include the power to order the closure of Virons the ripening seeds thereof exist between the parties, all of whom are sui juris and before the court, and the declaration
and Mencorps existing bus terminals; and that the E.O. is inconsistent with the provisions of the Public Service Act. sought will help in ending the controversy.[26] A question becomes justiciable when it is translated into a claim of right
Petitioners motion for reconsideration was denied by Resolution of November 23, 2005. which is actually contested.[27]
In the present cases, respondents resort to court was prompted by the issuance of the E.O. The 4th Whereas or leased by third persons like respondents would have to be eliminated; and respondents would be forced to operate
clause of the E.O. sets out in clear strokes the MMDAs plan to decongest traffic by eliminating the bus terminals now from the common bus terminals.
located along major Metro Manila thoroughfares and providing more convenient access to the mass transport system to It cannot be gainsaid that the E.O. would have an adverse effect on respondents. The closure of their bus
the commuting public through the provision of mass transport terminal facilities x x x. (Emphasis supplied) terminals would mean, among other things, the loss of income from the operation and/or rentals of stalls
Section 2 of the E.O. thereafter lays down the immediate establishment of common bus terminals for north- thereat. Precisely, respondents claim a deprivation of their constitutional right to property without due process of law.
and south-bound commuters. For this purpose, Section 8 directs the Department of Budget and Management to allocate Respondents have thus amply demonstrated a personal and substantial interest in the case such that [they
funds of not more than one hundred million pesos (P100,000,000) to cover the cost of the construction of the north and have] sustained, or will sustain, direct injury as a result of [the E.O.s] enforcement.[31] Consequently, the established rule
south terminals. And the E.O. was made effective immediately. that the constitutionality of a law or administrative issuance can be challenged by one who will sustain a direct injury as
The MMDAs resolve to immediately implement the Project, its denials to the contrary notwithstanding, is also a result of its enforcement has been satisfied by respondents.
evident from telltale circumstances, foremost of which was the passage by the MMC of Resolution No. 03-07, Series of On to the merits of the case.
2003 expressing its full support of the immediate implementation of the Project. Respondents posit that the MMDA is devoid of authority to order the elimination of their bus terminals under
Notable from the 5th Whereas clause of the MMC Resolution is the plan to remove the bus terminals located the E.O. which, they argue, is unconstitutional because it violates both the Constitution and the Public Service Act; and
along major thoroughfares of Metro Manila and an urgent need to integrate the different transport modes. The that neither is the MMDA clothed with such authority under R.A. No. 7924.
7th Whereas clause proceeds to mention the establishment of the North and South terminals. Petitioners submit, however, that the real issue concerns the Presidents authority to undertake or to cause the
As alleged in Virons petition, a diagram of the GMA-MTS North Bus/Rail Terminal had been drawn up, and implementation of the Project. They assert that the authority of the President is derived from E.O. No.
construction of the terminal is already in progress. The MMDA, in its Answer[28] and Position Paper,[29] in fact affirmed 125, REORGANIZING THE MINISTRY OF TRANSPORTATION AND COMMUNICATIONS DEFINING ITS POWERS
that the government had begun to implement the Project. AND FUNCTIONS AND FOR OTHER PURPOSES, her residual power and/or E.O. No. 292, otherwise known as the
It thus appears that the issue has already transcended the boundaries of what is merely conjectural or Administrative Code of 1987. They add that the E.O. is also a valid exercise of the police power.
anticipatory. E.O. No. 125,[32] which former President Corazon Aquino issued in the exercise of legislative powers,
reorganized the then Ministry (now Department) of Transportation and Communications. Sections 4, 5, 6 and 22 of E.O.
Under the circumstances, for respondents to wait for the actual issuance by the MMDA of an order for the 125, as amended by E.O. 125-A,[33] read:
closure of respondents bus terminals would be foolhardy for, by then, the proper action to bring would no longer be for
declaratory relief which, under Section 1, Rule 63[30] of the Rules of Court, must be brought before there is a breach or SECTION 4. Mandate. The Ministry shall be the primary policy, planning, programming,
coordinating, implementing, regulating and administrative entity of the Executive Branch of the
violation of rights. government in the promotion, development and regulation of dependable and coordinated
As for petitioners contention that the E.O. is a mere administrative issuance which creates no relation with networks of transportation and communication systems as well as in the fast, safe, efficient and
reliable postal, transportation and communications services.
third persons, it does not persuade. Suffice it to stress that to ensure the success of the Project for which the concerned
To accomplish such mandate, the Ministry shall have the following objectives:
government agencies are directed to coordinate their activities and resources, the existing bus terminals owned, operated (a) Promote the development of dependable and coordinated networks of transportation and
communications systems;
(b) Guide government and private investment in the development of the countrys
intermodal transportation and communications systems in a most practical, expeditious, and Since, under the law, the DOTC is authorized to establish and administer programs and projects for
orderly fashion for maximum safety, service, and cost effectiveness; (Emphasis and underscoring transportation, it follows that the President may exercise the same power and authority to order the implementation of
supplied)
the Project, which admittedly is one for transportation.
SECTION 5. Powers and Functions. To accomplish its mandate, the Ministry shall have the
following powers and functions: Such authority springs from the Presidents power of control over all executive departments as well as the
(a) Formulate and recommend national policies and guidelines for the preparation and obligation for the faithful execution of the laws under Article VII, Section 17 of the Constitution which provides:
implementation of integrated and comprehensive transportation and communications systems at the
national, regional and local levels; SECTION 17. The President shall have control of all the executive departments, bureaus
(b) Establish and administer comprehensive and integrated programs for transportation and offices. He shall ensure that the laws be faithfully executed.
and communications, and for this purpose, may call on any agency, corporation, or organization,
whether public or private, whose development programs include transportation and communications as
an integral part thereof, to participate and assist in the preparation and implementation of such program;
(c) Assess, review and provide direction to transportation and communications research and This constitutional provision is echoed in Section 1, Book III of the Administrative Code of 1987. Notably, Section 38,
development programs of the government in coordination with other institutions concerned;
(d) Administer all laws, rules and regulations in the field of transportation and Chapter 37, Book IV of the same Code defines the Presidents power of supervision and control over the executive
communications; (Emphasis and underscoring supplied) departments, viz:
SECTION 6. Authority and Responsibility. The authority and responsibility for the exercise of
the mandate of the Ministry and for the discharge of its powers and functions shall be vested in SECTION 38. Definition of Administrative Relationships. Unless otherwise expressly
the Minister of Transportation and Communications, hereinafter referred to as the Minister, who stated in the Code or in other laws defining the special relationships of particular agencies,
shall have supervision and control over the Ministry and shall be appointed by the President. (Emphasis administrative relationships shall be categorized and defined as follows:
and underscoring supplied)
(1) Supervision and Control. Supervision and control shall include authority to
SECTION 22. Implementing Authority of Minister. The Minister shall issue such orders, rules, act directly whenever a specific function is entrusted by law or regulation to a subordinate;
regulations and other issuances as may be necessary to ensure the effective implementation of direct the performance of duty; restrain the commission of acts; review, approve, reverse or modify
the provisions of this Executive Order. (Emphasis and underscoring supplied) acts and decisions of subordinate officials or units; determine priorities in the execution of plans and
programs. Unless a different meaning is explicitly provided in the specific law governing the
It is readily apparent from the abovequoted provisions of E.O. No. 125, as amended, that the President, then relationship of particular agencies the word "control" shall encompass supervision and control as
possessed of and exercising legislative powers, mandated the DOTC to be the primary policy, planning, programming, defined in this paragraph. x x x (Emphasis and underscoring supplied)

coordinating, implementing, regulating and administrative entity to promote, develop and regulate networks of Thus, whenever a specific function is entrusted by law or regulation to a subordinate, the President may act

transportation and communications. The grant of authority to the DOTC includes the power directly or merely direct the performance of a duty.[34]

to establish and administer comprehensive and integrated programs for transportation and communications. Respecting the Presidents authority to order the implementation of the Project in the exercise of the police
power of the State, suffice it to stress that the powers vested in the DOTC Secretary to establish and administer

As may be seen further, the Minister (now Secretary) of the DOTC is vested with the authority and responsibility comprehensive and integrated programs for transportation and communications and to issue orders, rules and

to exercise the mandate given to the department. Accordingly, the DOTC Secretary is authorized to issue such orders, regulations to implement such mandate (which, as previously discussed, may also be exercised by the President) have

rules, regulations and other issuances as may be necessary to ensure the effective implementation of the law. been so delegated for the good and welfare of the people. Hence, these powers partake of the nature of police power.
Police power is the plenary power vested in the legislature to make, ordain, and establish wholesome and
reasonable laws, statutes and ordinances, not repugnant to the Constitution, for the good and welfare of the
people.[35] This power to prescribe regulations to promote the health, morals, education, good order or safety, and general
(a) Formulate, coordinate and regulate the implementation of medium and long-term plans and
welfare of the people flows from the recognition that salus populi est suprema lex ─ the welfare of the people is the programs for the delivery of metro-wide services, land use and physical development within Metropolitan
supreme law. Manila, consistent with national development objectives and priorities;
(b) Prepare, coordinate and regulate the implementation of medium-term investment programs for
While police power rests primarily with the legislature, such power may be delegated, as it is in fact increasingly metro-wide services which shall indicate sources and uses of funds for priority programs and projects,
and which shall include the packaging of projects and presentation to funding institutions;
being delegated.[36] By virtue of a valid delegation, the power may be exercised by the President and administrative (c) Undertake and manage on its own metro-wide programs and projects for the delivery of
boards[37] as well as by the lawmaking bodies of municipal corporations or local governments under an express delegation specific services under its jurisdiction, subject to the approval of the Council. For this purpose, MMDA
can create appropriate project management offices;
by the Local Government Code of 1991.[38] (d) Coordinate and monitor the implementation of such plans, programs and projects in Metro
Manila; identify bottlenecks and adopt solutions to problems of implementation;
The authority of the President to order the implementation of the Project notwithstanding, the designation of (e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate
the MMDA as the implementing agency for the Project may not be sustained. It is ultra vires, there being no legal basis and regulate the implementation of all programs and projects concerning traffic management,
specifically pertaining to enforcement, engineering and education. Upon request, it shall be
therefor. extended assistance and cooperation, including but not limited to, assignment of personnel, by all other
government agencies and offices concerned;
(f) Install and administer a single ticketing system, fix, impose and collect fines and
It bears stressing that under the provisions of E.O. No. 125, as amended, it is the DOTC, and not the MMDA, which is penalties for all kinds of violations of traffic rules and regulations, whether moving or non-moving
in nature, and confiscate and suspend or revoke drivers licenses in the enforcement of such traffic laws
authorized to establish and implement a project such as the one subject of the cases at bar. Thus, the President, although and regulations, the provisions of RA 4136 and PD 1605 to the contrary notwithstanding. For this
purpose, the Authority shall impose all traffic laws and regulations in Metro Manila, through its traffic
authorized to establish or cause the implementation of the Project, must exercise the authority through the instrumentality
operation center, and may deputize members of the PNP, traffic enforcers of local government units,
of the DOTC which, by law, is the primary implementing and administrative entity in the promotion, development and duly licensed security guards, or members of non-governmental organizations to whom may be
delegated certain authority, subject to such conditions and requirements as the Authority may impose;
regulation of networks of transportation, and the one so authorized to establish and implement a project such as the and
Project in question. (g) Perform other related functions required to achieve the objectives of the MMDA, including the
undertaking of delivery of basic services to the local government units, when deemed necessary subject
By designating the MMDA as the implementing agency of the Project, the President clearly overstepped the to prior coordination with and consent of the local government unit concerned. (Emphasis and
underscoring supplied)
limits of the authority conferred by law, rendering E.O. No. 179 ultra vires.
In another vein, the validity of the designation of MMDA flies in the absence of a specific grant of authority to
it under R.A. No. 7924. The scope of the function of MMDA as an administrative, coordinating and policy-setting body has been settled
in Metropolitan Manila Development Authority (MMDA) v. Bel-Air Village Association, Inc.[41] In that case, the Court

To recall, R.A. No. 7924 declared the Metropolitan Manila area [39] as a special development and administrative region stressed:
Clearly, the scope of the MMDAs function is limited to the delivery of the seven (7) basic
and placed the administration of metro-wide basic services affecting the region under the MMDA. services. One of these is transport and traffic management which includes the formulation and
Section 2 of R.A. No. 7924 specifically authorizes the MMDA to perform planning, monitoring and coordinative monitoring of policies, standards and projects to rationalize the existing transport operations,
infrastructure requirements, the use of thoroughfares and promotion of the safe movement of persons
functions, and in the process exercise regulatory and supervisory authority over the delivery of metro-wide services, and goods. It also covers the mass transport system and the institution of a system of road regulation,
including transport and traffic management.[40] Section 5 of the same law enumerates the powers and functions of the the administration of all traffic enforcement operations, traffic engineering services and traffic education
programs, including the institution of a single ticketing system in Metro Manila for traffic violations. Under
MMDA as follows:
this service, the MMDA is expressly authorized to to set the policies concerning traffic and coordinate
and regulate the implementation of all traffic management programs. In addition, the MMDA may install
and administer a single ticketing system, fix, impose and collect fines and penalties for all traffic
violations.
It will be noted that the powers of the MMDA are limited to the following acts: formulation, Likewise, in Luque v. Villegas,[46] this Court emphasized that public welfare lies at the bottom of any regulatory
coordination, regulation, implementation, preparation, management, monitoring, setting of policies, measure designed to relieve congestion of traffic, which is, to say the least, a menace to public safety. [47] As such,
installation of a system and administration. There is no syllable in R.A. No. 7924 that grants the MMDA
police power, let alone legislative power. Even the Metro Manila Council has not been delegated any measures calculated to promote the safety and convenience of the people using the thoroughfares by the regulation of
legislative power. Unlike the legislative bodies of the local government units, there is no provision
in R.A. No. 7924 that empowers the MMDA or its Council to enact ordinances, approve vehicular traffic present a proper subject for the exercise of police power.
resolutions and appropriate funds for the general welfare of the inhabitants of Metro Manila. The Notably, the parties herein concede that traffic congestion is a public concern that needs to be addressed
MMDA is, as termed in the charter itself, a development authority. It is an agency created for the
purpose of laying down policies and coordinating with the various national government immediately. Indeed, the E.O. was issued due to the felt need to address the worsening traffic congestion in Metro Manila
agencies, peoples organizations, non-governmental organizations and the private sector for the
efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions which, the MMDA so determined, is caused by the increasing volume of buses plying the major thoroughfares and the
are administrative in nature and these are actually summed up in the charter itself, viz: inefficient connectivity of existing transport systems. It is thus beyond cavil that the motivating force behind the issuance

SECTION 2. Creation of the Metropolitan Manila Development Authority. . . . of the E.O. is the interest of the public in general.
Are the means employed appropriate and reasonably necessary for the accomplishment of the purpose. Are
The MMDA shall perform planning, monitoring and coordinative functions, and in the
process exercise regulatory and supervisory authority over the delivery of metro-wide they not duly oppressive?
services within Metro Manila, without diminution of the autonomy of the local government units
concerning purely local matters.[42] (Emphasis and underscoring supplied) With the avowed objective of decongesting traffic in Metro Manila, the E.O. seeks to eliminate[e] the bus
terminals now located along major Metro Manila thoroughfares and provid[e] more convenient access to the mass
transport system to the commuting public through the provision of mass transport terminal facilities x x x. [48] Common
In light of the administrative nature of its powers and functions, the MMDA is devoid of authority to implement
carriers with terminals along the major thoroughfares of Metro Manila would thus be compelled to close down their
the Project as envisioned by the E.O; hence, it could not have been validly designated by the President to undertake the
existing bus terminals and use the MMDA-designated common parking areas.
Project. It follows that the MMDA cannot validly order the elimination of respondents terminals.
In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,[49] two city ordinances were passed by
Even the MMDAs claimed authority under the police power must necessarily fail in consonance with the above-
the Sangguniang Panlungsod of Lucena, directing public utility vehicles to unload and load passengers at the Lucena
quoted ruling in MMDA v. Bel-Air Village Association, Inc. and this Courts subsequent ruling in Metropolitan Manila
Grand Central Terminal, which was given the exclusive franchise to operate a single common terminal. Declaring that
Development Authority v. Garin[43] that the MMDA is not vested with police power.
no other terminals shall be situated, constructed, maintained or established inside or within the city of Lucena,
Even assuming arguendo that police power was delegated to the MMDA, its exercise of such power does not
the sanggunian declared as inoperable all temporary terminals therein.
satisfy the two tests of a valid police power measure, viz: (1) the interest of the public generally, as distinguished from
The ordinances were challenged before this Court for being unconstitutional on the ground that, inter alia, the
that of a particular class, requires its exercise; and (2) the means employed are reasonably necessary for the
measures constituted an invalid exercise of police power, an undue taking of private property, and a violation of the
accomplishment of the purpose and not unduly oppressive upon individuals.[44] Stated differently, the police power
constitutional prohibition against monopolies.
legislation must be firmly grounded on public interest and welfare and a reasonable relation must exist between the
Citing De la Cruz v. Paras[50] and Lupangco v. Court of Appeals,[51] this Court held that the assailed ordinances
purposes and the means.
were characterized by overbreadth, as they went beyond what was reasonably necessary to solve the traffic problem in
As early as Calalang v. Williams,[45] this Court recognized that traffic congestion is a public, not merely a
the city. And it found that the compulsory use of the Lucena Grand Terminal was unduly oppressive because it would
private, concern. The Court therein held that public welfare underlies the contested statute authorizing the Director of
subject its users to fees, rentals and charges.
Public Works to promulgate rules and regulations to regulate and control traffic on national roads.
The true role of Constitutional Law is to effect an equilibrium between authority and liberty so that
rights are exercised within the framework of the law and the laws are enacted with due deference to Finally, an order for the closure of respondents terminals is not in line with the provisions of the Public Service
rights. Act.
A due deference to the rights of the individual thus requires a more careful formulation of solutions
to societal problems. Paragraph (a), Section 13 of Chapter II of the Public Service Act (now Section 5 of Executive Order No. 202,

From the memorandum filed before this Court by petitioner, it is gathered that the Sangguniang creating the Land Transportation Franchising and Regulatory Board or LFTRB) vested the Public Service Commission
Panlungsod had identified the cause of traffic congestion to be the indiscriminate loading and unloading (PSC, now the LTFRB) with x x x jurisdiction, supervision and control over all public services and their franchises,
of passengers by buses on the streets of the city proper, hence, the conclusion that the terminals
contributed to the proliferation of buses obstructing traffic on the city streets. equipment and other properties x x x.

Bus terminals per se do not, however, impede or help impede the flow of traffic. How the outright Consonant with such grant of authority, the PSC was empowered to impose such conditions as to
proscription against the existence of all terminals, apart from that franchised to petitioner, can construction, equipment, maintenance, service, or operation as the public interests and convenience may reasonably
be considered as reasonably necessary to solve the traffic problem, this Court has not been
enlightened. If terminals lack adequate space such that bus drivers are compelled to load and unload require[53] in approving any franchise or privilege.
passengers on the streets instead of inside the terminals, then reasonable specifications for the size of
Further, Section 16 (g) and (h) of the Public Service Act [54] provided that the Commission shall have the
terminals could be instituted, with permits to operate the same denied those which are unable to meet
the specifications. power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations

In the subject ordinances, however, the scope of the proscription against the maintenance and exceptions mentioned and saving provisions to the contrary:
of terminals is so broad that even entities which might be able to provide facilities better than
the franchised terminal are barred from operating at all. (Emphasis and underscoring supplied)
(g) To compel any public service to furnish safe, adequate, and proper service as regards the
As in Lucena, this Court fails to see how the prohibition against the existence of respondents terminals can be manner of furnishing the same as well as the maintenance of the necessary material and equipment.
considered a reasonable necessity to ease traffic congestion in the metropolis. On the contrary, the elimination of (h) To require any public service to establish, construct, maintain, and operate any
reasonable extension of its existing facilities, where in the judgment of said Commission, such
respondents bus terminals brings forth the distinct possibility and the equally harrowing reality of traffic congestion in the extension is reasonable and practicable and will furnish sufficient business to justify the construction
and maintenance of the same and when the financial condition of the said public service reasonably
common parking areas, a case of transference from one site to another. warrants the original expenditure required in making and operating such extension.(Emphasis and
Less intrusive measures such as curbing the proliferation of colorum buses, vans and taxis entering Metro underscoring supplied)

Manila and using the streets for parking and passenger pick-up points, as respondents suggest, might even be more
The establishment, as well as the maintenance of vehicle parking areas or passenger terminals, is generally
effective in easing the traffic situation. So would the strict enforcement of traffic rules and the removal of obstructions
considered a necessary service to be provided by provincial bus operators like respondents, hence, the investments they
from major thoroughfares.
have poured into the acquisition or lease of suitable terminal sites. Eliminating the terminals would thus run counter to
As to the alleged confiscatory character of the E.O., it need only to be stated that respondents certificates of
the provisions of the Public Service Act.
public convenience confer no property right, and are mere licenses or privileges. [52] As such, these must yield to
This Court commiserates with the MMDA for the roadblocks thrown in the way of its efforts at solving the
legislation safeguarding the interest of the people.
pestering problem of traffic congestion in Metro Manila. These efforts are commendable, to say the least, in the face of
the abominable traffic situation of our roads day in and day out. This Court can only interpret, not change, the law,
Even then, for reasons which bear reiteration, the MMDA cannot order the closure of respondents terminals
however. It needs only to be reiterated that it is the DOTC ─ as the primary policy, planning, programming, coordinating,
not only because no authority to implement the Project has been granted nor legislative or police power been delegated
implementing, regulating and administrative entity to promote, develop and regulate networks of transportation and
to it, but also because the elimination of the terminals does not satisfy the standards of a valid police power measure.
communications ─ which has the power to establish and administer a transportation project like the Project RUBEN T. REYES
Associate Justice
subject of the case at bar.

CERTIFICATION
No matter how noble the intentions of the MMDA may be then, any plan, strategy or project which it is not
authorized to implement cannot pass muster. Pursuant to Section 13, Article VIII of the Constitution, I hereby certify that the conclusions in the above decision had been reached in

consultation before the case was assigned to the writer of the opinion of the Court.
WHEREFORE, the Petition is, in light of the foregoing disquisition, DENIED. E.O. No. 179 is declared
NULL and VOID for being ultra vires. REYNATO S. PUNO
Chief Justice

SO ORDERED. [1] Luque v. Villegas, G.R. No. L-22545, November 28, 1969, 30 SCRA 408, 422.
[2] Rollo, pp. 8-12.
[3] Id. at 13.
CONCHITA CARPIO MORALES [4] Rollo, pp. 60-61.
Associate Justice [5] 4th Whereas Clause.
[6] 5th Whereas clause.
[7] Rollo, pp. 194-195.
WE CONCUR: [8] 5th and 6th Whereas Clauses of MMDA Resolution No. 03-07, series of 2003. These clauses read:

WHEREAS, there is a need to remove the bus terminals located along major thoroughfares of Metro Manila and an
urgent need to integrate the different transport modes namely the buses, the rail-based systems of the LRT, MRT and PNR
REYNATO S. PUNO
in order to decongest traffic and ensure efficient travel and comfort to the commuters;
Chief Justice
WHEREAS, the Greater Manila Mass Transport System Project aims to develop five (5) interim intermodal mass
transport terminals to integrate the different transport modes to serve the commuting public in the northwest, north, east,
south and southwest of Metro Manila.
LEONARDO A. QUISUMBING CONSUELO YNARES- SANTIAGO [9] Virons authorized routes are from Metro Manila to Pangasinan, Nueva Ecija, Ilocos Sur and Abra and vice versa.
Associate Justice Associate Justice [10] Rollo, pp. 64-75.
[11] Branch 26.
[12] Rollo, pp. 67-68; pp. 4-5 of Virons Petition.
[13] Rollo, p. 30.
[14] Id. at 149-162.
GELINA SANDOVAL-GUTIERREZ ANTONIO T. CARPIO [15] Id. at 153; page 5 of Mencorps Petition.
Associate Justice Associate Justice [16] Id. at 205-207.
[17] Id. at 219-221.
[18] Id. at 317-323.
[19] Id. at 35.
RENATO C. CORONA [20] Id. at 125-130; dated May 15, 2003.
MA. ALICIA AUSTRIA-MARTINEZ Associate Justice [21] Id. at 200-204.
Associate Justice [22] Id. at 309-316.
[23] Id. at 64-75 and 149-162; Virons petition dated February 21, 2003 and Mencorps petition dated March 25, 2003.
[24] Id. at 135-148 and 222-249; Virons Reply dated June 17, 2003 and Virons Position Paper of March 16, 2004.
ADOLFO S. AZCUNA DANTE O. TINGA [25] Republic v. Orbecido III, G.R. No. 154380, October 5, 2005, 472 SCRA 114, 118; Board of Optometry v. Colet, 328 Phil. 1187, 1205
Associate Justice Associate Justice
(1996); Macasiano v. National Housing Authority, G.R. No. 107921, July 1, 1993, 224 SCRA 236, 243.
[26] International Hardwood and Veneer Company of the Philippines v. University of the Philippines, G.R. No. 521518, August 13, 1991, 200

SCRA 554, 569.


CANCIO C. GARCIA [27] International Hardwood and Veneer Company of the P hilippines v. University of the Philippines, supra.
MINITA V. CHICO-NAZARIO [28] Supra note 20 at 126; paragraph 11 thereof.
Associate Justice Associate Justice
[29] Supra note 22 at 312.
[30] Section 1 of Rule 63 of the Rules of Court provides:
ESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA
Associate Justice Associate Justice
SECTION 1. Who may file petition. Any person interested under a deed, will, contract, or other written instrument, of the health and sanitation of the region and for the enhancement of ecological balance and the prevention, control
whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation and abatement of environmental pollution.
may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of (g) Public safety which includes the formulation and implementation of programs and policies and
construction or validity arising, and for a declaration of his rights or duties, thereunder. (Emphasis supplied) procedures to achieve public safety, especially preparedness for preventive or rescue operations during times of
[31] People v. Vera, 65 Phil. 56, 89 (1937). calamities and disasters such as conflagrations, earthquakes, flood and tidal waves, and coordination and mobilization
[32] Dated January 30, 1987. of resources and the implementation of contingency plans for the rehabilitation and relief operations in coordination
[33] AMENDING EXECUTIVE ORDER NO. 125, ENTITLED REORGANIZING THE MINISTRY OF TRANSPORTATION AND with national agencies concerned.
COMMUNICATIONS, DEFINING ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES, dated April 13, 1987.
[34] Chavez v. Romulo, G.R. No. 157036, June 9, 2004, 431 SCRA 534, 555. [41] Metropolitan Manila Development Authority (MMDA) v. Bel-Air Village Association, supra note 37.
[35] Binay v. Domingo, G.R. No. 92389, September 11, 1991, 201 SCRA508, 514; Presidential Commission on Good Government v. Pea, G.R. [42] Supra at 607-608.
No. L-77663, April 12, 1988, 159 SCRA 556, 574; Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 708. [43] G.R. No. 130230, April 15, 2005, 456 SCRA 176, 185.
[36] In the early case of Pangasinan Transportation Co., Inc. v. The Public Service Commission (70 Phil. 221,229 [1940]), this Court observed [44] Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc., G.R. No. 148339, February 23, 2005, 452 SCRA 174, 185; Chavez v. Romulo, supra

that with the growing complexity of modern life, the multiplication of the subjects of governmental regulation, and the increased difficulty note 34 at 563; Balacuit v. CFI of Agusan del Norte, G.R. No. L-38429, June 30, 1988, 163 SCRA 182, 191.
of administering the laws, there is a constantly growing tendency toward the delegation of greater power by the legislature, and toward [45] 70 Phil. 726, 733 (1940).

the approval of the practice by the courts. (Underscoring supplied)Vide also Eastern Shipping Lines, Inc. v. Philippine Overseas [46] Supra note 1.

Employment Administration, G.R. No. L-76633, October 18, 1988, 166 SCRA 533, 544. [47] Supra at 423.
[37] Abakada Guro Party List v. Ermita, G.R. No. 168056, September 1, 2005, 469 SCRA 1, 117; Metropolitan Manila Development Authority [48] 5th Whereas Clause.

(MMDA) v. Bel-Air Village Association, 385 Phil. 586, 601. [49] Supra note 44.
[38] SEC. 16. General Welfare. ─ Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, [50] G.R. No. L-42571-72, July 25, 1983, 123 SCRA 569. In this case, the Court declared as unconstitutional an ordinance passed by

as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the the Municipality of Bocaue, Bulacan, which prohibited the operation of all night clubs, cabarets and dance halls within its jurisdiction for
promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among the protection of public morals. Stating that the ordinance on its face was overbroad, the Court held that the purpose sought to be achieved
other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, could have been attained by reasonable restrictions rather than an absolute prohibition.
encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, [51] G.R. No. L-77372, April 29, 1988, 160 SCRA 848. The case involved a resolution issued by the Professional Regulation Commission, which

enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve prohibited examinees from attending review classes and receiving handout materials, tips, and the like three days before the date of
the comfort and convenience of their inhabitants. examination in order to preserve the integrity and purity of the licensure examinations in accountancy. The measure was declared by this
[39] Metropolitan or Metro Manila is a body composed of the local government units of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Court not only to be unreasonable and violative of academic freedom, but also to be more sweeping than what was necessary.
Quezon, Muntinlupa, Las Pias, Marikina, Paraaque, Valenzuela, Malabon, Navotas, Pateros, San Juan and Taguig. (Sec. 1 of R.A. 7924) [52] Luque v. Villegas, supra note 1 at 418.
[40] Section 3 of R.A. No. 7924 provides the scope of MMDA services : [53] COMMONWEALTH ACT NO. 146, Chapter II, Section 16 (b).

SECTION 3. Scope of MMDA Services. Metro-wide services under the jurisdiction of the MMDA are those [54] The present provision of Section 5(k) of E.O. No. 202 reads:

services which have metro-wide impact and transcend local political boundaries or entail huge expenditures such that k. To formulate, promulgate, administer, implement and enforce rules and regulations on land
it would not be viable for said services to be provided by the individual local government units (LGUs) comprising transportation public utilities, standards of measurements and/or design, and rules and regulations requiring operators
Metropolitan Manila. These services shall include: of any public land transportation service to equip, install and provide in their utilities and in their stations such devices,
equipment facilities and operating procedures and techniques as may promote safety, protection, comfort and
(a) Development planning which includes the preparation of medium and long-term development plans; convenience to persons and property in their charges as well as the safety of persons and property within their areas
the development, evaluation and packaging of projects; investments programming; and coordination and monitoring of operations;
of plan, program and project implementation.
(b) Transport and traffic management which include the formulation, coordination, and monitoring
of policies, standards, programs and projects to rationalize the existing transport operations, infrastructure
requirements, the use of thoroughfares, and promotion of safe and convenient movement of persons and goods;
provision for the mass transport system and the institution of a system to regulate road users; administration and
implementation of all traffic enforcement operations, traffic engineering services and traffic education programs,
including the institution of a single ticketing system in Metropolitan Manila.
(c) Solid waste disposal and management which include formulation and implementation of policies,
standards, programs and projects for proper and sanitary waste disposal. It shall likewise include the establishment
and operation of sanitary land fill and related facilities and the implementation of other alternative programs intended
to reduce, reuse and recycle solid waste.
(d) Flood control and sewerage management which include the formulation and implementation of
policies, standards, programs and projects for an integrated flood control, drainage and sewerage system.
(e) Urban renewal, zoning, and land use planning, and shelter services which include the formulation,
adoption and implementation of policies, standards, rules and regulations, programs and projects to rationalize and
optimize urban land use and provide direction to urban growth and expansion, the rehabilitation and development of
slum and blighted areas, the development of shelter and housing facilities and the provision of necessary social
services thereof.
(f) Health and sanitation, urban protection and pollution control which include the formulation and
implementation of policies, rules and regulations, standards, programs and projects for the promotion and safeguarding
G.R. No. 88265 December 21, 1989 Section 4. Violative Erroneous, and Impossible Prescriptions.

SANTIAGO A. DEL ROSARIO, GEORGE G. GACULA, EDGARDO G. SANTOS, ALBANO S. SIBAL, ALBERTO C. 4.1. Violative Prescriptions:
REYES, NONITO P. ARROYO, EMMANUEL F. TERENCIO, DOMINGO S. DE LEON, MODESTO O. LLAMAS,
FARIDA U. ALONTO, ZENAIDA A. FLOIRENDO, ISABEL A. MEJIA, LUZ P. MABANAG, RAMON H. RABAGO, 4.1.1 Where the generic name is not written;
JR., SAMUEL D. TROCIO and OSCAR M. BRION, petitioners,
vs.
HON. ALFREDO R. BENGZON, in his capacity as Secretary of the Department of Health, respondent. 4.1.2 Where the generic name is not legible and a brand name which is legible is written;

Facundo T. Bautista for petitioners. 4.1.3 Where the brand name is indicated and instructions added, such as the phase 'No Substitution' which tend
to obstruct, hinder or prevent proper generic dispensing.
GRIÑO-AQUINO, J.:
4.2 What to do with Violative Prescriptions.
This is a class suit filed by officers of the Philippine Medical Association, the national organization of medical doctors in
Violative prescriptions shall not be filled. They shall be kept and reported by the pharmacist of the drug outlet or
the Philippines, on behalf of their professional brethren who are of kindred persuasion, wherein this Court is asked to
any other interested party to the nearest DOH Officer for appropriate action. The pharmacist shall advise the
declare as unconstitutional, hence, null and void, some provisions of the Generics Act of 1988 (Rep. Act No. 6675),
and of the implementing Administrative Order No. 62 issued pursuant thereto, specifically: prescriber of the problem and/or instruct the customer to get the proper prescription.

(a) Section 6, Pars. (a) and (b) of the Generics Act which provide: 4.3 Erroneous Prescriptions:

a) All government health agencies and their personnel as well as other government agencies shall use generic 4.3.1 When the brand name precedes the generic name.
terminology or generic names in all transactions related to purchasing, prescribing, dispensing and administering
of drugs and medicines. 4.3.2 Where the generic name is the one in parenthesis.

b) All medical, dental and veterinary practitioners, including private practitioners, shall write prescriptions using 4.3.3 Where the brand name in (sic) not in parenthesis.
the generic name. The brand name may be included if so desired. (p. 6, Rollo.)
4.3.4 Where more than one drug product is prescribed in one prescription form.
(b) Section 12, Pars. (b), (c) and (d) of the same law which provide:
4.4 What to do with erroneous prescriptions.
b) For the second conviction, the penalty of file in the amount of not less than two thousand pesos (P2,000.00)
but not exceeding five thousand pesos (P5,000.00) at the discretion of the court. Erroneous prescriptions shall be filled. Such prescriptions shall also be kept and reported by the pharmacist of
the drug outlet or any other interested party to the nearest DOH Office for appropriate action.
c) For the third conviction, the penalty of fine in the amount of not less than five thousand pesos (P5,000.00) but
not exceeding ten thousand pesos (P10,000.00) and suspension of his license to practice his profession for thirty xxx xxx xxx
(30) days at the discretion of the court.
Section 7. Timetable of Implementation.
d) For the fourth and subsequent convictions, the penalty of fine of not less than ten thousand pesos
(P10,000.00) and suspension of his license to practice his profession for one year or longer at the discretion of In order to give all affected parties adequate time for learning and adjustment, the implementation of these Rules
the court. (pp. 6-7, Rollo.) and and Regulations shall be in three phases, as follows:

(c) Sections 4 and 7, Phase 3 of Administrative Order No. 62, Series of 1989 dated March 9, 1989, of the respondent Phase 1 Education Drive ...
Secretary of Health, which read as follows:
Phase 2 Monitoring of Compliance
xxx xxx xxx Petitioners concede that the requirement for doctors, dentists, and veterinarians to use the generic terminology in
writing their prescriptions, followed by the brand name in parenthesis, is "well and good" (p. 12, Rollo). However, they
Phase 3 Implementation. complain that under paragraph (d) of the law which reads:

Beginning September 1, 1989 the DOH and the other relevant agencies of government shall monitor compliance (d) Drug outlets, including drugstores, hospital and non-hospital pharmacies and non-traditional outlets such as
with these Rules and Regulations and all violations shall be subject to the appropriate sanctions and penalties supermarkets and stores, shall inform any buyer about any and all other drug products having the same generic
provided for under these Rules and Regulations and the Generics Act of 1988. (pp. 7-9, Rollo.) name, together with their corresponding prices so that the buyer may adequately exercise his option. Within one
(1) year after approval of this Act, the drug outlets referred to herein, shall post in conspicuous places in their
establishments, a list of drug products with the same generic name and their corresponding prices. (Annex A, p.
On March 15, 1989, the full text of Republic Act No. 6675 was published in two newspapers of general circulation in the 23, Rollo.)
Philippines. The law took effect on March 30, 1989, fifteen (15) days after its publication, as provided in Section 15
thereof.
the salesgirl at the drugstore counter is authorized to "substitute the prescribed medicine with another medicine
belonging to the same generic group." Since doctors are not allowed to instruct the druggist not to substitute the
Section 7, Phase 3 of Administrative Order No. 62 was amended by Administrative Order No. 76 dated August 28, prescription, or to "Dispense only as Prescribed" (per Sec. 4, Adm. Order No. 62), the petitioners argue that "the act of
1989 by postponing to January 1, 1990 the effectivity of the sanctions and penalties for violations of the law, provided prescribing the correct medicine for the patient becomes the act of the salesgirl at the drugstore counter, no longer the
in Sections 6 and 12 of the Generics Act and Sections 4 and 7 of the Administrative Order. act of the physician, dentist, or veterinarian" (p. 12, Rollo).

The petitioners allege that "as of this date, there is no breach or violation yet" of the law (p. 9, Rollo), which took effect Here again, the petitioners have distorted the clear provisions of the law and the implementing administrative order. For
on March 30, 1989. However, as the penal provisions will only take effect on January 1, 1990, it would have been more it is plain to see that neither paragraph (d) of Section 6 of the Generics Act, nor Section 4 of Administrative Order No.
accurate to state that "as of this date, no breaches or violations of the law have been punished yet" (p. 9, Rollo). 62, gives the salesgirl and/or druggist the discretion to substitute the doctor's prescription.

The petition is captioned as an action for declaratory relief, over which this Court does not exercise jurisdiction. On the contrary, Section 4, par. 4.1, of Administrative Order No. 62 directs the pharmacist not to fill "violative
Nevertheless, in view of the public interest involved, we decided to treat it as a petition for prohibition instead. prescriptions" (where the generic name is not written, or illegibly written, and the prescription of a brand name is
accompanied by the doctor's instruction not to substitute it), as well as "impossible prescriptions" (par. 4.5). Even a
The petitioner's main argument against paragraphs (a) and (b), Section 6 of the law, is the alleged unequal treatment of doctor's "erroneous" prescriptions "shall be filled," not substituted (par. 4.3, Adm. Order No. 62). And, Sections 3 and 5
government physicians, dentists, and veterinarians, on one hand, and those in private practice on the other hand, in the of Adm. Order No. 63 enjoin the drug outlets not (to) favor or suggest" or "impose" a particular brand or product on the
manner of prescribing generic drugs, for, while the former are allegedly required to use only generic terminology in their customer. The administrative older provides:
prescriptions, the latter may write the brand name of the drug in parenthesis below the generic name. The favored
treatment of private doctors, dentists and veterinarians under the law is allegedly a specie of invalid class legislation. In order to ensure the informed choice and use of drugs by the patient/ buyer, the drug outlet is required to:

There is no merit in that argument for it proceeds from a misreading and misinterpretation of the letter and intent of
3.1.1 Inform the patient/buyer of all available drug products generically equivalent to the one prescribed with their
paragraphs (a) and (b), Section 6 of the Generics Act. Indeed, as explained by the public respondent:
corresponding prices. In so doing, the drug outlet shall not favor or suggest any particular product so that the
patient/buyer may fully and adequately exercise his option to choose (Sec. 3, Adm. Order No. 63 s. 1989).
... while paragraph (a) enumerates the government transactions ('Purchasing, prescribing, dispensing and
administering of drugs and medicines') where the sole use of generic terminology has been required, the The following acts or omissions are considered violations of these rules and regulations:
'prescription' of drugs is further governed by paragraph (b). And the use of the word 'all' in the latter provision
emphasizes the absence of any distinction between government and private physicians. In other words, in
prescribing drugs, physicians, whether in government service or in private practice, are both governed by exactly 5.1 Imposing a particular brand or product on the buyer. ... (pp. 46-47, Rollo.)
the same rules, and thus, are both authorized to include the brand name in their respective prescriptions. (p. 44,
Rollo.) The salesgirl at the drugstore counter, merely informs the customer, but does not determine (for she is incompetent to
do so) all the other drug products or brands that have the same generic name, and their corresponding prices. That
Furthermore, it may be observed that while paragraph (a) refers to "all government health agencies, and their information she may obtain from the list of drug products determined by the Bureau of Food and Drugs to have the
personnel as well as other government agencies" (not necessarily physicians, dentists and veterinarians), paragraph same generic name, or which are the chemical, biological, and therapeutic equivalent of the generic drug. All
(b) refers to "all medical, dental and veterinary practitioners, including private practitioners." drugstores or drug outlets are required by the law to post such list in a conspicuous place in their premises for the
information of the customers, for the choice of whether to buy the expensive brand name drug, or the less expensive
generic, should be exercised by the customer alone.
The purpose of the Generics Act is to carry out the policy of the State: refuse a patient, just as the patient may take or refuse the doctor's advice or prescription. As aptly observed by the
public respondent, no doctor has ever filed an action for breach of contract against a patient who refused to take
To promote, encourage and require the use of generic terminology in the importation, manufacture, distribution, prescribed medication, undergo surgery, or follow a recommended course treatment by his doctor ( p. 53, Rollo). In any
marketing, advertising and promotion, prescription and dispensing of drugs; event, no private contract between doctor and patient may be allowed to override the power of the State to enact laws
that are reasonably necessary to secure the health, safety, good order, comfort, or general welfare of the community.
This power can neither be abdicated nor bargained away. All contractual and property rights are held subject to its fair
To ensure the adequate supply of drugs with generic names at the lowest possible cost and endeavor to make
exercise (Anglo-Fil Trading Corporation vs. Lazaro, 124 SCRA 495.)
them available for free to indigent patients;
Petitioners have also assailed Section 12, paragraphs b, c and d, of the Generics Act prescribing graduated penalties
To encourage the extensive use of drugs with generic names through a rational system of procurement and (ranging from a reprimand to a fine of not less that P10,000 and the suspension of the physician's license to practice
distribution; his profession for one [1]) year or longer, at the discretion of the court) for violations of its provisions. Petitioners'
allegation that these penalties violate the constitutional guarantee against excessive fines and cruel and degrading
To emphasize the scientific basis for the use of drugs, in order that health professionals may become more punishment, has no merit. Penal sanctions are indispensable if the law is to be obeyed. They are the "teeth" of the law.
aware and cognizant of their therapeutic effectiveness; and Without them, the law would be toothless, not worth the paper it is printed on, for physicians, dentists and veterinarians
may freely ignore its prescriptions and prohibitions. The penalty of suspension or cancellation of the physician's license
To promote drug safety by minimizing duplication in medications and/or use of drugs with potentially adverse is neither cruel, inhuman, or degrading. It is no different from the penalty of suspension or disbarment that this Court
drug interactions. (pp. 3839, Rollo.) inflicts on lawyers and judges who misbehave or violate the laws and the Codes of Professional and Judicial Conduct.

or, as stated by the public respondent, "to promote and require the use of generic drug products that are therapeutically We hold that the Generics Act and the implementing administrative orders of the Secretary of Health are constitutional.
equivalent to their brand-name counter-parts" (p. 39, Rollo) for "the therapeutic effect of a drug does not depend on its In light of its beneficial provisions, we cannot heed the petitioners' plea to kill it aborning, i.e., before it has had a
'brand' but on the 'active ingredients' which it contains." The medicine that cures is the "active ingredient" of the drug, chance to prove its value to our people as envisioned by its makers.
and not the brand name by which it has been baptized by the manufacturer.
WHEREFORE, the petition is dismissed for lack of merit. Costs against the petitioners.
The public respondent points out that the institution of generics in the Philippines will compel physicians to prescribe
drugs based on their therapeutic or "active ingredient," instead of their well-known brand names. Multiple medications SO ORDERED.
which may produce potentially adverse, even lethal, chemical reactions in the patient will thereby be avoided. Patients
with limited means will be able to buy generic drugs that cost less but possess the same active ingredients, dosage Fernan, C.J., Narvasa, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Medialdea and Regalado,
form, and strength as brand names, many of which are priced beyond the reach of the common tao because the high JJ., concur.
costs of advertising, packaging, royalties, and other inputs of production determine their pricing for the market.
Melencio-Herrera, J., concurs in the result.
The Court has been unable to find any constitutional infirmity in the Generics Act. It, on the contrary, implements the
constitutional mandate for the State "to protect and promote the right to health of the people" and "to make essential
goods, health and other social services available to all the people at affordable cost" (Section 15, Art. II and Section 11, Separate Opinions
Art. XIII, 1987 Constitution).
Gutierrez, Jr., J., concurring:
The prohibition against the use by doctors of "no substitution" and/or words of similar import in their prescription, is a
valid regulation to prevent the circumvention of the law. It secures to the patient the right to choose between the brand I concur in the result only because of the failure to overcome the presumption of constitutionality and not because the
name and its generic equivalent since his doctor is allowed to write both the generic and the brand name in his respondent's arguments are valid.
prescription form. If a doctor is allowed to prescribe a brand-name drug with "no substitution," the patient's option to
buy a lower-priced, but equally effective, generic equivalent would thereby be curtailed. The law aims to benefit the Separate Opinions
impoverished (and often sickly) majority of the population in a still developing country like ours, not the affluent and
generally healthy minority.
Gutierrez, Jr., J., concurring:
There is no merit in the petitioners' theory that the Generics Act impairs the obligation of contract between a physician
and his patient, for no contract ever results from a consultation between patient and physician. A doctor may take in or I concur in the result only because of the failure to overcome the presumption of constitutionality and not because the
respondent's arguments are valid.
[G.R. No. 110249. August 21, 1997] Courts[1] and Municipal Circuit Trial Courts in Palawan from assuming jurisdiction over and hearing cases
concerning the violation of the Ordinances and of the Office Order.
ALFREDO TANO, BALDOMERO TANO, DANILO TANO, ROMUALDO TANO, TEOCENES MIDELLO, ANGEL
DE MESA, EULOGIO TREMOCHA, FELIPE ONGONION, JR., ANDRES LINIJAN, ROBERT LIM, VIRGINIA More appropriately, the petition is, and shall be treated as, a special civil action for certiorari and prohibition.
LIM, FELIMON DE MESA, GENEROSO ARAGON, TEODORICO ANDRE, ROMULO DEL ROSARIO, The following is petitioners summary of the factual antecedents giving rise to the petition:
CHOLITO ANDRE, ERICK MONTANO, ANDRES OLIVA, VITTORIO SALVADOR, LEOPOLDO ARAGON,
RAFAEL RIBA, ALEJANDRO LEONILA, JOSE DAMACINTO, RAMIRO MANAEG, RUBEN MARGATE,
1. On December 15, 1992, the Sangguniang Panlungsod ng Puerto Princesa City enacted Ordinance No. 15-92
ROBERTO REYES, DANILO PANGARUTAN, NOE GOLPAN,ESTANISLAO ROMERO, NICANOR DOMINGO,
which took effect on January 1, 1993 entitled: AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH
ROLDAN TABANG, PANGANIBAN, ADRIANO TABANG, FREDDIE SACAMAY, MIGUEL TRIMOCHA,
AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND
PACENCIO LABABIT, PABLO H. OMPAD, CELESTINO A. ABANO, ALLAN ALMODAL, BILLY D.
PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF, the full text of which reads
BARTOLAY, ALBINO D. LIQUE, MELCHOR J. LAYSON, MELANI AMANTE, CLARO E. YATOC, MERGELDO
as follows:
B. BALDEO, EDGAR M. ALMASET A., JOSELITO MANAEG, LIBERATO ANDRADA, JR., ROBERTO
BERRY, RONALD VILLANUEVA, EDUARDO VALMORIA, WILDREDO MENDOZA, NAPOLEON BABANGA,
ROBERTO TADEPA, RUBEN ASINGUA, SILVERIO GABO, JERRY ROMERO, DAVID PANGAGARUTAN, Section 1. Title of the Ordinance. - This Ordinance is entitled: AN ORDINANCE BANNING THE SHIPMENT OF
DANIEL PANGGARUTAN, ROMEO AGAWIN, FERNANDO EQUIZ, DITO LEQUIZ, RONILO ODERABLE, ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY
BENEDICTO TORRES, ROSITO A. VALDEZ, CRESENCIO A. SAYANG, NICOMEDES S. ACOSTA, ERENEO 1, 1998 AND PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF.
A. SEGARINO, JR., WILDREDO A. RAUTO, DIOSDADO A. ACOSTA, BONIFACIO G. SISMO, TACIO
ALUBA, DANIEL B. BATERZAL, ELISEO YBAEZ, DIOSDADO E. HANCHIC, EDDIE ESCALICAS, ELEAZAR Section 2. Purpose, Scope and Coverage. - To effectively free our City Sea Waters from Cyanide and other
B. BATERZAL, DOMINADOR HALICHIC, ROOSEVELT RISMO-AN, ROBERT C. MERCADER, TIRSO Obnoxious substance, and shall cover all persons and/or entities operating within and outside the City of Puerto
ARESGADO, DANIEL CHAVEZ, DANILO CHAVEZ, VICTOR VILLAROEL, ERNESTO C. YABANEZ, Princesa who is are [sic] directly or indirectly in the business or shipment of live fish and lobster outside the City.
ARMANDO T. SANTILLAN, RUDY S. SANTILLAN, JODJEN ILUSTRISIMO, NESTOR SALANGRON,
ALBERTO SALANGRON, ROGER L. ROXAS, FRANCISCO T. ANTICANO, PASTOR SALANGRON, Section 3. Definition of terms. - For purpose of this Ordinance the following are hereby defined:
BIENVENIDO SANTILLAN, GILBUENA LADDY, FIDEL BENJAMIN JOVELITO BELGANO, HONEY PARIOL,
ANTONIO SALANGRON, NICASIO SALANGRON, & AIRLINE SHIPPERS ASSOCIATION OF A. SEA BASS - A kind of fish under the family of Centropomidae, better known as APAHAP;
PALAWAN, petitioners, vs. GOV. SALVADOR P. SOCRATES, MEMBERS OF SANGGUNIAN
PANLALAWIGAN OF PALAWAN, namely, VICE-GOVERNOR JOEL T. REYES, JOSE D. ZABALA,
ROSALINO R. ACOSTA, JOSELITO A. CADLAON, ANDRES R. BAACO, NELSON P. PENEYRA, CIPRIANO B. CATFISH - A kind of fish under the family of Plotosidae, better known as HITO-HITO;
C. BARROMA, CLARO E. ORDINARIO, ERNESTO A. LLACUN, RODOLFO C. FLORDELIZA, GILBERT S.
BAACO, WINSTON G. ARZAGA, NAPOLEON F. ORDONEZ and GIL P. ACOSTA, CITY MAYOR EDWARD C. MUDFISH - A kind of fish under the family of Orphicaphalisae better known as DALAG
HAGEDORN, MEMBERS OF SANGGUNIANG PANLUNGSOD NG PUERTO PRINCESA, ALL MEMBERS OF
BANTAY DAGAT, MEMBERS OF PHILIPPINE NATIONAL POLICE OF PALAWAN, PROVINCIAL AND CITY D. ALL LIVE FISH - All alive, breathing not necessarily moving of all specie[s] use for food and for aquarium
PROSECUTORS OF PALAWAN and PUERTO PRINCESA CITY, and ALL JUDGES OF PALAWAN, purposes.
REGIONAL, MUNICIPAL AND METROPOLITAN, respondents.
E. LIVE LOBSTER - Several relatively, large marine crustaceans of the genus Homarus that are alive and
DECISION breathing not necessarily moving.
DAVIDE, JR., J.:
Section 4. It shall be unlawful [for] any person or any business enterprise or company to ship out from Puerto
Princesa City to any point of destination either via aircraft or seacraft of any live fish and lobster except SEA
Petitioners caption their petition as one for Certiorari, Injunction With Preliminary Mandatory Injunction,with BASS, CATFISH, MUDFISH, AND MILKFISH FRIES.
Prayer for Temporary Restraining Order and pray that this Court: (1) declare as unconstitutional: (a) Ordinance No.
15-92, dated 15 December 1992, of the Sangguniang Panlungsod of Puerto Princesa; (b) Office Order No. 23,
Section 5. Penalty Clause. - Any person/s and or business entity violating this Ordinance shall be penalized with
Series of 1993, dated 22 January 1993, issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City; and
a fine of not more than P5,000.00 or imprisonment of not more than twelve (12) months, cancellation of their
(c) Resolution No. 33, Ordinance No. 2, Series of 1993, dated 19 February 1993, of the Sangguniang
permit to do business in the City of Puerto Princesa or all of the herein stated penalties, upon the discretion of the
Panlalawigan of Palawan; (2) enjoin the enforcement thereof; and (3) restrain respondents Provincial and City
court.
Prosecutors of Palawan and Puerto Princesa City and Judges of Regional Trial Courts, Metropolitan Trial
Section 6. If the owner and/or operator of the establishment found vilating the provisions of this ordinance is a OTHER SPECIES), PENAEUS MONODON (TIGER PRAWN-BREEDER SIZE OR MOTHER), EPINEPHELUS
corporation or a partnership, the penalty prescribed in Section 5 hereof shall be imposed upon its president SUILLUS (LOBA OR GREEN GROUPER) AND FAMILY: BALISTIDAE (TROPICAL AQUARIUM FISHES) FOR
and/or General Manager or Managing Partner and/or Manager, as the case maybe [sic]. A PERIOD FIVE (5) YEARS IN AND COMING FROM PALAWAN WATERS, the full text of which reads as
follows:
Section 7. Any existing ordinance or any provision of any ordinance inconsistent to [sic] this ordinance is deemed
repealed. WHEREAS, scientific and factual researches [sic] and studies disclose that only five (5) percent of the corals of
our province remain to be in excellent condition as [a] habitat of marine coral dwelling aquatic organisms;
Section 8. This Ordinance shall take effect on January 1, 1993.
WHEREAS, it cannot be gainsaid that the destruction and devastation of the corals of our province were
SO ORDAINED. principally due to illegal fishing activities like dynamite fishing, sodium cyanide fishing, use of other obnoxious
substances and other related activities;
2. To implement said city ordinance, then Acting City Mayor Amado L. Lucero issued Office Order No. 23, Series
of 1993 dated January 22, 1993 which reads as follows: WHEREAS, there is an imperative and urgent need to protect and preserve the existence of the remaining
excellent corals and allow the devastated ones to reinvigorate and regenerate themselves into vitality within the
span of five (5) years;
In the interest of public service and for purposes of City Ordinance No. PD426-14-74, otherwise known as AN
ORDINANCE REQUIRING ANY PERSON ENGAGED OR INTENDING TO ENGAGE IN ANY BUSINESS,
TRADE, OCCUPATION, CALLING OR PROFESSION OR HAVING IN HIS POSSESSION ANY OF THE WHEREAS, Sec. 468, Par. 1, Sub-Par. VI of the [sic] R.A. 7160 otherwise known as the Local Government Code
ARTICLES FOR WHICH A PERMIT IS REQUIRED TO BE HAD, TO OBTAIN FIRST A MAYORS PERMIT and of 1991 empowers the Sangguniang Panlalawigan to protect the environment and impose appropriate penalties
City Ordinance No. 15-92, AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER [upon] acts which endanger the environment such as dynamite fishing and other forms of destructive fishing,
OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998, you are hereby among others.
authorized and directed to check or conduct necessary inspections on cargoes containing live fish and lobster
being shipped out from the Puerto Princesa Airport, Puerto Princesa Wharf or at any port within the jurisdiction NOW, THEREFORE, on motion by Kagawad Nelson P. Peneyra and upon unanimous decision of all the
of the City to any point of destinations [sic] either via aircraft or seacraft. members present;

The purpose of the inspection is to ascertain whether the shipper possessed the required Mayors Permit issued Be it resolved as it is hereby resolved, to approve Resolution No. 33, Series of 1993 of the Sangguniang
by this Office and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Panlalawigan and to enact Ordinance No. 2 for the purpose, to wit:
Fisheries and Aquatic Resources and as to compliance with all other existing rules and regulations on the matter.
ORDINANCE NO. 2
Any cargo containing live fish and lobster without the required documents as stated herein must be held for Series of 1993
proper disposition.
BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN IN SESSION ASSEMBLED:
In the pursuit of this Order, you are hereby authorized to coordinate with the PAL Manager, the PPA Manager,
the local PNP Station and other offices concerned for the needed support and cooperation.Further, that the usual Section 1. TITLE - This Ordinance shall be known as an Ordinance Prohibiting the catching, gathering,
courtesy and diplomacy must be observed at all times in the conduct of the inspection. possessing, buying, selling and shipment of live marine coral dwelling aquatic organisms, to wit: 1.Family:
Scaridae (Mameng), 2. Epinephelus Fasciatus (Suno), 3. Cromileptes altivelis (Panther or Senorita), lobster
Please be guided accordingly. below 200 grams and spawning), 4. Tridacna Gigas (Taklobo), 5. Pinctada Margaretefera (Mother Pearl, Oysters,
Giant Clams and other species), 6. Penaeus Monodon (Tiger Prawn-breeder size or mother), 7. Epinephelus
3. On February 19, 1993, the Sangguniang Panlalawigan, Provincial Government of Palawan enacted Resolution Suillus (Loba or Green Grouper) and 8. Family: Balistidae (Topical Aquarium Fishes) for a period of five (5) years
No. 33 entitled: A RESOLUTION PROHIBITING THE CATCHING, GATHERING, POSSESSING, BUYING, in and coming from Palawan Waters.
SELLING AND SHIPMENT OF LIVE MARINE CORAL DWELLING AQUATIC ORGANISMS, TO WIT:
FAMILY: SCARIDAE (MAMENG), EPINE PHELUS FASCIATUS(SUNO). CROMILEPTES Section II. PRELIMINARY CONSIDERATIONS
ALTIVELIS (PANTHER OR SENORITA), LOBSTER BELOW 200 GRAMS AND SPAWNING, TRADACNA
GIGAS (TAKLOBO), PINCTADA MARGARITEFERA(MOTHER PEARL, OYSTERS, GIANT CLAMS AND
1. Sec. 2-A (Rep. Act 7160). It is hereby declared, the policy of the state that the territorial and political 4. The respondents implemented the said ordinances, Annexes A and C hereof thereby depriving all the
subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest fishermen of the whole province of Palawan and the City of Puerto Princesa of their only means of livelihood and
development as self reliant communities and make them more effective partners in the attainment of national the petitioners Airline Shippers Association of Palawan and other marine merchants from performing their lawful
goals. Toward this end, the State shall provide for [a] more responsive and accountable local government occupation and trade;
structure instituted through a system of decentralization whereby local government units shall be given more
powers, authority, responsibilities and resources. 5. Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, and Felipe
Ongonion, Jr. were even charged criminally under criminal case no. 93-05-C in the 1st Municipal Circuit Trial
2. Sec. 5-A (R.A. 7160). Any provision on a power of [a] local Government Unit shall be liberaly interpreted in its Court of Cuyo-Agutaya-Magsaysay, an original carbon copy of the criminal complaint dated April 12, 1993 is
favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the hereto attached as Annex D; while xerox copies are attached as Annex D to the copies of the petition;
lower government units. Any fair and reasonable doubts as to the existence of the power shall be interpreted in
favor of the Local Government Unit concerned. 6. Petitioners Robert Lim and Virginia Lim, on the other hand, were charged by the respondent PNP with the
respondent City Prosecutor of Puerto Princesa City, a xerox copy of the complaint is hereto attached as Annex E;
3. Sec. 5-C (R.A. 7160). The general welfare provisions in this Code shall be liberally interpreted to give more
powers to local government units in accelerating economic development and upgrading the quality of life for the Without seeking redress from the concerned local government units, prosecutors office and courts,
people in the community. petitioners directly invoked our original jurisdiction by filing this petition on 4 June 1993. In sum, petitioners contend
that:
4. Sec. 16 (R.A. 7160). General Welfare. - Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its First, the Ordinances deprived them of due process of law, their livelihood, and unduly restricted them from
efficient and effective governance; and those which are essential to the promotion of the general welfare. the practice of their trade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987
Constitution.
Section III. DECLARATION OF POLICY. - It is hereby declared to be the policy of the Province of Palawan to Second, Office Order No. 23 contained no regulation nor condition under which the Mayors permit could be
protect and conserve the marine resources of Palawan not only for the greatest good of the majority of the granted or denied; in other words, the Mayor had the absolute authority to determine whether or not to issue permit.
present generation but with [the] proper perspective and consideration of [sic] their prosperity, and to attain this
end, the Sangguniang Panlalawigan henceforth declares that is [sic] shall be unlawful for any person or any Third, as Ordinance No. 2 of the Province of Palawan altogether prohibited the catching, gathering,
business entity to engage in catching, gathering, possessing, buying, selling and shipment of live marine coral possession, buying, selling and shipping of live marine coral dwelling organisms, without any distinction whether it
dwelling aquatic organisms as enumerated in Section 1 hereof in and coming out of Palawan Waters for a period was caught or gathered through lawful fishing method, the Ordinance took away the right of petitioners-fishermen
of five (5) years; to earn their livelihood in lawful ways; and insofar as petitioners-members of Airline Shippers Association are
concerned, they were unduly prevented from pursuing their vocation and entering into contracts which are proper,
necessary, and essential to carry out their business endeavors to a successful conclusion.
Section IV. PENALTY CLAUSE. - Any person and/or business entity violating this Ordinance shall be penalized
with a fine of not more than Five Thousand Pesos (P5,000.00), Philippine Currency, and/or imprisonment of six Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and void, the criminal cases based
(6) months to twelve (12) months and confiscation and forfeiture of paraphernalias [sic] and equipment in favor of thereon against petitioners Tano and the others have to be dismissed.
the government at the discretion of the Court;
In the Resolution of 15 June 1993 we required respondents to comment on the petition, and furnished the
Office of the Solicitor General with a copy thereof.
Section V. SEPARABILITY CLAUSE. - If for any reason, a Section or provision of this Ordinance shall be held as
unconditional [sic] or invalid, it shall not affect the other provisions hereof. In their comment filed on 13 August 1993, public respondents Governor Socrates and Members of the
Sangguniang Panlalawigan of Palawan defended the validity of Ordinance No.2, Series of 1993, as a valid exercise
Section VI. REPEALING CLAUSE. - Any existing Ordinance or a provision of any ordinance inconsistent of the Provincial Governments power under the general welfare clause (Section 16 of the Local Government Code
herewith is deemed modified, amended or repealed. of 1991 [hereafter, LGC]), and its specific power to protect the environment and impose appropriate penalties for
acts which endanger the environment, such as dynamite fishing and other forms of destructive fishing under
Section VII. EFFECTIVITY. - This Ordinance shall take effect ten (10) days after its publication. Section 447 (a) (1) (vi), Section 458 (a) (1) (vi), and Section 468 (a) (1) (vi), of the LGC. They claimed that in the
exercise of such powers, the Province of Palawan had the right and responsibilty to insure that the remaining coral
reefs, where fish dwells [sic], within its territory remain healthy for the future generation. The Ordinance, they further
SO ORDAINED.
asserted, covered only live marine coral dwelling aquatic organisms which were enumerated in the ordinance and
excluded other kinds of live marine aquatic organisms not dwelling in coral reefs; besides the prohibition was for The second set of petitioners is composed of the rest of the petitioners numbering seventy-seven (77), all of
only five (5) years to protect and preserve the pristine coral and allow those damaged to regenerate. whom, except the Airline Shippers Association of Palawan -- an alleged private association of several marine
merchants -- are natural persons who claim to be fishermen.
Aforementioned respondents likewise maintained that there was no violation of due process and equal
protection clauses of the Constitution. As to the former, public hearings were conducted before the enactment of The primary interest of the first set of petitioners is, of course, to prevent the prosecution, trial and
the Ordinance which, undoubtedly, had a lawful purpose and employed reasonable means; while as to the latter, determination of the criminal cases until the constitutionality or legality of the Ordinances they allegedly violated
a substantial distinction existed between a fisherman who catches live fish with the intention of selling it live, and shall have been resolved. The second set of petitioners merely claim that they being fishermen or marine
a fisherman who catches live fish with no intention at all of selling it live, i.e., the former uses sodium cyanide while merchants, they would be adversely affected by the ordinances.
the latter does not. Further, the Ordinance applied equally to all those belonging to one class.
As to the first set of petitioners, this special civil for certiorari must fail on the ground of prematurity amounting
On 25 October 1993 petitioners filed an Urgent Plea for the Immediate Issuance of a Temporary Restraining to a lack of cause of action. There is no showing that the said petitioners, as the accused in the criminal cases,
Order claiming that despite the pendency of this case, Branch 50 of the Regional Trial Court of Palawan was bent have filed motions to quash the informations therein and that the same were denied. The ground available for such
on proceeding with Criminal Case No. 11223 against petitioners Danilo Tano, Alfredo Tano, Eulogio Tremocha, motions is that the facts charged therein do not constitute an offense because the ordinances in question are
Romualdo Tano, Baldomero Tano, Andres Lemihan and Angel de Mesa for violation of Ordinance No. 2 of the unconstitutional.[6] It cannot then be said that the lower courts acted without or in excess of jurisdiction or with grave
Sangguniang Panlalawigan of Palawan. Acting on said plea, we issued on 11 November 1993 a temporary abuse of discretion to justify recourse to the extraordinary remedy of certiorari or prohibition. It must further be
restraining order directing Judge Angel Miclat of said court to cease and desist from proceeding with the stressed that even if the petitioners did file motions to quash, the denial thereof would not forthwith give rise to a
arraignment and pre-trial of Criminal Case No. 11223. cause of action under Rule 65 of the Rules of Court. The general rule is that where a motion to quash is denied,
the remedy therefrom is not certiorari, but for the party aggrieved thereby to go to trial without prejudice to
On 12 July 1994, we excused the Office of the Solicitor General from filing a comment, considering that as reiterating special defenses involved in said motion, and if, after trial on the merits of adverse decision is rendered,
claimed by said office in its Manifestation of 28 June 1994, respondents were already represented by counsel. to appeal therefrom in the manner authorized by law.[7] And , even where in an exceptional circumstance such
The rest of the respondents did not file any comment on the petition. denial may be the subject of a special civil action for certiorari, a motion for reconsideration must have to be filed
to allow the court concerned an opportunity to correct its errors, unless such motion may be dispensed with because
In the resolution of 15 September 1994, we resolved to consider the comment on the petition as the Answer, of existing exceptional circumstances.[8] Finally, even if a motion for reconsideration has been filed and denied, the
gave due course to the petition and required the parties to submit their respective memoranda. [2] remedy under Rule 65 is still unavailable absent any showing of the grounds provided for in Section 1 thereof.[9] For
obvious reasons, the petition at bar does not, and could not have , alleged any of such grounds.
On 22 April 1997 we ordered impleaded as party respondents the Department of Agriculture and the Bureau
of Fisheries and Aquatic Resources and required the Office of the Solicitor General to comment on their behalf. As to the second set of petitioners, the instant petition is obviously one for DECLARATORY RELIEF, i.e., for
But in light of the latters motion of 9 July 1997 for an extension of time to file the comment which would only result a declaration that the Ordinances in question are a nullity ... for being unconstitutional. [10] As such, their petition
in further delay, we dispensed with said comment. must likewise fail, as this Court is not possessed of original jurisdiction over petitions for declaratory relief even if
only questions of law are involved,[11] it being settled that the Court merely exercises appellate jurisdiction over
After due deliberation on the pleadings filed, we resolved to dismiss this petition for want of merit, on 22 July
such petitions.[12]
1997, and assigned it to the ponente for the writing of the opinion of the Court.
II
I
Even granting arguendo that the first set of petitioners have a cause of action ripe for the extraordinary writ
There are actually two sets of petitioners in this case. The first is composed of Alfredo Tano, Baldomero
of certiorari, there is here a clear disregard of the hierarchy of courts, and no special and important reason or
Tano, Danilo Tano, Romualdo Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, Felipe Ongonion, Jr.,
exceptional or compelling circumstance has been adduced why direct recourse to us should be allowed. While we
Andres Linijan, and Felimon de Mesa, who were criminally charged with violating Sangguniang
have concurrent jurisdiction with Regional Trial courts and with the Court of Appeals to issue writs of certiorari,
Panlalawigan Resolution No. 33 and Ordinance No. 2, Series of 1993, of the Province of Palawan, in Criminal Case
prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence gives petitioners no
No. 93-05-C of the 1st Municipal Circuit Trial Court (MCTC) of Palawan;[3] and Robert Lim and Virginia Lim who
unrestricted freedom of choice of court forum, so we held in People v. Cuaresma:[13]
were charged with violating City Ordinance No. 15-92 of Puerto Princesa City and Ordinance No. 2, Series of 1993,
of the Province of Palawan before the Office of the City Prosecutor of Puerto Princesa. [4] All of them, with the
exception of Teocenes Midello, Felipe Ongonion, Jr., Felimon de Mesa, Robert Lim and Virginia Lim, are likewise This concurrence of jurisdiction is not to be taken as according to parties seeking any of the writs an absolute
the accused in Criminal Case No. 11223 for the violation of Ordinance No. 2 of the Sangguniang Panlalawigan of unrestrained freedom of choice of the court to which application therefor will be directed. There is after all
Palawan, pending before Branch 50 of the Regional Trial Court of Palawan.[5] hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general
determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial
hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level (inferior)
courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A SEC. 2. x x x
direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when
there are special and important reasons therefor, clearly and specifically set out in the petition. This is The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive
established policy. It is a policy necessary to prevent inordinate demands upon the Courts time and attention economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.
which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of
the Courts docket.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and
The Court feels the need to reaffirm that policy at this time, and to enjoin strict adherence thereto in the light of lagoons.
what it perceives to be a growing tendency on the part of litigants and lawyers to have their applications for the
so-called extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and
Sections 2 and 7 of Article XIII provide:
immediately by the highest tribunal of the land.
Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities based on
In Santiago v. Vasquez,[14] this Court forcefully expressed that the propensity of litigants and lawyers to
freedom of initiative and self-reliance.
disregard the hierarchy of courts must be put to a halt, not only because of the imposition upon the precious time
of this Court, but also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of
the case which often has to be remanded or referred to the lower court, the proper forum under the rules of SEC. 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the
procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We reiterated the preferential use of the communal marine and fishing resources, both inland and offshore. It shall provide support
judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in to such fishermen through appropriate technology and research, adequate financial, production, and marketing
the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and assistance, and other services. The State shall also protect, develop, and conserve such resources. The
calling for the exercise of [its] primary jurisdiction. protection shall extend to offshore fishing grounds of subsistence fishermen against foreign
intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources.
III
Notwithstanding the foregoing procedural obstacles against the first set of petitioners, we opt to resolve this There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. In
case on its merits considering that the lifetime of the challenged Ordinances is about to end. Ordinance No. 15-92 their petition, petitioner Airline Shippers Association of Palawan is described as a private association composed of
of the City of Puerto Princesa is effective only up to 1 January 1998, while Ordinance No. 2 of the Province of Marine Merchants; petitioners Robert Lim and Virginia Lim, as merchants; while the rest of the petitioners claim to
Palawan, enacted on 19 February 1993, is effective for only five (5) years. Besides, these Ordinances were be fishermen, without any qualification, however, as to their status.
undoubtedly enacted in the exercise of powers under the new LGC relative to the protection and preservation of Since the Constitution does not specifically provide a definition of the terms subsistence or marginal
the environment and are thus novel and of paramount importance. No further delay then may be allowed in the fishermen,[18] they should be construed in their general and ordinary sense. A marginal fisherman is an individual
resolution of the issues raised. engaged in fishing whose margin of return or reward in his harvest of fish as measured by existing price levels is
It is of course settled that laws (including ordinances enacted by local government units) enjoy the barely sufficient to yield a profit or cover the cost of gathering the fish, [19] while a subsistence fisherman is one
presumption of constitutionality.[15] To overthrow this presumption, there must be a clear and unequivocal breach whose catch yields but the irreducible minimum for his livelihood.[20] Section 131(p) of the LGC (R.A. No. 7160)
of the Constitution, not merely a doubtful or argumentative contradiction. In short, the conflict with the Constitution defines a marginal farmer or fisherman as an individual engaged in subsistence farming or fishing which shall be
must be shown beyond reasonable doubt.[16] Where doubt exists, even if well founded, there can be no finding of limited to the sale, barter or exchange of agricultural or marine products produced by himself and his immediate
unconstitutionality. To doubt is to sustain.[17] family. It bears repeating that nothing in the record supports a finding that any petitioner falls within these definitions.

After a scrunity of the challenged Ordinances and the provisions of the Constitution petitioners claim to have Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay
been violated, we find petitioners contentions baseless and so hold that the former do not suffer from any infirmity, stress on the duty of the State to protect the nations marine wealth. What the provision merely recognizes is that
both under the Constitution and applicable laws. the State may allow, by law, cooperative fish farming, with priority to subsistence fishermen and fishworkers in
rivers, lakes, bays, and lagoons. Our survey of the statute books reveals that the only provision of law which speaks
Petitioners specifically point to Section 2, Article XII and Sections 2 and 7, Article XIII of the Constitution as of the preferential right of marginal fishermen is Section 149 of the LGC of 1991 which pertinently provides:
having been transgressed by the Ordinances.
The pertinent portion of Section 2 of Article XII reads: SEC. 149. Fishery Rentals, Fees and Charges. -- x x x

(b) The sangguniang bayan may:


(1) Grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry areas, within Subject to whatever rules and regulations and local laws that may be passed, may be existing or will be
a definite zone of the municipal waters, as determined by it: Provided, however, That duly registered passed.[21] (underscoring supplied for emphasis).
organizations and cooperatives of marginal fishermen shall have preferential right to such fishery privileges ....
What must likewise be borne in mind is the state policy enshrined in the Constitution regarding the duty of
In a Joint Administrative Order No. 3, dated 25 April 1996, the Secretary of the Department of Agriculture and the the State to protect and advance the right of the people to a balanced and healthful ecology in accord with the
Secretary of the Department of Interior and Local Government prescribed the guidelines on the preferential rhythm and harmony of nature.[22] On this score, in Oposa v. Factoran,[23] this Court declared:
treatment of small fisherfolk relative to the fishery right mentioned in Section 149. This case, however, does not
involve such fishery right. While the right to balanced and healthful ecology is to be found under the Declaration of Principles the State
Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing resources, but Policies and not under the Bill of Rights, it does not follow that it is less important than any of the civil and political
of their protection, development, and conservation. As hereafter shown, the ordinances in question are meant rights enumerated in the latter. Such a right belongs to a different category of rights altogether for it concerns
precisely to protect and conserve our marine resources to the end that their enjoyment by the people may be nothing less than self-preservation and self-perpetuation - aptly and fittingly stressed by the petitioners - the
guaranteed not only for the present generation, but also for the generations to come. advancement of which may even be said to predate all governments and constitutions. As a matter of fact, these
basic rights need not even be written in the Constitution for they are assumed to exist from the inception of
The so-called preferential right of subsistence or marginal fishermen to the use of marine resources is not at humankind. If they are now explicitly mentioned in the fundamental charter, it is because of the well-founded fear
all absolute. In accordance with the Regalian Doctrine, marine resources belong to the State, and, pursuant to the of its framers that unless the rights to a balanced and healthful ecology and to health are mandated as state
first paragraph of Section 2, Article XII of the Constitution, their exploration, development and utilization ... shall be policies by the Constitution itself, thereby highlighting their continuing importance and imposing upon the state a
under the full control and supervision of the State. Moreover, their mandated protection, development, and solemn obligation to preserve the first and protect and advance the second , the day would not be too far when
conservation as necessarily recognized by the framers of the Constitution, imply certain restrictions on whatever all else would be lost not only for the present generation, but also for those to come - generations which stand to
right of enjoyment there may be in favor of anyone. Thus, as to the curtailment of the preferential treatment of inherit nothing but parched earth incapable of sustaining life.
marginal fisherman, the following exchange between Commissioner Francisco Rodrigo and Commissioner Jose
F.S. Bengzon, Jr., took place at the plenary session of the Constitutional Commission: The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing the
environment ...
MR. RODRIGO:
The LGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the
Let us discuss the implementation of this because I would not raise the hopes of our people, and afterwards people to a balanced and healthful ecology. In fact, the General Welfare Clause, expressly mentions this right:
fail in the implementation. How will this be implemented? Will there be a licensing or giving of permits so
that government officials will know that one is really a marginal fisherman? Or if policeman say that a SEC. 16. General Welfare.-- Every local government unit shall exercise the powers expressly granted, those
person is not a marginal fisherman, he can show his permit, to prove that indeed he is one. necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to the promotion of the general welfare. Within their
MR. BENGZON: respective territorial jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced
Certainly, there will be some mode of licensing insofar as this is concerned and this particular question ecology, encourage and support the development of appropriate and self-reliant scientific and technological
could be tackled when we discuss the Article on Local Governments -- whether we will leave to the local capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment
governments or to Congress on how these things will be implemented. But certainly, I think our among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.
Congressmen and our local officials will not be bereft of ideas on how to implement this mandate. (underscoring supplied).

MR. RODRIGO: Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC shall be
liberally interpreted to give more powers to the local government units in accelerating economic development and
upgrading the quality of life for the people of the community.
So, once one is licensed as a marginal fisherman, he can go anywhere in the Philippines and fish in
any fishing grounds. The LGC vests municipalities with the power to grant fishery privileges in municipal waters and to impose
rentals, fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or
MR. BENGZON: poisonous substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any
violation of the provisions of applicable fishery laws.[24] Further, the sangguniang bayan, the sangguniang
panlungsod and the sangguniang panlalawigan are directed to enact ordinances for the general welfare of the These functions are covered in the Memorandum of Agreement of 5 April 1994 between the Department of
municipality and its inhabitants, which shall include, inter alia, ordinances that [p]rotect the environment and impose Agriculture and the Department of Interior and Local Government.
appropriate penalties for acts which endanger the environment such as dynamite fishing and other forms of
destructive fishing ... and such other activities which result in pollution, acceleration of eutrophication of rivers and In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted
lakes or of ecological imbalance.[25] to local government units under Section 16 (the General Welfare Clause), and under Sections 149, 447 (a) (1) (vi),
458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity of the
Finally, the centerpiece of LGC is the system of decentralization[26] as expressly mandated by the questioned Ordinances cannot be doubted.
Constitution.[27] Indispensable thereto is devolution and the LGC expressly provides that [a]ny provision on a power
of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall Parenthetically, we wish to add that these Ordinances find full support under R.A. No. 7611, otherwise known
be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as the Strategic Environmental Plan (SEP) for Palawan Act, approved on 19 July 1992. This statute adopts a
as to the existence of the power shall be interpreted in favor of the local government unit concerned, [28]Devolution comprehensive framework for the sustainable development of Palawan compatible with protecting and enhancing
refers to the act by which the National Government confers power and authority upon the various local government the natural resources and endangered environment of the province, which shall serve to guide the local government
units to perform specific functions and responsibilities.[29] of Palawan and the government agencies concerned in the formulation and implementation of plans, programs
and projects affecting said province.[32]
One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of fishery
laws in municipal waters including the conservation of mangroves.[30] This necessarily includes enactment of At this time then, it would be appropriate to determine the relation between the assailed Ordinances and the
ordinances to effectively carry out such fishery laws within the municipal waters. aforesaid powers of the Sangguniang Panlungsod of the City of Puerto Princesa and the Sangguniang
Panlalawigan of the Province of Palawan to protect the environment. To begin, we ascertain the purpose of the
The term municipal waters, in turn, include not only streams, lakes, and tidal waters within the municipality, Ordinances as set forth in the statement of purposes or declaration of policies quoted earlier.
not being the subject of private ownership and not comprised within the national parks, public forest, timber lands,
forest reserves, or fishery reserves, but also marine waters included between two lines drawn perpendicularly to It is clear to the Court that both Ordinances have two principal objectives or purposes: (1) to establish a
the general coastline from points where the boundary lines of the municipality or city touch the sea at low tide and closed season for the species of fish or aquatic animals covered therein for a period of five years, and (2) to protect
a third line parallel with the general coastline and fifteen kilometers from it. [31] Under P.D. No. 704, the marine the corals of the marine waters of the City of Puerto Princesa and the Province of Palawan from further destruction
waters included in municipal waters is limited to three nautical miles from the general coastline using the above due to illegal fishing activities.
perpendicular lines and a third parallel line. The accomplishment of the first objective is well within the devolved power to enforce fishery laws in
These fishery laws which local government units may enforce under Section 17(b), (2), (i) in municipal waters municipal waters, such as P.D. No. 1015, which allows the establishment of closed seasons. The devolution of
include: (1) P.D. No. 704; (2) P.D. No. 1015 which, inter alia, authorizes the establishment of a closed season in such power has been expressly confirmed in the Memorandum of Agreement of 5 April 1994 between the
any Philippine water if necessary for conservation or ecological purposes; (3) P.D. No. 1219 which provides for the Department of Agriculture and the Department of Interior and Local Government.
exploration, exploitation, utilization, and conservation of coral resources; (4) R.A. No. 5474, as amended by B.P. The realization of the second objective falls within both the general welfare clause of the LGC and the express
Blg. 58, which makes it unlawful for any person, association, or corporation to catch or cause to be caught, sell, mandate thereunder to cities and provinces to protect the environment and impose appropriate penalties for acts
offer to sell, purchase, or have in possession any of the fish specie called gobiidae or ipon during closed season; which endanger the environment.[33]
and (5) R.A. No. 6451 which prohibits and punishes electrofishing, as well as various issuances of the BFAR.
The destruction of the coral reefs results in serious, if not irreparable, ecological imbalance, for coral reefs
To those specifically devolved insofar as the control and regulation of fishing in municipal waters and the are among the natures life-support systems.[34] They collect, retain, and recycle nutrients for adjacent nearshore
protection of its marine environment are concerned, must be added the following: areas such as mangroves, seagrass beds, and reef flats; provide food for marine plants and animals; and serve
1. Issuance of permits to construct fish cages within municipal waters; as a protective shelter for aquatic organisms.[35] It is said that [e]cologically, the reefs are to the oceans what forests
2. Issuance of permits to gather aquarium fishes within municipal waters; are to continents: they are shelter and breeding grounds for fish and plant species that will disappear without
3. Issuance of permits to gather kapis shells within municipal waters; them.[36]
4. Issuance of permits to gather/culture shelled mollusks within municipal waters; The prohibition against catching live fish stems, in part, from the modern phenomenon of live-fish trade which
5. Issuance of licenses to establish seaweed farms within municipal waters; entails the catching of so-called exotic tropical species of fish not only for aquarium use in the West, but also for
6. Issuance of licenses to establish culture pearls within municipal waters; the market for live banquet fish [which] is virtually insatiable in ever more affluent Asia. [37] These exotic species are
7. Issuance of auxiliary invoice to transport fish and fishery products; and coral-dwellers, and fishermen catch them by diving in shallow water with corraline habitats and squirting sodium
8. Establishment of closed season in municipal waters. cyanide poison at passing fish directly or onto coral crevices; once affected the fish are immobilized [merely
stunned] and then scooped by hand.[38] The diver then surfaces and dumps his catch into a submerged net attached
to the skiff . Twenty minutes later, the fish can swim normally.Back on shore, they are placed in holding pens, and
within a few weeks, they expel the cyanide from their system and are ready to be hauled. Then they are placed in sought would be that of the Secretary of the Department of Agriculture (not DENR) of municipal ordinances
saltwater tanks or packaged in plastic bags filled with seawater for shipment by air freight to major markets for live affecting fishing and fisheries in municipal waters has been dispensed with in view of the following reasons:
food fish.[39] While the fish are meant to survive, the opposite holds true for their former home as [a]fter the
fisherman squirts the cyanide, the first thing to perish is the reef algae, on which fish feed. Days later, the living (1) Section 534 (Repealing Clause) of the LGC expressly repeals or amends Section 16 and 29 of P.D. No.
coral starts to expire. Soon the reef loses its function as habitat for the fish, which eat both the algae and 704[45] insofar that they are inconsistent with the provisions of the LGC.
invertebrates that cling to the coral. The reef becomes an underwater graveyard, its skeletal remains brittle, (2) As discussed earlier, under the general welfare clause of the LGC, local government units have the
bleached of all color and vulnerable to erosion from the pounding of the waves.[40] It has been found that cyanide power, inter alia, to enact ordinances to enhance the right of the people to a balanced ecology. It likewise
fishing kills most hard and soft corals within three months of repeated application.[41] specifically vests municipalities with the power to grant fishery privileges in municipal waters, and impose rentals,
The nexus then between the activities barred by Ordinance No. 15-92 of the City of Puerto Princesa and the fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous
prohibited acts provided in Ordinance No. 2, Series of 1993 of the Province of Palawan, on one hand, and the use substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute other methods of
of sodium cyanide, on the other, is painfully obvious. In sum, the public purpose and reasonableness of the fishing; and to prosecute any violation of the provisions of applicable fishing laws. [46] Finally, it imposes upon
Ordinances may not then be controverted. the sangguniang bayan, the sangguniang panlungsod, and the sangguniang panlalawigan the duty to enact
ordinances to [p]rotect the environment and impose appropriate penalties for acts which endanger the environment
As to Office Order No. 23, Series of 1993, issued by Acting City Mayor Amado L. Lucero of the City of Puerto such as dynamite fishing and other forms of destructive fishing and such other activities which result in pollution,
Princesa, we find nothing therein violative of any constitutional or statutory provision. The Order refers to the acceleration of eutrophication of rivers and lakes or of ecological imbalance.[47]
implementation of the challenged ordinance and is not the Mayors Permit.
In closing, we commend the Sangguniang Panlungsod of the City of Puerto Princesa and Sangguniang
The dissenting opinion of Mr. Justice Josue N. Bellosillo relies upon the lack of authority on the part of Panlalawigan of the Province of Palawan for exercising the requisite political will to enact urgently needed
the Sangguniang Panlungsod of Puerto Princesa to enact Ordinance No. 15, Series of 1992, on the theory that the legislation to protect and enhance the marine environment, thereby sharing in the herculean task of arresting the
subject thereof is within the jurisdiction and responsibility of the Bureau of Fisheries and Aquatic Resources (BFAR) tide of ecological destruction. We hope that other local government units shall now be roused from their lethargy
under P.D. No. 704, otherwise known as the Fisheries Decree of 1975; and that, in any event, the Ordinance is and adopt a more vigilant stand in the battle against the decimation of our legacy to future generations. At this time,
unenforceable for lack of approval by the Secretary of the Department of Natural Resources (DNR), likewise in the repercussions of any further delay in their response may prove disastrous, if not, irreversible.
accordance with P.D. No. 704.
WHEREFORE, the instant petition is DISMISSED for lack of merit and the temporary restraining order issued
The majority is unable to accommodate this view. The jurisdiction and responsibility of the BFAR under P. D. on 11 November 1993 is LIFTED.
no. 704, over the management, conservation, development, protection, utilization and disposition of all fishery and
aquatic resources of the country is not all-encompassing. First, Section 4 thereof excludes from such jurisdiction No pronouncement as to costs.
and responsibility municipal waters, which shall be under the municipal or city government concerned, except SO ORDERED.
insofar as fishpens and seaweed culture in municipal in municipal centers are concerned. This section provides,
however, that all municipal or city ordinances and resolutions affecting fishing and fisheries and any disposition Narvasa, C.J., Padilla, Vitug, Panganiban, and Torres, Jr., JJ., concur.
thereunder shall be submitted to the Secretary of the Department of Natural Resources for appropriate action and Romero, Melo, Puno, and Francisco, JJ., joined the ponencias of Justices Davide and Mendoza.
shall have full force and effect only upon his approval.[42] Bellosillo, J., see dissenting opinion.
Kapunan and Hermosisima, Jr., JJ., join Justice Bellosillo in his dissenting opinion.
Second, it must at once be pointed out that the BFAR is no longer under the Department of Natural Resources Mendoza, see concurring opinion.
(now Department of Environment and Natural Resources). Executive Order No. 967 of 30 June 1984 transferred Regalado, J., on official leave.
the BFAR from the control and supervision of the Minister (formerly Secretary) of Natural Resources to the Ministry
of Agriculture and Food (MAF) and converted it into a mere staff agency thereof, integrating its functions with the
regional offices of the MAF.
[1] None, however, exists in Puerto Princesa City.
In Executive Order No. 116 of 30 January 1987, which reorganized the MAF, the BFAR was retained as an [2] Petitioners filed their Memorandum on 24 October 1994. Respondents City Mayor Hagedorn and Members of the
attached agency of the MAF. And under the Administrative Code of 1987, [43]the BFAR is placed under the Title Sangguniang Panlungsod of the City of Puerto Princesa filed their Memorandum on 25 January 1995, while respondents
concerning the Department of Agriculture.[44] Governor Socrates and Members of the Sangguniang Panlalawigan of Palawan filed their Memorandum on 31 January 1995.
[3] Annex D of Petition, Rollo, 35.
Therefore, it is incorrect to say that the challenged Ordinance of the City of Puerto Princesa is invalid or [4] Annex E of Petition; id, 36.
unenforceable because it was not approved by the Secretary of the DENR. If at all, the approval that should be [5] Annex A to A-5 inclusive of Urgent Plea for the Immediate Issuance of Temporary Restraining Order, Rollo, 86 et seq.
[6] VICENTE J. FRANCISCO, THE REVISED RULES OF COURT IN THE PHILIPPINES, CRIMINAL PROCEDURE, 582 (2nd ed. 1969), citing affecting fishing and fisheries and any disposition thereunder shall be submitted to the Secretary for appropriate action and
U.S. v. Pompeya, 31 Phil. 245 [1915]. shall have full force and effect only upon his approval. The Bureau shall also have authority to regulate and supervise the
[7] Acharon v. Purisima, 13 SCRA 309, 311 [1965]; Cruz v. Court of Appeals, 194 SCRA 145, 152-153 production, capture and gathering of fish and fishery/aquatic products.
[1991]; Yap v. Intermediate Appellate Court, 220 SCRA 245, 253 [1993]; People v. Bans, supra note 7. The Bureau shall prepare and implement, upon approval of the Fishery Industry Development Council, a Fishery Industry
[8] Liberty Insurance Corporation v. Court of Appeals, 222 SCRA 37 [1993]; Lasco v. United Nations Revolving Fund for Development Program.
Natural Resources Exploration, 241 SCRA 681, 684 [1995]. [43] Executive Order No. 292.
[9] See Mendoza v. Court of Appeals, 201 SCRA 343 [1991]; People v. Bans, supra note 7. [44] Section 20, Chapter 4, Title IV, Book IV.
[10] Rollo, 25. [45] These sections read as follows:
[11] Macasiano v. National Housing Authority, 224 SCRA 236, 243 [1993], citing Remotigue v. Osmea, 21 SCRA 837 [1967]; SEC. 16. License, lease, and permit.--- No person shall exploit, occupy, produce, culture, capture or gather fish, or fry or
Rural Bank of Olongapo v. Commissioner of Land Registration, 102 SCRA 794 [1981]; and Allied Broadcasting Center v. fingerling of any species of fish or fishery/aquatic products, or engage in any fishery activity in Philippine or municipal waters
Republic of the Philippines, 190 SCRA 782 [1990]. without a license, lease or permit: Provided, That when due to destruction wrought upon fishponds, fishpens or fish nurseries,
[12] Philnabank Employees Association v. Hon. Estanislao, 227 SCRA 804, 811 [1993]. by typhoon, floods and other fortuitous events, or due to speculation, monopolistic and other pernicious practices which tend
[13] 172 SCRA 415, 423-424 [1989], reiterated in Manalo v. Gloria, 236 SCRA 130, 138-139 [1994]. to create an artificial shortage of fry and/or fingerling, the supply of fish and fishery/aquatic products can reasonably be
[14] 217 SCRA 633, 652 [1993]. expected to fall below the usual demand therefor and the price thereof, to increase, the Secretary, upon recommendation of
[15] La Union Electric Cooperative Inc. v. Yaranon, 179 SCRA 828, 836 [1989]; Francisco v. Permskul, 173 SCRA 324, 333 the Director, is hereby authorized to fix a fair and reasonable price for fry and fingerling of any species of fish, and in so doing
[1989]. and when necessary , fix different price levels for various areas or regions taking into account such variable factors as
[16] See Peralta v. Commission on Elections, 82 SCRA 30, 55 [1978]. availability, accessibility to transportation facilities, packing and crating, and to regulate the movement, shipment and
[17] Paredes v. Executive Secretary, 128 SCRA 6, 11 [1984], citing Yu Cong Eng v. Trinidad, 47 Phil. 385 [1925]. See also transporting of such fry and fingerling: Provided, Further, That the price so fixed shall guarantee the gatherers of fry a just and
Aris(Phil.) Inc. v. NLRC, 200 SCRA 246, 255-256 [1991]. equitable return for their labor: Provided, Finally, That any administrative order issued by the Secretary to implement the
[18] Although the intent of the framers was to have the terms refer to those who lived a hand-to-mouth existence., JOAQUIN G. foregoing shall take effect immediately, the provisions of Section 7 hereof to the contrary notwithstanding.
BERNAS, THE INTENT OF THE 1986 CONSITUTION WRITERS 964 (1995). xxx
[19] Webster's Third New International Dictionary 1381 [1993]. C. MUNICIPAL FISHERIES
[20] Websters, supra., 2279. SEC. 29. Grant of fishery priviliges.--- A municipal or city council, conformably with an ordinance duly approved by the
[21] III Record of the Constitutional Commission, 50. Secretary pursuant to Section 4 hereof may:
[22] Section 16, Article II. a. grant to the highest qualified bidder the exclusive privilege of constructing and operating fish corrals, oyster culture beds, or
[23] 224 SCRA 792, 804-805 [1993]. of gathering of bangus fry, or the fry of other species, in municipal waters for a period not exceeding five (5)
[24] Section 149. years: Provided, That in the zoning and classification of municipal waters for purposes of awarding, through public bidding ,
[25] Section 447 [a] [1] [vi]; Section 458 [a] [1] [vi]; Section 468 [a] [1] [vi]. areas for the construction or operation of fish corrals, oyster culture bed, or the gathering of fry, the municipal or city council
[26] Section 2(a). shall set aside not more than one-fifth (1/5) of the area, earmarked for the gathering of fry, as may be designated by the
[27] Section 3, Article X. Bureau, as government bangus fry reservation: Provided, Further, That no fish corral shall be constructed within two hundred
[28] Section 5(a). (200) meters of another fish corral in marine fisheries, or one hundred (100) meters in freshwater fisheries, unless they belong
[29] Section 17 (e).